exv10w2





Exhibit
10.2


Execution Version     




 

 






Published CUSIP Number: 13083KAA6




CREDIT AGREEMENT




Dated as of October 27, 2009




among




CALIFORNIA WATER SERVICE COMPANY,

as Borrower,




BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender

and

L/C Issuer,




COBANK, ACB

and

BANK OF CHINA, LOS ANGELES BRANCH,

as Co-Syndication Agents,




COMPASS BANK

and

U.S. BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agents




and




The Other Lenders Party Hereto




BANC OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Book Manager




 

 






 









 












TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	Section	 	Page
	 
	 	 	 	 	 	 
	 

	 	ARTICLE I.	 	 	 	 
	 

	 	DEFINITIONS AND ACCOUNTING TERMS	 	 	 	 
	1.01

	 	Defined Terms
	 	 	1	 
	1.02

	 	Other Interpretive Provisions
	 	 	20	 
	1.03

	 	Accounting Terms
	 	 	21	 
	1.04

	 	Rounding
	 	 	22	 
	1.05

	 	Times of Day
	 	 	22	 
	1.06

	 	Letter of Credit Amounts
	 	 	22	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE II.	 	 	 	 
	 

	 	THE COMMITMENTS AND CREDIT EXTENSIONS	 	 	 	 
	2.01

	 	Revolving Loans
	 	 	22	 
	2.02

	 	Borrowings, Conversions and Continuations of Revolving Loans
	 	 	23	 
	2.03

	 	Letters of Credit
	 	 	24	 
	2.04

	 	Swing Line Loans
	 	 	33	 
	2.05

	 	Prepayments
	 	 	36	 
	2.06

	 	Termination or Reduction of Commitments
	 	 	36	 
	2.07

	 	Repayment of Loans
	 	 	37	 
	2.08

	 	Interest
	 	 	37	 
	2.09

	 	Fees
	 	 	38	 
	2.10

	 	Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate
	 	 	38	 
	2.11

	 	Evidence of Debt
	 	 	39	 
	2.12

	 	Payments Generally; Administrative Agent’s Clawback
	 	 	40	 
	2.13

	 	Sharing of Payments by Lenders
	 	 	41	 
	2.14

	 	[Intentionally Omitted]
	 	 	42	 
	2.15

	 	Cash Collateral and Other Credit Support
	 	 	42	 
	2.16

	 	Defaulting Lenders
	 	 	43	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE III.	 	 	 	 
	 

	 	TAXES, YIELD PROTECTION AND ILLEGALITY	 	 	 	 
	3.01

	 	Taxes
	 	 	45	 
	3.02

	 	Illegality
	 	 	48	 
	3.03

	 	Inability to Determine Rates
	 	 	49	 






i









 






	 	 	 	 	 	 	 
	 	 	Section	 	Page
	3.04

	 	Increased Costs; Reserves on Eurodollar Rate Loans
	 	 	50	 
	3.05

	 	Compensation for Losses
	 	 	51	 
	3.06

	 	Mitigation Obligations; Replacement of Lenders
	 	 	52	 
	3.07

	 	Survival
	 	 	52	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE IV.	 	 	 	 
	 

	 	CONDITIONS PRECEDENT TO CREDIT EXTENSIONS	 	 	 	 
	4.01

	 	Conditions of Initial Credit Extension
	 	 	52	 
	4.02

	 	Conditions to all Credit Extensions
	 	 	54	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE V.	 	 	 	 
	 

	 	REPRESENTATIONS AND WARRANTIES	 	 	 	 
	5.01

	 	Existence, Qualification and Power
	 	 	55	 
	5.02

	 	Authorization; No Contravention
	 	 	55	 
	5.03

	 	Governmental Authorization; Other Consents
	 	 	55	 
	5.04

	 	Binding Effect
	 	 	55	 
	5.05

	 	Financial Statements; No Material Adverse Effect
	 	 	56	 
	5.06

	 	Litigation
	 	 	56	 
	5.07

	 	No Default
	 	 	56	 
	5.08

	 	Ownership of Property; Liens
	 	 	57	 
	5.09

	 	Environmental Compliance
	 	 	57	 
	5.10

	 	Insurance
	 	 	57	 
	5.11

	 	Taxes
	 	 	57	 
	5.12

	 	ERISA Compliance
	 	 	57	 
	5.13

	 	Subsidiaries; Equity Interests
	 	 	58	 
	5.14

	 	Margin Regulations; Investment Company Act
	 	 	58	 
	5.15

	 	Disclosure
	 	 	58	 
	5.16

	 	Compliance with Laws
	 	 	59	 
	5.17

	 	Intellectual Property; Licenses, Etc
	 	 	59	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VI.	 	 	 	 
	 

	 	AFFIRMATIVE COVENANTS	 	 	 	 
	6.01

	 	Financial Statements
	 	 	60	 
	6.02

	 	Certificates; Other Information
	 	 	61	 
	6.03

	 	Notices
	 	 	62	 
	6.04

	 	Payment of Obligations
	 	 	63	 






ii









 






	 	 	 	 	 	 	 
	 	 	Section	 	Page
	6.05

	 	Preservation of Existence, Etc
	 	 	63	 
	6.06

	 	Maintenance of Properties
	 	 	63	 
	6.07

	 	Maintenance of Insurance
	 	 	64	 
	6.08

	 	Compliance with Laws
	 	 	64	 
	6.09

	 	Books and Records
	 	 	64	 
	6.10

	 	Inspection Rights
	 	 	64	 
	6.11

	 	Use of Proceeds
	 	 	64	 
	6.12

	 	Material Licenses, Permits and Franchises
	 	 	65	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VII.	 	 	 	 
	 

	 	NEGATIVE COVENANTS	 	 	 	 
	7.01

	 	Liens
	 	 	65	 
	7.02

	 	Investments
	 	 	67	 
	7.03

	 	Indebtedness
	 	 	69	 
	7.04

	 	Fundamental Changes
	 	 	71	 
	7.05

	 	Dispositions
	 	 	71	 
	7.06

	 	Restricted Payments
	 	 	72	 
	7.07

	 	Change in Business
	 	 	72	 
	7.08

	 	Transactions with Affiliates
	 	 	72	 
	7.09

	 	Burdensome Agreements
	 	 	73	 
	7.10

	 	Financial Covenants
	 	 	73	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VIII.	 	 	 	 
	 

	 	EVENTS OF DEFAULT AND REMEDIES	 	 	 	 
	8.01

	 	Events of Default
	 	 	73	 
	8.02

	 	Remedies Upon Event of Default
	 	 	76	 
	8.03

	 	Application of Funds
	 	 	76	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE IX.	 	 	 	 
	 

	 	ADMINISTRATIVE AGENT	 	 	 	 
	9.01

	 	Appointment and Authority
	 	 	77	 
	9.02

	 	Rights as a Lender
	 	 	78	 
	9.03

	 	Exculpatory Provisions
	 	 	78	 
	9.04

	 	Reliance by Administrative Agent
	 	 	79	 
	9.05

	 	Delegation of Duties
	 	 	79	 
	9.06

	 	Resignation of Administrative Agent
	 	 	79	 






iii









 






	 	 	 	 	 	 	 
	 	 	Section	 	Page
	9.07

	 	Non-Reliance on Administrative Agent and Other Lenders
	 	 	80	 
	9.08

	 	No Other Duties, Etc
	 	 	80	 
	9.09

	 	Administrative Agent May File Proofs of Claim
	 	 	81	 
	9.10

	 	Guaranteed Cash Management Agreements and Guaranteed Hedge Agreements
	 	 	81	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE X.	 	 	 	 
	 

	 	MISCELLANEOUS	 	 	 	 
	10.01

	 	Amendments, Etc
	 	 	82	 
	10.02

	 	Notices; Effectiveness; Electronic Communication.
	 	 	83	 
	10.03

	 	No Waiver; Cumulative Remedies; Enforcement
	 	 	85	 
	10.04

	 	Expenses; Indemnity; Damage Waiver
	 	 	86	 
	10.05

	 	Payments Set Aside
	 	 	88	 
	10.06

	 	Successors and Assigns
	 	 	88	 
	10.07

	 	Treatment of Certain Information; Confidentiality
	 	 	92	 
	10.08

	 	Right of Setoff
	 	 	93	 
	10.09

	 	Interest Rate Limitation
	 	 	94	 
	10.10

	 	Counterparts; Integration; Effectiveness
	 	 	94	 
	10.11

	 	Survival of Representations and Warranties
	 	 	94	 
	10.12

	 	Severability
	 	 	94	 
	10.13

	 	Replacement of Lenders
	 	 	95	 
	10.14

	 	Governing Law; Jurisdiction; Etc
	 	 	95	 
	10.15

	 	Waiver of Jury Trial
	 	 	96	 
	10.16

	 	No Advisory or Fiduciary Responsibility
	 	 	97	 
	10.17

	 	Electronic Execution of Assignments and Certain Other Documents
	 	 	97	 
	10.18

	 	USA PATRIOT Act Notice
	 	 	97	 
	 
	 	 	 	 	 	 
	SIGNATURES	 	 	S-1	 






iv









 






SCHEDULES




	 	 	 	 	 	 	 
	 

	 	 	2.01	 	 	Commitments and Applicable Percentages
	 

	 	 	5.13	 	 	Subsidiaries; Other Equity Investments
	 

	 	 	7.01	 	 	Existing Liens
	 

	 	 	7.02	 	 	Existing Investments
	 

	 	 	7.03	 	 	Existing Indebtedness
	 

	 	 	7.05	 	 	Permitted Dispositions for Remediation Plans
	 

	 	 	7.09	 	 	Existing Burdensome Agreements
	 

	 	 	10.02	 	 	Administrative Agent’s Office; Certain Addresses for Notices






EXHIBITS




	 	 	 	 	 
	 	 	Form of
	 
	 	 	 	 
	 

	 	A
	 	Revolving Loan Notice
	 

	 	B
	 	Swing Line Loan Notice
	 

	 	C
	 	Note
	 

	 	D
	 	Compliance Certificate
	 

	 	E-1
	 	Assignment and Assumption
	 

	 	E-2
	 	Administrative Questionnaire
	 

	 	F
	 	Guaranty
	 

	 	G-1
	 	Opinion of Gibson, Dunn & Crutcher, LLP
	 

	 	G-2
	 	Opinion of Nossaman LLP







v











 





CREDIT AGREEMENT




     This CREDIT AGREEMENT (this “Agreement”) is entered into as of October 27, 2009, among
CALIFORNIA WATER SERVICE COMPANY, a California corporation (the “Borrower”), each lender
from time to time party hereto (collectively, the “Lenders” and individually, a
“Lender”), and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C
Issuer.



     The Borrower has requested that the Lenders provide a revolving credit facility, and the
Lenders are willing to do so on the terms and conditions set forth herein.



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



ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS




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



     “Acquired Indebtedness” has the meaning specified in Section 7.03(h).



     “Administrative Agent” means Bank of America in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent appointed pursuant to
Section 9.06.



     “Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or account as
the Administrative Agent may from time to time designate in a notice to the Borrower and the
Lenders pursuant to Section 10.02.



     “Administrative Questionnaire” means an Administrative Questionnaire in substantially
the form of Exhibit E-2 or any other form approved by the Administrative Agent.



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



     “Aggregate Commitments” means the Commitments of all the Lenders. As of the Closing
Date, the Aggregate Commitments totaled $250,000,000.



     “Agreement” means this Credit Agreement.



     “Applicable Percentage” means with respect to any Lender at any time, the percentage
(carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s
Commitment at such time. If the commitment of each Lender to make Loans and the obligation of the
L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 or
if the Aggregate Commitments have expired, then the Applicable Percentage of each Lender shall be
determined based on the Applicable Percentage of such Lender most



1









 







recently in effect, giving effect to any subsequent assignments. The initial Applicable
Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or
in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as
applicable.



     “Applicable Rate” means the following percentages per annum, based upon the Total
Capitalization Ratio as set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section 6.02(a):



Applicable Rate




	 	 	 	 	 	 	 	 	 
	 	 	Total	 	Eurodollar Rate	 	 	 	 
	 	 	Capitalization	 	Loans and	 	Base Rate	 	 
	Pricing Level	 	Ratio	 	Letter of Credit Fees	 	Loans	 	Commitment Fee
	1
	 	≤ 40%
	 	1.50%
	 	0.50%
	 	0.250%
	2
	 	> 40% but ≤ 50%
	 	1.75%
	 	0.75%
	 	0.250%
	3
	 	> 50% but ≤ 60%
	 	2.00%
	 	1.00%
	 	0.300%
	4
	 	> 60%
	 	2.25%
	 	1.25%
	 	0.350%






     Any increase or decrease in the Applicable Rate resulting from a change in the Total
Capitalization Ratio shall become effective as of the first Business Day immediately following the
date a Compliance Certificate is delivered pursuant to Section 6.02(a); provided,
however, that if a Compliance Certificate is not delivered when due in accordance with such
Section, then, upon the request of the Required Lenders, Pricing Level 4 shall apply as of the
first Business Day after the date on which such Compliance Certificate was required to have been
delivered and shall remain in effect until the date on which such Compliance Certificate is
delivered. Subject to the preceding sentence, from the Closing Date to the date of the delivery of
the Compliance Certificate for the fiscal quarter ending September 30, 2009, Pricing Level 2 shall
apply.



     Notwithstanding anything to the contrary contained in this definition, the determination of
the Applicable Rate for any period shall be subject to the provisions of Section 2.10(b).



     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.



     “Arranger” means Banc of America Securities LLC, in its capacity as sole lead arranger
and sole book manager.



     “Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.



     “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section 



2









 







10.06(b)), and accepted by the Administrative Agent, in substantially the form of
Exhibit E-1 or any other form approved by the Administrative Agent.



     “Attributable Indebtedness” means, on any date, (a) in respect of any Capital Lease of
any Person, the capitalized amount thereof that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease
Obligation, the capitalized amount of the remaining lease payments under the relevant lease that
would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a Capital Lease.



     “Audited Financial Statements” means the audited consolidated balance sheet of Holdco
and its Subsidiaries for the fiscal year ended December 31, 2008, and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such fiscal year of
Holdco and its Subsidiaries, including the notes thereto.



     “Availability Period” means the period from and including the Closing Date to the
earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments
pursuant to Section 2.06, and (c) the date of termination of the commitment of each Lender
to make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to
Section 8.02.



     “Bank of America” means Bank of America, N.A. and its successors.



     “Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a)
the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly
announced from time to time by Bank of America as its “prime rate,” and (c) the Eurodollar Rate
(determined in accordance with clause (b) of the definition thereof) plus 1.00%. The “prime rate”
is a rate set by Bank of America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate. Any change in
such prime rate announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change.



     “Base Rate Loan” means a Loan that bears interest based on the Base Rate.



     “Base Rate Revolving Loan” means a Revolving Loan that is a Base Rate Loan.



     “Borrower” has the meaning specified in the introductory paragraph hereto.



     “Borrower Materials” has the meaning specified in Section 6.02.



     “Borrowing” means a Revolving Borrowing or a Swing Line Borrowing, as the context may
require.



     “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact closed in, the state
where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate
Loan, means any such day that is also a London Banking Day.



3









 





     “Capital Lease” means any lease of property, real or personal, which is required to be
accounted for and classified as a capital lease in accordance with GAAP.



     “Cash Collateralize” means to pledge and deposit with or deliver to the Administrative
Agent, for the benefit of the L/C Issuer or Swing Line Lender (as applicable) and the Lenders, as
collateral for L/C Obligations, Obligations in respect of Swing Line Loans, or obligations of
Lenders to fund participations in respect of either thereof (as the context may require), cash or
deposit account balances pursuant to documentation in form and substance satisfactory to (a) the
Administrative Agent and (b) the L/C Issuer or the Swing Line Lender (as applicable). “Cash
Collateral” shall have a meaning correlative to the foregoing.



     “Cash Management Agreement” means any agreement to provide cash management services,
including treasury, depository, overdraft, credit or debit card, electronic funds transfer and
other cash management arrangements.



     “Cash Management Bank” means any Person that, (a) at the time it enters into a Cash
Management Agreement, is a Lender or an Affiliate of a Lender, or (b) at the time it (or its
Affiliate) becomes a Lender, is a party to a Cash Management Agreement, in each case in its
capacity as a party to such Cash Management Agreement.



     “Change in Law” means the occurrence, after the date of this Agreement (or, in the
case of a Lender becoming a party hereto after the date of this Agreement, after the date such
Lender becomes a party hereto), of any of the following: (a) the adoption or taking effect of any
law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, guideline or directive (whether or not having the force of law)
by any Governmental Authority.



     “Change of Control” means an event or series of events by which:




     (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or
its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934), directly or indirectly, of
25% or more of the equity securities of Holdco entitled to vote for members of the board of
directors or equivalent governing body of Holdco on a fully-diluted basis (and taking into
account all such securities that such person or group has the right to acquire pursuant to
any option right); or




     (b) Holdco owns less than 100% of the equity interests of the Borrower.



     “Closing Date” means the first date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 10.01.



     “Code” means the Internal Revenue Code of 1986.



4









 





     “Commitment” means, as to each Lender, its obligation to (a) make Revolving Loans to
the Borrower pursuant to Section 2.01, (b) purchase participations in L/C Obligations, and
(c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time
outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as
applicable, as such amount may be adjusted from time to time in accordance with this Agreement.



     “Compliance Certificate” means a certificate substantially in the form of Exhibit
D.



     “Consolidated EBITDA” means, for any period, for Holdco and its Subsidiaries on a
consolidated basis, an amount equal to Consolidated Net Income for such period plus (a) the
following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated
Interest Charges for such period, (ii) the provision for Federal, state, local and foreign income
taxes payable by Holdco and its Subsidiaries for such period, (iii) depreciation and amortization
expense for such period, (iv) other expenses or charges of Holdco and its Subsidiaries reducing
such Consolidated Net Income for such period (including any non-cash stock-based compensation
expense recognized by Holdco) which do not represent a cash item in such period or any future
period, (v) transaction fees, costs and expenses incurred in such period in connection with (1) the
consummation of the transactions contemplated hereby, (2) the issuance of additional mortgage notes
pursuant to the Mortgage Note Documents (whether or not consummated) and (3) any Permitted
Acquisition (whether or not consummated); provided that in no event shall all such fees,
costs and expenses added back pursuant to this clause (v) exceed $10,000,000 in the
aggregate during the term of this Agreement, (vi) the amount of any reduction in such Consolidated
Net Income in accordance with FAS 141R as a result of an “earn-out” or other similar purchase price
adjustment in connection with a Permitted Acquisition prior to the actual cash payments of any such
earn-out or purchase price adjustment, minus (b) the following to the extent included in
calculating such Consolidated Net Income: (i) Federal, state, local and foreign income tax credits
of Holdco and its Subsidiaries for such period and (ii) all non-cash gains and non-cash items
increasing Consolidated Net Income for such period, and minus (c) the amount of any cash
payments in such period in respect of earn-outs or other similar purchase price adjustments,
without duplication of amounts already deducted in calculating Consolidated Net Income for such
period.



     “Consolidated Funded Indebtedness” means, as of any date of determination, for Holdco
and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of
all obligations, whether current or long-term, for borrowed money (including Obligations hereunder)
and the outstanding principal amount of all obligations evidenced by bonds, debentures, notes, loan
agreements or other similar instruments, (b) all purchase money Indebtedness, (c) all direct
obligations arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments (but only, in the case of any
obligations under surety bonds or similar instruments, to the extent the obligations thereunder are
non-contingent matured payment obligations), (d) all obligations in respect of the deferred
purchase price of property or services (other than (i) trade accounts payable and other similar
accrued liabilities incurred in the ordinary course of business, (ii) deferred compensation and
(iii) earn-outs and other contingent purchase price adjustments in respect of acquisitions except
to the extent that the liability on account of such earn-out or



5









 







purchase price adjustment becomes due and payable pursuant to the terms thereof), (e)
Attributable Indebtedness in respect of Capital Leases and Synthetic Lease Obligations, (f) without
duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in
clauses (a) through (e) above of Persons other than Holdco or any Subsidiary, and
(g) all Indebtedness of the types referred to in clauses (a) through (f) above of
any partnership or joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which Holdco or a Subsidiary is a general partner or joint venturer,
unless such Indebtedness is expressly made non-recourse to Holdco or such Subsidiary.



     “Consolidated Interest Charges” means, for any period, for Holdco and its Subsidiaries
on a consolidated basis, the sum of (a) all interest, premium payments, debt discount, fees,
charges and related expenses of Holdco and its Subsidiaries in connection with borrowed money
(including capitalized interest) or in connection with the deferred purchase price of assets, in
each case to the extent treated as interest in accordance with GAAP, and (b) the portion of rent
expense of Holdco and its Subsidiaries with respect to such period under Capital Leases that is
treated as interest in accordance with GAAP.



     “Consolidated Interest Coverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated EBITDA for the period of the four consecutive fiscal quarters ending on
such date to (b) Consolidated Interest Charges for such period.



     “Consolidated Net Income” means, for any period, for Holdco and its Subsidiaries on a
consolidated basis, the net income of Holdco and its Subsidiaries (excluding extraordinary gains
and extraordinary losses) for that period determined in accordance with GAAP.



     “Consolidated Net Worth” means, as of any date of determination, for Holdco and its
Subsidiaries on a consolidated basis, consolidated total assets (including leaseholds and leasehold
improvements and reserves against assets) minus total liabilities, including but not
limited to accrued and undeferred income taxes as of that date determined in accordance with GAAP.



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



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



     “CPUC” means the California Public Utilities Commission.



     “Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit
Extension.



     “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the



6









 







United States or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.



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



     “Default Rate” means (a) when used with respect to Obligations other than Letter of
Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if
any, applicable to Base Rate Loans plus (iii) 2% per annum; provided,
however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest
rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan
plus 2% per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the
Applicable Rate plus 2% per annum.



