Exhibit 10.1

 

 

 

CREDIT AGREEMENT

dated as of February 11, 2011

among

AVISTA CORPORATION,

THE LENDERS PARTY HERETO,

THE BANK OF NEW YORK MELLON, KEYBANK NATIONAL

ASSOCIATION and U.S. BANK NATIONAL ASSOCIATION,

as Co-Documentation Agents,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Syndication Agent and Issuing Bank,

And

UNION BANK, N.A.,

as Administrative Agent and Issuing Bank

 

 

 

UNION BANK, N.A. and WELLS FARGO SECURITIES, LLC,

as Co-Lead Arrangers and Co-Book Managers

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TABLE OF CONTENTS

 

                Page   ARTICLE I DEFINITIONS      1      Section1.01     
Defined Terms      1      Section1.02      Terms Generally      14    ARTICLE II
THE CREDITS      15      Section 2.01      Commitments      15      Section 2.02
     Loans      15      Section 2.03      Notice of Borrowings      17     
Section 2.04      Repayment of Loans; Evidence of Debt      17      Section 2.05
     Letters of Credit      18      Section 2.06      Fees      22     
Section 2.07      Interest on Loans      23      Section 2.08      Default
Interest      24      Section 2.09      Alternate Rate of Interest      24     
Section 2.10      Termination, Reduction and Increase in Commitments      24   
  Section 2.11      Prepayment      26      Section 2.12      Reserve
Requirements; Change in Circumstances      26      Section 2.13      Change in
Legality      28      Section 2.14      Indemnity      28      Section 2.15     
Pro Rata Treatment      29      Section 2.16      Sharing of Setoffs      29   
  Section 2.17      Payments      30      Section 2.18      Taxes      30     
Section 2.19      Termination or Assignment of Commitments under Certain
Circumstances      32      Section 2.20      Extension of Expiration Date     
33      Section 2.21      Defaulting Lenders      35    ARTICLE III
REPRESENTATIONS AND WARRANTIES      38      Section 3.01      Organization;
Powers      38      Section 3.02      Authorization      38      Section 3.03
     Enforceability      38      Section 3.04      Governmental Approvals     
38   

 

 

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  Section 3.05      Financial Statements    39   Section 3.06      No Material
Adverse Change    39   Section 3.07      Litigation’ Compliance with Laws    39
  Section 3.08      Federal Reserve Regulations    40   Section 3.09     
Investment Company Act    40   Section 3.10      No Material Misstatements    40
  Section 3.11      Employee Benefit Plans    40   Section 3.12     
Environmental and Safety Matters    40   Section 3.13      Significant
Subsidiaries    41 ARTICLE IV CONDITIONS TO BORROWINGS, LETTERS OF CREDIT AND
EXTENSIONS    41   Section 4.01      All Borrowings and Letters of Credit    41
  Section 4.02      First Borrowing or Letter of Credit    42   Section 4.03
     Extensions    44 ARTICLE V AFFIRMATIVE COVENANTS    45   Section 5.01     
Existence; Businesses and Properties    45   Section 5.02      Insurance    45  
Section 5.03      Taxes and Obligations    46   Section 5.04      Financial
Statements, Reports, etc.    46   Section 5.05      Litigation and Other Notices
   47   Section 5.06      ERISA    47   Section 5.07      Maintaining Records;
Access to Properties and Inspections    48   Section 5.08      Use of Proceeds
and Letters of Credit    48 ARTICLE VI NEGATIVE COVENANTS    48   Section 6.01
     Liens    48   Section 6.02      Sale-Leaseback Transactions    51   Section
6.03      Mergers, Consolidations and Acquisitions    51   Section 6.04     
Disposition of Assets    52   Section 6.05      Consolidated Total Debt to
Consolidated Total Capitalization Ratio    53   Section 6.06      Public Utility
Regulatory Borrowing Limits    53 ARTICLE VII EVENTS OF DEFAULT    53 ARTICLE
VIII RELEASE OF COLLATERAL    56   Section 8.01      Borrower’s Election    56

 

 

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  Section 8.02      Release upon Commitment Reduction    56   Section 8.03     
Release upon Termination and Repayment    56 ARTICLE IX THE ADMINISTRATIVE AGENT
   57   Section 9.01      Appointment and Powers    57   Section 9.02     
Limitation on Liability    57   Section 9.03      Other Transactions with
Borrower, Etc.    58   Section 9.04      Reimbursement; Indemnification    58  
Section 9.05      Absence of Reliance    58   Section 9.06      Resignation of
Administrative Agent    58   Section 9.07      Syndication Agent and
Co-Documentation Agents    59   Section 9.08      Removal of Lender    59
ARTICLE X MISCELLANEOUS    60   Section 10.01      Notices    60   Section 10.02
     Survival of Agreement    61   Section 10.03      Binding Effect    61  
Section 10.04      Successors and Assigns    61   Section 10.05      Expenses;
Indemnity, Damage Waiver    64   Section 10.06      Right of Setoff    65  
Section 10.07      Applicable Law    65   Section 10.08      Waivers; Amendment
   65   Section 10.09      Interest Rate Limitation    66   Section 10.10     
Entire Agreement    66   Section 10.11      Waiver of Jury Trial    67   Section
10.12      Severability    67   Section 10.13      Counterparts    67   Section
10.14      Headings    67   Section 10.15      Jurisdiction; Consent to Service
of Process    67   Section 10.16      USA Patriot Act Notification    68

 

Exhibit A        Form of Note Exhibit B        Form of Assignment and Assumption
Exhibit C        Form of Administrative Questionnaire Exhibit D        Form of
Commitment Increase Supplement Exhibit E        Form of Commitment Extension
Supplement

 

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Schedule 2.01    Names, Commitments and Addresses of Initial Lenders Schedule
3.13    Significant Subsidiaries Schedule 4.02(a)(ii)    Required Governmental
Approvals Schedule 6.01    Existing Secured Indebtedness

 

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CREDIT AGREEMENT, dated as of February 11, 2011, among AVISTA CORPORATION, a
Washington corporation, the Lenders listed in Schedule 2.01, THE BANK OF NEW
YORK MELLON, KEYBANK NATIONAL ASSOCIATION and U.S. BANK NATIONAL ASSOCIATION, as
Co-Documentation Agents, WELLS FARGO BANK, NATIONAL ASSOCIATION, as Syndication
Agent and an Issuing Bank, and UNION BANK, N.A., as Administrative Agent and an
Issuing Bank.

The Borrower has requested that the Lenders agree to make loans, and to acquire
participations in letters of credit issued by the Issuing Banks, on a revolving
credit basis during the period commencing with the date hereof and ending on the
Expiration Date (as defined herein) in an aggregate principal amount not in
excess of $400,000,000 at any time outstanding (subject to increase at the
election of the Borrower by an aggregate amount not to exceed $100,000,000, upon
satisfaction of certain conditions as hereinafter provided). The proceeds of
such borrowings and such letters of credit are to be used for general corporate
purposes.

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

ARTICLE I

DEFINITIONS

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

“ABR” when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

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

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

“Additional Commitment Lender” means (a) a Lender that increases its Commitment
pursuant to Section 2.10(c) or 2.20(e) or (b) an Eligible Assignee that becomes
a Lender pursuant to Section 2.10(c) or 2.20(e).

“Administrative Agent” shall mean Union Bank, as administrative agent for the
Lenders under the Loan Documents, and any successor Administrative Agent
appointed pursuant to Section 9.06.

“Administrative Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit C.

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“Affiliate” shall mean, when used with respect to a specified person, another
person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the person specified.

“Agreement” shall mean this Agreement, including all exhibits and schedules
hereto.

“Alternate Base Rate” shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) equal to the greatest of
(a) the Reference Rate in effect on such day, (b) the sum of (i) the Federal
Funds Effective Rate in effect for such day plus (ii)  1/2 of 1% and (c) the sum
of (i) the Eurodollar Rate for an Interest Period of 1 month commencing on such
day plus (ii) 1%. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate for any reason, the
Alternate Base Rate shall be determined without regard to clause (b) of the
first sentence of this definition until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Reference Rate shall be effective on the date such change in the
Reference Rate is adopted.

“Applicable Rate” shall mean, on any date with respect to the Facility Fee,
Eurodollar Loans, ABR Loans or the LC Participation Fee, the rate per annum set
forth in the following table in the “Facility Fee,” “Eurodollar Margin,” “ABR
Margin” or “LC Participation Fee” column, as applicable, for the Pricing Level
in effect for such date.

 

Pricing Level

  

Facility Fee

  

Eurodollar

Margin

  

ABR Margin

  

LC Participation

Fee

I

   0.175%    1.20%    0.20%    1.20%

II

   0.20%    1.30%    0.30%    1.30%

III

   0.25%    1.50%    0.50%    1.50%

IV

   0.375%    1.625%    0.625%    1.625%

V

   0.50%    1.875%    0.875%    1.875%

VI

   0.75%    2.00%    1.00%    2.00%

For purposes of determining which Pricing Level is applicable in the foregoing
table the following rules will apply:

“Pricing Level I” will be applicable at any date if, at such date, the Senior
Debt Rating is Fifth Lowest Investment Grade or higher;

“Pricing Level II” will be applicable at any date if, at such date, the Senior
Debt Rating is Fourth Lowest Investment Grade and Pricing Level I is not
applicable;

“Pricing Level III” will be applicable at any date if, at such date, the Senior
Debt Rating is Third Lowest Investment Grade and neither Pricing Level I nor
Pricing Level II is applicable;

 

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“Pricing Level IV” will be applicable at any date if, at such date, the Senior
Debt Rating is Second Lowest Investment Grade and none of Pricing Level I,
Pricing Level II or Pricing Level III is applicable;

“Pricing Level V” will be applicable at any date if, at such date, the Senior
Debt Rating is Lowest Investment Grade and none of Pricing Level I, Pricing
Level II, Pricing Level III or Pricing Level IV is applicable;

“Pricing Level VI” will be applicable at any date if, at such date, the Senior
Debt Rating is Highest Non-Investment Grade or lower.

“Assignment and Assumption” shall mean an assignment and assumption agreement
entered into by a Lender and an Eligible Assignee in the form of Exhibit B or
such other form as shall be approved by the Administrative Agent.

“Attributable Debt” shall mean, in connection with any Sale-Leaseback, the
present value (discounted in accordance with GAAP at the discount rate implied
in the lease) of the obligations of the lessee for rental payments during the
term of the lease.

“Availability Period” shall mean the period from and including the date of this
Agreement to but excluding the Expiration Date.

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

“Bond Delivery Agreement” shall mean the Bond Delivery Agreement, dated as of
February 11, 2011, between the Borrower and the Administrative Agent.

“Borrower” shall mean Avista Corporation, a Washington corporation, and its
successors and assigns.

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

“Business Day” shall mean any day (other than a day which is a Saturday, Sunday
or legal holiday in the State of California or the State of New York) on which
banks are open for business in Los Angeles and New York City; 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 dealings in deposits in dollars
in the London interbank market.

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

 

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“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 Securities
and Exchange Commission thereunder as in effect on the date hereof), of shares
representing more than 30% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Borrower; or (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Borrower by persons who were neither (i) nominated by the board of directors of
the Borrower nor (ii) appointed by directors so nominated; provided, that no
event described in clause (a) or clause (b) shall constitute a “Change in
Control” if, immediately after giving effect to the transaction that would
otherwise constitute a Change in Control, the Senior Debt Rating assigned by two
nationally recognized credit rating agencies is equal to or higher than Lowest
Investment Grade.

“Closing Date” shall mean the date on which the conditions precedent set forth
in Sections 4.01 and 4.02 are first satisfied or waived.

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

“Commitment” shall mean, with respect to each Lender, (a) (i) in the case of a
Lender listed on Schedule 2.01, the amount set forth opposite such Lender’s name
under the heading “Commitment” on such Schedule, (ii) in the case of a person
that becomes a Lender pursuant to Section 2.10 or 2.20, the amount specified as
such person’s Commitment in the Commitment Increase Supplement or Commitment
Extension Supplement pursuant to which such person becomes a Lender and (iii) in
the case of a person that becomes a Lender pursuant to an assignment under
Section 10.04, the amount specified as assigned to such person in the Assignment
and Assumption pursuant to which such person becomes a Lender, in each case, as
the same may be reduced from time to time pursuant to Section 2.10(b), increased
from time to time pursuant to Section 2.10(c) or 2.20(e), or reduced or
increased from time to time pursuant to assignments in accordance with
Section 10.04, or (b) as the context may require, the obligation of such Lender
to make Loans or acquire participations in Letters of Credit in an aggregate
unpaid principal amount not exceeding such amount.

“Commitment Extension Supplement” shall have the meaning assigned to such term
in Section 2.20(e).

“Commitment Increase Supplement” shall have the meaning assigned to such term in
Section 2.10(c).

“Consolidated Total Capitalization” on any date means the sum, without
duplication, of the following with respect to the Borrower and its consolidated
Subsidiaries: (a) total capitalization as of such date, as determined in
accordance with GAAP, (b) the current portion of liabilities which as of such
date would be classified in whole or part as long-term debt in accordance with
GAAP (it being understood that the noncurrent portion of such liabilities is
included in the total capitalization referred to in clause (a)), (c) all
obligations as lessee which, in accordance with GAAP, are capitalized as
liabilities (including the current portion thereof), and (d) all other
liabilities which would be classified as short-term debt in accordance with
GAAP.

 

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“Consolidated Total Debt” on any date means the sum, without duplication, of the
following with respect to the Borrower and its consolidated Subsidiaries:
(a) all liabilities which as of such date would be classified in whole or in
part as long-term debt in accordance with GAAP (including the current portion
thereof), (b) all obligations as lessee which, in accordance with GAAP, are
capitalized as liabilities (including the current portion thereof), (c) all
other liabilities which would be classified as short-term debt in accordance
with GAAP, and (d) all Guarantees of or by the Borrower.

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a person, whether
through the ownership of voting securities, by contract or otherwise, and
“Controlling” and “Controlled” shall have meanings correlative thereto.

“Current Expiration Date” shall have the meaning assigned to such term in
Section 2.20(a).

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

“Defaulting Lender” shall mean, at any time, subject to Section 2.21(d), any
Lender that at such time (a) has failed to perform any of its funding
obligations hereunder, including in respect of its Loans or its participations
in Letters of Credit, within two Business Days of the date on which any funding
is required by it hereunder, (b) has notified the Borrower or the Administrative
Agent that it does not intend to comply with its funding obligations or has made
a public statement to that effect with respect to its funding obligations
hereunder or generally under other agreements in which it commits to extend
credit, (c) has failed, within three Business Days after written request by the
Administrative Agent (based on its reasonable belief that such Lender may not
fulfill its funding obligations hereunder), to confirm in a manner reasonably
satisfactory to the Administrative Agent that it will comply with its funding
obligations hereunder or (d) has, or has a direct or indirect parent company
that has, (i) become the subject of a proceeding under any debtor-relief law,
(ii) had a receiver, conservator, trustee, administrator, assignee for the
benefit of creditors or similar person charged with reorganization or
liquidation of its business or a custodian appointed for it or (iii) taken any
action in furtherance of, or indicated its consent to, approval of or
acquiescence in, any such proceeding or appointment; provided, however, that a
Lender shall not be a Defaulting Lender solely by virtue of the control,
ownership or acquisition of any equity interest in that Lender or any direct or
indirect parent company thereof by a Governmental Authority.

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

“Electronic Delivery” shall have the meaning assigned to such term in
Section 5.04(a).

“Eligible Assignee” means (a) a financial institution organized under the laws
of the United States of America, or any state thereof, and having a combined
capital and surplus of at least $100,000,000 or the obligations of which are
directly guaranteed by a financial institution organized under the laws of the
United States of America, or any state thereof, and having a

 

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combined capital and surplus of at least $100,000,000; (b) a commercial bank
organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having a combined capital and surplus of at
least $100,000,000, provided that such bank is acting through a branch or agency
located in the United States of America; (c) a Person that is (i) a subsidiary
of a Lender, (ii) a subsidiary of a Person of which a Lender is a subsidiary or
(iii) a Person of which a Lender is a subsidiary; or (d) another Lender;
provided, however, that neither the Borrower nor any Affiliate of the Borrower,
nor any Defaulting Lender, shall qualify as an Eligible Assignee.

“Equity Interests” shall mean shares of stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or
other equity ownership interests in a person, and all options, warrants or other
rights to acquire any such equity ownership interests in a person.

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

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that is a member of a group of which the Borrower is a member and which is
treated as a single employer under Section 414 of the Code.

“Eurodollar,” when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Eurodollar Rate.

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

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

“Eurodollar Rate” shall mean, for any Interest Period, the rate of interest per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
(a) the rate appearing on Bloomberg screen BBAM (or any successor thereto) as
the London interbank offered rate for deposits in dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period (provided, however, if more
than one such rate is specified on Bloomberg screen BBAM, the applicable rate
shall be the arithmetic mean of all such rates), multiplied by (b) the Statutory
Reserve Rate. If, for any reason, the rate specified in clause (a) above is not
available for any Interest Period, there shall be substituted for such rate, for
such Interest Period, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) equal to the rate determined by the Administrative Agent to
be the offered rate on another page or service that displays an average British
Bankers Association Interest Settlement Rate for deposits in dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period. In the event
that the rates referenced in clause (a) above and in the preceding sentence are
not available, there shall be substituted for the rate specified in clause (a)

 

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above the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the rate that would be offered to first-class banks in the London
interbank market by Union Bank for deposits (for delivery on the first day of
the relevant Interest Period) in dollars of amounts in same-day funds comparable
to the principal amount of the applicable Loan by Union Bank for which the
Eurodollar Rate is then being determined with maturities comparable to such
Interest Period as of approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period.

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

“Evergreen Letter of Credit” shall mean a Letter of Credit that, by its terms,
provides that it shall be automatically renewed or extended for a stated period
of time at the end of its then scheduled expiration date unless the Issuing Bank
thereof notifies the beneficiary thereof prior to such expiration date that such
Issuing Bank elects not to renew or extend such Letter of Credit.

“Existing Commitments” shall have the meaning assigned to such term in
Section 2.20(c).

“Expiration Date” shall mean the fourth anniversary of the Closing Date or any
later date to which such date shall have been extended pursuant to Section 2.20.

“Extending Lender” shall have the meaning assigned to such term in
Section 2.20(a).

“Facility Fee” shall have the meaning assigned to such term in Section 2.06(a).

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

“Fees” shall mean the Facility Fee and the other fees referred to in
Section 2.06.

“Fifth Lowest Investment Grade” shall mean that the Senior Debt Rating assigned
to the applicable Indebtedness of the Borrower is a rating which, as reasonably
determined by the Administrative Agent, would be the rating granted by the
applicable credit-rating agency which is generally treated as “investment grade”
in the ratings regime of that credit-rating agency and is higher than Fourth
Lowest Investment Grade.

“Financial Officer” of any corporation shall mean the chief financial officer or
treasurer of such corporation.

“First Mortgage” shall mean the Mortgage and Deed of Trust dated as of June 1,
1939, made by the Borrower in favor of Citibank, N.A., as successor trustee, as
the same has been amended, modified or supplemented to date and as the same may
be further amended, modified or supplemented from time to time hereafter.

 

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“First Mortgage Bond” shall mean (a) a first mortgage bond of the Fifty-third
Series issued to the Administrative Agent on the Closing Date under a
supplemental indenture to the First Mortgage, in a principal amount equal to the
total Commitments on the date of execution and delivery of this Agreement,
and/or (b) any first mortgage bond issued under a supplemental indenture to the
First Mortgage in addition to, or in substitution for, a first mortgage bond
previously delivered to the Administrative Agent pursuant to this Agreement,
including in connection with an increase in the total Commitments pursuant to
Section 2.10(c) or a reduction in the total Commitments pursuant to
Section 2.10(b), 2.20 or 9.08(a).

“Fourth Lowest Investment Grade” shall mean that the Senior Debt Rating assigned
to the applicable Indebtedness of the Borrower is a rating which, as reasonably
determined by the Administrative Agent, would be the rating granted by the
applicable credit-rating agency which is generally treated as “investment grade”
in the ratings regime of that credit-rating agency and is higher than Third
Lowest Investment Grade but lower than Fifth Lowest Investment Grade.

“GAAP” shall mean generally accepted accounting principles, applied on a
consistent basis.

“Governmental Authority” shall mean, whether domestic or foreign, any national,
federal, state or local government, any political subdivision thereof, or any
governmental, quasi-governmental, judicial, public or statutory agency,
authority, instrumentality, body or entity, including any central bank and any
comparable authority.

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

“Highest Non-Investment Grade” shall mean that the Senior Debt Rating assigned
to the applicable Indebtedness of the Borrower is a rating which, as reasonably
determined by the Administrative Agent, would be the highest rating granted by
the applicable credit-rating agency which is generally not treated as
“investment grade” in the ratings regime of that credit-rating agency.

 

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“Indebtedness” of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional-sale or other title-retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services (other
than trade payables incurred in the ordinary course of business), (f) 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 obligations
secured thereby have been assumed, but limited, if such obligations are without
recourse to such person, to the lesser of the principal amount of such
Indebtedness or the fair-market value of such property, (g) all Guarantees by
such person of Indebtedness of others, (h) all Capital Lease Obligations of such
person, (i) all obligations of such person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements (the amount of any such obligation to be the
amount that would be payable upon the acceleration, termination or liquidation
thereof) and (j) all obligations of such person as an account party in respect
of letters of credit and bankers’ acceptances. The Indebtedness of any person
shall include the Indebtedness of any partnership in which such person is a
general partner.

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

“Interest Period” shall mean (a) as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on, as the Borrower may
elect, the date 2 weeks thereafter or the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day) in the calendar
month that is 1, 2, 3 or 6 months thereafter, and (b) as to any ABR Borrowing,
the period commencing on the date of such Borrowing and ending on the earlier of
(i) the next succeeding March 31, June 30, September 30 or December 31 and
(ii) the Expiration Date; provided, however, that if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless, in the case of a Eurodollar
Borrowing only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day. Interest shall accrue from and including the first day
of an Interest Period to but excluding the last day of such Interest Period.

“Issuing Bank” shall mean Union Bank or Wells Fargo Bank, in each case acting in
its capacity as the issuer of a Letter of Credit, or any Lender (or other
financial institution satisfactory to the Borrower and the Administrative Agent)
succeeding to such capacity or added in such capacity pursuant to
Section 2.05(k). The Issuing Bank of a Letter of Credit may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of such
Issuing Bank, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to any Letters of Credit issued by such Affiliate.

