Exhibit 10.2

 

 

$750,000,000

CREDIT AGREEMENT

among

PACIFIC GAS AND ELECTRIC COMPANY,

as Borrower,

The Several Lenders from Time to Time Parties Hereto,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

THE ROYAL BANK OF SCOTLAND PLC,

as Syndication Agent,

and

BANCO BILBAO VIZCAYA ARGENTARIA, S.A., NEW YORK BRANCH,

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH,

and

U.S. BANK NATIONAL ASSOCIATION,

as Documentation Agents

Dated as of June 8, 2010

 

 

WELLS FARGO SECURITIES, LLC

and

RBS SECURITIES INC.,

as Joint Lead Arrangers and Joint Book Runners

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TABLE OF CONTENTS

 

               Page SECTION   1.    DEFINITIONS    1   1.1    Defined Terms    1
  1.2    Other Definitional Provisions    15 SECTION   2.    AMOUNT AND TERMS OF
COMMITMENTS    16   2.1    Commitments    16   2.2    Procedure for Revolving
Loan Borrowing    16   2.3    Commitment Increases    16   2.4    Swingline
Commitment    18   2.5    Procedure for Swingline Borrowing; Refunding of
Swingline Loans    18   2.6    Facility Fees, etc    20   2.7    Termination or
Reduction of Commitments; Extension of Termination Date    20   2.8   
Prepayments    22   2.9    Conversion and Continuation Options    23   2.10   
Limitations on Eurodollar Tranches    23   2.11    Interest Rates and Payment
Dates    23   2.12    Computation of Interest and Fees    24   2.13    Inability
to Determine Interest Rate    24   2.14    Pro Rata Treatment and Payments;
Notes    24   2.15    Requirements of Law    26   2.16    Taxes    27   2.17   
Indemnity    29   2.18    Change of Lending Office    29   2.19    Replacement
of Lenders    29   2.20    Defaulting Lenders    30 SECTION   3.   
REPRESENTATIONS AND WARRANTIES    31   3.1    Financial Condition    31   3.2   
No Change    32   3.3    Existence; Compliance with Law    32   3.4    Power;
Authorization; Enforceable Obligations    32   3.5    No Legal Bar    32   3.6
   Litigation    32   3.7    No Default    33   3.8    Taxes    33   3.9   
Federal Regulations    33   3.10    ERISA    33   3.11    Investment Company
Act; Other Regulations    34   3.12    Use of Proceeds    34   3.13   
Environmental Matters    34   3.14    Regulatory Matters    34 SECTION   4.   
CONDITIONS PRECEDENT    34   4.1    Conditions to the Effective Date    34   4.2
   Conditions to Each Credit Event    35

 

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SECTION   5.    AFFIRMATIVE COVENANTS    35   5.1    Financial Statements    36
  5.2    Certificates; Other Information    36   5.3    Payment of Taxes    37  
5.4    Maintenance of Existence; Compliance    37   5.5    Maintenance of
Property; Insurance    37   5.6    Inspection of Property; Books and Records;
Discussions    37   5.7    Notices    37   5.8    Maintenance of Licenses, etc
   38 SECTION   6.    NEGATIVE COVENANTS    38   6.1    Consolidated
Capitalization Ratio    38   6.2    Liens    38   6.3    Fundamental Changes   
38 SECTION   7.    EVENTS OF DEFAULT    39 SECTION   8.    THE AGENTS    41  
8.1    Appointment    41   8.2    Delegation of Duties    41   8.3   
Exculpatory Provisions    41   8.4    Reliance by Administrative Agent    42  
8.5    Notice of Default    42   8.6    Non-Reliance on Agents and Other Lenders
   42   8.7    Indemnification    43   8.8    Agent in Its Individual Capacity
   43   8.9    Successor Administrative Agent    43   8.10    Documentation
Agents and Syndication Agent    44 SECTION   9.    MISCELLANEOUS    44   9.1   
Amendments and Waivers    44   9.2    Notices    45   9.3    No Waiver;
Cumulative Remedies    46   9.4    Survival of Representations and Warranties   
46   9.5    Payment of Expenses and Taxes    47   9.6    Successors and Assigns;
Participations and Assignments    48   9.7    Adjustments; Set off    51   9.8
   Counterparts    51   9.9    Severability    51   9.10    Integration    51  
9.11    GOVERNING LAW    51   9.12    Submission To Jurisdiction; Waivers    52
  9.13    Acknowledgments    52   9.14    Confidentiality    52   9.15   
WAIVERS OF JURY TRIAL    53   9.16    USA Patriot Act    53   9.17    Judicial
Reference    53

 

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SCHEDULES:

 

1.1A   

Commitments

EXHIBITS:

 

A   

Form of New Lender Supplement

B   

Form of Commitment Increase Supplement

C   

Form of Compliance Certificate

D   

Form of Closing Certificate

E   

Form of Assignment and Assumption

F   

Form of Legal Opinion of Orrick, Herrington & Sutcliffe LLP

G   

Form of Exemption Certificate

H   

Form of Note

 

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CREDIT AGREEMENT (this “Agreement”), dated as of June 8, 2010, among PACIFIC GAS
AND ELECTRIC COMPANY, a California corporation (the “Borrower”), the several
banks and other financial institutions or entities from time to time parties to
this Agreement (the “Lenders”), WELLS FARGO SECURITIES LLC and RBS SECURITIES
INC., as joint lead arrangers and joint book runners (together and in such
capacity, the “Arrangers”), THE ROYAL BANK OF SCOTLAND PLC, as syndication agent
(in such capacity, the “Syndication Agent”), BANCO BILBAO VIZCAYA ARGENTARIA,
S.A., New York Branch, THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., New York Branch,
and U.S. BANK NATIONAL ASSOCIATION, as documentation agents (in such capacities,
the “Documentation Agents”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells
Fargo”), as administrative agent (in such capacity, together with any successor
thereto, the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Lenders provide credit to the
Borrower, and the Lenders are willing to do so on the terms and conditions set
forth herein;

NOW, THEREFORE, IT IS AGREED THAT in consideration of the mutual covenants and
agreements herein contained, the parties hereto covenant and agree as follows:

SECTION 1. DEFINITIONS

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

“ABR”: for any day, a rate per annum equal to the greatest of (a) the Base Rate
in effect on such day; (b) the Federal Funds Effective Rate in effect on such
day plus  1/2 of 1%; and (c) the Eurodollar Base Rate for a Eurodollar Loan with
a one-month Interest Period commencing on such day plus the Applicable Margin
for Eurodollar Loans. For purposes hereof, “Base Rate” shall mean the rate of
interest per annum publicly announced from time to time by the Administrative
Agent as its base rate in effect at its principal office in Charlotte, North
Carolina (the Base Rate not being intended to be the lowest rate of interest
charged by the Administrative Agent in connection with extensions of credit to
debtors). Any change in the ABR due to a change in the Base Rate, the Federal
Funds Effective Rate or the Eurodollar Base Rate shall be effective as of the
opening of business on the effective day of such change in the Base Rate, the
Federal Funds Effective Rate or the Eurodollar Base Rate, respectively.

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

“Act”: as defined in Section 9.16.

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

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

“Agreement”: as defined in the preamble hereto.

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

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Level

  

Rating

S&P/Moody’s

  

Applicable Margin

for

ABR Loans

  

Applicable Margin

for

Eurodollar Loans

1

   A/A2 or higher    0%    1.325%

2

   A-/A3    0%    1.550%

3

   BBB+/Baa1    0%    1.750%

4

   BBB/Baa2    0%    1.875%

5

   BBB-/Baa3 or lower    0%    2.000%

Subject to the provisions of this paragraph regarding split ratings, changes in
the Applicable Margins shall become effective on the date on which S&P and/or
Moody’s changes its relevant Rating. In the event the Ratings of S&P and Moody’s
are in different levels set forth in the grid above, the higher of the two
Ratings (i.e., the Rating set forth in the grid above opposite the lower
numerical level number) shall govern. In the event that, at any time, a Rating
is not available from one of such rating agencies, the Applicable Margins shall
be determined on the basis of the Rating from the other rating agency. In the
event that, at any time, Ratings from each such rating agency are not available
for companies generally, the Applicable Margins shall be determined on the basis
of the last Rating(s) made available. In the event that, at any time, such
Ratings are not available for the Borrower but are generally available for other
companies, then the Applicable Margins shall be those set forth above opposite
level 5.

“Arrangers”: as defined in the preamble hereto.

“Assignee”: as defined in Section 9.6(b).

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

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

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

“Benefitted Lender”: as defined in Section 9.7(a).

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

“Borrower”: as defined in the preamble hereto.

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

 

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

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

“Change of Control”: PCG and its Subsidiaries shall at any time not be the
Beneficial Owner, directly or indirectly, of at least 80% of the common stock or
70% of the voting Capital Stock of the Borrower; provided that any such event
shall not constitute a Change of Control if, after giving effect to such event,
the Borrower’s senior, unsecured, non credit-enhanced debt ratings shall be at
least the higher of (1) Baa3 from Moody’s and BBB- from S&P and (2) the ratings
by such rating agencies of such debt in effect immediately before the earlier of
the occurrence or the public announcement of such event.

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

“Commitment”: as to any Lender, the obligation of such Lender, if any, to make
Revolving Loans and participate in Swingline Loans in an aggregate principal
amount not to exceed the amount set forth under the heading “Commitment”
opposite such Lender’s name on Schedule 1.1A or in the Assignment and Assumption
or New Lender Supplement pursuant to which such Lender became a party hereto, as
the same may be changed from time to time pursuant to the terms hereof. The
original amount of the Total Commitments is $750,000,000.

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

“Commitment Increase Supplement”: as defined in Section 2.3(c).

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

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

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

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

 

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Section 2.15, 2.16, 2.17 or 9.5 than the designating Lender would have been
entitled to receive in respect of the extensions of credit made by such Conduit
Lender or (b) be deemed to have any Commitment.

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

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

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

“Continuing Lender”: as defined in Section 2.7.

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

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

“Credit Event”: as defined in Section 4.2.

“Default”: any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Defaulting Lender”: means any Lender, as reasonably determined by the
Administrative Agent, that has (a) failed to fund any portion of its Revolving
Loans within three (3) business days of the date required to be funded by it
under this Agreement, (b) notified the Borrower, the Administrative Agent or any
Lender in writing that it does not intend to comply with any of its funding
obligations under this Agreement or has made a public statement to the effect
that it does not intend to comply with its funding obligations under this
Agreement (other than a notice of a good faith dispute or related

 

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communications) or generally under other agreements in which it commits to
extend credit, (c) failed, within three (3) Business Days after written request
by the Administrative Agent (based on the Administrative Agent’s reasonable
belief that such Lender may not fulfill its funding obligation), to confirm that
it will comply with the terms of this Agreement relating to its obligations to
fund prospective Revolving Loans, unless the subject of a good faith dispute,
(d) otherwise failed to pay over to the Administrative Agent or any other Lender
any other amount required to be paid by it under this Agreement within three
(3) business days of the date when due, unless the subject of a good faith
dispute, or (e) become the subject of a bankruptcy or insolvency proceeding, or
has had a receiver, conservator, trustee or custodian appointed for it, or has
consented to, approved of or acquiesced in any such proceeding or appointment or
has a parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee or custodian appointed
for it, or has consented to, approved of or acquiesced in any such proceeding or
appointment; provided that (i) if a Lender would be a “Defaulting Lender” solely
by reason of events relating to a parent company of such Lender or solely
because a Governmental Authority has been appointed as receiver, conservator,
trustee or custodian for such Lender, in each case as described in clause
(e) above, the Administrative Agent may, in its discretion, determine that such
Lender is not a “Defaulting Lender” if and for so long as the Administrative
Agent is satisfied that such Lender will continue to perform its funding
obligations hereunder and (ii) a Lender shall not be a Defaulting Lender solely
by virtue of the ownership or acquisition of voting stock or any other equity
interest in such Lender or a parent company thereof by a Governmental Authority
or an instrumentality thereof, or the exercise of control over such Lender or
parent company thereof, by a Governmental Authority or instrumentality thereof.

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

“Documentation Agents”: as defined in the preamble hereto.

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

“Effective Date”: the date on which the conditions precedent set forth in
Section 4.1 shall have been satisfied or waived.

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

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

 

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

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

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

“Eurodollar Base Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum determined on the basis of
the rate for deposits in Dollars for a period equal to such Interest Period
commencing on the first day of such Interest Period appearing on Reuters Screen
LIBOR01 Page (or on any successor or substitute page of such service, or any
successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to Dollar deposits in the
London interbank market) at or about 11:00 A.M., London time, two Business Days
prior to the beginning of such Interest Period. In the event that such rate does
not appear on Reuters Screen LIBOR01 Page (or on any successor or substitute
page of such service, or any successor to or substitute for such service,
providing rate quotations comparable to those currently provided on such page of
such service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to Dollar deposits
in the London interbank market), the “Eurodollar Base Rate” shall be determined
by reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent or, in the
absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York
City time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.