     “Defaulting Lender” means any Lender that, as determined by the Administrative Agent,
(a) has failed to perform its obligation to fund any portion of its Loans (or participations in
respect of Letters of Credit or Swing Line Loans) within three Business Days of the date required
to be funded by it hereunder, unless such obligation is the subject of a good faith dispute, (b)
has 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 that it does not intend to comply with its funding obligations under this Agreement or
generally under other agreements in which it commits to extend credit, (c) has failed, within three
Business Days after written request by the Administrative Agent, to confirm in a manner
satisfactory to the Administrative Agent, the Swing Line Lender and the L/C Issuer that it will
comply with the terms of this Agreement relating to its obligations to fund prospective Loans (or
participations in respect of Letters of Credit or Swing Line Loans), (d) otherwise has failed to
pay over to the Administrative Agent or any other Lender any other amount required to be paid by it
hereunder within three Business Days of the date when due, unless the subject of a good faith
dispute, or (e) has, or has a direct or indirect parent company that has, (i) become the subject of
a proceeding under any Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with reorganization or liquidation
of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or appointment;
provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership
or acquisition of any equity interest in such Lender or any direct or indirect parent company
thereof by a Governmental Authority. A Lender that has become a Defaulting Lender because of an
event referenced in this definition may cure such status and shall no longer constitute a
Defaulting Lender as provided in the last paragraph of Section 2.16.



     “Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by any Person, including
any sale, assignment, transfer or other disposal, with or without recourse, of any notes or
accounts receivable or any rights and claims associated therewith; provided that “Disposition”
shall not include the issuance of Equity Interests by the Borrower.



     “Dollar” and “$” mean lawful money of the United States.



7









 





     “Eligible Assignee” means any Person that meets the requirements to be an assignee
under Section 10.06(b)(iii) and (v) (subject to such consents, if any, as may be
required under Section 10.06(b)(iii)).



     “Environmental Laws” means any and all Federal, state, local, and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including those
related to hazardous substances or wastes, air emissions and discharges to waste or public systems.



     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower or any of its Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.



     “Equity Interests” means, with respect to any Person, all of the shares of capital
stock of (or other ownership or profit interests in) such Person, all of the warrants, options or
other rights for the purchase or acquisition from such Person of shares of capital stock of (or
other ownership or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person
or warrants, rights or options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are outstanding on any date of
determination.



     “ERISA” means the Employee Retirement Income Security Act of 1974.



     “ERISA Affiliate” means any trade or business (whether or not incorporated) under
common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the
Code).



     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e)
of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a termination under
Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a



8









 







trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.



     “Eurodollar Rate” means



     (a) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal
to (i) the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters
(or such other commercially available source providing quotations of BBA LIBOR as may be designated
by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two London
Banking Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery
on the first day of such Interest Period) with a term equivalent to such Interest Period, or (ii)
if such rate is not available at such time for any reason, the rate per annum determined by the
Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of
such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being
made, continued or converted and with a term equivalent to such Interest Period would be offered by
Bank of America’s London Branch to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two London Banking Days prior to the commencement
of such Interest Period; and



     (b) for any interest calculation with respect to a Base Rate Loan on any date, the rate per
annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London time determined two London
Banking Days prior to such date for Dollar deposits being delivered in the London interbank market
for a term of one month commencing that day or (ii) if such published rate is not available at such
time for any reason, the rate per annum determined by the Administrative Agent to be the rate at
which deposits in Dollars for delivery on the date of determination in same day funds in the
approximate amount of the Base Rate Loan being made or maintained with a term equal to one month
would be offered by Bank of America’s London Branch to major banks in the London interbank
Eurodollar market at their request at the date and time of determination.



     “Eurodollar Rate Loan” means a Revolving Loan that bears interest at a rate based on
clause (a) of the definition of “Eurodollar Rate.”



     “Event of Default” has the meaning specified in Section 8.01.



     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the L/C
Issuer or any other recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the Laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which its applicable
Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar
tax imposed by any other jurisdiction in which the Borrower is located, (c) any backup withholding
tax that is required by the Code to be withheld from amounts payable to a Lender that has failed to
comply with clause (A) of Section 3.01(e)(ii), and (d) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under Section 10.13),
any United States



9









 







withholding tax that (i) is required to be imposed on amounts payable to such Foreign Lender
pursuant to the Laws in force at the time such Foreign Lender becomes a party hereto (or designates
a new Lending Office) or (ii) is attributable to such Foreign Lender’s failure or inability (other
than as a result of a Change in Law) to comply with clause (B) of Section
3.01(e)(ii), except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new Lending Office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to Section
3.01(a)(ii) or (iii).



     “Existing Loan Agreement” means that certain Loan Agreement dated as of May 30, 2007,
between Bank of America and the Borrower.



     “FASB ASC” means the Accounting Standards Codification of the Financial Accounting
Standards Board.



     “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided that (a) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by the Administrative
Agent.



     “Fee Letter” means the letter agreement, dated August 31, 2009, among the Borrower,
Holdco, the Administrative Agent and the Arranger.



     “Foreign Lender” means any Lender that is organized under the Laws of a jurisdiction
other than that in which the Borrower is resident for tax purposes (including such a Lender when
acting in the capacity of the L/C Issuer). For purposes of this definition, the United States,
each State thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.



     “FRB” means the Board of Governors of the Federal Reserve System of the United States.



     “Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect
to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding L/C
Obligations other than L/C Obligations as to which (i) such Defaulting Lender’s participation
obligation has been reallocated pursuant to Section 2.16(d), or (ii) Cash Collateral or
other credit support acceptable to the L/C Issuer shall have been provided in accordance with
Section 2.03, and (b) with respect to the Swing Line Lender, such Defaulting Lender’s
Applicable Percentage of Swing Line Loans other than Swing Line Loans as to which (i) such
Defaulting Lender’s participation obligation has been reallocated pursuant to Section
2.16(d), or (ii) Cash Collateral or other credit support acceptable to the Swing Line Lender
shall have been provided in accordance with Section 2.04.



10









 





     “Fund” means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its activities.



     “GAAP” means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the circumstances as of the date
of determination, consistently applied.



     “Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or the European Central
Bank).



     “Guarantee” means, as to any Person, any (a) any obligation, contingent or otherwise,
of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation payable or performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Indebtedness or other obligation of the payment or
performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in
respect of such Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any
assets of such Person securing any Indebtedness or other obligation of any other Person, whether or
not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or
otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.



     “Guaranteed Cash Management Agreement” means any Cash Management Agreement that is
entered into by and between the Borrower and any Cash Management Bank.



     “Guaranteed Hedge Agreement” means any Swap Contract permitted under Article
VII that is entered into by and between the Borrower and any Hedge Bank.



11









 





     “Guaranteed Parties” means, collectively, the Administrative Agent, the Lenders, the
L/C Issuer, the Hedge Banks, the Cash Management Banks, and each co-agent or sub-agent appointed by
the Administrative Agent from time to time pursuant to Section 9.05.



     “Guaranty” means the Guaranty made by Holdco in favor of the Administrative Agent and
the Guaranteed Parties, substantially in the form of Exhibit F.



     “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.



     “Hedge Bank” means any Person that, (a) at the time it enters into a Swap Contract
permitted under Article VI or VII, is a Lender or an Affiliate of a Lender, or (b)
at the time it (or its Affiliate) becomes a Lender, is a party to a Swap Contract, in each case in
its capacity as a party to such Swap Contract.



     “Holdco” means California Water Service Group, a Delaware corporation.



     “Holdco Credit Agreement” means that certain Credit Agreement dated as of the date
hereof among Holdco, certain subsidiaries of Holdco, Bank of America, as Administrative Agent,
Swing Line Lender and L/C Issuer and the lenders from time to time party thereto.



     “Holdco Credit Commitment” means, as to each Lender, its obligation to make loans and
extend credit under the Holdco Credit Agreement.



     “Indebtedness” means, as to any Person at a particular time, without duplication, all
of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:




     (a) the principal amount of all obligations of such Person for borrowed money and the
principal amount of all obligations of such Person evidenced by bonds, debentures, notes,
loan agreements or other similar instruments;




     (b) all direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and
similar instruments;




     (c) net obligations of such Person under any Swap Contract;




     (d) all obligations of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable and other similar accrued liabilities incurred
in the ordinary course of business and deferred compensation);




     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness arising under conditional
sales or other title retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;



12









 






     (f) Capital Leases and Synthetic Lease Obligations;




     (g) all non-contingent mandatory payment obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in
such Person valued, in the case of a redeemable preferred interest, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid dividends;
and




     (h) all Guarantees of such Person in respect of any of the foregoing.



     For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture (other than a joint venture that is itself a corporation or limited
liability company) in which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under
any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such
date. The amount of any Capital Lease or Synthetic Lease Obligation as of any date shall be deemed
to be the amount of Attributable Indebtedness in respect thereof as of such date.



     “Indemnified Taxes” means Taxes other than Excluded Taxes.



     “Indemnitees” has the meaning specified in Section 10.04(b).



     “Information” has the meaning specified in Section 10.07.



     “Initial Opinion” has the meaning specified in Section 4.01(a)(v).



     “Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan, the
last day of each Interest Period applicable to such Loan and the Maturity Date; provided,
however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the
respective dates that fall every three months after the beginning of such Interest Period shall
also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the
first Business Day after the end of each March, June, September and December and the Maturity Date.



     “Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the
date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan
and ending on the date one, two, three or six months thereafter, or such other period that is
twelve months or less requested by the Borrower and consented to by all the Lenders, as selected by
the Borrower in its Revolving Loan Notice; provided that:




     (i) any Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next preceding
Business Day;




     (ii) 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



13









 







month at the end of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and




     (iii) no Interest Period shall extend beyond the Maturity Date.



     “Investment” means, as to any Person, any direct or indirect acquisition or investment
by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other
securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt or equity participation
or interest in, another Person, including any partnership or joint venture interest in such other
Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other
Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit. For purposes of covenant compliance,
the amount of any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.



     “IP Rights” has the meaning specified in Section 5.17.



     “IRS” means the United States Internal Revenue Service.



     “ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such
later version thereof as may be in effect at the time of issuance).



     “Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit
Application, and any other document, agreement and instrument entered into by the L/C Issuer and
the Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to such Letter of
Credit.



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



     “L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable Percentage.



     “L/C Borrowing” means an extension of credit resulting from a drawing under any Letter
of Credit which has not been reimbursed on the date when made or refinanced as a Revolving
Borrowing.



     “L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount thereof.



14









 





     “L/C Issuer” means Bank of America in its capacity as issuer of Letters of Credit
hereunder, or any successor issuer of Letters of Credit hereunder.



     “L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available
to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be
deemed to be “outstanding” in the amount so remaining available to be drawn.



     “Lender” has the meaning specified in the introductory paragraph hereto and, as the
context requires, includes the Swing Line Lender.



     “Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other office or offices as
a Lender may from time to time notify the Borrower and the Administrative Agent.



     “Letter of Credit” means any standby letter of credit issued hereunder.



     “Letter of Credit Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.



     “Letter of Credit Expiration Date” means the day that is seven days prior to the
Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business
Day).



     “Letter of Credit Fee” has the meaning specified in Section 2.03(h).



     “Letter of Credit Sublimit” means an amount equal to the lesser of (a) $25,000,000 and
(b) the Aggregate Commitments. The Letter of Credit Sublimit is part of, and not in addition to,
the Aggregate Commitments.



     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest
or preferential arrangement in the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any easement, right of way or
other encumbrance on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).



     “Loan” means an extension of credit by a Lender to the Borrower under Article
II in the form of a Revolving Loan or a Swing Line Loan.



     “Loan Documents” means this Agreement, each Note, each Issuer Document, any agreement
creating or perfecting rights in Cash Collateral or other credit support pursuant to the provisions
of Section 2.15, the Fee Letter and the Guaranty.



     “Loan Parties” means, collectively, the Borrower and Holdco.



15









 





     “London Banking Day” means any day on which dealings in Dollar deposits are conducted
by and between banks in the London interbank eurodollar market.



     “Margin Stock” means “margin stock” as such term is defined in Regulation T, U or X of
the FRB.



     “Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual or contingent) or
condition (financial or otherwise) of the Borrower, the Borrower and its Subsidiaries taken as a
whole, Holdco or Holdco and its Subsidiaries taken as a whole; (b) a material impairment of the
ability of any Loan Party to perform its obligations under any Loan Document to which it is a
party; or (c) a material adverse effect upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document to which it is a party.



     “Material Subsidiary” means each Subsidiary that (i) has total assets equal to or
greater than five percent (5%) of total assets of the Borrower and its Subsidiaries (calculated on
a consolidated basis as of the most recent fiscal period for which financial statements are
available), or (ii) has revenues equal to or greater than five percent (5%) of the total revenues
of the Borrower and its Subsidiaries (calculated on a consolidated basis for the most recent period
for which financial statements are available).



     “Maturity Date” means the earlier of (a) October 27, 2012 and (b) the date on which
the aggregate Holdco Credit Commitments are terminated pursuant to the terms of the Holdco Credit
Agreement.



     “Mortgage Note Documents” means (a) the Indenture dated as of April 1, 1928 between
the Borrower and Los Angeles-First National Trust & Savings Bank, as original Trustee (and
currently U.S. Bank National Association, as the successor Trustee thereunder), (b) any and all
notes issued pursuant thereto, and (c) any purchase or exchange agreements executed in connection
with either of the foregoing.



     “Mortgaged Property” has the meaning specified in Section 7.01(q).



     “Multiemployer Plan” means any employee benefit plan of the type described in Section
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been obligated to make
contributions.



     “Note” means a promissory note made by the Borrower in favor of a Lender evidencing
Loans made by such Lender, substantially in the form of Exhibit C.



     “Obligations” means all advances to, and debts, liabilities, obligations, covenants
and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any
Loan, Letter of Credit, Guaranteed Cash Management Agreement or Guaranteed Hedge Agreement, in each
case whether direct or indirect (including those acquired by assumption), absolute or contingent,
due or to become due, now existing or hereafter arising and including interest and fees that accrue
after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding
under any Debtor Relief Laws naming such Person as the



16









 







debtor in such proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.



     “Organization Documents” means, (a) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents
with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement; and (c) with respect
to any partnership, joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of its formation or organization and, if
applicable, any certificate or articles of formation or organization of such entity.



     “Other Taxes” means 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
under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.



     “Outstanding Amount” means (i) with respect to Revolving Loans and Swing Line Loans on
any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings
and prepayments or repayments of such Revolving Loans and Swing Line Loans, as the case may be,
occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of
such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements by the Borrower of Unreimbursed Amounts.



     “Participant” has the meaning specified in Section 10.06(d).



     “PBGC” means the Pension Benefit Guaranty Corporation.



     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and
is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any
ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.



     “Permitted Acquisition” means any purchase or acquisition of Equity Interests or
property permitted by Section 7.02(g).



     “Permitted Lien” means any Lien permitted by Section 7.01.



     “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.



17









 





     “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412
of the Code or Title IV of ERISA, any ERISA Affiliate.



     “Platform” has the meaning specified in Section 6.02.



     “Public Lender” has the meaning specified in Section 6.02.



     “Refunded Obligation” has the meaning specified in Section 4.02(d).



     “Register” has the meaning specified in Section 10.06(c).



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



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



     “Request for Credit Extension” means (a) with respect to a Borrowing, conversion or
continuation of Revolving Loans, a Revolving Loan Notice, (b) with respect to an L/C Credit
Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line
Loan Notice.



     “Required Lenders” means, as of any date of determination, Lenders having more than
50% of the Aggregate Commitments or, if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to
Section 8.02, Lenders holding in the aggregate more than 50% of the Total Outstandings
(with the aggregate amount of each Lender’s risk participation and funded participation in L/C
Obligations and Swing Line Loans being deemed “held” by such Lender for purposes of this
definition); provided that the Commitment of, and the portion of the Total Outstandings
held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.



     “Responsible Officer” means the chief executive officer, president, chief financial
officer, treasurer, assistant treasurer, controller or assistant to the chief financial officer of
a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Loan Party and such Responsible Officer shall
be conclusively presumed to have acted on behalf of such Loan Party.



     “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity Interest of the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on
account of any return of capital to the Borrower’s stockholders, partners or members (or the
equivalent Person thereof).



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     “Revolving Borrowing” means a borrowing consisting of simultaneous Revolving Loans of
the same Type, and, in the case of Eurodollar Rate Loans, having the same Interest Period made by
each of the Lenders pursuant to Section 2.01.



     “Revolving Loan” has the meaning specified in Section 2.01.



     “Revolving Loan Notice” means a notice of (a) a Revolving Borrowing, (b) a conversion
of Revolving Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans,
pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of
Exhibit A.



     “SEC” means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.



     “Subsidiary” of a Person means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other governing body (other
than securities or interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise controlled, directly,
or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary
or Subsidiaries of the Borrower.



     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions, interest
rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.



     “Swap Termination Value” means, in respect of any one or more Swap Contracts, after
taking into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or
other readily available quotations provided by any recognized dealer in such Swap Contracts (which
may include a Lender or any Affiliate of a Lender).



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     “Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section
2.04.



     “Swing Line Lender” means Bank of America in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.



     “Swing Line Loan” has the meaning specified in Section 2.04(a).



     “Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of Exhibit
B.



     “Swing Line Sublimit” means an amount equal to the lesser of (a) $15,000,000 and (b)
the Aggregate Commitments. The Swing Line Sublimit is part of, and not in addition to, the
Aggregate Commitments.



     “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or
possession of property creating obligations that do not appear on the balance sheet of such Person
but which, upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).



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



     “Threshold Amount” means $10,000,000.



     “Total Capitalization Ratio” means, as of any date of determination, the ratio of (a)
Consolidated Funded Indebtedness as of such date to (b) the sum of (i) Consolidated Net Worth plus
(ii) Consolidated Funded Indebtedness as of such date.



     “Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C
Obligations.



     “Type” means, with respect to a Revolving Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.



     “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets,
determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section
412 of the Code for the applicable plan year.



     “United States” and “U.S.” mean the United States of America.



     “Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).



     1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan
Document, unless otherwise specified herein or in such other Loan Document:



20









 






     (a) The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase
“without limitation.” The word “will” shall be construed to have the same meaning
and effect as the word “shall.” Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set forth herein or in any
other Loan Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein,” “hereof” and
“hereunder,” and words of similar import when used in any Loan Document, shall be
construed to refer to such Loan Document in its entirety and not to any particular provision
thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, the Loan Document in which such references appear, (v) any reference to any
law shall include all statutory and regulatory provisions consolidating, amending, replacing
or interpreting such law and any reference to any law or regulation shall, unless otherwise
specified, refer to such law or regulation as amended, modified or supplemented from time to
time, and (vi) the words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.




     (b) In the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means
“to and including.”




     (c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this Agreement or
any other Loan Document.



     1.03 Accounting Terms. (a) Generally. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted pursuant to this
Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing the Audited Financial
Statements, except as otherwise specifically prescribed herein. Notwithstanding the
foregoing, for purposes of determining compliance with any covenant (including the computation of
any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries or
Holdco and its Subsidiaries, as applicable, shall be deemed to be carried at 100% of the
outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on
financial liabilities shall be disregarded.



     (b) Changes in GAAP. If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or
the Required Lenders shall so request, the Administrative Agent, the Lenders and



21









 







the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval of the Required
Lenders); provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower
shall provide to the Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and after giving effect to such
change in GAAP.



     (c) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of Holdco and its Subsidiaries or to the determination of any
amount for the Borrower and its Subsidiaries or Holdco and its Subsidiaries, as applicable, on a
consolidated basis or any similar reference shall, in each case, be deemed to include each variable
interest entity that the Borrower or Holdco, respectively, is required to consolidate pursuant to
FASB ASC 810 as if such variable interest entity were a Subsidiary as defined herein
(provided that such entity shall not be deemed to be a Subsidiary hereunder for any other
purpose).



     1.04 Rounding. Any financial ratios required to be maintained by Holdco pursuant to this
Agreement shall be calculated by dividing the appropriate component by the other component,
carrying the result to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a rounding-up if there is no
nearest number).



     1.05 Times of Day. Unless otherwise specified, all references herein to times of day shall be
references to Pacific time (daylight or standard, as applicable).



     1.06 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of
Credit at any time shall be deemed to be the amount available to be drawn under such Letter of
Credit at such time; provided, however, that with respect to any Letter of Credit
that, by its terms or the terms of any Issuer Document related thereto, provides for one or more
automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be
deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.



ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS




     2.01 Revolving Loans. Subject to the terms and conditions set forth herein, each Lender
severally agrees to make loans (each such loan, a “Revolving Loan”) to the Borrower from
time to time, on any Business Day during the Availability Period, in an aggregate amount not to
exceed at any time outstanding the amount of such Lender’s Commitment; provided,
however, that after giving effect to any Revolving Borrowing, (i) the Total Outstandings
shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the
Revolving Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding
Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lender’s Commitment. Within the limits of
each Lender’s Commitment, and subject to the other terms and conditions hereof (including



22









 







Section 2.07 herein), the Borrower may borrow under this Section 2.01, prepay
under Section 2.05, and reborrow under this Section 2.01. Revolving Loans may be
Base Rate Loans or Eurodollar Rate Loans, as further provided herein.