 

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“Issuing Bank Exposure” shall mean, with respect to any Issuing Bank at any
time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of
Credit issued by such Issuing Bank at such time plus (b) the aggregate amount of
all LC Disbursements by such Issuing Bank that have not yet been reimbursed by
or on behalf of the Borrower at such time.

“LC Disbursement” shall mean a payment made by an Issuing Bank pursuant to a
Letter of Credit.

“LC Exposure” shall mean, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Lender at any time shall be
its Pro Rata Share of the total LC Exposure at such time.

“LC Participation Fee” shall have the meaning assigned to such term in
Section 2.06(b).

“Lender” shall mean (a) any person listed on Schedule 2.01, (b) any person that
becomes a Lender pursuant to Section 2.10(c) or 2.20(e) and (c) any person that
is assigned any or all of the rights or obligations of a Lender pursuant to
Section 10.04.

“Letter of Credit” shall mean (a) each standby letter of credit issued pursuant
to this Agreement and (b) each standby letter of credit issued under the 2004
Credit Agreement and outstanding on the Closing Date.

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

“Loan Documents” shall mean this Agreement, the First Mortgage Bond, the First
Mortgage, the Supplemental Indenture, the Bond Delivery Agreement, any Notes,
any letter of credit applications executed and delivered by the Borrower with
respect to Letters of Credit, each letter agreement between the Borrower and an
Issuing Bank referred to in Section 2.05(a), the agreement between the Borrower
and the Administrative Agent referred to in Section 2.06(c) and the Funds
Transfer Agreement and related documents referred to in Section 4.02(a)(xii).

“Loans” shall mean loans made by the Lenders to the Borrower pursuant to this
Agreement.

“Lowest Investment Grade” shall mean that the Senior Debt Rating assigned to the
applicable Indebtedness of the Borrower is a rating which, as reasonably
determined by the Administrative Agent, would be the lowest rating granted by
the applicable credit-rating agency which is generally treated as “investment
grade” in the ratings regime of that credit-rating agency.

“Margin Stock” shall have the meaning given such term under Regulation U.

 

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“Material Adverse Effect” shall mean an effect on the business, assets,
operations or financial condition of the Borrower and the Subsidiaries taken as
a whole which could reasonably be expected to have a material adverse effect on
the creditworthiness of the Borrower.

“non-Defaulting Lenders” shall have the meaning assigned to such term in
Section 2.21(a)(i).

“Notes” shall mean any promissory notes of the Borrower, substantially in the
form of Exhibit A, evidencing Loans, as may be delivered pursuant to
Section 2.04.

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

“person” shall mean (a) a corporation, association, partnership, trust, limited
liability company, organization, business or individual or (b) a Governmental
Authority.

“Plan” shall mean any pension plan subject to the provisions of Title IV of
ERISA or Section 412 of the Code which is maintained for employees of the
Borrower or any ERISA Affiliate.

“Pro Rata Share” shall mean, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment. If the Commitments
have terminated or expired, the Pro Rata Shares of the Lenders shall be
determined based upon the Commitments most recently in effect.

“Reference Rate” shall mean the variable rate of interest per annum established
by Union Bank from time to time as its “reference rate.” Such “reference rate”
is set by Union Bank as a general reference rate of interest for “prime”
commercial lending transactions, taking into account such factors as Union Bank
may deem appropriate, it being understood that many of Union Bank’s commercial
or other loans are priced in relation to such rate, that it is not necessarily
the lowest or best rate actually charged to any customer and that Union Bank may
make various commercial or other loans at rates of interest having no
relationship to such rate. For purposes of this Agreement, each change in the
Reference Rate shall be effective as of the opening of business on the date
announced as the effective date of any change in such “reference rate.”

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

“Regulation D” shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof and
shall include any successor or other regulation or official interpretation of
the Board relating to reserve requirements applicable to member banks of the
Federal Reserve System.

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

 

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

“Reportable Event” shall mean any reportable event as defined in Section 4043(b)
of ERISA or the regulations issued thereunder with respect to a Plan (other than
a Plan maintained by an ERISA Affiliate which is considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of Section 414 of the Code).

“Required Lenders” shall mean, at any time, Lenders having Revolving Credit
Exposures representing more than 50.0% of the aggregate Revolving Credit
Exposures or, if there shall be no Revolving Credit Exposures, Lenders having
Commitments representing more than 50.0% of the aggregate Commitments; provided,
however, that if any Lender is a Defaulting Lender at such time, then the
Commitment of such Lender shall be excluded from the determination of Required
Lenders at such time.

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

“Revolving Credit Exposure” shall mean, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender’s Loans and its LC
Exposure at such time.

“RTO Transaction” shall mean any sale, transfer or other disposition of
transmission assets entered into in connection with the formation of a regional
transmission organization pursuant to or in a manner consistent with regulatory
requirements applicable to the Borrower.

“Sale-Leaseback” shall mean any arrangement whereby any person shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.

“Second Lowest Investment Grade” shall mean that the Senior Debt Rating assigned
to the applicable Indebtedness of the Borrower is a rating which, as reasonably
determined by the Administrative Agent, would be the rating granted by the
applicable credit-rating agency which is generally treated as “investment grade”
in the ratings regime of that credit-rating agency and is higher than Lowest
Investment Grade but lower than Third Lowest Investment Grade.

“Senior Debt Rating” means, as of any date of determination, as of the close of
business on such date, (a) if the obligations of the Borrower under this
Agreement are secured by the First Mortgage and are not rated, the rating
assigned to the Borrower’s most senior secured long-term public Indebtedness
(without credit enhancement), (b) if such obligations are not secured by the
First Mortgage and are not rated, the rating assigned to the Borrower’s most
senior unsecured long-term public Indebtedness (without credit enhancement) and
(c) if such obligations are rated, the rating assigned to such obligations
(without credit enhancement), in each such case by a nationally recognized
credit-rating agency designated by the Borrower,

 

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reasonably approved by the Administrative Agent and not objected to by the
Required Lenders within five Business Days following notice of such designation.
Notwithstanding the foregoing, (i) if the Senior Debt Rating(s) assigned by any
of the other nationally recognized credit-rating agencies is or are different
from the Senior Debt Rating assigned by the agency designated by the Borrower
and the ratings (including that of the agency designated by the Borrower) are
split by just one level, then the higher rating will apply, and (ii) if the
ratings (including that of the agency designated by the Borrower) are split by
more than one level, then the level that is one level below the highest rating
will apply.

“Significant Subsidiary” shall mean a Subsidiary meeting any one of the
following conditions: (a) the investments in and advances to such Subsidiary by
the Borrower and the other Subsidiaries, if any, as at the end of the Borrower’s
latest fiscal quarter exceeded 10% of the total assets of the Borrower and its
Subsidiaries at such date, computed and consolidated in accordance with GAAP; or
(b) the Borrower’s and the other Subsidiaries’ proportionate share of the total
assets (after intercompany eliminations) of such Subsidiary as at the end of the
Borrower’s latest fiscal quarter exceeded 10% of the total assets of the
Borrower and its Subsidiaries at such date, computed and consolidated in
accordance with GAAP; or (c) the equity in the income from continuing operations
before income taxes, extraordinary items and cumulative effect of a change in
accounting principles of such Subsidiary (excluding amounts attributable to any
minority interests therein) for the period of four consecutive fiscal quarters
ending at the end of the Borrower’s latest fiscal quarter exceeded 10% of such
income of the Borrower and its Subsidiaries for such period, computed and
consolidated in accordance with GAAP; or (d) such Subsidiary is the parent of
one or more Subsidiaries and together with such Subsidiaries would, if
considered in the aggregate, constitute a Significant Subsidiary.

“Statutory Reserve Rate” shall mean a fraction, expressed as a decimal, the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including for any
marginal, special, emergency or supplemental reserves), expressed as a decimal,
established by the Board and to which Union Bank is subject for Eurocurrency
funding (currently referred to as “Eurocurrency liabilities” in Regulation D).
Such reserve percentages shall include those imposed pursuant to Regulation D.
Eurodollar Loans shall be deemed to constitute Eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that might be available from time to time to any Lender
under Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any applicable reserve percentage.

“subsidiary” shall mean, for any person (the “Parent”), any corporation, limited
liability company, partnership or other entity of which securities or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
of such corporation, limited liability company, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, limited liability
company, partnership or other entity shall have or might have voting power by
reason of the happening of any contingency) are at the time directly or
indirectly owned or controlled by the Parent or one or more of its subsidiaries
or by the Parent and one or more of its subsidiaries.

 

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“Subsidiary” shall mean a subsidiary of the Borrower.

“Supplemental Indenture” shall mean (a) the Fifty-first Supplemental Indenture,
dated as of February 1, 2011, between the Borrower and Citibank, N.A., as
trustee under the First Mortgage, and/or (b) any supplemental indenture to the
First Mortgage, in form and substance satisfactory to the Administrative Agent,
pursuant to which a first mortgage bond is issued in addition to, or in
substitution for, a first mortgage bond previously delivered to the
Administrative Agent pursuant to this Agreement, including in connection with an
increase in the total Commitments pursuant to Section 2.10(c) or a reduction in
the total Commitments pursuant to Section 2.10(b), 2.20 or 9.08(a).

“Terminating Lender” shall have the meaning assigned to such term in
Section 2.20(c).

“Third Lowest Investment Grade” shall mean that the Senior Debt Rating assigned
to the applicable Indebtedness of the Borrower is a rating which, as reasonably
determined by the Administrative Agent, would be the rating granted by the
applicable credit-rating agency which is generally treated as “investment grade”
in the ratings regime of that credit-rating agency and is higher than Second
Lowest Investment Grade but lower than Fourth Lowest Investment Grade.

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

“Transferee” shall have the meaning assigned to such term in Section 2.18(a).

“2004 Credit Agreement” shall mean the Credit Agreement dated as of December 17,
2004, as amended to the date hereof, among the Borrower, the banks party thereto
as lenders, Bank of America, N.A., as managing agent, KeyBank, National
Association, as documentation agent, U.S. Bank, National Association, as
documentation agent, Wells Fargo, as documentation agent and an issuing bank,
Union Bank, as syndication agent and an issuing bank, and The Bank of New York
Mellon, as administrative agent and an issuing bank.

“2009 Credit Agreement” shall mean the Credit Agreement dated as of November 25,
2009 among the Borrower, the financial institutions party thereto as lenders,
JPMorgan Chase Bank, N.A. and UBS Securities LLC, as co-documentation agents,
Wells Fargo Securities, LLC as syndication agent, and Union Bank, as
administrative agent.

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

“Union Bank” shall mean Union Bank, N.A.

“Wells Fargo Bank” shall mean Wells Fargo Bank, National Association.

 

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Section 1.02 Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including” shall
be deemed to be followed by the phrase “without limitation.” All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, all accounting terms not otherwise defined herein shall have
the meanings assigned to them in conformity with GAAP as in effect at that time.
Financial statements and other information required to be delivered by the
Borrower to the Administrative Agent, the Lenders and the Issuing Banks pursuant
to Section 5.04 shall be prepared in accordance with GAAP as in effect at the
time of such preparation, and calculations in connection with the definitions,
covenants and other provisions hereof shall utilize accounting principles and
policies in conformity with GAAP as in effect at the time of such preparation.
If the Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request 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, such provision shall be
interpreted on the basis of GAAP as in effect at that time until such provision
is amended in accordance herewith.

ARTICLE II

THE CREDITS

Section 2.01 Commitments. Subject to the terms and conditions and relying upon
the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, to make Loans to the Borrower, at any time and from
time to time during the Availability Period, in an aggregate principal amount at
any time outstanding that will not result in (a) the Revolving Credit Exposure
of any Lender exceeding such Lender’s Commitment or (b) the total Revolving
Credit Exposures exceeding the total Commitments. Within the limits set forth in
the preceding sentence, the Borrower may borrow, pay or prepay, and reborrow
Loans during the Availability Period, subject to the terms, conditions and
limitations set forth herein.

Section 2.02 Loans.

(a) Each Loan shall be made as part of a Borrowing consisting of Loans made by
the Lenders ratably in accordance with their Commitments. The failure of any
Lender to make any Loan required to be made hereunder shall not in itself
relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender). The
Loans comprising each Borrowing shall be in the aggregate principal amount of
$1,000,000 or a whole-integer multiple of $100,000 in excess thereof.

(b) Subject to Section 2.09, each Borrowing shall be comprised entirely of ABR
Loans or Eurodollar Loans, as the Borrower may request pursuant to Section 2.03.
Each Lender may at its option fulfill its Commitment with respect to any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in

 

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accordance with the terms of this Agreement or any applicable Note. Borrowings
of more than one Type may be outstanding at the same time; provided, however,
that the Borrower shall not be entitled to request any Borrowing which, if made,
would result in an aggregate of more than fifteen separate Eurodollar Loans of
any Lender being outstanding hereunder at any one time. For purposes of the
foregoing, Loans having different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate Loans.

(c) Subject to paragraph (e) below, each Lender shall make a Loan in the amount
of its Pro Rata Share of each Borrowing on the proposed date thereof by wire
transfer of immediately available funds to the Administrative Agent in Los
Angeles, California, not later than 11:00 a.m., Pacific time, and the
Administrative Agent shall by 1:00 p.m., Pacific time, make available to the
Borrower in immediately available funds the amounts so received (i) by wire
transfer for credit to the account of the Borrower with Wells Fargo Bank bearing
Account Number 41688 14770, ABA # 121000248, re: Avista Corp. or (ii) as
otherwise specified by the Borrower in its notice of Borrowing or, if a
Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Lenders. Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Eurodollar Borrowing or prior to 11:00
a.m., Pacific time, on the date of any ABR Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with this paragraph (c), and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have made
such portion available to the Administrative Agent, such Lender and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, the Federal Funds Effective Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount shall constitute such Lender’s Loan as part of such Borrowing for
purposes of this Agreement.

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

(e) The Borrower may refinance all or any part of any Borrowing with a new
Borrowing of the same or a different Type, subject to the conditions and
limitations set forth in this Agreement. Any Borrowing or part thereof so
refinanced shall be deemed to be repaid or prepaid in accordance with
Section 2.04 or 2.11, as applicable, with the proceeds of the new Borrowing, and
the proceeds of the new Borrowing, to the extent they do not exceed the
principal amount of the Borrowing being refinanced, shall not be paid by the
Lenders to the Administrative Agent or by the Administrative Agent to the
Borrower pursuant to paragraph (c) above.

 

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Section 2.03 Notice of Borrowings. To request a Borrowing, the Borrower shall
give the Administrative Agent notice thereof (a) in the case of a Eurodollar
Borrowing, not later than 9:00 a.m., Pacific time, three Business Days before a
proposed borrowing and (b) in the case of an ABR Borrowing, not later than 9:00
a.m., Pacific time, the day of a proposed borrowing. Such notice shall be
irrevocable and shall in each case refer to this Agreement and specify
(i) whether the Borrowing then being requested is to be a Eurodollar Borrowing
or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a Business
Day) and the amount thereof; and (iii) if such Borrowing is to be a Eurodollar
Borrowing, the Interest Period with respect thereto. If no election as to the
Type of Borrowing is specified in any such notice, then the requested Borrowing
shall be an ABR Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then the Borrower shall be deemed to
have selected an Interest Period of one month’s duration. If the Borrower shall
not have given notice in accordance with this Section 2.03 of its election to
refinance a Borrowing or given notice to the Administrative Agent not later than
9:00 a.m., Pacific time, on the last day of the Interest Period applicable to
such Borrowing that it will not refinance such Borrowing, then the Borrower
shall be deemed to have given notice of an election to refinance such Borrowing
with an ABR Borrowing. The Administrative Agent shall promptly advise the
Lenders of any notice given pursuant to this Section 2.03 and of each Lender’s
portion of the requested Borrowing.

Section 2.04 Repayment of Loans; Evidence of Debt.

(a) The Borrower hereby unconditionally promises to pay each Lender the then
unpaid principal amount of each Loan of such Lender on the last day of the
Interest Period applicable to such Loan and on the Expiration Date. Each Loan
shall bear interest on the outstanding principal balance thereof as set forth in
Section 2.07.

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

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

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

(e) Any Lender may request that Loans made by it be evidenced by a Note. In such
event, the Borrower shall prepare, execute and deliver to such Lender a Note
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered

 

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assigns). Thereafter, the Loans evidenced by such Note and interest thereon
shall at all times (including after assignment pursuant to Section 10.04) be
represented by one or more Notes in such form payable to the order of the payee
named therein (or, if such Note is a registered Note, to such payee and its
registered assigns).

Section 2.05 Letters of Credit.

(a) Subject to the terms and conditions set forth herein, the Borrower may
request the issuance of Letters of Credit for its own account, in a form
reasonably acceptable to the Administrative Agent and the applicable Issuing
Bank, 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, an Issuing Bank relating to any Letter of Credit, the terms and conditions
of this Agreement shall control; provided, however, that any letter agreement
entered into by the Borrower with an Issuing Bank from time to time with respect
to the maximum Issuing Bank Exposure of such Issuing Bank shall control with
respect thereto.

(b) To request the issuance of a Letter of Credit (or the renewal, extension or
other amendment of an outstanding Letter of Credit), the Borrower shall
hand-deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the applicable Issuing Bank) to
the applicable Issuing Bank and the Administrative Agent (reasonably in advance
of the requested date of issuance, renewal, extension or other amendment) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be renewed, extended or otherwise amended, and specifying the date
of issuance, renewal, extension or other amendment (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 amount of such Letter of Credit, the
name and address of the beneficiary thereof and such other information as shall
be necessary to prepare, renew, extend or otherwise amend such Letter of Credit.
If requested by such Issuing Bank, the Borrower shall also submit a letter of
credit application on such Issuing Bank’s standard form in connection with any
request for a Letter of Credit. A Letter of Credit shall be issued, renewed,
extended or otherwise amended only if (and upon the issuance, renewal, extension
or other amendment of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, renewal,
extension or other amendment, (i) the total LC Exposure would not exceed
$300,000,000 and (ii) the total Revolving Credit Exposures would not exceed the
total Commitments.

(c) Each Letter of Credit shall expire (or, in the case of an Evergreen Letter
of Credit, shall expire if the applicable Issuing Bank gives the required notice
of nonrenewal or nonextension) not later than the close of business on the date
that is five Business Days prior to the first anniversary of the Expiration
Date. Each Issuing Bank agrees to notify the Borrower, substantially
simultaneously with its notice to the beneficiary of an Evergreen Letter of
Credit, if such Issuing Bank decides not to renew or extend such Evergreen
Letter of Credit; provided, however, that such Issuing Bank’s failure to so
notify the Borrower shall not affect the nonrenewal or nonextension of such
Evergreen Letter of Credit.

 

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(d) By the issuance of a Letter of Credit (or an amendment to a Letter of Credit
increasing the amount thereof) and without any further action on the part of the
applicable Issuing Bank or any Lender, such Issuing Bank hereby grants to each
Lender, and each Lender hereby acquires from such Issuing Bank, a participation
in such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate
amount available to be drawn under such Letter of Credit. In consideration and
in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
such Issuing Bank, such Lender’s Pro Rata Share of (i) each LC Disbursement made
by such Issuing Bank and not reimbursed by the Borrower on the date due as
provided in paragraph (e) of this Section and (ii) any reimbursement payment
required to be refunded to the Borrower for any reason, to the extent received
by such Lender. Each Lender acknowledges and agrees that its obligation to
acquire participations in respect of Letters of Credit pursuant to this
paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any renewal, extension or other amendment of
any Letter of Credit or the occurrence and continuance of a Default or Event of
Default or a reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.

(e) If the Issuing Bank of a Letter of Credit shall make an LC Disbursement in
respect of such Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, Pacific time, on (i) the Business Day on
which the Borrower receives notice of such LC Disbursement, if such notice is
received prior to 10:00 a.m., Pacific time, on the day of receipt, or (ii) the
Business Day immediately following the day on which the Borrower receives such
notice, if such notice is not received prior to such time on the day of receipt;
provided, however, that, if such LC Disbursement is in the amount of $1,000,000
or more, the Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.03 that such payment be financed
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. If the Borrower fails to make such payment when
due, the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and such
Lender’s Pro Rata Share thereof. Promptly following receipt of such notice, each
Lender shall pay to the Administrative Agent its Pro Rata Share of the payment
then due from the Borrower, in the same manner as provided in Section 2.02 with
respect to Loans made by such Lender (and Section 2.02 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to such Issuing Bank the amounts so received by it from
the Lenders. Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the relevant Issuing Bank or, to the extent
that Lenders have made payments pursuant to this paragraph to reimburse such
Issuing Bank, to such Lenders and such Issuing Bank as their interests may
appear. Any payment made by a Lender pursuant to this paragraph to reimburse the
Issuing Bank of a Letter of Credit for any LC Disbursement (other than the
funding of ABR Loans as contemplated above) shall not constitute a Loan and
shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

 

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(f) The Borrower’s obligation to reimburse LC Disbursements as provided in
paragraph (e) 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 (i) any lack of
validity or enforceability of any Letter of Credit or this Agreement, or any
term or provision therein, (ii) any 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 Issuing Bank under a Letter of Credit against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit or
(iv) any 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 Administrative Agent nor any
Lender or Issuing Bank, nor any of their respective directors, officers,
employees or agents, 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 payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), 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 any technical term or
any consequence arising from any cause beyond the control of the applicable
Issuing Bank; provided, however, that the foregoing shall not excuse the Issuing
Bank of a Letter of Credit from liability to the Borrower to the extent of any
direct damages (as opposed to consequential 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 such Issuing Bank’s gross negligence
or willful misconduct. The parties hereto agree that, in the absence of gross
negligence or willful misconduct on the part of the Issuing Bank of a Letter of
Credit (as finally determined by a court of competent jurisdiction), such
Issuing Bank shall be deemed to have exercised reasonable care in each action
taken or not taken thereby in respect of such Letter of Credit. In furtherance
of the foregoing and without limiting the generality thereof, the parties agree
that, with respect to each document presented that appears on its face to be in
substantial compliance with the terms of a Letter of Credit, the applicable
Issuing Bank may, in its sole discretion, either accept and make payment upon
such document without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such document if such document is not in strict compliance with the terms
of such Letter of Credit.

(g) The Issuing Bank of a Letter of Credit shall, promptly following its receipt
of documents purporting to represent a demand for payment under such Letter of
Credit, examine all such documents. Such Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopier) of
such demand for payment and whether such Issuing Bank has made or will make an
LC Disbursement in respect thereof; provided, however, that any failure to give
or delay in giving such notice shall not relieve the Borrower of its obligation
to reimburse such Issuing Bank and the Lenders with respect to any such LC
Disbursement.

