REVOLVING CREDIT AGREEMENT

dated as of

April 6, 2005

among

SOUTHWEST GAS CORPORATION,

as Borrower,

THE LENDERS LISTED ON THE SIGNATURE PAGES HERETO

and

THE BANK OF NEW YORK,

as Administrative Agent,

BANK OF AMERICA, N.A.,

as Syndication Agent,

JPMORGAN CHASE BANK, N.A.,

as Co-Documentation Agent,

UNION BANK OF CALIFORNIA, N.A.,

as Co-Documentation Agent,

KEYBANK NATIONAL ASSOCIATION,

as Co-Documentation Agent,

BNY CAPITAL MARKETS, INC.,

as Co-Lead Arranger and Bookrunner, and

BANC OF AMERICA SECURITIES, LLC,

as Co-Lead Arranger and Bookrunner

$300,000,000

 

 

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TABLE OF CONTENTS

PAGE

 

ARTICLE I DEFINITIONS

1

 

Section 1.01

Definitions.

1

 

ARTICLE II THE CREDIT FACILITY

18

 

Section 2.01

Loans.

18

 

Section 2.02

Borrowing Procedure.

18

 

Section 2.03

Termination and Reduction and Increase of Commitments.

19

 

Section 2.04

Repayment.

20

 

Section 2.05

Optional Prepayment.

20

 

ARTICLE III INTEREST AND FEES

21

 

Section 3.01

Interest Rate Determination; Conversion

21

 

Section 3.02

Interest on ABR Loans.

21

 

Section 3.03

Interest on Eurodollar Loans.

22

 

Section 3.04

Interest on Overdue Amounts.

23

 

Section 3.05

Day Counts.

23

 

Section 3.06

Maximum Interest Rate.

23

 

Section 3.07

Commitment Fees; Utilization Fee.

24

 

ARTICLE IV DISBURSEMENT AND PAYMENT

25

 

Section 4.01

Disbursement.

25

 

Section 4.02

Method and Time of Payments; Sharing among Lenders.

26

 

Section 4.03

Compensation for Losses.

27

 

Section 4.04

Withholding and Additional Costs.

27

 

Section 4.05

Funding Impracticable.

30

 

Section 4.06

Expenses; Indemnity.

31

 

Section 4.07

Survival.

32

 

Section 4.08

Substitution of a Lender.

32

 

ARTICLE V REPRESENTATIONS AND WARRANTIES

32

 

Section 5.01

Representations and Warranties.

32

 

Section 5.02

Survival.

38

 

ARTICLE VI CONDITIONS PRECEDENT

38

 

Section 6.01

Conditions to the Availability of the Commitments.

38

 

Section 6.02

Conditions to All Loans.

40

 

Section 6.03

Satisfaction of Conditions Precedent.

40

 

 

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ARTICLE VII COVENANTS

40

 

Section 7.01

Affirmative Covenants.

40

 

Section 7.02

Negative Covenants.

45

 

Section 7.03

Financial Covenants.

47

 

ARTICLE VIII EVENTS OF DEFAULT

48

 

Section 8.01

Events of Default

48

 

 

ARTICLE IX THE ADMINISTRATIVE AGENT

51

 

Section 9.01

The Agency.

51

 

Section 9.02

The Administrative Agent’s Duties.

51

 

Section 9.03

Limitation of Liabilities.

51

 

Section 9.04

The Administrative Agent as a Lender.

52

 

Section 9.05

Lender Credit Decision.

52

 

Section 9.06

Indemnification.

52

 

Section 9.07

Successor Administrative Agent

53

 

ARTICLE X EVIDENCE OF LOANS; TRANSFERS

53

 

Section 10.01

Evidence of Loans; Revolving Credit Notes.

53

 

Section 10.02

Participations.

54

 

Section 10.03

Assignments.

54

 

Section 10.04

Certain Pledges.

55

 

ARTICLE XI MISCELLANEOUS

55

 

Section 11.01

APPLICABLE LAW.

55

 

Section 11.02

WAIVER OF JURY.

55

 

Section 11.03

Jurisdiction and Venue.

56

 

Section 11.04

Set-off.

56

 

Section 11.05

Confidentiality.

56

 

Section 11.06

Integration; Amendments and Waivers.

57

 

Section 11.07

Cumulative Rights; No Waiver.

58

 

Section 11.08

Notices.

58

 

Section 11.09

Separability.

59

 

Section 11.10

Parties in Interest.

59

 

Section 11.11

Execution in Counterparts.

60

 

Section 11.12

USA Patriot Act Notice.

60

 

 

 

 

 

 

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SCHEDULE

Schedule I

Lenders and Commitments

 

Schedule II

Form of Schedule II Certificate

EXHIBITS

Exhibit A

Form of Borrowing Request for Loans

 

Exhibit B

Form of Conversion Request

 

Exhibit C

Form of Revolving Credit Note

 

Exhibit D

Form of Opinion of Borrower’s Counsel

Exhibit E

Form of Assignment and Acceptance

 

Exhibit F

Form of Confidentiality Agreement

 

Exhibit G

Form of Increase Request

 

 

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REVOLVING CREDIT AGREEMENT, dated as of April 6, 2005, among SOUTHWEST GAS
CORPORATION, a California corporation (the “Borrower”), each of the lenders from
time to time parties to this Agreement (collectively, the “Lenders”), and THE
BANK OF NEW YORK, as Administrative Agent (the “Administrative Agent”).

WITNESSETH:

WHEREAS, the Borrower has requested the Lenders severally to commit to lend to
the Borrower up to $300,000,000 on a revolving basis for general corporate
purposes, including, without limitation, for commercial paper back-up;

WHEREAS, the Lenders are willing to make such loans, on the terms and conditions
provided herein;

NOW, THEREFORE, the parties agree as follows:

ARTICLE I

 

DEFINITIONS

Section 1.01

Definitions.

(a)        Terms Generally. The definitions ascribed to terms in this Agreement
apply equally to both the singular and plural forms of such terms. Whenever the
context may require, any pronoun shall be deemed to include the corresponding
masculine, feminine and neuter forms. The words “include”, “includes” and
“including” shall be interpreted as if followed by the phrase “without
limitation”. The phrase “individually or in the aggregate” shall be deemed
general in scope and not to refer to any specific Section or clause of this
Agreement. 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. The
table of contents, headings and captions herein shall not be given effect in
interpreting or construing the provisions of this Agreement. Except as otherwise
expressly provided herein, all references to “dollars” or “$” shall be deemed
references to the lawful money of the United States of America.

(b)        Accounting Terms. Except as otherwise expressly provided herein, the
term “consolidated” and all other terms of an accounting nature shall be
interpreted and construed in accordance with GAAP, as in effect from time to
time; provided, however, that, for purposes of determining compliance with any
covenant set forth in Article VII, such terms shall be construed in accordance
with GAAP as in effect on the date of this Agreement, applied on a basis
consistent with the construction thereof applied in preparing the Borrower’s
audited financial statements referred to in Section 5.01(k). If there shall
occur a change in GAAP which but for the foregoing proviso would affect the
computation used to determine compliance with any covenant set forth in Article
VII, the Borrower and the Lenders agree to negotiate in good faith in an effort
to agree upon an amendment to this Agreement that will permit compliance with
such covenant to be determined by reference to GAAP as so changed while
affording the Lenders the protection intended to be afforded by such covenant
prior to such change (it being

 

 

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understood, however, that such covenant shall remain in full force and effect in
accordance with its existing terms unless and until such amendment shall become
effective).

(c)        Other Terms. The following terms have the meanings ascribed to them
below or in the Sections of this Agreement indicated below:

“ABR Loans” means Loans that bear interest at a rate or rates determined by
reference to the Alternate Base Rate.

“Acquisition” means any purchase or other acquisition of (a) any assets of any
other Person that, taken together, constitute a business unit, (b) any capital
stock of or equity interests in any other Person if, immediately thereafter,
such other Person would be a Subsidiary of the Borrower or a Subsidiary of a
Subsidiary of the Borrower, or (c) any assets of any other Person otherwise not
in the ordinary course of business.

“Acquisition Consideration” has the meaning assigned to such term in Section
7.02(c) hereof.

“Administrative Agent” means The Bank of New York, acting in the capacity of
administrative agent for the Lenders, or any successor administrative agent
appointed pursuant to the terms of this Agreement.

“Administrative Questionnaire” means an administrative details reply form
delivered by a Lender to the Administrative Agent, in substantially the form
provided by the Administrative Agent or the form attached to an Assignment and
Acceptance.

“Affiliate” means, when used with reference to any Person, a Person (other than
a Subsidiary) which directly or indirectly controls, is controlled by, or is
under common control with, such other Person. For purposes of this definition,
“control” (including with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”) as applied to any Person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.

“Agreement” means this Revolving Credit Agreement, as it may be amended,
modified or supplemented from time to time.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of:

(i)         the rate of interest from time to time publicly announced by the
Administrative Agent in The City of New York as its prime commercial loan rate
in effect on such day; and

(ii) the sum of (a) 1/2 of 1% per annum and (b) the Federal Funds Rate in effect
on such day.

The Alternate Base Rate shall change as and when the greater of the foregoing
rates shall change. Any change in the Alternate Base Rate shall become effective
as of the opening of business on the day of such change.

 

2

 

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“Applicable Lending Office” means, with respect to a Loan, the applicable office
of the Lender for making such Loan, as specified in Schedule 1 or in an
Administrative Questionnaire delivered to the Administrative Agent as the office
from which such Lender makes Loans of the relevant type.

“Applicable Margin” means, at any date and with respect to each Loan during
which the applicable Pricing Level set forth below is in effect, the percentage
set forth below adjacent to such Pricing Level:

Pricing
Level

 

 

Applicable
Margin

Applicable
Margin

 

 

 

Eurodollar Loans

ABR Loans

I

 

 

0.400%

0.000%

II

 

 

0.500%

0.000%

III

 

 

0.625%

0.000%

IV

 

 

0.875%

0.000%

V

 

 

1.250%

0.125%

 

“Assignee” has the meaning assigned to such term in Section 10.03.

“Assignment and Acceptance” has the meaning assigned to such term in Section
10.03.

“Available Commitment” means, on any day, an amount equal to (a) the Total
Commitment on such day minus (b) the aggregate outstanding principal amount of
Loans on such day.

“Borrower” has the meaning assigned to such term in the preamble.

“Borrowing Date” means, with respect to any Loan, the Business Day set forth in
the relevant Borrowing Request as the date upon which the Borrower desires to
borrow such Loan.

“Borrowing Request” means a request, substantially in the form of Exhibit A, by
the Borrower for Loans, which shall specify (a) the requested Borrowing Date,
(b) the aggregate amount of such Loans, and (c) (i) whether such Loans are to
bear interest initially as ABR Loans or Eurodollar Loans and (ii) if applicable,
the initial Interest Period therefor.

“Business Day” means any day that is (a) not a Saturday, Sunday or other day on
which commercial banks in the City of New York and California are authorized by
law to close and (b) with respect to any Eurodollar Loan, a day on which
commercial banks are open for domestic and international business (including
dealings in U.S. dollar deposits) in London.

 

3

 

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“Capital Lease” means, as to the Borrower and its Subsidiaries, a lease of (or
other agreement conveying the right to use) real and/or personal Property, the
obligations with respect to which are required to be classified and accounted
for as a capital lease on a balance sheet of the Borrower or any of its
Subsidiaries under GAAP (including Statement of Financial Accounting Standards
No. 13 of the Financial Accounting Standards Board).

“Capital Lease Obligations” means, as to the Borrower and its Subsidiaries, the
obligations of the Borrower or any of its Subsidiaries to pay rent or other
amounts under a Capital Lease and, for purposes of this Agreement, the amount of
such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP (including such Statement No. 13 referenced in the
definition of “Capital Lease”).

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and any regulation promulgated thereunder.

“Change in Control” means the occurrence of either of the following conditions:
(a) any Person or group of associated Persons acting in concert shall have
acquired an aggregate of more than 51 % of the outstanding shares of voting
stock of the Borrower, or (b) individuals who constitute the board of directors
of the Borrower on the date hereof (the “Incumbent Board”) cease for any reason
to constitute at least a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Borrower’s shareholders, was approved by a vote of a majority of
the directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Borrower in which such person is named as
a nominee for director, without objection to such nomination) shall be, for
purposes of this clause (b), considered as though such person were a member of
the Incumbent Board.

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

“Commitment” means, with respect to a Lender, the amount set forth opposite such
Lender’s name under the heading “Commitment” on Schedule 1, as such amount may
be reduced or increased from time to time pursuant to Section 2.03.

“Commitment Fee” has the meaning assigned to such term in Section 3.07(a).

“Confidential Information” means information delivered to the Administrative
Agent for the Lenders or to a Lender by or on behalf of the Borrower in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is confidential or proprietary in nature at the time it is so
delivered or information obtained by the Administrative Agent or such Lender in
the course of its review of the books or records of the Borrower contemplated
herein; provided that such term shall not include information (a) that was
publicly known or otherwise known to the Administrative Agent or such Lender
prior to the time of such disclosure, (b) that subsequently becomes publicly
known through no act or omission by the Administrative Agent or such Lender or
any Person acting on the Administrative Agent or such Lender’s behalf, (c) that
otherwise becomes known from a third party who the Administrative Agent or such
Lender did not know or have reason to believe received such information in a
restricted or unlawful manner or (d) that constitutes financial information
delivered to the Administrative Agent or such Lender that is otherwise publicly
available.

 

4

 

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“Contingent Obligation” means, for the Borrower and its Subsidiaries, any direct
or indirect Contractual Obligation with respect to any Debt, lease, dividend,
letter of credit or other obligation (the “primary obligations”) of another
Person (the “primary obligor”), including, without limitation, any obligation of
the Borrower or any Subsidiary, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligations or any Property
constituting direct or indirect security therefor, or (b) to advance or provide
funds (i) for the payment or discharge of any such primary obligation, or (ii)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor prior to such obligation
being a stated or determinable amount, or (c) to purchase Property, securities
or services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, or (d) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or if indeterminable, the maximum reasonably
anticipated liability in respect thereof.

“Contractual Obligations” means, as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its Property is bound.

“Conversion Date” means, with respect to a Loan, the date on which a conversion
of interest rates on such Loan shall take effect.

“Conversion Request” means a request, substantially in the form of Exhibit B, by
the Borrower to convert the interest rate basis for all or portions of
outstanding Loans, which shall specify (a) the requested Conversion Date, which
shall be not fewer than three Business Days after the date of such Conversion
Request, (b) the aggregate amount of such Loans, on and after the Conversion
Date, which are to bear interest as ABR Loans or Eurodollar Loans and (c) the
term of the Interest Periods therefor, if any.

“CPUC Order” means, collectively, the Opinion addressed to the Company, dated
April 22, 2002, and Decision No. 02-04-054, as modified by Decision No.
02-04-072, of the California Public Utilities Commission.

“Credit Documents” means this Agreement and the Notes.

“Debt” means, with respect to the Borrower and its Subsidiaries, (a) all
obligations for borrowed money, including interest or fees of any nature related
to the borrowing of money accrued but unpaid, (b) all obligations under letters
of credit, bills of exchange or bankers acceptances, (c) all obligations
representing the deferred purchase price of Property or services which in
accordance with GAAP would be shown on the balance sheet as a liability, (d) all
obligations, whether or not assumed by or with recourse to such Person, secured
by Liens upon, or payable out of the proceeds or production from, assets owned
by such Person, (e) all Capital Lease Obligations, and (f) all Contingent
Obligations.

 

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“Default” means any event or circumstance which, with the giving of notice or
the passage of time, or both, would be an Event of Default.

“Effective Date” has the meaning assigned to such term in Section 6.01.

“Environmental Claim” means all claims, however asserted, by any Governmental
Authority or other Person alleging potential liability or responsibility for
violation of any Environmental Law or for release or injury to the environment
or threat to public health, personal injury (including sickness, disease or
death), property damage, natural resources damage, or otherwise alleging
liability or responsibility for damages (punitive or otherwise), cleanup,
removal, remedial or response costs, restitution, civil or criminal penalties,
injunctive relief, or other type of relief, resulting from or based upon (a) the
presence, placement, discharge, emission or release (including intentional and
unintentional, negligent and non-negligent, sudden or non-sudden, accidental or
non-accidental placement, spills, leaks, discharges, emissions or releases) of
any hazardous material at, in or from Property, whether or not owned by the
Borrower, or (b) any other circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.

“Environmental Laws” means all federal, state or local laws, statutes, common
law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters; including
CERCLA, the Clean Air Act, the Federal Water Pollution Control Act of 1972, the
Solid Waste Disposal Act, the Federal Resource Conservation and Recovery Act and
the Toxic Substances Control Act.

“Environmental Permits” shall have the meaning ascribed to such term in Section
5.01(1)(ii).

“Equity Issuance” means the issuance of any equity securities or the receipt of
any capital contribution, in each case, by the Borrower or any Subsidiary, other
than (a) any issuance of equity securities to, or receipt of any such capital
contribution from, the Borrower, (b) the issuance of stock in connection with an
Acquisition, or (c) the issuance of common stock pursuant to a stock option
plan, dividend reinvestment plan, employee benefit investment plan or for
executive compensation, in each case, in the ordinary course of business.

“ERISA” means the Employee Retirement Income Security Act of 1974 and any
regulation promulgated thereunder, as amended from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower or any Subsidiary of the Borrower within
the meaning of Section 414(b), 414(c) or 414(m) of the Code.

“ERISA Event” means (a) a Reportable Event with respect to a Qualified Plan or a
Multiemployer Plan; (b) a withdrawal by any ERISA Affiliate from a Qualified
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA); (c) a complete
or partial withdrawal by any ERISA Affiliate from a Multiemployer Plan; (d) the
filing of a notice of intent to terminate, the treatment of a plan

 

6

 

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amendment as a termination under Section 4041 or 4041A of ERISA or the
commencement of proceedings by the PBGC to terminate a Qualified Plan or
Multiemployer Plan subject to Title IV of ERISA; (e) a failure to make required
contributions to a Qualified Plan or Multiemployer Plan; (f) an event or
condition which might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Qualified Plan or Multiemployer Plan; (g) the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon any ERISA Affiliate; or (h) an
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code with respect to any Qualified Plan.