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

“Eurodollar Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):

 

    

Eurodollar Base Rate

      

1.00 - Eurocurrency Reserve Requirements

 

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

 

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“Event of Default”: any of the events specified in Section 7, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

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

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

“Extensions of Credit”: as to any Lender at any time, an amount equal to the sum
of (a) the aggregate principal amount of all Revolving Loans held by such Lender
then outstanding and (b) an amount equal to the aggregate principal amount of
all Swingline Loans then outstanding multiplied by such Lender’s Percentage.

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

 

Level

 

Rating

S&P/Moody’s

 

Facility Fee Rate

1

  A/A2 or higher   0.175%

2

  A-/A3   0.200%

3

  BBB+/Baa1   0.250%

4

  BBB/Baa2   0.375%

5

  BBB-/Baa3 or lower   0.500%

Subject to the provisions of this paragraph regarding split ratings, changes in
the Facility Fee Rate shall become effective on the date on which S&P and/or
Moody’s changes its relevant Rating. In the event the Ratings of S&P and Moody’s
are in different levels set forth in the grid above, the higher of the two
Ratings (i.e., the Rating set forth in the grid above opposite the lower
numerical level number) shall govern. In the event that, at any time, a Rating
is not available from one of such rating agencies, the Facility Fee Rate shall
be determined on the basis of the Rating from the other rating agency. In the
event that, at any time, Ratings from each such rating agency are not available
for companies generally, the Facility Fee Rate shall be determined on the basis
of the last Rating(s) made available. In the event that, at any time, such
Ratings are not available for the Borrower but are generally available for other
companies, then the Facility Fee Rate shall be that set forth above opposite
level 5.

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

“Fee Payment Date”: (a) the fifth Business Day following the last day of each
March, June, September and December during the Commitment Period, (b) the last
day of the Commitment Period and (c) the last day of each March, June, September
and December after the last day of the Commitment Period, so long as any
principal amount of the Loans remain outstanding after the last day of the
Commitment Period.

 

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

“Fronting Exposure”: at any time there is a Defaulting Lender, such Defaulting
Lender’s Percentage of Swingline Loans other than Swingline Loans as to which
such Defaulting Lender’s participation obligation has been reallocated to other
Lenders or cash collateralized in accordance with the terms hereof.

“Funding Office”: the office of the Administrative Agent specified in
Section 9.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.

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

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

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing person that guarantees any Indebtedness, leases, dividends
or other obligations (the “primary obligations”) of any other third Person (the
“primary obligor”) in any manner, whether directly or indirectly, including any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof or (v) to reimburse or
indemnify an issuer of a letter of credit, surety bond or guarantee issued by
such issuer in respect of primary obligations of a primary obligor other than
the Borrower or any Significant Subsidiary; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The

 

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amount of any Guarantee Obligation of any guaranteeing person shall be deemed to
be the lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made and
(b) the maximum amount for which such guaranteeing person may be liable pursuant
to the terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s reasonably anticipated
liability in respect thereof as determined by the Borrower in good faith.

“Indebtedness”: of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables, including under energy procurement and transportation contracts,
incurred in the ordinary course of such Person’s business), (c) all obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all obligations of such Person as lessee which are capitalized in
accordance with GAAP, (f) all obligations of such Person, contingent or
otherwise, as an account party or applicant under or in respect of acceptances,
letters of credit, surety bonds or similar arrangements (other than
reimbursement obligations, which are not due and payable on such date, in
respect of documentary letters of credit issued to provide for the payment of
goods and services in the ordinary course of business), (g) the liquidation
value of all mandatorily redeemable preferred Capital Stock of such Person,
(h) all Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (g) above, (i) all obligations of the
kind referred to in clauses (a) through (h) above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including accounts and contract rights) owned
by such Person, whether or not such Person has assumed or become liable for the
payment of such obligation (provided, that if such Person is not liable for such
obligation, the amount of such Person’s Indebtedness with respect thereto shall
be deemed to be the lesser of the stated amount of such obligation and the value
of the property subject to such Lien), and (j) for the purposes of Section 7(e)
only, all obligations of such Person in respect of Swap Agreements, provided
that Indebtedness as used in this Agreement shall exclude any Non-Recourse Debt.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness expressly provide that such Person is not liable
therefor.

“Indenture”: the Indenture, dated as of April 22, 2005 (which supplemented,
amended and restated the Indenture of Mortgage, dated as of March 11, 2004,
between the Borrower and the Indenture Trustee, as supplemented by the First
Supplemental Indenture, dated as of March 23, 2004, the Second Supplemental
Indenture, dated as of April 12, 2004), as supplemented by the First
Supplemental Indenture, dated as of March 13, 2007, as further supplemented by
the Second Supplemental Indenture, dated as of December 4, 2007, as further
supplemented by the Third Supplemental Indenture, dated as of March 3, 2008, as
further supplemented by the Fourth Supplemental Indenture, dated as of
October 15, 2008, as further supplemented by the Fifth Supplemental Indenture,
dated as of November 18, 2008, as further supplemented by the Sixth Supplemental
Indenture, dated as of March 6, 2009, as further supplemented by the Seventh
Supplemental Indenture, dated as of June 11, 2009, as further supplemented by
the Eighth Supplemental

 

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Indenture, dated as of November 18, 2009, as further supplemented by the Ninth
Supplemental Indenture, dated as of April 1, 2010, and as further supplemented
or amended from time to time.

“Indenture Trustee”: The Bank of New York Mellon Trust Company, N.A., as
successor to BNY Western Trust Company, and any successor thereto as trustee
under the Indenture

“Information Memorandum”: the information memorandum dated May 5, 2010, and
furnished to certain Lenders in connection with the syndication of the
Commitments, as supplemented by each and all Specified Exchange Act Filings
filed by the Borrower during the period from March 31, 2010 through the date of
this Agreement.

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

“Insolvent”: pertaining to a condition of Insolvency.

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

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

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

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

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

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

 

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

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

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

“Loan”: any loan made by any Lender pursuant to this Agreement, including
Swingline Loans and Revolving Loans.

“Loan Documents”: this Agreement and the Notes and, in each case, any amendment,
waiver, supplement or other modification to any of the foregoing.

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

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

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

“Mortgaged Property”: as defined in the Indenture.

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

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

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

“Non-Excluded Taxes”: as defined in Section 2.16(a).

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

“Non-Procurement Facility Limit”: $250,000,000 or such other amount as the
Borrower shall notify the Administrative Agent in writing pursuant to
Section 9.1.

“Non-Recourse Debt”: Indebtedness of the Borrower or any of its Significant
Subsidiaries that is incurred in connection with the acquisition, construction,
sale, transfer or other disposition of specific assets, to the extent recourse,
whether contractual or as a matter of law, for non-

 

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payment of such Indebtedness is limited (a) to such assets, or (b) if such
assets are (or are to be) held by a Subsidiary formed solely for such purpose,
to such Subsidiary or the Capital Stock of such Subsidiary.

“Non-U.S. Lender”: as defined in Section 2.16(d).

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

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

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

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

“Participant”: as defined in Section 9.6(c).

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

“PCG”: PG&E Corporation, a California corporation and the holder of all of the
issued and outstanding common stock of the Borrower.

“Percentage”: as to any Lender at any time, the percentage which such Lender’s
Commitment then constitutes of the Total Commitments or, at any time after the
Commitments shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender’s Revolving Loans then outstanding constitutes
of the aggregate principal amount of the Revolving Loans then outstanding,
provided, that, in the event that the Revolving Loans are paid in full prior to
the reduction to zero of the Total Extensions of Credit, the Percentages shall
be determined in a manner designed to ensure that the other outstanding
Extensions of Credit shall be held by the Lenders on a comparable basis.

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

 

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

“Procurement Facility Limit”: $500,000,000 or such other amount as the Borrower
shall notify the Administrative Agent in writing pursuant to Section 9.1.

“Rating”: each rating announced by S&P and Moody’s in respect of the Borrower’s
senior unsecured, non credit-enhanced debt.

“Refunded Swingline Loans”: as defined in Section 2.5.

“Register”: as defined in Section 9.6(b).

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

“Reorganization”: with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

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

“Required Lenders”: at any time, the holders of more than 50% of the Total
Commitments then in effect or, if the Commitments have been terminated, the
Total Extensions of Credit then outstanding.

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

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

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

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

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

“S&P”: Standard & Poor’s Ratings Services.

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

“Securitized Bonds”: any securitized bonds or similar asset-backed securities
that are non-recourse to the Borrower, are issued by a special purpose
subsidiary of the Borrower and are

 

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payable from a specific or dedicated rate component, including the energy
recovery bonds backed by energy recovery property that the Borrower issued in
2005, the outstanding principal amount of which was $1,120,270,137 on March 31,
2010.

“Significant Subsidiary”: as defined in Article 1, Rule 1-02(w) of
Regulation S-X of the Exchange Act as of the Effective Date, provided that
notwithstanding the foregoing, PG&E Energy Recovery Funding LLC and any other
special purpose finance subsidiary shall not constitute a Significant
Subsidiary. Unless otherwise qualified, all references to a “Significant
Subsidiary” or to “Significant Subsidiaries” in this Agreement shall refer to a
Significant Subsidiary or Significant Subsidiaries of the Borrower.

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

“Specified Exchange Act Filings”: the Borrower’s Form 10-K annual report for the
year ended December 31, 2009 and each and all of the Form 10-Ks, Form 10-Qs and
Form 8-Ks (and to the extent applicable proxy statements) filed by the Borrower
or PCG with the SEC after December 31, 2009 and prior to the date that is one
Business Day before the date of this Agreement.

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

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

“Swingline Commitment”: the obligation of the Swingline Lender to make Swingline
Loans pursuant to Section 2.4 in an aggregate principal amount at any one time
outstanding not to exceed $75,000,000.

“Swingline Lender”: Wells Fargo, in its capacity as the lender of Swingline
Loans.

“Swingline Loans”: as defined in Section 2.4.

“Swingline Participation Amount”: as defined in Section 2.5.

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

“Termination Date”: February 26, 2012 or such later date as may be determined
pursuant to Section 2.7(b) or such earlier date as otherwise determined pursuant
to Section 2.7.

 

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

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

“Transferee”: any Assignee or Participant.

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

“United States”: the United States of America.

“Wells Fargo”: as defined in the preamble hereto.

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

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

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

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

(e) The Borrower shall not be required to perform, nor shall it be required to
guarantee the performance of, any of the affirmative covenants set forth in
Section 5 that apply to any of its Significant Subsidiaries nor shall any of the
Borrower’s Significant Subsidiaries be required to perform, nor shall any of
such Significant Subsidiaries be required to guarantee the performance of, any
of the Borrower’s affirmative covenants set forth in Section 5 or any of the
affirmative covenants set forth in Section 5 that apply to any other Significant
Subsidiary; provided, that nothing in this Section 1.2(e) shall prevent the
occurrence of a Default or an Event of Default arising out of the Borrower’s
failure to cause any Significant Subsidiary to comply with the provisions of
this Agreement applicable to such Significant Subsidiary.

 

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SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

2.1 Commitments. (a) Subject to the terms and conditions hereof, each Lender
severally agrees to make revolving credit loans (“Revolving Loans”) to the
Borrower from time to time on or after the Effective Date and during the
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to an amount equal to the aggregate principal amount of all
Swingline Loans then outstanding multiplied by such Lender’s Percentage, does
not exceed the amount of such Lender’s Commitment; provided that, (x) subject to
Section 9.1, the aggregate outstanding principal amount of all Loans, the
proceeds of which were used for activities other than energy procurement, may
not at any time exceed the Non-Procurement Facility Limit and (y) after giving
effect to the Revolving Loans requested to be made, the aggregate amount of the
Available Commitments shall not be less than zero. During the Commitment Period,
the Borrower may use the Commitments by borrowing, prepaying the Revolving Loans
in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.2 and 2.9.

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

2.2 Procedure for Revolving Loan Borrowing. The Borrower may borrow under the
Commitments during the Commitment Period on any Business Day, provided that the
Borrower shall give the Administrative Agent irrevocable notice (which notice
must be received by the Administrative Agent (a) prior to 12:00 Noon, New York
City time, three Business Days prior to the requested Borrowing Date, in the
case of Eurodollar Loans, or (b) prior to 11:00 A.M., New York City time, on the
requested Borrowing Date, in the case of ABR Loans) specifying (i) the amount
and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date
and (iii) in the case of Eurodollar Loans, the respective amounts of each such
Type of Loan and the respective lengths of the initial Interest Period therefor.
Each borrowing under the Commitments shall be in an amount equal to $5,000,000
or a whole multiple of $1.000,000 in excess thereof (or, if the then aggregate
Available Commitments are less than $5,000,000, such lesser amount); provided,
that the Swingline Lender may request, on behalf of the Borrower, borrowings
under the Commitments that are ABR Loans in other amounts pursuant to
Section 2.5. Upon receipt of any such notice from the Borrower, the
Administrative Agent shall promptly notify each Lender thereof. Each Lender will
make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent.