(h) If the Issuing Bank of a Letter of Credit shall make an LC Disbursement
under such Letter of Credit, then, unless the Borrower shall reimburse such LC
Disbursement in full on the date on which such LC Disbursement is made, the
unpaid amount thereof shall bear interest, for each day from and including the
date on which such LC Disbursement is made to but excluding the date on which
the Borrower reimburses such LC Disbursement, at the rate per

 

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annum then applicable to ABR Loans; provided, however, that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of
this Section, then Section 2.08 shall apply. Interest accrued pursuant to this
paragraph shall be for the account of such Issuing Bank, except that interest
accrued on or after the date of payment by any Lender pursuant to paragraph
(e) of this Section to reimburse such Issuing Bank shall be for the account of
such Lender to the extent of such payment.

(i) If any Event of Default shall occur and be continuing, then, on the Business
Day on which the Borrower receives notice from the Administrative Agent, at the
request of any Issuing Bank of an outstanding Letter of Credit or the Required
Lenders, demanding the deposit of cash collateral pursuant to this paragraph,
the Borrower shall deposit into an account with the Administrative Agent, in the
name of the Administrative Agent and for the benefit of the Issuing Banks and
the Lenders, an amount in cash equal to the total LC Exposure as of such date
plus any accrued and unpaid interest thereon; provided, however, 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 (g) or (h) of Article VII. Such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrower under the Loan Documents,
pursuant to documentation executed by the Borrower in form and substance
reasonably satisfactory to the Administrative Agent. The Administrative Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Such deposits may, at the option and sole
discretion of the Administrative Agent, be invested in one or more money-market
accounts, but such deposits shall not otherwise be invested or bear interest.
Interest or other profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Banks for LC Disbursements for which they have 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 total LC Exposure at
such time or be applied to satisfy other obligations of the Borrower under the
Loan Documents. If the Borrower is required to provide cash collateral hereunder
as a result of the occurrence of an Event of Default, the full amount of such
cash collateral (to the extent not applied as aforesaid) shall be returned to
the Borrower within three Business Days after all Events of Default have been
cured or waived. The Borrower hereby grants to the Administrative Agent a
security interest in all such accounts in the name of the Administrative Agent
and the cash collateral and investments held therein or pursuant thereto from
time to time, including any interest or other profits on any such investments,
to secure the obligations of the Borrower to the Administrative Agent, the
Issuing Banks and the Lenders under this Agreement and the other Loan Documents.

(j) In the event that any Letter of Credit remains outstanding on the Expiration
Date and has an expiration date thereafter, the Borrower shall either
(i) deposit into an account with the Administrative Agent an amount in cash
equal to the total LC Exposure as of such date with respect to such Letter of
Credit, to be held and applied as provided in Section 2.05(i), or (ii) enter
into an agreement with the Issuing Bank of such Letter of Credit (which such
Issuing Bank may do or not do in its sole and absolute discretion), effective as
of the Expiration Date, whereby such Letter of Credit shall thereafter be
governed by such agreement and shall cease to be governed by this Agreement,
whereupon all participations of the Lenders in such

 

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Letter of Credit shall automatically terminate; provided, however, that such
agreement, cessation and termination shall not affect the obligation of the
Borrower with respect to amounts accrued or owing at such time under the Loan
Documents with respect to such Letter of Credit. The provisions of this
paragraph shall apply to each Letter of Credit outstanding on the Expiration
Date and having an expiration date thereafter.

(k) Any Issuing Bank may be replaced at any time, or a Lender or other financial
institution may be added as an Issuing Bank, by written agreement between the
Borrower and the Administrative Agent; provided, however, that (i) each Issuing
Bank shall be either a Lender or another financial institution satisfactory to
the Administrative Agent, and (ii) without limiting the effect of the foregoing
clause (i), the Administrative Agent shall review any such proposed agreement
for form only and not with respect to the identity of any successor or
additional Issuing Bank or, if applicable, the identity of the Issuing Bank to
be replaced. The Administrative Agent shall notify the Lenders of any such
replacement or addition of an Issuing Bank. At the time any such replacement
shall become effective, the Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank pursuant to Section 2.06(b)(ii) and shall
return to such Issuing Bank each Letter of Credit issued by such Issuing Bank.
From and after the effective date of any such replacement or addition of an
Issuing Bank, (A) the successor or additional Issuing Bank shall have all of the
rights and obligations of an Issuing Bank under this Agreement with respect to
Letters of Credit to be issued by it on such effective date or thereafter, and
(B) references herein to “Issuing Bank” shall be deemed to refer to such
successor or additional Issuing Bank and/or to any previous Issuing Bank, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall continue to have all of the rights and obligations
of an Issuing Bank under this Agreement with respect to Letters of Credit issued
by it before such replacement, but such replaced Issuing Bank shall not be
required to issue additional Letters of Credit.

(l) Each “Letter of Credit” outstanding under the 2004 Credit Agreement on the
Closing Date shall automatically, without further action on the part of the
Borrower, the applicable Issuing Bank or any other person, be deemed to have
been issued under this Section 2.05 and shall be a Letter of Credit under this
Agreement for all purposes.

Section 2.06 Fees.

(a) The Borrower agrees to pay to each Lender, through the Administrative Agent,
on the first Business Day of January, April, July and October of each year and
on the date on which the Commitment of such Lender shall be reduced or
terminated as provided herein, a facility fee at the Applicable Rate (a
“Facility Fee”) on the daily amount of the Commitment of such Lender during the
preceding quarter (or shorter period commencing with the date hereof or ending
with the Expiration Date or the date on which the Commitment of such Lender
shall be reduced or terminated); provided, however, that no Lender shall be
entitled to receive any Facility Fee with respect to the unused portion of its
Commitment (i.e., its Commitment minus its Revolving Credit Exposure) for any
period during which that Lender is a Defaulting Lender (and the Borrower shall
not be required to pay any Facility Fee that it otherwise would have been
required to pay to that Lender with respect to the unused portion of its
Commitment). The Facility Fees shall accrue on each day at a rate per annum
equal to the Applicable Rate in effect on such day. All Facility Fees shall be
computed on the basis of a year of 365 or 366 days, as the

 

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case may be, and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The Facility Fee due to
each Lender shall commence to accrue on the date of this Agreement and shall
cease to accrue on the date on which the Commitment of such Lender shall be
terminated as provided herein.

(b) The Borrower agrees to pay (i) to the Administrative Agent for the account
of each Lender, a participation fee with respect to its participations in
Letters of Credit, which fee shall accrue at the Applicable Rate (an “LC
Participation Fee”) on the average daily amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the date of this Agreement to but excluding
the later of the date on which such Lender’s Commitment terminates and the date
on which such Lender ceases to have any LC Exposure, and (ii) to each Issuing
Bank, a fronting fee for Letters of Credit issued by such Issuing Bank, which
fee shall accrue at the rate of 0.20% per annum on the average daily amount of
such Issuing Bank’s Issuing Bank Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements of such Issuing Bank) during the
period from and including the date of this Agreement to but excluding the later
of the date of termination of the Commitments and the date on which there ceases
to be any Issuing Bank Exposure (with the calculation and payment of such fee to
be determined by such Issuing Bank and the Borrower). LC Participation Fees and
Letter of Credit fronting fees shall be payable quarterly in arrears on the
first Business Day of January, April, July and October of each year and on the
date on which the Commitments terminate as provided herein; provided, however,
that all such fees accruing after the date on which the Commitments terminate
shall be payable on demand. All LC Participation Fees and Letter of Credit
fronting fees shall be computed on the basis of a year of 365 or 366 days, as
the case may be, and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day) during the period in
question.

(c) The Borrower agrees to pay to the Administrative Agent, for its own account,
the fees separately agreed between the Administrative Agent and the Borrower.

(d) Once paid, none of the Fees shall be refundable under any circumstances.

Section 2.07 Interest on Loans.

(a) Subject to the provisions of Section 2.08, the Loans comprising each ABR
Borrowing shall bear interest at a rate per annum equal to the Alternate Base
Rate plus the Applicable Rate.

(b) Subject to the provisions of Section 2.08, the Loans comprising each
Eurodollar Borrowing shall bear interest at a rate per annum equal to the
Eurodollar Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.

(c) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement.

(d) Interest computed on the basis of the Alternate Base Rate (including
interest payable on overdue amounts under Section 2.08) shall be computed on the
basis of a year of 365 or 366 days, as the case may be, for the actual number of
days elapsed so long as the

 

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Reference Rate is the applicable rate for calculation of the Alternate Base
Rate, and on the basis of a year of 360 days for the actual number of days
elapsed so long as the Federal Funds Effective Rate is the applicable rate for
calculation of the Alternate Base Rate. Interest computed on the basis of the
Eurodollar Rate (including interest payable on overdue amounts under
Section 2.08) shall be computed on the basis of a year of 360 days for the
actual number of days elapsed.

(e) The applicable Alternate Base Rate or Eurodollar Rate for each Interest
Period or day within an Interest Period, as the case may be, shall be determined
by the Administrative Agent, and such determination shall be conclusive absent
manifest error.

Section 2.08 Default Interest. If the Borrower shall default in the payment of
the principal of or interest on any Loan or any other amount becoming due under
the Loan Documents, by acceleration or otherwise, the Borrower shall on demand
from time to time pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum equal to the Alternate Base Rate
plus the Applicable Rate plus 2% (except that the interest rate applicable to an
overdue amount of principal of a Eurodollar Borrowing that became due on a day
other than on the last day of the Interest Period applicable thereto shall, for
the period until the last day of such Interest Period, be equal to 2% above the
rate that would otherwise be applicable thereto during such Interest Period).

Section 2.09 Alternate Rate of Interest. In the event, and on each occasion,
that on the day two Business Days prior to the commencement of any Interest
Period for a Eurodollar Borrowing the Administrative Agent shall have in good
faith determined that dollar deposits in the principal amounts of the Loans
comprising such Borrowing are not generally available in the London interbank
market, or that the rates at which such dollar deposits are being offered will
not adequately and fairly reflect the cost to the majority in interest of the
Lenders of making or maintaining their Eurodollar Loans during such Interest
Period, or that reasonable means do not exist for ascertaining the Eurodollar
Rate, the Administrative Agent shall, as soon as practicable thereafter, give
notice of such determination to the Borrower and the Lenders. In the event of
any such determination, any request by the Borrower for a Eurodollar Borrowing
pursuant to Section 2.03 shall, until the Administrative Agent shall have
advised the Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.

Section 2.10 Termination, Reduction and Increase in Commitments.

(a) The Commitments shall automatically terminate on the Expiration Date.

(b) Upon at least three Business Days’ prior irrevocable notice to the
Administrative Agent, the Borrower may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the unused portion
of the Commitments; provided, however, that (i) each partial reduction of the
Commitments shall be in the aggregate amount of $5,000,000 or a higher
whole-integer multiple thereof, and (ii) the Borrower shall not terminate or
reduce the Commitments if, after giving effect to any concurrent prepayment of
the Loans in accordance with Section 2.11, the sum of the Revolving Credit
Exposures would exceed the total Commitments.

 

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(c) At any time following the date of this Agreement and prior to the Expiration
Date, the total Commitments may, at the option of the Borrower, be increased by
an aggregate amount not in excess of $100,000,000, either by newly establishing
or increasing Commitments of one or more persons that become Additional
Commitment Lenders pursuant to this Section 2.10(c); provided that (i) each such
Additional Commitment Lender shall be selected or approved by the Borrower and
shall be reasonably acceptable to the Administrative Agent and the Issuing
Banks, (ii) no Lender shall have an obligation to become such an Additional
Commitment Lender, (iii) no Default or Event of Default shall exist immediately
prior to or after the effective date of each such increase in the total
Commitments, (iv) the representations and warranties set forth in Article III
shall be true and correct in all material respects on and as of the effective
date of each such increase in the total Commitments with the same effect as if
made on and as of such date, except to the extent that such representations and
warranties expressly relate to an earlier date, (v) each such newly established
Commitment shall be in an amount equal to or greater than $5,000,000, (vi) each
increase in the total Commitments pursuant to this Section 2.10(c) shall be in
the aggregate amount of $10,000,000 or a whole-integer multiple of $5,000,000 in
excess thereof, (vii) the aggregate amount of increases in the total Commitments
pursuant to this Section 2.10(c) shall not exceed $100,000,000, and (viii) no
such newly established Commitment or increase in a Commitment shall become
effective unless and until (A) the Borrower, the Administrative Agent, the
Issuing Banks and the relevant Additional Commitment Lender shall have executed
and delivered an agreement substantially in the form of Exhibit D (a “Commitment
Increase Supplement”) with respect thereto, (B) such Additional Commitment
Lender, if not already a Lender, shall have delivered an Administrative
Questionnaire to the Administrative Agent, and (C) if the obligations of the
Borrower under this Agreement are then secured by the First Mortgage, the
Administrative Agent shall have received a substitute First Mortgage Bond in an
amount equal to the total Commitments after giving effect to the increase in the
total Commitments, together with a supplemental indenture, a bond delivery
agreement, mortgage title insurance, legal opinions and other certificates and
documents with respect thereto comparable to those delivered pursuant to
Section 4.02(a) with respect to the First Mortgage Bond issued under the First
Mortgage and delivered to the Administrative Agent on the Closing Date, in each
case in form and substance satisfactory to the Administrative Agent. Upon
compliance with the provisions of this Section 2.10(c), each Additional
Commitment Lender hereunder shall have the Commitment specified in its
Commitment Increase Supplement and, if not already a Lender, shall constitute a
“Lender” hereunder.

(d) On the effective date of each increase in the total Commitments pursuant to
Section 2.10(c), each relevant Additional Commitment Lender shall purchase, as
an assignment from each other Lender, the portion of such other Lender’s Loans,
unreimbursed LC Disbursements and participations in Letters of Credit
outstanding at such time such that, after giving effect to such assignments, the
respective aggregate amount of Loans, unreimbursed LC Disbursements and
participations in Letters of Credit of each Lender shall be equal to such
Lender’s Pro Rata Share of the aggregate Loans, unreimbursed LC Disbursements
and participations in Letters of Credit outstanding. The purchase price for the
Loans, unreimbursed LC Disbursements and participations in Letters of Credit so
assigned shall be the sum of (i) the principal amount of the Loans and
unreimbursed LC Disbursements so assigned plus the amount

 

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of accrued and unpaid interest thereon as of the date of assignment and (ii) the
amount of accrued and unpaid LC Participation Fees as of the date of assignment
on the participations in Letters of Credit so assigned. Each such Additional
Commitment Lender shall pay the aggregate purchase price payable by it to the
Administrative Agent on the effective date of the corresponding increase in the
total Commitments, and the Administrative Agent shall promptly forward to each
other Lender the portion thereof payable to it. Upon payment of such purchase
price, each other Lender shall be automatically deemed to have sold and made
such an assignment to each such Additional Commitment Lender and shall, to the
extent of the interest assigned, be released from its obligations under the Loan
Documents, and each such Additional Commitment Lender shall be automatically
deemed to have purchased and assumed such an assignment from each other Lender
and, if not already a Lender hereunder, shall be a party hereto and, to the
extent of the interest assigned, have the rights and obligations of a Lender
under the Loan Documents.

Section 2.11 Prepayment. The Borrower shall have the right at any time and from
time to time to prepay any Borrowing, in whole or in part, upon at least three
Business Days’ prior notice to the Administrative Agent, in the case of a
prepayment of a Eurodollar Borrowing, and upon at least one Business Day’s prior
notice, in the case of a prepayment of an ABR Borrowing; provided, however, that
each partial prepayment shall be in the amount of $1,000,000 or a higher
whole-integer multiple thereof. Each notice of prepayment shall specify the
prepayment date and the principal amount of each Borrowing (or portion thereof)
to be prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing by the amount stated therein on the date stated therein. All
prepayments under this Section 2.11 shall be subject to Section 2.14 but
otherwise without premium or penalty. All prepayments under this Section 2.11
shall be accompanied by accrued interest on the principal amount being prepaid
to (but excluding) the date of payment.

Section 2.12 Reserve Requirements; Change in Circumstances.

(a) Notwithstanding any other provision herein, if after the date of this
Agreement there is adopted any new law, rule or regulation or any change in
applicable law or regulation or in the interpretation, promulgation,
implementation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) which shall impose, modify or deem applicable any reserve,
special-deposit or similar requirement against assets of, deposits with or for
the account of or credit extended by any Lender or Issuing Bank (except any such
reserve requirement which is reflected in the Eurodollar Rate) or shall impose
on any Lender or Issuing Bank or on the London interbank market any other
condition affecting this Agreement, any Eurodollar Loan or any Letter of Credit
or participation therein, and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Loan,
to increase the cost to such Lender or Issuing Bank of participating in, issuing
or maintaining any Letter of Credit or to reduce the amount of any sum received
or receivable by such Lender or Issuing Bank hereunder or under any Notes
(whether of principal, interest or otherwise) by an amount deemed by such Lender
or Issuing Bank to be material, then the Borrower will pay to such Lender or
Issuing Bank upon demand such additional amount or amounts as will compensate
such Lender or Issuing Bank for such additional costs incurred or reduction
suffered.

 

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(b) If any Lender or Issuing Bank shall have determined that the applicability
of any law, rule, regulation, agreement or guideline adopted after the date
hereof regarding capital adequacy, or any change in any of the foregoing or the
adoption after the date hereof of any change in any law, rule, regulation,
agreement or guideline existing on the date hereof or in the interpretation or
administration of any of the foregoing by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by any Lender
or Issuing Bank (or any lending office thereof) or any Lender’s or Issuing
Bank’s holding company with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender’s or Issuing Bank’s capital or on the capital of such Lender’s or
Issuing Bank’s holding company, if any, with respect to this Agreement, any Loan
or any Letter of Credit or participation therein to a level below that which
such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company
could have achieved but for such applicability, adoption, change or compliance
(taking into consideration such Lender’s or Issuing Bank’s policies and the
policies of such Lender’s or Issuing Bank’s holding company with respect to
capital adequacy) by an amount deemed by such Lender or Issuing Bank to be
material, then from time to time the Borrower shall pay to such Lender or
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or Issuing Bank or such Lender’s or Issuing Bank’s
holding company for any such reduction suffered. It is acknowledged that this
Agreement is being entered into by the Lenders and the Issuing Banks on the
understanding that the Lenders and the Issuing Banks will not be required to
maintain capital against their obligations to make Loans or issue Letters of
Credit or purchase participations therein under currently applicable laws,
regulations and regulatory guidelines. In the event that any Lender or Issuing
Bank shall be advised by any Governmental Authority, or shall otherwise
determine on the basis of pronouncements of any Governmental Authority, that
such understanding is incorrect, it is agreed that each such Lender or Issuing
Bank will be entitled to make claims under this paragraph based upon market
requirements prevailing on the date hereof for commitments under comparable
credit facilities against which capital is required to be maintained.

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

(d) Failure on the part of any Lender or Issuing Bank to demand compensation for
any increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to any period shall not constitute a waiver of
such Lender’s or Issuing Bank’s right to demand compensation with respect to
such period or any other period. The protection of this Section shall be
available to each Lender and Issuing Bank regardless of any possible contention
of the invalidity or inapplicability of the law, rule, regulation, guideline or
other change or condition which shall have occurred or been imposed.

 

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(e) For purposes of this Agreement, notwithstanding anything in this Agreement
to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all rules, regulations, interpretations, agreements, guidelines, directives
and requests in connection therewith are deemed to have been adopted, and to
have gone into effect, after the date of this Agreement, regardless of the date
on which the same were actually adopted or went into effect.

Section 2.13 Change in Legality.

(a) Notwithstanding any other provision herein, if any change in, or adoption
of, any law or regulation or in the interpretation thereof by any Governmental
Authority charged with the administration or interpretation thereof shall make
it unlawful for any Lender to make or maintain any Eurodollar Loan or to give
effect to its obligations as contemplated hereby with respect to any Eurodollar
Loan, then, by notice to the Borrower and to the Administrative Agent, such
Lender may:

(i) declare that Eurodollar Loans will not thereafter be made by such Lender
hereunder, whereupon any request by the Borrower for a Eurodollar Borrowing
shall, as to such Lender only, be deemed a request for an ABR Loan unless such
declaration shall be subsequently withdrawn; and

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

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

(b) For purposes of this Section 2.13, a notice to the Borrower by any Lender
shall be effective as to each Eurodollar Loan, if lawful, on the last day of the
Interest Period currently applicable to such Eurodollar Loan.

Section 2.14 Indemnity. The Borrower shall indemnify each Lender against any
loss or expense which such Lender may sustain or incur as a consequence of
(a) any failure by the Borrower to fulfill on the date of any Eurodollar
Borrowing hereunder the applicable conditions set forth in Article IV, (b) any
failure by the Borrower to borrow any Eurodollar Loan hereunder after
irrevocable notice of such borrowing has been given or deemed given pursuant to
Section 2.03, (c) any payment or prepayment of a Eurodollar Loan required by any
provision of this Agreement or otherwise made or deemed made on a date other
than the last day of the Interest Period applicable thereto, (d) any assignment
of a Eurodollar Loan pursuant to Section 2.19(b) made or deemed made on a date
other than the last day of the Interest Period applicable thereto, or (e) any
default in payment or prepayment of the principal amount of any Eurodollar Loan
or any part thereof or interest accrued thereon, as and when due and payable (at
the due date

 

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thereof, whether by scheduled maturity, acceleration, irrevocable notice of
prepayment or otherwise) including, in each such case, any loss or reasonable
expense sustained or incurred or to be sustained or incurred in liquidating or
employing deposits from third parties acquired to effect or maintain such Loan
or any part thereof as a Eurodollar Loan. Such loss or reasonable expense shall
include an amount equal to the excess, if any, as reasonably determined by such
Lender, of (i) its cost of obtaining the funds for the Eurodollar Loan being
paid, prepaid, assigned or not borrowed (assumed to be the Eurodollar Rate
applicable thereto) for the period from the date of such payment, prepayment,
assignment or failure to borrow to the last day of the Interest Period for such
Loan (or, in the case of a failure to borrow, the Interest Period for such
Eurodollar Loan which would have commenced on the date of such failure) over
(ii) the amount of interest (as reasonably determined by such Lender) that would
be realized by such Lender in reemploying the funds so paid, prepaid, assigned
or not borrowed for such period or Interest Period, as the case may be. A
certificate of any Lender setting forth any amount or amounts which such Lender
is entitled to receive pursuant to this Section, and the manner in which such
Lender has determined the same, shall be delivered to the Borrower and shall be
conclusive absent manifest error.