“Eurodollar Lending Office” initially, the office of each Lender through which
it will be making or maintaining Eurodollar Loans, as reported by such Lender to
the Administrative Agent.

“Eurodollar Loans” means Loans that bear interest at a rate or rates determined
by reference to LIBOR.

“Eurodollar Reserve Percentage” means, for any day, the percentage prescribed by
the Federal Reserve Board for determining the maximum reserve requirement
(including any marginal, supplemental or emergency reserve requirements) on such
day for a member bank of the Federal Reserve System in respect of “Eurocurrency
Liabilities” (as defined in Regulation D of the Federal Reserve Board (or any
successor regulation), as amended from time to time) for other deposits having a
maturity approximately equal to the applicable Interest Period.

“Event of Default” has the meaning assigned to such term in Section 8.01.

“Excluded Taxes” means all present and future taxes, levies, imposts, duties,
deductions, withholdings, fees, liabilities and similar charges imposed on or
measured by the overall net income of any Lender (or any office, branch or
subsidiary of such Lender) or any franchise taxes, taxes on doing business or
taxes measured by capital or net worth imposed on any Lender (or any office,
branch or subsidiary of such Lender), in each case imposed by the United States
of America or any political subdivision or taxing authority thereof or therein,
or taxes on or measured by the overall net income of any office, branch or
subsidiary of a Lender or any franchise taxes, taxes imposed on doing business
or taxes measured by capital or net worth imposed on any office, branch or
subsidiary of such Lender, in each case imposed by any foreign country or
subdivision thereof in which such Lender’s principal office or Eurodollar
Lending Office is located.

“Existing Credit Agreement” means the Revolving Credit Agreement, dated as of
May 4, 2004, by and among the Borrower, the Lenders party thereto and the
Administrative Agent, as amended from time to time.

“Federal Funds Rate” means, for any day, the rate per annum (rounded, if
necessary, to the next greater l/16 of 1 %) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (i) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business

 

7

 

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Day, and (ii) if no such rate is so published on such next succeeding Business
Day, then the Federal Funds Rate for such day shall be the average rate quoted
to the Administrative Agent on such day on such transactions, as determined by
the Administrative Agent.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority).

“Funded Debt” means, for the Borrower and its Subsidiaries, (a) all obligations
for borrowed money, (b) all obligations representing the deferred purchase price
of Property or services which in accordance with GAAP would be shown on a
balance sheet of such Person as a liability due more than 12 months from the
date of the occurrence or evidenced by a note or similar instrument, (c) all
Capital Lease Obligations, (d) all Contingent Obligations and (e) Preferred
Securities to the extent that the aggregate stated liquidation amount thereof
exceeds 7.5% of Total Capitalization.

“GAAP” means generally accepted accounting principles, as set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entities as may be approved by a significant segment of the accounting
profession of the United States of America.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

“Hazardous Materials” means all those substances which are regulated by, or
which may form the basis of liability under, any Environmental Law, including
all substances identified under any Environmental Law as a pollutant,
contaminant, waste, solid waste, hazardous waste, hazardous constituent, special
waste, hazardous substance, hazardous material, or toxic substance, or petroleum
or petroleum derived substance or waste.

“Increase Request” means a request by the Borrower for an increase of the Total
Commitment in accordance with Section 2.03.

“Incremental Lender” has the meaning assigned to such term in Section 2.03(c).

“Incumbent Board” has the meaning specified in the definition of “Change of
Control.”

“Indemnitee” has the meaning assigned to such term in Section 4.06.

“Interest Period” means, with respect to any Eurodollar Loan, each one week, or
one, two, three or six-month period, or if made available by all Lenders,
periods of seven to thirty-one days or twelve months, such period being the one
selected by the Borrower pursuant to Section 2.02 or 3.01 and commencing on the
date such Loan is made, on any conversion date from an ABR Loan to a Eurodollar
Loan or at the end of the preceding Interest Period, as the case may be;
provided, however, that:

(a)        any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next Business Day, unless such Business
Day falls

 

8

 

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in another calendar month, in which case such Interest Period shall end on the
next preceding Business Day;

(b)        any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall, subject to
clause (c) below, end on the last Business Day of a calendar month; and

(c)        any Interest Period that would otherwise end after the Termination
Date then in effect shall end on the Termination Date.

“Investments” means any direct or indirect purchase or acquisition of any
obligations or other securities of, or any interest in, any Person (other than
purchases or acquisitions constituting an Acquisition), or any advance (other
than payroll, travel and similar advances to cover matters that are expected at
the time of such advance ultimately to be treated as an expense for accounting
purposes and that are made in the ordinary course of business), loan, extension
of credit or capital contribution to, or any other investment in, any Person
including, without limitation, any Affiliates of such Person.

“IRS” means the Internal Revenue Service (or any successor Governmental
Authority).

“Lease Obligations” means, as of the date of any determination thereof, for the
Borrower and its Subsidiaries the aggregate rental commitments under leases for
real and/or personal Property (net of income received or receivable (if no
default), from subleases thereof, but including taxes, insurance, maintenance
and similar expenses which the lessee is obligated to pay under the terms of
said leases), whether or not such obligations are reflected as liabilities or
commitments on a balance sheet of the Borrower or any Subsidiary or in the notes
thereto, excluding, however, Capital Lease Obligations.

“Lenders” has the meaning assigned to such term in the preamble.

“LIBOR” means, with respect to any Interest Period, the rate per annum
determined by the Administrative Agent to be the offered rate for dollar
deposits with a term comparable to such Interest Period that appears on the
display designated as Page 3750 on the Dow Jones Telerate Service (or such other
page as may replace such page on such service, or on another service designated
by the British Bankers’ Association, for the purpose of displaying the rates at
which dollar deposits are offered by leading banks in the London interbank
deposit market) at approximately 11:00 A.M., London time, on the second Business
Day preceding the first day of such Interest Period. If such rate does not
appear on such page, “LIBOR” shall mean the arithmetic mean (rounded, if
necessary, to the next higher 1/16 of 1%) of the respective rates of interest
communicated by the LIBOR Reference Bank to the Administrative Agent as the rate
at which U.S. dollar deposits are offered to the LIBOR Reference Bank by leading
banks in the London interbank deposit market at approximately 11:00 A.M., London
time, on the second Business Day preceding the first day of such Interest Period
in an amount substantially equal to the respective LIBOR Reference Amounts for a
term equal to such Interest Period.

“LIBOR Reference Amount” means, with respect to any LIBOR Reference Bank and
Interest Period, the amount of the Eurodollar Loan of the Lender which is, or is
affiliated with,

 

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such LIBOR Reference Bank, scheduled to be outstanding during that Interest
Period (without taking into account any assignment or participation and rounded
up to the nearest integral multiple of $1,000,000).

“LIBOR Reference Bank” means The Bank of New York; provided that if the LIBOR
Reference Bank assigns its Commitment or all its Loans to an unaffiliated
institution, such Person shall be replaced as a LIBOR Reference Bank by the
Administrative Agent’s appointment, in consultation with the Borrower and with
the consent of the Required Lenders, of another bank which is a Lender (or an
Affiliate of a Lender).

“Lien” means any voluntary or involuntary mortgage, assignment, pledge, security
interest, encumbrance, lien, claim or charge of any kind on or with respect to,
or any preferential arrangement with respect to the payment of any obligations
with the proceeds or from the production of, any asset of any kind, including,
without limitation, any agreement to give any of the foregoing, any conditional
sale or other title retention agreement or any lease in the nature thereof.

“Loans” has the meaning assigned to such term in Section 2.01.

“Margin Stock” means “margin stock” as such term is defined in Regulations T, U
or X of the Federal Reserve Board.

“Material Adverse Effect” means a change, or announcement of a change, which
would reasonably be expected, immediately or with the passage of time, to result
in a material adverse change in, or a material adverse effect upon, any of (i)
the operations, business, Properties, financial condition of the Borrower or the
Borrower and its Subsidiaries taken as a whole, (ii) the ability of the Borrower
timely to perform any of its material obligations, or of the Lenders to exercise
any remedy, under any Credit Document or (iii) the legality, validity, binding
nature or enforceability of any Credit Document.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that
is a nationally recognized rating agency.

“Multiemployer Plan” means a “multiemployer plan” (within the meaning of Section
4001 (a)(3) of ERISA) and to which any ERISA Affiliate makes, is making, or is
obligated to make contributions or has made, or been obligated to make,
contributions.

“Net Worth” means the amount of (a) Borrower’s common shareholders’ equity
determined in accordance with GAAP, plus (b) preferred and preference stock,
plus (c) the aggregate stated liquidation amount of Preferred Securities, but
not in excess of 7.5% of Total Capitalization.

“New Lender” has the meaning assigned to such term in Section 2.03(c).

“Obligations” means the Loans and any other liability or duty owing by the
Borrower to the Administrative Agent or any Lender or Indemnitee hereunder.

“Participant” has the meaning assigned to such term in Section 10.02.

 

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“PBGC” means the Pension Benefit Guaranty Corporation (or any successor
Governmental Authority).

“Pension Plan” means a Plan that (i) is an employee pension benefit plan, as
defined in Section 3(3) of ERISA (other than a Multiemployer Plan) and (ii) is
subject to the provisions of Title IV of ERISA or is subject to the minimum
funding standards under Section 412 of the Code.

“Permitted Investments” means Investments made by the Borrower and its
Subsidiaries in the ordinary course of business as presently conducted or
transactions permitted by Section 7.02(b), provided that the Borrower may only
make cash Investments in (a) U.S. government and agency securities; (b) money
market funds rated AA or A-1 or better by S&P and Aaa or P-1 or better by
Moody’s; (c) municipal securities rated within the top two ratings by S&P and
Moody’s; (d) repurchase agreements with reputable financial institutions fully
secured by collateral consisting of securities described in clauses (a) and (b)
above having a market value at least equal to 102% of the amount so invested;
(e) bankers’ acceptances issued by a bank rated Aaa or better by Moody’s or
rated AA or better by S&P and eligible for purchase by a Federal Reserve Bank;
(f) interest-bearing demand or time deposits (including certificates of deposit)
in banks and savings and loan associations, provided such deposits are (i)
secured at all times, in the manner and to the extent provided by law, by
collateral consisting of securities described in clauses (a) and (b) above
having a market value of no less than 102% of the amount of moneys so invested
or (ii) fully insured by federal deposit insurance; (g) shares of any “regulated
investment company” within the meaning of Section 851(a) of the Code, the assets
of which consist only of securities or investments described in clauses (a)
through (f) above; (h) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof) which
have been rated at least A-1 by S&P and at least P-1 by Moody’s at the time of
such investment; (i) other obligations of corporations which have been rated at
least AA by S&P and at least Aaa by Moody’s at the time of such investment; (j)
open ended mutual funds, as regulated by Rule 2a-7 under the Investment Company
Act of 1940 and whose net asset value remains a constant $1 a share; (k)
investments directed by the Borrower in conjunction with industrial development
revenue bonds, and (1) Subsidiaries, Affiliates and transactions permitted by
Section 7.02(b).

“Permitted Liens” means any of the following:

(a)        Liens on any Property acquired, constructed, or improved by the
Borrower or its Subsidiaries after the Effective Date that are created or
assumed contemporaneously with, or within 120 days after, such acquisition or
completion of the construction or improvement, or within six months thereafter
pursuant to a firm commitment for financing arranged with a lender or investor
within such 120-day period, to secure or provide for the payment of all or any
part of the purchase price of such Property or the cost of such construction or
improvement incurred after the Effective Date or, in addition to Liens
contemplated by clauses (b) and (c) below, Liens on any Property existing at the
time of acquisition thereof, provided that the Liens shall not apply to any
Property theretofore owned by the Borrower or its Subsidiaries other than, in
the case of any such construction or improvement, any theretofore unimproved
Property on which the Property so constructed or the improvement is located;

 

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(b)        Existing Liens on any Property or indebtedness of a corporation that
is merged with or into or consolidated with the Borrower or its Subsidiaries or
becomes a Subsidiary; provided that the Liens shall not apply to any Property
theretofore owned by the Borrower or its Subsidiaries;

(c)        Liens in favor of the United States of America, any state or any
foreign country or any department, agency or instrumentality or political
subdivision of any such jurisdiction to secure partial, progress, advance or
other payment pursuant to any contract or statute or to secure any indebtedness
incurred for the purpose of financing all or any part of the purchase price or
cost of constructing or improving the Property subject to such Liens, including,
without limitation, Liens to secure debt of the pollution control or industrial
revenue bond type;

(d)        Liens on current assets of the Borrower or its Subsidiaries to secure
loans to the Borrower or its Subsidiaries which mature within 12 months from the
creation thereof and which are made in the ordinary course of business;

(e)        Liens on any Property (including any natural gas, oil or other
mineral property of the Borrower or its Subsidiaries) to secure all or part of
the cost of exploration or drilling for or development of oil or gas reserves or
laying a pipeline or to secure debt incurred to provide funds for any such
purpose;

(f)         Any Lien existing on Property of the Borrower or its Subsidiaries on
the Effective Date;

(g)        Liens on moneys or U.S. Government obligations deposited pursuant to
Article Thirteen of the Borrower’s July 15, 1996 Indenture and Article Four of
the Borrower’s August 1, 1986 Indenture;

(h)        Liens for the sole purpose of extending, renewing or replacing, in
whole or in part, Liens securing debt of the type referred to in the foregoing
clauses (a) through (g), inclusive, or this clause (h); provided, however, that
the principal amount of debt so secured at the time of such extension, renewal
or replacement shall not be increased, and that such extension or replacement
shall be limited to all or part of the Property or indebtedness which secured
the Lien so extended, renewed or replaced (plus improvements on such Property);

(i)         Carriers, warehousemen’s, mechanics’, landlords’, materialmen’s,
repairmen’s or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty and which are being
contested in good faith and by appropriate proceedings;

(j)         Liens (other than any Lien imposed by ERISA) on Property of the
Borrower or any of its Subsidiaries incurred, or pledges or deposits required,
in connection with workers compensation, unemployment insurance and other social
security legislation;

 

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(k)        Liens on Property of the Borrower or any of its Subsidiaries securing
(i) the performance of bids, trade contracts (other than for borrowed money),
leases, statutory obligations, and (ii) obligations on surety and appeal bonds,
and (iii) other obligations of a like nature incurred in the ordinary course of
business;

(l)         Licenses, easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the Property subject thereto or interfere
with the ordinary conduct of the businesses of the Borrower and its
Subsidiaries;

(m)       Liens on the Property of a Subsidiary (i) other than a Significant
Subsidiary which could not reasonably be expected to have a Material Adverse
Effect and (ii) Liens on the Property of Northern Pipeline Construction, Co.;

(n)

Intellectual property licenses;

(o)        Any attachment or judgment Lien not constituting an Event of Default
under Section 8.01(g); and

(p)        Leases or subleases granted to others not interfering in any material
respect with the ordinary conduct of the business of the Borrower and UCC
financing statements relating solely thereto.

“Person” means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, entity or
government (whether federal, state, county, city, municipal or otherwise,
including any instrumentality, division, agency, body or department thereof).

“Plan” means an employee benefit plan (as defined in Section 3(a) of ERISA)
which the Borrower or any ERISA Affiliate sponsors or maintains or to which the
Borrower or ERISA Affiliate makes or is obligated to make contributions, and
includes any Multiemployer Plan or Qualified Plan.

“Preferred Securities” means any preferred securities issued by a financing
entity (i.e., partnership, trust, limited liability company, etc.) used
exclusively to raise capital for the Borrower having the following structural
characteristics: (a) the financing entity is capitalized by a nominal equity
investment from the Borrower and the remainder through preferred securities
issued by the financing entity, (b) the financing entity lends the proceeds from
the issuance of preferred securities to the Borrower in exchange for
subordinated debt securities (which debt securities are subordinated in all
respects to the Funded Debt of the Borrower, except for Funded Debt which by its
terms is expressly subordinated to or pari passu with such debt securities), (c)
the Borrower makes periodic interest payments (associated with the subordinated
debt securities) to the financing entity which, in turn, are used to make
corresponding payments to holders of the preferred securities of the financing
entity, (d) the subordinated debt securities issued by the Borrower and
corresponding preferred securities issued by the financing entity have a
maturity of at least thirty years, (e) interest payments on the subordinated
debt securities may be deferred at the Borrower’s discretion for one or more
consecutive periods of up to five years, which

 

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would result in a corresponding deferral of payments to holders of the preferred
securities, plus accrual of interest thereon, and (f) the subordinated debt
securities and corresponding preferred securities may not be redeemed for a
period of five years from the date of issuance other than as a result of a tax
or other special event.

“Prescribed Forms” has the meaning assigned to such term in Section 4.04(a).

“Pricing Level I” means at any time the Borrower’s Senior Debt Rating is (a) A-
or higher by S&P or (b) A3 or higher by Moody’s.

“Pricing Level II” means at any time the Borrower’s Senior Debt Rating is (a)
BBB+ or higher by S&P or (b) Baa1 or higher by Moody’s, and Pricing Level I is
not applicable.

“Pricing Level III” means at any time the Borrower’s Senior Debt Rating is (a)
BBB or higher by S&P or (b) Baa2 or higher by Moody’s, and Pricing Levels I and
II are not applicable.

“Pricing Level IV” means at any time the Borrower’s Senior Debt Rating is (a)
BBB- or higher by S&P or (b) Baa3 or higher by Moody’s, and Pricing Levels I, II
and III are not applicable.

“Pricing Level V” means at any time the Borrower’s Senior Debt Rating is (1)
less than or equal to BB+ by S&P or (2) less than or equal to Ba1 by Moody’s,
and Pricing Levels I, II, III, and IV are not applicable.

“Property” means all types of real, personal, tangible, intangible or mixed
property.

“Proposed Lender” has the meaning assigned to such term in Section 2.03(c).

“Pro Rata Share” means, with respect to any Lender at any time of determination,
in relation to Loans, the proportion of such Lender’s Commitment to the Total
Commitment then in effect or, after the Termination Date, the proportion of such
Lender’s Loans to the aggregate amount of Loans then outstanding.