     2.02 Borrowings, Conversions and Continuations of Revolving Loans.



     (a) Each Revolving Borrowing, each conversion of Revolving Loans from one Type to the other,
and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice
to the Administrative Agent, which may be given by telephone. Each such notice must be received by
the Administrative Agent not later than 10:00 a.m. (i) three Business Days prior to the requested
date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any
conversion of Eurodollar Rate Loans to Base Rate Revolving Loans, and (ii) on the requested date of
any Borrowing of Base Rate Revolving Loans. Each telephonic notice by the Borrower pursuant to
this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of
a written Revolving Loan Notice, appropriately completed and signed by a Responsible Officer of the
Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as
provided in Sections 2.03(c) and 2.04(c), each Revolving Borrowing of or conversion
to Base Rate Revolving Loans shall be in a principal amount of $1,000,000 or a whole multiple
thereof. Each Revolving Loan Notice (whether telephonic or written) shall specify (i) whether the
Borrower is requesting a Revolving Borrowing, a conversion of Revolving Loans from one Type to the
other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal
amount of Revolving Loans to be borrowed, converted or continued, (iv) the Type of Revolving Loans
to be borrowed or to which existing Revolving Loans are to be converted, and (v) if applicable, the
duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of
Revolving Loan in a Revolving Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Revolving Loans shall be made as, or
converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective
as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar
Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar
Rate Loans in any such Revolving Loan Notice, but fails to specify an Interest Period, it will be
deemed to have specified an Interest Period of one month.



     (b) Following receipt of a Revolving Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Applicable Percentage of the applicable Revolving Loans,
and if no timely notice of a conversion or continuation is provided by the Borrower, the
Administrative Agent shall notify each Lender of the details of any automatic conversion to Base
Rate Loans as described in the preceding subsection. In the case of a Revolving Borrowing, each
Lender shall make the amount of its Revolving Loan available to the Administrative Agent in
immediately available funds at the Administrative Agent’s Office not later than 12:00 noon on the
Business Day specified in the applicable Revolving Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial
Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received
available to the Borrower in like funds as received by the Administrative Agent either by (i)
crediting the account of the Borrower on the books of Bank of America with the amount of



23









 







such funds or (ii) wire transfer of such funds, in each case in accordance with instructions
provided to (and reasonably acceptable to) the Administrative Agent by the Borrower;
provided, however, that if, on the date the Revolving Loan Notice with respect to
such Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then the proceeds of
such Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings,
and, second, shall be made available to the Borrower as provided above.



     (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted
only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of
a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without
the consent of the Required Lenders.



     (d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of
such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent
shall notify the Borrower and the Lenders of any change in Bank of America’s prime rate used in
determining the Base Rate promptly following the public announcement of such change.



     (e) After giving effect to all Revolving Borrowings, all conversions of Revolving Loans from
one Type to the other, and all continuations of Revolving Loans as the same Type, there shall not
be more than ten Interest Periods in effect with respect to Revolving Loans.



     2.03 Letters of Credit.



     (a) The Letter of Credit Commitment.




     (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in
reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from
time to time on any Business Day during the period from the Closing Date until the Letter of
Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or its
Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in
accordance with subsection (b) below, and (2) to honor drawings under the Letters of
Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for
the account of the Borrower or its Subsidiaries and any drawings thereunder;
provided that after giving effect to any L/C Credit Extension with respect to any
Letter of Credit, (x) the Total Outstandings shall not exceed the Aggregate Commitments, (y)
the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations,
plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount of the L/C
Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower
for the issuance or amendment of a Letter of Credit shall be deemed to be a representation
by the Borrower that the L/C Credit Extension so requested complies with the conditions set
forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to
the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be
fully revolving, and accordingly the Borrower may, during the



24









 







foregoing period, obtain Letters of Credit to replace Letters of Credit that have
expired or that have been drawn upon and reimbursed.




     (ii) The L/C Issuer shall not issue any Letter of Credit, if:




     (A) subject to Section 2.03(b)(iii), the expiry date of such requested
Letter of Credit would occur more than twelve months after the date of issuance or
last extension, unless the Required Lenders have approved such expiry date and the
Administrative Agent shall have been furnished with satisfactory evidence (including
a satisfactory opinion of regulatory counsel reasonably acceptable to the
Administrative Agent, which opinion is additional to and not included within the
Initial Opinion) that all required approvals from the CPUC have been obtained; or




     (B) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such expiry
date and the Administrative Agent shall have been furnished with satisfactory
evidence (including a satisfactory opinion of regulatory counsel reasonably
acceptable to the Administrative Agent, which opinion is additional to and not
included within the Initial Opinion) that all required approvals from the CPUC have
been obtained.




     (iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit
if:




     (A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such
Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental Authority
with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer
refrain from, the issuance of letters of credit generally or such Letter of Credit
in particular or shall impose upon the L/C Issuer with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the L/C Issuer is
not otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good faith deems material
to it;




     (B) the issuance of such Letter of Credit would violate one or more policies of
the L/C Issuer applicable to letters of credit generally;




     (C) except as otherwise agreed by the Administrative Agent and the L/C Issuer,
such Letter of Credit is in an initial stated amount less than $250,000;




     (D) such Letter of Credit is to be denominated in a currency other than
Dollars; or




25












 






     (E) any Lender is at such time a Defaulting Lender, unless the L/C Issuer has
entered into arrangements satisfactory to the L/C Issuer (in its sole discretion)
with the Borrower or such Lender to eliminate the L/C Issuer’s actual or potential
Fronting Exposure with respect to such Lender as to either the Letter of Credit then
proposed to be issued or such Letter of Credit and all other L/C Obligations as to
which the L/C Issuer has such actual or potential risk, as it may elect in its sole
discretion.




     (iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be
permitted at such time to issue such Letter of Credit in its amended form under the terms
hereof.




     (v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A)
the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its
amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does
not accept the proposed amendment to such Letter of Credit.




     (vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith, and the L/C Issuer shall have
all of the benefits and immunities (A) provided to the Administrative Agent in Article
IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents
pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used
in Article IX included the L/C Issuer with respect to such acts or omissions, and
(B) as additionally provided herein with respect to the L/C Issuer.



     (b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of
Credit.




     (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative
Agent) in the form of a Letter of Credit Application, appropriately completed and signed by
a Responsible Officer of the Borrower. Such Letter of Credit Application must be received
by the L/C Issuer and the Administrative Agent not later than 10:00 a.m. at least two
Business Days (or such later date and time as the Administrative Agent and the L/C Issuer
may agree in a particular instance in their sole discretion) prior to the proposed issuance
date or date of amendment, as the case may be. In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and
detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested
Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry
date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the
purpose and nature of the requested Letter of Credit; and (H) such other matters as the L/C
Issuer may require. In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Application shall specify in form
and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B)
the



26









 







proposed date of amendment thereof (which shall be a Business Day); (C) the nature of
the proposed amendment; and (D) such other matters as the L/C Issuer may require.
Additionally, the Borrower shall furnish to the L/C Issuer and the Administrative Agent such
other documents and information pertaining to such requested Letter of Credit issuance or
amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may
require.




     (ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will
confirm with the Administrative Agent (by telephone or in writing) that the Administrative
Agent has received a copy of such Letter of Credit Application from the Borrower and, if
not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the
L/C Issuer has received written notice from any Lender, the Administrative Agent or the
Borrower, at least one Business Day prior to the requested date of issuance or amendment of
the applicable Letter of Credit, that one or more applicable conditions contained in
Article IV shall not then be satisfied, then, subject to the terms and conditions
hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the
account of the Borrower (or the applicable Subsidiary) or enter into the applicable
amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and
customary business practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase
from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the
product of such Lender’s Applicable Percentage times the amount of such Letter of
Credit.




     (iii) If the Borrower so requests in any applicable Letter of Credit Application, the
L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that
has automatic extension provisions (each, an “Auto-Extension Letter of
Credit”); provided that any such Auto-Extension Letter of Credit must permit the
L/C Issuer to prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior notice to
the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in
each such twelve-month period to be agreed upon at the time such Letter of Credit is issued;
provided further, that the Borrower shall not request any Auto-Extension
Letter of Credit hereunder until it shall have first furnished satisfactory evidence
(including a satisfactory opinion of regulatory counsel reasonably acceptable to the
Administrative Agent, which opinion is additional to and not included within the Initial
Opinion) that all required approvals from the CPUC have been obtained. Unless otherwise
directed by the L/C Issuer, the Borrower shall not be required to make a specific request to
the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been
issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer
to permit the extension of such Letter of Credit at any time to an expiry date not later
than the Letter of Credit Expiration Date; provided, however, that the L/C
Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it
would not be permitted, or would have no obligation, at such time to issue such Letter of
Credit in its
revised form (as extended) under the terms hereof (by reason of the provisions of
clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has
received notice (which may be by telephone or in writing) on or before the day that is seven
Business Days before the



27









 







Non-Extension Notice Date (1) from the Administrative Agent that
the Required Lenders have elected not to permit such extension or (2) from the
Administrative Agent, any Lender or the Borrower that one or more of the applicable
conditions specified in Section 4.02 is not then satisfied, and in each such case
directing the L/C Issuer not to permit such extension.




     (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter
of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C
Issuer will also deliver to the Borrower and the Administrative Agent a true and complete
copy of such Letter of Credit or amendment.



     (c) Drawings and Reimbursements; Funding of Participations.




     (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and the
Administrative Agent thereof. Not later than 10:00 a.m. on the date of any payment by the
L/C Issuer under a Letter of Credit (or 10:00 a.m. on the following Business Day in the
event the L/C Issuer fails to notify the Borrower of any such payment by 9:00 a.m. on the
date of any such payment) (each such date, an “Honor Date”), the Borrower shall
reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount
of such drawing. If the Borrower fails to so reimburse the L/C Issuer by such time, the
Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Lender’s
Applicable Percentage thereof. In such event, the Borrower shall be deemed to have
requested a Revolving Borrowing of Base Rate Loans to be disbursed on the Honor Date in an
amount equal to the Unreimbursed Amount, without regard to the minimum and multiples
specified in Section 2.02 for the principal amount of Base Rate Loans, but subject
to the amount of the unutilized portion of the Aggregate Commitments and the conditions set
forth in Section 4.02 (other than the delivery of a Revolving Loan Notice). Any
notice given by the L/C Issuer or the Administrative Agent pursuant to this Section
2.03(c)(i) may be given by telephone if immediately confirmed in writing;
provided that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.




     (ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make
funds available (including for this purpose the application of available Cash Collateral and
other credit support provided pursuant to Section 2.03(a)(iii)(E)) to the
Administrative Agent for the account of the L/C Issuer at the Administrative Agent’s Office
in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than
12:00 noon on the Business Day specified in such notice by the Administrative Agent,
whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that so
makes funds available shall be deemed to have made a Base Rate Revolving Loan to the
Borrower in such amount. The Administrative Agent shall remit the funds so received to
the L/C Issuer.




     (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Revolving Borrowing of Base Rate Loans because the conditions set forth in Section



28









 







4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have
incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that
is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with
interest) and shall bear interest at the Default Rate. In such event, each Lender’s payment
to the Administrative Agent for the account of the L/C Issuer pursuant to Section
2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.03.




     (iv) Until each Lender funds its Revolving Loan or L/C Advance pursuant to this
Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of
Credit, interest in respect of such Lender’s Applicable Percentage of such amount shall be
solely for the account of the L/C Issuer.




     (v) Each Lender’s obligation to make Revolving Loans or L/C Advances to reimburse the
L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section
2.03(c), shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right
which such Lender may have against the L/C Issuer, the Borrower, any Subsidiary or any other
Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Revolving Loans
pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrower of a Revolving Loan Notice). No
such making of an L/C Advance shall relieve or otherwise impair the obligation of the
Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer
under any Letter of Credit, together with interest as provided herein.




     (vi) If any Lender fails to make available to the Administrative Agent for the account
of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.03(c) by the time specified in Section
2.03(c)(ii), then without limiting the other provisions of this Agreement, the L/C
Issuer shall be entitled to recover from such Lender (acting through the Administrative
Agent), on demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available to the L/C
Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate
determined by the L/C Issuer in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees customarily charged by the
L/C Issuer in connection with the foregoing. If such Lender pays such amount (with interest
and fees as aforesaid), the amount so paid shall constitute such Lender’s Revolving Loan
included in the relevant Revolving Borrowing or L/C Advance in respect of the relevant L/C
Borrowing, as the case may be. A certificate of the L/C Issuer submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing under this clause
(vi) shall be conclusive absent manifest error.



29









 





     (d) Repayment of Participations.




     (i) At any time after the L/C Issuer has made a payment under any Letter of Credit and
has received from any Lender such Lender’s L/C Advance in respect of such payment in
accordance with Section 2.03(c), if the Administrative Agent receives for the
account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or
interest thereon (whether directly from the Borrower or otherwise, including proceeds of
Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Lender its Applicable Percentage thereof in the same funds as those
received by the Administrative Agent.




     (ii) If any payment received by the Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the
circumstances described in Section 10.05 (including pursuant to any settlement
entered into by the L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Applicable Percentage thereof on
demand of the Administrative Agent, plus interest thereon from the date of such demand to
the date such amount is returned by such Lender, at a rate per annum equal to the Federal
Funds Rate from time to time in effect. The obligations of the Lenders under this clause
shall survive the payment in full of the Obligations and the termination of this Agreement.



     (e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:




     (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or
any other Loan Document;




     (ii) the existence of any claim, counterclaim, setoff, defense or other right that the
Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of
such Letter of Credit (or any Person for whom any such beneficiary or any such transferee
may be acting), the L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement
or instrument relating thereto, or any unrelated transaction;




     (iii) any draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing under such
Letter of Credit;




     (iv) any payment by the L/C Issuer under such Letter of Credit against presentation of
a draft or certificate that does not strictly comply with the terms of such Letter of
Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any



30









 







beneficiary
or any transferee of such Letter of Credit, including any arising in connection with any
proceeding under any Debtor Relief Law; or




     (v) any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or any Subsidiary.



     The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto
that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s
instructions or other irregularity, the Borrower will immediately notify the L/C Issuer. The
Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.



     (f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly required by the Letter
of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of the L/C Issuer, the
Administrative Agent, any of their respective Related Parties nor any correspondent, participant or
assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document
or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all
risks of the acts or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to, and
shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, the
Administrative Agent, any of their respective Related Parties nor any correspondent, participant or
assignee of the L/C Issuer shall be liable or responsible for any of the matters described in
clauses (i) through (v) of Section 2.03(e); provided,
however, that Section 2.03(e) to the contrary notwithstanding, the Borrower may
have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by the L/C Issuer’s willful
misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly
complying with the terms and conditions of a Letter of Credit. In furtherance and not in
limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any notice or information to
the contrary, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or purporting to transfer
or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason.



     (g) Applicability of ISP. Unless otherwise expressly agreed by the L/C Issuer and the
Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each Letter of
Credit.



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     (h) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage a Letter of Credit fee (the
“Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Rate
times the daily amount available to be drawn under such Letter of Credit; provided,
however, any Letter of Credit Fees otherwise payable for the account of a Defaulting Lender with
respect to any Letter of Credit as to which such Defaulting Lender has not provided Cash Collateral
or other credit support arrangements satisfactory to the L/C Issuer pursuant to this Section
2.03 shall be payable, to the maximum extent permitted by applicable law, to the other Lenders
in accordance with the upward adjustments in their respective Applicable Percentages allocable to
such Letter of Credit pursuant to Section 2.16(d), with the balance of such fee, if any,
payable to the L/C Issuer for its own account. For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be
determined in accordance with Section 1.06. Letter of Credit Fees shall be (i) due and
payable on the first Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in
arrears. If there is any change in the Applicable Rate during any quarter, the daily amount
available to be drawn under each Letter of Credit shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such Applicable Rate was in
effect. Notwithstanding anything to the contrary contained herein, upon the request of the
Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the
Default Rate.



     (i) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The
Borrower shall pay directly to the L/C Issuer for its own account a fronting fee with respect to
each Letter of Credit, at the rate per annum specified in the Fee Letter, computed on the daily
amount available to be drawn under such Letter of Credit on a quarterly basis in arrears. Such
fronting fee shall be due and payable on the first Business Day after the end of each March, June,
September and December in respect of the most recently-ended quarterly period (or portion thereof,
in the case of the first payment), commencing with the first such date to occur after the issuance
of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For
purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount
of such Letter of Credit shall be determined in accordance with Section 1.06. In addition,
the Borrower shall pay directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and charges, of the L/C
Issuer relating to letters of credit as from time to time in effect. Such customary fees and
standard costs and charges are due and payable on demand and are nonrefundable.



     (j) Conflict with Issuer Documents. In the event of any conflict between the terms
hereof and the terms of any Issuer Document, the terms hereof shall control.



     (k) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or is for the account
of, a Subsidiary, the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and
all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of
Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and that
the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.



32









 





     2.04 Swing Line Loans.



     (a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing
Line Lender, in reliance upon the agreements of the other Lenders set forth in this Section
2.04, may in its sole discretion make loans (each such loan, a “Swing Line Loan”) to
the Borrower from time to time on any Business Day during the Availability Period in an aggregate
amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding
the fact that such Swing Line Loans, when aggregated with the Applicable Percentage of the
Outstanding Amount of Revolving Loans and L/C Obligations of the Lender acting as Swing Line
Lender, may exceed the amount of such Lender’s Commitment; provided, however, that
after giving effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed the
Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of any
Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C
Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all
Swing Line Loans shall not exceed such Lender’s Commitment, and provided, further,
that the Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding
Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions
hereof, including but not limited to Section 2.07, the Borrower may borrow under this
Section 2.04, prepay under Section 2.05, and reborrow under this Section
2.04. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a Swing
Line Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal
to the product of such Lender’s Applicable Percentage times the amount of such Swing Line
Loan.



     (b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Borrower’s
irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent
not later than 12:00 noon on the requested borrowing date, and shall specify (i) the amount to be
borrowed, which shall be a minimum of $100,000, and (ii) the requested borrowing date, which shall
be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing
Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after receipt by the Swing
Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent has also received
such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing)
of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in
writing) from the Administrative Agent (including at the request of any Lender) prior to 1:00 p.m.
on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make
such Swing Line Loan as a result of the limitations set forth in the first proviso to the first
sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified
in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the
Swing Line Lender will, not later than 2:00 p.m. on the borrowing date specified in such Swing Line
Loan Notice, make the amount of its Swing Line Loan available to the Borrower at its office by
crediting the account of the Borrower on the books of the Swing Line Lender in immediately
available funds.



33









 





     (c) Refinancing of Swing Line Loans.




     (i) The Swing Line Lender at any time in its sole and absolute discretion may request,
on behalf of the Borrower (which hereby irrevocably authorizes the Swing Line Lender to so
request on its behalf), that each Lender make a Base Rate Revolving Loan in an amount equal
to such Lender’s Applicable Percentage of the amount of Swing Line Loans then outstanding.
Such request shall be made in writing (which written request shall be deemed to be a
Revolving Loan Notice for purposes hereof) and in accordance with the requirements of
Section 2.02, without regard to the minimum and multiples specified therein for the
principal amount of Base Rate Loans, but subject to the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.02. The Swing Line Lender
shall furnish the Borrower with a copy of the applicable Revolving Loan Notice promptly
after delivering such notice to the Administrative Agent. Each Lender shall make an amount
equal to its Applicable Percentage of the amount specified in such Revolving Loan Notice
available (including for this purpose Cash Collateral and other credit support made
available with respect to the applicable Swing Line Loan) to the Administrative Agent in
immediately available funds for the account of the Swing Line Lender at the Administrative
Agent’s Office not later than 12:00 noon on the day specified in such Revolving Loan Notice,
whereupon, subject to Section 2.04(c)(ii), each Lender that so makes funds available
shall be deemed to have made a Base Rate Revolving Loan to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the Swing Line Lender.




     (ii) If for any reason any Swing Line Loan cannot be refinanced by such a Revolving
Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate Revolving
Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request
by the Swing Line Lender that each of the Lenders fund its risk participation in the
relevant Swing Line Loan and each Lender’s payment to the Administrative Agent for the
account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed
payment in respect of such participation.




     (iii) If any Lender fails to make available to the Administrative Agent for the account
of the Swing Line Lender any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.04(c) by the time specified in Section
2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Lender
(acting through the Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on which such payment is
immediately available to the Swing Line Lender at a rate per annum equal to the greater of
the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with
banking industry rules on interbank compensation, plus any administrative processing or
similar fees customarily charged by the Swing Line Lender in connection with the foregoing.
If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid
shall constitute such Lender’s Revolving Loan included in the relevant Revolving Borrowing
or funded participation in the relevant Swing Line Loan, as the case may be. A certificate
of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (iii) shall be conclusive absent
manifest error.



34









 






     (iv) Each Lender’s obligation to make Revolving Loans or to purchase and fund risk
participations in Swing Line Loans pursuant to this Section 2.04(c) shall be
absolute and unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right which such Lender may have against
the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the
occurrence or continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each
Lender’s obligation to make Revolving Loans pursuant to this Section 2.04(c) is
subject to the conditions set forth in Section 4.02. No such funding of risk
participations shall relieve or otherwise impair the obligation of the Borrower to repay
Swing Line Loans, together with interest as provided herein.




     (v) In the event that the Swing Line Lender, in the exercise of its discretion,
requires that, as a condition to the making of any Swing Line Loan, a Defaulting Lender, or
the Borrower, enter into arrangements satisfactory to the Swing Line Lender for the
provision of sufficient Cash Collateral or other credit support acceptable to the Swing Line
Lender, to eliminate the Swing Line Lender’s actual or potential Fronting Exposure with
respect to any such Lender, then the provisions of Section 2.15 shall apply.



     (d) Repayment of Participations.




     (i) At any time after any Lender has purchased and funded a risk participation in a
Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line
Loan, the Swing Line Lender will distribute to such Lender its Applicable Percentage thereof
in the same funds as those received by the Swing Line Lender.




     (ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line Lender under
any of the circumstances described in Section 10.05 (including pursuant to any
settlement entered into by the Swing Line Lender in its discretion), each Lender shall pay
to the Swing Line Lender its Applicable Percentage thereof on demand of the Administrative
Agent, plus interest thereon from the date of such demand to the date such amount is
returned, at a rate per annum equal to the Federal Funds Rate. The
Administrative Agent will make such demand upon the request of the Swing Line Lender.
The obligations of the Lenders under this clause shall survive the payment in full of the
Obligations and the termination of this Agreement.