Section 2.15 Pro Rata Treatment. Except as required under Sections 2.12, 2.14
and 2.18, each Borrowing, each payment or prepayment of principal of any
Borrowing or LC Disbursement, each payment of interest on the Loans or LC
Disbursements, each payment of the Fees, and each reduction of the Commitments
shall be allocated among the Lenders in accordance with their respective Pro
Rata Shares. Each Lender agrees that, in computing such Lender’s portion of any
Borrowing to be made hereunder, the Administrative Agent may, in its discretion,
round each Lender’s Pro Rata Share of such Borrowing to the next higher or lower
whole-dollar amount.

Section 2.16 Sharing of Setoffs. Each Lender agrees that if it shall, through
the exercise of a right of banker’s lien, setoff or counterclaim against the
Borrower, or pursuant to a secured claim under Section 506 of Title 11 of the
United States Code or other security or interest arising from, or in lieu of,
such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of its Loans or participations in
LC Disbursements as a result of which the unpaid principal portion of its Loans
or participations in LC Disbursements shall be proportionately less than the
unpaid principal portion of the Loans or participations in LC Disbursements of
any other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the Loans or participations in LC
Disbursements of such other Lender (“Sharing Participations”), so that (a) the
aggregate unpaid principal amount of the Loans, participations in LC
Disbursements and Sharing Participations held by each Lender shall be in the
same proportion to the aggregate unpaid principal amount of all Loans and LC
Disbursements then outstanding as (b) the principal amount of its Loans,
participations in LC Disbursements and Sharing Participations prior to such
exercise of banker’s lien, setoff or counterclaim or other event was to the
principal amount of all Loans and LC Disbursements outstanding prior to such
exercise of banker’s lien, setoff or counterclaim or other event; provided,
however, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the

 

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purchase price or prices or adjustment restored without interest. The Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in a Loan or in a participation in an LC Disbursement
deemed to have been so purchased may exercise any and all rights of banker’s
lien, setoff or counterclaim with respect to any and all moneys owing by the
Borrower to such Lender by reason thereof as fully as if such Lender had made a
Loan directly to the Borrower or had acquired a participation in an LC
Disbursement directly from the applicable Issuing Bank, as the case may be, in
the amount of such participation.

Section 2.17 Payments.

(a) The Borrower shall make each payment (including for principal of or interest
on any Borrowing, reimbursements of LC Disbursements, Fees and other amounts)
hereunder and under any other Loan Document not later than 9:00 a.m., Pacific
time, on the date when due in dollars to the Administrative Agent at its offices
at 445 South Figueroa Street, Los Angeles, California 90071, in immediately
available funds.

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

Section 2.18 Taxes.

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

 

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(a) than such Lender would have been entitled to receive with respect to the
rights assigned, participated or other wise transferred except to the extent
that such greater payment arises from circumstances not in existence at the time
such assignment, participation or transfer shall have been made.

(b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made under any Loan Document or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as “Other Taxes”).

(c) The Borrower will indemnify each Lender (or Transferee), each Issuing Bank
(or Transferee) and the Administrative Agent for the full amount of any Taxes
and Other Taxes paid by such Lender or Issuing Bank (or Transferee) or the
Administrative Agent, as the case may be, and any liability (including
penalties, interest and reasonable expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted by the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date any Lender or
Issuing Bank (or Transferee) or the Administrative Agent, as the case may be,
makes written demand therefor. If a Lender or Issuing Bank (or Transferee) or
the Administrative Agent shall become aware that it is entitled to receive a
refund in respect of Taxes or Other Taxes as to which it has been indemnified by
the Borrower pursuant to this Section 2.18, it shall promptly notify the
Borrower of the availability of such refund and shall, within 30 days after
receipt of a request by the Borrower, apply for such refund at the Borrower’s
expense.

(d) If any Lender or Issuing Bank (or Transferee) or the Administrative Agent
receives a refund in respect of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower pursuant to this Section 2.18, it shall promptly
notify the Borrower of such refund and shall repay such refund to the Borrower
(to the extent of amounts that have been paid by the Borrower under this
Section 2.18 with respect to such refund) within 30 days (or promptly upon
receipt, if the Borrower has requested application for such refund pursuant
hereto), net of all reasonable out-of-pocket expenses of such Lender or Issuing
Bank (or Transferee) and without interest (other than interest included in such
refund); provided that the Borrower, upon the request of such Lender or Issuing
Bank (or Transferee) or the Administrative Agent, agrees to return such refund
(plus penalties, interest or other charges) to such Lender or Issuing Bank (or
Transferee) or the Administrative Agent in the event such Lender or Issuing Bank
(or Transferee) or the Administrative Agent is required to repay such refund.
Nothing contained in this paragraph (d) shall require any Lender or Issuing Bank
(or Transferee) or the Administrative Agent to make available any of its tax
returns (or any other information relating to its taxes which it deems to be
confidential); provided that Borrower, at its expense, shall have the right to
receive an opinion from a firm of independent public accountants of recognized
national standing acceptable to the Borrower that the amount due hereunder is
correctly calculated.

(e) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld by the Borrower in respect of any payment to any Lender or Issuing Bank
(or Transferee) or the Administrative Agent, the Borrower will furnish to the
Administrative Agent, at its address referred to in Section 10.01, the original
or a certified copy of a receipt received by the Borrower evidencing payment
thereof.

 

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(f) Without prejudice to the survival of any other agreement contained herein,
the agreements and obligations contained in this Section 2.18 shall survive the
payment in full of the principal of and interest on all Loans made hereunder.

(g) On or prior to the execution of this Agreement and on or before the transfer
to a Transferee, the Administrative Agent shall notify the Borrower of each
Lender’s or Issuing Bank’s (or Transferee’s) address. On or prior to each
Lender’s or Issuing Bank’s (or Transferee’s) first Interest Payment Date, and
from time to time as required by law, each Lender or Issuing Bank (or
Transferee) that is not a United States person within the meaning of
Section 7701(a)(30) of the Code (a “Non-U.S. Person”) shall, if legally able to
do so, deliver to the Borrower and the Administrative Agent (i) one duly
completed and executed copy of United States Internal Revenue Service Form
W-8BEN or W-8ECI, (ii) if claiming exemption from United States Federal
withholding tax pursuant to Section 871(h) or 881(c) of the Code, one duly
completed and executed copy of a United States Internal Revenue
Service Form W-8BEN and a certificate representing that such Non-U.S. Person is
not a bank for purposes of Section 881(c) of the Code, is not a 10 percent
shareholder (within the meaning of Section 871(h)(3)(b) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code) or (iii) any successor
applicable form of any thereof, establishing in each case that such Lender or
Issuing Bank (or Transferee) is entitled to receive payments under the Loan
Documents payable to it without deduction or withholding of any United States
Federal income taxes, or is subject to a reduced rate thereof. Unless the
Borrower and the Administrative Agent have received forms or other documents
satisfactory to them indicating that such payments under the Loan Documents are
not subject to United States Federal withholding tax or are subject to such tax
at a rate reduced by an applicable tax treaty, the Borrower shall withhold taxes
from such payments at the applicable statutory rate.

(h) The Borrower shall not be required to pay any additional amounts to any
Lender or Issuing Bank (or Transferee) in respect of United States Federal
withholding tax pursuant to paragraph (a) above if the obligation to pay such
additional amounts would not have arisen but for a failure by such Lender or
Issuing Bank (or Transferee) to comply with the provisions of paragraph
(g) above; provided, however, that the Borrower shall be required to pay those
amounts to any Lender or Issuing Bank (or Transferee) that it was required to
pay hereunder prior to the failure of such Lender or Issuing Bank (or
Transferee) to comply with the provisions of such paragraph (g).

Section 2.19 Termination or Assignment of Commitments under Certain
Circumstances.

(a) Any Lender or Issuing Bank (or Transferee) claiming any additional amounts
payable pursuant to Section 2.12 or 2.18 or exercising its rights under
Section 2.13 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested by the Borrower or
to change the jurisdiction of its applicable lending office if the making of
such a filing or change would avoid the need for or reduce the amount of any
such additional amounts which may thereafter accrue or avoid the circumstances
giving rise to such exercise and would not, in the sole determination of such
Lender or Issuing Bank (or Transferee), be otherwise disadvantageous to such
Lender or Issuing Bank (or Transferee).

 

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(b) In the event that any Lender shall have delivered a notice or certificate
pursuant to Section 2.13, or the Borrower shall be required to make additional
payments under Section 2.12 or 2.18 to any Lender or Issuing Bank (or
Transferee) or to the Administrative Agent with respect to any Lender or Issuing
Bank (or Transferee), the Borrower shall have the right, at its own expense,
upon notice to such Lender or Issuing Bank (or Transferee) and the
Administrative Agent (and, if a Commitment is being terminated or assigned, the
Issuing Banks), (i) to terminate the Commitment of such Lender or Issuing Bank
(or Transferee) or (ii) to require such Lender or Issuing Bank (or Transferee)
to transfer and assign without recourse (in accordance with and subject to the
restrictions contained in Section 10.04) all its interests, rights and
obligations under the Loan Documents to another financial institution which
shall assume such obligations; provided that (A) no such termination or
assignment shall conflict with any law, rule or regulation or order of any
Governmental Authority and (B) the Borrower or the assignee, as the case may be,
shall pay to the affected Lender or Issuing Bank (or Transferee) in immediately
available funds on the date of such termination or assignment the principal of
and interest accrued to the date of payment on the Loans made by it hereunder
and all other amounts accrued for its account and owed to it under the Loan
Documents and, in the case of a termination or assignment by an Issuing Bank,
shall cause all Letters of Credit issued by such Issuing Bank to be surrendered
for cancellation on or prior to the date of such termination or assignment.

Section 2.20 Extension of Expiration Date.

(a) If no Event of Default has occurred and is continuing, the Borrower may
request, by simultaneous notice to the Administrative Agent and each Lender
given no later than 60 days before the Expiration Date applicable on the date of
such notice (the “Current Expiration Date”), that the Lenders extend their
respective Commitments for an additional period of one year or two years (the
“Requested Extension Period”). If a Lender agrees, in its sole and absolute
discretion, to so extend its Commitment, it will give notice to the
Administrative Agent of its decision to do so within 30 days after the
Borrower’s delivery of notice to the Administrative Agent and the Lenders
requesting extension of the Current Expiration Date. Promptly after expiration
of such 30-day period, the Administrative Agent will notify the Borrower and
each Lender as to the Lenders (each an “Extending Lender”) from which it has
received such a notice agreeing to so extend. Any failure by a Lender to so
notify the Administrative Agent shall be deemed to be a decision by such Lender
not to so extend its Commitment.

(b) If all Lenders elect to so extend their respective Commitments, and provided
that the additional conditions specified in Section 4.03 shall have been
satisfied, then on the Current Expiration Date the Expiration Date shall
automatically be extended by a period equal to the Requested Extension Period.

(c) If, at the time the Administrative Agent gives the notice contemplated by
Section 2.20(a) to the Borrower and the Lenders, the Commitments of the
Extending Lenders aggregate at least 66-2/3%, but less than 100%, of the
Commitments of all of the Lenders at such

 

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time (the “Existing Commitments”), then, notwithstanding anything in
Section 10.08(b) to the contrary, (i) as to each Extending Lender, on the
Current Expiration Date the Expiration Date shall automatically be extended by a
period equal to the Requested Extension Period, provided that the additional
conditions specified in Section 4.03 shall have been satisfied, (ii) the
Expiration Date shall remain unchanged as to each Lender that is not an
Extending Lender (each a “Terminating Lender”), (iii) each Terminating Lender’s
Commitment shall terminate on the Current Expiration Date, and (iv) on the
Current Expiration Date the Borrower shall (A) pay the outstanding Loans owed to
each Terminating Lender and all other amounts owed to each Terminating Lender
and (B) deposit into an account with the Administrative Agent an amount in cash
equal to the aggregate LC Exposure of the Terminating Lenders plus any accrued
and unpaid interest thereon, to be held and applied as provided in
Section 2.05(i). If, at the time the Administrative Agent gives the notice
contemplated by Section 2.20(a) to the Borrower and the Lenders, the Commitments
of the Extending Lenders aggregate less than 66-2/3% of the Existing
Commitments, then none of the Commitments (including the Commitment of any
Extending Lender) shall be extended, and the Expiration Date shall remain
unchanged.

(d) The Borrower may undertake the process contemplated by this Section 2.20
only once for a Requested Extension Period of two years or up to twice for
Requested Extension Periods of one year each.

(e) If, at any time that the Administrative Agent gives a notice contemplated by
Section 2.20(a) to the Borrower and the Lenders, the Commitments of the
Extending Lenders aggregate at least 66 2/3% but less than 100% of the then
Existing Commitments, the Borrower shall have the right to replace the
Commitments of the Terminating Lenders by either newly establishing or
increasing Commitments of one or more persons that become Additional Commitment
Lenders pursuant to this Section 2.20(e); provided that (i) each such Additional
Commitment Lender shall be selected or approved by the Borrower and shall be
reasonably acceptable to the Administrative Agent and the Issuing Banks, (ii) no
Extending Lender shall have an obligation to become such an Additional
Commitment Lender, (iii) the additional conditions specified in Section 4.03
shall have been satisfied, (iv) each such newly established Commitment shall be
in an amount equal to or greater than $5,000,000, (v) the aggregate of such
newly established Commitments and increases in Commitments shall not exceed the
aggregate Commitments of the Terminating Lenders, and (vi) no such newly
established Commitment or increase in a Commitment shall become effective unless
and until (A) the Borrower, the Administrative Agent, the Issuing Banks and the
relevant Additional Commitment Lender shall have executed and delivered an
agreement substantially in the form of Exhibit E (a “Commitment Extension
Supplement”) with respect thereto, in each case in form and substance
satisfactory to the Administrative Agent, and (B) such Additional Commitment
Lender, if not already a Lender, shall have delivered an Administrative
Questionnaire to the Administrative Agent. Upon compliance with the provisions
of this Section 2.20(e), each Additional Commitment Lender hereunder shall have
the Commitment specified in its Commitment Extension Supplement and, if not
already a Lender, shall constitute a “Lender” hereunder.

(f) On the effective date of each replacement of all or a portion of one or more
Commitments of Terminating Lenders pursuant to Section 2.20(e), each relevant
Additional Commitment Lender shall purchase, as an assignment from each other
Lender, the portion of such other Lender’s Loans, unreimbursed LC Disbursements
and participations in

 

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Letters of Credit outstanding at such time such that, after giving effect to
such assignments, the respective aggregate amount of Loans, unreimbursed LC
Disbursements and participations in Letters of Credit of each Lender shall be
equal to such Lender’s Pro Rata Share of the aggregate Loans, unreimbursed LC
Disbursements and participations in Letters of Credit outstanding. The purchase
price for the Loans, unreimbursed LC Disbursements and participations in Letters
of Credit so assigned shall be the sum of (i) the principal amount of the Loans
and unreimbursed LC Disbursements so assigned plus the amount of accrued and
unpaid interest thereon as of the date of assignment and (ii) the amount of
accrued and unpaid LC Participation Fees as of the date of assignment on the
participations in Letters of Credit so assigned. Each such Additional Commitment
Lender shall pay the aggregate purchase price payable by it to the
Administrative Agent on the effective date of the corresponding replacement of
all or a portion of one or more Commitments of Terminating Lenders, and the
Administrative Agent shall promptly forward to each other Lender the portion
thereof payable to it. Upon payment of such purchase price, each other Lender
shall be automatically deemed to have sold and made such an assignment to each
such Additional Commitment Lender and shall, to the extent of the interest
assigned, be released from its obligations under the Loan Documents, and each
such Additional Commitment Lender shall be automatically deemed to have
purchased and assumed such an assignment from each other Lender and, if not
already a Lender hereunder, shall be a party hereto and, to the extent of the
interest assigned, have the rights and obligations of a Lender under the Loan
Documents.

Section 2.21 Defaulting Lenders.

(a) If any Letters of Credit are outstanding at the time a Lender becomes a
Defaulting Lender, and the Commitments have not been terminated in accordance
with Article VII, then:

(i) so long as no Default or Event of Default has occurred and is continuing,
all or any part of the LC Exposure of such Defaulting Lender shall be
reallocated among the Lenders that are not Defaulting Lenders (“non-Defaulting
Lenders”) in accordance with their respective Pro Rata Shares (disregarding any
Defaulting Lender’s Commitment), but only to the extent that the sum of (A) the
aggregate principal amount of all Loans made by such non-Defaulting Lenders and
outstanding at such time, plus (B) the aggregate amount of such non-Defaulting
Lenders’ LC Exposures (before giving effect to the reallocation contemplated
herein), plus (C) such Defaulting Lender’s LC Exposure does not exceed the total
of all non-Defaulting Lenders’ Commitments, and in no event shall the sum of the
aggregate principal amount of all Loans made by a non-Defaulting Lender plus its
LC Exposure after giving effect to the reallocation described in this clause
(i) exceed such non-Defaulting Lender’s Commitment;

(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall, within one Business Day following
notice by any Issuing Bank, cash-collateralize such Defaulting Lender’s LC
Exposure (after giving effect to any partial reallocation pursuant to clause
(i) above) by providing cash collateral to such Issuing Bank in accordance with
Section 2.05(i); provided, however, that, so long as no Default or Event of
Default has occurred and is continuing, such cash collateral shall be released
promptly upon the earliest of (A) the full reallocation of the LC Exposure among
non-Defaulting Lenders in accordance with clause (i) above, (B) the termination
of the Defaulting Lender status of the applicable Lender and (C) such Issuing
Bank’s good-faith determination that there exists excess cash collateral (in
which case, the amount equal to such excess cash collateral shall be released);

 

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(iii) if and to the extent that the LC Exposures of the non-Defaulting Lenders
are reallocated pursuant to this Section 2.21(a), then the LC Participation Fees
payable to the Lenders pursuant to Section 2.06(b) shall be adjusted in
accordance with such non-Defaulting Lenders’ reallocated percentage of the total
LC Exposure; or

(iv) if and to the extent that any Defaulting Lender’s LC Exposure is neither
reallocated nor cash-collateralized pursuant to this Section 2.21(a), then,
without prejudice to any other rights or remedies of any Issuing Bank or any
Lender hereunder, all LC Participation Fees payable under Section 2.06(b) with
respect to such Defaulting Lender’s LC Exposure shall be payable to the
applicable Issuing Bank until such Defaulting Lender’s LC Exposure is fully
reallocated and/or cash-collateralized.

(b) So long as any Lender is a Defaulting Lender, no Issuing Bank shall be
required to issue, renew, extend or otherwise amend any Letter of Credit unless
it is satisfied that (i) its exposure in respect of all outstanding Letters of
Credit is fully covered by the Commitments of non-Defaulting Lenders and/or cash
collateral provided by the Borrower in accordance with Section 2.21(a), and
(ii) participating interests in any such newly issued or increased Letter of
Credit will be allocated among non-Defaulting Lenders and/or cash-collateralized
in a manner consistent with Section 2.21(a) (and Defaulting Lenders shall not
participate therein).

(c) No Commitment of any Lender shall be increased or otherwise affected, and,
except as otherwise expressly provided in this Section 2.21, the performance by
the Borrower of its obligations under this Agreement shall not be excused or
otherwise modified, as a result of the operation of this Section 2.21. The
rights and remedies against a Defaulting Lender under this Section 2.21 are in
addition to any other rights and remedies that the Borrower, the Administrative
Agent, any Issuing Bank or any Lender might have against such Defaulting Lender.
The failure of any Lender to perform its obligations under this Agreement shall
not excuse or relieve any other Lender or any Issuing Bank of its obligations
under this Agreement, and no Lender or Issuing Bank shall be responsible for the
default of any other Lender or Issuing Bank except to the extent expressly
provided herein.

(d) If the Borrower, the Administrative Agent and each Issuing Bank agree in
writing, in their reasonable determination, that a Lender should no longer be
deemed to be a Defaulting Lender, the Administrative Agent will so notify the
other parties hereto, whereupon as of the effective date specified in such
notice and subject to any conditions set forth therein (which may include
arrangements with respect to cash collateral), that Lender will purchase such
portion of outstanding Loans of the other Lenders and/or participations of the
other Lenders in outstanding Letters of Credit, and take such other actions, as
the Administrative Agent may determine to be necessary to cause the Loans and
funded and unfunded participations in Letters of Credit to be held on a pro rata
basis by the Lenders in accordance with their Pro Rata Shares (without giving
effect to Section 2.21(a)), whereupon such Lender will cease to be a Defaulting
Lender; provided, however, that (i) no adjustments will be made retroactively
with respect to fees accrued or payments made by or on behalf of the Borrower
while that Lender was a

 

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Defaulting Lender, and (ii) except to the extent expressly agreed otherwise by
the affected parties, no change hereunder from Defaulting Lender to Lender will
constitute a waiver or release of any claim of any party hereunder arising from
such Lender’s having been a Defaulting Lender.

(e) Notwithstanding anything to the contrary contained in this Agreement, any
payment of principal, interest, Facility Fees (with respect to the used portion
of a Defaulting Lender’s Commitment), LC Participation Fees or other amounts
received by the Administrative Agent for the account of any Defaulting Lender
under this Agreement (whether voluntary or mandatory, at maturity, pursuant to
Article VII or otherwise) shall be applied at such time or times as may be
determined by the Administrative Agent as follows: first, to the payment of any
amounts owing by such Defaulting Lender to the Administrative Agent hereunder;
second, to the payment on a pro rata basis of any amounts owing by such
Defaulting Lender to any Issuing Banks hereunder; third, if so determined by the
Administrative Agent or requested by any Issuing Bank, to be held as cash
collateral for future funding obligations of such Defaulting Lender in respect
of any participation in any Letter of Credit; fourth, as the Borrower may
request (so long as no Default or Event of Default exists), to the funding of
any Loan in respect of which that Defaulting Lender has failed to fund its
portion as required by this Agreement, as determined by the Administrative
Agent; fifth, if so determined by the Administrative Agent and the Borrower, to
be held as cash collateral and released in order to satisfy obligations of such
Defaulting Lender to fund Loans under this Agreement; sixth, to the payment of
any amount owing to any Lender or Issuing Bank as a result of any judgment of a
court of competent jurisdiction obtained by such Lender or Issuing Bank against
such Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement; seventh, so long as no Default or Event of
Default exists, to the payment of any amounts owing to the Borrower as a result
of any judgment of a court of competent jurisdiction obtained by the Borrower
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; and eighth, to such Defaulting Lender or
as otherwise directed by a court of competent jurisdiction; provided, however,
that if (i) any such payment is a payment of the principal amount of any Loan in
respect of which such Defaulting Lender has not fully funded its appropriate
share, and (ii) such Loan was made or the related Letter of Credit was issued at
a time when the applicable conditions set forth in Article IV were satisfied or
waived, then such payment shall be applied solely to repay the Loans of all
non-Defaulting Lenders on a pro rata basis prior to being applied to the
repayment of any Loan or portion thereof of such Defaulting Lender; and further
provided, however, that any amounts held as cash collateral for funding
obligations of a Defaulting Lender shall be returned to such Defaulting Lender
upon the termination of this Agreement and the satisfaction of such Defaulting
Lender’s obligations hereunder. Any payments, prepayments or other amounts paid
or payable to a Defaulting Lender that are applied (or held) to pay amounts owed
by a Defaulting Lender or to post cash collateral pursuant to this Section 2.21
shall be deemed to have been paid to and redirected by such Defaulting Lender,
and each Lender irrevocably consents thereto.