2.3 Commitment Increases.

(a) In the event that the Borrower wishes to increase the Total Commitments at
any time when no Default or Event of Default has occurred and is continuing (or
shall result of such increase) and subject to obtaining all necessary regulatory
approvals, it shall notify the Administrative Agent in writing, given not more
frequently than once a calendar year, of the amount (the “Revolving Credit
Offered Increase Amount”) of such proposed increase (such notice, a “Commitment
Increase Notice”) which shall be in a minimum amount equal to $10,000,000 and

 

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shall not exceed, in the aggregate for all increases, $250,000,000. The Borrower
shall offer each of the Lenders the opportunity to provide such Lender’s
Percentage of the Revolving Credit Offered Increase Amount, and if any Lender
declines such offer, in whole or in part, the Borrower may offer such declined
amount to (i) other Lenders and/or (ii) other banks, financial institutions or
other entities with the consent of the Administrative Agent (which consent of
the Administrative Agent shall not be unreasonably withheld or delayed). The
Commitment Increase Notice shall specify the Lenders and/or banks, financial
institutions or other entities that will be requested to provide such Revolving
Credit Offered Increase Amount. The Borrower or, if requested by the Borrower,
the Administrative Agent will notify such Lenders, and/or banks, financial
institutions or other entities of such offer.

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

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

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

 

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(e) Notwithstanding anything to the contrary in this Section 2.3, (i) no Lender
shall have any obligation to increase its Commitment unless it agrees to do so
in its sole discretion and unless the Administrative Agent consents to such
increase (which consent of the Administrative Agent shall not be unreasonably
withheld or delayed) and (ii) in no event shall any transaction effected
pursuant to this Section 2.3 (A) cause the Total Commitments to exceed
$1,000,000,000 or (B) occur at a time at which a Default or an Event of Default
has occurred and is continuing.

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

2.4 Swingline Commitment. (a) Subject to the terms and conditions hereof, the
Swingline Lender agrees to make a portion of the credit otherwise available to
the Borrower under the Commitments from time to time on or after the Effective
Date during the Commitment Period by making swingline loans (“Swingline Loans”)
to the Borrower; provided that (i) the aggregate principal amount of Swingline
Loans outstanding at any time shall not exceed the Swingline Commitment then in
effect (notwithstanding that the Swingline Loans outstanding at any time, when
aggregated with the Swingline Lender’s other outstanding Revolving Loans, may
exceed the Swingline Commitment or the Swingline Lender’s Commitment then in
effect) and (ii) the Borrower shall not request, and the Swingline Lender shall
not make, any Swingline Loan if, after giving effect to the making of such
Swingline Loan, (x) the aggregate amount of the Available Commitments would be
less than zero or (y) subject to Section 9.1, the aggregate outstanding
principal amount of all Loans, the proceeds of which were used for activities
other than energy procurement, would exceed the Non-Procurement Facility Limit.
During the Commitment Period, the Borrower may use the Swingline Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof. Swingline Loans shall be ABR Loans only.

(b) The Borrower shall repay to the Swingline Lender the then unpaid principal
amount of each Swingline Loan on or prior to the date that is the earlier of
(i) 30 days after the date such Swingline Loan is made and (ii) the Termination
Date; provided that on each date on which a Revolving Loan is borrowed, the
Borrower shall repay all Swingline Loans then outstanding.

2.5 Procedure for Swingline Borrowing; Refunding of Swingline Loans.
(a) Whenever the Borrower wishes to borrow Swingline Loans, it shall give the
Swingline Lender irrevocable telephonic notice confirmed promptly in writing
(which telephonic notice must be received by the Swingline Lender not later than
1:00 P.M., New York City time, on the proposed Borrowing Date), specifying
(i) the amount to be borrowed and (ii) the requested Borrowing Date (which shall
be a Business Day during the Commitment Period). Each borrowing under the
Swingline Commitment shall be in an amount equal to $100,000 or a whole multiple
thereof. Not later than 2:00 P.M., New York City time, on the Borrowing Date
specified in a notice in respect of Swingline Loans, the Swingline Lender shall
make available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the amount of the Swingline Loan to be made
by the Swingline Lender. The Administrative Agent shall make the proceeds of
such Swingline Loan available to the Borrower on such Borrowing Date by
depositing such proceeds in the account of the Borrower with the Administrative
Agent on such Borrowing Date in immediately available funds.

 

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(b) The Swingline Lender, at any time and from time to time in its sole and
absolute discretion may, on behalf of the Borrower (which hereby irrevocably
directs the Swingline Lender to act on its behalf), on one Business Day’s notice
given by the Swingline Lender no later than 12:00 Noon, New York City time,
request each Lender to make, and each Lender hereby agrees to make, a Revolving
Loan, in an amount equal to such Lender’s Percentage of the aggregate amount of
the Swingline Loans (the “Refunded Swingline Loans”) outstanding on the date of
such notice, to repay the Swingline Lender. Each Lender shall make the amount of
such Revolving Loan available to the Administrative Agent at the Funding Office
in immediately available funds, not later than 10:00 A.M., New York City time,
one Business Day after the date of such notice. The proceeds of such Revolving
Loans shall be immediately made available by the Administrative Agent to the
Swingline Lender for application by the Swingline Lender to the repayment of the
Refunded Swingline Loans. The Borrower irrevocably authorizes the Swingline
Lender to charge the Borrower’s accounts with the Administrative Agent (up to
the amount available in each such account) in order to immediately pay the
amount of such Refunded Swingline Loans to the extent amounts received from the
Lenders are not sufficient to repay in full such Refunded Swingline Loans.

(c) If prior to the time a Revolving Loan would have otherwise been made
pursuant to Section 2.5(b), one of the events described in Section 7(f) shall
have occurred and be continuing with respect to the Borrower or if for any other
reason, as determined by the Swingline Lender in its sole discretion, Revolving
Loans may not be made as contemplated by Section 2.5(b), each Lender shall, on
the date such Revolving Loan was to have been made pursuant to the notice
referred to in Section 2.5(b), purchase for cash an undivided participating
interest in the then outstanding Swingline Loans by paying to the Swingline
Lender an amount (the “Swingline Participation Amount”) equal to (i) such
Lender’s Percentage times (ii) the sum of the aggregate principal amount of
Swingline Loans then outstanding that were to have been repaid with such
Revolving Loans.

(d) Whenever, at any time after the Swingline Lender has received from any
Lender such Lender’s Swingline Participation Amount, the Swingline Lender
receives any payment on account of the Swingline Loans, the Swingline Lender
will distribute to such Lender its Swingline Participation Amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender’s participating interest was outstanding and funded and, in
the case of principal and interest payments, to reflect such Lender’s pro rata
portion of such payment if such payment is not sufficient to pay the principal
of and interest on all Swingline Loans then due); provided, however, that in the
event that such payment received by the Swingline Lender is required to be
returned, such Lender will return to the Swingline Lender any portion thereof
previously distributed to it by the Swingline Lender.

(e) Each Lender’s obligation to make the Loans referred to in Section 2.5(b) and
to purchase participating interests pursuant to Section 2.5(c) shall be absolute
and unconditional and shall not be affected by any circumstance, including
(i) any setoff, counterclaim, recoupment, defense or other right that such
Lender or the Borrower may have against the Swingline Lender, the Borrower or
any other Person for any reason whatsoever, (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 4, (iii) any adverse change in the condition
(financial or otherwise) of the Borrower, (iv) any breach of this Agreement or
any other Loan Document by the Borrower or any other Lender or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.

 

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2.6 Facility Fees, etc. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a facility fee for the period from and
including the date hereof to the last day of the Commitment Period, computed at
the Facility Fee Rate on the Commitment of such Lender during the period for
which payment is made, payable quarterly in arrears on each Fee Payment Date,
commencing on the first such date to occur after the date hereof. In addition,
if the principal amount of any Loan shall remain outstanding and unpaid after
the last day of the Commitment Period, the Borrower agrees to pay to the
Administrative Agent, for the account of each Lender, a facility fee for the
period from the last day of the Commitment Period until the date on which such
amounts are repaid in full, computed at the Facility Fee Rate on such amounts,
payable quarterly in arrears on each Fee Payment Date, commencing on the first
such date after the last day of the Commitment Period.

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

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

(b) The Borrower may, by written notice to the Administrative Agent (such notice
being an “Extension Notice”) given (i) no more frequently than once in each
calendar year, on not more than on two occasions and (iii) not less than 35 days
prior to the applicable Termination Date, request the Lenders to consider an
extension of the then applicable Termination Date to a later date not more than
364 days after the then current Termination Date. The Administrative Agent shall
promptly transmit any Extension Notice to each Lender. Each Lender shall notify
the Administrative Agent whether it wishes to extend the then applicable
Termination Date not later than 30 days after the date of such Extension Notice,
and any such notice given by a Lender to the Administrative Agent, once given,
shall be irrevocable as to such Lender. Any Lender which does not expressly
notify the Administrative Agent prior to the expiration of such thirty-day
period that it wishes to so extend the then applicable Termination Date shall be
deemed to have rejected the Borrower’s request for extension of such Termination
Date. Lenders consenting to extend the then applicable Termination Date are
hereinafter referred to as “Continuing Lenders”, and Lenders declining to
consent to extend such Termination Date (or Lenders deemed to have so declined)
are hereinafter referred to as “Non-Extending Lenders”. If the Required Lenders
have elected (in their sole and absolute discretion) to so extend the
Termination Date, the Administrative Agent shall promptly notify the Borrower of
such election by the Required Lenders, and effective on the date which is
30 days after the date of such notice by the Administrative Agent to the
Borrower, the Termination Date shall be automatically and immediately so
extended with regard to Continuing Lenders. No extension will be permitted
hereunder without the consent of the Required Lenders. Upon the delivery of an
Extension Notice and upon the extension of the Termination Date pursuant to this
Section, the Borrower shall be deemed to have represented and warranted on and
as of the date of such Extension Notice and the effective date of such
extension, as the case may be, that no Default or Event of Default has occurred
and is continuing. Notwithstanding anything contained in this Agreement to the
contrary, no Lender shall have any obligation to extend the Termination

 

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Date, and each Lender may at its option, unconditionally and without cause,
decline to extend the Termination Date.

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

(d) If any Lender shall determine (or be deemed to have determined) not to
extend the Termination Date as requested by any Extension Notice given by the
Borrower pursuant to this Section, the Commitment of such Non-Extending Lender
(including the obligations of such Lender under Section 2.5 and 3.4) shall
terminate on the Termination Date without giving any effect to such proposed
extension, and the Borrower shall on such date pay to the Administrative Agent,
for the account of such Non-Extending Lender, the principal amount of, and
accrued interest on, such Non-Extending Lender’s Loans, together with any
amounts payable to such Lender pursuant to Section 2.17 and any and all fees or
other amounts owing to such Non-Extending Lender under this Agreement; provided
that if the Borrower has replaced such Non-Extending Lender pursuant to
paragraph (e) below then the provisions of such paragraph shall apply. The Total
Commitments shall be reduced by the amount of the Commitment of such
Non-Extending Lender to the extent the Commitment of such Non-Extending Lender
has not been transferred to one or more Continuing Lenders pursuant to
paragraph (e) below.

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

(f) If the Termination Date shall have been extended in respect of Continuing
Lenders in accordance with this Section, any notice of borrowing pursuant to
Section 2.2 or 2.5 specifying a Borrowing Date occurring after the Termination
Date applicable to a Non-Extending Lender or requesting an Interest Period
extending beyond such date shall (i) have no effect in respect of such
Non-Extending Lender and (ii) not specify a requested aggregate principal amount
exceeding the aggregate Available Commitments (calculated on the basis of the
Commitments of the Continuing Lenders).

 

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(g) At any time after a Lender has become a Defaulting Lender, the Borrower may
(i) reduce the Defaulting Lender’s Commitment to be equal to the amount of such
Defaulting Lender’s outstanding Loans (and participations in Swingline Loans) at
the time such Lender becomes a Defaulting Lender, by giving notice to such
Defaulting Lender and the Administrative Agent (provided that concurrently with
such reduction, the Total Commitments shall be reduced by the amount by which
such Defaulting Lender’s Commitment is reduced) or (ii) terminate in full the
Commitment of such Defaulting Lender by giving notice to such Defaulting Lender
and the Administrative Agent; provided that (1) at the time of any such
termination pursuant to clause (ii), no Default or Event of Default exists (or,
if a Default or Event of Default exists, the Required Lenders consent to such
termination); (2) concurrently with such termination (A) the Total Commitments
shall be reduced by the Commitment of such Defaulting Lender (it being
understood that the Borrower may not terminate the Commitment of a Defaulting
Lender to the extent that, after giving effect to such termination, the Total
Extensions of Credit would exceed the Total Commitments) and (B) the Borrower
shall pay all amounts owed to such Defaulting Lender hereunder (subject to
Section 2.20(c)) less the Borrower’s reasonable estimate of the amount (if any)
of any breakage costs expected to be incurred by the Borrower as a result of the
events or circumstances pursuant to which such Lender became a Defaulting Lender
(which estimate shall be conclusive, absent manifest error). The Borrower agrees
to return to such Defaulting Lender the excess (if any) of its reasonable
estimate of the amount of any breakage costs over the actual amount of such
breakage costs. The termination of the Commitment of a Defaulting Lender
pursuant to this Section 2.7(g) shall not be deemed to be a waiver of any right
that (x) the Borrower, the Administrative Agent or any other Lender may have
against such Defaulting Lender or (y) such Defaulting Lender may have against
the Borrower based on the estimate described in the preceding sentence.