     (e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each Lender
funds its Base Rate Revolving Loan or risk participation pursuant to this Section 2.04 to
refinance such Lender’s Applicable Percentage of any Swing Line Loan, interest in respect of such
Applicable Percentage shall be solely for the account of the Swing Line Lender.



     (f) Payments Directly to Swing Line Lender. The Borrower shall make all payments of
principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.



35









 





     2.05 Prepayments. (a) The Borrower may, upon notice to the Administrative Agent, at any time
or from time to time voluntarily prepay Revolving Loans in whole or in part without premium or
penalty; provided that (i) such notice must be received by the Administrative Agent not
later than 10:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate
Loans, and (B) on the date of prepayment of Base Rate Revolving Loans; (ii) any prepayment of
Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Revolving Loans shall be in a
principal amount of $1,000,000 or a whole multiple thereof or, in each case, if less, the entire
principal amount thereof then outstanding. Each such notice shall specify the date and amount of
such prepayment and the Type(s) of Revolving Loans to be prepaid and, if Eurodollar Rate Loans are
to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable
Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and payable on the
date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all
accrued interest on the amount prepaid, together with any additional amounts required pursuant to
Section 3.05. Subject to Section 2.16, each such prepayment shall be applied to
the Revolving Loans of the Lenders in accordance with their respective Applicable Percentages.



     (b) The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative
Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part
without premium or penalty; provided that (i) such notice must be received by the Swing
Line Lender and the Administrative Agent not later than 12:00 noon on the date of the prepayment,
and (ii) any such prepayment shall be in a minimum principal amount of $100,000. Each such notice
shall specify the date and amount of such prepayment. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such notice shall be due
and payable on the date specified therein.



     (c) If for any reason the Total Outstandings at any time exceed the Aggregate Commitments then
in effect, then, the Borrower shall immediately prepay Loans and/or the Borrower shall Cash
Collateralize the L/C Obligations in an aggregate amount equal to such excess; provided,
however, that the Borrower shall not be required to Cash Collateralize the L/C
Obligations pursuant to this Section 2.05(c) unless after the prepayment in full of
the Loans the Total Outstandings exceed the Aggregate Commitments then in effect.



     2.06 Termination or Reduction of Commitments. The Borrower may, upon notice to the
Administrative Agent, terminate the Aggregate Commitments, or from time to time permanently reduce
the Aggregate Commitments; provided that (i) any such notice shall be received by the
Administrative Agent not later than 10:00 a.m. five Business Days prior to the date of termination
or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any
whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate or reduce
the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Total Outstandings would exceed the Aggregate Commitments, and (iv) if, after giving
effect to any reduction of the Aggregate Commitments, the Letter of Credit Sublimit or the Swing
Line Sublimit exceeds the amount of the Aggregate Commitments, such sublimit shall be automatically
reduced by the amount of such excess. The



36









 







Administrative Agent will promptly notify the Lenders of
any such notice of termination or reduction of the Aggregate Commitments. Any reduction of the
Aggregate Commitments shall be applied to the Commitment of each Lender according to its Applicable
Percentage. All fees accrued until the effective date of any termination of the Aggregate
Commitments shall be paid on the effective date of such termination.



     2.07 Repayment of Loans. (a) The Borrower shall repay to the Lenders on the Maturity Date the
aggregate principal amount of the Revolving Loans made to the Borrower outstanding on such date.
In addition, until the Borrower shall have furnished satisfactory evidence to the Administrative
Agent (including a satisfactory opinion of regulatory counsel reasonably acceptable to the
Administrative Agent, which opinion is additional to and not included within the Initial Opinion)
that the Borrower has received all regulatory approvals from the CPUC necessary to remove the
requirement to make repayments outlined in this sentence, the Borrower shall (i) repay to the
Lenders each Revolving Loan no later than the date that is twelve (12) months after such Revolving
Loan is made, and (ii) cause there to be no outstanding Loans hereunder for a period of at least
thirty (30) consecutive days in the twelve-month (12) period commencing on the date of the initial
Credit Extension hereunder and in each twelve month period from and after the issuance of a new
Credit Extension hereunder.



     (b) The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the date ten
Business Days after such Loan is made and (ii) the Maturity Date.



     2.08 Interest. (a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period
plus the Applicable Rate; (ii) each Base Rate Revolving Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal
to the Base Rate plus the Applicable Rate; and (iii) each Swing Line Loan shall bear
interest on the outstanding principal amount thereof from the applicable borrowing date at a rate
per annum equal to the Base Rate plus the Applicable Rate.




(b) (i) If any amount of principal of any Loan is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or otherwise, such
amount shall thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.




     (ii) If any amount (other than principal of any Loan) payable by the Borrower under any
Loan Document is not paid when due (without regard to any applicable grace periods), whether
at stated maturity, by acceleration or otherwise, then upon and following the request of the
Required Lenders to the Administrative Agent and the Borrower (provided that no such request
of, or notice to, the Borrower shall be required in connection with the occurrence of an
Event of Default under Section 8.01(f) or 8.01(g)), such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.



37









 






     (iii) Upon and following the request of the Required Lenders to the Administrative
Agent and the Borrower (provided that no such request of, or notice to, the Borrower shall
be required in connection with the occurrence of an Event of Default under Section
8.01(f) or 8.01(g)), to the extent any Event of Default then exists, the
Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder
at a fluctuating interest rate per annum at all times equal to the Default Rate to the
fullest extent permitted by applicable Laws.




     (iv) Accrued and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.



     (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein. Interest hereunder shall be
due and payable in accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.



     2.09 Fees. In addition to certain fees described in Sections 2.03(h) and (i):



     (a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage, a commitment fee equal to the
Applicable Rate times the actual daily amount by which the Aggregate Commitments exceed the
sum of (i) the Outstanding Amount of Revolving Loans and (ii) the Outstanding Amount of L/C
Obligations, subject to adjustment as provided in Section 2.16. The commitment fee shall
accrue at all times during the Availability Period, including at any time during which one or more
of the conditions in Article IV is not met, and shall be due and payable quarterly in
arrears on the first Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the Closing Date, and on the last day of the
Availability Period. The commitment fee shall be calculated quarterly in arrears, and if there is
any change in the Applicable Rate during any quarter, the actual daily amount shall be computed
and multiplied by the Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.



     (b) Other Fees. (i) The Borrower shall pay to the Arranger and the Administrative
Agent for their own respective accounts fees in the amounts and at the times specified in the Fee
Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason
whatsoever.



     (ii) The Borrower shall pay to the Lenders, in Dollars, such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be
fully earned when paid and shall not be refundable for any reason whatsoever.



     2.10 Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate. (a) All
computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to
the Eurodollar Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed. All other computations of fees and interest shall be made on the basis of
a 360-day year and actual days elapsed (which results in



38









 







more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan
for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for
the day on which the Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.12(a), bear interest for one
day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be
conclusive and binding for all purposes, absent manifest error.



     (b) If, as a result of any restatement of or other adjustment to the financial statements of
Holdco or for any other reason, Holdco or the Lenders determine that (i) the Total Capitalization
Ratio as calculated by Holdco as of any applicable date was inaccurate and (ii) a proper
calculation of the Total Capitalization Ratio would have resulted in higher pricing for such
period, the Borrower shall immediately and retroactively be obligated to pay to the Administrative
Agent for the account of the applicable Lenders or the L/C Issuer, as the case may be, promptly on
demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the United States,
automatically and without further action by the Administrative Agent, any Lender or the L/C
Issuer), an amount equal to the excess of the amount of interest and fees that should have been
paid for such period over the amount of interest and fees actually paid for such period. This
paragraph shall not limit the rights of the Administrative Agent, any Lender or the L/C Issuer, as
the case may be, under Section 2.03(c)(iii), 2.03(h) or 2.08(b) or under
Article VIII. The Borrower’s obligations under this paragraph shall survive for a period
of six months following the termination of the Aggregate Commitments and the indefeasible repayment
of all other Obligations (other than contingent indemnity obligations) hereunder.



     2.11 Evidence of Debt. (a) The Credit Extensions made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the Administrative Agent in the
ordinary course of business. The accounts or records maintained by the Administrative Agent and
each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made
by the Lenders to the Borrower and the interest and
payments thereon. Any failure to so record or any error in doing so shall not, however, limit
or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect
to the Obligations. In the event of any conflict between the accounts and records maintained by
any Lender and the accounts and records of the Administrative Agent in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of manifest error.
Upon the request of any Lender to the Borrower made through the Administrative Agent, the Borrower
shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall
evidence such Lender’s Loans to the Borrower in addition to such accounts or records. Each Lender
may attach schedules to a Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.



     (b) In addition to the accounts and records referred to in subsection (a), each Lender
and the Administrative Agent shall maintain in accordance with its usual practice accounts or
records evidencing the purchases and sales by such Lender of participations in Letters of Credit
and Swing Line Loans. In the event of any conflict between the accounts and records maintained by
the Administrative Agent and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of manifest error.



39









 





     2.12 Payments Generally; Administrative Agent’s Clawback. (a) General. All payments
to be made by the Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the
Borrower hereunder shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in
immediately available funds not later than 1:00 p.m. on the date specified herein. The
Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other
applicable share as provided herein) of such payment in like funds as received by wire transfer to
such Lender’s Lending Office. All payments received by the Administrative Agent after 1:00 p.m.
shall be deemed received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day, and such extension
of time shall be reflected in computing interest or fees, as the case may be.



     (b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the proposed date of any
Revolving Borrowing of Eurodollar Rate Loans (or, in the case of any Revolving Borrowing of Base
Rate Loans, prior to 11:00 a.m. on the date of such Revolving Borrowing) that such Lender will not
make available to the Administrative Agent such Lender’s share of such Revolving Borrowing, the
Administrative Agent may assume that such Lender has made such share available on such date in
accordance with Section 2.02 (or, in the case of a Revolving Borrowing of Base Rate Loans,
that such Lender has made such share available in accordance with and at the time required by
Section 2.02) and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share of the applicable
Revolving Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount in immediately available funds with interest thereon,
for each day from and including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be
made by such Lender, the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by the Administrative Agent in
connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the
interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such
interest to the Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for
such period. If such Lender pays its share of the applicable Revolving Borrowing to the
Administrative Agent, then the amount so paid shall constitute such Lender’s Revolving Loan
included in such Revolving Borrowing. Any payment by the Borrower shall be without prejudice to
any claim the Borrower may have against a Lender that shall have failed to make such payment to the
Administrative Agent.



     (ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrower prior to the date on which any
payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer
hereunder that the Borrower will not make such payment, the Administrative Agent may assume



40









 







that
the Borrower has made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the amount due.
In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the
L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or the L/C Issuer, in immediately available funds
with interest thereon, for each day from and including the date such amount is distributed to it to
but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.



     A notice of the Administrative Agent to any Lender or Borrower with respect to any amount
owing under this subsection (b) shall be conclusive, absent manifest error.



     (c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the
Administrative Agent funds for any Loan to be made by such Lender to the Borrower as provided in
the foregoing provisions of this Article II, and such funds are not made available to the
Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set
forth in Article IV are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from such Lender) to such
Lender, without interest.



     (d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make
Revolving Loans, to fund participations in Letters of Credit and Swing Line Loans and to make
payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender
to make any Revolving Loan, to fund any such participation or to make any payment under
Section 10.04(c) on any date required hereunder shall not relieve any other Lender of
its corresponding obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Revolving Loan, to purchase its participation or to make
its payment under Section 10.04(c).



     (e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a representation by any
Lender that it has obtained or will obtain the funds for any Loan in any particular place or
manner.



     2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff
or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of
the Revolving Loans made by it, or the participations in L/C Obligations or in Swing Line Loans
held by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of
such Revolving Loans or participations and accrued interest thereon greater than its pro
rata share thereof as provided herein, then the Lender receiving such greater proportion
shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Revolving Loans and subparticipations in L/C Obligations and Swing Line Loans
of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Revolving Loans and other amounts owing them,
provided that:



41









 






     (i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the extent of such
recovery, without interest; and




     (ii) the provisions of this Section shall not be construed to apply to (x) any payment
made by or on behalf of the Borrower pursuant to and in accordance with the express terms of
this Agreement (including the application of funds arising from the existence of a
Defaulting Lender), (y) the application of Cash Collateral or other credit support (and
proceeds thereof) in respect of obligations relating to Letters of Credit and Swing Line
Loans (including related Lender participation obligations) provided for in Section
2.15, or (z) any payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Revolving Loans or subparticipations in L/C
Obligations or Swing Line Loans to any assignee or participant, other than an assignment to
the Borrower or any Affiliate thereof (as to which the provisions of this Section shall
apply).



     The Borrower consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.



     2.14 [Intentionally Omitted].



     2.15 Cash Collateral and Other Credit Support.



     (a) Certain Credit Support Events; Grant of Security Interest. Upon the request of
the Administrative Agent, (i) if the L/C Issuer has honored any full or partial drawing request
under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the
Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the
Borrower shall, in each case, immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations. In addition, (x) Sections 2.05(c) and 8.02(c) set forth certain
additional requirements to deliver Cash Collateral hereunder, (y) Section 2.03(a)(iii)(E)
contemplates the delivery of Cash Collateral or other credit support in certain circumstances to
support the issuance of Letters of Credit, and (z) Section 2.04 contemplates the delivery
of Cash Collateral or other credit support in connection with the issuance of Swing Line Loans.
The Borrower, and to the extent provided by any Lender, such Lender, hereby grants to the
Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuer and the Lenders
(including the Swing Line Lender), a security interest in all such cash, deposit accounts and all
balances therein, and all other property provided as collateral pursuant to Section 2.03,
Section 2.04, Section 2.05(c) and Section 8.02(c), and all proceeds of the
foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts
at Bank of America. For the avoidance of doubt, to the extent that any other Person may have a
claim, by virtue of an intercreditor arrangement, tag-along right or any other term in any other
document or instrument, to share in any Cash Collateral or other credit support provided pursuant
to any of the aforementioned sections of this Agreement, the L/C Issuer, Swing Line Lender or
Administrative Agent, as applicable, may take



42









 







such provisions into account in determining whether
Cash Collateral or other credit support is satisfactory.



     (b) Application. Notwithstanding anything to the contrary contained in this Agreement,
(i) Cash Collateral or other credit support (and proceeds thereof) provided by any Defaulting
Lender pursuant to Sections 2.03 or 2.04 to support the obligations of such Lender
in respect of Letters of Credit or Swing Line Loans shall be held and applied, first, to
fund the L/C Advances of such Lender, such Lender’s funding of participations in Swing Line Loans,
or such Lender’s Applicable Percentage of Base Rate Revolving Loans used to repay L/C Borrowings,
L/C Advances or Swing Line Loans with respect to which such collateral or other credit support was
provided, as applicable, and, second, to fund any interest accrued for the benefit of the
L/C Issuer or Swing Line Lender pursuant to Sections 2.03(c)(vi) and 2.04(c)(iii)
allocable to such Lender, and (ii) Cash Collateral and other credit support (and proceeds thereof)
otherwise provided by or on behalf of any Loan Party under Sections 2.03, 2.04,
2.05(c) or 8.02(c) to support L/C Obligations or Swing Line Loans shall be held and
applied, first, to the satisfaction of the specific L/C Obligations, Swing Line Loans or
obligations to fund participations therein of the applicable Defaulting Lender for which the Cash
Collateral or other credit support was so provided and, second, if remedies under
Section 8.02 shall have been exercised, to the application of such collateral or other
credit support (or proceeds thereof) to any other Obligations in accordance with Section
8.03.



     (c) Release. Cash Collateral and other credit support provided under Section
2.03 or 2.04 in connection with any Lender’s status as a Defaulting Lender shall be
released (except as the L/C Issuer, Swing Line Lender and the Person providing such Cash Collateral
or other credit support may agree otherwise (as applicable)) promptly following the earlier to
occur of (A) the termination of such Lender’s status as a Defaulting Lender or (B) following the
L/C Issuer’s or Swing Line Lender’s (as applicable) good faith determination that there remain
outstanding no L/C Obligations or Swing Line Loans, as applicable, as to which it has actual or
potential Fronting Exposure in relation to such Lender as to which it desires to maintain Cash
Collateral or other credit support; subject, however, to the additional condition that, as to any
such collateral or other credit support provided by or on behalf of a Loan Party, no Default or
Event of Default shall then have occurred and be continuing.



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



     (a) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove
any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in
Section 10.01.



     (b) Reallocation of Loan Payments. (i) Any payment or prepayment of any portion of the
principal amount of Loans of such Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VIII or otherwise) shall be applied, first, to the Loans of other Lenders
as if such Defaulting Lender had no Loans outstanding, until such time as the Outstanding Amount of
Revolving Loans of each Lender shall equal its pro rata share thereof based on its Applicable
Percentage (without giving effect to Section 2.16(d)) ratably to the Lenders in accordance
with



43









 







their Applicable Percentages of Loans being repaid or prepaid; second, to the then
outstanding amounts (including interest thereon) owed under the terms hereof by such Defaulting
Lender to the Administrative Agent or (to the extent the Administrative Agent has received notice
thereof) to any other Lender, ratably to the Persons entitled thereto, and third, to the
posting of Cash Collateral in respect of its Applicable Percentage (without giving effect to the
last sentence in the definition thereof) of L/C Obligations and Swing Line Loans, ratably to the
L/C Issuer and Swing Line Lender in accordance with their respective applicable Fronting Exposures,
and (ii) any other amounts thereafter received by the Administrative Agent for the account of such
Defaulting Lender (including amounts made available to the Administrative Agent by such Defaulting
Lender pursuant to Section 10.08) shall be applied, first, to the liabilities above
referred to in item second of clause (i) above, and second, to the matters
above referred to in item third of clause (i) above. Any payments, prepayments or
other amounts paid or payable to a Defaulting Lender that are reallocated to pay outstanding
amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section
2.16(b)) shall be deemed paid to such Defaulting Lender, and each Lender hereby irrevocably
consents thereto.



     (c) Certain Fees. Such Defaulting Lender (i) shall not be entitled to receive any
commitment fee pursuant to Section 2.09(a) for any period during which such Lender is a
Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise
would have been required to have been paid to such Defaulting Lender) and (ii) shall be
limited in its right to Letter of Credit Fees as provided in Section 2.03(h).



     (d) Reallocation of Applicable Percentages to Reduce Fronting Exposure. During any
period in which there is a Defaulting Lender as to which the L/C Issuer or Swing Line Lender (as
applicable) has not received Cash Collateral or other credit support acceptable to it in respect of
the related participation and funding obligations of such Defaulting Lender, then upon the request
of the L/C Issuer or Swing Line Lender (as applicable) to the Administrative Agent, for purposes of
computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance or fund
participations in Letters of Credit or Swing Line Loans pursuant to Sections 2.03 and
2.04, the “Applicable Percentage” of each non-Defaulting Lender shall be computed without
giving effect to the Commitment of such Defaulting Lender; provided, that, in all cases,
the obligation of each non-Defaulting Lender to acquire, refinance or fund participations in
Letters of Credit or Swing Line Loans shall not exceed the positive difference, if any, between (1)
the Commitment of such non-Defaulting Lender and (2) the aggregate Outstanding Amount of the
Revolving Loans of such Lender, plus such Lender’s Applicable Percentage of the Outstanding
Amount of all other L/C Obligations (prior to giving effect to such reallocation), plus
such Lender’s Applicable Percentage of the Outstanding Amount of all other Swing Line Loans (prior
to giving effect to such reallocation).



     A Lender that has become a Defaulting Lender because of an event referenced in the definition
of Defaulting Lender may cure such status and shall no longer constitute a Defaulting Lender as a
result of such event when (i) such Defaulting Lender shall have fully funded or paid, as
applicable, all Loans, participations in respect of Letters of Credit or Swing Line Loans or other
amounts required to be funded or paid by it hereunder as to which it is delinquent (together, in
each case, with such interest thereon as shall be required to any Person as otherwise provided in
this Agreement), (ii) the Administrative Agent shall have received a certification by such
Defaulting Lender of its ability and intent to comply with the provisions of this Agreement going



44









 







forward, and (iii) each of (x) the Administrative Agent, (y) the L/C Issuer, the Swing Line Lender
and any other Lender as to which a delinquent obligation was owed, and (z) in the case of the
failure to fund any Loan, the Borrower, shall have determined (and notified the Administrative
Agent) that they are satisfied, in their sole discretion, that such Defaulting Lender intends to
continue to perform its obligations as a Lender hereunder and has all approvals required to enable
it to continue to perform its obligations as a Lender hereunder. No reference in this subsection
to an event being “cured” shall by itself preclude any claim by any Person against any Lender that
becomes a Defaulting Lender for such direct damages as may otherwise be available to such Person
arising from any failure to fund or pay any amount when due hereunder or from any other event that
gave rise to such Lender’s status as a Defaulting Lender.



ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY




     3.01 Taxes.



     (a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.




     (i) Any and all payments by or on account of any obligation of the Borrower hereunder
or under any other Loan Document shall to the extent permitted by applicable Laws be made
free and clear of and without reduction or withholding for any Taxes. If, however,
applicable Laws require the Borrower or the Administrative Agent to withhold or deduct any
Tax, such Tax shall be withheld or deducted in accordance with such Laws as determined by
the Borrower or the Administrative Agent, as the case may be, upon the basis of the
information and documentation to be delivered pursuant to subsection (e) below.




     (ii) If the Borrower or the Administrative Agent shall be required by the Code to
withhold or deduct any Taxes, including both United States Federal backup withholding and
withholding taxes, from any payment, then (A) the Administrative Agent shall withhold or
make such deductions as are determined by the Administrative Agent to be required based upon
the information and documentation it has received pursuant to subsection (e) below,
(B) the Administrative Agent shall timely pay the full amount withheld or deducted to the
relevant Governmental Authority in accordance with the Code, and (C) to the extent that the
withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum
payable by the Borrower shall be increased as necessary so that after any required
withholding or the making of all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or L/C Issuer,
as the case may be, receives an amount equal to the sum it would have received had no such
withholding or deduction been made.