“Qualified Plan” means a pension plan (as defined in Section 3(2) of ERISA)
intended to be tax-qualified under Section 401(a) of the Code and which any
ERISA Affiliate sponsors, maintains, or to which it makes or is obligated to
make contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the
immediately preceding period covering at least five (5) plan years, but
excluding any Multiemployer Plan.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Required Lenders” means, at any date of determination, Lenders having at least
51% of the Total Commitment then in effect or, if the Total Commitment has been
cancelled or terminated, holding at least 51% of the aggregate unpaid principal
amount of the Loans then outstanding.

 

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“Requirement of Law” means, as to any Person, any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its Property or to which the Person or any of its Property is subject.

“Responsible Officer” means the chief executive officer, president, chief
financial officer, chief accounting officer, treasurer or any vice president,
senior vice president or executive vice president of the Borrower.

“Revolving Credit Notes” means the promissory notes of the Borrower
substantially in the form of Exhibit C.

“SEC” means the Securities and Exchange Commission (or any successor
Governmental Authority).

“Senior Debt Rating” means the Borrower’s senior unsecured debt ratings from
either S&P and Moody’s.

“S&P” means Standard & Poor’s Ratings Group and any successor thereto that is a
nationally recognized rating agency.

“Significant Subsidiary” means any Subsidiary of the Borrower having 10% or more
of the total assets of the Borrower and its Subsidiaries on a consolidated basis
as of the end of any fiscal quarter or generating 10% or more of the income of
the Borrower and its Subsidiaries on a consolidated basis during the most
recently completed four fiscal quarters for which financial statements have been
delivered pursuant to Section 7.01(a).

“Subsidiary” means any corporation, association, partnership, joint venture or
other business entity of which the Borrower and/or any subsidiary of the
Borrower either (a) in respect of a corporation, owns more than 50% of the
outstanding stock having ordinary voting power to elect a majority of the board
of directors or similar managing body, irrespective of whether or not at the
time the stock of any class or classes shall or might have voting power by
reason of the happening of any contingency, or (b) in respect of an association,
partnership, joint venture or other business entity, is the sole general partner
or is entitled to share in more than 50% of the profits, however determined.

“Substitute Lender” has the meaning ascribed to such term in Section 4.08.

“Taxes” has the meaning assigned to such term in Section 4.04(a).

“Termination Date” means, April 5, 2010, or such earlier date on which the
Revolving Credit Notes shall become due and payable, whether by acceleration or
otherwise.

“Total Capitalization” means Funded Debt plus Net Worth.

“Total Commitment” means, on any day, the aggregate Commitments on such day of
all the Lenders.

 

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“Unfunded Pension Liabilities” means the excess of a Plan’s accrued benefits, as
defined in Section 3(23) of ERISA, over the current value of that Plan’s assets,
as defined in Section 3(26) of ERISA.

“Unsecured Debt” means all Debt which has not been secured by a pledge of any
real or personal property.

“Unused Commitment” means, with respect to a Lender on any day, such Lender’s
Commitment in effect on such day, less the principal amount of such Lender’s
Revolving Credit Loans outstanding on such day.

“Utilization Fee” has the meaning assigned to such term in Section 3.07(b).

(d)        Ratings Determinations. Whenever this Agreement requires the
determination of the Borrower’s Senior Debt Rating (i) if there is a split
rating as between Moody’s and S&P (1) by one rating category, the higher of the
two ratings will apply and (2) by more than one category, the rating that is one
rating level below the higher rating will apply, (ii) if any rating established
by Moody’s or S&P shall be changed (other than as a result of a change in the
rating system of either Moody’s or S&P), such change shall be given effect as of
the date on which such change is first announced by the rating agency making
such change and (iii) if both Moody’s and S&P have not rated the Company’s
senior Unsecured Debt, Pricing Level V will apply for the purposes of
determining the Applicable Margin, the Utilization Fee and the Commitment Fee.

ARTICLE II

 

THE CREDIT FACILITY

Section 2.01

Loans.

Until the Termination Date, subject to the terms and conditions of this
Agreement, each of the Lenders, severally and not jointly with the other
Lenders, agrees to make loans (collectively, the “Loans”) in dollars to the
Borrower in an aggregate principal amount at any one time outstanding not to
exceed such Lender’s Commitment. Loans shall be made on any Borrowing Date only
(i) in the minimum aggregate principal amount of $5,000,000 or in integral
multiples of $1,000,000 in excess thereof, in the case of Eurodollar Loans, and
in the minimum aggregate amount of $1,000,000 or in integral multiples of
$100,000, in the case of ABR Loans and (ii) in a maximum aggregate principal
amount not exceeding the Available Commitment (after giving effect to any
repayments or prepayments and any other borrowings of Loans on such Borrowing
Date).

Section 2.02

Borrowing Procedure.

In order to borrow Loans, the Borrower shall give a Borrowing Request to the
Administrative Agent not later than 12:00 noon, New York time, (i) on the
Borrowing Date for ABR Loans and (ii) on the third Business Day before the
Borrowing Date for Eurodollar Loans. Upon receipt, the Administrative Agent
forthwith shall give notice to each Lender of the substance of the Borrowing
Request. Not later than 2:00 P.M., New York time, on the Borrowing

 

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Date, each Lender shall make available to the Administrative Agent such Lender’s
Pro Rata Share of the requested Loans in funds immediately available at the
Administrative Agent’s office specified pursuant to Section 11.08(a). Subject to
satisfaction, or waiver by all of the Lenders, of each of the applicable
conditions precedent contained in Article VI, on the Borrowing Date the
Administrative Agent shall make available, in like funds, to the Borrower the
amounts received by the Administrative Agent from the Lenders.

Section 2.03

Termination and Reduction and Increase of Commitments.

(a)        Unless previously terminated, the Commitments shall terminate on the
Termination Date.

(b)        The Borrower may terminate the Total Commitment, or reduce the amount
thereof, by (i) giving written notice to the Administrative Agent, not later
than 5:00 P.M., New York time, on the fifth Business Day prior to the date of
termination or reduction and (ii) paying the amount of the Commitment Fees
accrued through such date of termination or reduction. Reductions of the Total
Commitment shall be in the amount of $5,000,000 or in integral multiples of
$1,000,000 in excess thereof (or, if the amount of the Available Commitment is
less than $5,000,000, then all of such lesser amount), but shall not exceed the
Available Commitment in effect immediately before giving effect to such
reduction. Any termination, and all reductions, of the Total Commitment shall be
permanent.

(c)        The Borrower may from time to time, at its sole expense and effort
after consulting with the Administrative Agent, request: (i) one or more Lenders
reasonably acceptable to the Administrative Agent to increase (in the sole and
absolute discretion of each such Lender) the amount of their respective
Commitments and/or (ii) one or more other lending institutions acceptable to the
Administrative Agent (each, a “New Lender”) to become “Lenders” and extend
Commitments hereunder (each such Lender and each New Lender being herein
referred to as a “Proposed Lender”). To request an increase pursuant to this
Section 2.03(c), the Borrower shall submit to the Administrative Agent an
Increase Request, in the form annexed hereto as Exhibit G, signed by the
Borrower, which shall be irrevocable and shall specify, as the case may be: (A)
each such Lender and the amount of the proposed increase in its Commitment, or
(B) the proposed Commitment for such New Lender. Promptly following receipt of
an Increase Request, the Administrative Agent shall advise each Lender of the
details thereof. If one or more of such Proposed Lenders shall have
unconditionally agreed to such Increase Request in a writing delivered to the
Borrower and the Administrative Agent (each such existing Lender and New Lender
being hereinafter referred to as an “Incremental Lender”), then: (1) each such
Incremental Lender which shall then be an existing Lender shall have its
Commitment increased by the amount set forth in such Increase Request, and (2)
each such New Lender shall be and become a “Lender” hereunder having a
Commitment equal to the amount set forth therefor in such Increase Request,
provided, however, that in each such case: (I) immediately before and after
giving effect thereto, no Default or Event of Default shall or would exist, (II)
each such Incremental Lender shall have executed and delivered to the
Administrative Agent a supplement to this Agreement providing for its increased
Commitment or its Commitment, as applicable, in form approved by the
Administrative Agent, (III) immediately after giving effect thereto, the Total
Commitments under this Agreement shall not exceed $350,000,000, (IV) each such
Increase Request shall be in an aggregate minimum amount of $10,000,000 or an
integral multiple of $5,000,000 in excess thereof, and (V) the Commitment
extended by any such

 

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Incremental Lender which is a New Lender shall be in a minimum amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.

(d)        Simultaneously with each increase in the aggregate amount of the
Commitments under this Section 2.03(c), each Incremental Lender shall, to the
extent necessary, purchase from each other Lender, and each other Lender shall
sell to each Incremental Lender, in each case at par and without representation,
warranty, or recourse (in accordance with and subject to the restrictions
contained in Section 10.03), such principal amount of the Loans of such other
Lender, together with all accrued and unpaid interest thereon, as will result,
after giving effect to such transaction, in each Lender’s Applicable Percentage
of Loans outstanding being equal to such Lender’s Applicable Percentage of all
Loans, provided that each such assignor Lender shall have received (to the
extent of the interests, rights and obligations assigned) payment of the
outstanding principal amount of such Loans, accrued interest thereon, accrued
fees, commissions and all other amounts payable to it under the Loan Documents
from the applicable assignee Lenders (to the extent of such outstanding
principal and accrued interest, fees and commissions) or the Borrower (in the
case of all other amounts).

Section 2.04

Repayment.

Loans shall be repaid, together with all accrued and unpaid interest thereon, on
the Termination Date.

Section 2.05

Optional Prepayment.

The Borrower may prepay Loans bearing interest on the same basis and having the
same Interest Periods, if any, by giving notice to the Administrative Agent not
later than 1:00 P.M., New York time, on the third Business Day preceding the
proposed date of prepayment, in the case of Eurodollar Loans, or not later than
1:00 P.M., New York time on the Business Day of the proposed prepayment, in the
case of ABR Loans. Each such prepayment of Eurodollar Loans shall be in an
aggregate principal amount of $5,000,000 or in integral multiples of $1,000,000
in excess thereof (or, if the aggregate amount of outstanding Eurodollar Loans
is less than $5,000,000, then all of such lesser amount), and each prepayment of
ABR Loans shall be in an aggregate amount of $1,000,000 or in integral multiples
of $100,000 in excess thereof (or, if the aggregate amount of outstanding ABR
Loans is less than $1,000,000, then all of such lesser amount), and, in the case
of Eurodollar Loans, together with the amounts required by Section 4.03, accrued
interest on the principal being prepaid to the date of prepayment. Subject to
the terms and conditions of this Agreement, prepaid Loans may be reborrowed.

ARTICLE III

 

INTEREST AND FEES

Section 3.01

Interest Rate Determination; Conversion.

(a)        Except to the extent that the Borrower shall request, in a Revolving
Credit Request, in a Conversion Request or in a written election pursuant to
Section 3.03(b), that Loans (or portions thereof) bear interest as Eurodollar
Loans, Loans shall bear interest as ABR Loans.

 

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(b)        The Borrower may request, by giving a Conversion Request to the
Administrative Agent, not later than 1:00 P.M., New York time on the third
Business Day prior to the requested Conversion Date, that all or portions of the
outstanding Loans, in the aggregate principal amount of $5,000,000 or in
integral multiples of $1,000,000 in excess thereof, in the case of Loans being
converted to or continued as Eurodollar Loans, and in the aggregate principal
amount of $1,000,000 or in integral multiples of $100,000 in excess thereof (or,
if the aggregate principal amount of outstanding Loans is less than $1,000,000,
then all such lesser amount), in the case of ABR Loans, bear interest from and
after the Conversion Date as either ABR Loans or Eurodollar Loans; provided,
however, that during the continuance of any Default or Event of Default that
shall have occurred, no Loan (or portion thereof) may be converted into
Eurodollar Loans. Upon receipt, the Administrative Agent forthwith shall give
notice to each Lender of the substance of each Conversion Request. Upon payment
by the Borrower of the amounts, if any, required by Section 4.03, on the
Conversion Date the Loans or portions thereof as to which the Conversion Request
was made shall commence to accrue interest in the manner selected by the
Borrower therein.

Section 3.02

Interest on ABR Loans.

Each ABR Loan shall bear interest from the date made until the date repaid, or
(if converted into a Eurodollar Loan) to (but excluding) the first day of any
relevant Interest Period, as the case may be, payable in arrears on the last day
of each calendar quarter of each year, commencing with the first such date after
the Effective Date, and on the date such Loan is repaid, at a rate per annum
equal to the sum of (i) the Applicable Margin and (ii) the Alternate Base Rate
in effect from time to time, which rate shall change as and when said Alternate
Base Rate shall change.

Section 3.03

Interest on Eurodollar Loans.

(a)        Each Eurodollar Loan shall bear interest from the date made until the
date repaid or converted to an ABR Loan, payable in arrears, with respect to
Interest Periods of three months or less, on the last day of such Interest
Period, and with respect to Interest Periods longer than three months, the
respective dates that fall every three months after the commencement of such
Interest Period and on the last day of such Interest Period, at a rate per annum
equal to the sum of (i) the Applicable Margin and (ii) the LIBOR rate for such
Interest Period.

(b)        Each Eurodollar Loan shall become an ABR Loan at the end of the
Interest Period therefor, unless (i) there shall not have occurred and be
continuing a Default or Event of Default and (ii) not later than the third
Business Day prior to the last day of such Interest Period, (x) the Borrower
shall have delivered to the Administrative Agent an irrevocable written election
of the subsequent Interest Period, in which case such Eurodollar Loan shall
remain outstanding as a Eurodollar Loan, or (y) the Borrower shall have
delivered to the Administrative Agent a Conversion Request with respect thereto,
in which case such Eurodollar Loan shall be converted in accordance with Section
3.01(b).

(c)        If, during any period, a Lender shall be required to maintain
reserves against “Eurocurrency Liabilities” in accordance with Federal Reserve
Board Regulation D (or any successor regulation), the Borrower shall pay
additional interest during such period on each outstanding Eurodollar Loan of
such Lender (contemporaneously with each interest payment due

 

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thereon commencing with the first such payment due at least five Business Days
after receipt of the notice referred to in the next sentence) at a rate per
annum up to but not exceeding the marginal rate determined by the following
formula:

LIBOR

- LIBOR

l -Eurodollar Reserve Percentage

Each Lender shall promptly notify the Borrower, with a copy to the
Administrative Agent, upon becoming aware that the Borrower may be required to
make a payment of additional interest to such Lender. When requesting payment
pursuant to this Section 3.03(c), a Lender shall provide to the Borrower, with a
copy to the Administrative Agent, a certificate, signed by an officer of such
Lender setting forth, in reasonable detail, the basis of such claim, the amount
required to be paid by the Borrower to such Lender and the computations made by
such Lender to determine such amount. Absent manifest error, such certificate
shall be binding as to the amounts of additional interest owing in respect of
such Lender’s Eurodollar Loans. Any Lender that gives notice under this Section
3.03(c) shall promptly withdraw such notice (by written notice of withdrawal
given to the Administrative Agent and the Borrower) whenever such Lender is no
longer required to maintain such reserves or the circumstances giving rise to
such notice shall otherwise cease.

Section 3.04

Interest on Overdue Amounts.

All overdue amounts (including principal, interest and fees) hereunder, and,
during the continuance of any Event of Default that shall have occurred, each
Loan, shall bear interest, payable on demand, at a rate per annum equal to the
sum of (i) 2% and (ii) in the case of Eurodollar Loans, the rate then applicable
until the end of the current Interest Period therefor, and thereafter the rate
of interest applicable to ABR Loans, changing as and when such rate shall
change, and in the case of ABR Loans, the rate of interest applicable thereto,
changing as and when such rate shall change.

Section 3.05

Day Counts.

Interest on ABR Loans shall be calculated on the basis of (a) a 365- or, if
applicable, a 366-day year for the actual number of days elapsed for so long as
interest is determined pursuant to clause (i) of the definition of “Alternate
Base Rate” and (b) a 360-day year for the actual number of days elapsed for so
long as interest is determined based on clause (ii) of the definition of
“Alternate Base Rate”. Interest on all other Loans, and all fees shall be
calculated on the basis of a 360-day year for the actual number of days elapsed.

Section 3.06

Maximum Interest Rate.

(a)        Nothing in this Agreement shall require the Borrower to pay interest
at a rate exceeding the maximum rate permitted by applicable law. Neither this
Section nor Section 11.01 is intended to limit the rate of interest payable for
the account of any Lender to the maximum rate permitted by the laws of the State
of New York (or any other applicable law) if a higher rate is permitted with
respect to such Lender by supervening provisions of U.S. Federal law.

 

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(b)        If the amount of interest payable for the account of any Lender on
any interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to this Article III, would exceed the
maximum amount permitted by applicable law to be charged by such Lender, the
amount of interest payable for its account on such interest payment date shall
automatically be reduced to such maximum permissible amount.

(c)        If the amount of interest payable for the account of any Lender in
respect of any interest computation period is reduced pursuant to Section
3.06(b) and the amount of interest payable for its account in respect of any
subsequent interest computation period would be less than the maximum amount
permitted by law to be charged by such Lender, then the amount of interest
payable for its account in respect of such subsequent interest computation
period shall be automatically increased to such maximum permissible amount;
provided that at no time shall the aggregate amount by which interest paid for
the account of any Lender has been increased pursuant to this Section 3.06(c)
exceed the aggregate amount by which interest paid for its account has
theretofore been reduced pursuant to Section 3.06(b).

Section 3.07

Commitment Fees; Utilization Fee.