2.8 Prepayments. (a) The Borrower may at any time and from time to time prepay
the Loans, in whole or in part, without premium or penalty, upon irrevocable
notice delivered to the Administrative Agent no later than 12:00 Noon, New York
City time, three Business Days prior thereto, in the case of Eurodollar Loans,
and no later than 12:00 Noon, New York City time, one Business Day prior
thereto, in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans or ABR
Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the
last day of the Interest Period applicable thereto, the Borrower shall also pay
any amounts owing pursuant to Section 2.17. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Loans that are ABR Loans and Swingline Loans) accrued interest to such
date on the amount prepaid. Partial prepayments of Revolving Loans which shall
be in an aggregate principal amount of $1,000,000 or a whole multiple of
$500,000 in excess thereof. Partial prepayments of Swingline Loans shall be in
an aggregate principal amount of $100,000 or a whole multiple thereof.

(b) If a Lender becomes a Defaulting Lender at a time when Swingline Loans are
outstanding and such occurrence results in the existence of Fronting Exposure,
then the Borrower shall promptly (and in any event within three Business Days),
prepay Loans in an amount sufficient to eliminate such Fronting Exposure. Except
for the mandatory nature thereof, any prepayment of Loans pursuant to this
Section 2.8(b) shall be subject to the provisions of Section 2.8(a); provided
that such prepayment may be in the amount needed to eliminate the Fronting
Exposure.

 

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

(b) Any Eurodollar Loan may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Borrower giving irrevocable
notice to the Administrative Agent, in accordance with the applicable provisions
of the term “Interest Period” set forth in Section 1.1, of the length of the
next Interest Period to be applicable to such Loans, provided that no Eurodollar
Loan may be continued as such when any Event of Default has occurred and is
continuing and the Required Lenders have determined in their sole discretion not
to permit such continuations, and provided, further, that if the Borrower shall
fail to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans shall
be automatically converted to ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.

2.10 Limitations on Eurodollar Tranches. Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than 15 Eurodollar Tranches shall
be outstanding at any one time.

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

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

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

 

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provided that interest accruing pursuant to paragraph (c) of this Section shall
be payable from time to time on demand.

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

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

2.13 Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:

(a) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or

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

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

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

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

 

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

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

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

(f) The Borrower agrees that, upon the request to the Administrative Agent by
any Lender, the Borrower will promptly execute and deliver to such Lender a
promissory note (a “Note”) of the Borrower evidencing any Revolving Loans of
such Lender, substantially in the form of Exhibit H, with appropriate insertions
as to date and principal amount; provided, that delivery of

 

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Notes shall not be a condition precedent to the occurrence of the Effective Date
or the making of Loans on the Effective Date.

2.15 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:

(i) shall subject any Lender to any tax of any kind whatsoever with respect to
this Agreement or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Non-Excluded
Taxes and Other Taxes covered by Section 2.16 and net income taxes and franchise
taxes imposed in lieu of net income taxes);

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

(iii) shall impose on such Lender any other condition that is generally
applicable to loans made by such Lender;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, within ten Business Days after its demand, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable. If any Lender becomes entitled to claim any
additional amounts pursuant to this paragraph, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled; provided, however, that no Lender shall be
entitled to demand such compensation more than 90 days following (x) the last
day of the Interest Period in respect of which such demand is made or (y) the
repayment of the Loan or Swingline Loan in respect of which such demand is made.

(b) If any Lender shall have determined that the adoption of or any change in
any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the rate of return on such
Lender’s or such corporation’s capital as a consequence of its obligations
hereunder to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender’s or such corporation’s policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction.

(c) A certificate as to any additional amounts payable pursuant to this Section
submitted by any Lender to the Borrower (with a copy to the Administrative
Agent) shall constitute

 

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

2.16 Taxes. (a) All payments made by the Borrower under this Agreement shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding (i) net
income taxes and franchise taxes (imposed in lieu of net income taxes) imposed
on the Administrative Agent or any Lender as a result of a present or former
connection between the Administrative Agent or such Lender and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from the Administrative Agent or such Lender having executed, delivered
or performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document) and (ii) any branch profits tax imposed by
the United States. If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or Other Taxes
are required to be withheld from any amounts payable to the Administrative Agent
or any Lender hereunder, the amounts so payable to the Administrative Agent or
such Lender shall be increased to the extent necessary to yield to the
Administrative Agent or such Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the Borrower shall
not be required to increase any such amounts payable to any Lender with respect
to any Non-Excluded Taxes (i) that are attributable to such Lender’s failure to
comply with the requirements of paragraph (d) or (e) of this Section or
(ii) that are United States withholding taxes imposed on amounts payable to such
Lender at the time such Lender becomes a party to this Agreement, except to the
extent that such Lender’s assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to this paragraph.

(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower,
as promptly as possible thereafter the Borrower shall send to the Administrative
Agent for its own account or for the account of the relevant Lender, as the case
may be, a certified copy of any original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority, the Borrower
shall indemnify the Administrative Agent and the Lenders for any incremental
taxes, interest or penalties that may become payable by the Administrative Agent
or any Lender as a result of any such failure.

(d) Each Lender (or Transferee) that is not a “U.S. Person” as defined in
Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form

 

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W-8BEN or Form W-8ECI, or, in the case of a Non U.S. Lender claiming exemption
from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of “portfolio interest”, a statement substantially in
the form of Exhibit G and a Form W-8BEN, or any subsequent versions thereof or
successors thereto, properly completed and duly executed by such Non U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal withholding
tax on all payments by the Borrower under this Agreement and the other Loan
Documents. Such forms shall be delivered by each Non-U.S. Lender on or before
the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such Non
U.S. Lender is not legally able to deliver; provided, however, if any Non-U.S.
Lender fails to file forms with the Borrower and the Administrative Agent (or,
in the case of a Participant, with the Lender from which the related
participation was purchased) on or before the date the Non-U.S. Lender becomes a
party to this Agreement (or, in the case of a Participant, on or before the date
such Participant purchased the related participation) entitling the Non-U.S.
Lender to a complete exemption from United States withholding taxes at such
time, such Non-U.S. Lender shall not be entitled to receive any increased
payments from the Borrower with respect to United States withholding taxes under
paragraph (a) of this Section, except to the extent that the Non-U.S. Lender’s
assignor (if any) was entitled, at the time of the assignment to the Non-U.S.
Lender, to receive additional amounts from the Borrower with respect to United
States withholding taxes.

(e) A Lender that is entitled to an exemption from or reduction of non-U.S.
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender’s judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.

(f) If the Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Non-Excluded Taxes or Other
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower has paid amounts pursuant to this Section 2.16, it shall pay
over such refund to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section 2.16 with
respect to the Non-Excluded Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of the Administrative Agent or such Lender and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Borrower, upon the
request of the Administrative Agent or such Lender, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges imposed
by the relevant Governmental Authority) to the Administrative Agent or such
Lender in the event the Administrative Agent or such Lender is required to repay
such refund to such Governmental Authority. This paragraph shall not be
construed to require the Administrative Agent or any

 

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Lender to make available its tax returns (or any other information relating to
its taxes which it deems confidential) to the Borrower or any other Person.

(g) The agreements in this Section shall survive for one year after the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

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

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

2.19 Replacement of Lenders. The Borrower shall be permitted to replace any
Lender that (a) requests (on its behalf or any of its Participants)
reimbursement for amounts owing pursuant to Section 2.15 or 2.16(a) or
(b) becomes a Defaulting Lender, with a replacement financial institution;
provided that (i) such replacement does not conflict with any Requirement of
Law, (ii) no Event of Default shall have occurred and be continuing at the time
of such replacement, (iii) prior to any such replacement, such Lender shall have
taken no action under Section 2.18 which eliminates the continued need for
payment of amounts owing pursuant to Section 2.15 or 2.16(a), (iv) the
replacement financial institution shall purchase, at par, all Loans and other
amounts owing to such replaced Lender on or prior to the date of replacement,
(v) the Borrower shall be liable to such replaced Lender under Section 2.17 if
any Eurodollar Loan owing to such replaced Lender shall be purchased other than
on the last day of the Interest Period relating thereto, (vi) the replacement
financial institution, if not already a Lender, shall be reasonably satisfactory
to the Administrative Agent, (vii) the replaced Lender shall be obligated to
make such replacement in accordance with the provisions of Section 9.6 (provided
that the Borrower shall be obligated to pay the registration and processing fee
referred to therein), (viii) until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts (if any) required
pursuant to Section 2.15 or 2.16(a), as the case may be, and (ix) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Administrative Agent or any other Lender shall have against the replaced
Lender.

 

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

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

(b) that Defaulting Lender shall be entitled to receive (i) any facility fee
pursuant to Section 2.6(a) for any period during which that Lender is a
Defaulting Lender only to the extent allocable to the sum of (1) the outstanding
principal amount of Loans funded by it and (2) the principal amount of the
Swingline Loans for which it has provided cash collateral pursuant to 2.20(a)
(and the Borrower shall (x) be required to pay to the Swingline Lender, as
applicable, the amount of such fee allocable to its fronting of Extensions of
Credit arising from that Defaulting Lender and (y) not be required to pay the
remaining amount of such fee that otherwise would have been required to have
been paid to that Defaulting Lender) and (ii) interest on Loans funded by such
Lender prior to the period in which such Lender became a Defaulting Lender or
during the period in which such Lender is a Defaulting Lender;

(c) during any period in which there is a Defaulting Lender, for purposes of
computing the amount of the obligation of each non-Defaulting Lender to acquire,
refinance or

 

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fund participations in Swingline Loans pursuant to Section 2.5, the Percentage
of each non-Defaulting Lender shall be computed without giving effect to the
Commitment of that Defaulting Lender; provided, that, (i) each such reallocation
shall be given effect only if, at the date the applicable Lender becomes a
Defaulting Lender, no Default or Event of Default exists; and (ii) the aggregate
obligation of each non-Defaulting Lender to acquire, refinance or fund
participations in Swingline Loans shall not exceed the positive difference, if
any, of (1) the Commitment of that non-Defaulting Lender minus (2) the aggregate
outstanding Loans of that Lender; and

(d) that Defaulting Lender’s right to approve or disapprove any amendment,
supplement, modification, waiver or consent with respect to this Agreement shall
be restricted as set forth in Section 9.1.

If the Borrower, the Administrative Agent and Swingline Lender reasonably
determine in writing that a Defaulting Lender should no longer be deemed to be a
Defaulting Lender, the Administrative Agent will so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any
conditions set forth therein, that Lender will, to the extent applicable,
purchase that portion of outstanding Loans of the other Lenders or take such
other actions as the Administrative Agent may determine to be necessary to cause
the Loans and funded and unfunded participations in Swingline Loans to be held
on a pro rata basis by the Lenders in accordance with their Percentages (without
giving effect to Section 2.20(c)), whereupon that Lender will cease to be a
Defaulting Lender; provided that no adjustments will be made retroactively with
respect to fees accrued or payments made by or on behalf of the Borrower while
that Lender was a Defaulting Lender; and provided, further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Lender to Lender will constitute a waiver or release of any
claim of any party hereunder arising from that Lender’s having been a Defaulting
Lender.

Cash collateral held by the Administrative Agent to reduce Fronting Exposure
shall be released to the applicable Lender promptly following (i) the
elimination of the applicable Fronting Exposure or other obligations giving rise
thereto (including by the termination of Defaulting Lender status of the
applicable Lender (or, as appropriate, its assignee following compliance with
Section 9.6)); (ii) the Administrative Agent’s good faith determination that
there exists excess cash collateral; and (iii) the termination of the Commitment
Period and the repayment in full of all outstanding Loans.

SECTION 3. REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Agreement
and to make the Loans, the Borrower hereby represents and warrants to the
Administrative Agent and each Lender, on the Effective Date and, except as
provided in Section 4.2(a), on the date of each Credit Event hereunder after the
Effective Date, that:

3.1 Financial Condition. The audited consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as of December 31, 2009, and the related
consolidated statement of operations and cash flows for the fiscal year ended on
such date, reported on by Deloitte & Touche LLP, present fairly in all material
respects the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as of such date, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal year then
ended. All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved.

 

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3.2 No Change. Since December 31, 2009, there has been no development or event
that has had or could reasonably be expected to have a Material Adverse Effect,
except as disclosed in the Specified Exchange Act Filings.