(f) Upon any Lender becoming a Defaulting Lender, the Borrower may remove and
replace such Lender in accordance with Section 9.08.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to each of the Lenders and Issuing Banks
that:

Section 3.01 Organization; Powers. Each of the Borrower and the Significant
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, (c) is qualified to
do business in every jurisdiction where such qualification is required, except
where the failure so to qualify would not result in a Material Adverse Effect,
and (d) in the case of the Borrower, has the corporate power and authority to
execute, deliver and perform its obligations under each of the Loan Documents
and each other agreement or instrument contemplated thereby to which it is or
will be a party and to borrow hereunder.

Section 3.02 Authorization. The execution, delivery and performance by the
Borrower of each of the Loan Documents, and the Borrowings and procurement of
Letters of Credit hereunder (collectively, the “Transactions”), (a) have been
duly authorized by all requisite corporate and, if required, stockholder action
and (b) will not (i) violate (A) any provision of law, statute, rule or
regulation the violation of which could reasonably be expected to impair the
validity and enforceability of this Agreement or any other Loan Document or
materially impair the rights of or benefits available to the Lenders or the
Issuing Banks under the Loan Documents, or of the certificate or articles of
incorporation or other constitutive documents or bylaws of the Borrower or any
Significant Subsidiary, (B) any order of any Governmental Authority the
violation of which could reasonably be expected to impair the validity or
enforceability of this Agreement or any other Loan Document, or materially
impair the rights of or benefits available to the Lenders or the Issuing Banks
under the Loan Documents, or (C) any provision of any indenture or other
material agreement or instrument evidencing or relating to borrowed money to
which the Borrower or any Significant Subsidiary is a party or by which any of
them or any of their property is or may be bound in a manner which could
reasonably be expected to impair the validity and enforceability of this
Agreement or any other Loan Document or materially impair the rights of or
benefits available to the Lenders or the Issuing Banks under the Loan Documents,
(ii) be in conflict with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument in a manner which could reasonably be expected to impair the
validity and enforceability of this Agreement or any other Loan Document or
materially impair the rights of or benefits available to the Lenders or the
Issuing Banks under the Loan Documents or (iii) result in the creation or
imposition under any such indenture, agreement or other instrument of any Lien
upon or with respect to any property or assets now owned or hereafter acquired
by the Borrower.

Section 3.03 Enforceability. This Agreement has been duly executed and delivered
by the Borrower and constitutes, and each other Loan Document when executed and
delivered by the Borrower will constitute, a legal, valid and binding obligation
of the Borrower enforceable against the Borrower in accordance with its terms.

Section 3.04 Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except such as have
been made or obtained and are in full force and effect.

 

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Section 3.05 Financial Statements. The Borrower has heretofore furnished to the
Lenders and the Issuing Banks its (a) consolidated balance sheets and statements
of income and statements of cash flow as of and for the fiscal year ended
December 31, 2009, audited by and accompanied by the opinion of Deloitte &
Touche LLP, independent public accountants, and (b) unaudited consolidated
balance sheets and statements of income and statements of cash flow as of and
for the fiscal quarter ended September 30, 2010, certified by a Financial
Officer of the Borrower. All such financial statements present fairly the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods. Such balance
sheets and the notes thereto, together with the Borrower’s Annual Report on Form
10-K for the fiscal year ended December 31, 2009, reflect all liabilities,
direct or contingent, of the Borrower and its consolidated Subsidiaries as of
the dates thereof which are material on a consolidated basis. Such financial
statements were prepared in accordance with GAAP applied (except as noted
therein) on a consistent basis.

Section 3.06 No Material Adverse Change. Except as disclosed in the Borrower’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2009 and in
any document filed after December 31, 2009, but prior to the date of this
Agreement, pursuant to Section 13(a), 14 or 15(d) of the Securities Exchange Act
of 1934, there has been no change in the business, assets, operations or
financial condition of the Borrower and the Subsidiaries, taken as a whole,
since December 31, 2009, which could reasonably be expected to have a Material
Adverse Effect. For the avoidance of doubt, the representation set forth in this
Section 3.06 is and will be made solely at and as of the Closing Date, at and as
of the effective date of any increase in the Commitments pursuant to
Section 2.10(c) and at and as of the effective date of any extension of the
Expiration Date pursuant to Section 2.20.

Section 3.07 Litigation; Compliance with Laws.

(a) Except as set forth in the Annual Report of the Borrower on Form 10-K for
the year ended December 31, 2009, or in any document filed after December 31,
2009, but prior to the date of this Agreement pursuant to Section 13(a), 14 or
15(d) of the Securities Exchange Act of 1934, there are not any actions, suits
or proceedings at law or in equity or by or before any Governmental Authority
now pending or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or any Subsidiary or any business, property or rights of
any such person (i) which involve any Loan Document or the Transactions or
(ii) which could reasonably be anticipated, individually or in the aggregate, to
result in a Material Adverse Effect.

(b) Neither the Borrower nor any of the Subsidiaries is in violation of any law,
rule or regulation, or in default with respect to any judgment, writ, injunction
or decree of any Governmental Authority, where such violation or default would
be reasonably likely to result in a Material Adverse Effect.

 

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Section 3.08 Federal Reserve Regulations.

(a) Neither the Borrower nor any of the Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.

(b) No part of the proceeds of any Loan or Letter of Credit will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to purchase or carry Margin Stock or to extend credit to others
for the purpose of purchasing or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose, or (ii) for any purpose which entails a
violation of, or which is inconsistent with, the provisions of the Regulations
of the Board, including Regulation U or X.

Section 3.09 Investment Company Act. The Borrower is not an “investment company”
as defined in, or subject to regulation under, the Investment Company Act of
1940.

Section 3.10 No Material Misstatements. No information, report, financial
statement, exhibit or schedule furnished by or on behalf of the Borrower to the
Administrative Agent, any Lender or any Issuing Bank in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto contained, contains or will contain any material misstatement of fact
or, when considered together with all reports theretofore filed with the
Securities and Exchange Commission, omitted, omits or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading.

Section 3.11 Employee Benefit Plans. Each of the Borrower and its ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the regulations and published interpretations
thereunder. No Reportable Event has occurred as to which the Borrower or any
ERISA Affiliate was required to file a report with the PBGC. The value of the
assets of each Plan is at least 80% of the “funding target” (as defined in Code
Section 430(d)(1)) of such Plan as of the last annual valuation date applicable
thereto.

Section 3.12 Environmental and Safety Matters. Each of the Borrower and the
Subsidiaries has complied with all Federal, state, local and other statutes,
ordinances, orders, judgments, rulings and regulations relating to environmental
pollution or to environmental or nuclear regulation or control or to employee
health or safety, except where noncompliance would not be reasonably likely to
result in a Material Adverse Effect. Neither the Borrower nor any Subsidiary has
received notice of any failure so to comply, except where noncompliance would
not be reasonably likely to result in a Material Adverse Effect. The Borrower’s
and the Subsidiaries’ plants do not manage any hazardous wastes, hazardous
substances, hazardous materials, toxic substances, toxic pollutants or
substances similarly denominated, as those terms or similar terms are used in
the Resource Conservation and Recovery Act, the Comprehensive Environmental
Response Compensation and Liability Act, the Hazardous Materials Transportation
Act, the Toxic Substance Control Act, the Clean Air Act, the Clean Water Act or
any other applicable law relating to environmental pollution or employee health
and safety, or any nuclear fuel or other radioactive materials, in all cases in
violation of any law or any regulations promulgated pursuant thereto, where such
violation would be reasonably likely to

 

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result in a Material Adverse Effect. The Borrower is aware of no events,
conditions or circumstances involving environmental pollution or contamination
or employee health or safety that could reasonably be expected to result in a
Material Adverse Effect. The representations and warranties set forth in this
Section 3.12 are, however, subject to any matters, circumstances or events set
forth in the Borrower’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2009 and in any document filed after December 31, 2009, but prior
to the date of this Agreement pursuant to Section 13(a), 14 or 15(d) of the
Securities Exchange Act of 1934; provided, however, that the inclusion of such
matters, circumstances or events as exceptions (or any other exceptions
contained in the representations and warranties which refer to the Borrower’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2009 or in any
document filed after December 31, 2009, but prior to the date of this Agreement
pursuant to Section 13(a), 14 or 15(d) of the Securities Exchange Act of 1934)
shall not be construed to mean that the Borrower has concluded that any such
matter, circumstance or effect is likely to result in a Material Adverse Effect.

Section 3.13 Significant Subsidiaries. Schedule 3.13 sets forth as of the date
hereof a list of all Significant Subsidiaries of the Borrower and the percentage
ownership interest of the Borrower therein.

ARTICLE IV

CONDITIONS TO BORROWINGS, LETTERS OF CREDIT AND EXTENSIONS

Section 4.01 All Borrowings and Letters of Credit. The obligations of the
Lenders to make Loans on the date of each Borrowing (including the first
Borrowing under this Agreement and each Borrowing in which Loans are refinanced
with new Loans as contemplated by Section 2.02(e) or LC Disbursements are
refinanced with Loans as contemplated by Section 2.05(e)), and the obligations
of the Issuing Banks to issue, renew, extend or otherwise amend Letters of
Credit (including the first issuance of a Letter of Credit under this Agreement
(including pursuant to Section 2.05(l)), are subject to the satisfaction of the
following conditions:

(a) The Administrative Agent shall have received (i) in the case of a Borrowing,
a notice of such Borrowing as required by Section 2.03 and (ii) in the case of
the issuance, renewal, extension or other amendment of a Letter of Credit, a
notice requesting the same and any letter of credit application as required by
Section 2.05; provided, however, that no such notice shall be required in
respect of a Letter of Credit deemed to be issued pursuant to Section 2.05(l).

(b) The representations and warranties set forth in Article III hereof
(excluding (i) in the case of each Borrowing (including each Borrowing in which
Loans or LC Disbursements are refinanced with new Loans) after the Closing Date
and each issuance, renewal, extension or other amendment of a Letter of Credit
after the Closing Date, the representation set forth in Section 3.06 and (ii) in
the case of each refinancing of Loans or LC Disbursements and each issuance,
renewal, extension or other amendment of a Letter of Credit, in each case if the
same does not increase the Revolving Credit Exposure of any Lender, the
representations set forth in Section 3.07) shall be true and correct in all
material respects on and as of the date of such Borrowing or the date of such
issuance, renewal, extension or other amendment of a Letter of Credit, with the
same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.

 

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

Each Borrowing and each issuance, renewal, extension or other amendment 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
(b) and (c) of this Section 4.01.

Section 4.02 First Borrowing or Letter of Credit. The obligations of the Lenders
to make Loans on the date of the first Borrowing under this Agreement, and the
obligation of each Issuing Bank to issue its first Letter of Credit under this
Agreement (including pursuant to Section 2.05(l)), are subject to the
satisfaction of the following conditions:

(a) The Administrative Agent shall have received each of the following, in form
and substance satisfactory to it:

(i) Opinions of Davis Wright Tremaine LLP, counsel to the Borrower, Hawley
Troxell Ennis & Hawley LLP, Idaho counsel to the Borrower, and Crowley Fleck
PLLP, Montana counsel to the Borrower (or such other firm or firms approved by
the Administrative Agent), each dated the date of this Agreement and addressed
to the Administrative Agent, the Lenders and the Issuing Banks (or, in the case
of the latter two opinions, addressed to Davis Wright Tremaine LLP), with
respect to such matters relating to the Borrower and the Loan Documents as the
Administrative Agent or any Lender or Issuing Bank may reasonably request. The
Borrower hereby instructs such counsel to deliver such opinion to the
Administrative Agent.

(ii) Evidence satisfactory to the Administrative Agent and set forth on Schedule
4.02(a)(ii) that the Borrower shall have obtained all consents and approvals of,
and shall have made all filings and registrations with, any Governmental
Authority required in order to consummate the Transactions, in each case without
the imposition of any condition which, in the judgment of the Lenders or the
Issuing Banks, could adversely affect their rights or interests under the Loan
Documents.

(iii) A copy of the certificate or articles of incorporation of the Borrower (as
most recently amended and restated), including all amendments thereto, certified
as of a recent date by the Secretary of State of the State of Washington, and a
certificate as to the good standing of the Borrower as of a recent date, from
such Secretary of State.

(iv) A certificate of the Secretary or Assistant Secretary of the Borrower dated
the date of this Agreement and certifying (A) that attached thereto is a true
and complete copy of the restated articles of incorporation and the bylaws of
the Borrower as in effect on the date of this Agreement and at all times since a
date prior to the date of the resolutions described in clause (B) below,
(B) that attached thereto is a true and complete copy of resolutions duly
adopted by the board of directors of the Borrower authorizing the execution,

 

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delivery and performance of the Loan Documents and borrowings and procurement of
Letters of Credit hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the certificate
or articles of incorporation of the Borrower have not been amended since the
date of the last amendment thereto shown on the certification with respect
thereto furnished pursuant to clause (iii) above, and (D) as to the incumbency
and specimen signature of each officer executing any Loan Document or any other
document delivered in connection therewith on behalf of the Borrower.

(v) A certificate of another officer of the Borrower as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (iv) above.

(vi) A certificate, dated the date of this Agreement and signed by a Financial
Officer of the Borrower, confirming compliance with the conditions precedent set
forth in paragraphs (b) and (c) of Section 4.01.

(vii) This Agreement, the Supplemental Indenture, the Bond Delivery Agreement,
the First Mortgage Bond and any Notes requested by the Lenders for issuance on
the date of this Agreement, duly executed and delivered by all parties thereto,
together with a copy of the bond application (including all attachments thereto)
relating to the First Mortgage Bond.

(viii) A copy of the First Mortgage, certified by a Financial Officer of the
Borrower.

(ix) A copy of title insurance policy No. NSL 31426-SEA issued by First American
Title Insurance Company, together with copies of all endorsements thereto
(including an endorsement extending the coverage of such policy to the
Supplemental Indenture and the First Mortgage Bond), naming the trustee under
the First Mortgage as the insured, insuring the Borrower’s title to the real
property subject to the Lien of the First Mortgage, and the validity and first
priority of the Lien of the First Mortgage (subject to Liens permitted to exist
by the terms of the First Mortgage), in an amount not less than $785,000,000,
certified by a Financial Officer of the Borrower.

(x) A letter agreement between the Borrower and Union Bank concerning the fees
payable pursuant to Section 2.06(c), duly executed and delivered by the
Borrower.

(xi) Letter agreements between the Borrower and each Issuing Bank concerning
such Issuing Bank’s maximum Issuing Bank Exposure, duly executed and delivered
by all parties thereto.

(xii) A Funds Transfer Agreement between Union Bank and the Borrower (including
a related Funds Transfer Authorization and Master Repetitive Wire Instruction
referring to said Agreement), substantially in Union Bank’s usual form, duly
executed and delivered by the Borrower.

(xiii) Such other documents as the Administrative Agent, any Lender, any Issuing
Bank or legal counsel to any of the foregoing may reasonably request.

 

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(b) All fees payable by the Borrower to the Administrative Agent, the “Co-Lead
Arrangers” identified on the cover page of this Agreement, the Issuing Banks,
the Lenders or any of their respective Affiliates on or prior to the date of
this Agreement with respect to this Agreement, and all amounts payable by the
Borrower pursuant to Section 10.05 for which invoices have been delivered to the
Borrower on or prior to such date, shall have been paid in full or arrangements
satisfactory to the Administrative Agent shall have been made to cause them to
be paid in full concurrently with the disbursement of the proceeds of any
Borrowing to be made on such date.

(c) All legal matters incident to the Loan Documents and the transactions
contemplated thereby shall be reasonably satisfactory to the Administrative
Agent, the Lenders and their respective legal counsel.

(d) The commitments of the lenders under the 2004 Credit Agreement and the
lenders under the 2009 Credit Agreement shall have been terminated, and the
obligations of the Borrower under the 2004 Credit Agreement and under the 2009
Credit Agreement shall have been paid in full.

Section 4.03 Extensions. Each extension of the Expiration Date pursuant to
Section 2.20 is subject to the satisfaction of the following additional
conditions on the effective date of such extension:

(a) No Loans shall be outstanding on the date of such extension.

(b) The representations and warranties set forth in Article III shall be true
and correct in all material respects on and as of the date of such extension
with the same effect as though made on and as of such date, except to the extent
such representations and warranties expressly relate to an earlier date.

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

(d) The Borrower shall have furnished to the trustee under the First Mortgage
the evidence of extension, executed by the Administrative Agent, contemplated by
Article I, Section 1, subsection (II)(h) of the initial Supplemental Indenture
or any comparable provision of a subsequent Supplemental Indenture.

An extension of the Expiration Date shall be deemed to constitute a
representation and warranty by the Borrower on the date thereof as to the
matters specified in paragraphs (b) and (c) of this Section 4.03.

 

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ARTICLE V

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees with each Lender and each Issuing Bank that,
so long as any Commitment shall remain in effect or the principal of or interest
on any Loan or LC Disbursement, any Fees or any other amounts payable under any
Loan Document shall be unpaid or any Letter of Credit shall remain outstanding:

Section 5.01 Existence; Businesses and Properties.

(a) The Borrower shall, and shall cause each Significant Subsidiary to, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence, except as otherwise expressly permitted under
Section 6.03.

(b) The Borrower shall, and shall cause each Significant Subsidiary to, (i) do
or cause to be done all things necessary to obtain, preserve, renew, extend and
keep in full force and effect the rights, licenses, permits, franchises,
authorizations, patents, copyrights, trademarks and trade names utilized in the
conduct of its business, except where the failure so to obtain, preserve, renew,
extend or maintain any of the foregoing would not result in a Material Adverse
Effect; (ii) maintain and operate its business in substantially the manner in
which it is presently conducted and operated, except as otherwise expressly
permitted under this Agreement; (iii) comply in all material respects with all
applicable laws, rules, regulations and orders of any Governmental Authority,
whether now in effect or hereafter enacted if failure to comply with such
requirements would result in a Material Adverse Effect; and (iv) at all times
maintain and preserve all property material to the conduct of its business and
keep such property in good repair, working order and condition and from time to
time make, or cause to be made, all needful and proper repairs, renewals,
additions, improvements and replacements thereto necessary in order that the
business carried on in connection therewith may be properly conducted at all
times; provided, however, that the Borrower or any Significant Subsidiary may
cause the discontinuance of the operation or a reduction in the capacity of any
of its facilities, or any element or unit thereof, including real and personal
properties, facilities, machinery and equipment, (A) if, in the judgment of the
Borrower or such Significant Subsidiary, it is no longer advisable to operate
the same, or to operate the same at its former capacity, and such discontinuance
or reduction would not result in a Material Adverse Effect, or (B) if the
Borrower or a Significant Subsidiary intends to sell and dispose of its interest
in the same in accordance with the terms of this Agreement and within a
reasonable time shall endeavor to effectuate the same.

Section 5.02 Insurance.

(a) The Borrower shall, and shall cause each Significant Subsidiary to,
(i) maintain insurance, to such extent and against such risks, as is customary
with companies in the same or similar businesses and owning similar properties
in the same general area in which it operates and (ii) maintain such other
insurance as may be required by law. All insurance required by this Section 5.02
shall be maintained with financially sound and reputable insurers or through
self-insurance; provided, however, that the portion of such insurance
constituting self-insurance shall be comparable to that usually maintained by
companies engaged in the same or similar businesses and owning similar
properties in the same general area in which the Borrower or such Significant
Subsidiary, as applicable, operates and the reserves maintained with respect to
such self-insured amounts are deemed adequate by its officer or officers
responsible for insurance matters.

 

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Section 5.03 Taxes and Obligations. The Borrower shall, and shall cause each
Significant Subsidiary to, pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims for labor, materials and
supplies or otherwise which, if unpaid, might give rise to a Lien upon such
properties or any part thereof; provided, however, that such payment and
discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Borrower shall, to
the extent required by GAAP, have set aside on its books adequate reserves with
respect thereto.