(a)        The Borrower agrees to pay to the Administrative Agent, for the
account of each Lender, on the last day of each calendar quarter of each year,
commencing with the first such day after the Effective Date (or such later date
on which such Lender becomes a Lender), and on the Termination Date (or other
date on which the Commitment shall terminate) with respect to such Lender, a fee
(the “Commitment Fee”) computed by applying (i) on each day on which the
applicable Pricing Level set forth below is in effect, the percentage per annum
set forth below adjacent to such Pricing Level on such day during the
then-ending quarter (or shorter period ending with the Termination Date or any
other date on which the Commitment of such Lender shall terminate) to (ii) the
amount of such Lender’s unused Commitment on such day:

Pricing
Level

 

 

Commitment
Fee

I

 

 

0.100%

II

 

 

0.125%

III

 

 

0.150%

IV

 

 

0.175%

V

 

 

0.300%

 

(b)        The Borrower agrees to pay to the Administrative Agent, for the
account of each Lender, on the last day of each calendar quarter of each year,
commencing with the first such day after the Effective Date (or such later date
on which such Lender becomes a Lender), and on the Termination Date (or other
date on which the Commitment shall terminate) with respect to such Lender, a fee
(the “Utilization Fee”), computed by applying on any date the outstanding
principal

 

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amount of the Loans exceeds 50% of the Commitments (i) on each day on which the
applicable Pricing Level set forth below is in effect, the percentage per annum
set forth below adjacent to such Pricing Level on such day during the
then-ending quarter (or shorter period ending with the Termination Date or any
other date on which the Commitment of such Lender shall terminate) to (ii) the
outstanding principal amount of such Lender’s Loans on such day:

 

Pricing Level

 

 

Utilization Fee

I

 

 

0.100%

II

 

 

0.125%

III

 

 

0.125%

IV

 

 

0.125%

V

 

 

0.250%

 

 

 

ARTICLE IV

 

DISBURSEMENT AND PAYMENT

Section 4.01

Disbursement.

(a)        Each Loan shall be made by the relevant Lender from such Lender’s
branch or affiliate identified as its Applicable Lending Office.

(b)        The failure of any Lender to make any Loan to be made by it on the
Borrowing Date therefor shall not relieve any other Lender of its obligation to
make its Loan or Loans on such date, but neither any Lender nor the
Administrative Agent shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender.

(c)        The Administrative Agent may, but shall not be required to, advance
on behalf of any Lender the amount of such Lender’s Loan to be made on a
Borrowing Date, unless such Lender shall have notified the Administrative Agent
prior to such Borrowing Date that it does not intend to make such Loan on such
date. If the Administrative Agent makes any such advance, the Administrative
Agent shall be entitled to recover the amount so advanced on demand from the
Lender on whose behalf such advance was made and, if such Lender does not pay
the Administrative Agent the amount of such advance on demand, the Borrower
agrees promptly to repay such amount to the Administrative Agent. Until such
amount is repaid to the Administrative Agent by such Lender or the Borrower,
such advance shall be deemed for all purposes to be a Loan made on such
Borrowing Date by the Administrative Agent. The Administrative Agent shall be
entitled to recover from the Lender or the Borrower, as the case may be,
interest on the amount advanced by it for each day from the Borrowing Date
therefor until repaid to the Administrative Agent, at a rate per annum equal to
the Federal Funds Rate

 

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until the third Business Day after the date of the advance and, thereafter, at
the rate per annum equal to the relevant rate on Loans made on the relevant
Borrowing Date.

Section 4.02

Method and Time of Payments; Sharing among Lenders.

(a)        All funds received by the Administrative Agent for the account of the
Lenders in respect of payments made by the Borrower under, or from any other
Person on account of, any Credit Document shall be distributed forthwith by the
Administrative Agent among the Lenders, in like funds as received, ratably in
proportion to their respective interests therein. Each payment of Commitment
Fees and each reduction of the Total Commitment shall be apportioned among the
Lenders in proportion to each Lender’s Pro Rata Share.

(b)        All payments by the Borrower hereunder shall be made without setoff
or counterclaim to the Administrative Agent, for its account or for the account
of the Lender or Lenders entitled thereto, as the case may be, in dollars and in
immediately available funds at the office of the Administrative Agent prior to
3:00 P.M., New York time, on the date when due.

(c)        Whenever any payment from the Borrower shall be due on a day that is
not a Business Day, the date of payment thereof shall be extended to the next
succeeding Business Day. If the date for any payment of principal is extended by
operation of law or otherwise, interest thereon shall be payable for such
extended time.

(d)        Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment from the Borrower is due that
the Borrower will not make such payment in full, the Administrative Agent may
assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, but shall not be obligated to, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent that the Borrower shall not have so made such payment, each
Lender shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent, at the Federal Funds Rate.

(e)        If any Lender shall receive from the Borrower or any other Person any
amount owing under any Credit Document (whether received pursuant to the
exercise of any right of set-off, banker’s lien, realization upon any security
held for or appropriated to such obligation or otherwise) other than in
proportion to such Lender’s ratable share thereof, then such Lender shall
purchase from each other Lender a participating interest in so much of the other
Lenders’ Loans as shall be necessary in order that each Lender shall share such
payment with each of the other Lenders in proportion to each Lender’s ratable
share; provided that nothing herein contained shall obligate any Lender to apply
any set-off, banker’s lien or collateral security first to the obligations of
the Borrower hereunder if the Borrower is obligated to such Lender pursuant to
other loans or notes. If any purchasing Lender shall be required to return any
excess payment received by it, such participation shall be rescinded and the
purchase price restored to the extent of such return, but without interest.

 

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Section 4.03

Compensation for Losses.

(a)        If (i) the Borrower makes a prepayment, or a Conversion Date occurs,
other than on the last day of the relevant Interest Period, (ii) the Borrower
fails to borrow, convert, continue or prepay any Eurodollar Loan on the date
specified in any notice delivered pursuant hereto, (iii) the Borrower revokes
any Borrowing Request for Eurodollar Loans, (iv) Eurodollar Loans (or portions
thereof) are converted into ABR Loans pursuant to Section 4.05 at any time other
than at the end of an Interest Period or (v) Loans (or portions thereof) shall
become or be declared to be due prior to the scheduled maturity thereof, then
the Borrower shall pay to each Lender an amount that will compensate such Lender
for any loss (other than lost profit) or premium or penalty incurred by such
Lender as a result of such prepayment, conversion, declaration or revocation in
respect of funds obtained for the purpose of making or maintaining such Lender’s
Eurodollar Loans, or any portion thereof. Such compensation shall include an
amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so paid or prepaid, or not borrowed or converted, for
the period from the date of such payment or prepayment or conversion or failure
to borrow to the last day of such Interest Period (or, in the case of a failure
to borrow, the Interest Period that would have commenced on the date of such
failure to borrow) in each case at the applicable rate of interest for such
Eurodollar Loan provided for herein (excluding, however, any Applicable Margin
included therein) over (ii) the amount of interest (as reasonably determined by
such Lender) which would have accrued to such Lender on such amount by placing
such amount on deposit for a comparable period with leading banks in the London
interbank deposit market.

(b)        In connection with a demand for payment pursuant to this Section
4.03, a Lender shall provide to the Borrower, with a copy to the Administrative
Agent, a certificate, signed by an officer of such Lender, setting forth in
reasonable detail the amount required to be paid by the Borrower to such Lender
and the computations made by such Lender to determine such amount. In the
absence of manifest error, such certificate shall be conclusive as to the amount
so required to be paid.

Section 4.04

Withholding and Additional Costs.

(a)        Withholding. (i) To the extent permitted by law, all payments under
this Agreement and under the Revolving Credit Notes (including payments of
principal and interest) shall be payable to each Lender free and clear of any
and all present and future taxes, levies, imposts, duties, deductions,
withholdings, fees, liabilities and similar charges other than Excluded Taxes
(collectively, “Taxes”). If any Taxes are required to be withheld or deducted
from any amount payable under this Agreement, then the amount payable under this
Agreement shall be increased to the amount which, after deduction from such
increased amount of all Taxes required to be withheld or deducted therefrom,
will yield to such Lender the amount stated to be payable under this Agreement.
The Borrower shall also hold each Lender harmless and indemnify it for any stamp
or other taxes with respect to the preparation, execution, delivery, recording,
performance or enforcement of the Credit Documents (all of which shall be
included within “Taxes”). If any of the Taxes specified in this Section 4.04(a)
are paid by any Lender, the Borrower shall, upon demand of such Lender, promptly
reimburse such Lender for such payments, together with any interest, penalties
and expenses incurred in connection therewith. The Borrower shall deliver to the
Administrative Agent certificates or other valid vouchers for all Taxes or other
charges deducted from or paid with respect to payments made by the Borrower

 

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hereunder. Notwithstanding the foregoing, the Borrower shall be entitled, to the
extent required to do so by law, to deduct or withhold (and shall not be
required to make payments as otherwise required by this Section 4.04 on account
of such deductions or withholdings) income or other similar taxes imposed by the
United States of America from interest, fees or other amounts payable hereunder
for the account of any Lender other than a Lender (A) that is a U.S. Person for
U.S. federal income tax purposes or (B) that has the Prescribed Forms on file
with the Borrower for the applicable year to the extent deduction or withholding
of such taxes is not required as a result of such filing of such Prescribed
Forms; provided that, if the Borrower shall so deduct or withhold any such
taxes, the Borrower shall provide a statement to the Administrative Agent and
such Lender, setting forth the amount of such taxes so deducted or withheld, the
applicable rate and any other information or documentation which such Lender may
reasonably request for assisting such Lender to obtain any allowable credits or
deductions for the taxes so deducted or withheld in the jurisdiction or
jurisdictions in which such Lender is subject to tax.

(ii)         Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Administrative Agent on or prior to the Effective Date, or in the case
of a Lender that is an assignee or transferee of an interest under this
Agreement pursuant to Section 10.03 (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment or transfer), on the date
of such assignment or transfer to such Lender, (i) if the Lender is a “bank”
within the meaning of Section 881(c)(3)(A) of the Code, two accurate and
complete original signed copies of Internal Revenue Service Form W-8BEN or Form
W-8ECI (or successor forms) certifying such Lender’s entitlement to a complete
exemption from United States withholding tax with respect to payments to be made
under this Agreement and under any Revolving Credit Note, or (ii) if the Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, either
Internal Revenue Service Form W-8BEN or Form W-8ECI as set forth in clause (i)
above, or (x) a certificate in substantially the form of Schedule II (any such
certificate, a “Schedule II Certificate”) and (y) two accurate and complete
original signed copies of Internal Revenue Service Form W-8BEN (or successor
form) certifying such Lender’s entitlement to an exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Revolving Credit Note. In addition, each Lender agrees
that it will deliver upon the Borrower’s request updated versions of the
foregoing, as applicable, whenever the previous certification has become
obsolete or inaccurate in any material respect, together with such other forms
as may be required in order to confirm or establish the entitlement of such
Lender to a continued exemption from or reduction in United States withholding
tax with respect to payments under this Agreement and any Revolving Credit Note.
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
Taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Lender which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. federal income
tax purposes to the extent that such Lender has not provided to the Borrower
U.S. Internal Revenue Service Forms that establish a complete exemption from
such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 4.04(a) hereof to gross-up payments to be made to a Lender
in respect of Taxes imposed by the United States if (I) such Lender has not
provided to the Borrower the Internal Revenue Service Forms required to be
provided to the Borrower pursuant to this Section 4.04(b) or (II) in the case of
a

 

25

 

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payment, other than interest, to a Lender described in clause (ii) above, to the
extent that such Forms do not establish a complete exemption from withholding of
such Taxes. Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 4.04, the Borrower agrees to pay
additional amounts and to indemnify each Lender in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any amounts deducted or withheld by
it as described in the immediately preceding sentence as a result of any changes
after the Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of Taxes.

(b)

Additional Costs. Subject to Sections 4.04(c), (d) and (e):

(i)         Without duplication of any amounts payable described in Section
3.03(c) or 4.03 (a), if after the date hereof, any change in any law or
regulation or in the interpretation thereof by any court or administrative or
Governmental Authority charged with the administration thereof or the enactment
of any law or regulation shall either (1) impose, modify or deem applicable any
reserve, special deposit or similar requirement against any Lender’s Commitment
or Loans or (2) impose on any Lender (or such Lender’s Applicable Lending
Office) any other condition regarding this Agreement, its Commitment or the
Loans and the result of any event referred to in clause (1) or (2) shall be to
increase the cost to such Lender (or such Lender’s Applicable Lending Office) of
maintaining its Commitment or any Eurodollar Loans made by such Lender (which
increase in cost shall be calculated in accordance with such Lender’s reasonable
averaging and attribution methods) by an amount which such Lender deems to be
material, then, upon demand by such Lender, the Borrower shall pay to such
Lender, on demand, an amount equal to such increase in cost; and

(ii)         Without duplication of any amounts payable described in Section
3.03(c) or 4.03(a), if any Lender shall have determined that the adoption of any
applicable law, rule, regulation or guideline regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, (including any such adoption or change
made prior to the date hereof but not effective until after the date hereof) or
compliance by such Lender (or such Lender’s Applicable Lending Office) 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 capital for such Lender (or
such Lender’s Applicable Lending Office) or any corporation controlling such
Lender as a consequence of its obligations under this Agreement to a level below
that which such Lender (or such Lender’s Applicable Lending Office) or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender’s (or such Lender’s Applicable Lending
Office) or such corporation’s policies with respect to capital adequacy), then
from time to time, upon demand by such Lender, then the Borrower shall pay to
such Lender, on demand, such additional amount or amounts as will compensate
such Lender (or such Lender’s Applicable Lending Office) or such corporation for
such reduction.

(c)        Lending Office Designations. Before making any demand for payment
pursuant to this Section 4.04, each Lender shall, if possible, designate a
different Applicable Lending

 

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Office if such designation will avoid the need for giving such notice and will
not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender.

(d)        Certificate, Etc. In connection with any demand for payment pursuant
to this Section 4.04, a Lender shall provide to the Borrower, with a copy to the
Administrative Agent, a certificate, signed by an officer of such Lender,
setting forth in reasonable detail the basis for such demand, the amount
required to be paid by the Borrower to such Lender the computations made by such
Lender to determine such amount.

(e)        Limitations. The Borrower shall not be obligated to compensate a
Lender for any amount under Section 4.04(b) (i) and (ii) arising or occurring
more than 90 days prior to the date on which an office of such Lender primarily
responsible for the administration of this Agreement obtains actual knowledge
that such Lender is entitled to such compensation.

Section 4.05

Funding Impracticable.

If at any time any Lender shall have determined in good faith (which
determination shall be conclusive) that the making or maintenance of all or any
part of such Lender’s Eurodollar Loans has been made impracticable or unlawful
because of compliance by such Lender in good faith with any law or guideline or
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof or with any request or
directive of such body (whether or not having the effect of law) or because U.S.
dollar deposits in the amount and requested maturity of such Eurodollar Loans
are not available to such Lender in the London Eurodollar interbank market, then
the Administrative Agent, upon notification to it of such determination by such
Lender, shall forthwith advise the other Lenders and the Borrower thereof. Upon
such date as shall be specified in such notice and until such time as the
Administrative Agent, upon notification to it by such Lender, shall notify the
Borrower and the other Lenders that the circumstances specified by it in such
notice no longer apply, (i) notwithstanding any other provision of this
Agreement, such Eurodollar Loans shall, automatically and without requirement of
further notice, or any payment pursuant to Section 4.03 or 4.04, by the
Borrower, be converted to ABR Loans, and (ii) the obligation of such Lender to
make or continue Eurodollar Loans shall be suspended, and, if the Borrower shall
request in a Borrowing Request or Conversion Request that the Lenders make a
Eurodollar Loan, the Loan requested to be made by such Lender shall instead be
made as an ABR Loan.

Section 4.06

Expenses; Indemnity.

(a)        The Borrower agrees to pay all reasonable out-of-pocket expenses
incurred by the Administrative Agent or any Lender (including reasonable fees
and disbursements of counsel) in connection with the enforcement of, and the
protection of their respective rights under, any provision of any Credit
Document or any amendment or supplement to this Agreement.

(b)        The Borrower agrees to indemnify the Administrative Agent, BNY
Capital Markets, Inc. and each of the Lenders and their respective directors,
officers, employees and agents (each, an “Indemnitee”) against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including counsel fees and expenses, 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 any Credit Document or any agreement or
instrument

 

27

 

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contemplated by any Credit Document, the performance by the parties thereto of
their respective obligations under any Credit Document or the consummation of
the transactions contemplated by any Credit Document, (ii) the use of the
proceeds of the Loans 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.

(c)        All amounts due under this Section 4.06 shall be payable in
immediately available funds upon written demand therefor.

Section 4.07

Survival.

The provisions of Sections 4.03, 4.04, 4.06 and 9.06, 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 reduction or termination of any Commitments,
the invalidity or unenforceability of any term or provision of any Credit
Document, or any investigation made by or on behalf of the Lenders.

Section 4.08

Substitution of a Lender.

Notwithstanding anything to the contrary contained herein, if any Lender shall
request compensation pursuant to Section 4.04(b)(i) and (ii) then, in each case,
the Borrower may require that such Lender transfer all of its right, title and
interest under this Agreement and such Lender’s Revolving Credit Notes to one or
more of the other Lenders or any other lender identified by the Borrower and
reasonably acceptable to the Administrative Agent (a “Substitute Lender”) which
is willing to assume all of the obligations of such Lender, for consideration
equal to the outstanding principal amount of such Lender’s Loans, together with
interest thereon to the date of such transfer and all other amounts payable
under the Credit Documents to such Lender on or prior to the date of such
transfer (including, without limitation, any fees accrued hereunder and any
amounts which would be payable under Section 4.03 as if all of such Lender’s
Loans were being prepaid in full on such date). Subject to the execution and
delivery of new notes, an Assignment and Acceptance, and such other documents as
such Lender may reasonably require, such Substitute Lender shall be a “Lender”
for all purposes hereunder. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements of the Borrower contained in
Sections 4.04 and 4.06 (without duplication of any payments made to such Lender
by the Borrower or the Substitute Lender) shall survive for the benefit of any
Lender replaced under this Section 4.08 with respect to the time prior to such
replacement.

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

Section 5.01

Representations and Warranties.

The Borrower represents and warrants to the Administrative Agent and each Lender
as follows:

 

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(a)

Corporate Existence.

(i)         the Borrower and each of its Significant Subsidiaries has been duly
incorporated and is validly existing and in good standing under the laws of its
jurisdiction of incorporation;

(ii)         the Borrower and each of its Significant Subsidiaries has the
corporate power and authority and all necessary governmental licenses,
authorizations, consents and approvals material to the ownership of its assets
and the carrying on of its business;

(iii)        the Borrower has the power and authority and all governmental
licenses, authorizations, consents and approvals to execute, deliver and perform
its obligations under this Agreement and the Revolving Credit Notes; and

(iv)        the Borrower is duly qualified as a foreign corporation, licensed
and in good standing under the laws of each jurisdiction where its ownership,
lease or operation of Property or the conduct of its business requires such
qualification, except any such failure to be qualified, licensed or in good
standing as would not be reasonably expected to have a Material Adverse Effect.