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

3.4 Power; Authorization; Enforceable Obligations. The Borrower has the
corporate power and corporate authority to make, deliver and perform the Loan
Documents and to obtain extensions of credit hereunder. The Borrower has taken
all necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents and to authorize the extensions of credit on
the terms and conditions of this Agreement. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the extensions of
credit hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents (other than the
Indenture), except (i) consents, authorizations, filings and notices which have
been obtained or made and are in full force and effect, (ii) any consent,
authorization or filing that may be required in the future the failure of which
to make or obtain could not reasonably be expected to have a Material Adverse
Effect and (iii) applicable regulatory requirements (including the approval of
the CPUC) prior to foreclosure under the Indenture. This Agreement has been, and
each other Loan Document upon execution and delivery will be, duly executed and
delivered. This Agreement constitutes, and each other Loan Document upon
execution will constitute, a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms, except
as enforceability may be limited by (x) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally, laws of general application related to the
enforceability of securities secured by real estate and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law)
and (y) applicable regulatory requirements (including the approval of the CPUC)
prior to foreclosure under the Indenture.

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

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

 

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

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

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

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

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

 

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were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made, except as could not reasonably be expected to result in a Material
Adverse Effect. No such Multiemployer Plan is in Reorganization or Insolvent.

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

3.12 Use of Proceeds. The proceeds of the Revolving Loans and the Swingline
Loans shall be used for general corporate purposes, including commercial paper
back-up and to support liquidity requirements associated with the Borrower’s
energy procurement hedging activities.

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

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

SECTION 4. CONDITIONS PRECEDENT

4.1 Conditions to the Effective Date. The occurrence of the Effective Date and
the effectiveness of this Agreement is subject to the satisfaction of the
following conditions precedent on or before June 30, 2010:

(a) Credit Agreement. The Administrative Agent shall have received this
Agreement, executed and delivered by the Administrative Agent, the Borrower and
each Person listed on Schedule 1.1A.

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

(c) Fees. The Lenders, the Arrangers and the Administrative Agent shall have
received all fees required to be paid, and all expenses for which invoices have
been presented (including the reasonable fees and expenses of legal counsel), on
or before the Effective Date.

(d) Closing Certificate; Certified Articles of Incorporation; Good Standing
Certificates. The Administrative Agent shall have received (i) a certificate of
the Borrower, dated the Effective Date, substantially in the form of Exhibit D,
with appropriate insertions and

 

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attachments, including the articles of incorporation of the Borrower certified
by the Secretary of State of the State of California, and (ii) a good standing
certificate for the Borrower from the Secretary of State of the State of
California; such closing certificate shall contain a confirmation by the
Borrower that the conditions precedent set forth in this Section 4.1 have been
satisfied.

(e) Legal Opinion. The Administrative Agent shall have received the legal
opinion of Orrick, Herrington & Sutcliffe LLP, counsel to the Borrower,
substantially in the form of Exhibit F.

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

(g) No Default. No Default or Event of Default shall have occurred and be
continuing.

4.2 Conditions to Each Credit Event. The agreement of each Lender to make any
Loan hereunder (a “Credit Event”), on any date (including any Credit Event to
occur on the Effective Date) is subject to the satisfaction of the following
conditions precedent:

(a) Representations and Warranties. Each of the representations and warranties
made by the Borrower in this Agreement that does not contain a materiality
qualification (other than, with respect to any Credit Event after the Effective
Date, the representations and warranties set forth in Section 3.2, 3.6(b) and
3.13) shall be true and correct in all material respects on and as of the date
of such Credit Event as if made on and as of such date, and each of the
representations and warranties made by the Borrower in this Agreement that
contains a materiality qualification (other than, with respect to any Credit
Event after the Effective Date, the representations and warranties set forth in
Sections 3.2, 3.6(b) and 3.13) shall be true and correct on and as of such date
(or, to the extent such representations and warranties specifically relate to an
earlier date, that such representations and warranties were true and correct in
all material respects, or true and correct, as the case may be, as of such
earlier date).

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

Each borrowing of Loans hereunder shall constitute a representation and warranty
by the Borrower as of the date of such Credit Event that the conditions
contained in this Section 4.2 have been satisfied.

SECTION 5. AFFIRMATIVE COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect, or
any Loan, any interest on any Loan or any fee payable to any Lender or the
Administrative Agent hereunder remains outstanding, or any other amount then due
and payable is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall and, with respect to Sections 5.3 and 5.6(b), shall cause its
Significant Subsidiaries to:

 

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

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

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

All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied (except as approved by such accountants or officer, as the case may be,
and disclosed in reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods. The Borrower shall be deemed to have
delivered the financial statements required to be delivered pursuant to this
Section 5.1 upon the filing of such financial statements by the Borrower through
the SEC’s EDGAR system or the publication by the Borrower of such financial
statements on its website.

5.2 Certificates; Other Information. Furnish to the Administrative Agent with a
copy for each Lender (or, in the case of clause (c), the relevant Lender), and
the Administrative Agent shall deliver to each Lender:

(a) within two days after the delivery of any financial statements pursuant to
Section 5.1, (i) a certificate of a Responsible Officer stating that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate and (ii) in the case of quarterly or
annual financial statements, a Compliance Certificate, substantially in the form
of Exhibit C, containing all information and calculations reasonably necessary
for determining compliance by the Borrower with the provisions of this Agreement
referred to therein as of the last day of the fiscal quarter or fiscal year of
the Borrower, as the case may be;

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

(c) promptly, such additional financial and other information as any Lender,
through the Administrative Agent, may from time to time reasonably request.

 

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

5.4 Maintenance of Existence; Compliance. (a)(i) Preserve, renew and keep in
full force and effect its organizational existence and (ii) take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business, except, in each case, as otherwise
permitted by Section 6.3 and except, in the case of clause (ii) above, to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; (b) comply with all Contractual Obligations except to the extent
that failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect and (c) comply with all Requirements
of Law except for any Requirements of Law being contested in good faith by
appropriate proceedings and except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

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

5.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) unless a
Default or Event of Default has occurred and is continuing, not more than once a
year and after at least five Business Days’ notice, (i) permit representatives
of any Lender to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time to discuss
the business, operations, properties and financial and other condition of the
Borrower and its Significant Subsidiaries with officers and employees of the
Borrower and its Significant Subsidiaries and (ii) use commercially reasonable
efforts to provide for the Lenders (in the presence of representatives of the
Borrower) to meet with the independent certified public accountants of the
Borrower and its Subsidiaries; provided, that any such visits or inspections
shall be subject to such conditions as the Borrower and each of its Significant
Subsidiaries shall deem necessary based on reasonable considerations of safety
and security; and provided, further, that neither the Borrower nor any
Significant Subsidiary shall be required to disclose to any Lender or its agents
or representatives any information which is subject to the attorney-client
privilege or attorney work-product privilege properly asserted by the applicable
Person to prevent the loss of such privilege in connection with such information
or which is prevented from disclosure pursuant to a confidentiality agreement
with third parties.

5.7 Notices. Promptly give notice to the Administrative Agent with a copy for
each Lender of, and the Administrative Agent shall deliver such notice to each
Lender:

 

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(a) when known to a Responsible Officer, the occurrence of any Default or Event
of Default;

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

(c) the following events, as soon as possible and in any event within 30 days
after the Borrower knows thereof: (i) the occurrence of any Reportable Event
with respect to any Plan which has not been waived, a failure to make any
required minimum contribution to a Plan under Section 412 or 430 of the Code,
the creation of any Lien in favor of the PBGC with respect to a Plan or any
withdrawal by the Borrower or any Commonly Controlled Entity from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other material action by the
PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan.

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

SECTION 6. NEGATIVE COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect, or
any Loan, or any interest on any Loan or any fee payable to any Lender or the
Administrative Agent hereunder remains outstanding, or any other amount then due
and payable is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall not and, with respect to Section 6.2, shall not permit its
Significant Subsidiaries to:

6.1 Consolidated Capitalization Ratio. Permit the Consolidated Capitalization
Ratio on the last day of any fiscal quarter, from and after the last day of the
first fiscal quarter ending after the Effective Date, to exceed 0.65 to 1.00.

6.2 Liens. Create, incur, assume or suffer to exist any Lien upon any assets of
the Borrower or any Significant Subsidiary, whether now owned or hereafter
acquired, except for (i) Liens securing the Borrower’s obligations to the
Administrative Agent and the Lenders under this Agreement and the other Loan
Documents and (ii) Liens permitted by the Indenture.

6.3 Fundamental Changes. Enter into any merger, consolidation or amalgamation,
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or Dispose of all or substantially all of its property or business
(including, without limitation, rental equipment or leasehold interests and
excluding the sale or transfer of any accounts receivable or of any amounts that
are accrued and recorded in a regulatory account for collections by the
Borrower, in each case, in connection with a securitization transaction), except
that the Borrower may be merged, consolidated or amalgamated with another Person
or Dispose of all or substantially all of its property or business so long as,
after giving effect to such transaction, (a) no Default or Event of Default
shall have occurred and be continuing, (b) either (i) the Borrower is the
continuing or surviving corporation of such merger, consolidation or
amalgamation or (ii) the continuing or surviving corporation of such merger,
consolidation or amalgamation, if not the Borrower or the purchaser, shall have
assumed all obligations of the Borrower under the Loan Documents pursuant to
arrangements reasonably satisfactory to the Administrative

 

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Agent and (c) the ratings by Moody’s and S&P of the continuing or surviving
corporation’s or purchaser’s senior, unsecured, non credit-enhanced debt shall
be at least the higher of (1) Baa3 from Moody’s and BBB- from S&P and (2) the
ratings by such rating agencies of the Borrower’s senior, unsecured, non
credit-enhanced debt in effect before the earlier of the occurrence or the
public announcement of such event.

SECTION 7. EVENTS OF DEFAULT

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

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

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

(c) the Borrower shall default in the observance or performance of any agreement
contained in Section 6.1 or Section 6.3 of this Agreement; or

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

(e) the Borrower or any of its Significant Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including any Guarantee
Obligation, but excluding the Loans) on the due date with respect thereto (after
giving effect to any period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created); or (ii) default in making
any payment of any interest on any such Indebtedness beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness
was created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or (in the case of all Indebtedness other than
Indebtedness under any Swap Agreement) to permit the holder or beneficiary of
such Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such Indebtedness
to become due prior to its stated maturity or (in the case of any such
Indebtedness constituting a Guarantee Obligation) to become payable; provided,
that a default, event or condition described in clause (i), (ii) or (iii) of
this paragraph (e) shall not at any time constitute an Event of Default unless,
at such time, one or

 

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more defaults, events or conditions of the type described in clauses (i),
(ii) and (iii) of this paragraph (e) shall have occurred and be continuing with
respect to Indebtedness the outstanding principal amount of which exceeds in the
aggregate $100,000,000; provided further, that unless payment of the Loans
hereunder has already been accelerated, if such default shall be cured by the
Borrower or such Significant Subsidiary or waived by the holders of such
Indebtedness and any acceleration of maturity having resulted from such default
shall be rescinded or annulled, in each case, in accordance with the terms of
such agreement or instrument, without any modification of the terms of such
Indebtedness requiring the Borrower or such Significant Subsidiary to furnish
security or additional security therefor, reducing the average life to maturity
thereof or increasing the principal amount thereof, or any agreement by the
Borrower or such Significant Subsidiary to furnish security or additional
security therefor or to issue in lieu thereof Indebtedness secured by additional
or other collateral or with a shorter average life to maturity or in a greater
principal amount, then any Default hereunder by reason thereof shall be deemed
likewise to have been thereupon cured or waived; or

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

(g) a trustee shall be appointed to administer any Plan under Section 4042 of
ERISA, or the PBGC shall institute proceedings to terminate, or to have a
trustee appointed to administer any Plan and such proceedings shall continue
undismissed or unstayed and in effect for a period of 60 days, but only if any
such event could reasonably be expected to result in a Material Adverse Effect;
or

(h) one or more judgments or decrees shall be entered against the Borrower or
any of its Significant Subsidiaries involving in the aggregate a liability (not
paid or, subject to customary deductibles, fully covered by insurance as to
which the relevant insurance company has not denied coverage) of $100,000,000 or
more, and all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 30 days from the entry thereof; or

(i) there shall have occurred a Change of Control.

 

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

SECTION 8. THE AGENTS

8.1 Appointment. Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.

8.2 Delegation of Duties. The Administrative Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.

8.3 Exculpatory Provisions. Neither any Agent nor any of their respective
officers, directors, employees, agents, attorneys in fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person’s own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement (other than (in the
case of the Administrative Agent only) to confirm

 

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receipt of the deliverables required pursuant to Section 4.1) or any other Loan
Document, or to inspect the properties, books or records of the Borrower.

8.4 Reliance by Administrative Agent. The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders (or, if so specified by this Agreement, all Lenders),
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Loans.

8.5 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Administrative Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders (or, if so specified by this Agreement, all Lenders);
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.