Section 5.04 Financial Statements, Reports, etc. The Borrower shall furnish to
the Administrative Agent, each Lender and each Issuing Bank:

(a) within 105 days after the end of each fiscal year of the Borrower,
consolidated and consolidating balance sheets and related statements of income
and statements of cash flow, showing the financial condition of the Borrower and
its consolidated Subsidiaries as of the close of such fiscal year and the
results of their operations during such year, all audited by Deloitte & Touche
LLP or other independent public accountants of recognized national standing
acceptable to the Required Lenders and accompanied by an opinion of such
accountants (which shall not be qualified in any material respect) to the effect
that such consolidated financial statements fairly present the financial
condition and results of operations of the Borrower on a consolidated basis
(except as noted therein) in accordance with GAAP consistently applied;
provided, however, that the Borrower shall be deemed to have satisfied the
requirement to furnish such financial statements and opinion if and to the
extent that the Borrower has, within the period specified above, (i) filed
documents meeting the requirements set forth above with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or all of
the functions of said Commission, and (ii) posted such documents on the
Borrower’s home page on the worldwide web (at the date of this Agreement,
located at http//www.avistacorp.com) (such filing and posting being referred to
as “Electronic Delivery”);

(b) within 50 days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower, consolidated and, to the extent otherwise
available, consolidating balance sheets and related statements of income and
statements of cash flow, showing the financial condition of the Borrower and its
consolidated Subsidiaries as of the close of such fiscal quarter and the results
of their operations during such fiscal quarter and the then elapsed portion of
the fiscal year, all certified by a Financial Officer of the Borrower as fairly
presenting the financial condition and results of operations of the Borrower on
a consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments; provided, however, that the Borrower shall be
deemed to have satisfied the requirement to furnish such financial statements
and certification if and to the extent that the Borrower has, within the period
specified above, made Electronic Delivery thereof;

(c) concurrently with any delivery of financial statements under (a) or
(b) above, (i) a certificate of the relevant accounting firm opining on or
certifying such statements or of a Financial Officer of the Borrower (which
certificate, when furnished by an accounting firm, may be limited to accounting
matters and disclaim responsibility for legal interpretations)

 

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certifying that, to the knowledge of the accounting firm or the Financial
Officer, as the case may be, no Event of Default or Default has occurred or, if
an Event of Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto, and (ii) a certificate of a Financial Officer of the Borrower setting
forth in reasonable detail such calculations as are required to establish
whether the Borrower was in compliance with Section 6.05 on the date of such
financial statements;

(d) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by it with the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any of or all the functions of said Commission, or with any national securities
exchange, or distributed to its shareholders, as the case may be; provided,
however, that the Borrower shall be deemed to have satisfied the requirement to
furnish such reports, statements and other materials if and to the extent that
the Borrower has, within the period specified above, made Electronic Delivery
thereof; and

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

Section 5.05 Litigation and Other Notices. The Borrower shall furnish to the
Administrative Agent, each Lender and each Issuing Bank prompt notice of the
following:

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

(b) the filing or commencement of, or any written threat or notice of intention
of any person to file or commence, any action, suit or proceeding, whether at
law or in equity or by or before any Governmental Authority, against the
Borrower or any Subsidiary which could reasonably be anticipated to result in a
Material Adverse Effect; and

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

Section 5.06 ERISA. The Borrower shall, and shall cause each Significant
Subsidiary to, comply in all material respects with the applicable provisions of
ERISA, and the Borrower shall furnish to the Administrative Agent, each Lender
and each Issuing Bank (a) as soon as possible, and in any event within 30 days
after any Responsible Officer of the Borrower or any ERISA Affiliate either
knows or has reason to know that any Reportable Event has occurred that alone or
together with any other Reportable Event could reasonably be expected to result
in liability of the Borrower to the PBGC in an aggregate amount exceeding
$25,000,000, a statement of a Financial Officer of the Borrower setting forth
details as to such Reportable Event and the action proposed to be taken with
respect thereto, together with a copy of the notice, if any, of such Reportable
Event given to the PBGC, (b) as soon as possible, and in any event within 30
days after any Responsible Officer of the Borrower or any ERISA Affiliate either
knows or has reason to know that the value of the assets of any Plan is less
than 80% of the “funding target” (as defined in Code Section 430(d)(1)) of such
Plan as of the last annual

 

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valuation date applicable thereto, a statement of a Financial Officer of the
Borrower setting forth details as to such event, (c) promptly after receipt
thereof, a copy of any notice the Borrower or any ERISA Affiliate may receive
from the PBGC relating to the intention of the PBGC to terminate any Plan or
Plans (other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code) or to appoint a trustee to administer any Plan or Plans and (d) within 10
days after the due date for filing with the PBGC pursuant to Section 430(k) of
the Code of a notice of failure to make a required installment or other payment
with respect to a Plan, a statement of a Financial Officer of the Borrower
setting forth details as to such failure and the action proposed to be taken
with respect thereto, together with a copy of such notice given to the PBGC.

Section 5.07 Maintaining Records; Access to Properties and Inspections. The
Borrower shall, and shall cause each Significant Subsidiary to, (a) maintain all
financial records in accordance with GAAP and (b) permit any representatives
designated by the Administrative Agent, any Lender or any Issuing Bank to visit
and inspect its financial records and properties at reasonable times and as
often as requested and to make extracts from and copies of such financial
records, and permit any representatives designated by the Administrative Agent,
any Lender or any Issuing Bank to discuss its affairs, finances and condition
with its chief financial officer, or other person designated by the chief
financial officer, and independent accountants therefor.

Section 5.08 Use of Proceeds and Letters of Credit. The Borrower shall use the
proceeds of the Loans and the Letters of Credit only for the purposes set forth
in the preamble to this Agreement.

ARTICLE VI

NEGATIVE COVENANTS

The Borrower covenants and agrees with each Lender and each Issuing Bank that,
so long as any Commitment shall remain in effect or the principal of or interest
on any Loan or LC Disbursement, any Fees or any other amounts payable under any
Loan Document shall be unpaid or any Letter of Credit shall remain outstanding:

Section 6.01 Liens. The Borrower shall not create, incur, assume or permit to
exist any Lien on any property or assets (including stock or other securities of
any person, including any Subsidiary) now owned or hereafter acquired by it or
on any income or revenues or rights in respect of any thereof, except:

(a) Liens on property or assets of the Borrower created by the documents,
instruments or agreements existing on the date hereof and which are listed as
exhibits to the Borrower’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2009, to the extent that such Liens secure only obligations arising
under such existing documents, agreements or instruments and the amount of
Indebtedness secured thereby does not exceed the amount thereof as of the date
hereof as set forth on Schedule 6.01;

(b) any Lien existing on any property or asset prior to the acquisition thereof
by the Borrower; provided that (i) such Lien is not created in contemplation of
or in connection with such acquisition and (ii) such Lien does not apply to any
other property or assets of the Borrower;

 

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(c) the Lien of the First Mortgage and the Lien of any collateral trust mortgage
or similar instrument which would be intended to eventually replace (in one
transaction or a series of transactions) the First Mortgage (as amended,
modified or supplemented from time to time, “Collateral Trust Mortgage”) on
properties or assets of the Borrower to secure bonds, notes and other
obligations of the Borrower but only to the extent such Liens, collectively,
secure Indebtedness, whether now existing or hereafter created, in an aggregate
amount no greater than the aggregate amount of first mortgage bonds permitted to
be issued under the First Mortgage;

(d) Liens not prohibited under the First Mortgage or the Collateral Trust
Mortgage (whether or not such Liens cover properties or assets subject to the
Lien of the First Mortgage or the Collateral Trust Mortgage);

(e) Liens for taxes, assessments or governmental charges not yet due or which
are being contested in compliance with Section 5.03;

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

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

(h) Liens incurred or created in connection with or to secure the performance of
bids, tenders, trade contracts (other than for Indebtedness), leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business;

(i) zoning restrictions, easements, rights-of-way, restrictions on use of real
property and other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and do not
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the business of the Borrower or any of its
Subsidiaries;

(j) Liens (i) which secure obligations not assumed by the Borrower, (ii) on
account of which the Borrower has not and does not expect to pay interest
directly or indirectly and (iii) which exist upon real estate or rights in or
relating to real estate in respect of which the Borrower has a right-of-way or
other easement for purposes of substations or transmission or distribution
facilities;

(k) rights reserved to or vested in any federal, state or local governmental
body or agency by the terms of any right, power, franchise, grant, license,
contract or permit, or by any provision of law, to recapture or to purchase, or
designate a purchase of or order the sale of, any property of the Borrower or to
terminate any such right, power, franchise, grant, license, contract or permit
before the expiration thereof;

 

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(l) Liens of judgments covered by insurance, or upon appeal and covered by bond,
or to the extent not so covered not exceeding at one time $40,000,000 in
aggregate amount;

(m) any Liens, moneys sufficient for the discharge of which shall have been
deposited in trust with the trustee or mortgagee under the instrument evidencing
such Lien, with irrevocable authority of such trustee or mortgagee to apply such
moneys to the discharge of such Lien to the extent required for such purpose;

(n) rights reserved to or vested in any federal, state or local governmental
body or agency or other public authority to control or regulate the business or
property of the Borrower;

(o) any obligations or duties affecting the property of the Borrower to any
federal, state or local governmental body or agency or other public authority
with respect to any authorization, permit, consent or license of such body,
agency or authority, given in connection with the purchase, construction,
equipping, testing and operation of the Borrower’s utility property;

(p) with respect to any property which the Borrower may hereafter acquire, any
exceptions or reservations therefrom existing at the time of such acquisition or
any terms, conditions, agreements, covenants, exceptions and reservations
expressed or provided in the deeds or other instruments, respectively, under and
by virtue of which the Borrower shall hereafter acquire such property, none of
which terms, conditions, agreements, covenants, exceptions and reservations
materially impairs the use of such property for the purposes for which it is
acquired by the Borrower;

(q) leases and subleases entered into in the ordinary course of business;

(r) banker’s Liens and other Liens in the nature of a right of setoff;

(s) renewals, replacements, amendments, modifications, supplements, refinancings
or extensions of Liens set forth in clauses (a)-(d) above to the extent that the
principal amount of Indebtedness secured by such Lien immediately prior thereto
is not increased and such Lien is not extended to other property;

(t) security deposits or amounts paid into trust funds for the reclamation of
mining properties;

(u) restrictions on transfer or use of properties and assets, first rights of
refusal, and rights to acquire properties and assets granted to others;

(v) non-consensual equitable Liens on the Borrower’s tenant-in-common or other
interest in joint projects;

 

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(w) Liens on the Borrower’s tenant-in-common or other interest in joint projects
incurred by the project sponsor without the express consent of the Borrower to
such incurrence;

(x) cash collateral in favor of the Administrative Agent as contemplated by this
Agreement; and

(y) Liens on receivables and related properties or interests therein.

Section 6.02 Sale-Leaseback Transactions. The Borrower shall not enter into any
Sale-Leaseback if as a result thereof the aggregate outstanding principal amount
of Attributable Debt outstanding in connection with all Sale-Leasebacks entered
into after the date hereof would exceed 5% of the total tangible assets of the
Borrower as of the date of the financial statements most recently delivered
under Section 5.04(a) or (b) at such time.

Section 6.03 Mergers, Consolidations and Acquisitions. The Borrower shall not,
and shall not permit any Significant Subsidiary (without the consent of the
Required Lenders, not to be unreasonably withheld) to, merge with or into or
consolidate with any other person, or purchase, lease or otherwise acquire (in
one transaction or a series of transactions) all or substantially all of the
assets of any other person (whether directly by purchase, lease or other
acquisition of all or substantially all of the assets of such person or
indirectly by purchase or other acquisition of all or substantially all of the
capital stock of such other person) other than acquisitions in the ordinary
course of the Borrower’s or such Significant Subsidiary’s business, except that,
if at the time thereof and immediately after giving effect thereto no Event of
Default or Default shall have occurred and be continuing, (a) the Borrower or
any Significant Subsidiary may merge with or into or consolidate with the
Borrower or any Subsidiary, provided that, in any transaction involving the
Borrower, the Borrower is the surviving person, (b) the Borrower or any
Significant Subsidiary may purchase, lease or otherwise acquire from any
Subsidiary all or substantially all of its assets, (c) the Borrower may merge
with or into or consolidate with any other person so long as (i) in the case
where the business of such other person, or an Affiliate of such other person,
entirely or primarily consists of an electric or gas utility business, (A) if
the Borrower is the surviving person, then, immediately after such merger or
consolidation, the Senior Debt Rating assigned to the applicable Indebtedness of
the Borrower by two nationally recognized credit-rating agencies shall be equal
to or higher than Lowest Investment Grade and (B) if the Borrower is not the
surviving person, (1) the surviving person shall assume in writing the
obligations of the Borrower under this Agreement and any other Loan Documents
and (2) immediately after such merger or consolidation, the ratings assigned to
the most senior secured public Indebtedness of the surviving person by two
nationally recognized credit rating agencies shall be equal to or higher than
the ratings comparable to the Second Lowest Investment Grade, and (ii) in the
case where such other person’s business does not entirely or primarily consist
of an electric or gas utility business, (A) the assets of such person at the
time of such consolidation or merger do not exceed 10% of the total assets of
the Borrower and its Subsidiaries after giving effect to such merger or
consolidation, computed and consolidated in accordance with GAAP consistently
applied and (B) if the Borrower is not the surviving person, the surviving
person shall assume in writing the obligations of the Borrower under this
Agreement and the other Loan Documents, (d) the Borrower may purchase, lease or
otherwise acquire all or substantially all of the assets of any other person
(including by purchase or other acquisition of all or substantially

 

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all of the capital stock of such person) so long as (i) the assets being
purchased, leased or acquired (or the assets of the person whose capital stock
is being acquired) entirely or primarily consist of electric or gas utility
assets or (ii) in the case where the assets being purchased, leased or acquired
(or the assets of the person whose capital stock is being acquired) do not
entirely or primarily consist of electric or gas utility assets, the assets
being purchased, leased or acquired (or the Borrower’s proportionate share of
the assets of the person whose capital stock is being acquired) do not exceed
10% of the total assets of the Borrower and its Subsidiaries, after giving
effect to such purchase, lease or acquisition, computed and consolidated in
accordance with GAAP consistently applied, (e) any Significant Subsidiary may
merge with or into or consolidate with any other person so long as the assets of
such person at the time of such merger or consolidation do not exceed 10% of the
total assets of the Borrower and its Subsidiaries after giving effect to such
merger or consolidation, computed and consolidated in accordance with GAAP
consistently applied, and (f) any Significant Subsidiary may purchase, lease or
otherwise acquire all or substantially all of the assets of any other person
(including by purchase or other acquisition of all or substantially all of the
capital stock of such person) so long as the assets being purchased, leased or
acquired (or the Significant Subsidiary’s proportionate share of the assets of
the person whose capital stock is being acquired) do not exceed 10% of the total
assets of the Borrower and its Subsidiaries after giving effect to such
purchase, lease or acquisition, computed and consolidated in accordance with
GAAP consistently applied; provided, however, that notwithstanding anything in
this Section 6.03 to the contrary, this Section 6.03 shall not be deemed to
prohibit any merger, consolidation or acquisition involving a Significant
Subsidiary (and not also the Borrower) if, after giving effect to the
consummation of such transaction, such Significant Subsidiary shall have or be
deemed to have a ratio of total long-term Indebtedness to total stockholders’
equity equal to or less than 1.857 to 1.0.

Section 6.04 Disposition of Assets. The Borrower shall not, and shall not permit
any Significant Subsidiary (without the consent of the Required Lenders, not to
be unreasonably withheld) to, sell, lease, transfer, assign or otherwise dispose
of any assets or any interest therein (whether now owned or hereafter acquired),
except (a) dispositions of obsolete or retired property not used or useful in
its business, (b) grants of Liens by the Borrower permitted under Section 6.01
and grants of Liens by Significant Subsidiaries, (c) disposition by the Borrower
of its interest in the Washington Public Power Supply System Nuclear Project
No. 3 in accordance with the settlement agreement among the Borrower, the
Washington Public Power Supply System and Bonneville Power Administration, as
the same may be amended, modified or supplemented from time to time,
(d) disposition by the Borrower of all or any portion of its transmission assets
in one or more RTO Transactions, (e) disposition by the Borrower of its
interests in the Colstrip Project and related assets, (f) disposition of
receivables and related properties or interests therein, (g) other dispositions
of assets (not otherwise permitted by clauses (a)-(f) of this Section) made in
the ordinary course of business not exceeding in any fiscal year 5% of the
assets of the Borrower and its Subsidiaries as of the end of the prior fiscal
year, computed and consolidated in accordance with GAAP consistently applied,
and (h) other dispositions of assets (not otherwise permitted by clauses
(a)-(f) of this Section) not exceeding in any fiscal year 10% of the assets of
the Borrower and its Subsidiaries as of the end of the prior fiscal year,
computed and consolidated in accordance with GAAP consistently applied;
provided, however, that notwithstanding anything in this Section 6.04 to the
contrary, this Section 6.04 shall not be deemed to prohibit any disposition by a
Significant Subsidiary if, after giving effect to the consummation of such
transaction, such Significant Subsidiary shall have or be deemed to have a ratio
of total long-term Indebtedness to total stockholders’ equity equal to or less
than 1.857 to 1.0.

 

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Section 6.05 Consolidated Total Debt to Consolidated Total Capitalization Ratio.
The Borrower shall not permit the ratio of Consolidated Total Debt to
Consolidated Total Capitalization to be, at any time, greater than 0.65 to 1.00.

Section 6.06 Public Utility Regulatory Borrowing Limits. The Borrower shall not
incur actual borrowings or commitments or issued and outstanding debt of the
Borrower in excess of the amount authorized by statute or by orders of public
utility commissions, as in effect from time to time.

ARTICLE VII

EVENTS OF DEFAULT

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

(a) any representation or warranty made or deemed made in or in connection with
any Loan Document, any Borrowing or any Letter of Credit, or any representation
or warranty contained in any certificate or other document furnished in
connection with or pursuant to any Loan Document, shall prove to have been false
or misleading in any material respect when so made or deemed made;

(b) default shall be made in the payment of any principal of any Loan or LC
Disbursement when and as the same shall become due and payable, whether at the
scheduled maturity date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;

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

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

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

(f) the Borrower or any Significant Subsidiary shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any Indebtedness
when the aggregate unpaid principal amount is in excess of $40,000,000, when and
as the same shall become due and payable (after expiration of any applicable
grace period), or (ii) fail to observe

 

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or perform any other term, covenant, condition or agreement (after expiration of
any applicable grace period) contained in any agreement or instrument evidencing
or governing any such Indebtedness if the effect of any failure referred to in
this clause (ii) is to cause, or to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf (with or without the giving of
notice, the lapse of time or both) to cause, such Indebtedness to become due
prior to its stated maturity;

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

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

(i) a final judgment or judgments shall be rendered against the Borrower, any
Significant Subsidiary or any combination thereof for the payment of money with
respect to which an aggregate amount in excess of $40,000,000 is not covered by
insurance, and the same shall remain undischarged for a period of 30 consecutive
days during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to levy upon assets or properties of the
Borrower or any Significant Subsidiary to enforce any such judgment;

(j) a Reportable Event or Reportable Events, or a failure to make a required
installment or other payment (within the meaning of Section 430(k)(1) of the
Code), shall have occurred with respect to any Plan or Plans that reasonably
could be expected to result in liability of the Borrower to the PBGC or to any
Plan or Plans in an aggregate amount exceeding $25,000,000, or the value of the
assets of any Plan is less than 80% of the “funding target” (as defined in Code
Section 430(d)(1)) of such Plan as of the last annual valuation date applicable
thereto, and within 30 days after the reporting of any such Reportable Event to
the Administrative Agent or after the receipt by the Administrative Agent of a
statement required

 

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pursuant to Section 5.06, the Administrative Agent shall have notified the
Borrower in writing that (i) the Required Lenders have made a determination
that, on the basis of such Reportable Event or Reportable Events, such failure
to make a required installment or other payment or the fact that the value of
the assets of a Plan is less than 80% of the “funding target” (as defined in
Code Section 430(d)(1)) of such Plan as of the last annual valuation date
applicable thereto, there are reasonable grounds (A) for the termination of any
such Plan by the PBGC, (B) for the appointment by the appropriate United States
District Court of a trustee to administer any such Plan or (C) for the
imposition of a Lien in favor of any such Plan, and (ii) as a result thereof an
Event of Default exists hereunder; or a trustee shall be appointed by a United
States District Court to administer any such Plan; or the PBGC shall institute
proceedings to terminate any such Plan;

(k) any Loan Document, at any time after its execution and delivery and for any
reason, shall cease to be in full force and effect, or is declared by a court of
competent jurisdiction to be null and void, invalid or unenforceable in any
respect, or the Borrower denies that it has any or further liability or
obligation under any Loan Document, or purports to revoke, terminate or rescind
any Loan Document; provided, however, that the foregoing shall not apply to the
First Mortgage Bond, the First Mortgage, the Supplemental Indenture or the Bond
Delivery Agreement at any time when the Borrower’s obligations under this
Agreement are not secured by the First Mortgage pursuant to the Borrower’s
exercise of its rights under Section 8.01;

(l) a Change in Control shall occur;

(m) except at any time when the Borrower’s obligations under this Agreement are
not secured by the First Mortgage pursuant to the Borrower’s exercise of its
rights under Section 8.01, the Lien purported to be created in any substantial
portion of the property of the Borrower purported to be made subject thereto
pursuant to the First Mortgage shall at any time fail to be a valid, perfected,
first-priority Lien (subject to Liens permitted to exist by the terms of the
First Mortgage) securing the obligations of the Borrower under the First
Mortgage (including the obligations of the First Mortgage Bond), and such
failure shall constitute or have resulted in a “Completed Default” under the
First Mortgage; or

(n) except at any time when the Borrower’s obligations under this Agreement are
not secured by the First Mortgage pursuant to the Borrower’s exercise of its
rights under Section 8.01, (i) the mortgage title insurance policy referred to
in Section 4.02(a)(ix) or any other mortgage title insurance policy purported to
be issued for the benefit of the trustee under the First Mortgage, at any time
after its issuance and for any reason, shall cease to be in full force and
effect or is declared by a court of competent jurisdiction to be null and void,
invalid or unenforceable in any respect, or (ii) the issuer of such policy
denies that it has any or further liability or obligation under such policy, or
purports to revoke, terminate or rescind such policy;

then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent, at the request of the
Required Lenders, shall, by notice to the Borrower, take any or all of the
following actions, at the same or different times: (i) terminate forthwith the
Commitments, (ii) declare the Loans then outstanding to be forthwith due and
payable in whole

 

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or in part, whereupon (A) the Commitments will automatically be terminated and
(B) the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and any unpaid accrued Fees and all other liabilities
of the Borrower accrued hereunder and under any other Loan Document, shall
become forthwith due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding, and (iii) except at any time when the Borrower’s
obligations under this Agreement are not secured by the First Mortgage pursuant
to the Borrower’s exercise of its rights under Section 8.01, deliver to the
Borrower notice demanding redemption of the First Mortgage Bond; and in any
event with respect to the Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate, and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding.

ARTICLE VIII

RELEASE OF COLLATERAL

Section 8.01 Borrower’s Election. If at any time (a) the Senior Debt Rating
assigned to the Borrower’s most senior long-term unsecured public Indebtedness
(without credit enhancement) by two nationally recognized credit-rating agencies
is equal to or higher than Lowest Investment Grade, in each case with a stable
outlook, and (b) no Default or Event of Default has occurred and is continuing,
then, upon demand by the Borrower, the Administrative Agent shall return to the
Borrower the First Mortgage Bond then held by the Administrative Agent, without
recourse, representation or warranty, and shall execute and deliver to the
Borrower such documents of assignment as may be reasonably requested by the
Borrower to terminate the Lien of the Administrative Agent evidenced by such
First Mortgage Bond.

Section 8.02 Release upon Commitment Reduction. In connection with any permanent
reduction in the Commitments, including pursuant to Section 2.10(b), 2.20 or
9.08(a), the Administrative Agent shall surrender to, or upon the order of, the
Borrower the First Mortgage Bond then held by the Administrative Agent against
receipt by the Administrative Agent of a substitute First Mortgage Bond in an
amount equal to the total Commitments after giving effect to the reduction.