(b)        Corporate Authorization; No Contravention. The execution, delivery,
and performance by the Borrower of the Credit Documents have been duly
authorized by all necessary corporate action and do not and will not:

(i)         contravene the terms of the Borrower’s articles of incorporation,
bylaws or other organizational document;

(ii)         conflict with or result in any breach or contravention of, or the
creation of any Lien under, any Contractual Obligation, injunction, order or
decree to which the Borrower is a party or by which it is bound including,
without limitation, the CPUC Order; or

(iii)

violate any Requirement of Law.

(c)        Governmental Authorization. No consent, approval, authorization or
order of any Governmental Authority is required for due execution, delivery and
performance by the Borrower of the Credit Documents, other than the CPUC Order,
which has been obtained and is in full force and effect.

(d)        Binding Effect. This Agreement is, and the Revolving Credit Notes
when delivered hereunder will be, legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their respective
terms subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws of general applicability relating to or affecting
creditors’ rights and to general equity principles.

(e)        Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of the Borrower, threatened at law,
in equity, in arbitration or before any Governmental Authority, against the
Borrower, or its Subsidiaries or any of their respective Properties which (i)
purport to affect or pertain to this Agreement, or any of the transactions
contemplated hereby; or (ii) would reasonably be expected to have a Material
Adverse Effect.

 

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No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery and performance of any Credit Document or
directing that the transactions provided for herein not be consummated as herein
provided.

(f)         No Default. No Default or Event of Default exists or would result
from the incurring of the Obligations by the Borrower under this Agreement.
Neither the Borrower, nor any of its Significant Subsidiaries, is in default
under or with respect to any Contractual Obligation which, individually or
together with all such defaults, would have a Material Adverse Effect.

(g)        ERISA Compliance. (i) Each Qualified Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law, including all requirements under the Code or ERISA for
filing reports (which are true and correct in all material respects as of the
date filed), and to the best knowledge of the Borrower, benefits have been paid
in accordance with the provisions of such Plan.

(ii)         Each Qualified Plan has been determined by the IRS to qualify under
Section 401 of the Code, the IRS has not determined that any amendment to any
Qualified Plan does not qualify under Section 401 of the Code, and the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the Code, and to the best knowledge of the
Borrower, nothing has occurred which would cause the loss of such qualification
or tax-exempt status.

(iii)        There is no material outstanding liability under Title IV of ERISA
with respect to any Plan maintained or sponsored by the Borrower or any ERISA
Affiliate (as to which the Borrower is or may be liable), nor with respect to
any Plan to which the Borrower or any ERISA Affiliate (wherein the Borrower is
or may be liable) contributes or is obligated to contribute.

(iv)        None of the Qualified Plans subject to Title IV of ERISA has any
Unfunded Pension Liability in excess of $50,000,000 as to which the Borrower is
or may be liable.

(v)        No ERISA Event has occurred or is reasonably expected to occur with
respect to any Plan maintained or sponsored by the Borrower or to which the
Borrower is obligated to contribute.

(vi)        There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, other than routine claims for benefits
in the usual and ordinary course, asserted or instituted against (i) any Plan
maintained or sponsored by the Borrower or its assets, (ii) any ERISA Affiliate
with respect to any Qualified Plan of the Company, or (iii) any fiduciary with
respect to any Plan for which the Borrower may be directly or indirectly liable,
through indemnification obligations or otherwise which would be reasonably
likely to have a Material Adverse Effect.

(vii)       The Borrower has not incurred nor reasonably expects to incur (i)
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of

 

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ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with
respect to a Multiemployer Plan or (ii) any liability under Title IV of ERISA
(other than premiums due and not delinquent under Section 4007 of ERISA) with
respect to a Qualified Plan.

(viii)      The Borrower has not transferred any Unfunded Pension Liability to
any entity other than an ERISA Affiliate or otherwise engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.

(ix)        The Borrower has not engaged, directly or indirectly, in a
non-exempt prohibited transaction (as defined in Section 4975 of the Code or
Section 406 of ERISA) in connection with any Plan which would have a Material
Adverse Effect.

(h)        Use of Proceeds; Margin Regulations. No Loans will be used, directly
or indirectly, (i) to purchase or carry Margin Stock or (ii) to repay or
otherwise refinance indebtedness of the Borrower or others incurred to purchase
or carry Margin Stock or (iii) to extend credit for the purpose of purchasing or
carrying any Margin Stock. No Loan will be used to acquire any security in any
transaction which is subject to Sections 13 or 14 of the Securities Exchange Act
of 1934.

(i)         Title to Properties. The Borrower and each of its Significant
Subsidiaries has sufficient and legal title in fee simple to or valid leasehold
interest in all its real Property, except for such defects in title as could
not, individually or in the aggregate, have a Material Adverse Effect. Such
Property is free and clear of all Liens or rights of others, except Permitted
Liens.

(j)         Taxes. The Borrower and its Subsidiaries have filed all federal and
other material tax returns and reports required to be filed and have paid all
federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their Properties, income or assets
otherwise due and payable except (a) those which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP, and (b) those levied or imposed on
Subsidiaries other than Significant Subsidiaries the nonpayment of which would
not, in the aggregate, have a Material Adverse Effect. To the best knowledge of
the Borrower, there is no proposed tax assessment against the Borrower or any of
its Subsidiaries which would, if the assessment were made, have a Material
Adverse Effect.

(k)

Financial Condition.

The audited consolidated balance sheet of the Borrower as of December 31, 2004
and the related consolidated statements of income, changes in shareholders’
equity and cash flows for the period then ended, copies of which have been
furnished to the Administrative Agent and the Lenders, fairly present the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as of, and the results of its operations and cash flows for, the
period then ended, applied on a consistent basis. Such financial statements were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, are complete and accurate, and show all material indebtedness
and other liabilities of the Borrower and its consolidated Subsidiaries as of
the date thereof (including liabilities for taxes and material commitments).

 

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(l)

Environmental Matters.

(i)         The operations of the Borrower and each of its Subsidiaries comply
with all Environmental Laws except where such noncompliance would not have a
Material Adverse Effect.

(ii)         The Borrower and each of its Subsidiaries have obtained all
licenses, permits, authorizations and registrations required under any
Environmental Law (“Environmental Permits”) necessary for its operations, and
all such Environmental Permits are in good standing, and the Borrower and each
of its Subsidiaries are in compliance with all terms and conditions of such
Environmental Permits, except where the failure so to obtain, be in good
standing or be in compliance would not have a Material Adverse Effect.

(iii)        None of the Borrower, any of its Subsidiaries or any of their
present Property or operations is subject to any outstanding written order from
or agreement with any Governmental Authority or other Person, nor subject to any
judicial or docketed administrative proceeding, respecting any Environmental
Law, Environmental Claim or Hazardous Material which would have a Material
Adverse Effect.

(iv)        There are no conditions or circumstances which may give rise to any
Environmental Claim arising from the operations of the Borrower or its
Subsidiaries which would have a Material Adverse Effect. Without limiting the
generality of the foregoing, except as would not, in the aggregate, have a
Material Adverse Effect (i) neither the Borrower nor any of its Subsidiaries has
any underground storage tanks (x) that are not properly registered or permitted
under applicable Environmental Laws or (y) that are leaking or disposing of
Hazardous Materials offsite and (ii) the Borrower and its Subsidiaries have
notified all of their employees of the existence, if any, of any health hazard
arising from the conditions of their employment and have met all notification
requirements under Title III of CERCLA or any other Environmental Law.

(m)       Regulated Entities. Neither the Borrower nor any Person controlling
the Borrower is (i) an “Investment Company” within the meaning of the Investment
Company Act of 1940; or (ii) subject to regulation under the Public Utility
Holding Company Act of 1935 other than pursuant to Section 9(a)(2) thereof, the
Federal Power Act, the Interstate Commerce Act or any regulation thereunder
limiting its ability to incur Debt.

(n)        Labor Relations. There are no strikes, lockouts or other labor
disputes against the Borrower or any of its Subsidiaries or, to the best of the
Borrower’s knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries which would have a Material Adverse Effect, and no significant
unfair labor practice complaint is pending against the Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrower, threatened against any
of them before any Governmental Authority which would have a Material Adverse
Effect.

(o)        Insurance. The Properties of the Borrower and its Significant
Subsidiaries are insured with financially sound and reputable insurance
companies, in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar Properties in localities where the Borrower or such Significant
Subsidiary operates.

 

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(p)        Full Disclosure. None of the representations or warranties made by
the Borrower in this Agreement as of the date of such representations and
warranties, and none of the statements contained in any certificate furnished by
or on behalf of the Borrower in connection with this Agreement contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading.

(q)        Compliance with Applicable Laws. Neither the Borrower nor any
Subsidiary is in default with respect to any judgment, order, writ, injunction,
decree or decision of any Governmental Authority which default would have a
Material Adverse Effect. The Borrower and each Subsidiary is complying in all
material respects with all applicable statutes and regulations, including ERISA
and applicable occupational, safety and health and other labor laws, of all
Governmental Authorities, a violation of which would have a Material Adverse
Effect.

(r)         Ranking. The Obligations of the Borrower to the Lenders to be
undertaken under the Credit Documents will rank senior to or pari passu with
other Unsecured Debt of the Borrower.

Section 5.02

Survival.

All representations and warranties made by the Borrower in this Agreement, and
in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement, shall (i) be considered to have been relied
upon by the Lenders, (ii) survive the making of Loans regardless of any
investigation made by, or on behalf of, the Lenders, and (iii) continue in full
force and effect as long as the Commitments have not been terminated and,
thereafter, so long as any Loan, fee or other amount payable hereunder remains
unpaid.

ARTICLE VI

 

CONDITIONS PRECEDENT

Section 6.01

Conditions to the Availability of the Commitments.

The obligations of each Lender hereunder are subject to, and the Lenders’
Commitments shall not become available until the earliest date (the “Effective
Date”) on which each of the following conditions precedent shall have been
satisfied or waived in writing by the Lenders:

(a)        This Agreement. The Administrative Agent shall have received this
Agreement duly executed and delivered by each of the Lenders and the Borrower.

(b)        The Revolving Credit Notes. The Borrower shall have delivered to the
Administrative Agent, for each of the Lenders, a duly executed Revolving Credit
Note.

(c)

Evidence of Corporate Action. The Lenders shall have received the following:

(i)         The articles of incorporation of the Borrower as in effect on the
Effective Date, certified by the Secretary of State of California as of a recent
date and by the Secretary or Assistant Secretary of the Borrower as of the
Effective

 

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Date and the bylaws of the Borrower as in effect on the Effective Date,
certified by the Secretary or Assistant Secretary of the Borrower as of the
Effective Date.

(ii)         Certificates of good standing for the Borrower from each of the
Secretary of State of California and the Secretaries of State of the states
where the Borrower conducts its principal operations, certifying that the
Borrower is in good standing in such states, such certificates to be dated
reasonably near the Effective Date.

(iii)        Copies of the resolutions of the board of directors of the Borrower
approving and authorizing the execution, delivery and performance by the
Borrower of this Agreement and the Revolving Credit Notes and authorizing the
borrowings hereunder, certified as of the Effective Date by the Secretary or an
Assistant Secretary of the Borrower.

(iv)        A certificate of the Secretary or an Assistant Secretary of the
Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Agreement, the Revolving Credit Notes and any
certificates or other documents, to be delivered in connection herewith.

(d)        Opinions of Counsel. The Lenders shall have received a favorable
written opinion, dated the Effective Date, of Robert M. Johnson, Assistant
General Counsel of the Borrower, and Morrison & Foerster LLP, in substantially
the form of Exhibit D.

(e)        Representations and Warranties; Etc. The following statements shall
be true and the Administrative Agent shall have received a certificate signed by
a Responsible Officer of the Borrower, dated the Effective Date, stating that:

(i)         The representations and warranties contained in Section 5.01 of this
Agreement are correct on and as of the Effective Date as though made on and as
of such date;

(ii)         Since December 31, 2004, neither the Borrower nor any of its
Subsidiaries have entered into or consummated any transaction or transactions,
and there has occurred no change, affecting the business, credit, operations or
financial condition of the Borrower and its Subsidiaries, taken as a whole,
which would have a Material Adverse Effect;

(iii)        No litigation, proceeding or inquiry before or by any arbitrator or
Governmental Authority is continuing or, to the best of the Borrower’s
knowledge, threatened which would have a Material Adverse Effect; and

(iv)        No event has occurred and is continuing which constitutes a Default
or Event of Default.

(f)         Existing Credit Agreement. All amounts outstanding under the
Existing Credit Agreement shall be paid from the proceeds of the Loans made
under this Agreement and the commitments thereunder shall have been terminated.

 

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(g)        Other Documents. The Lenders shall have received such other
certificates, opinions and other documents as the Required Lenders reasonably
may require.

Section 6.02

Conditions to All Loans.

The obligations of the Lenders to make each Loan are subject to the conditions
precedent that, on the date of each Loan and after giving effect thereto, each
of the following conditions precedent shall have been satisfied, or waived in
writing by the Lenders:

(a)        Borrowing Request. The Administrative Agent shall have received a
Borrowing Request complying with the terms of this Agreement.

(b)        No Default. No Default or Event of Default shall have occurred and be
continuing, nor shall any Default or Event of Default occur as a result of the
making of such Loan.

(c)        Representations and Warranties. The representations and warranties
contained in Section 5.01 shall have been true and correct when made and (except
to the extent that any representation or warranty speaks as of a date certain)
shall be true and correct on the Borrowing Date with the same effect as though
such representations and warranties had been made on such Borrowing Date.

Section 6.03

Satisfaction of Conditions Precedent.

Each of (i) the delivery by the Borrower of a Borrowing Request (unless the
Borrower notifies the Lenders in writing to the contrary prior to the Borrowing
Date) and (ii) the acceptance of the proceeds of a Loan shall be deemed to
constitute a certification by the Borrower that, as of the Borrowing Date, each
of the conditions precedent contained in Section 6.02 has been satisfied with
respect to any Loans then being made.

ARTICLE VII

 

COVENANTS

Section 7.01

Affirmative Covenants.

Until satisfaction in full of all the obligations of the Borrower under the
Credit Documents and termination of the Commitments of the Lenders hereunder:

(a)        Financial Statements; Compliance Certificates. The Borrower shall
furnish to the Lenders:

(i)         As soon as available, but not later than 120 days after the end of
each fiscal year of the Borrower, (i) the audited, consolidated balance sheet of
the Borrower as of the end of such fiscal year and the related consolidated
statements of income, changes in shareholders’ equity and cash flows for such
fiscal year, certified by Arthur Andersen LLP or other independent certified
public accountants of recognized national standing, and (ii) the unaudited
unconsolidated balance sheet of the Borrower as of the end of such fiscal year
and the related

 

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unaudited unconsolidated statements of income, changes in shareholders’ equity
and cash flows for such fiscal year, in each case setting forth comparative
figures for the preceding fiscal year, all in reasonable detail, certified by a
Responsible Officer of the Borrower who was involved in the preparation of the
financial statements referred to herein;

(ii)         As soon as available, but not later than 60 days after the end of
each of the first three quarterly accounting periods in each fiscal year of the
Borrower, (i) the unaudited unconsolidated balance sheet of the Borrower as of
the end of such quarterly period and the related unaudited unconsolidated
statements of income, changes in shareholders’ equity and cash flows, and (ii)
the unaudited consolidated balance sheet of the Borrower as of the end of such
quarterly period and the related unaudited consolidated statements of income,
changes in shareholders’ equity and cash flows for the elapsed portion of the
fiscal year ended with the last day of such quarterly period. Such statements
shall be in reasonable detail and certified by a Responsible Officer of the
Borrower who was involved in the preparation of the financial statements
referred to herein;

(iii)        Concurrently with the delivery of the financial statements referred
to in clauses (i) and (ii) above, a certificate of a Responsible Officer (A)
stating that, to the best of such officer’s knowledge after reasonable
investigation, the Borrower, during such period, has observed or performed all
of its covenants and other agreements in all material respects, and satisfied
every condition contained in this Agreement to be observed, performed or
satisfied by it, and that such officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate, and (B) showing in
detail the calculation supporting such statement in respect of Section 7.03;

(iv)        Concurrently with the delivery of the financial statements referred
to in clause (i) above, a comprehensive budget that has been reviewed by the
Board of Directors of the Borrower for such fiscal year (including pro forma
unconsolidated projected balance sheets, income statements and cash flow
statements, in each case for the current budget year) and financial forecast for
the next two fiscal years, together with an explanation of key assumptions, all
in the form such budget has previously been delivered to the Administrative
Agent;

(v)        Within 5 days after the same are sent, copies of all financial
statements and reports which the Borrower sends to its shareholders, and
promptly after the same are filed, copies of all financial statements and
regular, periodical or special reports which the Borrower may make to, or file
with, the SEC; and

(vi)        Promptly, such additional financial and other information as the
Administrative Agent, at the request of any Lender may from time to time
reasonably request.

(b)        Notices. The Borrower shall promptly notify the Administrative Agent
(who shall notify each Lender):

 

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(i)

of the occurrence of any Default or Event of Default;

(ii)         of any (A) breach or non-performance of, or any default under any
Contractual Obligation of the Borrower or any of its Subsidiaries which would be
reasonably expected to result in a Material Adverse Effect; or (B) dispute,
litigation, investigation, proceeding or suspension which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental Authority
which would reasonably be expected to result in a Material Adverse Effect;

(iii)        of the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary which, if
adversely determined, would have a Material Adverse Effect;

(iv)        of any other litigation or proceeding affecting the Borrower or any
of its Subsidiaries which the Borrower would be required to report to the SEC
pursuant to the Securities Exchange Act of 1934, within four days after
reporting the same to the SEC;

(v)        of any ERISA Event affecting the Borrower or any ERISA Affiliate (but
in no event more than ten days after such ERISA Event) together with (i) a copy
of any notice with respect to such ERISA Event that may be required to be filed
with the PBGC and (ii) any notice delivered by the PBGC to the Borrower or any
ERISA Affiliate with respect to such ERISA Event;

(vi)

upon becoming aware thereof, of any Material Adverse Effect;

(vii)       upon becoming aware thereof, of any change in the Borrower’s Senior
Debt Rating by Moody’s or S&P;

(viii)      following any change in accounting policies or financial reporting
practices; and

(ix)        upon becoming aware of any labor controversy resulting in or
threatening to result in any strike, work stoppage, boycott, shutdown or other
labor disruption against or involving the Borrower or any Subsidiary and which
would reasonably be expected to have a Material Adverse Effect.