8.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges
that neither the Agents nor any of their respective officers, directors,
employees, agents, attorneys in fact or affiliates have made any representations
or warranties to it and that no act by any Agent hereafter taken, including any
review of the affairs of the Borrower or any of its affiliates, shall be deemed
to constitute any representation or warranty by any Agent to any Lender. Each
Lender represents to the Agents that it has, independently and without reliance
upon any Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and its affiliates and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon any Agent 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 analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrower and its affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
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Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower or any of its affiliates that may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys in fact or affiliates.

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

8.8 Agent in Its Individual Capacity. Each Agent and its affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower as though such Agent were not an Agent. With respect to its Loans
made or renewed by it, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, and the terms “Lender” and “Lenders” shall
include each Agent in its individual capacity.

8.9 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 10 days’ notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 7(f) with respect to the
Borrower shall have occurred and be continuing) be subject to approval by the
Borrower (which approval shall not be unreasonably withheld or delayed),
whereupon such successor agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term “Administrative Agent” shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent’s rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After any retiring Administrative Agent’s
resignation as Administrative Agent, the provisions of this Section 8 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.

 

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

SECTION 9. MISCELLANEOUS

9.1 Amendments and Waivers. Neither this Agreement, any other Loan Document, nor
any terms hereof or thereof may be amended, supplemented or modified except in
accordance with the provisions of this Section 9.1. The Required Lenders and the
Borrower may, or, with the written consent of the Required Lenders, the
Administrative Agent and the Borrower may, from time to time, (a) enter into
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Borrower hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall:

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

(ii) eliminate or reduce the voting rights of any Lender under this Section 9.1
or Section 9.6(a)(i) without the written consent of such Lender;

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

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

(v) amend, modify or waive any provision of Section 8 without the written
consent of the Administrative Agent;

(vi) amend, modify or waive any provision of Section 2.4 or 2.5 without the
written consent of the Swingline Lender; or

(vii) amend, modify or waive any provision of Section 4.1 without the consent of
all the Lenders.

Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrower, the
Lenders, the Administrative Agent and all future holders of the Loans. In the
case of any waiver, the Borrower, the Lenders and the Administrative Agent shall
be restored to their former position and rights hereunder and under the other
Loan Documents, and any Default or Event of Default waived shall be deemed to be
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continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.

If the Required Lenders shall have approved any amendment which requires the
consent of all of the Lenders, the Borrower shall be permitted to replace any
non-consenting Lender with another financial institution, provided that, (i) the
replacement financial institution shall purchase at par, all Loans and other
amounts owing to such replaced Lender on or prior to the date of replacement,
(ii) the Borrower shall be liable to such replaced Lender under Section 2.17 if
any Eurodollar Loan owing to such replaced Lender shall be purchased other than
on the last day of the Interest Period relating thereto (as if such purchase
constituted a prepayment of such Loans), (iii) such replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (iv) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 9.6 (provided that the
Borrower shall be obligated to pay the registration and processing fee referred
to therein) and (v) any such replacement shall not be deemed to be a waiver of
any rights the Borrower, the Administrative Agent or any other Lender shall have
against the replaced Lender.

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

Notwithstanding anything to the contrary herein but subject to obtaining all
necessary regulatory approvals, in addition to the amendments described above,
each of the Non-Procurement Facility Limit and the Procurement Facility Limit
may be changed by the Borrower by written notice to the Administrative Agent and
no consent of any other party shall be required; provided that, the sum of the
Non-Procurement Facility Limit and the Procurement Facility Limit may not exceed
the Total Commitments; provided that any notice delivered pursuant to
Section 2.2 or Section 2.5 which would, after giving effect to the Loans
requested to be made, cause the aggregate outstanding principal amount of the
Loans, the proceeds of which were used for activities other than energy
procurement, to exceed the Non-Procurement Facility Limit or cause the aggregate
outstanding principal amount of the Loans, the proceeds of which were used for
energy procurement to exceed the Procurement Facility Limit, shall be deemed to
be a notice by the Borrower hereunder.

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

 

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Borrower:

   Pacific Gas and Electric Company    c/o PG&E Corporation    One Market Street
   Spear Tower, Suite 2400    San Francisco, California 94105    Attention:
Treasurer    Telecopy: (415) 267-7265/7268    Telephone: (415) 817-8199/(415)
267-7000 with a copy to:    Pacific Gas and Electric Company    c/o PG&E
Corporation    One Market Street    Spear Tower, Suite 2400    San Francisco,
California 94105    Attention: Chief Counsel, Corporate    Telecopy: (415)
817-8225    Telephone: (415) 817-8200 Administrative Agent:    Wells Fargo Bank,
National Association    1525 W. WT Harris Boulevard    Charlotte, NC 28262   
Attention: Syndication Agency Services    Telecopy: (704) 715-0017    Telephone:
(704) 590-2706,

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

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

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

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

 

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9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse
the Administrative Agent and the Lenders for all their respective reasonable out
of pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including the reasonable fees and disbursements
of only one counsel and special California regulatory counsel to the
Administrative Agent and filing and recording fees and expenses, with statements
with respect to the foregoing to be submitted to the Borrower prior to the
Effective Date (in the case of amounts to be paid on the Effective Date) and
from time to time thereafter on a quarterly basis or such other periodic basis
as the Administrative Agent shall deem appropriate, (b) to pay or reimburse each
Lender and the Administrative Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
fees and disbursements of only one counsel to the Administrative Agent and the
Lenders, (c) to pay, indemnify, and hold each Lender and the Administrative
Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and Other Taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Lender and the Administrative Agent and their respective officers, directors,
employees, affiliates, agents and controlling persons (each, an “Indemnitee”)
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever, whether brought by the Borrower or any other
Person, with respect to the execution, delivery, enforcement and performance of
this Agreement, the other Loan Documents and any such other documents, including
any of the foregoing relating to the use of proceeds of the Loans or the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Borrower and its Significant Subsidiaries or
any of the facilities and properties owned, leased or operated by the Borrower
and its Significant Subsidiaries and the reasonable fees and expenses of one
legal counsel in connection with claims, actions or proceedings by any
Indemnitee against the Borrower under any Loan Document (all the foregoing in
this clause (d), collectively, the “Indemnified Liabilities”), provided, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities resulted
from the gross negligence or willful misconduct of such Indemnitee as determined
in a final judgment by a court of competent jurisdiction. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Significant Subsidiaries not to assert, and
hereby waives and agrees to cause its Significant Subsidiaries to waive, all
rights for contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any Indemnitee. All
amounts due under this Section 9.5 shall be payable not later than 30 days after
written demand therefor, subject to the Borrower’s receipt of reasonably
detailed invoices. Statements payable by the Borrower pursuant to this
Section 9.5 shall be submitted to Treasurer (Telephone No. (415) 817-8199/(415)
267-7000) (Telecopy No. (415) 267-7265/7268), at the address of the Borrower set
forth in Section 9.2 with a copy to Chief Counsel, Corporate (Telephone No.
(415) 817-8200) (Telecopy No. (415) 817-8225), at the address of the Borrower
set forth in Section 9.2, or to such other Person or address as may be hereafter
designated by the Borrower in a written notice to the Administrative Agent. The
agreements in this Section 9.5 shall survive for two years after repayment of
the Loans and all other amounts payable hereunder.

 

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9.6 Successors and Assigns; Participations and Assignments. (a) The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
(i) the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section 9.6.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees (each, an “Assignee”) other than the
Borrower or an affiliate of the Borrower all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld or delayed) of:

(A) the Borrower, provided that no consent of the Borrower shall be required for
an assignment to a Lender, an Eligible Assignee that is an affiliate of any
Lender party to this Agreement on the Effective Date or, if an Event of Default
has occurred and is continuing, any other Person; and

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

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

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

(B) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500, except that no such processing fee shall be
payable in the case of an assignee which is an affiliate of a Lender; and

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

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

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
below, from and after the effective date specified in each Assignment and
Assumption the Assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.15,
2.16, 2.17 and 9.5 but shall be subject to the limitations set forth therein).
Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 9.6 shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (c) of this Section.

(iv) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

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

(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans owing to it); provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
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parties hereto for the performance of such obligations and (C) the Borrower, the
Administrative Agent and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement. Any agreement pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver that (1) requires the consent of each Lender
directly affected thereby pursuant to the proviso to the second sentence of
Section 9.1 and (2) directly affects such Participant. Subject to paragraph
(c)(ii) of this Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.

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

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

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

(f) Notwithstanding the foregoing, any Conduit Lender may assign any or all of
the Loans it may have funded hereunder to its designating Lender without the
consent of the Borrower or the Administrative Agent and without regard to the
limitations set forth in Section 9.6(b). Each of the Borrower, each Lender and
the Administrative Agent hereby confirms that it will not institute against a
Conduit Lender or join any other Person in instituting against a Conduit Lender
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper note issued by
such Conduit Lender; provided, however, that each Lender designating any Conduit
Lender hereby agrees to indemnify, save and hold harmless each other party
hereto for any loss, cost, damage, expense, obligations, penalties, actions,
judgments, suits or any kind whatsoever arising out of its inability to
institute such a proceeding against such Conduit Lender during such period of
forbearance.

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

 

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9.7 Adjustments; Set off. (a) Except to the extent that this Agreement expressly
provides for payments to be allocated to a particular Lender, if any Lender (a
“Benefitted Lender”) shall receive any payment of all or part of the Obligations
owing to it hereunder, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set off, pursuant to events or proceedings of
the nature referred to in Section 7(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of the Obligations owing to such other Lender hereunder, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of the Obligations owing to each such other Lender hereunder, or
shall provide such other Lenders with the benefits of any such collateral, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.

(b) In addition to any rights and remedies of the Lenders provided by law,
including other rights of set-off, each Lender shall have the right, without
prior notice to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise), after any applicable grace period, to set off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch, affiliate or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application made
by such Lender, provided that the failure to give such notice shall not affect
the validity of such setoff and application.

9.8 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

9.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

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

9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED

 

51

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BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.

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

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States for the Southern District of New York, and appellate
courts from any thereof;

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

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 9.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

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

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

9.13 Acknowledgments. The Borrower hereby acknowledges that:

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

(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
Administrative Agent and Lenders, on one hand, and the Borrower, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and

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

9.14 Confidentiality. Each of the Administrative Agent and each Lender agrees to
keep confidential in accordance with such party’s customary practices (and in
any event in compliance with applicable law regarding material non-public
information) all non-public information provided to it by the Borrower, the
Administrative Agent or any Lender pursuant to or in connection with this
Agreement that is designated by the provider thereof as confidential; provided
that nothing herein shall prevent the Administrative Agent or any Lender from
disclosing any such information (a) to the Administrative

 

52

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Agent, any other Lender or any affiliate thereof, (b) subject to an agreement to
comply with the provisions of this Section or substantially equivalent
provisions, to any actual or prospective Transferee or any direct or indirect
counterparty to any Swap Agreement (or any professional advisor to such
counterparty), (c) to its employees, directors, agents, attorneys, accountants
and other professional advisors or those of any of its affiliates (as long as
such attorneys, accountants and other professional advisors are subject to
confidentiality requirements substantially equivalent to this Section), (d) upon
the request or demand of any Governmental Authority, (e) in response to any
order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) if requested or required to do
so in connection with any litigation or similar proceeding, (g) that has been
publicly disclosed, (h) to the National Association of Insurance Commissioners
or any similar organization or any nationally recognized rating agency that
requires access to information about a Lender’s investment portfolio in
connection with ratings issued with respect to such Lender, or (i) in connection
with the exercise of any remedy hereunder or under any other Loan Document,
provided that, in the case of clauses (d), (e) and (f) of this Section 9.14,
with the exception of disclosure to bank regulatory authorities, the Borrower
(to the extent legally permissible) shall be given prompt prior notice so that
it may seek a protective order or other appropriate remedy.

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

9.16 USA Patriot Act. Each Lender hereby notifies the Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “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.

9.17 Judicial Reference. If any action or proceeding is filed in a court of the
State of California by or against any party hereto in connection with any of the
transactions contemplated by this Agreement or any other Loan Document, (i) the
court shall, and is hereby directed to, make a general reference pursuant to
California Code of Civil Procedure Section 638 to a referee (who shall be a
single active or retired judge) to hear and determine all of the issues in such
action or proceeding (whether of fact or of law) and to report a statement of
decision, provided that at the option of any party to such proceeding, any such
issues pertaining to a “provisional remedy” as defined in California Code of
Civil Procedure Section 1281.8 shall be heard and determined by the court, and
(ii) without limiting the generality of Section 9.5, the Borrower shall be
solely responsible to pay all fees and expenses of any referee appointed in such
action or proceeding.

[Remainder of page intentionally left blank.]