Section 8.03 Release upon Termination and Repayment. The Administrative Agent
shall surrender to, or upon the order of, the Borrower all First Mortgage Bonds
then held by it pursuant hereto at the first time at which the Commitments shall
have been terminated and all amounts owing under this Agreement shall have been
paid in full.

 

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ARTICLE IX

THE ADMINISTRATIVE AGENT

Section 9.01 Appointment and Powers. In order to expedite the various
transactions contemplated by the Loan Documents, Union Bank is hereby appointed
to act as Administrative Agent on behalf of the Lenders and the Issuing Banks.
Each of the Lenders and the Issuing Banks hereby irrevocably authorizes and
directs the Administrative Agent to take such action on behalf of such Lender or
Issuing Bank under the terms and provisions of the Loan Documents, and to
exercise such powers thereunder as are specifically delegated to or required of
the Administrative Agent by the terms and provisions thereof, together with such
powers as are reasonably incidental thereto. The Administrative Agent is hereby
expressly authorized on behalf of the Lenders and the Issuing Banks, without
hereby limiting any implied authority, (a) to receive on behalf of each of the
Lenders and the Issuing Banks any payment of principal of or interest on the
Loans and LC Disbursements outstanding hereunder, any reimbursements of LC
Disbursements and all other amounts accrued under the Loan Documents paid to the
Administrative Agent, and to distribute to each Lender and Issuing Bank its
proper share of all payments so received as soon as practicable; (b) to give
notice promptly on behalf of each of the Lenders and the Issuing Banks to the
Borrower of any Event of Default of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder; and (c) to
distribute promptly to each Lender and each Issuing Bank copies of all notices,
agreements and other material as provided for in the Loan Documents as received
by such Administrative Agent.

Section 9.02 Limitation on Liability. Neither the Administrative Agent nor any
of its directors, officers, employees or agents shall be liable to any Lender or
Issuing Bank as such for any action taken or omitted by any of them under the
Loan Documents except for its, his or her own gross negligence or willful
misconduct, or be responsible for any statement, warranty or representation
therein or the contents of any document delivered in connection therewith or be
required to ascertain or to make any inquiry concerning the performance or
observance by the Borrower of any of the terms, conditions, covenants or
agreements of the Loan Documents. The Administrative Agent shall not be
responsible to the Lenders or the Issuing Banks for the due execution,
genuineness, validity, enforceability or effectiveness of the Loan Documents or
any other instrument to which reference is made therein. The Administrative
Agent shall in all cases be fully protected in acting, or refraining from
acting, in accordance with written instructions signed by the Required Lenders,
and, except as otherwise specifically provided herein, such instructions and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders and the Issuing Banks. The Administrative Agent shall, in the absence of
knowledge to the contrary, be entitled to rely on any paper or document believed
by it in good faith to be genuine and correct and to have been signed or sent by
the proper person or persons. Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall have any responsibility to the
Borrower on account of the failure or delay in performance or breach by any
Lender or Issuing Bank of any of its obligations under the Loan Documents or to
any Lender or Issuing Bank on account of the failure of or delay in performance
or breach by any other Lender or Issuing Bank or the Borrower of any of their
respective obligations thereunder or in connection therewith. The Administrative
Agent may execute any of its duties under the Loan Documents by or through
agents or attorneys selected by it using reasonable care and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys selected and authorized to act by it with reasonable
care unless the damage complained of directly results from an act or failure to
act on the part of the Administrative Agent which constitutes gross negligence
or willful misconduct. Delegation to an attorney for the Administrative Agent
shall not release the Administrative Agent from its obligation to perform

 

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or cause to be performed the delegated duty. The Administrative Agent shall be
entitled to advice of legal counsel selected by it with respect to all matters
arising under the Loan Documents and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.

Section 9.03 Other Transactions with Borrower, Etc. The Administrative Agent and
its Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Borrower or any Affiliate thereof as if it were
not the Administrative Agent. The person serving as the Administrative Agent
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Administrative Agent,
and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated
or unless the context otherwise requires, include the person serving as the
Administrative Agent when acting in its individual capacity.

Section 9.04 Reimbursement; Indemnification. Each Lender agrees (a) to reimburse
the Administrative Agent in the amount of such Lender’s Pro Rata Share of any
expenses incurred for the benefit of the Lenders by the Administrative Agent,
including reasonable counsel fees and compensation of agents and employees paid
for services rendered on behalf of the Lenders, to the extent not reimbursed by
the Borrower and (b) to indemnify and hold harmless the Administrative Agent and
any of its directors, officers, employees or agents, on demand, in the amount of
its Pro Rata Share, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against it in its capacity as the Administrative Agent or any of
them in any way relating to or arising out of the Loan Documents or any action
taken or omitted by it or any of them under the Loan Documents, to the extent
not reimbursed by the Borrower; provided, however, that no Lender shall be
liable to the Administrative Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent or any of its directors, officers,
employees or agents.

Section 9.05 Absence of Reliance. Each of the Lenders and the Issuing Banks
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or Issuing Bank and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each of the Lenders and the
Issuing Banks also acknowledges that it will, independently and without reliance
upon the Administrative Agent or any other Lender or Issuing Bank, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own decisions in taking or not taking action under or based
upon the Loan Documents, any related agreement or any document furnished
thereunder.

Section 9.06 Resignation of Administrative Agent. The Administrative Agent may
at any time give notice of its resignation to the Lenders, the Issuing Banks and
the Borrower and shall promptly give such notice in the event that the
Administrative Agent becomes a Defaulting Lender. Upon receipt of any such
notice of resignation, the Required Lenders may, with the consent of the
Borrower (which consent shall not be unreasonably withheld and shall not be
required during an Event of Default), appoint a successor Administrative Agent.
If no successor

 

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Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent’s giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Banks and
after consultation with the Lenders, the Issuing Banks and the Borrower, appoint
a successor Administrative Agent. Upon the acceptance by any person of its
appointment as a successor Administrative Agent, such person shall thereupon
succeed to and become vested with all the rights, powers, privileges, duties and
obligations of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations as
Administrative Agent under the Loan Documents. After any retiring Administrative
Agent’s resignation as Administrative Agent, the provisions of this Article IX
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent.

Section 9.07 Syndication Agent and Co-Documentation Agents. Neither the
Syndication Agent nor any Co-Documentation Agent shall have any rights, powers,
obligations, liabilities, responsibilities or duties under the Loan Document
other than those applicable to all Lenders as such. Without limiting the
foregoing, none of the persons identified as “Syndication Agent” or
“Co-Documentation Agent” shall have or be deemed to have any fiduciary
relationship with any Lender or Issuing Bank. Each of the Lenders and the
Issuing Banks acknowledges that it has not relied, and will not rely, on any of
the persons so identified in deciding to enter into this Agreement or in taking
or not taking action hereunder.

Section 9.08 Removal of Lender.

(a) If a Lender (i) is a Defaulting Lender or (ii) fails to give its consent to
any amendment, waiver or action for which consent of all of the Lenders was
required and to which the Required Lenders consented, such Lender shall, upon
notice from the Borrower, execute and deliver to the Administrative Agent one or
more Assignments and Assumptions assigning all of that Lender’s interests,
rights and obligations under the Loan Documents to one or more Eligible
Assignees designated by the Borrower, subject to (A) compliance with the
provisions of Section 10.04, (B) payment in full of all principal, interest and
fees owing to such Lender through the date of assignment (including any amounts
payable pursuant to Section 2.14 but, in the case of a Defaulting Lender,
excluding any amounts payable pursuant to Section 2.14(c) or (d)) and
(C) delivery by such assignee(s) of such appropriate assurances and indemnities
(which may include letters of credit) as such Lender may reasonably require with
respect to its participation interests in any Letters of Credit then
outstanding; provided, however, that the failure of any such Lender to execute
and deliver to the Administrative Agent such Assignment(s) and Assumption(s)
shall not render such assignment(s) invalid, and the Administrative Agent shall
record such assignment(s) in the Register. Alternatively, the Borrower may
reduce the total Commitments (and for this purpose the minimum amounts for
Commitment reductions shall not apply) by an amount equal to that Lender’s
Commitment and pay and provide to such Lender the amounts, assurances and
indemnities described above and release such Lender from its Commitment;
provided, however, that the Commitment of a Defaulting Lender may not be so
reduced so long as any Default or Event of Default has occurred and is
continuing. The Administrative Agent shall distribute an amended Schedule 2.01
(which shall thereafter be incorporated into this Agreement) to reflect any new
Commitments and Pro Rata Shares.

 

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(b) In order to make all Lenders’ interests in any outstanding Loans and in any
fees and other amounts due in respect of Letters of Credit ratable in accordance
with any revised Pro Rata Shares after giving effect to the removal of any
Lender, the Borrower shall pay or prepay, if necessary, on the effective date of
such removal all outstanding Loans and fees and other amounts in respect of
Letters of Credit and pay, to the extent applicable, any amounts due under
Section 2.14. The Borrower may then borrow Loans from the Lenders in accordance
with their revised Pro Rata Shares.

ARTICLE X

MISCELLANEOUS

Section 10.01 Notices. Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed or sent by telecopy, graphic scanning or other telegraphic communications
equipment of the sending party, as follows:

(a) if to the Borrower, to:

Avista Corporation

1411 East Mission Avenue (99202)

P.O. Box 3727

Spokane, Washington 99220

Attention: Senior Vice President and Chief Financial Officer

Telecopy: 509-495-4361

(b) if to the Administrative Agent for credit matters, to:

Union Bank, N.A.

445 South Figueroa Street, 15th Floor

Los Angeles, California 90071

Attention: Power & Utilities

Telecopy: 213-236-4096

and if to the Administrative Agent for operational matters, to:

Union Bank, N.A.

601 Potrero Grande Drive, Mail Code 4-957-161

Monterey Park, California 91755

Attention: Kevin Chan, Commercial Loan & Agency Services

Telephone: 323-720-2586

Telecopy: 323-656-2855

E-mail: kevin.chan@unionbank.com

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

 

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All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or other telegraphic communications equipment of the sender, or on the
date five Business Days after dispatch by certified or registered mail if
mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 10.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 10.01.

Section 10.02 Survival of Agreement. All covenants, agreements, representations
and warranties, including any indemnities and reimbursement obligations, made by
the Borrower in the Loan Documents and in the certificates or other instruments
prepared or delivered in connection therewith or pursuant thereto shall be
considered to have been relied upon by the Lenders and the Issuing Banks and
shall survive the making of any Loans by the Lenders, the issuance of any
Letters of Credit by the Issuing Banks and the execution and delivery to the
Lenders of any Notes evidencing such Loans, regardless of any investigation made
by the Lenders or the Issuing Banks, or on their behalf, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any Fee or any other amount payable under this Agreement or any other
Loan Document is outstanding and unpaid or any Letter of Credit is outstanding
and so long as the Commitments have not been terminated.

Section 10.03 Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent and when
the Administrative Agent shall have received copies hereof which, when taken
together, bear the signatures of each Lender and each Issuing Bank, and this
Agreement shall thereafter be binding upon and inure to the benefit of the
Borrower, the Administrative Agent, each Lender and each Issuing Bank and their
respective successors and permitted assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and permitted assigns of such party; and all covenants, promises and
agreements by or on behalf of the Borrower, the Administrative Agent, any Lender
or any Issuing Bank that are contained in this Agreement shall bind and inure to
the benefit of each such person’s successors and permitted assigns.

Section 10.04 Successors and Assigns.

(a) Subject to Section 6.03, the Borrower may not assign or delegate any of its
rights or duties under any of the Loan Documents without the prior written
consent of each of the Lenders and the Issuing Banks.

(b) Each Lender (including the Administrative Agent and any Issuing Bank when
acting as a Lender) may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under the Loan Documents
(including all or a portion of its Commitment and the same portion of the
applicable Loan or Loans at the time owing to it); provided, however, that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
the Borrower and the Administrative Agent must give their prior written consent
to such assignment (which consents shall not be unreasonably withheld), provided
that the consent of the Borrower shall not be required if an Event of Default
shall exist, (ii) in the case of an assignment to a person other than a Lender
of all or a portion of a Lender’s Commitment or its obligation in

 

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respect of its LC Exposure, the Issuing Banks must give their prior written
consent to such assignment (which consents shall not be unreasonably withheld),
(iii) no assignee of any Lender shall be entitled to receive any greater payment
or protection under Section 2.12, 2.13(a) or 2.18 than such Lender would have
been entitled to receive with respect to the rights assigned or otherwise
transferred unless such assignment or transfer shall have been made at a time
when the circumstances giving rise to such greater payment did not exist,
(iv) each such assignment shall be of a constant, and not a varying, percentage
of all the assigning Lender’s rights and obligations under this Agreement,
(v) the amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000 (or, if less, the total amount of such Lender’s Commitment),
(vi) the parties to each such assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption and a processing and
recordation fee of $3,500 and (vii) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire. Upon
acceptance and recording pursuant to paragraph (d) of this Section 10.04, from
and after the effective date specified in each Assignment and Assumption, which
effective date shall be at least five Business Days after the execution thereof,
(A) the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under the Loan Documents and (B) the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under the Loan Documents (and, in
the case of an Assignment and Assumption covering all or the remaining portion
of an assigning Lender’s rights and obligations under the Loan Documents, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.12, 2.14, 2.18 and 10.05, as well as to any Fees accrued
for its account and not yet paid).

(c) The Administrative Agent shall maintain a copy of each Assignment and
Assumption delivered to it, including the recordation of the names and addresses
of the Lenders, and the Commitment of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”). The Administrative Agent, the Lenders and the Issuing
Banks may treat each person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of the Loan Documents.
The Register shall be available for inspection by the Borrower, any Lender and
any Issuing Bank at any reasonable time and from time to time upon reasonable
prior notice.

(d) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an Eligible Assignee, an Administrative Questionnaire
completed in respect of the Eligible Assignee (unless the Eligible Assignee
shall already be a Lender hereunder), the processing and recordation fee
referred to in paragraph (b) above and, to the extent required, the written
consent of the Borrower, the Administrative Agent and the Issuing Banks to such
assignment, the Administrative Agent shall (i) accept such Assignment and
Assumption, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower and the Issuing Banks. Upon the
request of the assignee, the Borrower, at its own expense, shall execute and
deliver to the Administrative Agent, a new Note or Notes to the order of such
assignee in a principal amount equal to the applicable Commitment assumed by it
pursuant to such Assignment and Assumption and, if the assigning Lender has
retained a Commitment, upon the request of the assigning Lender, the Borrower
shall execute and deliver a new Note to the order of such assigning Lender in a
principal amount equal to the applicable Commitment retained by it. Canceled
Notes shall be returned to the Borrower.

 

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(e) Each Lender may, without the consent of the Borrower, the Administrative
Agent or any Issuing Bank, sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under the Loan
Documents (including all or a portion of its Commitment and the Loans owing to
it and any Notes held by it); provided, however, that (i) such Lender’s
obligations under the Loan Documents shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.12, 2.14 and 2.18 to the same extent as if they were Lenders (provided, that
the amount of such benefit shall be limited to the amount in respect of the
interest sold to which the seller of such participation would have been entitled
had it not sold such interest) and (iv) the Borrower, the Administrative Agent,
the other Lenders and the Issuing Banks shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under the Loan Documents, and such Lender shall retain the sole
right to enforce the obligations of the Borrower relating to the Loans and to
approve any amendment, modification or waiver of any provision of the Loan
Documents (other than amendments, modifications or waivers (A) decreasing any
Fees or the amount of principal of or the rate at which interest is payable on
any Loans or LC Disbursements, (B) extending any scheduled date for the payment
of Fees or principal of or interest on any Loans or LC Disbursements,
(C) extending the expiration date of the Commitments, (D) extending the
expiration date of any Letter of Credit to a date after the expiration date of
the Commitments or (E) releasing the First Mortgage Bond or releasing all or
substantially all of the collateral therefor, in each such case except pursuant
to Article VIII).

(f) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 10.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information.

(g) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special-purpose funding vehicle (an “SPC”) the
option to fund all or any part of any Loan that such Granting Lender would
otherwise be obligated to fund pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to fund any Loan,
and (ii) if an SPC elects not to exercise such option or otherwise fails to fund
all or any part of such Loan, the Granting Lender shall be obligated to fund
such Loan pursuant to the terms hereof. The funding of a Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same extent
as if such Loan were funded by such Granting Lender. Each party hereto hereby
agrees that no SPC shall be liable for any indemnity or payment under the Loan
Documents for which a Lender would otherwise be liable for so long as, and to
the extent, the Granting Lender provides such indemnity or makes such payment.
Notwithstanding anything to the contrary contained in this Agreement, any SPC
may disclose on

 

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a confidential basis any non-public information relating to its funding of Loans
to any rating agency, commercial paper dealer or provider of any surety or
guarantee to such SPC. This paragraph may not be amended without the prior
written consent of each Granting Lender, all or any part of whose Loans are
being funded by an SPC at the time of such amendment.

(h) Any Lender may at any time assign for security purposes all or any portion
of its rights under the Loan Documents to a Federal Reserve Bank; provided that
no such assignment shall release a Lender from any of its obligations
thereunder.

Section 10.05 Expenses; Indemnity, Damage Waiver.

(a) The Borrower agrees to pay all reasonable out-of-pocket expenses (including
the reasonable fees, charges and disbursements of internal or external legal
counsel) (i) incurred by the Administrative Agent in connection with the
preparation of the Loan Documents, in connection with any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions thereby contemplated shall be consummated) or in connection with
the use of DXSyndicate, IntraLinks or any similar service in relation to this
Agreement, (ii) incurred by any Issuing Bank in connection with the issuance,
renewal, extension or other amendment of any Letter of Credit or any demand for
payment thereunder or (iii) incurred by the Administrative Agent, any Lender or
any Issuing Bank in connection with the enforcement or protection of its rights
in connection with any Loan Document, any Loan or any Letter of Credit or
participation therein.

(b) The Borrower agrees that it shall indemnify the Administrative Agent, the
Lenders and the Issuing Banks against, and hold them harmless from, any
documentary taxes, assessments or charges made by any Governmental Authority by
reason of the execution and delivery of this Agreement or any of the other Loan
Documents.

(c) The Borrower agrees to indemnify the Administrative Agent, each Lender and
each Issuing Bank and each of their respective directors, officers, employees
and agents (each such person being called an “Indemnitee”) against, and to hold
each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees, charges and
disbursements, incurred by or asserted against any Indemnitee arising out of, in
any way connected with, or as a result of, (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated thereby, (ii) the use of the proceeds of the Loans and of the
Letters of Credit (including any refusal by an Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of Credit)
or (iii) any claim, litigation, investigation or proceeding relating to any of
the foregoing, whether or not 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, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.

 

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(d) To the fullest extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, 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, the transactions contemplated hereby or thereby, any Loan
or Letter of Credit or the use of the proceeds thereof; provided that such
waiver shall not, as to any Indemnitee, apply to special, indirect or
consequential damages to the extent resulting from, or punitive damages awarded
on account of, conduct by such Indemnitee that is determined by a court of
competent jurisdiction by final and nonappealable judgment to have constituted
gross negligence or willful misconduct by such Indemnitee.

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

Section 10.06 Right of Setoff. If an Event of Default shall have occurred and be
continuing and the Loans shall have been accelerated as set forth in Article
VII, each of the Lenders and the Issuing Banks is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
or Issuing Bank (or person Controlling such Lender or Issuing Bank) to or for
the credit or the account of the Borrower against any of and all the obligations
of the Borrower now or hereafter existing under this Agreement and other Loan
Documents held by such Lender or Issuing Bank, irrespective of whether or not
such Lender or Issuing Bank shall have made any demand under this Agreement or
any other Loan Document and although such obligations of the Borrower are owed
to a branch or office of such Lender or Issuing Bank different from the branch
or office holding such deposit or obligated on such indebtedness. The rights of
each Lender and each Issuing Bank under this Section are in addition to other
rights and remedies (including other rights of setoff) which such Lender or
Issuing Bank may have. Any Lender or Issuing Bank, as the case may be, shall
promptly notify the Borrower after exercising its rights under this Section.

Section 10.07 Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, OTHER
THAN THE FIRST MORTGAGE BOND, THE FIRST MORTGAGE AND THE SUPPLEMENTAL INDENTURE,
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.

Section 10.08 Waivers; Amendment.

(a) No failure or delay of the Administrative Agent, any Lender or any Issuing
Bank in exercising any power or right under the Loan Documents 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

 

65

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the Administrative Agent, the Lenders and the Issuing Banks hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies which they would otherwise have. No waiver of any provision of this
Agreement or any other 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) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice or demand
on the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.

(b) Neither any Loan Document nor any provision thereof (excluding letter of
credit applications, which may be waived, amended or otherwise modified by
agreement of the Borrower and the applicable Issuing Bank) may be waived,
amended or otherwise modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders; provided,
however, that no such agreement shall (i) without the consent of the applicable
Lender, (A) decrease the principal of or the rate of interest on such Lender’s
Loans or the Fees payable to such Lender, (B) extend the date for any scheduled
payment of principal of or interest on such Lender’s Loans or the Fees payable
to such Lender, or (C) increase the amount or extend the expiration date of such
Lender’s Commitment, or (ii) without the consent of each Lender, (A) decrease
the principal of or the rate of interest on any LC Disbursement, (B) extend the
date for any scheduled payment of principal of or interest on any LC
Disbursement, (C) extend the expiration date of any Letter of Credit after the
Expiration Date has occurred, (D) release the First Mortgage Bond or release all
or substantially all of the collateral therefor, in each such case except
pursuant to Article VIII, or (E) amend or modify the provisions of Section 2.15,
the provisions of this Section, the definition of “Required Lenders” or any
other provision requiring the consent or agreement of each of the Lenders;
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent or any Issuing Bank under the
Loan Documents without the prior written consent of the Administrative Agent or
such Issuing Bank, as the case may be. Each Lender and each holder of a Note
shall be bound by any waiver, amendment or modification authorized by this
Section regardless of whether its Note shall have been marked to make reference
thereto, and any consent by any Lender or holder of a Note pursuant to this
Section shall bind any person subsequently acquiring a Note from it, whether or
not such Note shall have been so marked.

Section 10.09 Interest Rate Limitation. Notwithstanding anything herein or in
any Notes to the contrary, if at any time the applicable interest rate, together
with all fees and charges which are treated as interest under applicable law
(collectively the “Charges”), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken or reserved by any Lender, shall exceed the maximum lawful rate (the
“Maximum Rate”) which may be contracted for, charged, taken, received or
reserved by such Lender in accordance with applicable law, the rate of interest
payable under any Note held by such Lender, together with all Charges payable to
such Lender, shall be limited to the Maximum Rate.

Section 10.10 Entire Agreement. Each Loan Document constitutes the entire
contract between or among the parties relative to the subject matter thereof,
and any previous agreement between or among the parties with respect to the
subject matter thereof is superseded by such Loan Document. Nothing in this
Agreement or in the other Loan Documents, expressed or implied, is intended to
confer upon any party other than the parties hereto and thereto any rights,
remedies, obligations or liabilities under or by reason of this Agreement or the
other Loan Documents.

 

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Section 10.11 Waiver of Jury Trial. Each party hereto hereby waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in respect of any litigation directly or indirectly arising out of, under
or in connection with this Agreement or any of the other Loan Documents. Each
party hereto (a) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver and
(b) acknowledges that it and the other parties hereto have been induced to enter
into this Agreement and the other Loan Documents, as applicable, by, among other
things, the mutual waivers and certifications in this Section 10.11.

Section 10.12 Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

Section 10.13 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 10.03.

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

Section 10.15 Jurisdiction; Consent to Service of Process.

(a) The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, any Lender or any Issuing Bank may otherwise have to bring
any action or proceeding relating to this Agreement or the other Loan Documents
against the Borrower or its properties in the courts of any jurisdiction.

 

67

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

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

Section 10.16 USA Patriot Act Notification. Each Lender and each Issuing Bank
hereby notifies the Borrower that, pursuant to the requirements of the USA Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Act”), it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or Issuing Bank to identify the
Borrower in accordance with the Act. The Borrower agrees to cooperate with each
Lender and each Issuing Bank and to provide true, accurate and complete
information to such Lender or Issuing Bank in response to any such request.

[Signature pages follow.]

 

68

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WITNESS the due execution hereof as of the date first above written.

 

AVISTA CORPORATION By:  

/s/ Mark T. Thies

Name:   Mark T. Thies Title:   Senior Vice President and   Chief Financial
Officer

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UNION BANK, N.A., as Administrative Agent, an Issuing Bank and a Lender By:  

/s/ Bryan P. Read

Name:   Bryan P. Read Title:   Vice President

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

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

/s/ Tom Beil

Name:   Tom Beil Title:   Vice President

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

THE BANK OF NEW YORK MELLON, as a Lender By:  

/s/ Mark W. Rogers

Name:   Mark W. Rogers Title:   Vice President

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

KEYBANK NATIONAL ASSOCIATION, as a Lender By:  

/s/ Keven D. Smith

Name:   Keven D. Smith Title:   Senior Vice President

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

U.S. BANK NATIONAL ASSOCIATION, as a Lender By:  

/s/ Holland Williams

Name:   Holland Williams Title:   Assistant Vice President and   Portfolio
Manager

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

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

/s/ James J. Teichman

Name:   James J. Teichman Title:   Senior Vice President

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

JPMORGAN CHASE BANK, N.A., as a Lender By:  

/s/ Nancy R. Barwig

Name:   Nancy R. Barwig Title:   Credit Executive

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

UBS LOAN FINANCE LLC, as a Lender By:  

/s/ Irja R. Otsa

Name:   Irja R. Otsa Title:   Associate Director By:  

/s/ Mary E. Evans

Name:   Mary E. Evans Title:   Associate Director

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

CIBC INC., as a Lender By:  

/s/ Robert Casey

Name:   Robert Casey Title:   Executive Director By:  

/s/ Eoin Roche

Name:   Eoin Roche Title:   Executive Director

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

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

/s/ Bill O’Daly

Name:   Bill O’Daly Title:   Director By:  

/s/ Sanja Gazahi

Name:   Sanja Gazahi Title:   Associate

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

SCOTIABANC INC., as a Lender

By:  

/s/ J.F. Todd

Name:   J.F. Todd Title:   Managing Director

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

BANK HAPOALIM B.M., as a Lender

By:  

/s/ Helen H. Gateson

Name:   Helen H. Gateson Title:   Vice President By:  

/s/ Frederic S. Becker

Name:   Frederic S. Becker Title:   Senior Vice President

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

BANNER BANK, as a Lender By:  

/s/ TJ Brill

Name:   TJ Brill Title:   Vice President

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

COMERICA BANK, as a Lender By:  

/s/ Steve Clear

Name:   Steve Clear Title:   Vice President

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

FIRST COMMERCIAL BANK LTD., NEW YORK BRANCH, as a Lender By:  

/s/ Jason Lee

Name:   Jason Lee Title:   Vice President and General Manager

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EXHIBIT A

[FORM OF]

NOTE

 

$        

                 , 20       

FOR VALUE RECEIVED, the undersigned, AVISTA CORPORATION, a Washington
corporation (the “Borrower”), hereby promises to pay to the order of
                             (the “Lender”), at the office of Union Bank, N.A.,
as administrative agent (the “Administrative Agent”), at 445 South Figueroa
Street, Los Angeles, California, on the Expiration Date, as defined in the
Credit Agreement dated as of February 11, 2011 among the Borrower, the Lenders
listed in Schedule 2.01 thereto, The Bank of New York Mellon, KeyBank National
Association and U.S. Bank National Association, as Co-Documentation Agents,
Wells Fargo Bank, National Association, as Syndication Agent and an Issuing
Bank, and Union Bank, N.A., as Administrative Agent and an Issuing Bank (the
“Credit Agreement”), the aggregate unpaid principal amount of all Loans (as
defined in the Credit Agreement) of the Lender under the Credit Agreement, in
lawful money of the United States of America in immediately available funds, and
to pay interest from the date hereof on the principal amount hereof from time to
time outstanding, in like funds, at said office, at the rate or rates per annum
and payable on the dates provided in the Credit Agreement.

The Borrower promises to pay interest, on demand, on any overdue principal and,
to the extent permitted by law, overdue interest from their due dates at the
rate or rates provided in the Credit Agreement.

The Borrower hereby waives diligence, presentment, demand, protest and notice of
any kind whatsoever. The nonexercise by the holder of any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.

All Loans evidenced by this Note and all payments and prepayments of the
principal hereof and interest hereon and the respective dates and maturity dates
thereof shall be endorsed by the holder hereof on the schedule attached hereto
and made a part hereof or on a continuation thereof which shall be attached
hereto and made a part hereof, or otherwise recorded by such holder in its
internal records; provided, however, that the failure of the holder hereof to
make such a notation or any error in such a notation shall not affect the
obligations of the Borrower under this Note.

This Note is one of the Notes referred to in the Credit Agreement, which, among
other things, contains provisions for the acceleration of the maturity hereof
upon the happening of certain events, for optional and mandatory prepayment of
the principal hereof prior to the maturity hereof and for the amendment or
waiver of certain provisions of the Credit Agreement,

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

all upon the terms and conditions therein specified. This Note shall be
construed in accordance with and governed by the laws of the State of New York
and any applicable laws of the United States of America.

 

AVISTA CORPORATION By:  

 

Name:  

 

Title:  

 

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

Loans and Payments

 

Date   

Amount

and

Type of Loan

    

Maturity

Date

    

Payments of

Principal Interest

     Unpaid Principal
Balance of Note      Name of Person
Making Notation                                                                 
           

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

EXHIBIT B

[FORM OF]

ASSIGNMENT AND ASSUMPTION

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

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

 

1.    Assignor:   

 

   2.    Assignee:   

 

         [an Affiliate of [identify existing Lender]]1    3.    Borrower:   
Avista Corporation    4.    Administrative Agent:    Union Bank, N.A.    5.   
Credit Agreement:    Credit Agreement, dated as of February 11, 2011, among
Avista Corporation, the Lenders listed in Schedule 2.01 thereto, The Bank of New
York Mellon, KeyBank National Association and U.S. Bank National Association, as
Co-Documentation Agents, Wells Fargo Bank, National Association, as Syndication
Agent and an Issuing Bank, and Union Bank, N.A., as Administrative Agent and an
Issuing Bank

 

1

Include if applicable.

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

6. Assigned Interest:

 

Facility Assigned2

   Aggregate Amount of
[Commitments /
Revolving Credit
Exposures]3 for all
Lenders4    Amount of
[Commitment /
Revolving Credit
Exposure]3 Assigned4    Percentage5 Assigned
of [Commitments /
Revolving Credit
Exposures] 3 for all
Lenders      $                $                               %    
$                $                               %     $               
$                               % 

 

[7.

Trade Date:             , 20    ]6

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

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

ASSIGNOR [NAME OF ASSIGNOR] By:  

 

Name:  

 

Title:  

 

 

2

Fill in the appropriate terminology for the types of facilities under the Credit
Agreement that are being assigned under the Assignment (e.g., “Revolving Credit
Agreement”)

3

Use “Revolving Credit Exposure[s]” if Commitments have been terminated;
otherwise, use “Commitment[s].”

4

Amount to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective Date.

5

Set forth, to at least 9 decimals, as a percentage of the Commitments /
Revolving Credit Exposures of all Banks thereunder.

6

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

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

ASSIGNEE [NAME OF ASSIGNEE] By:  

 

Name:  

 

Title:  

 

[Consented to and]7 Accepted: UNION BANK, N.A., as Administrative Agent By:  

 

Name:  

 

Title:  

 

[Consented to: AVISTA CORPORATION By:  

 

Name:  

 

Title:  

 

[Consented to: UNION BANK, N.A., as an Issuing Bank By:  

 

Name:  

 

Title:  

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as an Issuing Bank

By:  

 

Name:  

 

Title:  

 

 

7

To be included if such consent is required by the terms of the Credit Agreement.

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

                             , as an Issuing Bank   By:  

 

  Name:  

 

  Title:  

 

  ]7

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

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

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

1.2 Assignee. The Assignee (a) represents and warrants that (i) it is an
Eligible Assignee, (ii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (iii) from and after the Effective Date, it shall be bound by
the provisions of the Credit Agreement as a Lender thereunder and, to the extent
of the Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 5.04 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Non-U.S.
Person (as defined in Section 2.18(g) of the Credit Agreement), attached to the
Assignment and Assumption is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; (b) agrees that (i) it will, independently and without reliance on
the Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender; and (c) effective on the Effective Date, appoints
and authorizes the Administrative Agent to take such action as Administrative
Agent on its behalf and to exercise such powers under the Loan Documents as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Inrest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

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

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

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EXHIBIT C

[FORM OF]

ADMINISTRATIVE QUESTIONNAIRE

ACCOUNT: Avista Corporation

FACILITY: Revolving Credit Facility

LEGAL NAME OF LENDER:

 

 

Operations Contact

(Draws/Repayments/Funding Matters)

 

Name     Title     Street Address     City, State and Zip     Telephone     Fax
    E-Mail Address    

Credit Contact

(Compliance Matters and Financial Statements)

 

Name     Title     Street Address     City, State and Zip     Telephone     Fax
    E-Mail Address    

Wire Instructions:

 

 

 

 

 

 

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

EXHIBIT D

[FORM OF]

COMMITMENT INCREASE SUPPLEMENT

THIS COMMITMENT INCREASE SUPPLEMENT is made and dated as of             , 20
    , by and among [ADDITIONAL COMMITMENT LENDER] (the “Additional Commitment
Lender”), AVISTA CORPORATION, a Washington corporation (the “Borrower”), and
UNION BANK, N.A., as Administrative Agent under the Credit Agreement, dated as
of February 11, 2011, among the Borrower, the Lenders listed in Schedule 2.01
thereto, The Bank of New York Mellon, KeyBank National Association and U.S. Bank
National Association, as Co-Documentation Agents, Wells Fargo Bank, National
Association, as Syndication Agent and an Issuing Bank, and Union Bank, N.A., as
Administrative Agent and an Issuing Bank (as amended, modified or supplemented
from time to time, the “Credit Agreement”). Terms used and not otherwise defined
herein are used herein with the meanings ascribed thereto in the Credit
Agreement.

WHEREAS, pursuant to Section 2.10(c) of the Credit Agreement, the Borrower
desires to have the aggregate amount of the Commitments increased; and

WHEREAS, the Additional Commitment Lender is willing to [become an additional
Lender] [increase its Commitment];

NOW, THEREFORE, the parties hereto agree as follows:

1. Upon the effectiveness of this Commitment Increase Supplement, [the
Additional Commitment Lender shall be a party to the Credit Agreement and shall
be entitled to all of the rights, and be subject to all of the obligations, of a
Lender under the Credit Agreement]1 [the Commitment of the Additional Commitment
Lender shall be increased from $         to $        .]2 [The initial amount of
the Additional Commitment Lender’s Commitment shall be $        .]1

2. The Additional Commitment Lender acknowledges, and agrees to comply with, its
obligation under Section 2.10(c) of the Credit Agreement to purchase assignments
of Loans, unreimbursed LC Disbursements and participations in Letters of Credit
from the other Lenders on the effective date hereof.

3. This Commitment Increase Supplement shall become effective upon the execution
and delivery hereof by the Additional Commitment Lender, the Borrower and the
Administrative Agent.

4. This Commitment Increase Supplement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.

5. This Commitment Increase Supplement shall be construed in accordance with and
governed by the law of the State of New York.

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

IN WITNESS WHEREOF, the parties hereto have caused this Commitment Increase
Supplement to be executed as of the day and year first written above.

 

[ADDITIONAL COMMITMENT LENDER] By:  

 

Name:  

 

Title:  

 

AVISTA CORPORATION By:  

 

Name:  

 

Title:  

 

UNION BANK, N.A., as Administrative Agent and an Issuing Bank By:  

 

Name:  

 

Title:  

 

Consented to:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as an Issuing Bank

By:  

 

Name:  

 

Title:  

 

                              , as an Issuing Bank By:  

 

Name:  

 

Title:  

 

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

EXHIBIT E

[FORM OF]

COMMITMENT EXTENSION SUPPLEMENT

THIS COMMITMENT EXTENSION SUPPLEMENT is made and dated as of             , 20
     by and among                              (the “Additional Commitment
Lender”), AVISTA CORPORATION, a Washington corporation (the “Borrower”), and
UNION BANK, N.A., as Administrative Agent under the Credit Agreement, dated as
of February 11, 2011, among the Borrower, the Lenders listed in Schedule 2.01
thereto, The Bank of New York Mellon, KeyBank National Association and U.S. Bank
National Association, as Co-Documentation Agents, Wells Fargo Bank, National
Association, as Syndication Agent and an Issuing Bank, and Union Bank, N.A., as
Administrative Agent and an Issuing Bank (as amended, modified or supplemented
from time to time, the “Credit Agreement”). Terms used and not otherwise defined
herein are used herein with the meanings ascribed thereto in the Credit
Agreement.

WHEREAS, pursuant to Section 2.20(e) of the Credit Agreement, the Borrower
desires to have an aggregate amount of Commitments up to the aggregate amount of
the Existing Commitments extended; and

WHEREAS, the Additional Commitment Lender is willing to [become an additional
Lender]1 [increase its Commitment]2;

NOW, THEREFORE, the parties hereto agree as follows:

1. Upon the effectiveness of this Commitment Extension Supplement, [the
Additional Commitment Lender shall be a party to the Credit Agreement and shall
be entitled to all of the rights, and be subject to all of the obligations, of a
Lender under the Credit Agreement]1 [the Commitment of the Additional Commitment
Lender shall be increased from $         to $         .]2 [The initial amount of
the Additional Commitment Lender’s Commitment shall be $        .]1

2. The Additional Commitment Lender acknowledges, and agrees to comply with, its
obligation under Section 2.20(e) of the Credit Agreement to purchase assignments
of Loans, unreimbursed LC Disbursements and participations in Letters of Credit
from the other Lenders on the effective date hereof.

3. This Commitment Extension Supplement shall become effective upon the
execution and delivery hereof by the Additional Commitment Lender, the Borrower
and the Administrative Agent.

4. This Commitment Extension Supplement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.

 

 

1

Include if Additional Commitment Lender is not an existing Lender.

2

Include if Additional Commitment Lender is an existing Lender.

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

5. This Commitment Extension Supplement shall be construed in accordance with
and governed by the law of the State of New York.

IN WITNESS WHEREOF, the parties hereto have caused this Commitment Extension
Supplement to be executed as of the day and year first written above.

 

[ADDITIONAL COMMITMENT LENDER] By:  

 

Name:  

 

Title:  

 

AVISTA CORPORATION By:  

 

Name:  

 

Title:  

 

UNION BANK, N.A., as Administrative Agent and an Issuing Bank By:  

 

Name:  

 

Title:  

 

Consented to:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as an Issuing Bank

   By:  

 

     Name:  

 

     Title:  

 

                                                                          
, as an Issuing Bank    By:  

 

     Name:  

 

     Title:  

 

    

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

SCHEDULE 2.01

Names, Commitments and Addresses of Initial Lenders

 

Lender

   Commitment  

Union Bank, N.A.

445 South Figueroa Street

Los Angeles, CA 90071

Attention: Bryan Read

Telecopy: 213-236-4096

 

   $ 50,000,000   

Wells Fargo Bank, National Association

601 West 1st Avenue, Suite 900

Spokane, WA 99201

Attention: Tom Beil / Jessy Hummel

Telecopy: 866-917-7929

 

   $ 50,000,000   

The Bank of New York Mellon

BNY Mellon Center, Room 3600

Pittsburgh, PA 15258-0001

Attention: Mark W. Rogers

Telecopy: 412-236-6112

 

   $ 37,500,000   

KeyBank National Association

601 108th Avenue

Bellevue, WA 98004

Attention: Keven Smith

Telecopy: 425-709-4348

 

   $ 37,500,000   

U.S. Bank National Association

101 South Capitol Boulevard

Boise, ID 83712

Attention: Holland Williams

Telecopy: 208-383-7574

 

   $ 37,500,000   

Bank of America, N.A.

800 5th Avenue, Floor 36

WA 1-501-36-06

Seattle, WA 98104

Attention: Mark Crawford

Telecopy: 206-585-8638

   $ 30,000,000   

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

JPMorgan Chase Bank, N.A.

10 South Dearborn Street, Floor 9

Chicago, IL 60603

Attention: John Zur

Telecopy: 312-732-1762

 

   $30,000,000

UBS Loan Finance LLC

677 Washington Boulevard

Stamford, CT 06901

Attention: Denise Bushee

Telecopy: 203-719-3888

 

   $30,000,000

CIBC Inc.

425 Lexington Avenue, 4th Floor

New York, NY 10017

Attention: Robert W. Casey, Jr.

Telecopy: 212-856-3612

 

   $18,750,000

Credit Suisse AG, Cayman Islands Branch

11 Madison Avenue

New York, NY 10010

Attention: William O’Daly

Telecopy: 212-743-2254

 

   $18,750,000

Scotiabanc Inc.

711 Louisiana Street, Suite 1400

Houston, TX 77002

Attention: Jocelyn Todd

Telecopy: 832-426-6000

 

   $18,750,000

Bank Hapoalim B.M.

1177 Avenue of the Americas

New York, NY 10036-2790

Attention: Helen H. Gateson

Telecopy: 212-782-2382

 

   $10,312,500

Banner Bank

802 West Riverside Avenue

Spokane, WA 99201

Attention: TJ Brill

Telecopy: 509-482-5765

   $10,312,500

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

Comerica Bank

611 Anton Boulevard, 4th Floor

M/C 4462

Costa Mesa, CA 92626

Attention: Steve D. Clear

Telecopy: 714-433-3236

 

   $10,312,500

First Commercial Bank Ltd., New York Branch

750 3rd Avenue, 34th Floor

New York, NY 10017

Attention: Jeffrey Yu

Telecopy: 212-599-6133

 

   $10,312,500      TOTAL:    $400,000,000     

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

SCHEDULE 3.13

Significant Subsidiaries

None.

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

SCHEDULE 4.02(a)(ii)

Required Governmental Approvals

Washington

Order Establishing Compliance with Section 80.08.040 of the Revised Code of
Washington, entered September 29, 2010, in Docket No. UE-101544 of the
Washington Utilities and Transportation Commission.

Oregon

Order No. 10-370, entered September 22, 2010, in file number UF 4265 from the
Public Utility Commission of Oregon.

Idaho

Order No. 32096, entered October 15, 2010, in Case No. AVU-U-10-01 of the Idaho
Public Utilities Commission.

Montana

Default Order No. 4535, entered July 2, 1979, in Docket No. 6690 of the Public
Service Commission of the State of Montana.

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

SCHEDULE 6.01

Existing Secured Indebtedness

First Mortgage Bonds Outstanding under Mortgage and Deed of Trust Dated as of
June 1, 1939,

as Modified by Supplemental Indentures Thereto

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

SUPPLEMENTAL INDENTURE

  

DATED AS OF

  

SERIES

   PRINCIPAL
AMOUNT
ISSUED    PRINCIPAL
AMOUNT
OUTSTANDING       NO.   

DESIGNATION

     

Twenty-Sixth

   April 1, 1993    24   

Secured Medium-Term

Notes, Series A

($250,000,000 authorized)

   $250,000,000    $43,000,000

Thirty-fourth

   November 1, 2004    32    5.45% Series due 2019    $90,000,000    $90,000,000

Thirty-fifth

   December 1, 2004    33    Collateral Series 2004A    $88,850,000   
$25,000,000

Thirty-ninth

   November 1, 2005    39    6.25% Series due 2035    $100,000,000

$50,000,000

   $100,000,000

$50,000,000

Fortieth

   April 1, 2006    40    Collateral Series due 2011    $320,000,000   
$320,000,0001

Forty-first

   December 1, 2006    41    5.70% Series due 2037    $150,000,000   
$150,000,000

Forty-second

   April 1, 2008    42    5.95% Series due 2018    $250,000,000    $250,000,000

Forty-sixth

   September 1, 2009    46    5.125% Series due 2022    $250,000,000   
$250,000,000

Forty-seventh

   November 1, 2009    47    Collateral Series 2009A    $75,000,000   
$75,000,0001

Forty-eighth

   December 1, 2010    48    Collateral Series 2010A    $66,700,000   
$66,700,000

Forty-eighth

   December 1, 2010    49    Collateral Series 2010B    $17,000,000   
$17,000,000

Forty-ninth

   December 1, 2010    50    3.89% Series due 2020    $52,000,000    $52,000,000

Forty-ninth

   December 1, 2010    51    5.55% Series due 2040    $35,000,000    $35,000,000

Fiftieth

   December 1, 2010    52    1.68% Series due 2013    $50,000,000    $50,000,000

Aggregate principal amount of First Mortgage Bonds outstanding through and
including the Fiftieth Supplemental Indenture (but excluding the Fifty-first
Supplemental Indenture) = $1,573,700,000.

 

 

1

To be retired in connection with the delivery of $400,000,000 of First Mortgage
Bonds, Collateral Series 2011A, pursuant to the Fifty-first Supplemental
Indenture.