Each notice pursuant to this Section 7.01(b) shall be accompanied by a written
statement by a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein.

(c)        Preservation of Corporate Existence, Etc. The Borrower shall and
shall cause each of its Significant Subsidiaries to:

(i)         preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction of
incorporation except as permitted under Section 7.02(b) hereof;

 

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(ii)         preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary or useful
in the normal conduct of its business, except as would not be reasonably
expected to have a Material Adverse Effect;

(iii)        use its reasonable efforts, in the ordinary course and consistent
with past practice, to preserve its business organization and preserve the
goodwill and business of the customers, suppliers and others having business
relations with it, except as would not be reasonably expected to have a Material
Adverse Effect; and

(iv)        preserve or renew all of its registered trademarks, trade names and
service marks, the non-preservation of which would have a Material Adverse
Effect.

(d)        Maintenance of Property. The Borrower shall maintain, and shall cause
each of its Significant Subsidiaries to maintain, and preserve all its Property
which is used or useful in its business in good working order and condition,
ordinary wear and tear excepted.

(e)        Insurance. The Borrower shall maintain, and shall cause each
Significant Subsidiary to maintain, with financially sound and reputable
insurers, insurance with respect to its Properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons, including workers’
compensation insurance, public liability and property and casualty insurance.

(f)         Payments of Obligations. The Borrower shall, and shall cause its
Subsidiaries to, pay and discharge as the same shall become due and payable (or
prior to delinquency), all obligations and liabilities material to the Borrower
and its Subsidiaries taken as a whole, including:

(i)         all tax liabilities, assessments and governmental charges or levies
upon it or its Properties or assets, and

(ii)         all lawful claims which, if unpaid, might by law become a Lien
other than a Permitted Lien upon its Property.

except in each case (x) those that are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by the Borrower or such Subsidiary or (y) the same are levied or
imposed on Subsidiaries other than Significant Subsidiaries and the nonpayment
of which would not, in the aggregate, have a Material Adverse Effect.

(g)        Compliance with Laws. The Borrower shall comply, and shall cause each
of its Subsidiaries to comply, in all material respects with all Requirements of
Law of any Governmental Authority having jurisdiction over it or its business,
except such as may be contested in good faith or as to which a bona fide dispute
may exist or where such noncompliance would not have a Material Adverse Effect.

 

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(h)        Inspection of Property and Books and Records. The Borrower shall
maintain and shall cause each of its Subsidiaries to maintain, proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Borrower and such Subsidiaries.
To the extent permitted by applicable law and subject to Section 11.05, the
Borrower will permit, and will cause each of its Subsidiaries to permit,
representatives of the Administrative Agent or any Lender to visit and inspect
any of their respective Properties, to examine their respective corporate,
financial and operating records and make copies thereof or abstracts therefrom,
and to discuss their respective affairs, finances and accounts with their
respective directors, officers, employees and independent public accountants,
all at the expense of the Borrower and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower.

Section 7.02

Negative Covenants.

Until satisfaction in full of all the obligations of the Borrower under the
Credit Documents and termination of the Commitments of the Lenders hereunder,
the Borrower will not, without the written consent of the Required Lenders:

(a)        Liens. Create or suffer to exist, or permit any of its Subsidiaries
to create or suffer to exist, any Lien upon or with respect to any of its
Property except Permitted Liens.

(b)        Consolidations and Mergers; Disposition of Assets. Merge, consolidate
with or into, or convey, transfer, lease or otherwise dispose of, or permit any
of its Significant Subsidiaries to merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of, (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereinafter acquired) or enter into, or permit any of its Significant
Subsidiaries to enter into, any joint venture or partnership with, any Person
except:

(i)         any Significant Subsidiary of the Borrower may merge, consolidate or
combine with or into, or transfer assets to the Borrower (if the Borrower shall
be the continuing or surviving corporation) or with, into or to any one or more
Significant Subsidiaries of the Borrower; provided that if any transaction shall
be between a Significant Subsidiary and a wholly-owned Significant Subsidiary,
the wholly-owned Significant Subsidiary shall be the continuing or surviving
corporation;

(ii)         any Significant Subsidiary of the Borrower may sell, lease,
transfer or otherwise dispose of any or all of it assets (upon voluntary
liquidation or otherwise), to the Borrower or another wholly-owned Significant
Subsidiary of the Borrower; if immediately after giving effect thereto no
Default or Event of Default would exist;

(iii)        the Borrower may merge, consolidate or combine with another entity
if (1) the Borrower is the corporation surviving the merger, and (2) immediately
after giving effect thereto, no Default or Event of Default would exist; and

 

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(iv)        the Borrower and any Subsidiary may enter into joint ventures and
partnerships in the ordinary course of business as presently conducted.

(c)        Investments and Acquisitions. Make, or permit any of its Significant
Subsidiaries to make, any Investments or Acquisitions except (i) for Permitted
Investments, (ii) as required by any Governmental Authority, and (iii) for
Acquisitions, provided that:

(i)         immediately before or after giving effect to each Acquisition, no
Default shall or would exist, and immediately after giving effect thereto, all
of the representations and warranties contained in this Agreement shall be true
and correct with the same effect as though then made,

(ii)         the Person or business acquired is engaged in the same line of
business as the Borrower or any Significant Subsidiary,

(iii)        the Borrower shall have delivered to the Administrative Agent
notice thereof not less than ten days prior to the consummation of such
Acquisition,

(iv)        the Borrower shall have delivered to the Administrative Agent a
certificate of a financial officer thereof, in all respects reasonably
satisfactory to the Administrative Agent and dated the date of such
consummation,

(1)        certifying that prior to and after giving effect to such Acquisition
and based on the most recent financial statements delivered pursuant to Section
7.01(a), the Borrower is and will be in compliance with Section 7.03,

(2)        demonstrating that the sum (the “Acquisition Consideration”) of (A)
the cash consideration paid or agreed to be paid, plus (B) the fair market value
of all non-cash consideration paid or agreed to be paid plus (C) an amount equal
to the principal or stated amount of all liabilities assumed or incurred
(without duplication of amounts included pursuant to clause (A) above) in
connection with such Acquisition and paid for all Acquisitions consummated after
the Effective Date and prior to such Acquisition would not exceed $200,000,000
in the aggregate, and

(3)        providing or attaching such other information, documents and other
items as the Administrative Agent shall have reasonably requested.

(d)        Transactions with Affiliates. Enter into, or permit any of its
Subsidiaries to enter into, any transaction with any Affiliate of the Borrower
or of any such Subsidiary except as permitted by this Agreement or in the
ordinary course of business and pursuant to the reasonable requirements of the
business of the Borrower or such Subsidiary and upon fair and reasonable terms
no less favorable to the Borrower or such Subsidiary than would be obtained in a
comparable arm’s-length transaction with a Person not an Affiliate of the
Borrower or such Subsidiary.

(e)        Compliance with ERISA. Directly or indirectly, or permit any ERISA
Affiliate to directly or indirectly (i) terminate, any Qualified Plan subject to
Title IV of ERISA so as to result

 

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in any material (in the opinion of the Administrative Agent) liability to the
Borrower or any ERISA Affiliate, (ii) permit to exist any ERISA Event or any
other event or condition, which presents the risk of a material (in the opinion
of the Administrative Agent) liability of the Borrower or any ERISA Affiliate,
or (iii) make a complete or partial withdrawal (within the meaning of ERISA
Section 4201) from any Multiemployer Plan so as to result in any material (in
the opinion of the Required Lenders) liability to the Borrower or any ERISA
Affiliate, (iv) except in the ordinary course of business consistent with past
practice, enter into any new Plan or modify any existing Plan so as to increase
its obligations thereunder which would reasonably be expected to result in any
material (in the opinion of the Administrative Agent) liability of the Borrower
or any ERISA Affiliate, or (v) permit the present value of all nonforfeitable
accrued benefits under each Qualified Plan (using the actuarial assumptions that
would be utilized by the PBGC upon termination of such a Qualified Plan)
materially (in the opinion of the Required Lenders) to exceed the fair market
value of such Qualified Plan’s assets allocable to such benefits, all determined
as of the most recent valuation date for each such Qualified Plan.

(f)         Lease Obligations. Create or suffer to exist, or permit any
Significant Subsidiary to create or suffer to exist, any Lease Obligations,
except for:

(i)         leases of the Borrower or any of its Significant Subsidiaries in
existence on the Effective Date and any arms’ length renewal, extension or
refinancing thereof, and

(ii)         after the Effective Date, any leases entered into by the Borrower
or any of its Significant Subsidiaries in the ordinary course of business in a
manner and to an extent consistent with past practice.

(g)        Restricted Payments. Declare or make any dividend payment or other
distribution of assets, Properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock or purchase, redeem or
otherwise acquire for value (or permit any of its Subsidiaries to do so) any
shares of its capital stock or any warrants, rights or options to acquire such
shares, now or hereafter outstanding if a Default or Event of Default has
occurred and is continuing or would result therefrom.

(h)        Change in Business. Engage, or permit any of its Subsidiaries to
engage, in any material line of business substantially different from those
lines of business carried on by it on the date hereof and any and all reasonably
related businesses necessary for, in support, furtherance or anticipation of
and/or ancillary to or in the preparation for such businesses.

Section 7.03

Financial Covenants.

(a)

Leverage Ratio

 

Until satisfaction in full of all the obligations of the Borrower under the
Credit Documents and termination of the Commitments of the Lenders hereunder,
the Borrower will not permit the ratio of Funded Debt to Total Capitalization to
exceed 0.70 to 1.00 as of the end of any quarter of any fiscal year.

 

 

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(b)

Net Worth

Until satisfaction in full of all of the obligations of the Borrower under the
Credit Documents and the termination of the Commitments of the Lenders
hereunder, the Borrower will not permit its Net Worth as of the end of any
quarter of any fiscal year to be less than $475,000,000 plus 25% of the net
proceeds of any Equity Issuance from and after December 31, 2003.

ARTICLE VIII

 

EVENTS OF DEFAULT

Section 8.01

Events of Default

If one or more of the following events (each, an “Event of Default”) shall
occur:

(a)        The Borrower shall fail duly to pay any principal of any Loan when
due, whether at maturity, by notice of intention to prepay or otherwise; or

(b)        The Borrower shall fail duly to pay any interest, fee or any other
amount payable under the Credit Documents within two Business Days after the
same shall be due; or

(c)        Any representation or warranty made or deemed made by the Borrower
herein, or any statement or representation made in any certificate, report or
opinion delivered by or on behalf of the Borrower in connection herewith, shall
prove to have been false or misleading in any material respect when so made or
deemed made; or

(d)        The Borrower shall fail duly to observe or perform any term, covenant
or agreement contained in Sections 7.01(c), 7.02 or 7.03; or

(e)        The Borrower shall fail duly to observe or perform any other term,
covenant or agreement contained in this Agreement and such failure shall have
continued unremedied for a period of thirty (30) days after a Responsible
Officer of the Borrower shall have obtained knowledge thereof; or

(f)         The Borrower or any Subsidiary shall fail to pay any of its
obligations (other than its Obligations hereunder) in an amount of $10,000,000
or more when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), or any other default or event of default
under any agreement or instrument relating to any such obligation shall occur
and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, or if the maturity of such obligation is accelerated,
or any such obligation shall be declared to be due and payable, or required to
be prepaid prior to the stated maturity thereof, or

(g)        One or more judgments against the Borrower or attachments against its
Property, which in the aggregate exceed $10,000,000 not covered by insurance, or
the operation or result of which would interfere materially and adversely with
the conduct of the business of the Borrower, shall remain unpaid, unstayed on
appeal, undischarged, unbonded and undismissed for a period of 30 days or more;
or any Person shall have filed any suit, action or proceeding which results in
the granting of any form of injunction or restraining order, temporary or
otherwise, the

 

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compliance with which would have a Material Adverse Effect, and which injunction
or restraining order is not dissolved (or otherwise terminated) or modified
within 30 days so as to eliminate that portion of such injunction or restraining
order which would have such Material Adverse Effect; or

(h)        Any order, writ, warrant, garnishment or other process of any court
attaching, garnishing, distraining or otherwise freezing assets of the Borrower
in an amount equal to $10,000,000 or more in value in the aggregate for all such
orders, writs, warrants, garnishments shall remain unstayed on appeal,
undischarged or undismissed for a period of 30 days or more; or

(i)         (i) The Borrower shall commence any case, proceeding, or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of debts,
seeking to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or the Borrower shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against the
Borrower any case, proceeding or other action of a nature referred to in clause
(i) above and such case, proceeding or action shall not have been vacated,
discharged or stayed within 60 days from the entry thereof, or (iii) the
Borrower shall consent to the institution of, or fail to controvert in a timely
and appropriate manner, any case, proceeding or other action of a nature
referred to above; or (iv) the Borrower shall file an answer admitting the
material allegations of a petition filed against it in any case, proceeding or
other action of a nature referred to above; or (v) the Borrower shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or (vi) the Borrower shall take corporate action for
the purpose of effecting any of the foregoing; or

(j)         The Borrower or an ERISA Affiliate shall fail to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under a Multiemployer Plan; (ii) the
Borrower or an ERISA Affiliate shall fail to satisfy its contribution
requirements under Section 412(c)(II) of the Code, whether or not it has sought
a waiver under Section 412(d) of the Code where such failure can reasonably be
expected to impose on the Borrower or an ERISA Affiliate liability (for
additional taxes, to Plan participants, or otherwise) in the aggregate amount in
excess of $50,000,000; (iii) the Unfunded Pension Liabilities of a Plan or Plans
shall exceed $50,000,000; (iv) a Plan that is intended to be qualified under
Section 401(a) of the Code shall lose its qualification, and such loss can
reasonably be expected to impose on the Borrower or an ERISA Affiliate liability
(for additional taxes, to Plan participants, or otherwise) in the aggregate
amount of $50,000,000 or more; (v) the commencement or increase of contributions
to, the adoption of, or the amendment of a Plan by, the Borrower or an ERISA
Affiliate shall result in a net increase in unfunded liabilities of the Borrower
or an ERISA Affiliate in excess of $50,000,000; or (vi) any combination of
events listed in clause (iii) through (vi) that involves a net increase in
aggregate Unfunded Pension Liabilities and unfunded liabilities in excess of
$50,000,000 shall occur; or

(k)        All or substantially all of the Property of the Borrower or its
Subsidiaries shall be condemned, seized or appropriated, excluding Property of a
Subsidiary other than a Significant Subsidiary the condemnation, seizure or
appropriation of which would not have a Material Adverse Effect; or

 

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(l)         Any Governmental Authority shall revoke or fail to renew any
license, permit or franchise of the Borrower or any of its Subsidiaries, or the
Borrower or any of its Subsidiaries shall for any reason lose any license,
permit or franchise, if such revocation, non-renewal or loss would have a
Material Adverse Effect; or

(m)       Any Credit Document (other than Revolving Credit Notes which have been
replaced or superseded) shall cease to be in full effect; or

(n)

A Change in Control shall occur;

then, and at any time during the continuance of such Event of Default, the
Required Lenders, may, by written notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments and (ii) declare any Loans then outstanding to be due and
payable, whereupon the principal of the Loans so declared to be due, together
with accrued interest thereon and any other unpaid amounts accrued under the
Credit Documents, 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); provided that, in the case of any Event of
Default described in Section 8.01(i) occurring with respect to the Borrower, the
Commitments shall automatically and immediately terminate and the principal of
all Loans then outstanding, together with accrued interest thereon and any other
unpaid amounts accrued under the Credit Documents, shall automatically and
immediately 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).

ARTICLE IX

 

THE ADMINISTRATIVE AGENT

Section 9.01

The Agency.

Each Lender appoints The Bank of New York as its agent hereunder and irrevocably
authorizes the Administrative Agent to take such action on its behalf and to
exercise such powers hereunder as are specifically delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto, and the Administrative Agent hereby accepts such
appointment subject to the terms hereof. The relationship between the
Administrative Agent and the Lenders shall be that of agent and principal only
and nothing herein shall be construed to constitute the Administrative Agent a
trustee or fiduciary for any Lender nor to impose on the Administrative Agent
duties or obligations other than those expressly provided for herein.

Section 9.02

The Administrative Agent’s Duties.

The Administrative Agent shall promptly forward to each Lender copies, or notify
each Lender as to the contents, of all notices received from the Borrower
pursuant to the terms of this Agreement and, in the event that the Borrower
fails to pay when due the principal of or interest

 

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on any Loan, the Administrative Agent shall promptly give notice thereof to the
Lenders. As to any other matter not expressly provided for herein, the
Administrative Agent shall have no duty to act or refrain from acting with
respect to the Borrower, except upon the instructions of the Required Lenders.
The Administrative Agent shall not be bound by any waiver, amendment,
supplement, or modification of this Agreement which affects its duties
hereunder, unless it shall have given its prior written consent thereto. The
Administrative Agent shall have no duty to ascertain or inquire as to the
performance or observance of any of the terms, conditions, covenants or
agreements binding on the Borrower pursuant to this Agreement nor shall the
Administrative Agent be deemed to have knowledge of the occurrence of any
Default or Event of Default (other than a failure of the Borrower to pay when
due the principal or interest on any Loan), unless it shall have received
written notice from the Borrower or a Lender specifying such Default or Event of
Default and stating that such notice is a “Notice of Default”.

Section 9.03

Limitation of Liabilities.

Each of the Lenders and the Borrower agree that (i) neither the Administrative
Agent nor any of its officers or employees shall be liable for any action taken
or omitted to be taken by any of them hereunder except for its or their own
gross negligence or willful misconduct, (ii) neither the Administrative Agent
nor any of its officers or employees shall be liable for any action taken or
omitted to be taken by any of them in good faith in reliance upon the advice of
counsel, independent public accountants or other experts selected by the
Administrative Agent, and (iii) the Administrative Agent shall be entitled to
rely upon any notice, consent, certificate, statement or other document believed
by it to be genuine and correct and to have been signed and/or sent by the
proper Persons.

Section 9.04

The Administrative Agent as a Lender.