 

53

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

 

PACIFIC GAS AND ELECTRIC COMPANY By:  

 

Name:   Nicholas M. Bijur Title:   Treasurer

 

-Signature Page-

Credit Agreement

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

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Swingline
Lender and as a Lender

By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

THE ROYAL BANK OF SCOTLAND PLC, as

Syndication Agent and as a Lender

By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

BANCO BILBAO VIZCAYA ARGENTARIA, S.A., New York Branch, as Documentation Agent
and as a Lender

By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., New York Branch, as Documentation Agent
and as a Lender

By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

U.S. BANK NATIONAL ASSOCIATION,

as Documentation Agent

By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

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

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

BARCLAYS BANK PLC, as a Lender By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

BNP PARIBAS, as a Lender By:  

 

Name:   Title:   By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

DEUTSCHE BANK AG, New York Branch,

as a Lender

By:  

 

Name:   Title:   By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

GOLDMAN SACHS BANK USA, as a Lender By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

MIZUHO CORPORATE BANK (USA), as a Lender

By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

MORGAN STANLEY BANK, N.A., as a Lender

By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

ROYAL BANK OF CANADA, as a Lender

By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

UBS LOAN FINANCE LLC, as a Lender By:  

 

Name:   Title:   By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

CITIBANK, N.A., as a Lender By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

EAST WEST BANK, as a Lender By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

RBC BANK (USA), as a Lender By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

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

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

THE NORTHERN TRUST COMPANY, as a Lender By:  

 

Name:   Title:  

 

-Signature Page-

Credit Agreement

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

SCHEDULE 1.1A

COMMITMENTS

 

Lender

   Commitment

Wells Fargo Bank, National Association

   $ 145,000,000

The Royal Bank of Scotland plc

   $ 95,000,000

Banco Bilbao Vizcaya Argentaria, S.A., New York Branch

   $ 35,000,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

   $ 35,000,000

U.S. Bank National Association

   $ 35,000,000

Bank of America N.A.

   $ 35,000,000

Barclays Bank PLC

   $ 35,000,000

BNP Paribas

   $ 35,000,000

Deutsche Bank AG New York Branch

   $ 35,000,000

Goldman Sachs Bank USA

   $ 35,000,000

Mizuho Corporate Bank (USA)

   $ 35,000,000

Morgan Stanley Bank N.A.

   $ 35,000,000

Royal Bank of Canada

   $ 35,000,000

UBS Loan Finance LLC

   $ 35,000,000

Citibank N.A.

   $ 20,000,000

East West Bank

   $ 20,000,000

RBC Bank (USA)

   $ 20,000,000

JPMorgan Chase Bank N.A.

   $ 15,000,000

The Northern Trust Company

   $ 15,000,000

TOTAL

   $ 750,000,000.00

 

Schedule 1.1A

Credit Agreement

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

EXHIBIT A

FORM OF

NEW LENDER SUPPLEMENT

Reference is made to the $750,000,000 Credit Agreement, dated as of June 8, 2010
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Pacific Gas and Electric Company, a California corporation
(the “Borrower”), the Lenders parties thereto, Wells Fargo Securities LLC and
RBS Securities Inc., as joint lead arrangers and joint book runners, The Royal
Bank of Scotland plc, as syndication agent, Banco Bilbao Vizcaya Argentaria,
S.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, U.S. Bank
National Association, as documentation agents, and Wells Fargo Bank, National
Association, as administrative agent (in such capacity, the “Administrative
Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.

The New Revolving Credit Lender identified on Schedule l hereto (the “New
Lender”), the Administrative Agent and the Borrower agree as follows:

1. The New Lender hereby irrevocably makes a Commitment to the Borrower in the
amount set forth on Schedule 1 hereto (the “New Commitment”) pursuant to
Section 2.3(b) of the Credit Agreement. From and after the Effective Date (as
defined below), the New Lender will be a Lender under the Credit Agreement with
respect to the New Commitment.

2. The Administrative Agent (a) 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 with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement; and (b) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower, any
of its Subsidiaries or any other obligor or the performance or observance by the
Borrower, any of its Subsidiaries or any other obligor of any of their
respective obligations under the Credit Agreement or any other instrument or
document furnished pursuant hereto or thereto.

3. The New Lender (a) represents and warrants that it is legally authorized to
enter into this New Lender Supplement; (b) confirms that it has received a copy
of the Credit Agreement, together with copies of the most recent financial
statements delivered or deemed delivered pursuant to Section 5.1 of the Credit
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this New Lender
Supplement; (c) agrees that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement or
any other instrument or document furnished pursuant hereto or thereto;
(d) appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Credit
Agreement or any other instrument or document furnished pursuant hereto or
thereto as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are incidental thereto; and (e) agrees that it will
be bound by the provisions of the Credit Agreement and

 

Exhibits

Credit Agreement

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

will perform in accordance with its terms all the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Lender.

4. The effective date of this New Lender Supplement shall be the Effective Date
of the New Commitment described in Schedule 1 hereto (the “Effective Date”).
Following the execution of this New Lender Supplement by each of the New Lender
and the Borrower, it will be delivered to the Administrative Agent for
acceptance and recording by it pursuant to the Credit Agreement, effective as of
the Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).

5. Upon such acceptance and recording, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the New Commitment
(including payments of principal, interest, fees and other amounts) to the New
Lender for amounts which have accrued on and subsequent to the Effective Date.

6. From and after the Effective Date, the New Lender shall be a party to the
Credit Agreement and, to the extent provided in this New Lender Supplement,
shall have the rights and obligations of a Lender thereunder and shall be bound
by the provisions thereof.

7. This New Lender Supplement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.

IN WITNESS WHEREOF, the parties hereto have caused this New Lender Supplement to
be executed as of              , 201   by their respective duly authorized
officers on Schedule 1 hereto.

[Remainder of page intentionally left blank. Schedule 1 to follow.]

 

Exhibits

Credit Agreement

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

Schedule 1

to New Lender Supplement

 

Name of New Lender:

   

 

 

Effective Date of New Commitment:

   

 

 

Principal Amount of New Commitment:

  $  

 

 

 

[NAME OF NEW LENDER] By:  

 

Name:   Title:  

 

PACIFIC GAS AND ELECTRIC COMPANY By:  

 

Name:   Title:  

 

WELLS FARGO BANK, NATIONAL

ASSOCIATION,

as Administrative Agent By:  

 

Name:   Title:  

 

Exhibits

Credit Agreement

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

EXHIBIT B

FORM OF

COMMITMENT INCREASE SUPPLEMENT

Reference is made to the $750,000,000 Credit Agreement, dated as of June 8, 2010
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Pacific Gas and Electric Company, a California corporation
(the “Borrower”), the Lenders parties thereto, Wells Fargo Securities LLC and
RBS Securities Inc., as joint lead arrangers and joint book runners, The Royal
Bank of Scotland plc, as syndication agent, Banco Bilbao Vizcaya Argentaria,
S.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, U.S. Bank
National Association, as documentation agents, and Wells Fargo Bank, National
Association, as administrative agent (in such capacity, the “Administrative
Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.

The Lender identified on Schedule l hereto (the “Increasing Lender”), the
Administrative Agent and the Borrower agree as follows:

1. The Increasing Lender hereby irrevocably increases its Commitment to the
Borrower by the amount set forth on Schedule 1 hereto under the heading
“Principal Amount of Increased Commitment” (the “Increased Commitment”) pursuant
to Section 2.3(c) of the Credit Agreement. From and after the Effective Date (as
defined below), the Increasing Lender will be a Lender under the Credit
Agreement with respect to the Increased Commitment as well as its existing
Commitment under the Credit Agreement.

2. The Administrative Agent (a) 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 with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement; and (b) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower, any
of its Subsidiaries or any other obligor or the performance or observance by the
Borrower, any of its Subsidiaries or any other obligor of any of their
respective obligations under the Credit Agreement or any other instrument or
document furnished pursuant hereto or thereto.

3. The Increasing Lender (a) represents and warrants that it is legally
authorized to enter into this Commitment Increase Supplement; (b) confirms that
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered or deemed delivered pursuant to
Section 5.1 of the Credit Agreement and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Commitment Increase Supplement; (c) agrees that it will, independently
and without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement or any other instrument or document furnished pursuant
hereto or thereto; (d) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Credit Agreement or any other instrument or document furnished
pursuant hereto or thereto as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are incidental thereto; and
(e) agrees that it will be bound by the provisions of the Credit Agreement and

 

Exhibits

Credit Agreement

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

will perform in accordance with its terms all the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Lender.

4. The effective date of this Commitment Increase Supplement shall be the
Effective Date of the Increased Commitment described in Schedule 1 hereto (the
“Effective Date”). Following the execution of this Commitment Increase
Supplement by each of the Increasing Lender and the Borrower, it will be
delivered to the Administrative Agent for acceptance and recording by it
pursuant to the Credit Agreement, effective as of the Effective Date (which
shall not, unless otherwise agreed to by the Administrative Agent, be earlier
than five Business Days after the date of such acceptance and recording by the
Administrative Agent).

5. Upon such acceptance and recording, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Increased
Commitment (including payments of principal, interest, fees and other amounts)
to the Increasing Lender for amounts which have accrued on and subsequent to the
Effective Date.

6. This Commitment Increase Supplement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.

IN WITNESS WHEREOF, the parties hereto have caused this Commitment Increase
Supplement to be executed as of              , 201   by their respective duly
authorized officers on Schedule 1 hereto.

[Remainder of page intentionally left blank. Schedule 1 to follow.]

 

Exhibits

Credit Agreement

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

Schedule 1

to Commitment Increase Supplement

 

Name of Increasing Lender:  

 

  Effective Date of Increased Commitment:  

 

 

 

Principal

Amount of

Increased Commitment:

   Total Amount of Commitment
of Increasing Lender
(including Increased Commitment):           $                $                  

 

[NAME OF INCREASING LENDER] By:  

 

Name:   Title:  

 

PACIFIC GAS AND ELECTRIC COMPANY By:  

 

Name:   Title:  

Accepted:

 

WELLS FARGO BANK, NATIONAL

ASSOCIATION,

as Administrative Agent By:  

 

Name:   Title:  

 

Exhibits

Credit Agreement

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

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

This Compliance Certificate is delivered pursuant to Section 5.2 of the
$750,000,000 Credit Agreement, dated as of June 8, 2010 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Pacific Gas and Electric Company, a California corporation (the
“Borrower”), the lenders parties thereto (the “Lenders”), Wells Fargo Securities
LLC and RBS Securities Inc., as joint lead arrangers and joint book runners, The
Royal Bank of Scotland plc, as syndication agent, Banco Bilbao Vizcaya
Argentaria, S.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, U.S.
Bank National Association, as documentation agents, and Wells Fargo Bank,
National Association, as administrative agent (in such capacity, the
“Administrative Agent”). Terms defined in the Credit Agreement are used herein
as therein defined.

The undersigned hereby certifies to the Administrative Agent and the Lenders as
follows:

1. I am the duly elected, qualified and acting [Chief Financial Officer]
[Treasurer] [Assistant Treasurer] of the Borrower.

2. I have reviewed and am familiar with the contents of this Certificate.

3. To the knowledge of the undersigned, during the fiscal period covered by the
financial statements attached hereto as Attachment 1, no Default or Event of
Default has occurred and is continuing [, except as set forth below].

4. Attached hereto as Attachment 2 are the computations showing compliance with
the covenant set forth in Section 6.1 of the Credit Agreement.

[Remainder of page intentionally left blank. Schedule 1 to follow.]

 

Exhibits

Credit Agreement

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

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of the date set forth below.

 

PACIFIC GAS AND ELECTRIC COMPANY By:  

 

Name:   Title:  

Date:             , 201  

 

Exhibits

Credit Agreement

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

Attachment 1

to Exhibit C

Financial Statements

Period Ended             , 201  

 

Exhibits

Credit Agreement

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

Attachment 2

to Exhibit C

The information described herein is as of             , 201  .

[Set forth Covenant Calculation]

 

Exhibits

Credit Agreement

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

EXHIBIT D

FORM OF CLOSING CERTIFICATE

This Closing Certificate is delivered pursuant to Section 4.1(d) of the
$750,000,000 Credit Agreement, dated as of June 8, 2010 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Pacific Gas and Electric Company, a California corporation (the
“Borrower”), the lenders parties thereto (the “Lenders”), Wells Fargo Securities
LLC and RBS Securities Inc., as joint lead arrangers and joint book runners, The
Royal Bank of Scotland plc, as syndication agent, Banco Bilbao Vizcaya
Argentaria, S.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, U.S.
Bank National Association, as documentation agents, and Wells Fargo Bank,
National Association, as administrative agent (in such capacity, the
“Administrative Agent”). Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

The undersigned [                                ] of the Borrower hereby
certifies to the Administrative Agent and the Lenders as follows:

1. The representations and warranties of the Borrower set forth in the Credit
Agreement that do not contain a materiality qualification are true and correct
in all material respects on and as of the date hereof with the same effect as if
made on the date hereof, and the representations and warranties of the Borrower
set forth in the Credit Agreement that do contain a materiality qualification
are true and correct on and as of the date hereof with the same effect as if
made on the date hereof, except for any representations and warranties that
specifically relate to an earlier date, in which case such representations and
warranties were true and correct in all material respects, or true and correct,
as the case may be, as of such earlier date.

2. [                    ] is the duly elected and qualified [Assistant]
Secretary of the Borrower and the signature set forth for such officer below is
such officer’s true and genuine signature.

3. No Default or Event of Default has occurred and is continuing as of the date
hereof.

4. The conditions precedent set forth in Section 4.1 of the Credit Agreement
were satisfied as of the Effective Date.

5. All governmental and third party consents and approvals necessary in
connection with the Credit Agreement and the other Loan Documents and the
transactions contemplated thereby have been obtained and are now in full force
and effect.

 

Exhibits

Credit Agreement

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

The undersigned [Assistant] Secretary of the Borrower certifies as follows:

1. There are no liquidation or dissolution proceedings pending or to my
knowledge threatened against the Borrower.

2. The Borrower is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of California.

3. Attached hereto as Annex 1 is a true and complete copy of resolutions duly
adopted by the Board of Directors of the Borrower on
[                                ]; such resolutions have not in any way been
amended, modified, revoked or rescinded, have been in full force and effect
since their adoption to and including the date hereof and are now in full force
and effect and are the only corporate proceedings of the Borrower now in force
relating to or affecting the Credit Agreement.

4. Attached hereto as Annex 2 is a true and complete copy of the Bylaws of the
Borrower as in effect on the date hereof.

5. Attached hereto as Annex 3 is a true and complete copy of the Articles of
Incorporation of the Borrower as in effect on the date hereof, and such Articles
of Incorporation have not been amended, repealed, modified or restated.

6. The following persons are now duly elected and qualified officers of the
Borrower holding the offices indicated next to their respective names below, and
that the facsimile signatures affixed next to their respective names below are
the facsimile signatures of such officers, and each of such officers is duly
authorized to execute and deliver on behalf of the Borrower each of the Loan
Documents to which it is a party and any certificate or other document to be
delivered by the Borrower pursuant to the Loan Documents to which it is a party:

 

Name

  

Office

  

Signature

               

 

           

 

           

 

           

 

     

 

Exhibits

Credit Agreement

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

IN WITNESS WHEREOF, the undersigned have executed this Closing Certificate as of
the date set forth below.

 

 

    

 

  

[Name]

    

[Name]

  

[Title]

    

[Assistant] Secretary

  

Date: June 8, 2010

 

Exhibits

Credit Agreement

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

ANNEX 1

[Board Resolutions]

 

Exhibits

Credit Agreement

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

ANNEX 2

[Bylaws of the Company]

 

Exhibits

Credit Agreement

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

ANNEX 3

[Articles of Incorporation]

 

Exhibits

Credit Agreement

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

EXHIBIT E

FORM OF

ASSIGNMENT AND ASSUMPTION

Reference is made to the $750,000,000 Credit Agreement, dated as of June 8, 2010
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Pacific Gas and Electric Company, a California corporation
(the “Borrower”), the Lenders parties thereto, Wells Fargo Securities LLC and
RBS Securities Inc., as joint lead arrangers and joint book runners, The Royal
Bank of Scotland plc, as syndication agent, Banco Bilbao Vizcaya Argentaria,
S.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, U.S. Bank
National Association, as documentation agents, and Wells Fargo Bank, National
Association, as administrative agent (in such capacity, the “Administrative
Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.

The Assignor identified on Schedule l hereto (the “Assignor”) and the Assignee
identified on Schedule l hereto (the “Assignee”) agree as follows:

1. The Assignor hereby irrevocably sells and assigns to the Assignee without
recourse to the Assignor, and the Assignee hereby irrevocably purchases and
assumes from the Assignor without recourse to the Assignor, as of the Effective
Date (as defined below), (i) the interest described in Schedule 1 hereto in and
to the Assignor’s rights and obligations under the Credit Agreement (the
“Assigned Facility”) in the principal amount set forth on Schedule 1 hereto and
(ii) to the extent permitted to be assigned under applicable law, all claims,
suits, causes of action and any other right of the Assignor (in its capacity as
a Lender) against any Person, whether known or unknown, arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the “Assigned Interest”).

2. The Assignor (a) 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 with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any of its Subsidiaries or any other
obligor or the performance or observance by the Borrower, any of its
Subsidiaries or any other obligor of any of their respective obligations under
the Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; and (c) attaches any Note held by
it evidencing the Assigned Facility and (i) requests that the Administrative
Agent, upon request by the Assignee, exchange the attached Note for a new Note
payable to the Assignee and (ii) if the Assignor has retained any interest in
the Assigned

 

Exhibits

Credit Agreement

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Facility, requests that the Administrative Agent exchange the attached Note for
a new Note payable to the Assignor, in each case in amounts which reflect the
assignment being made hereby (and after giving effect to any other assignments
which have become effective on the Effective Date).

3. The Assignee (a) represents and warrants that it is legally authorized to
enter into this Assignment and Assumption; (b) confirms that it has received a
copy of the Credit Agreement, together with copies of the financial statements
delivered pursuant to Section 5.1 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 Assumption; (c) agrees that it will,
independently and without reliance upon the Assignor, the Agents or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (d) appoints and
authorizes the Agents to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Agents by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to
Section 2.16(d) of the Credit Agreement.

4. The effective date of this Assignment and Assumption shall be the Effective
Date of Assignment described in Schedule 1 hereto (the “Effective Date”).
Following the execution of this Assignment and Assumption, it will be delivered
to the Administrative Agent for acceptance by it and recording by the
Administrative Agent pursuant to the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).

5. Upon such acceptance and recording, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) [to the
Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date] [to
the Assignee whether such amounts have accrued prior to the Effective Date or
accrue subsequent to the Effective Date. The Assignor and the Assignee shall
make all appropriate adjustments in payments by the Agent for periods prior to
the Effective Date or with respect to the making of this assignment directly
between themselves.]

6. From and after the Effective Date, (a) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Assumption,
have the rights and obligations of a Lender thereunder and under the other Loan
Documents and shall be bound by the provisions thereof and (b) the Assignor
shall, to the extent provided in this Assignment and Assumption, relinquish its
rights and be released from its obligations under the Credit Agreement.

7. This Assignment and Assumption shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.

 

Exhibits

Credit Agreement

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IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.

 

[ASSIGNOR]   [ASSIGNEE]     By:  

 

    By:   

 

  Name:       Name:      Title:       Title:     

 

Exhibits

Credit Agreement

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Schedule 1

to Assignment and Assumption

 

Name of Assignor:                                     

Name of Assignee:                                     

Effective Date of Assignment:                                     

 

________________________   ________________________      

Assigned Facility

 

Principal

Amount Assigned

  

[Percentage Assigned]*

        $                    .    %   

[Name of Assignor] By:  

 

Name:   Title:  

 

[Name of Assignee]

By:  

 

Name:   Title:  

 

 

* Calculate the Commitment Percentage that is assigned to at least 10 decimal
places and show as a percentage of the aggregate commitments of all Lenders.

 

Exhibits

Credit Agreement

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Consented to:

PACIFIC GAS AND ELECTRIC

COMPANY**

By:

 

 

Name:

 

Title:

 

Accepted and Consented to:

[WELLS FARGO BANK, NATIONAL

ASSOCIATION, as

Administrative Agent]**

By:

 

 

Name:

 

Title:

 

 

 

** As applicable pursuant to Section 9.6(b).

 

Exhibits

Credit Agreement

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EXHIBIT F

FORM OF LEGAL OPINION OF ORRICK, HERRINGTON & SUTCLIFFE LLP

 

Exhibits

Credit Agreement

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EXHIBIT G

FORM OF EXEMPTION CERTIFICATE

Reference is made to the $750,000,000 Credit Agreement, dated as of June 8, 2010
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Pacific Gas and Electric Company, a California corporation
(the “Borrower”), the Lenders parties thereto, Wells Fargo Securities LLC and
RBS Securities Inc., as joint lead arrangers and joint book runners, The Royal
Bank of Scotland plc, as syndication agent, Banco Bilbao Vizcaya Argentaria,
S.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, U.S. Bank
National Association, as documentation agents, and Wells Fargo Bank, National
Association, as administrative agent (in such capacity, the “Administrative
Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.

[                                 ] (the “Non-U.S. Lender”) is providing this
certificate pursuant to Section 2.16(d) of the Credit Agreement. The Non-U.S.
Lender hereby represents and warrants that:

1. The Non-U.S. Lender is the sole record and beneficial owner of the Loans or
the obligations evidenced by Note(s) in respect of which it is providing this
certificate.

2. The Non-U.S. Lender is not a “bank” for purposes of Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended (the “Code”). In this regard, the
Non-U.S. Lender further represents and warrants that:

(a) the Non-U.S. Lender is not subject to regulatory or other legal requirements
as a bank in any jurisdiction; and

(b) the Non-U.S. Lender 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. The Non-U.S. Lender is not a ten percent (10%) shareholder of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code; and

4. The Non-U.S. Lender is not a controlled foreign corporation receiving
interest from a related person within the meaning of Section 881(c)(3)(C) of the
Code.

[Remainder of page intentionally left blank.]

 

Exhibits

Credit Agreement

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IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date
set forth below.

 

[NAME OF NON-U.S. LENDER] By:  

 

Name:   Title:  

Date:                     

 

Exhibits

Credit Agreement

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EXHIBIT H

FORM OF NOTE

THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.

 

$               New York, New York       as of [            ], 201[  ]

FOR VALUE RECEIVED, PACIFIC GAS AND ELECTRIC COMPANY, a California corporation
(the “Borrower”), DOES HEREBY PROMISE TO PAY to the order of [insert name of
Lender] (the “Lender”) at the office of WELLS FARGO BANK, NATIONAL ASSOCIATION,
in its capacity as administrative agent, at [                    ], in lawful
money of the United States of America in immediately available funds, the
principal amount of                      DOLLARS ($            ), or, if less,
the aggregate unpaid principal amount of all Revolving Loans (as defined in the
Credit Agreement referred to below) made by the Lender to the Borrower pursuant
to the Credit Agreement referred to below, whichever is less, on such date or
dates as is required by said Credit Agreement, and to pay interest on the unpaid
principal amount from time to time outstanding hereunder, in like money, at such
office, and at such times and in such amounts as set forth in Section 2.11 of
said Credit Agreement.

The holder of this Note is authorized to indorse on the schedules annexed hereto
and made a part hereof or on a continuation thereof which shall be attached
hereto and made a part hereof the date, the Type and amount of each Revolving
Loan made pursuant to the Credit Agreement and the date and amount of each
payment or prepayment of principal thereof, each continuation thereof, each
conversion of all or a portion thereof to another Type and, in the case of
Eurodollar Loans, the length of each Interest Period with respect thereto. Each
such endorsement shall constitute prima facie evidence of the accuracy of the
information indorsed. The failure to make any such endorsement or any error in
any such endorsement shall not affect the obligations of the Borrower in respect
of any Revolving Loan.

The Borrower hereby waives demand, presentment for payment, protest, notice of
any kind (including, but not limited to, notice of dishonor, notice of protest,
notice of intention to accelerate or notice of acceleration), other than notice
required pursuant to the Credit Agreement and diligence in collecting and
bringing suit against any party hereto. The non-exercise by the holder of this
Note of any of its rights hereunder in any particular instance shall not
constitute a waiver thereof in that or any subsequent instance.

This Note (a) is one of the promissory notes referred to in the $750,000,000
Credit Agreement, dated as of June 8, 2010 (as amended, supplemented or
otherwise modified from time to

 

Exhibits

Credit Agreement

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time the “Credit Agreement”), among the Borrower, the Lenders parties thereto,
Wells Fargo Securities LLC and RBS Securities Inc., as joint lead arrangers and
joint book runners, The Royal Bank of Scotland plc, as syndication agent, Banco
Bilbao Vizcaya Argentaria, S.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., New
York Branch, U.S. Bank National Association, as documentation agents, and Wells
Fargo Bank, National Association, as administrative agent, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to optional prepayment in
whole or in part and acceleration of the maturity hereof upon the occurrence of
certain events, all as provided in the Credit Agreement. Terms defined in the
Credit Agreement are used herein as therein defined.

 

Exhibits

Credit Agreement

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NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT
AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE
WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 9.6 OF THE CREDIT
AGREEMENT.

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

 

PACIFIC GAS AND ELECTRIC COMPANY By:  

 

Name:   Title:  

 

Exhibits

Credit Agreement

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Schedule A

to Note

LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS

 

Date

   Amount of ABR Loans    Amount
Converted to
ABR Loans    Amount of Principal of Base
Rate Loans Repaid    Amount of ABR Loans
Converted to
Eurodollar Loans    Unpaid Principal Balance of
ABR Loans    Notation Made
By                                                                              
                                                                                
                                      

 

Exhibits

Credit Agreement

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Schedule B

to Note

LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS

 

Date

  

Amount of Eurodollar

Loans

  

Amount Converted to

Eurodollar Loans

  

Interest Period and

Eurodollar Rate with

Respect Thereto

  

Amount of Principal of

Eurodollar Loans Repaid

  

Amount of Eurodollar

Loans Converted to

ABR Loans

  

Unpaid Principal

Balance of Eurodollar
Loans

  

Notation

Made By

                                                                                
                                                                                
                                                                                
        

 

Exhibits

Credit Agreement