     (b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable Laws.



     (c) Tax Indemnifications.



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     (i) Without limiting the provisions of subsection (a) or (b) above, the
Borrower shall, and does hereby, indemnify the Administrative Agent, each Lender and the L/C
Issuer, and shall make payment in respect thereof within 10 days after demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this Section)
withheld or deducted by the Borrower or the Administrative Agent or paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. The Borrower shall also, and does hereby, indemnify the
Administrative Agent, and shall make payment in respect thereof within 10 days after demand
therefor, for any amount which a Lender or the L/C Issuer for any reason fails to pay to the
Administrative Agent as required by clause (ii) of this subsection. A certificate
as to the amount of any such payment or liability delivered to the Borrower by a Lender or
the L/C Issuer (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of
a Lender or the L/C Issuer, shall be conclusive absent manifest error.




     (ii) Without limiting the provisions of subsection (a) or (b) above,
each Lender and the L/C Issuer shall, and does hereby, indemnify the Borrower and the
Administrative Agent, and shall make payment in respect thereof within 10 days after demand
therefor, against any and all Taxes and any and all related losses, claims, liabilities,
penalties, interest and expenses (including the fees, charges and disbursements of any
counsel for the Borrower or the Administrative Agent) incurred by or asserted against the
Borrower or the Administrative Agent by any Governmental Authority as a result of the
failure by such Lender or the L/C Issuer, as the case may be, to deliver, or as a result of
the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by
such Lender or the L/C Issuer, as the case may be, to the Borrower or the Administrative
Agent pursuant to subsection (e). Each Lender and the L/C Issuer hereby authorizes
the Administrative Agent to set off and apply any and all amounts at any time owing to such
Lender or the L/C Issuer, as the case may be, under this Agreement or any other Loan
Document against any amount due to the Administrative Agent under this clause (ii).
The agreements in this clause (ii) shall survive the resignation and/or replacement
of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender or
the L/C Issuer, the termination of the Aggregate Commitments and the repayment, satisfaction
or discharge of all other Obligations.



     (d) Evidence of Payments. Upon request by the Borrower or the Administrative Agent,
as the case may be, after any payment of Taxes by the Borrower or by the Administrative Agent to a
Governmental Authority as provided in this Section 3.01, the Borrower shall deliver to the
Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case may be,
the original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of any return required by Laws to report such payment or other evidence of such
payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.



     (e) Status of Lenders; Tax Documentation.



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     (i) Each Lender shall deliver to the Borrower and to the Administrative Agent, at the
time or times prescribed by applicable Laws or when reasonably requested by the Borrower or
the Administrative Agent, such properly completed and executed documentation prescribed by
applicable Laws or by the taxing authorities of any jurisdiction and such other reasonably
requested information as will permit the Borrower or the Administrative Agent, as the case
may be, to determine (A) whether or not payments made hereunder or under any other Loan
Document are subject to Taxes, (B) if applicable, the required rate of withholding or
deduction, and (C) such Lender’s entitlement to any available exemption from, or reduction
of, applicable Taxes in respect of all payments to be made to such Lender by the Borrower
pursuant to this Agreement or otherwise to establish such Lender’s status for withholding
tax purposes in the applicable jurisdiction.




     (ii) Without limiting the generality of the foregoing, if the Borrower is resident for
tax purposes in the United States,




     (A) any Lender that is a “United States person” within the meaning of Section
7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent
executed originals of Internal Revenue Service Form W-9 or such other documentation
or information prescribed by applicable Laws or reasonably requested by the Borrower
or the Administrative Agent as will enable the Borrower or the Administrative Agent,
as the case may be, to determine whether or not such Lender is subject to backup
withholding or information reporting requirements; and




     (B) each Foreign Lender that is entitled under the Code or any applicable
treaty to an exemption from or reduction of withholding tax with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the request of the
Borrower or the Administrative Agent, but only if such Foreign Lender is legally
entitled to do so), whichever of the following is applicable:




     (I) executed originals of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States
is a party,




     (II) executed originals of Internal Revenue Service Form W-8ECI,




     (III) executed originals of Internal Revenue Service Form W-8IMY and
all required supporting documentation,




     (IV) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a “bank”
within



47









 







the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent
shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) executed originals of Internal Revenue
Service Form W-8BEN, or




     (V) executed originals of any other form prescribed by applicable Laws
as a basis for claiming exemption from or a reduction in United States
Federal withholding tax together with such supplementary documentation as
may be prescribed by applicable Laws to permit the Borrower or the
Administrative Agent to determine the withholding or deduction required to
be made.




     (iii) Each Lender shall promptly (A) notify the Borrower and the Administrative Agent
of any change in circumstances which would modify or render invalid any claimed exemption or
reduction, and (B) take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable Laws of any
jurisdiction that the Borrower or the Administrative Agent make any withholding or deduction
for taxes from amounts payable to such Lender.



     (f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time
shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a
Lender or the L/C Issuer, or have any obligation to pay to any Lender or the L/C Issuer, any refund
of Taxes withheld or deducted from funds paid for the account of such Lender or the L/C Issuer, as
the case may be. If the Administrative Agent, any Lender or the L/C Issuer determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to
the extent of indemnity payments made, or additional amounts paid, by the Borrower under this
Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses incurred by the Administrative Agent, such Lender or the L/C Issuer, as the
case may be, 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, such Lender or the L/C Issuer, 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, such Lender or the L/C Issuer in the event the
Administrative Agent, such Lender or the L/C Issuer is required to repay such refund to such
Governmental Authority. This subsection shall not be construed to require the Administrative
Agent, any Lender or the L/C Issuer to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrower or any other Person.



     3.02 Illegality. If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending
Office to make, maintain or fund Loans whose interest is determined by reference to the Eurodollar
Rate, or to determine or charge interest rates based upon the Eurodollar Rate, or any



48









 







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



     3.03 Inability to Determine Rates. If the Required Lenders determine that for any reason in
connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof
that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market
for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period
with respect to a proposed Eurodollar Rate Loan or in connection with an existing or proposed Base
Rate Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding
such Eurodollar Rate Loan, the Administrative Agent will promptly so notify the Borrower and each
Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurodollar Rate Loans
shall be suspended, and (y) in the event of a determination described in the preceding sentence
with respect to the Eurodollar Rate component of the Base Rate, the utilization of the Eurodollar
Rate component in determining the Base Rate shall be suspended, in each case until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon
receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion
to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Revolving Borrowing of Base Rate Loans in the amount specified
therein.




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     3.04 Increased Costs; Reserves on Eurodollar Rate Loans.



     (a) Increased Costs Generally. If any Change in Law shall:




     (i) (i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with or for the
account of, or credit extended or participated in by, any Lender (except any reserve
requirement contemplated by Section 3.04(e)) or the L/C Issuer;




     (ii) subject any Lender or the L/C Issuer to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or
any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such
Lender or the L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes
covered by Section 3.01 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender or the L/C Issuer); or




     (iii) impose on any Lender or the L/C Issuer or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such
Lender or any Letter of Credit or participation therein;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Loan the interest on which is determined by reference to the Eurodollar Rate (or of
maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the
L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its
obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum
received or receivable by such Lender or the L/C Issuer hereunder (whether of principal, interest
or any other amount) then, upon request of such Lender or the L/C Issuer, the Borrower will pay to
such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or the L/C Issuer, as the case may be, for such additional costs incurred or
reduction suffered.




     (b) Capital Requirements. If any Lender or the L/C Issuer determines that any Change
in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such
Lender’s or the L/C Issuer’s holding company, if any, regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on
the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below
that which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could
have achieved but for such Change in Law (taking into consideration such Lender’s or the L/C
Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with
respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the
L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or
the L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such reduction
suffered.



50









 





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



     (d) Delay in Requests. Failure or delay on the part of any Lender or the L/C Issuer
to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a
waiver of such Lender’s or the L/C Issuer’s right to demand such compensation, provided
that the Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant to the
foregoing provisions of this Section for any increased costs incurred or reductions suffered more
than nine months prior to the date that such Lender or the L/C Issuer, as the case may be, notifies
the Borrower of the Change in Law giving rise to such increased costs or reductions and of such
Lender’s or the L/C Issuer’s intention to claim compensation therefor (except that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect thereof).



     (e) Additional Reserve Requirements. The Borrower shall pay to each Lender, as long
as such Lender shall be required to maintain reserves with respect to liabilities or assets
consisting of or including eurocurrency funds or deposits (currently known as “eurodollar
liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan
equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by
such Lender in good faith, which determination shall be conclusive), which additional interest
shall be due and payable on each date on which interest is payable on such Loan, provided
the Borrower shall have received at least 10 days’ prior notice (with a copy to the Administrative
Agent) of such additional interest from such Lender. If a Lender fails to give notice 10 days
prior to the relevant Interest Payment Date, such additional interest shall be due and payable 10
days from receipt of such notice.



     3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the Administrative
Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such
Lender harmless from any loss, cost or expense incurred by it as a result of:



     (a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate
Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary,
mandatory, automatic, by reason of acceleration, or otherwise);



     (b) any failure by the Borrower (for a reason other than the failure of such Lender to make a
Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in
the amount notified by the Borrower; or



     (c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest
Period therefor as a result of a request by the Borrower pursuant to Section 10.13;


excluding any loss of anticipated profits, but including any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable


51









 






to terminate the deposits from which such funds were obtained. The Borrower shall also pay any
customary administrative fees charged by such Lender in connection with the foregoing.



For purposes of calculating amounts payable by the Borrower to the Lenders under this Section
3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the
Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank
eurodollar market for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.




     3.06 Mitigation Obligations; Replacement of Lenders.



     (a) Designation of a Different Lending Office. If any Lender requests compensation
under Section 3.04, or the Borrower is required to pay any additional amount to any Lender,
the L/C Issuer or any Governmental Authority for the account of any Lender or the L/C Issuer
pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02,
then such Lender or the L/C Issuer shall, as applicable, use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of
such Lender or the L/C Issuer, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or
eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each
case, would not subject such Lender or the L/C Issuer, as the case may be, to any unreimbursed cost
or expense and would not otherwise be disadvantageous to such Lender or the L/C Issuer, as the case
may be. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender
or the L/C Issuer in connection with any such designation or assignment.



     (b) Replacement of Lenders. If any Lender requests compensation under Section
3.04, or if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01, the Borrower
may replace such Lender in accordance with Section 10.13.



     3.07 Survival. All of the Borrower’s obligations under this Article III shall survive
termination of the Aggregate Commitments, repayment of all other Obligations hereunder and
resignation of the Administrative Agent.



ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS




     4.01 Conditions of Initial Credit Extension. The obligation of the L/C Issuer and each Lender
to make its initial Credit Extension hereunder is subject to satisfaction of the following
conditions precedent:



     (a) The Administrative Agent’s receipt of the following, each of which shall be originals or
telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a
Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date) and each in form and
substance satisfactory to the Administrative Agent and each of the Lenders:



52









 






     (i) executed counterparts of this Agreement and the Guaranty, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;




     (ii) a Note executed by the Borrower in favor of each Lender requesting a Note;




     (iii) such certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the Administrative Agent
may require evidencing the identity, authority and capacity of each Responsible Officer
thereof authorized to act as a Responsible Officer in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party;




     (iv) such documents and certifications as the Administrative Agent may reasonably
require to evidence that each Loan Party is duly organized or formed, and that each Loan
Party is validly existing, in good standing and qualified to engage in business in each
jurisdiction where its ownership, lease or operation of properties or the conduct of its
business requires such qualification, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect;




     (v) favorable opinions of (x) Gibson, Dunn & Crutcher LLP, counsel to the Loan Parties,
addressed to the Administrative Agent and each Lender, as to the matters set forth in
Exhibit G-1 and such other matters concerning the Loan Parties and the Loan
Documents as the Required Lenders may reasonably request, and (y) Nossaman LLP, counsel to
the Loan Parties, addressed to the Administrative Agent and each Lender (the “Initial
Opinion”), as to the matters set forth in Exhibit G-2 and such other matters
concerning the Loan Parties and the Loan Documents as the Required Lenders may reasonably
request;




     (vi) a certificate of a Responsible Officer of each Loan Party either (A) attaching
copies of all consents, licenses and approvals required in connection with the execution,
delivery and performance by such Loan Party of the Loan Documents to which it is a party,
and certifying that such consents, licenses and approvals are in full force and effect, or
(B) certifying that no such consents, licenses or approvals are so required;




     (vii) a certificate signed by a Responsible Officer of the Borrower certifying (A) that
the conditions specified in Sections 4.02(a) and (b) have been satisfied,
and (B) that there has been no event or circumstance since the date of the Audited Financial
Statements that has had or could be reasonably expected to have, either individually or in
the aggregate, a Material Adverse Effect;




     (viii) evidence that the Existing Loan Agreement has been or concurrently with the
Closing Date is being terminated and all Liens securing obligations under the Existing
Credit Agreement have been or concurrently with the Closing Date are being released;




     (ix) evidence that the Holdco Credit Agreement shall be effective substantially
simultaneously herewith; and



53









 






     (x) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent, the L/C Issuer, the Swing Line Lender or the Required Lenders
reasonably may require.



     (b) Any fees required to be paid on or before the Closing Date shall have been paid.



     (c) Unless waived by the Administrative Agent, the Borrower shall have paid all fees, charges
and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by
the Administrative Agent) to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of such fees, charges and disbursements as shall constitute its reasonable
estimate of such fees, charges and disbursements incurred or to be incurred by it through the
closing proceedings (provided that such estimate shall not thereafter preclude a final settling of
accounts between the Borrower and the Administrative Agent).



     Without limiting the generality of the provisions of the last paragraph of Section
9.03, for purposes of determining compliance with the conditions specified in this Section
4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved
or accepted or to be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative
Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.



     4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor any Request
for Credit Extension (other than a Revolving Loan Notice requesting only a conversion of Revolving
Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the following
conditions precedent:



     (a) The representations and warranties of the Borrower and each other Loan Party contained in
Article V, any other Loan Document or in any document furnished at any time under or in
connection herewith or therewith, shall be true and correct in all material respects (except, if a
qualifier relating to materiality, Material Adverse Effect or a similar concept applies, such
representation or warranty shall be required to be true and correct in all respects) on and as of
the date of such Credit Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and correct as of such
earlier date, and except that for purposes of this Section 4.02, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 shall be
deemed to refer to the most recent statements furnished pursuant to clauses (a) and
(b), respectively, of Section 6.01.



     (b) No Default shall exist, or would result from such proposed Credit Extension or the
application of the proceeds thereof.



     (c) The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender shall
have received a Request for Credit Extension in accordance with the requirements hereof.



     (d) If any of the proceeds of any Borrowing are to be used to refinance any Unreimbursed
Amount or a Revolving Borrowing (any such amount, a “Refunded Obligation”), the Borrower
shall have furnished evidence satisfactory to the Administrative Agent (including,



54









 







if requested by the Administrative Agent, a satisfactory opinion of regulatory counsel
reasonably acceptable to the Administrative Agent, which opinion is additional to and not included
within the Initial Opinion) that all required approvals from the CPUC have been obtained for the
refinancing of such Refunded Obligation hereunder.



     Each Request for Credit Extension (other than a Revolving Loan Notice requesting only a
conversion of Revolving Loans to the other Type or a continuation of Eurodollar Rate Loans)
submitted by the Borrower shall be deemed to be a representation and warranty that the conditions
specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of
the applicable Credit Extension.



ARTICLE V.

REPRESENTATIONS AND WARRANTIES




     The Borrower represents and warrants to the Administrative Agent and the Lenders that:



     5.01 Existence, Qualification and Power. Each Loan Party and each Subsidiary thereof (a) is
duly organized or formed, validly existing and, as applicable, in good standing under the Laws of
the jurisdiction of its incorporation or organization, (b) has all requisite power and authority
and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease
its assets and carry on its business and (ii) execute, deliver and perform its obligations under
the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and, as
applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such qualification or license;
except in each case referred to in clause (b)(i) or (c), to the extent that failure
to do so could not reasonably be expected to have a Material Adverse Effect.



     5.02 Authorization; No Contravention. The execution, delivery and performance by each Loan
Party of each Loan Document to which such Person is party, have been duly authorized by all
necessary corporate or other organizational action, and do not and will not (a) contravene the
terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to be made under (i)
any material Contractual Obligation (other than the Existing Loan Agreement) to which such Person
is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or
(ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to
which such Person or its property is subject; or (c) violate any Law.



     5.03 Governmental Authorization; Other Consents. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any Governmental Authority or any
other Person is necessary or required in connection with the execution, delivery or performance by,
or enforcement against, any Loan Party of this Agreement or any other Loan Document.



     5.04 Binding Effect. This Agreement has been, and each other Loan Document, when delivered
hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.
This Agreement constitutes, and each other Loan Document when so delivered



55









 







will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against
each Loan Party that is party thereto in accordance with its terms.



     5.05 Financial Statements; No Material Adverse Effect.



     (a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii)
fairly present the consolidated financial condition of Holdco and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise expressly noted
therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of
Holdco and its Subsidiaries as of the date thereof, including liabilities for taxes, material
commitments and Indebtedness, in each case, to the extent required to be reflected thereon (or
described in the footnotes thereto) in accordance with GAAP.



     (b) The unaudited condensed consolidated and consolidating balance sheets of Holdco and its
Subsidiaries dated June 30, 2009, and the related condensed consolidated and consolidating
statements of income or operations and cash flows for the fiscal quarter ended on that date (i)
were prepared in accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein, and (ii) fairly present the financial condition of
Holdco and its Subsidiaries as of the date thereof and their results of operations for the period
covered thereby, subject, in the case of clauses (i) and (ii), to the absence of
footnotes and to normal year-end audit adjustments.



     (c) Since the date of the Audited Financial Statements, there has been no event or
circumstance, either individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.



     (d) The consolidated and consolidating forecasted balance sheet and statements of income and
cash flows of Holdco and its Subsidiaries delivered pursuant to Section 6.01(c) were
prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair
in light of the conditions existing at the time of delivery of such forecasts, and represented, at
the time of delivery, Holdco’s reasonable good faith estimate of its future financial condition and
performance.



     5.06 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to
the knowledge of the Borrower after due and diligent investigation, threatened or contemplated, at
law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or
any of its Subsidiaries or against any of their properties or revenues that (a) purport to affect
or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) either individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect.



     5.07 No Default. Neither any Loan Party nor any Subsidiary thereof is in default under or
with respect to any Contractual Obligation that could, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. No Default has occurred



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and is continuing or would result from the consummation of the transactions contemplated by
this Agreement or any other Loan Document.



     5.08 Ownership of Property; Liens. Each of the Borrower and each Subsidiary has good record
and marketable title in fee simple to, or valid leasehold interests in, all real property necessary
or used in the ordinary conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The
property of the Borrower and its Subsidiaries is subject to no Liens, other than Permitted Liens.



     5.09 Environmental Compliance. The Borrower and its Subsidiaries conduct in the ordinary
course of business a review of the effect of existing Environmental Laws and claims alleging
potential liability or responsibility for violation of any Environmental Law on their respective
businesses, operations and properties, and as a result thereof the Borrower has reasonably
concluded that such Environmental Laws and claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.



     5.10 Insurance. The properties of the Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts
(after giving effect to any self-insurance compatible with the following standards), with such
deductibles and covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Borrower or the applicable
Subsidiary operates.



     5.11 Taxes. The Borrower and its Subsidiaries have filed all Federal, state and other
material tax returns and reports required to be filed, and have paid all Federal, state and other
material taxes, assessments, fees and other governmental charges shown on such tax returns and
reports as due and payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been provided in accordance
with GAAP. There is no known proposed tax assessment against the Borrower or any Subsidiary that
would, if made, reasonably be expected to have a Material Adverse Effect. Neither any Loan Party
nor any Subsidiary thereof is party to any tax sharing agreement.



     5.12 ERISA Compliance.



     (a) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Federal or state Laws. Each Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with respect thereto and, to
the best knowledge of the Borrower, nothing has occurred which would prevent, or cause the loss of,
such qualification. The Borrower and each ERISA Affiliate have made all required contributions to
each Plan subject to Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code has been made with respect
to any Plan.



     (b) There are no pending or, to the best knowledge of the Borrower, threatened claims, actions
or lawsuits, or action by any Governmental Authority, with respect to any Plan



57









 







that could reasonably be expected to have a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan
that has resulted or could reasonably be expected to result in a Material Adverse Effect.



     (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan
has any Unfunded Pension Liability for which provision is not made pursuant to rate-case rulings in
excess of $50,000,000 in the aggregate; (iii) neither the Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan;
and (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.



     5.13 Subsidiaries; Equity Interests. As of the Closing Date, the Borrower has no Subsidiaries
other than those specifically disclosed in Part (a) of Schedule 5.13, and all of
the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by a Loan Party in the amounts specified on Part (a) of
Schedule 5.13 free and clear of all Liens (other than Permitted Liens). As of the Closing
Date, the Borrower has no equity investments in any other corporation or entity other than those
specifically disclosed in Part (b) of Schedule 5.13. Part (c) of
Schedule 5.13 sets forth, as of the Closing Date, the Borrower’s jurisdiction of formation,
the address of its principal place of business and its U.S. taxpayer identification number.



     5.14 Margin Regulations; Investment Company Act.



     (a) The Borrower is not engaged and will not engage, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock. Following the application of the proceeds of each Borrowing or drawing under each
Letter of Credit, not more than 25% of the value of the assets (either of the Borrower only or of
the Borrower and its Subsidiaries on a consolidated basis) subject to the provisions of Section
7.01 or Section 7.07 or subject to any restriction contained in any agreement or
instrument between the Borrower and any Lender or any Affiliate of any Lender relating to
Indebtedness and within the scope of Section 8.01(e) will be Margin Stock.