The Administrative Agent may, without any liability to account, maintain
deposits or credit balances for, invest in, lend money to and generally engage
in any kind of banking business with the Borrower or any Subsidiary or Affiliate
of the Borrower without any duty to account therefor to the other Lenders.

Section 9.05

Lender Credit Decision.

Neither the Administrative Agent, nor any of its Affiliates, officers or
employees has any responsibility for, gives any guaranty in respect of, nor
makes any representation to the Lenders as to, (i) the condition, financial or
otherwise, of the Borrower or any Subsidiary thereof or the truth of any
representation or warranty given or made in this Agreement, or in connection
herewith or (ii) the validity, execution, sufficiency, effectiveness,
construction, adequacy, enforceability or value of this Agreement or any other
document or instrument related hereto. Except as specifically provided herein,
neither the Administrative Agent nor any of its Affiliates, officers or
employees shall have any duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect to the operations, business, property, condition or
creditworthiness of the Borrower or any of its Subsidiaries, whether such
information comes into the Administrative Agent’s possession on or before the
date hereof or at any time thereafter. Each Lender acknowledges that (i) it has,
independently and without reliance upon the Administrative Agent or any other
Lender, based on such documents and information as it has deemed appropriate,
made its own credit analysis

 

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and decision to enter into this Agreement and (ii) all information reviewed by
it in its credit analysis or otherwise in connection herewith has been provided
solely by or on behalf of the Borrower, and the Administrative Agent has no
responsibility for such information. Each Lender also acknowledges that it will
independently and without reliance upon the Administrative Agent or any other
Lender, 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 any Credit Document.

Section 9.06

Indemnification.

Each Lender agrees to indemnify the Administrative Agent, to the extent not
reimbursed by the Borrower, ratably in proportion to its Commitment, from and
against any and all liabilities, obligations, losses, claims, 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 the Administrative Agent in any way relating to or arising out of this
Agreement, or any action taken or omitted to be taken by the Administrative
Agent hereunder; provided, that no Lender shall be liable 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 officers or
employees. Without limiting the foregoing, each Lender agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including fees and disbursements of counsel incurred by
the Administrative Agent in connection with the preparation, execution or
enforcement of, or legal advice in respect of rights or responsibilities under,
any Credit Document or any amendments or supplements thereto, to the extent that
the Administrative Agent is not reimbursed for such expenses by the Borrower.
Except for action expressly required of the Administrative Agent hereunder, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall receive further assurances to its
satisfaction from the Lenders of their indemnification obligations under this
Section 9.06 against any and all liability and expense that may be incurred by
it by reason of taking or continuing to take any such action.

Section 9.07

Successor Administrative Agent

The Administrative Agent may resign at any time by giving 30 days prior written
notice thereof (unless the parties agree otherwise) to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent reasonably acceptable to the
Borrower. If no successor Administrative Agent shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the resigning Administrative Agent’s giving of notice of resignation, the
resigning Administrative Agent may appoint a successor Administrative Agent,
which shall be a commercial bank organized or licensed under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $250,000,000. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the resigned Administrative
Agent, and the resigned Administrative Agent shall be discharged from its duties
and obligations under this Agreement. After any Administrative Agent’s
resignation, the provisions of this Article IX shall

 

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continue to inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement.

ARTICLE X

 

EVIDENCE OF LOANS; TRANSFERS

Section 10.01

Evidence of Loans; Revolving Credit Notes.

The Borrower’s obligation to repay the Loans shall be evidenced by Revolving
Credit Notes, one such payable to the order of each Lender. The Revolving Credit
Note of each Lender shall (i) be in the principal amount of such Lender’s
Commitment, (ii) be dated the Effective Date and (iii) be stated to mature on
the Termination Date and bear interest from its date until maturity on the
principal balance (from time to time outstanding thereunder) payable at the
rates and in the manner provided herein. Each Lender is authorized to indicate
upon the grid attached to its Revolving Credit Note all Loans made by it
pursuant to this Agreement, interest elections and payments of principal and
interest thereon. Such notations shall be presumptive, absent manifest error, as
to the aggregate unpaid principal amount of all Loans made by such Lender, and
interest due thereon, but the failure by any Lender to make such notations or
the inaccuracy or incompleteness of any such notations shall not affect the
obligations of the Borrower hereunder or under the Revolving Credit Notes.

Section 10.02

Participations.

Any Lender may at any time grant to one or more financial institutions (each a
“Participant”) participating interests in its Commitment or any or all of its
Loans. In the event of any such grant by a Lender of a participating interest to
a Participant, whether or not upon notice to the Borrower and the Administrative
Agent, such Lender shall remain responsible for the performance of its
obligations hereunder, and, except to the extent such participating interest has
been granted pursuant to Section 4.02(e), the Borrower and the Administrative
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement. Any agreement
pursuant to which any Lender may grant such a participating interest shall
provide that such Lender shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including the right to approve
any amendment, modification or waiver of any provision of this Agreement;
provided, that such participation agreement may provide that such Lender will
not agree to any modification, amendment or waiver of this Agreement described
in clauses (i) through (vi), inclusive, of Section 11.06 without the consent of
the Participant.

Section 10.03

Assignments.

(a)        Any Lender may at any time assign to one or more financial
institutions (each an “Assignee”) all, or a proportionate part of all, of its
rights and obligations under this Agreement, and such Assignee shall assume such
rights and obligations, pursuant to an instrument, in substantially the form of
Exhibit E (an “Assignment and Acceptance”), executed by such Assignee and such
transferring Lender, with (and subject to) the signed consent of the Borrower
and the Administrative Agent (which consents shall not be unreasonably
withheld); provided, that the foregoing consent requirement shall not be
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other transfer by any Lender to an affiliate of such Lender, to another Lender
or to a Federal Reserve Bank provided further, that any consent of the Borrower
otherwise required under this Section shall not be required if an Event of
Default has occurred and is continuing. Upon execution and delivery of an
Assignment and Acceptance and payment by such Assignee to such transferring
Lender of an amount equal to the purchase price agreed between such transferring
Lender and such Assignee and payment by the transferring Lender or the Assignee
of an assignment fee of $3,500 to the Administrative Agent, such Assignee shall
be a Lender party to this Agreement and shall have all the rights and
obligations of a Lender with a Commitment as set forth in such Assignment and
Acceptance, and the transferring Lender shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required.

(b)        No Assignee of any transferring Lender’s rights shall be entitled to
receive any greater payment under Section 4.03 or 4.04 than such Lender would
have been entitled to receive with respect to the rights transferred, unless
such transfer is made with the Borrower’s prior written consent or by reason of
the provisions of Section 4.04(c) requiring such transferring Lender to
designate a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such payment did not exist.

Section 10.04

Certain Pledges.

Notwithstanding any other provision in this Agreement, any Lender may at any
time create a security interest in, or pledge, all or any portion of its rights
under this Agreement and any Revolving Credit Note held by it in favor of any
Federal Reserve Bank in accordance with Federal Reserve Board Regulation A (or
any successor provision) or U.S. Treasury Regulation 31 C.F.R. § 203.14 (or any
successor provision), and such Federal Reserve Bank may enforce such pledge or
security interest in any manner permitted under applicable law.

ARTICLE XI

 

MISCELLANEOUS

Section 11.01

APPLICABLE LAW.

THE RIGHTS AND DUTIES OF THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS
UNDER THIS AGREEMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

Section 11.02

WAIVER OF JURY.

THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS EACH HEREBY WAIVES TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR THE
RELATIONSHIPS ESTABLISHED HEREUNDER.

 

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Section 11.03

Jurisdiction and Venue.

The Borrower, the Administrative Agent and the Lenders each hereby irrevocably
submits to the non-exclusive jurisdiction of any state or federal court in the
Borough of Manhattan, The City of New York for the purpose of any suit, action,
proceeding or judgment relating to or arising out of any Credit Document. The
Borrower, the Administrative Agent and the Lenders each hereby irrevocably
consents to the jurisdiction of any such court in any such action and to the
laying of venue in the Borough of Manhattan, The City of New York. The Borrower,
the Administrative Agent and the Lenders each hereby irrevocably waives, to the
fullest extent permitted by applicable law, any objection to the laying of the
venue of any such suit, action or proceeding brought in the aforesaid courts and
hereby irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.

Section 11.04

Set-off.

The Borrower hereby authorizes each Lender (including each Lender in its
capacity as a purchaser of a participation interest pursuant to Section 4.02(e))
upon the occurrence of an Event of Default and at any time and from time to time
during the continuance thereof, to the fullest extent permitted by law, to
set-off and apply any and all deposits (whether general or special, time or
demand, provisional or final and in whatever currency) at any time held, and
other indebtedness at any time owing, by such Lender to or for the credit or the
account of the Borrower against any of the Obligations of the Borrower, now or
hereafter existing under any Credit Document, held by such Lender, irrespective
of whether such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section 11.04 are in addition to other rights and remedies (including other
rights of set-off) which such Lender may have. Any Lender exercising its rights
under this Section 11.04 shall give notice thereof to the Borrower and the
Administrative Agent concurrently with or prior to the exercise of such rights;
provided that failure to give such notice shall not affect the validity of such
exercise.

Section 11.05

Confidentiality.

(a)        The Lenders and the Administrative Agent agree (on behalf of
themselves and each of their Affiliates, directors, officers, employees and
representatives) to take normal and reasonable precautions and exercise due care
to maintain the confidentiality of all non-public information provided to them
by the Borrower or any Subsidiary or by the Administrative Agent on the
Borrower’s or any Subsidiary’s behalf in connection with this Agreement and
neither the Administrative Agent, any Lender, nor any of their Affiliates,
directors, officers, employees and representatives shall use any such
information for any purpose or in any manner other than pursuant to the terms
contemplated by this Agreement, except to the extent such information (a) was or
becomes generally available to the public other than as a result of a disclosure
by the Administrative Agent or any Lender, or (b) was or becomes available on a
non-confidential basis from a source other than the Borrower, provided that such
source is not bound by a confidentiality agreement with the Borrower known to
the Administrative Agent or affected Lender(s); provided that nothing herein
shall limit the disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process; (ii) to counsel for any of the
Lenders or the Administrative Agent; (iii) to bank examiners, auditors or
accountants; (iv) to the

 

49

 

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Administrative Agent or any other Lender; (v) by the Administrative Agent or any
Lender to an Affiliate thereof who is bound by this Section 11.05; provided that
any such information delivered to an Affiliate shall be for the purposes related
to the extension of credit represented by this Agreement and the administration
and enforcement thereof and for no other purpose; (vi) in connection with any
litigation relating to enforcement of the Credit Documents or (vii) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant (or prospective assignee or participant) first executes
and delivers to the respective Lender a Confidentiality Agreement, in
substantially the form of Exhibit F. Each Lender and the Administrative Agent
agree, unless specifically prohibited by applicable law or court order, to
notify the Borrower of any request for disclosure of any such non public
information (x) by any Governmental Authority or representative thereof (other
than any such request in connection with an examination of your financial
condition by such Governmental Authority) or (y) pursuant to legal process.

(b)        This Agreement is intended to provide express authorization to each
of the Lenders and their Affiliates (and each employee, representative, or other
agent of each Lender and its of Affiliates) to disclose to any and all Persons,
without limitation of any kind, the “tax treatment” and “tax structure” (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to the Lenders or any of them
or any of their Affiliates (and any such employees, representatives or other
agents) relating to such tax treatment and structure; provided, that, with
respect to any document or similar item that in either case contains information
concerning the tax treatment or tax structure of the transactions contemplated
hereby as well as other information, this authorization shall only apply to such
portions of the document or similar item that relate to the tax treatment or tax
structure of the transactions contemplated hereby.

Section 11.06

Integration; Amendments and Waivers.

(a)        This Agreement and any separate letter agreements with respect to
fees payable by the Borrower with respect to this Agreement constitute the
entire agreement among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof.

(b)        Any provision of this Agreement may be amended, modified,
supplemented or waived, but only by a written amendment or supplement, or
written waiver, signed by the Borrower and either the Required Lenders (and, if
the rights or duties of the Administrative Agent are affected thereby, by the
Administrative Agent), or the Administrative Agent with the consent of the
Required Lenders; provided , however, that no such amendment, modification, or
waiver shall, unless signed by all the Lenders, or by the Administrative Agent
with the consent of all the Lenders, (i) increase or decrease the Commitment of
any Lender, except as contemplated by Section 2.03, or subject any Lender to any
additional obligation, (ii) reduce the principal of or rate of interest on any
Loan or any fees hereunder (other than the default rate set forth in Section
3.04 hereof), (iii) postpone any payment of principal of or interest on any Loan
or any fees hereunder, (iv) postpone any reduction or termination of any
Commitment, (v) change the percentage of, the Commitments or of the aggregate
unpaid principal amount of Loans, or the number of Lenders, which shall be
required for the Lenders or any of them to take any action under this Section
11.06 or any other provision of this Agreement, or (vi) amend,

 

50

 

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modify, supplement or waive the provisions of this Section 11.06. Except to the
extent expressly set forth therein, any waiver shall be effective only in the
specific instance and for the specific purpose for which such waiver is given.

Section 11.07

Cumulative Rights; No Waiver.

Each and every right granted to the Administrative Agent and the Lenders
hereunder or under any other document delivered in connection herewith, or
allowed them by law or equity, shall be cumulative and not exclusive and may be
exercised from time to time. No failure on the part of the Administrative Agent
or any Lender to exercise, and no delay in exercising, any right will operate as
a waiver thereof, nor will any single or partial exercise by the Administrative
Agent or any Lender of any right preclude any other or future exercise thereof
or the exercise of any other right.

Section 11.08

Notices.

(a)        Any communication, demand or notice to be given hereunder will be
duly given when delivered in writing or by telecopy to a party at its address as
indicated below or such other address as such party may specify in a notice to
each other party hereto. A communication, demand or notice given pursuant to
this Section 11.08 shall be addressed:

If to the Borrower, at

Southwest Gas Corporation

5241 Spring Mountain Road

Las Vegas, Nevada 89150

Telecopy: (702) 364-3023

Attention: Treasury Services

If to the Administrative Agent, at

BNY Capital Markets, Inc.

Agency Function Administration

One Wall Street, 18th Floor

New York, New York 10286

Telecopy: (212) 635-6365

Telephone: (212) 635-4692

Attention: Sandra Morgan

With a copy to:

The Bank of New York

One Wall Street

New York, NY 10286

Telecopy: (212) 635-7923

Telephone: (212) 635-7834

Attention:          Ray Palmer

 

 

51

 

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If to any Lender, at its address indicated on Schedule I hereto, or at such
other address as may be designated by such Lender in an Administrative
Questionnaire or other appropriate writing, delivered to the Administrative
Agent and the Borrower.

This Section 11.08 shall not apply to notices referred to in Article II of this
Agreement, except to the extent set forth therein.

(b)        Unless otherwise provided to the contrary herein, any notice which is
required to be given in writing pursuant to the terms of this Agreement may be
given by telecopy.

Section 11.09

Separability.

In case any one or more of the provisions contained in any Credit Document shall
be invalid, illegal or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions contained herein or in
any other Credit Document shall not in any way be affected or impaired thereby.

Section 11.10

Parties in Interest.

This Agreement shall be binding upon and inure to the benefit of the Borrower
and the Lenders and their respective successors and assigns, except that the
Borrower may not assign any of its rights hereunder without the prior written
consent of all of the Lenders, and any purported assignment by the Borrower
without such consent shall be void.

Section 11.11

Execution in Counterparts.

This Agreement 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 the counterparts, including
counterparts delivered by facsimile, shall together constitute one and the same
instrument.

Section 11.12

USA Patriot Act Notice.

Each Lender hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the Act.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

52

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

SOUTHWEST GAS CORPORATION

By:     /S/KENNETH J. KENNY     

Name: Kenneth J. Kenny

Title: Treasurer

 

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SOUTHWEST GAS CORPORATION

REVOLVING CREDIT AGREEMENT

THE BANK OF NEW YORK, as a Lender and as Administrative Agent

By:     /S/RAYMOND J. PALMER     

Name: Raymond J. Palmer

Title: Vice President

                

 

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SOUTHWEST GAS CORPORATION

REVOLVING CREDIT AGREEMENT

BANK OF AMERICA, N.A., as a Lender and as Syndication Agent

By:     /S/PETER J. VITALE     

Name: Peter J. Vitale

Title: Senior Vice President

                

 

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SOUTHWEST GAS CORPORATION

REVOLVING CREDIT AGREEMENT

JPMORGAN CHASE BANK, N.A., as a Lender and as Co-Documentation Agent

By:     /S/ROBERT W. TRABAND     

Name: Robert W. Traband

Title: Vice President

                

 

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SOUTHWEST GAS CORPORATION

REVOLVING CREDIT AGREEMENT

UNION BANK OF CALIFORNIA, N.A., as a Lender and as Co-Documentation Agent

By:     /S/KEVIN M. ZITAR     

Name: Kevin M. Zitar

Title: Vice President

 

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

 

 

SOUTHWEST GAS CORPORATION

REVOLVING CREDIT AGREEMENT

KEYBANK NATIONAL ASSOCIATION, as a Lender and as Co-Documentation Agent

By:     /S/KEVEN D. SMITH     

Name: Keven D. Smith

Title: Vice President

                

 

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

 

 

SOUTHWEST GAS CORPORATION

REVOLVING CREDIT AGREEMENT

KBC BANK, N.V.

By:     /S/JEAN-PIERRE DIELS     

Name: Jean-Pierre Diels

Title: First Vice President

                

By:     /S/ERIC RASKIN     

Name: Eric Raskin

Title: Vice President

                

 

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

 

 

SOUTHWEST GAS CORPORATION

REVOLVING CREDIT AGREEMENT

MELLON BANK, N.A.

By:     /S/MARK W. ROGERS     

Name: Mark W. Rogers

Title: Vice President

                

 

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

 

 

SOUTHWEST GAS CORPORATION

REVOLVING CREDIT AGREEMENT

U. S. BANK NATIONAL ASSOCIATION

By:     /S/DALE PARSHALL     

Name: Dale Parshall

Title: Vice President

                

 

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

 

 

Schedule I

Lenders and Commitments

Lender

Commitment

as of

the Effective

Date

Address for

Notices

The Bank of New York

$52,000,000

The Bank of New York

One Wall Street

New York, New York 10286

Attention: Ray Palmer

Bank of America, N.A.