     (b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is
required to be registered as an “investment company” under the Investment Company Act of 1940.



     5.15 Disclosure. The Borrower has disclosed to the Administrative Agent and the Lenders all
agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries
is subject, and all other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No written report, financial
statement, certificate or other written information furnished by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with the transactions contemplated hereby



58









 







and the negotiation of this Agreement or delivered hereunder or under any other Loan Document
(in each case, as modified or supplemented by other information so furnished) contains (on the date
furnished) any material misstatement of fact or omits to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided that (a) with respect to projected financial information, the Borrower
represents only that such information was prepared in good faith based upon assumptions believed to
be reasonable at the time, (b) with respect to financial statements, other than projected financial
information, of Holdco and its Subsidiaries, the Borrower only represents that such financial
statements present fairly in all material respects the consolidated financial condition of the
applicable Person as of the dates indicated and for the periods covered thereby, (c) with respect
to information relating to Holdco’s industry generally and trade data which relates to a Person
that is not Holdco or a Subsidiary thereof, the Borrower represents and warrants only that such
information is believed by Holdco in good faith to be accurate in all material respects, and (d)
any statements describing documents and agreements are summary only and as such are qualified in
their entirety by reference to such documents and agreements.



     5.16 Compliance with Laws. Each Loan Party and each Subsidiary thereof is in compliance in
all material respects with the requirements of all Laws and all orders, writs, injunctions and
decrees applicable to it or to its properties, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply therewith, either
individually or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.



     5.17 Intellectual Property; Licenses, Etc. The Borrower and its Subsidiaries own, or possess
the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent
rights, franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person. To the best knowledge of the Borrower, no
slogan or other advertising device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Borrower or any Subsidiary infringes upon any
rights held by any other Person where such infringement could reasonably be expected to have a
Material Adverse Effect. No claim or litigation regarding any of the foregoing is pending or, to
the best knowledge of the Borrower, threatened, which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.



ARTICLE VI.

AFFIRMATIVE COVENANTS




     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied (other than contingent indemnity obligations or
expense reimbursements), or any Letter of Credit shall remain outstanding, the Borrower shall, and
shall (except in the case of the covenants set forth in Sections 6.01, 6.02, and
6.03) cause each Subsidiary to:



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     6.01 Financial Statements. Deliver to the Administrative Agent, in form and detail consistent
with similar deliveries under the Existing Loan Agreement:



     (a) as soon as available, but in any event within 15 days after the date on which consolidated
financial statements for each fiscal year are required to be delivered to the SEC under the
Securities Exchange Act of 1934 (if financial statements are not required to be delivered by the
SEC, then within 90 days after the end of such fiscal year of Holdco), a consolidated and
consolidating balance sheet of Holdco and its Subsidiaries as at the end of such fiscal year, and
the related consolidated and consolidating statements of income or operations, changes in
shareholders’ equity, and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP, such consolidated statements to be audited and accompanied by a report and
opinion of an independent certified public accountant of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of such audit, and
such consolidating statements to be certified by the chief executive officer, chief financial
officer, treasurer or controller of Holdco to the effect that such statements are fairly stated in
all material respects when considered in relation to the consolidated financial statements of
Holdco and its Subsidiaries;



     (b) as soon as available, but in any event within 15 days after the date on which consolidated
financial statements for each of the first three fiscal quarters of each fiscal year are required
to be delivered to the SEC under the Securities Exchange Act of 1934 (if financial statements are
not required to be delivered by the SEC, then within 45 days after the end of such fiscal quarter
of Holdco), a condensed consolidated and consolidating balance sheet of Holdco and its Subsidiaries
as at the end of such fiscal quarter, and the related condensed consolidated and consolidating
statements of income or operations for such fiscal quarter and for the portion of Holdco’s fiscal
year then ended, and the related consolidated and consolidating statements of cash flows for the
portion of Holdco’s fiscal year then ended, setting forth in each case in comparative form, as
applicable, the figures for the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail, such consolidated
statements to be certified by the chief executive officer, chief financial officer, treasurer or
controller of Holdco as fairly presenting the financial condition, results of operations and cash
flows of Holdco and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes and such consolidating statements to be certified by the
chief executive officer, chief financial officer, treasurer or controller of Holdco to the effect
that such statements are fairly stated in all material respects when considered in relation to the
consolidated financial statements of Holdco and its Subsidiaries; and



     (c) as soon as available, but in any event by April 30 of each year, an annual business plan
and budget of Holdco and its Subsidiaries on a consolidated and consolidating basis, including
forecasts prepared by management of Holdco of consolidated and consolidating balance sheets and
statements of income or operations and cash flows of Holdco and its Subsidiaries on a quarterly
basis for the immediately following fiscal year (including the fiscal year in which the Maturity
Date occurs; no updated projections for the fiscal year in which the



60









 







Maturity Date occurs shall be required prior to the delivery of the annual business plan
required to be delivered hereby in respect of such final fiscal year).


As to any information contained in materials furnished pursuant to Section 6.02(c), the
Borrower and Holdco shall not be separately required to furnish such information under clause
(a) or (b) above, but the foregoing shall not be in derogation of the obligation of the
Borrower and Holdco to furnish the information and materials described in clauses (a) and
(b) above at the times specified therein.




     6.02 Certificates; Other Information. Deliver to the Administrative Agent:



     (a) concurrently with the delivery of the financial statements referred to in Sections
6.01(a) and (b) (commencing with the delivery of the financial statements for the
fiscal quarter ended September 30, 2009), a duly completed Compliance Certificate signed by the
chief executive officer, chief financial officer, treasurer or controller of each Loan Party;



     (b) promptly after any request by the Administrative Agent, copies of any detailed audit
reports, management letters or recommendations submitted to the board of directors (or the audit
committee of the board of directors) of the Borrower by independent accountants in connection with
the accounts or books of such Loan Party or any Subsidiary thereof, or any audit of any of them;



     (c) promptly after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of a Loan Party, and copies of
all annual, regular, periodic and special reports and registration statements which a Loan Party
may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange
Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant
hereto;



     (d) promptly after the furnishing thereof, copies of any material statement or report
furnished to any holder of debt securities of any Loan Party or any Subsidiary thereof pursuant to
the terms of any indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section
6.02;



     (e) promptly, and in any event within five Business Days after receipt thereof by any Loan
Party or any Subsidiary thereof, copies of each notice or other correspondence received from the
SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or
possible investigation or other inquiry by such agency regarding financial or other operational
results of any Loan Party or any Subsidiary thereof; and



     (f) promptly, such additional information regarding the business, financial or corporate
affairs of the Borrower or any Subsidiary, or compliance with the terms of the Loan Documents, as
the Administrative Agent may from time to time reasonably request.



     Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) (to the extent any such documents are included in materials otherwise filed
with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the applicable Loan Party posts such documents, or provides a
link thereto on



61









 







such Loan Party’s website on the Internet at the website address listed on Schedule
10.02; or (ii) on which such documents are posted on such Loan Party’s behalf on an Internet or
intranet website, if any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative Agent); provided
that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or
any Lender that requests the Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower
shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein,
in every instance the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(a) to the Administrative Agent. Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery
or to maintain copies of the documents referred to above, and in any event shall have no
responsibility to monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such
documents.



     The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will
make available to the Lenders and the L/C Issuer materials and/or information provided by or on
behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the
Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and
(b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to
receive material non-public information with respect to the Borrower or its Affiliates, or the
respective securities of any of the foregoing, and who may be engaged in investment and other
market-related activities with respect to such Persons’ securities. The Borrower hereby agrees
that so long as the Borrower is the issuer of any outstanding debt or equity securities that are
registered or issued pursuant to a private offering or is actively contemplating issuing any such
securities (w) all Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC”
shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC”, the
Borrower shall be deemed to have authorized the Administrative Agent, the Arranger, the L/C Issuer
and the Lenders to treat such Borrower Materials as not containing any material non-public
information with respect to the Borrower or its securities for purposes of United States Federal
and state securities laws (provided, however, that to the extent such Borrower
Materials constitute Information, they shall be treated as set forth in Section 10.07); (y)
all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Side Information”; and (z) the Administrative Agent and the Arranger
shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable
only for posting on a portion of the Platform not designated “Public Side Information”.



     6.03 Notices. Promptly notify the Administrative Agent:



     (a) of the occurrence of any Default;



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     (b) of any matter that has resulted or could reasonably be expected to result in a Material
Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual
Obligation of the Borrower or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Borrower or any Subsidiary and any Governmental Authority; or
(iii) the commencement of, or any material development in, any litigation or proceeding affecting
the Borrower or any Subsidiary, including pursuant to any applicable Environmental Laws; in each
case, to the extent any of the foregoing has resulted or could reasonably be expected to result in
a Material Adverse Effect;



     (c) of the occurrence of any ERISA Event; and



     (d) of any material change in accounting policies or financial reporting practices by Holdco
or any Subsidiary, including any determination by Holdco referred to in Section 2.10(b).



     Each notice pursuant to this Section 6.03 shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and
stating what action the Borrower has taken and proposes to take with respect thereto. Each notice
pursuant to Section 6.03(a) shall describe with particularity any and all provisions of
this Agreement and any other Loan Document that have been breached.



     6.04 Payment of Obligations. Pay and discharge as the same shall become due and payable (a)
all tax liabilities, assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower or
such Subsidiary or the failure to pay any of the foregoing could not reasonably be expected to
result in a Material Adverse Effect; (b) all lawful claims which, if unpaid, would by law become a
Lien upon its property not constituting a Permitted Lien; and (c) all Indebtedness, as and when due
and payable to the extent necessary to avoid the occurrence of an Event of Default, but subject to
any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.



     6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and
effect its legal existence and good standing under the Laws of the jurisdiction of its organization
except in a transaction permitted by Section 7.04 or 7.05; (b) take all reasonable
action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable
in the normal conduct of its business, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its
registered patents, trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.



     6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its material
properties and equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation
and maintenance of its facilities.



63









 





     6.07 Maintenance of Insurance. Maintain with financially sound and reputable insurance
companies not Affiliates of the Borrower, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons engaged in the same or
similar business, of such types and in such amounts (after giving effect to any self-insurance
compatible with the following standards) as are customarily carried under similar circumstances by
such other Persons and providing for not less than 30 days’ prior notice to the Administrative
Agent of termination, lapse or cancellation of such insurance.



     6.08 Compliance with Laws. Comply in all material respects with the requirements of all Laws
and all orders, writs, injunctions and decrees applicable to it or to its business or property,
except in such instances in which (a) such requirement of Law or order, writ, injunction or decree
is being contested in good faith by appropriate proceedings diligently conducted; or (b) the
failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.



     6.09 Books and Records. Maintain proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Borrower or such Subsidiary, as
the case may be.



     6.10 Inspection Rights. Permit representatives and independent contractors of the
Administrative Agent to visit and inspect any of its properties, to examine its corporate,
financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, executive officers, and independent public
accountants, all at the expense of the Borrower and at such reasonable times during normal business
hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower,
with the understanding that, to the extent the Borrower requests and makes a representative
available at the applicable time, the Borrower may accompany the Administrative Agent during such
inspection, examination or discussion, as the case may be; provided, however, that
when an Event of Default exists the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.



     6.11 Use of Proceeds. Use the proceeds of the Credit Extensions (i) to refinance outstanding
obligations under the Existing Loan Agreement and (ii) to provide short term financing for general
corporate purposes or working capital for operations, other than, directly or indirectly, (A) for a
purpose in contravention of any Law or of any Loan Document, (B) to purchase or carry Margin Stock,
(C) to repay or otherwise refinance Indebtedness of the Borrower or others incurred to purchase or
carry Margin Stock, (D) to extend credit for the purpose of purchasing or carrying any Margin
Stock, or (E) to acquire any security in any transaction that is subject to Section 13 or 14 of the
Exchange Act; provided, however, that notwithstanding clauses (B) through
(D) above, the Borrower may use proceeds of Loans as described in clause (ii) above
so long as either (x) the Margin Stock so acquired is promptly retired following the purchase or
other acquisition thereof or (y) at all times and after giving effect to each such purchase or
acquisition, not more than twenty-five percent (25%) of the total assets of the Borrower and its
Subsidiaries on a consolidated basis are represented by Margin Stock owned by the Borrower and its
Subsidiaries on a consolidated basis.



64









 





     6.12 Material Licenses, Permits and Franchises. Maintain each license, permit or franchise
issued by a Governmental Authority necessary to the conduct of its business except where the
failure to do so could not reasonably be expected to have a Material Adverse Effect.



ARTICLE VII.

NEGATIVE COVENANTS




     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied (other than contingent indemnity obligations or
expense reimbursements), or any Letter of Credit shall remain outstanding, the Borrower shall not,
nor shall it permit any Subsidiary to, directly or indirectly:



     7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, other than the following:



     (a) Liens pursuant to any Loan Document;



     (b) Liens existing on the date hereof and listed on Schedule 7.01 and any renewals or
extensions thereof, provided that (i) the property covered thereby is not changed, (ii) the
amount secured or benefited thereby is not increased except as contemplated by Section
7.03(b), (iii) the direct or any contingent obligor with respect thereto is not changed, and
(iv) any renewal or extension of the obligations secured or benefited thereby is permitted by
Section 7.03(b);



     (c) Liens for taxes not yet delinquent or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with GAAP;



     (d) landlord’s, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not delinquent or which are being
contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;



     (e) pledges or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation, other than any Lien
imposed by ERISA;



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



     (g) reversionary rights, easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount, and which do not in
any case materially detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the applicable Person;



     (h) Liens securing judgments for the payment of money not constituting an Event of Default
under Section 8.01(h);



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     (i) rights of setoff or bankers’ liens in favor of banks or other depository institutions
whether arising by contract or operation of law, incurred in the ordinary course of business;



     (j) Liens securing Acquired Indebtedness permitted by Section 7.03(h);
provided that such Liens do not (i) at any time encumber any property other than the
property acquired in connection with the corresponding Investment permitted by Section
7.02(g) (and improvements, accessions and attachments thereto) and (ii) secure any Indebtedness
other than Acquired Indebtedness existing immediately prior to the time of acquisition of such
property;



     (k) Liens securing Indebtedness permitted by Section 7.03(e); provided that
(i) such Liens do not at any time encumber any property other than the property financed by such
Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost or fair market
value, whichever is lower, of the property being acquired on the date of acquisition;



     (l) Liens arising under leases, subleases, licenses and rights to use granted to third parties
and not interfering in any material respect with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;



     (m) Liens arising by operation of law in favor of issuers of letters of credit in the
documents presented under a letter of credit;



     (n) assignments of insurance or condemnation proceeds provided to landlords (or their
mortgagees) pursuant to the terms of any lease and Liens and rights reserved in any lease for rent
or for compliance with the terms of such lease;



     (o) Liens on cash relating to escrows established for an adjustment in purchase price or
liabilities or indemnities for Dispositions, to the extent such Dispositions are permitted hereby
and such Liens do not secure Consolidated Funded Indebtedness;



     (p) Liens vested in lessors, licensors, franchisors or permittors for rent or other amounts to
become due or for other obligations or acts to be performed, the payment of which rent or other
amounts or the performance of which other obligations or acts is required under leases, subleases,
licenses, franchises or permits, so long as the payment of such rent or other amounts or the
performance of such other obligations or acts is not delinquent or is being contested in good faith
and by appropriate proceedings;



     (q) controls, restrictions, obligations, duties or other burdens imposed by federal, state,
municipal or other Law or orders of Governmental Authorities upon real and personal property
encumbered by the Mortgage Note Documents (the “Mortgaged Property”) or any part thereof or
the operation or use thereof or upon the Borrower with respect to such Mortgaged Property or any
part thereof or the operation or use thereof or with respect to any franchise, grant, license,
permit or public purpose requirement, or any rights reserved to or otherwise vested in Governmental
Authorities to impose any such controls, restrictions, obligations, duties or other burdens;



     (r) rights which Governmental Authorities may have by virtue of franchises, grants, licenses,
permits or contracts, or by virtue of law, to purchase, recapture or designate a purchaser of or
order the sale of the Mortgaged Property or any part thereof, to terminate franchises, grants,



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licenses, permits, contracts or other rights or to regulate the property and business of the
Borrower; and any and all obligations of the Borrower correlative to any such rights;



     (s) Liens required by Law (i) as a condition to the transaction of any business or the
exercise of any privilege or license, (ii) to enable the Borrower to maintain self-insurance or to
participate in any funds established to cover any insurance risks, (iii) in connection with
workers’ compensation, unemployment insurance, social security, any pension or welfare benefit plan
or (iv) to share in the privileges or benefits required for companies participating in one or more
of the arrangements described in clauses (ii) and (iii) above;



     (t) Liens on the Mortgaged Property or any part thereof which are granted by the Borrower to
secure duties or public or statutory obligations or to secure, or serve in lieu of, surety, stay or
appeal bonds;



     (u) rights reserved to or vested in others to take or receive any part of any coal, ore, gas,
oil and other minerals, any timber or any electric capacity or energy, gas, water, steam and any
other products, developed, produced, manufactured, generated, purchased or otherwise acquired by
the Borrower or by others on property of the Borrower;



     (v) (i) rights and interests of Persons other than the Borrower arising out of contracts,
agreements and other instruments to which the Borrower is a party and which relate to the common
ownership or joint use of property; and (ii) all Liens on the interests of Persons other than the
Borrower in property owned in common by such Persons and the Borrower if and to the extent that the
enforcement of such Liens would not adversely affect the interests of the Borrower in such property
in any material respect;



     (w) any restrictions on assignment or requirements of any assignee to qualify as a permitted
assignee or a public utility or public service corporation; and



     (x) Liens on the Mortgaged Property securing Indebtedness and other obligations under Mortgage
Note Documents permitted by Section 7.03(n);



     (y) Liens securing Indebtedness permitted by Section 7.03(p).



     7.02 Investments. Make any Investments, except:



     (a) Investments held by the Borrower or such Subsidiary in the form of cash equivalents;



     (b) advances to officers, directors and employees of the Borrower and Subsidiaries in an
aggregate amount not to exceed, when taken together with all such advances made by Holdco or any
Subsidiary of Holdco pursuant to Section 7.02(b) of the Holdco Credit Agreement, $4,000,000
at any time outstanding, for travel, entertainment, relocation and analogous ordinary business
purposes;



     (c) Investments of the Borrower in Holdco or in any wholly-owned Subsidiary of the Borrower
and Investments of any wholly-owned Subsidiary in the Borrower or in another wholly-owned
Subsidiary;



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     (d) Investments existing on the date hereof (other than those referred to in Section
7.02(c)) and set forth on Schedule 7.02;



     (e) Investments consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course of business, and
Investments received in satisfaction or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary in order to prevent or limit loss;



     (f) Guarantees permitted by Section 7.03;



     (g) the purchase or other acquisition of all of the Equity Interests in, or all or
substantially all of the property of, any Person that, upon the consummation thereof, will be
wholly-owned directly by the Borrower or one or more of its wholly-owned Subsidiaries (including as
a result of a merger or consolidation); provided that, with respect to each purchase or
other acquisition made pursuant to this Section 7.02(g): 




     (i) the lines of business of the Person to be (or the property of which is to be) so
purchased or otherwise acquired shall be substantially the same lines of business as one or
more of the principal businesses of the Borrower and its Subsidiaries engaged in currently
or subsequently in the ordinary course of the operation of such businesses;




     (ii) the total consideration (exclusive of consideration constituting Equity Interests
of the Borrower) paid by or on behalf of the Borrower and its Subsidiaries for any such
purchase or other acquisition, when aggregated with the total consideration paid by or on
behalf of the Borrower and its Subsidiaries for all other purchases and other acquisitions
made by the Borrower and its Subsidiaries pursuant to this Section 7.02(g), shall
not exceed, when taken together with all acquisitions made by Holdco or any Subsidiary of
Holdco pursuant to Section 7.02(g) of the Holdco Credit Agreement, $30,000,000 in
any fiscal year; and




     (iii) (A) immediately before and immediately after giving pro forma effect to any such
purchase or other acquisition, no Default shall have occurred and be continuing and (B)
immediately after giving effect to such purchase or other acquisition, the Borrower and its
Subsidiaries shall be in pro forma compliance with all of the covenants set forth in
Section 7.10, such compliance to be determined on the basis of the financial
information most recently delivered to the Administrative Agent pursuant to Section
6.01(a) or (b) (together with such pro forma expense adjustments as are
reasonably supportable by the Borrower) as though such purchase or other acquisition had
been consummated as of the first day of the four consecutive fiscal-quarter period covered
thereby;



     (h) Investments arising in connection with Swap Contracts;



     (i) Investments in respect of prepaid taxes and other expenses, negotiable instruments held
for collection or lease, workers’ compensation, performance and other similar deposits provided to
third parties in the ordinary course of business;



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     (j) Investments constituting non-cash consideration received by the Borrower or any Subsidiary
in connection with Dispositions permitted hereby; and



     (k) other Investments not exceeding, when taken together with all Investments made by Holdco
or any Subsidiary of Holdco pursuant to Section 7.02(k) of the Holdco Credit Agreement,
$10,000,000 in the aggregate in any fiscal year of the Borrower.



     7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:



     (a) Indebtedness under this Agreement or any other Loan Document;



     (b) Indebtedness outstanding on the date hereof (exclusive of Indebtedness incurred pursuant
to the Mortgage Note Documents) and listed on Schedule 7.03 and any refinancings,
refundings, renewals or extensions thereof; provided that (i) the amount of such
Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder, (ii) the weighted average life of any such refinancing,
refunding, renewing or extending Indebtedness is greater than the weighted average life of any
Indebtedness being refinanced, refunded, renewed or extended, (iii) the maturity date of any such
refinancing, refunding, renewing or extending Indebtedness is later than the maturity date of any
Indebtedness being refinanced, refunded, renewed or extended, (iv) the terms relating to
subordination (if any) of any such refinancing, refunding, renewing or extending Indebtedness are
no less favorable in any material respect to the Borrower or the Lenders than the subordination
terms of any agreement or instrument governing the Indebtedness being refinanced, refunded, renewed
or extended, and (v) the interest rate applicable to any such refinancing, refunding, renewing or
extending Indebtedness does not exceed the then applicable market interest rate (the conditions
referred to in the preceding clauses (i) through and including (v) being referred to herein as the
“Refinancing Conditions”);



     (c) Guarantees of the Borrower or any Subsidiary in respect of Indebtedness otherwise
permitted hereunder of the Borrower or any wholly-owned Subsidiary;



     (d) obligations (contingent or otherwise) of the Borrower or any Subsidiary existing or
arising under any Swap Contract, provided that (i) such obligations are (or were) entered
into by such Person in the ordinary course of business for the purpose of directly mitigating risks
associated with liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such Person, and not
for purposes of speculation or taking a “market view;” and (ii) such Swap Contract does not contain
any provision exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party;



     (e) Indebtedness in respect of Capital Leases, Synthetic Lease Obligations and purchase money
obligations for fixed or capital assets within the limitations set forth in Section
7.01(k); provided, however, that the aggregate amount of all such Indebtedness
at any one time outstanding shall not exceed, when taken together with all Indebtedness incurred by
Holdco or a Subsidiary of Holdco pursuant to Section 7.03(e) of the Holdco Credit
Agreement, $10,000,000;




69












 





     (f) Indebtedness under surety and appeal bonds, performance bonds and other obligations of a
like nature incurred in the ordinary course of business and permitted by Section 7.01(f);



     (g) Indebtedness created by endorsing negotiable instruments received in the ordinary course
of business;



     (h) Indebtedness of any Person acquired in connection with an Investment permitted by
Section 7.02(g); provided that such Indebtedness (i) is existing at the time such
Person is acquired, and (ii) was not created in contemplation of such acquisition (such
Indebtedness, “Acquired Indebtedness”);



     (i) contingent liabilities granted in favor of title insurers in the ordinary course of
business;



     (j) (i) Indebtedness constituting indemnification obligations or obligations in respect of
purchase price or other similar adjustments in connection with Investments permitted under
Section 7.02 and Dispositions permitted under Section 7.05; and (ii) Indebtedness
consisting of obligations of the Borrower or any Subsidiary under deferred compensation or other
similar arrangements incurred by such Person in connection with any Investment permitted under
Section 7.02;



     (k) Indebtedness of a Loan Party or a wholly-owned Subsidiary thereof to another Loan Party or
another wholly-owned Subsidiary;



     (l) [intentionally omitted];



     (m) Indebtedness in respect of netting services, overdraft protections and otherwise in
connection with deposit accounts; and



     (n) Indebtedness under Mortgage Note Documents (x) existing on the date hereof, (y) subject to
the Refinancing Conditions, any refinancings that do not increase the aggregate principal amount
thereof except by an amount equal to a reasonable premium or other reasonable amount paid, and fees
and expenses reasonably incurred, in connection with such refinancing, and (z) otherwise incurred
after the Closing Date from time to time in an aggregate principal amount not to exceed
$100,000,000 at any time outstanding; provided that the amount of Indebtedness permitted by
this clause (z), when taken together with Indebtedness permitted by Section 7.03(o)
and Indebtedness incurred by Holdco or a Subsidiary of Holdco under clause (z) of
Section 7.03(n) and Section 7.03(o) of the Holdco Credit Agreement, shall not
exceed $150,000,000 in the aggregate at any time outstanding;



     (o) other unsecured Indebtedness (not described in any other clause of this Section, as to
which such clause shall govern the Indebtedness and this clause (o) shall not be additive
thereto) in an aggregate principal amount not to exceed $100,000,000 at any time outstanding;
provided that the amount of Indebtedness permitted by this Section 7.03(o), when
taken together with Indebtedness permitted by clause (z) of Section 7.03(n) and
Indebtedness incurred by Holdco or a Subsidiary of Holdco under clause (z) of Section
7.03(n) and Section 7.03(o) of the



70









 







Holdco Credit Agreement, shall not exceed $150,000,000 in the aggregate at any time
outstanding; and



     (p) other Indebtedness (not described in any other clause of this Section, as to which such
clause shall govern the Indebtedness and this clause (p) shall not be additive thereto) in
an aggregate principal amount not to exceed, when taken together with Indebtedness incurred by
Holdco or a Subsidiary of Holdco under Section 7.03(p) of the Holdco Credit Agreement,
$10,000,000 at any time outstanding.



     7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another
Person, or Dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any
Person, except that:



     (a) any Subsidiary may merge with (i) the Borrower, provided that the Borrower shall
be the continuing or surviving Person, or (ii) any one or more other Subsidiaries, provided
that when any wholly-owned Subsidiary is merging with another Subsidiary, the wholly-owned
Subsidiary shall be the continuing or surviving Person;



     (b) any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or to another Subsidiary; provided that if the
transferor in such a transaction is a wholly-owned Subsidiary, then the transferee must either be
the Borrower or a wholly-owned Subsidiary; and



     (c) so long as no Default exists or would result therefrom, mergers consummated in connection
with Permitted Acquisitions shall be permitted, provided that in connection with any merger
involving the Borrower or Holdco, the Borrower or Holdco, as applicable, shall be the continuing or
surviving Person.



     7.05 Dispositions. Make any Disposition, except:



     (a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in
the ordinary course of business;



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



     (c) Dispositions as may be necessary in connection with remedial actions taken by the Borrower
to remedy certain plans set forth on Schedule 7.05;



     (d) Dispositions of equipment or real property to the extent that (i) such property is
exchanged for credit against the purchase price of similar replacement property or (ii) the
proceeds of such Disposition are reasonably promptly applied to the purchase price of such
replacement property;



     (e) Dispositions of property by any Subsidiary to the Borrower or to a wholly-owned
Subsidiary;



     (f) Dispositions permitted by Section 7.04; and



71









 





     (g) other Dispositions by the Borrower and its Subsidiaries; provided (i) no Event of
Default shall have occurred and be continuing or would result therefrom, (ii) in the case of
Dispositions by any Person that is a regulated utility, (x) the Borrower or applicable Subsidiary
has received certification from its engineering department or an appropriate outside engineering
firm that the asset or assets to be Disposed of (the “Subject Assets”) are no longer useful
to the business of or of value to operation of such regulated utility and has received any
necessary regulatory approvals for such Disposition, and (y) the Subject Assets are transferred by
such regulated utility to the Borrower or a Subsidiary that is not a regulated utility for
Disposition in a manner consistent with past practice, and (iii) the net cash proceeds from such
Disposition are reinvested in the businesses of the Borrower or its Subsidiaries in a manner
consistent with the Laws of any applicable Governmental Authorities that have regulatory oversight
of the Borrower or the applicable Subsidiary;


provided, however, that any Disposition pursuant to Section 7.05 (a),
(b) and (c) shall be for fair market value.




     7.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except that:



     (a) each Subsidiary may make Restricted Payments to the Borrower, Holdco and any other Person
that owns an Equity Interest in such Subsidiary, ratably according to their respective holdings of
the type of Equity Interest in respect of which such Restricted Payment is being made;



     (b) the Borrower and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other common Equity Interests of such Person;



     (c) the Borrower and each Subsidiary may purchase, redeem or otherwise acquire Equity
Interests issued by it with the proceeds received from the substantially concurrent issue of new
shares of its common stock or other common Equity Interests; and



     (d) the Borrower may (i) declare or pay cash dividends to Holdco in amounts sufficient to
allow Holdco (x) to discharge any Federal, state and local income tax liability arising from the
operations of the Borrower and its Subsidiaries, and (y) to pay corporate overhead and
administrative expenses reasonably allocable to the operations of the Borrower and its
Subsidiaries, and (ii) so long as no Event of Default exists under Section 7.10(a) or
clause (a), (f) or (g) of Section 8.01, before or after giving effect thereto, (x) declare
or pay cash dividends to Holdco, and (y) purchase, redeem or otherwise acquire Equity Interests
issued by it.



     7.07 Change in Business. (a) Engage in any material line of business substantially different
from those lines of business conducted by the Borrower and its Subsidiaries on the date hereof or
any business substantially related or incidental thereto; or (b) voluntary suspend the business of
any Loan Party for more than seven days in any 365-day period.



     7.08 Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate
of the Borrower, whether or not in the ordinary course of business, other than on fair and
reasonable terms substantially as favorable to the Borrower or such Subsidiary as would



72









 







reasonably be obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s
length transaction with a Person other than an Affiliate; provided that the foregoing
restriction shall not apply to (a) any transaction between or among the Borrower and/or Holdco; (b)
reasonable and customary fees paid to members of the board of directors (or similar governing body)
of the Borrower and its Subsidiaries; (c) compensation arrangements for officers and other
employees of the Borrower and its Subsidiaries entered into in the ordinary course of business; and
(d) Restricted Payments and Investments otherwise permitted to be made hereunder and Indebtedness
otherwise permitted to be incurred hereunder.



     7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than this Agreement,
any other Loan Document and the Holdco Credit Agreement) that (a) limits the ability (i) of any
Subsidiary to make Restricted Payments to the Borrower or to otherwise transfer property to the
Borrower, (ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of the
Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such
Person; provided, however, that this clause (iii) shall not prohibit any
negative pledge incurred or provided in favor of any holder of Indebtedness permitted under
Section 7.03(e) or 7.03(h) solely to the extent any such negative pledge relates to
the property financed by or the subject of such Indebtedness; or (b) requires the grant of a Lien
to secure an obligation of such Person if a Lien is granted to secure another obligation of such
Person; except, in the case of clauses (a) and (b), (1) as required under
applicable Law, (2) for restrictions in the Mortgage Note Documents on (I) the transfer or
encumbrance of the property securing the Indebtedness and other obligations evidenced by the
Mortgage Note Documents and (II) related party transactions, (3) for prohibitions on assignment or
transfer, or in connection with net worth requirements, contained in leases, (4) restrictions
imposed pursuant to a binding agreement that has been entered into for the sale of Equity Interests
or assets of a Subsidiary; provided that such restrictions apply solely to the Equity
Interests or assets of such Subsidiary which are to be sold, (5) Contractual Obligations required
to be entered into by any relevant regulatory authority, (6) restrictions in Acquired Indebtedness
existing at the time of the applicable Acquisition; provided, that such restrictions are
not materially more restrictive, taken as a whole, than the restrictions set forth in this
Agreement and the Holdco Credit Agreement, and (7) restrictions existing on the date hereof in the
Agreements set forth on Schedule 7.09.



     7.10 Financial Covenants.



     (a) Total Capitalization Ratio. Permit the Total Capitalization Ratio at any time to
be greater than 66.7%.



     (b) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage
Ratio as of the end of any fiscal quarter of Holdco to be less than 3.00 to 1.00.



ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES




     8.01 Events of Default. Any of the following shall constitute an Event of Default:



     (a) Non-Payment. The Borrower fails to pay (i) when and as required to be paid
herein, any amount of principal of any Loan or any L/C Obligation, or (ii) within three days after



73









 







the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due
hereunder, or (iii) within five days after the same becomes due, any other amount payable hereunder
or under any other Loan Document; or



     (b) Specific Covenants. The Borrower fails to perform or observe any term, covenant
or agreement contained in any of (i) Section 6.01 or 6.02(a) and such failure
continues for five (5) Business Days or (ii) Section 6.03(a), 6.05, 6.10 or
6.11 or Article VII, or Holdco fails to perform or observe any term, covenant or
agreement contained in the Guaranty; or



     (c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or
agreement (not specified in subsection (a) or (b) above) contained in any Loan
Document on its part to be performed or observed and such failure continues for 30 days after the
first to occur of (1) knowledge of the existence of such failure by an officer of the Borrower and
(2) receipt of written notice from the Administrative Agent identifying the particular failure to
perform or observe such covenant or agreement; or



     (d) Representations and Warranties. Any written representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the Borrower or any other
Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith
or therewith shall be incorrect or misleading in any material respect (except, if a qualifier
relating to materiality, Material Adverse Effect or a similar concept applies, such representation,
warranty, certification or statement of fact shall be incorrect or misleading in any respect) when
made or deemed made; or



     (e) Cross-Default. (i) The Borrower or any Material Subsidiary of the Borrower (A)
fails to make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than
Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B)
fails to observe or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or
any other event occurs, the effect of which default or other event is to cause, or to permit the
holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a
trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such
Guarantee to become payable or cash collateral in respect thereof to be demanded; (ii) there occurs
under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from
(A) any event of default under such Swap Contract as to which the Borrower or any Subsidiary is the
Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined)
under such Swap Contract as to which the Borrower or any Material Subsidiary of the Borrower is an
Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the
Borrower or such Material Subsidiary of the Borrower as a result thereof is greater than the
Threshold Amount; or (iii) there occurs an Event of Default (as defined in the Holdco Credit
Agreement); or



74









 





     (f) Insolvency Proceedings, Etc. Any Loan Party or any Material Subsidiary of the
Borrower institutes or consents to the institution of any proceeding under any Debtor Relief Law,
or makes an assignment for the benefit of creditors; or applies for or consents to the appointment
of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for
it or for all or any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without the application or
consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days;
or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material
part of its property is instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or



     (g) Inability to Pay Debts; Attachment. (i) The Borrower or any Material Subsidiary
of the Borrower becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process
is issued or levied against all or any material part of the property of any such Person and is not
released, vacated or fully bonded within 30 days after its issue or levy; or



     (h) Judgments. There is entered against the Borrower or any Material Subsidiary of
the Borrower (i) one or more final judgments or orders for the payment of money in an aggregate
amount (as to all such judgments or orders) exceeding the Threshold Amount (to the extent not
covered by independent third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A)
enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is
a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a
pending appeal or otherwise, is not in effect; or



     (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer
Plan which has resulted or could reasonably be expected to result in liability of the Borrower
under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount
in excess of the Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any installment payment with respect to
its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount in excess of the Threshold Amount; or



     (j) Invalidity of Loan Documents. Any provision of any Loan Document, at any time
after its execution and delivery and for any reason other than as expressly permitted hereunder or
thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect;
or any Loan Party or any Subsidiary thereof contests in any manner the validity or enforceability
of any provision of any Loan Document; or any Loan Party denies that it has any or further
liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any
provision of any Loan Document; or



     (k) Change of Control. There occurs any Change of Control.



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     8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the
Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders,
take any or all of the following actions:



     (a) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer
to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be
terminated;



     (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document
to be immediately due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrower;



     (c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to
the then Outstanding Amount thereof); and



     (d) exercise on behalf of itself, the Lenders and the L/C Issuer all rights and remedies
available to it, the Lenders and the L/C Issuer under the Loan Documents;



     provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the
obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit
Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and
all interest and other amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall
automatically become effective, in each case without further act of the Administrative Agent or any
Lender.



     8.03 Application of Funds. After the exercise of remedies provided for in Section
8.02 (or after the Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set forth in the proviso
to Section 8.02), any amounts received on account of the Obligations shall, subject to the
provisions of Sections 2.15 and 2.16, be applied by the Administrative Agent in the
following order:



     First, to payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including fees, charges and disbursements of counsel to the
Administrative Agent and amounts payable under Article III) payable to the Administrative
Agent in its capacity as such;



     Second, to payment of that portion of the Obligations constituting fees, indemnities
and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders
and the L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders
and the L/C Issuer (including fees and time charges for attorneys who may be employees of any
Lender or the L/C Issuer) and amounts payable under Article III), ratably among them in
proportion to the respective amounts described in this clause Second payable to them;



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     Third, to payment of that portion of the Obligations constituting accrued and unpaid
Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Obligations arising under
the Loan Documents, ratably among the Lenders and the L/C Issuer in proportion to the respective
amounts described in this clause Third payable to them;



     Fourth, to payment of that portion of the Obligations constituting unpaid principal of
the Loans and L/C Borrowings and Obligations then owing under Guaranteed Hedge Agreements and
Guaranteed Cash Management Agreements, ratably among the Lenders, the L/C Issuer, the Hedge Banks
and the Cash Management Banks in proportion to the respective amounts described in this clause
Fourth held by them;



     Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters
of Credit to the extent not otherwise Cash Collateralized by the Borrower pursuant to Sections
2.03 and 2.15; and



     Last, the balance, if any, after all of the Obligations have been indefeasibly paid in
full, to the Borrower or as otherwise required by Law.


Subject to Sections 2.03(c) and 2.15, amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on
deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired,
such remaining amount shall be applied to the other Obligations, if any, in the order set forth
above.



Notwithstanding the foregoing, Obligations arising under Guaranteed Cash Management Agreements and
Guaranteed Hedge Agreements shall be excluded from the application described above if the
Administrative Agent has not received written notice thereof, together with such supporting
documentation as the Administrative Agent may request, from the applicable Cash Management Bank or
Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to this
Agreement that has given the notice contemplated by the preceding sentence shall, by such notice,
be deemed to have acknowledged and accepted (i) the appointment of the Administrative Agent
pursuant to the terms of Article IX for itself and its Affiliates as if a “Lender” party
hereto and (ii) the requirements and obligations of the provisions set forth in Section
10.07.




ARTICLE IX.

ADMINISTRATIVE AGENT




     9.01 Appointment and Authority. Each of the Lenders and the L/C Issuer hereby irrevocably
appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the
other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental thereto. The
provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and
the L/C Issuer, and the Borrower shall not have rights as a third party beneficiary of any of such
provisions.



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     9.02 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and may exercise the
same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder
and without any duty to account therefor to the Lenders.



     9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, the Administrative Agent:



     (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing;



     (b) shall not have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan
Documents that the Administrative Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided
for herein or in the other Loan Documents), provided that the Administrative Agent shall
not be required to take any action that, in its opinion or the opinion of its counsel, may expose
the Administrative Agent to liability or that is contrary to any Loan Document or applicable law;
and



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



     The Administrative Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii)
in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice describing such Default is
given to the Administrative Agent by the Borrower, a Lender or the L/C Issuer.



     The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with this Agreement or
any other Loan Document, (ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV



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or elsewhere herein, other than to confirm receipt of items expressly required to be delivered
to the Administrative Agent.




     9.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing (including any electronic message,
Internet or intranet website posting or other distribution) believed by it to be genuine and to
have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of
Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the
Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C
Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender
or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The
Administrative Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be liable for any action
taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.



     9.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and
exercise its rights and powers hereunder or under any other Loan Document by or through any one or
more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and powers by or through
their respective Related Parties. The exculpatory provisions of this Article shall apply to any
such sub-agent and to the Related Parties of the Administrative Agent and any such sub agent, and
shall apply to their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.



     9.06 Resignation of Administrative Agent.



     (a) The Administrative Agent may at any time give notice of its resignation to the Lenders,
the L/C Issuer and the Borrower. Upon receipt of any such notice of resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which
shall be a bank with an office in the United States, or an Affiliate of any such bank with an
office in the United States. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set
forth above; provided that if the Administrative Agent shall notify the Borrower and the
Lenders that no qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the Administrative Agent on
behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (2) all payments,



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communications and determinations provided to be made by, to or through the Administrative
Agent shall instead be made by or to each Lender and the L/C Issuer directly, until such time as
the Required Lenders appoint a successor Administrative Agent as provided for above in this
Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers, privileges and duties
of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder or under the other Loan Documents (if
not already discharged therefrom as provided above in this Section). The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the retiring Administrative
Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article
and Section 10.04 shall continue in effect for the benefit of such retiring Administrative
Agent, its sub agents and their respective Related Parties in respect of any actions taken or
omitted to be taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.



     (b) The Administrative Agent agrees that in the event it shall fail, in its capacity as a
Lender hereunder, to fund its portion of any Borrowing within three Business Days of the date on
which it shall have been required to fund same, so long as the Administrative Agent is a Defaulting
Lender as a result of such failure, it shall cooperate in good faith with efforts initiated by the
Borrower to replace it with a successor administrative agent that is satisfactory to the Required
Lenders and the Borrower (including resigning in connection with such replacement).



     (c) Any resignation by Bank of America as Administrative Agent pursuant to this Section shall
also constitute its resignation as L/C Issuer and Swing Line Lender. Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer and
Swing Line Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all
of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the
successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if
any, outstanding at the time of such succession or make other arrangements satisfactory to the
retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect
to such Letters of Credit.



     9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the L/C Issuer
acknowledges that it has, independently and without reliance upon the Administrative Agent or any
other Lender or any of their Related Parties and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and based on such
documents and information as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or thereunder.



     9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the
Bookrunners, Arrangers, Co-Syndication Agents or Co-Documentation Agents listed on the



80









 







cover page hereof shall have any powers, duties or responsibilities under this Agreement or
any of the other Loan Documents, except in its capacity, as applicable, as the Administrative
Agent, a Lender or the L/C Issuer hereunder.



     9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding
under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall
then be due and payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise



     (a) to file and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid
and to file such other documents as may be necessary or advisable in order to have the claims of
the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and the
Administrative Agent and their respective agents and counsel and all other amounts due the Lenders,
the L/C Issuer and the Administrative Agent under Sections 2.03(h) and (i),
2.09 and 10.04) allowed in such judicial proceeding; and



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



     and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such
payments to the Administrative Agent and, in the event that the Administrative Agent shall consent
to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.



     Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or
consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or the
L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or
the L/C Issuer in any such proceeding.



     9.10 Guaranteed Cash Management Agreements and Guaranteed Hedge Agreements. No Cash
Management Bank or Hedge Bank that obtains the benefit of the provisions of Section 8.03
and the Guaranty by virtue of the provisions hereof or of the Guaranty shall have any right to
notice of any action or to consent to, direct or object to any action hereunder or under any other
Loan Document other than in its capacity as a Lender and, in such case, only to the extent
expressly provided in the Loan Documents. Notwithstanding any other provision of this Article
IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or
that other satisfactory arrangements have been made with respect to, Obligations arising under
Guaranteed Cash Management Agreements and Guaranteed Hedge Agreements unless the Administrative
Agent has received written notice of such Obligations,



81









 







together with such supporting documentation as the Administrative Agent may request, from the
applicable Cash Management Bank or Hedge Bank, as the case may be.



ARTICLE X.

MISCELLANEOUS




     10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom,
shall be effective unless in writing signed by the Required Lenders and the Borrower or the
applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each
such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:



     (a) waive any condition set forth in Section 4.01(a) without the written consent of
each Lender;



     (b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 8.02) without the written consent of such Lender;



     (c) postpone any date fixed by this Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under
any other Loan Document or waive any failure to pay any principal, interest, fees or other amounts
due to the Lenders (or any of them) hereunder or under any of the Loan Documents on the date fixed
for such payment by this Agreement or such other Loan Document without the written consent of each
Lender directly affected thereby;



     (d) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C
Borrowing, or (subject to clause (iv) of the second proviso to this Section 10.01)
any fees or other amounts payable hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby; provided, however, that only the
consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or
to waive any obligation of the Borrower to pay interest or Letter of Credit Fees at the Default
Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if
the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Borrowing
or to reduce any fee payable hereunder;



     (e) change Section 2.13 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each Lender;



     (f) change any provision of this Section or the definition of “Required Lenders” or any other
provision hereof specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights hereunder or make any determination or grant any consent hereunder
without the written consent of each Lender; or



     (g) release Holdco from the Guaranty without the written consent of each Lender;



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and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights
or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of
Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall,
unless in writing and signed by the Administrative Agent in addition to the Lenders required above,
affect the rights or duties of the Administrative Agent under this Agreement or any other Loan
Document; and (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent
hereunder (and any amendment, waiver or consent which by its terms requires the consent of all
Lenders may be effected with the consent of all Lenders other than Defaulting Lenders), except that
(x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of
such Defaulting Lender and (y) any waiver, amendment or the modification requiring the consent of
all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely
than other affected Lenders shall require the consent of such Defaulting Lender.




     10.02 Notices; Effectiveness; Electronic Communication.



     (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subsection (b)
below), all notices and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or registered mail or sent by
telecopier as follows, and all notices and other communications expressly permitted hereunder to be
given by telephone shall be made to the applicable telephone number, as follows:




     (i) if to the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line
Lender, to the address, telecopier number, electronic mail address or telephone number
specified for such Person on Schedule 10.02; and




     (ii) if to any other Lender, to the address, telecopier number, electronic mail address
or telephone number specified in its Administrative Questionnaire (including, as
appropriate, notices delivered solely to the Person designated by a Lender on its
Administrative Questionnaire then in effect for the delivery of notices that may contain
material non-public information relating to the Borrower).


Notices and other communications sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received; notices and other
communications sent by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have been given at the
opening of business on the next business day for the recipient). Notices and other communications
delivered through electronic communications to the extent provided in subsection (b) below,
shall be effective as provided in such subsection (b).




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     (b) Electronic Communications. Notices and other communications to the Lenders and
the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e
mail and Internet or intranet websites) pursuant to procedures approved by the Administrative
Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C
Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified
the Administrative Agent that it is incapable of receiving notices under such Article by electronic
communication. 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.



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



     (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR
THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE
BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE
BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its
Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any
Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of
any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the
Administrative Agent’s transmission of Borrower Materials through the Internet, except to the
extent that such losses, claims, damages, liabilities or expenses are determined by a court of
competent jurisdiction by a final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Agent Party; provided, however, that in no
event shall any Agent Party have any liability to the Borrower, any Lender, the L/C Issuer or any
other Person for indirect, special, incidental, consequential or punitive damages (as opposed to
direct or actual damages).



     (d) Change of Address, Etc. Each of the Borrower, the Administrative Agent, the Swing
Line Lender and the L/C Issuer may change its address, telecopier or telephone number for notices
and other communications hereunder by notice to the other parties hereto. Each other Lender may
change its address, telecopier or telephone number for notices and other



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communications hereunder by notice to the Borrower, the Administrative Agent, the Swing Line
Lender and the L/C Issuer. In addition, each Lender agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record (i) an effective address,
contact name, telephone number, telecopier number and electronic mail address to which notices and
other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore,
each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to
at all times have selected the “Private Side Information” or similar designation on the content
declaration screen of the Platform in order to enable such Public Lender or its delegate, in
accordance with such Public Lender’s compliance procedures and applicable Law, including United
States Federal and state securities Laws, to make reference to Borrower Materials that are not made
available through the “Public Side Information” portion of the Platform and that may contain
material non-public information with respect to the Borrower or its securities for purposes of
United States Federal or state securities laws.



     (e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative
Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including
telephonic Revolving Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of
the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete
or were not preceded or followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall
indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of
them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of any Borrower. All telephonic notices to and other
telephonic communications with the Administrative Agent may be recorded by the Administrative
Agent, and each of the parties hereto hereby consents to such recording.



     10.03 No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder 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.



     Notwithstanding anything to the contrary contained herein or in any other Loan Document, the
authority to enforce rights and remedies hereunder and under the other Loan Documents against the
Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law
in connection with such enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and
the L/C Issuer; provided, however, that the foregoing shall not prohibit (a) the
Administrative Agent from exercising on its own behalf the rights and remedies that inure to its
benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan
Documents, (b) the L/C Issuer or the Swing Line Lender from exercising the rights and remedies that
inure to its benefit (solely in its capacity as L/C Issuer or Swing Line Lender, as the case may
be) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in
accordance with Section 10.08 (subject to the terms of Section 2.13), or (d) any
Lender



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from filing proofs of claim or appearing and filing pleadings on its own behalf during the
pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and
provided, further, that if at any time there is no Person acting as Administrative
Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the
rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in
addition to the matters set forth in clauses (b), (c) and (d) of the
preceding proviso and subject to Section 2.13, any Lender may, with the consent of the
Required Lenders, enforce any rights and remedies available to it and as authorized by the Required
Lenders.



     10.04 Expenses; Indemnity; Damage Waiver.



     (a) Costs and Expenses. The Borrower shall pay (i) all reasonable documented
out-of-pocket costs and expenses incurred by the Administrative Agent and its Affiliates (including
the reasonable documented fees, charges and disbursements of counsel for the Administrative Agent),
in connection with the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the other Loan Documents
or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of
pocket-expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket
expenses incurred by the Administrative Agent, any Lender or the L/C Issuer (including the fees,
charges and disbursements of any counsel for the Administrative Agent, any Lender or the L/C
Issuer), in connection with the enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan Documents, including its rights under this Section, or (B) in
connection with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of
such Loans or Letters of Credit.



     (b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative
Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of any of
the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold
each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related
documented out-of-pocket expenses (including, without limitation, the reasonable fees,
disbursements and other charges of (x) one counsel for all Indemnitees, (y) if deemed necessary by
the Administrative Agent, one firm of local counsel in each appropriate jurisdiction for all
Indemnitees and (z) in the case of an actual or perceived conflict of interest with respect to any
Indemnitee, of another firm of counsel for such affected Indemnitee), incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party
arising out of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby,
the performance by the parties hereto of their respective obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby, or, in the case of the
Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration
of this Agreement and the other Loan Documents (including in respect of any matters addressed in
Section 3.01), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not



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strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by the Borrower or any
of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of
its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrower, and regardless of whether any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the
extent that such losses, claims, damages, liabilities or related documented out-of-pocket expenses
(x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a
claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith
of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or
such other Loan Party has obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.



     (c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to
pay any amount required under subsection (a) or (b) of this Section to be paid by
it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of
any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment
is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified
loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity as such,
or against any Related Party of any of the foregoing acting for the Administrative Agent (or any
such sub-agent) or L/C Issuer in connection with such capacity. The obligations of the Lenders
under this subsection (c) are subject to the provisions of Section 2.12(d).



     (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to
direct or actual damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the transactions
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.
No Indemnitee referred to in subsection (b) above shall be liable for any damages arising
from the use by unintended recipients of any information or other materials distributed to such
unintended recipients by such Indemnitee through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other Loan Documents or
the transactions contemplated hereby or thereby other than for direct or actual damages resulting
from the gross negligence or willful misconduct of such Indemnitee as determined by a final and
nonappealable judgment of a court of competent jurisdiction.



     (e) Payments. All amounts due under this Section shall be payable not later than ten
Business Days after demand therefor.



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     (f) Survival. The agreements in this Section shall survive the resignation of the
Administrative Agent, the Swing Line Lender and the L/C Issuer, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.



     10.05 Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is
made to the Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the
L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the Administrative
Agent, the L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a)
to the extent of such recovery, the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the
Administrative Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such
demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from
time to time in effect. The obligations of the Lenders and the L/C Issuer under clause (b)
of the preceding sentence shall survive the payment in full of the Obligations and the termination
of this Agreement.



     10.06 Successors and Assigns.



     (a) Successors and Assigns Generally. 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 the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the Administrative Agent and
each Lender and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of
this Section, (ii) by way of participation in accordance with the provisions of subsection
(d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to
the restrictions of subsection (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.



     (b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations and in Swing Line Loans) at the time owing to it);
provided that (except as otherwise approved by the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, Holdco) such Lender concurrently assigns a like



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percentage of its Holdco Credit Commitment; and provided further that any such
assignment shall be subject to the following conditions:




     (i) Minimum Amounts.




     (A) in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the case
of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no
minimum amount need be assigned; and




     (B) in any case not described in subsection (b)(i)(A) of this Section,
the aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the principal
outstanding balance of the 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 or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date, shall not be less
than $5,000,000 unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each such
consent not to be unreasonably withheld or delayed); provided,
however, that concurrent assignments to members of an Assignee Group and
concurrent assignments from members of an Assignee Group to a single Eligible
Assignee (or to an Eligible Assignee and members of its Assignee Group) will be
treated as a single assignment for purposes of determining whether such minimum
amount has been met.




     (ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement with respect to the Loans or the Commitment assigned, except that this
clause (ii) shall not apply to the Swing Line Lender’s rights and obligations in
respect of Swing Line Loans;




     (iii) Required Consents. No consent shall be required for any assignment
except to the extent required by subsection (b)(i)(B) of this Section and, in
addition:




     (A) the consent of the Borrower (such consent not to be unreasonably withheld,
conditioned or delayed) shall be required unless (1) an Event of Default has
occurred and is continuing at the time of such assignment or (2) such assignment is
to a Lender, an Affiliate of a Lender or an Approved Fund;




     (B) the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required if such assignment is to a
Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with
respect to such Lender;




     (C) the consent of the L/C Issuer (such consent not to be unreasonably withheld
or delayed) shall be required for any assignment that increases the



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obligation of the assignee to participate in exposure under one or more Letters
of Credit (whether or not then outstanding); and




     (D) the consent of the Swing Line Lender (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment.




     (iv) Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee in the amount of $3,500; provided, however,
that the Administrative Agent may, in its sole discretion, elect to waive such processing
and recordation fee in the case of any assignment. The assignee, if it is not a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire




     (v) No Assignment to Certain Persons. No such assignment shall be made (A)
without the consent of the Required Lenders and the Administrative Agent and cancellation of
the Commitments and Obligations assigned with such consent, to the Borrower or any of the
Borrower’s Affiliates or Subsidiaries, or (B) to any Defaulting Lender or any of its
Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of
the foregoing Persons described in this clause (B), or (C) to a natural person.




     (vi) Certain Additional Payments. In connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be effective
unless and until, in addition to the other conditions thereto set forth herein, the parties
to the assignment shall make such additional payments to the Administrative Agent in an
aggregate amount sufficient, upon distribution thereof as appropriate (which may be by
outright payments, 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) the full pro rata share
of all Loans and participations in Letters of Credit and Swing Line Loans that such
Defaulting Lender failed to fund in accordance with its Applicable Percentage.


Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection
(c) of this Section, from and after the effective date specified in each Assignment and
Assumption, the assignee thereunder shall be a party to this Agreement 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 3.01, 3.04, 3.05, and
10.04 with respect to facts and circumstances occurring prior to the effective date of such
assignment.




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Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that
does not comply with this subsection 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 subsection
(d) of this Section.




     (c) Register. The Administrative Agent, acting solely for this purpose as an agent of
the Borrower (such agency being solely for tax purposes), shall maintain at the Administrative
Agent’s Office 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
amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”). The entries in the Register shall be conclusive, 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. In addition, the Administrative Agent shall maintain on
the Register information regarding the designation, and revocation of designation, of any Lender as
a Defaulting Lender. 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.



     (d) Participations. Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person (other than a natural
person, a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates or Subsidiaries)
(each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to it); provided
that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent, the Lenders and the L/C Issuer shall continue to
deal solely and directly with such Lender in connection with such Lender’s rights and obligations
under this Agreement.



     Any agreement or instrument 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 or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to subsection (b) of this Section. To the
extent permitted by law, each Participant also shall be entitled to the benefits of Section
10.08 as though it were a Lender, provided such Participant agrees to be subject to
Section 2.13 as though it were a Lender.



     (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable Lender
would have been entitled to receive with respect to the participation sold to such Participant,
unless the sale of the



91









 







participation to such Participant is made with the Borrower’s prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.01 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to comply with
Section 3.01(e) as though it were a Lender.



     (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its Note(s), if any) to
secure obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender
from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as
a party hereto.



     (g) Resignation as L/C Issuer or Swing Line Lender after Assignment. Notwithstanding
anything to the contrary contained herein, if at any time Bank of America assigns all of its
Commitment and Loans pursuant to subsection (b) above, Bank of America may, (i) upon 30
days’ notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days’ notice
to the Borrower, resign as Swing Line Lender. In the event of any such resignation as L/C Issuer
or Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders a successor
L/C Issuer or Swing Line Lender hereunder; provided, however, that no failure by
the Borrower to appoint any such successor shall affect the resignation of Bank of America as L/C
Issuer or Swing Line Lender, as the case may be. If Bank of America resigns as L/C Issuer, it
shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect
to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and
all L/C Obligations with respect thereto (including the right to require the Lenders to make Base
Rate Revolving Loans or fund risk participations in Unreimbursed Amounts pursuant to Section
2.03(c)). If Bank of America resigns as Swing Line Lender, it shall retain all the rights of
the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and
outstanding as of the effective date of such resignation, including the right to require the
Lenders to make Base Rate Revolving Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer and/or
Swing Line Lender, (a) such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be,
and (b) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of
Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory
to Bank of America to effectively assume the obligations of Bank of America with respect to such
Letters of Credit.



     10.07 Treatment of Certain Information; Confidentiality. Each of the Administrative Agent,
the Lenders, the L/C Issuer and each other Guaranteed Party agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed (a) to its
Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees,
agents, trustees, advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (c) to the extent



92









 







required by applicable laws or regulations or by any subpoena or similar legal process, (d) to
any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any
other Loan Document or any action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap
or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the
Borrower or (h) to the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the Administrative Agent, any
Lender, the L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a
source other than the Borrower.



     For purposes of this Section, “Information” means all information received from the
Borrower or any Subsidiary or Affiliate relating to the Borrower or any Subsidiary or any of their
respective businesses, other than any such information that is available to the Administrative
Agent, any Lender, the L/C Issuer or any other Guaranteed Party on a nonconfidential basis prior to
disclosure by the Borrower or any Subsidiary. Any Person required to maintain the confidentiality
of Information as provided in this Section shall be considered to have complied with its obligation
to do so if such Person has exercised the same degree of care to maintain the confidentiality of
such Information as such Person would accord to its own confidential information.



     Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the
Information may include material non-public information concerning the Borrower or a Subsidiary, as
the case may be, (b) it has developed compliance procedures regarding the use of material
non-public information and (c) it will handle such material non-public information in accordance
with applicable Law, including United States Federal and state securities Laws.



     10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each
Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by applicable law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in whatever currency) at
any time held and other obligations (in whatever currency) at any time owing by such Lender, the
L/C Issuer or any such Affiliate to or for the credit or the account of the Borrower against any
and all of the obligations of the Borrower now or hereafter existing under this Agreement or any
other Loan Document to such Lender or the L/C Issuer, irrespective of whether or not such Lender or
the L/C Issuer shall have made any demand under this Agreement or any other Loan Document and
although such obligations of the Borrower may be contingent or unmatured or are owed to a branch or
office of such Lender or the L/C Issuer different from the branch or office holding such deposit or
obligated on such indebtedness; provided, that in the event that any Defaulting Lender
shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately
to the Administrative Agent for further application in accordance with the provisions of
Section 2.16 and, pending such payment, shall be segregated by such Defaulting Lender from
its other funds and deemed held in trust for the benefit of the Administrative Agent and the
Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a
statement describing in reasonable detail the Obligations owing to



93









 







such Defaulting Lender as to which it exercised such right of setoff. The rights of each
Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other
rights and remedies (including other rights of setoff) that such Lender, the L/C Issuer or their
respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify the Borrower and
the Administrative Agent promptly after any such setoff and application, provided that the
failure to give such notice shall not affect the validity of such setoff and application.



     10.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any
Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the
maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If
the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the Borrower. In determining whether the interest contracted for,
charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the
effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the Obligations hereunder.



     10.10 Counterparts; Integration; Effectiveness. This Agreement and the other Loan Documents
may be executed in counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement and the other Loan Documents constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement and the other Loan Documents shall become effective when each
such Loan Document shall have been executed by the Administrative Agent and when the Administrative
Agent shall have received counterparts hereof that, when taken together, bear the signatures of
each of the other parties hereto and thereto. Delivery of an executed counterpart of a signature
page of this Agreement and any other Loan Document by telecopy or other electronic imaging means
shall be effective as delivery of a manually executed counterpart of this Agreement and the other
Loan Documents.



     10.11 Survival of Representations and Warranties. All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or
in connection herewith or therewith shall survive the execution and delivery hereof and thereof.
Such representations and warranties have been or will be relied upon by the Administrative Agent
and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or
on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of any Credit Extension, and shall continue in full force
and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied
or any Letter of Credit shall remain outstanding.



     10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to
be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the



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remaining provisions of this Agreement and the other Loan Documents shall not be affected or
impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable provisions. The
invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction. Without limiting the foregoing provisions of this
Section 10.12, if and to the extent that the enforceability of any provisions in this
Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in
good faith by the Administrative Agent, the L/C Issuer or the Swing Line Lender, as applicable,
then such provisions shall be deemed to be in effect only to the extent not so limited.



     10.13 Replacement of Lenders. If any Lender requests compensation under Section 3.04,
or if the Borrower is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, if any Lender is a
Defaulting Lender or if any other circumstance exists hereunder that gives the Borrower the right
to replace a Lender as a party hereto, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained in, and consents
required by, Section 10.06), all of its interests, rights and obligations under this
Agreement and the related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided that:



     (a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in
Section 10.06(b);



     (b) such Lender shall have received payment of an amount equal to the outstanding principal of
its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder and under the other Loan Documents (including any amounts under Section 3.05)
from the assignee (to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts);



     (c) in the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments thereafter; and



     (d) such assignment does not conflict with applicable Laws.



     A Lender shall not be required to make any such assignment or delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.



     10.14 Governing Law; Jurisdiction; Etc.



     (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.



     (b) SUBMISSION TO JURISDICTION. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE



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NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES
HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY
LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.



     (c) WAIVER OF VENUE. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.



     (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.



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



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BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.



     10.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of each
transaction contemplated hereby (including in connection with any amendment, waiver or other
modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and
acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services
regarding this Agreement provided by the Administrative Agent and the Arranger, are arm’s-length
commercial transactions between the Borrower and its Affiliates, on the one hand, and the
Administrative Agent and the Arranger, on the other hand, (B) the Borrower has consulted its own
legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the
Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of
the transactions contemplated hereby and by the other Loan Documents; (ii) (A), the Administrative
Agent and the Arranger each is and has been acting solely as a principal and, except as expressly
agreed in writing by the relevant parties, has not been, is not, and will not be acting as an
advisor, agent or fiduciary for the Borrower or any of its Affiliates or any other Person and (B)
neither the Administrative Agent nor the Arranger has any obligation to the Borrower or any of its
Affiliates with respect to the transactions contemplated hereby except those obligations expressly
set forth herein and in the other Loan Documents; and (iii) the Administrative Agent and the
Arranger and their respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower and its Affiliates, and neither the
Administrative Agent nor the Arranger has any obligation to disclose any of such interests to the
Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and
releases any claims that it may have against the Administrative Agent and the Arranger with respect
to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.



     10.17 Electronic Execution of Assignments and Certain Other Documents. The words “execution,”
“signed,” “signature,” and words of like import in any Assignment and Assumption or in any
amendment or other modification hereof (including waivers and consents) shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as provided for in any
applicable law, including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.



     10.18 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined)
and the Administrative Agent (for itself and not on behalf of any 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 or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act. The Borrower shall, promptly
following a request by the Administrative Agent or any Lender, provide all documentation and other
information that the Administrative Agent or such Lender



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requests in order to comply with its ongoing obligations under applicable “know your customer”
and anti-money laundering rules and regulations, including the Act.




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



	 	 	 	 	 
	 
	 	CALIFORNIA WATER SERVICE COMPANY

 	 
	 	By:  	/s/
Martin A. Kropelnicki	 
	 	 	Name: 	Martin A. Kropelnicki	 
	 	 	Title:  	Vice
President, Chief Financial Officer and Treasurer	 
	 



California Water Service Company

Credit Agreement

Signature Page




 









 








	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as


Administrative Agent

 	 
	 	By:  	/s/
Dora A. Brown	 
	 	 	Name:  	Dora A. Brown 	 
	 	 	Title:  	Vice President 	 
	 



California Water Service Company

Credit Agreement

Signature Page