$52,000,000

Bank of America, N.A.

300 S. 4th Street, 2nd Floor

Las Vegas, Nevada 89101

Attention: Alan Gordon

Relationship Manager

JPMorgan Chase Bank, N.A.

$42,000,000

JPMorgan Chase Bank, N.A.

1 Bank One Plaza

Suite IL 1-0634

Chicago, Illinois 60670

Attention: Kenneth Fecko

Client Service Associate

Union Bank of California, N.A.

$42,000,000

Union Bank of California, N.A.

601 Potrero Grande Dr.

Monterey Park, California 91754

Attention: Gohar Karapetyan

Ruby Gonzales

Commercial Loan

Operations

KeyBank National Association

$42,000,000

KeyBank National Association

601-108th Avenue, N.E.

Bellevue, Washington 98004

Attention: Keven Smith

KBC Bank, N.V.

$30,000,000

KBC Bank, N.V.

125 West 55th Street, 10th Floor

New York, New York 10019

Attention: Rose Pagan

 

 

 

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

 

 

 

U.S. Bank National Association

$25,000,000

U.S. Bank National Association

555 S.W. Oak Street, PL-4

Portland, Oregon 97204

Attention: Scott J. Bell

Vice President and

Relationship Manager

Commercial Loan

Servicing Department

Mellon Bank, N.A.

$15,000,000

Mellon Bank, N.A.

525 William Penn Place,

Room 1203

Pittsburgh, Pennsylvania 15259

Attention: Barbara Gago

 

 

ii

 

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

 

 

Schedule II

FORM OF SCHEDULE II CERTIFICATE

Reference is hereby made to the Revolving Credit Agreement, dated as of April 6,
2005, among Southwest Gas Corporation (the “Borrower”), the lenders from time to
time parties thereto (collectively, the “Lenders” individually, a “Lender”), The
Bank of New York, as Administrative Agent for the Lenders thereunder, Bank of
America, N.A., as Syndication Agent and JPMorgan Chase Bank, N.A., Union Bank of
California, N.A. and KeyBank National Association, as Co-Documentation Agents
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”). Pursuant to the provisions of Section 4.04 of the Credit Agreement,
the undersigned hereby certifies that:

1.          it is the sole record and beneficial owner of the loans or the
obligations evidenced by the Revolving Credit Note(s) in respect of which it is
providing this certificate.

2.          it is not a bank (as such term is used in Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended (the “Code”)). In this regard, the
undersigned further represents and warrants that:

1.

(a)           it is not subject to regulatory or other legal requirements as a
bank in any jurisdiction; and

2.

(b)           it has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any Governmental Authority,
any application made to a rating agency or qualification for any exemption from
tax, securities law or other legal requirements;

3.          it is not a “10-percent shareholder” of the Borrower (as such term
is used in Section 881(c)(3)(B) of the Code);

4.          it is not a controlled foreign corporation related to the Borrower
within the meaning of Section 864(d)(4) of the Code; and

5.          it is not a “bank” as such term is used in Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended. Attached hereto are two accurate
and complete original signed copies of Internal Revenue Service Form W-8BEN (or
successor form).

[NAME OF LENDER]

By:_____________________________

 

 

Name:_____________________________

 

Title:_____________________________ 

 

iii

 

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

 

 

Exhibit A

Form of Borrowing Request For Loans

[Date]

Attention:___________________

Borrowing Request for Loans

Ladies and Gentlemen:

Reference is made to the Revolving Credit Agreement, dated as of April 6, 2005
(as amended, modified or supplemented from time to time, the “Credit
Agreement”), among Southwest Gas Corporation (the “Borrower”), the Lenders from
time to time parties thereto and The Bank of New York as Administrative Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Credit Agreement.

The Borrower hereby gives you notice, pursuant to Section 2.02 of the Credit
Agreement, that it requests Loans, and in that connection sets forth below the
terms on which such Loans are requested to be made:

(A)

Borrowing Date1

[_________________]

 

(B)

Aggregate Principal Amount2

$_________________

 

(C)

Interest Rate Basis

[ABR] [Eurodollar] Loan

(D)

Interest Period and the

 

 

last day thereof3

[_________________]

 

Very truly yours,

SOUTHWEST GAS CORPORATION

By:_____________________________

Title:

_________________________

1

Must be a Business Day.

2               Must be an amount not less than $5,000,000, or an integral
multiple of $1,000,000 in excess thereof, in the case of Eurodollar Loans, or at
least $1,000,000 or an integral multiple of $100,000 in excess thereof in the
case of an ABR Loans.

3               In the case of Eurodollar Loans, one week, one, two, three or
six-month periods, or, if made available by all Lenders, periods of seven to
thirty-one days or twelve months. Not applicable to ABR Loans.

 

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

 

 

Exhibit B

Form of Continuation/Conversion Request

[Date]

Attention:____________________

Continuation/Conversion Request

Ladies and Gentlemen:

Reference is made to the Revolving Credit Agreement, dated as of April 6, 2005
(as amended, modified or supplemented from time to time, the “Credit
Agreement”), among Southwest Gas Corporation (the “Borrower”), the Lenders from
time to time parties thereto and The Bank of New York, as Administrative Agent.
Capitalized terms used herein but not otherwise defined herein shall have the
meanings ascribed to such terms in the Credit Agreement.

The Borrower hereby requests, pursuant to Section 3.05(a) of the Credit
Agreement, that on __________, 200_:

(1)        $__,000,000 of the presently outstanding principal amount of Loans
originally made on ___________ 200_ [and $__________ of the presently
outstanding principal amount of the Loans originally made on ___________ 200_],

(2)

presently being maintained as [ABR] [Eurodollar] Loans,

(3)        be [converted into] [continued as], [Eurodollar Loans having an
Interest Period of [one week] [__ days] [one] [two] [three] [six] [twelve]
months].

Very truly yours,

SOUTHWEST GAS CORPORATION

By:_____________________________

Title:

 

 

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Exhibit C

Form of Revolving Credit Note

PROMISSORY NOTE

[Principal Amount]

[Date]

SOUTHWEST GAS CORPORATION, a California corporation (the “Borrower”), for value
received, promises to pay to the order of [LENDER] (the “Lender”), on the
Termination Date (as defined in the Credit Agreement referred to below), the
principal sum of [PRINCIPAL AMOUNT IN DOLLARS] or, if less, the aggregate
principal amount of the Loans made by the Lender to the Borrower pursuant to
that certain Revolving Credit Agreement, dated as of April 6, 2005 (as amended,
modified or supplemented from time to time, the “Credit Agreement”), among the
Borrower, the Lenders from time to time parties thereto and The Bank of New
York, as Administrative Agent.

The Borrower also promises to pay interest on the unpaid principal amount hereof
from time to time outstanding, from the date hereof until the date of repayment,
at the rate or rates per annum and on the date or dates specified in the Credit
Agreement.

Payments of both principal and interest are to be made in lawful money of the
United States of America in funds immediately available to the Lender at its
office or offices designated in accordance with the Credit Agreement.

All parties hereto, whether as makers, endorsers, or otherwise, severally waive
diligence, presentment, demand, protest and notice of any kind whatsoever. The
failure or forbearance by the holder to exercise any of its rights hereunder in
any particular instance shall in no event constitute a waiver thereof.

All borrowings evidenced by this Note and all payments and prepayments of the
principal hereof and interest hereon and the respective dates thereof shall be
endorsed by the holder of this Note 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, provided, however, that any failure of the holder of this
Note to make such a notation or any error in such notation shall in no manner
affect the validity or enforceability of the obligation of the Borrower to make
payments of principal and interest in accordance with the terms of this Note and
the Credit Agreement.

This Note is one of the Revolving Credit 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
prepayment of the principal hereof prior to the maturity thereof and for the
amendment or waiver of certain provisions of the Credit Agreement and/or this
Note, all upon the terms and conditions therein specified. Capitalized terms
used and not otherwise defined herein have the meanings ascribed thereto in the
Credit Agreement.

 

2

 

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THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL, PURSUANT TO NEW
YORK GENERAL OBLIGATIONS LAW SECTION 5-1401 BE GOVERNED BY THE LAW OF THE STATE
OF NEW YORK.

 

 

This Note is not negotiable and interests herein may be assigned only upon the
terms and conditions specified in the Credit Agreement.

SOUTHWEST GAS CORPORATION

By:_____________________________

Title:

 

3

 

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LOANS AND PRINCIPAL PAYMENTS

 

Amount of Revolving

Credit Loans Made

 

Amount of Principal
Repaid

 

Amount of Unpaid
Principal Balance

 

 

Date

ABR
Loan

Euro
dollar
Loan

Interest
Period (if
applicable)

ABR
Loan

Euro
dollar
Loan

 

ABR
Loan

Euro
dollar
Loan

Total

Notation
Made By

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit D

Form of Opinion of

Counsel for the Borrower

 

 

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Exhibit E

Form of Assignment and Acceptance

ASSIGNMENT AND ACCEPTANCE

Reference is made to the Revolving Credit Agreement, dated as of April 6, 2005
(as amended, modified or supplemented from time to time, the “Credit
Agreement”), among Southwest Gas Corporation (the “Borrower”), the Lenders from
time to time parties thereto and The Bank of New York, as Administrative Agent.
Capitalized terms defined in the Credit Agreement are used herein with the same
meanings.

Section 1. Assignment and Acceptance. The Assignor identified in Annex I hereto
(the “Assignor”) hereby sells and assigns, without recourse, to the Assignee
identified in Annex I hereto (the “Assignee”), and the Assignee hereby purchases
and assumes, without recourse, from the Assignor, effective as of the Transfer
Effective Date set forth in Annex I hereto, the interests set forth on Annex 1
hereto (the “Assigned Interest”) in the Assignor’s rights and obligations under
the Credit Agreement, including, without limitation, the interests set forth on
Annex I in the Commitment of the Assignor on the Transfer Effective Date and
Loans owing to the Assignor which are outstanding on the Transfer Effective
Date. Each of the Assignor and the Assignee hereby makes and agrees to be bound
by all the representations, warranties and agreements set forth in Section 9.05
of the Credit Agreement, a copy of which has been received by the Assignee. From
and after the Transfer Effective Date (i) the Assignee shall be a party to and
be bound by the provisions of the Credit Agreement and, to the extent of the
interests assigned by this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of
the interests assigned by this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement.

Section 2. Other Documentation. This Assignment and Acceptance is being
delivered to the Administrative Agent together with a properly completed
Administrative Questionnaire, attached as Annex 2 hereto, if the Assignee is not
already a Lender under the Credit Agreement.

Section 3. Representations and Warranties of the Assignor. The Assignor (i)
represents and warrants that, as of the date hereof, it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is held by it free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, or any other
instrument or document executed or furnished pursuant thereto; and (iii) makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto.

Section 4. Representations and Warranties of the Assignee. The Assignee (a)
confirms that it has received a copy of the Credit Agreement, together with
copies of the financial

 

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

 

statements delivered on or before the date hereof pursuant to Sections 5.01(k)
and 7.01(a) thereof 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 Acceptance; (b) agrees that it will, independently and without
reliance upon 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 any
action under the Credit Documents; (c) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Documents as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (d) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Documents are
required to be performed by it as a Lender; and (e) if the Assignee is organized
under the laws of a jurisdiction outside the United States, confirms to the
Borrower (and is providing to the Administrative Agent and the Borrower the
forms required pursuant to Section 4.04(b) of the Credit Agreement) that (i) the
Assignee is entitled to benefits under an income tax treaty to which the United
States is a party that reduces the rate of withholding tax on payments under the
Credit Agreement or (ii) that the income receivable pursuant to the Credit
Agreement is effectively connected with the conduct of a trade or business in
the United States.

Section 5. GOVERNING LAW. THE RIGHTS AND DUTIES OF THE PARTIES UNDER THIS
ASSIGNMENT AND ACCEPTANCE SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1401, BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Annex I hereto.

 

2

 

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Annex 1 to Assignment and Acceptance

Date of
Assignment:__________________________________________________________________________

 

Legal Name of
Assignor:____________________________________________________________________________

 

Legal Name of
Assignee:____________________________________________________________________________

 

Assignee’s Address for
Notices:__________________________________________________________

__________________________________________________________   

 

Transfer Effective Date of Assignment

(may not be fewer than two Business

Days after the Date of
Assignment):________________________________________________________

________________________________________________________     

                                                                            

 

Principal Amount Assigned

Percentage Assigned of Commitment (set forth, to at least 8 decimals, as a
percentage of the Total Commitment)

Commitment Assigned:

$

%

Revolving Credit Loans

$

 

 

The terms set forth above are hereby agreed to:

 

 

Consent given:

 

______________________, as Assignor

SOUTHWEST GAS CORPORATION

By:___________________________ 

Name:

Title:

By:___________________________ 

Name:

Title:

______________________, as Assignee

 

By:___________________________ 

Name:

Title:

 

 

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Annex 2 to Assignment and Acceptance

LEGAL NAME OF ASSIGNEE TO APPEAR IN DOCUMENTATION:

________________________________________________________________________

GENERAL INFORMATION

ABR LENDING OFFICE:

Institution Name:_________________________________________________________

Street Address:___________________________________________________________

City, State, Country, Zip Code:______________________________________________

EURODOLLAR LENDING OFFICE:

Institution Name:_________________________________________________________

Street Address:___________________________________________________________

City, State, Country, Zip Code:______________________________________________

CONTACTS/NOTIFICATION METHODS CREDIT CONTACTS:

Primary Contact:_________________________________________________________

Street Address:___________________________________________________________

City, State, Country, Zip Code: _____________________________________________

Phone Number:___________________________________________________________

FAX Number:____________________________________________________________

Backup Contact:__________________________________________________________

Street Address: ___________________________________________________________

City, State, Country, Zip Code:______________________________________________

Phone Number: __________________________________________________________

FAX Number: ___________________________________________________________

E-Mail Address: __________________________________________________________

 

 

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ADMINISTRATIVE CONTACTS -- BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.

Contact:_________________________________________________________________

Street Address:___________________________________________________________

City, State, Country, Zip Code: ______________________________________________

Phone Number:___________________________________________________________

FAX Number:____________________________________________________________

PAYMENT INSTRUCTIONS

Name of bank where funds are to be transferred:_________________________________

Routing Transit/ABA number of bank where funds are to be
transferred:______________________________________________________________

Name of Account, if applicable:______________________________________________

Account Number:_________________________________________________________

Additional Information:____________________________________________________

_______________________________________________________________________

TAX WITHHOLDING

 

Non Resident Alien _______  Y* _____ N

* Form 4224 Enclosed

Tax ID Number____________

 

2

 

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MAILINGS

Please specify who should receive financial information:

Name:__________________________________________________________________

Street Address:___________________________________________________________

City, State, Country, Zip Code:______________________________________________

 

3

 

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Exhibit F

Form of Confidentiality Agreement

[Date]

[Insert Name and

Address of Prospective

Participant or Assignee]

Re:

Revolving Credit Agreement, dated as of April 6, 2005,

among Southwest Gas Corporation, the Lenders from time

to time parties thereto and The Bank of New York,

as Administrative Agent

Dear _____________:

As a Lender party to the above-referenced credit agreement (the “Credit
Agreement”), we have agreed with Southwest Gas Corporation (the “Borrower”),
pursuant to Section 11.05 of the Credit Agreement, to use our best efforts to
keep confidential, except as otherwise provided therein, all Confidential
Information (as defined in the Credit Agreement) regarding the Borrower and its
Subsidiaries.

As provided in such Section 11.05, we are permitted to provide you, as a
prospective participant or assignee, with certain of such Confidential
Information subject to the execution and delivery by you, prior to receiving
such non-public information, of a Confidentiality Agreement in this form. Such
information will not be made available to you until your execution and return to
us of this Confidentiality Agreement.

Accordingly, in consideration of the foregoing, you agree (on behalf of yourself
and each of your affiliates, directors, officers, employees and representatives)
that (A) such information will not be used by you except in connection with a
proposed [participation] [assignment] to you pursuant to the Credit Agreement
and (B) you shall take normal and reasonable precautions and exercise due care
to maintain the confidentiality of all Confidential Information provided to you;
provided that nothing herein shall limit the disclosure of any such information
(i) to the extent required by statute, rule, regulation or judicial process,
(ii) to your counsel or to counsel for any of the Lenders or the Administrative
Agent, (iii) to bank examiners, auditors or accountants, (iv) to the
Administrative Agent or any other Lender, and (v) in connection with any
litigation relating to enforcement of the Credit Documents; provided further,
that, unless specifically prohibited by applicable law or court order, you
agree, prior to disclosure thereof, to notify the Borrower of any request for
disclosure of any such non-public information (x) by any Governmental Authority
or representative thereof (other than any such request in connection with an
examination of your financial condition by such Governmental Authority) or (y)
pursuant to legal process.

 

 

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

 

 

Please indicate your agreement to the foregoing by signing at the place provided
below the enclosed copy of this Confidentiality Agreement.

Very truly yours,

[Insert Name of Lender]

By:___________________________

Name:

Title:

 

Agreed as of the date of this letter.

[Insert name of prospective

participant or assignee]

By:___________________________

 

2

 

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Exhibit G

Form of Increase Request

[Date]

The Bank of New York

Agency Function Administration

One Wall Street - 18th Floor

New York, NY 10286

Attention: Sandra Morgan

Increase Request for Revolving Credit Loans

Ladies and Gentlemen:

Reference is made to the Revolving Credit Agreement, dated as of April 6, 2005
(as amended, modified or supplemented from time to time, the “Credit
Agreement”), among Southwest Gas Corporation (the “Borrower”), the Lenders from
time to time parties thereto and The Bank of New York, as Administrative Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Credit Agreement.

The Borrower hereby gives you notice, pursuant to Section 2.03(c) of the Credit
Agreement, that it requests an increase in the Commitments, and in that
connection sets forth below (A) the Lender(s) and the amount of the proposed
increase of the Commitment of such Lender(s) and (B) the proposed New Lender(s)
and the proposed amount of the Commitment of such New Lender(s):

(A)

Lender

Increase in Commitment

(B)

New Lender

New Commitment

 

Very truly yours,

SOUTHWEST GAS CORPORATION

By: _____________________________

Title: