Exhibit 10.11.5





Exhibit 10.11.5




Execution Version




CUSIP Number: 723485AE8




U.S. $200,000,000

THREE-YEAR CREDIT AGREEMENT

Dated as of February 12, 2010

among

PINNACLE WEST CAPITAL CORPORATION,

as Borrower,




THE LENDERS PARTY HERETO,




BANK OF AMERICA, N.A.,

as Agent and Issuing Bank,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Co-Syndication Agent and Issuing Bank,

BARCLAYS CAPITAL

and

CREDIT SUISSE, CAYMAN ISLANDS BRANCH,

as Co-Syndication Agents,

BANC OF AMERICA SECURITIES LLC,

WELLS FARGO SECURITIES, LLC,

BARCLAYS CAPITAL

and

CREDIT SUISSE SECURITIES (USA) LLC

as Joint Lead Arrangers

and

BANC OF AMERICA SECURITIES LLC,

and

WELLS FARGO SECURITIES, LLC,

as Joint Book Runners





 


 









 







TABLE OF CONTENTS




	 	 	 	 	 
	ARTICLE I

	 
	 	 	 	 
	DEFINITIONS AND ACCOUNTING TERMS

	 
	 	 	 	 
	Section 1.01 Certain Defined Terms
	 	 	1	 
	Section 1.02 Other Interpretive Provisions
	 	 	15	 
	Section 1.03 Accounting Terms
	 	 	16	 
	Section 1.04 Rounding
	 	 	16	 
	Section 1.05 Times of Day
	 	 	16	 
	 
	 	 	 	 
	ARTICLE II

	 
	 	 	 	 
	AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT

	 
	 	 	 	 
	Section 2.01 The Advances and Letters of Credit
	 	 	16	 
	Section 2.02 Making the Advances
	 	 	17	 
	Section 2.03 Letters of Credit
	 	 	18	 
	Section 2.04 Fees
	 	 	26	 
	Section 2.05 Optional Termination or Reduction of the Commitments
	 	 	27	 
	Section 2.06 Repayment of Advances
	 	 	28	 
	Section 2.07 Interest on Advances
	 	 	28	 
	Section 2.08 Interest Rate Determination
	 	 	29	 
	Section 2.09 Optional Conversion of Advances
	 	 	30	 
	Section 2.10 Prepayments of Advances
	 	 	30	 
	Section 2.11 Increased Costs
	 	 	31	 
	Section 2.12 Illegality
	 	 	33	 
	Section 2.13 Payments and Computations
	 	 	33	 
	Section 2.14 Taxes
	 	 	34	 
	Section 2.15 Sharing of Payments, Etc.
	 	 	38	 
	Section 2.16 Evidence of Debt
	 	 	39	 
	Section 2.17 Use of Proceeds
	 	 	39	 
	Section 2.18 Increase in the Aggregate Revolving Credit Commitments
	 	 	39	 
	Section 2.19 Affected Lenders
	 	 	41	 
	Section 2.20 Replacement of Lenders
	 	 	42	 
	 
	 	 	 	 
	ARTICLE III

	 
	 	 	 	 
	CONDITIONS PRECEDENT

	 
	 	 	 	 
	Section 3.01 Conditions Precedent to Effectiveness
	 	 	43	 
	Section 3.02 Conditions Precedent to Each Credit Extension and Commitment Increase
	 	 	44	 
	Section 3.03 Determinations Under Section 3.01
	 	 	45	 






 


 









 





	 	 	 	 	 
	ARTICLE IV

	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES

	 
	 	 	 	 
	Section 4.01 Representations and Warranties of the Borrower
	 	 	45	 
	 
	 	 	 	 
	ARTICLE V

	 
	 	 	 	 
	COVENANTS OF THE BORROWER

	 
	 	 	 	 
	Section 5.01 Affirmative Covenants
	 	 	48	 
	Section 5.02 Negative Covenants
	 	 	51	 
	Section 5.03 Financial Covenant
	 	 	52	 
	 
	 	 	 	 
	ARTICLE VI

	 
	 	 	 	 
	EVENTS OF DEFAULT

	 
	 	 	 	 
	Section 6.01 Events of Default
	 	 	53	 
	Section 6.02 Actions in Respect of Letters of Credit upon Default
	 	 	55	 
	 
	 	 	 	 
	ARTICLE VII

	 
	 	 	 	 
	THE AGENT

	 
	 	 	 	 
	Section 7.01 Appointment and Authority
	 	 	56	 
	Section 7.02 Rights as a Lender
	 	 	56	 
	Section 7.03 Exculpatory Provisions
	 	 	56	 
	Section 7.04 Reliance by Agent
	 	 	57	 
	Section 7.05 Delegation of Duties
	 	 	57	 
	Section 7.06 Resignation of Agent
	 	 	57	 
	Section 7.07 Non-Reliance on Agent and Other Lenders
	 	 	58	 
	Section 7.08 No Other Duties, Etc.
	 	 	58	 
	Section 7.09 Issuing Banks
	 	 	58	 
	 
	 	 	 	 
	ARTICLE VIII

	 
	 	 	 	 
	MISCELLANEOUS

	 
	 	 	 	 
	Section 8.01 Amendments, Etc.
	 	 	59	 
	Section 8.02 Notices, Etc.
	 	 	59	 
	Section 8.03 No Waiver; Cumulative Remedies; Enforcement
	 	 	61	 
	Section 8.04 Costs and Expenses; Indemnity; Damage Waiver
	 	 	62	 
	Section 8.05 Right of Set-off
	 	 	64	 
	Section 8.06 Binding Effect
	 	 	64	 
	Section 8.07 Successors and Assigns
	 	 	64	 
	Section 8.08 Confidentiality
	 	 	68	 
	Section 8.09 Governing Law
	 	 	69	 






 


 









 





	 	 	 	 	 
	Section 8.10 Counterparts; Integration; Effectiveness
	 	 	69	 
	Section 8.11 Jurisdiction, Etc.
	 	 	69	 
	Section 8.12 Payments Set Aside
	 	 	69	 
	Section 8.13 Patriot Act
	 	 	70	 
	Section 8.14 Waiver of Jury Trial
	 	 	70	 
	Section 8.15 No Advisory or Fiduciary Responsibility
	 	 	70	 
	Section 8.16 Survival of Representations and Warranties
	 	 	71	 
	Section 8.17 Severability
	 	 	71	 






Schedules




Schedule 1.01 Commitments and Ratable Shares

Schedule 4.01(j) Subsidiaries

Schedule 4.01(k) Existing Indebtedness

Schedule 8.02 Certain Address for Notices




Exhibits




Exhibit A Form of Note

Exhibit B Form of Notice of Borrowing

Exhibit C Form of Assignment and Assumption






 


 









 







THREE-YEAR CREDIT AGREEMENT




Dated as of February 12, 2010




PINNACLE WEST CAPITAL CORPORATION, an Arizona corporation (the “Borrower”), the banks,
financial institutions and other institutional lenders (the “Initial Lenders”) and initial
issuing banks (the “Initial Issuing Banks”) listed on the signature pages hereof, Banc of
America Securities LLC, Wells Fargo Securities, LLC, Barclays Capital, the investment banking
division of Barclays Bank PLC, and Credit Suisse Securities (USA) LLC, as Joint Lead Arrangers (the
“Arrangers”), Wells Fargo Bank, National Association, Barclays Capital, the investment
banking division of Barclays Bank PLC and Credit Suisse Securities (USA) LLC, as Co-Syndication
Agents and BANK OF AMERICA, N.A., as Agent for the Lenders (as hereinafter defined), agree as
follows:



The Borrower has requested that the Lenders provide a revolving credit facility for the
purposes set forth herein, 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




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



“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Agent.



“Advance” means an advance by a Lender to the Borrower as part of a Borrowing, including a
Base Rate Advance made pursuant to Section 2.03(c), but excluding any L/C Advance made as part of
an L/C Borrowing, and refers to a Base Rate Advance or a Eurodollar Rate Advance (each of which
shall be a “Type” of Advance).



“Affected Lender” means any Lender, as reasonably determined by the Agent or if the
Agent is the Affected Lender, by the Required Lenders, that (a) has defaulted in its obligation to
fund any Advance or any of its other funding obligations under this Agreement, (b) has notified the
Borrower, the Agent, any Issuing Bank or any Lender in writing of its intention not to fund any
Advance or any of its other funding obligations under this Agreement, (c) has otherwise failed to
pay over to the 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, (d)
has failed, within three Business Days after written request by the Agent, or if the Agent is the
Affected Lender, by the Required Lenders, to confirm that it will comply with the terms of this
Agreement relating to its obligations to fund prospective Advances or (e) shall (or whose parent
company shall) generally not pay its debts as such debts become due, or shall



 


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admit in writing its inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or shall have had any proceeding instituted by or against such Lender
(or its parent company) seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or
its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a receiver, trustee,
administrator, assignee for the benefit of creditors or similar Person charged with reorganization
or liquidation of its business or custodian for it or for any substantial part of its property and,
in the case of any such proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 30 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of an order for relief against,
or the appointment of a receiver, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or custodian for, it or
for any substantial part of its property) shall occur, or shall take (or whose parent company shall
take) any corporate action to authorize any of the actions set forth above in this subsection (e),
provided that a Lender shall not be deemed to be an Affected Lender solely by virtue of the
ownership or acquisition of any equity interest in any Lender or any Person that directly or
indirectly controls such Lender by a Governmental Authority or an instrumentality thereof.



“Affiliate” means, as to any Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person or is a director or officer
of such Person. For purposes of this definition, the term “control” (including the terms
“controlling”, “controlled by” and “under common control with”) of a Person means the possession,
direct or indirect, of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of Voting Stock, by contract or otherwise.



“Agent” means Bank of America in its capacity as administrative agent under any of the
Loan Documents, or any successor administrative agent.



“Agent’s Account” means the account of the Agent designated on Schedule 8.02 under the
heading “Agent’s Account” or such other account as the Agent may designate to the Lenders and the
Borrower from time to time.



“Agent’s Office” means the Agent’s address and, as appropriate, the Agent’s Account,
or such other address or account as the Agent may from time to time notify to the Borrower and the
Lenders.



“Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic
Lending Office in the case of a Base Rate Advance and such Lender’s Eurodollar Lending Office in
the case of a Eurodollar Rate Advance.


 


2









 





“Applicable Rate” means, from time to time, the following percentages per annum
determined by reference to the Public Debt Rating as set forth below:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	Public Debt Rating	 	 	 	 	 	Eurodollar Rate	 	 	 	 
	S&P/Moody’s	 	Base Rate Advances	 	 	Advances	 	 	Commitment Fee	 
	Level 1

≥ BBB+/Baa1
	 	 	1.500	%	 	 	2.500	%	 	 	0.375	%
	Level 2

< Level 1 but ≥
BBB/Baa2
	 	 	1.750	%	 	 	2.750	%	 	 	0.500	%
	Level 3

< Level 2 but ≥
BBB-/Baa3
	 	 	2.000	%	 	 	3.000	%	 	 	0.625	%
	Level 4

< Level 3 but ≥
BB+/Ba1
	 	 	2.500	%	 	 	3.500	%	 	 	0.750	%
	Level 5

< Level 4
	 	 	3.000	%	 	 	4.000	%	 	 	1.000	%







“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 any entity that administers or manages a
Lender.




“APS” means Arizona Public Service Company, an Arizona corporation.




“Arrangers” has the meaning given to such term in the introductory paragraph hereof.



“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 Eligible Assignee, and accepted by the Agent, in substantially the form of
Exhibit C hereto.




“Assuming Lender” has the meaning specified in Section 2.18(d).




“Assumption Agreement” has the meaning specified in Section 2.18(d)(ii).



“Authorized Officer” means the chairman of the board, chief executive officer, chief
operating officer, chief financial officer, chief accounting officer, president, any vice
president, treasurer, controller or any assistant treasurer of the Borrower.



“Available Amount” of any Letter of Credit means, at any time, the maximum amount
available to be drawn under such Letter of Credit at such time (assuming compliance at such time
with all conditions to drawing).



“Bank of America” means Bank of America, N.A.


 


3









 






“Base Rate” means for any day a fluctuating rate per annum equal to the highest of:




(a) the rate of interest in effect for such day as publicly announced from time to time
by the Agent as its “prime rate”;




(b) the Federal Funds Rate plus 0.50%; and




(c) an amount equal to (i) the Eurodollar Rate for a one month Interest Period on such
day (or if such day is not a Business Day, the immediately preceding Business Day) plus (ii)
1%.




“Prime rate” means the rate of interest in effect for such day as publicly announced
from time to time by the Agent as its “prime rate.” The “prime rate” is a rate set by the
Agent based upon various factors including the Agent’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 the
“prime rate” announced by the Agent shall take effect at the opening of business on the day
specified in the public announcement of such change.



“Base Rate Advance” means an Advance that bears interest as provided in Section
2.07(a)(i).




“Borrower” has the meaning given to such term in the introductory paragraph hereof.




“Borrower Information” has the meaning specified in Section 8.08.



“Borrowing” means a borrowing consisting of simultaneous Advances of the same Type
made by each of the Lenders pursuant to Section 2.01(a).



“Business Day” means a day of the year on which banks are not required or authorized
by Law to close in New York City, Phoenix, Arizona or Charlotte, North Carolina and, if the
applicable Business Day relates to any Advance in which interest is calculated by reference to the
Eurodollar Rate, on which dealings are carried on in the London interbank market.



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



“Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption of any Law, (b) any change in any Law 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.


 


4









 






“Commitment” means a Revolving Credit Commitment or a Letter of Credit Commitment.




“Commitment Date” has the meaning specified in Section 2.18(b).




“Commitment Increase” has the meaning specified in Section 2.18(a).




“Consolidated” refers to the consolidation of accounts in accordance with GAAP.



“Consolidated Indebtedness” means, at any date, the Indebtedness of the Borrower and
its Consolidated Subsidiaries determined on a Consolidated basis as of such date.



“Consolidated Net Worth” means, at any date, the sum as of such date of (a) the par
value (or value stated on the books of the Borrower) of all classes of capital stock of the
Borrower and its Subsidiaries, excluding the Borrower’s capital stock owned by the Borrower and/or
its Subsidiaries, plus (or minus in the case of a surplus deficit) (b) the amount of the
Consolidated surplus, whether capital or earned, of the Borrower, determined in accordance with
GAAP as of the end of the most recent calendar month (excluding the effect on the Borrower’s
accumulated other comprehensive income/loss of the ongoing application of Accounting Standards
Codification Topic 815).



“Consolidated Subsidiary” means, at any date, any Subsidiary or other entity the
accounts of which would be consolidated with those of the Borrower on its Consolidated financial
statements if such financial statements were prepared as of such date.



“Convert”, “Conversion” and “Converted” each refers to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.08, Section 2.09 or
Section 2.12.



“Credit Extension” means each of the following: (a) a Borrowing and (b) the issuance
of a Letter of Credit.



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



“Default” means any Event of Default or any event that would constitute an Event of
Default but for the requirement that notice be given or time elapse or both.




“Dollars” or “$” means dollars of the United States of America.



“Domestic Lending Office” means, with respect to any Lender, the office 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 Agent.



“Effective Date” has the meaning specified in Section 3.01.


 


5









 





“Eligible Assignee” means any Person that meets the requirements to be an assignee
under Section 8.07(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required
under Section 8.07(b)(iii)).



“Environmental Action” means any action, suit, demand, demand letter, claim, notice of
non-compliance or violation, notice of liability or potential liability, investigation, proceeding,
consent order or consent agreement relating in any way to any Environmental Law, Environmental
Permit or Hazardous Materials or arising from alleged injury or threat of injury to health, safety
or the environment and relating to any Environmental Law, including, without limitation, (a) by any
Governmental Authority for enforcement, cleanup, removal, response, remedial or other actions or
damages and (b) by any Governmental Authority or any third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.



“Environmental Law” means any federal, state, local or foreign statute, law,
ordinance, rule, regulation, code, order, judgment, decree or judicial or agency interpretation,
policy or guidance relating to pollution or protection of the environment, natural resources or, to
the extent relating to exposure to Hazardous Materials, human health or safety, including, without
limitation, those relating to the use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.



“Environmental Permit” means any permit, approval, identification number, license or
other authorization required under any Environmental Law.




“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 Internal
Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions
relating to Section 412 of the Internal Revenue 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 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 Lending Office” means, with respect to any Lender, the office 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 Agent.


 


6









 






“Eurodollar Rate” means:



(a) for any Interest Period with respect to a Eurodollar Rate Advance, the rate per annum
equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters
(or other commercially available source providing quotations of BBA LIBOR as designated by the
Agent from time to time) at approximately 11:00 a.m., London time, two Business 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. If such rate is not available at
such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per
annum determined by the 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
Advance being made, continued or converted by the Agent and with a term equivalent to such Interest
Period would be offered by the Agent to major banks in the London interbank eurodollar market at
their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement
of such Interest Period; and



(b) for any interest rate calculation with respect to a Base Rate Advance, the rate per annum
equal to (i) BBA LIBOR, at approximately 11:00 a.m. two Business Days prior to, London time on the
date of determination (provided that if such day is not a Business Day in London, the next
preceding Business Day in London) 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 determined by the 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 Advance being made, continued or converted by the Agent and with a term equal to one
month would be offered by the Agent’s London Branch to major banks in the London interbank
Eurodollar market at their request at the date and time of determination.



“Eurodollar Rate Advance” means an Advance that bears interest at a rate based on the
Eurodollar Rate (other than a Base Rate Advance bearing interest at a rate based on the Eurodollar
Rate).




“Events of Default” has the meaning specified in Section 6.01.



“Excluded Taxes” means, with respect to the Agent, any Lender, any Issuing Bank 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 United States or the
jurisdiction (or any political subdivision thereof) under the Laws of which such recipient is
organized or does business 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 Internal Revenue Code to be
withheld from amounts payable to a Lender that has failed to comply with clause (A) of Section
2.14(e)(ii), and (d) in the case of a Foreign Lender (other than as agreed to between any assignee
and the Borrower pursuant to a request by the Borrower under Section 2.20), any United States
withholding tax that (i) is required to be imposed on amounts payable to such Foreign Lender



 


7









 






pursuant to the Laws in force at the time such Foreign Lender becomes a party hereto (or
designates a new Applicable 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 2.14(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 Applicable Lending Office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax pursuant to Section
2.14(a)(i) or (ii).



“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 the Agent on such day on such transactions as determined by the Agent.



“Fee Letters” means (a) each of the following letters to the Borrower dated December
24, 2009: (i) the letter from Bank of America, Banc of America Securities LLC, Wells Fargo Bank,
National Association and Wells Fargo Securities, LLC, (ii) the letter from Credit Suisse AG, Cayman
Islands Branch and Credit Suisse Securities (USA) LLC, and (iii) the letter from Barclays Bank PLC,
each relating to certain fees payable by the Borrower to such parties in respect of the
transactions contemplated by this Agreement and (b) any letter between the Borrower and any Issuing
Bank other than an Initial Issuing Bank relating to certain fees payable to such Issuing Bank in
its capacity as such, each as amended, modified, restated or supplemented from time to time.



“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 an Issuing Bank). For purposes of this definition, the United States,
each State thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.



“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 business.




“GAAP” has the meaning specified in Section 1.03.



“Governmental Authority” means the government of the United States of America 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).


 


8









 





“Guarantee” means as to any Person, any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner
providing for the payment of any Indebtedness of any other Person or otherwise protecting the
holder of such Indebtedness against loss (whether by virtue of partnership arrangements, agreements
to keep well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise),
provided that the term “Guarantee” shall not include endorsements for collection or deposit
in the ordinary course of business. The term “Guarantee” used as a verb has a
corresponding meaning.



“Hazardous Materials” means (a) petroleum and petroleum products, byproducts or
breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls
and radon gas and (b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.



“Hedge Agreement” means any interest rate swap, cap or collar agreement, interest rate
future or option contract, currency swap agreement, currency future or option contract, commodity
future or option contract, commodity forward contract or other similar agreement.




“Increase Date” has the meaning specified in Section 2.18(a).




“Increasing Lender” has the meaning specified in Section 2.18(b).



“Indebtedness” means as to any Person at any date (without duplication): (a)
indebtedness created, issued, incurred or assumed by such Person for borrowed money or evidenced by
bonds, debentures, notes or similar instruments; (b) all obligations of such Person to pay the
deferred purchase price of property or services, excluding, however, trade accounts payable (other
than for borrowed money) arising in, and accrued expenses incurred in, the ordinary course of
business of such Person so long as such trade accounts payable are paid within 180 days of the date
incurred; (c) all Indebtedness secured by a lien on any asset of such Person, to the extent such
Indebtedness has been assumed by, or is a recourse obligation of, such Person; (d) all Guarantees
by such Person; (e) all Capital Lease Obligations of such Person; and (f) the amount of all
reimbursement obligations of such Person (whether contingent or otherwise) in respect of letters of
credit, bankers’ acceptances, surety or other bonds and similar instruments in support of
Indebtedness.




“Indemnified Taxes” means Taxes other than Excluded Taxes.



“Initial Issuing Banks” has the meaning given to such term in the introductory
paragraph hereof.



“Initial Lenders” has the meaning given to such term in the introductory paragraph
hereof.



“Interest Period” means, for each Eurodollar Rate Advance comprising part of the same
Borrowing, the period commencing on the date such Eurodollar Rate Advance is disbursed or the date
of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance and ending on the last
day of the period selected by the Borrower pursuant to the provisions below and,



 


9









 






thereafter, each subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be one, two, three or six
months, as the Borrower may, upon notice received by the Agent not later than 12:00 noon on the
third Business Day prior to the first day of such Interest Period, select; provided,
however, that:




(a) the Borrower may not select any Interest Period that ends after the Termination
Date;




(b) Interest Periods commencing on the same date for Eurodollar Rate Advances
comprising part of the same Borrowing shall be of the same duration;




(c) whenever the last day of any Interest Period would otherwise occur on a day other
than a Business Day, the last day of such Interest Period shall be extended to occur on the
next succeeding Business Day, provided, however, that, if such extension
would cause the last day of such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the next preceding Business Day;
and




(d) whenever the first day of any Interest Period occurs on a day of an initial
calendar month for which there is no numerically corresponding day in the calendar month
that succeeds such initial calendar month by the number of months equal to the number of
months in such Interest Period, such Interest Period shall end on the last Business Day of
such succeeding calendar month.



“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.




“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).



“Issuing Bank” means the Initial Issuing Banks or any other Lender approved by the
Borrower that may agree to issue Letters of Credit pursuant to an Assignment and Assumption or
other agreement in form satisfactory to the Borrower and the Agent, so long as such Lender
expressly agrees to perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as an Issuing Bank and notifies the Agent of
its Applicable Lending Office (which information shall be recorded by the Agent in the Register),
for so long as such Initial Issuing Bank or Lender, as the case may be, shall have a Letter of
Credit Commitment.



“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 Ratable Share.


 


10









 





“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 nor refinanced as a Base Rate
Advance.



“L/C Cash Deposit Account” means an interest bearing cash deposit account to be
established and maintained by the Agent, over which the Agent shall have sole dominion and control,
upon terms as may be satisfactory to the Agent.



“L/C Obligations” means, as at any date of determination, the aggregate Available
Amount of all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts,
including all L/C Borrowings. 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.



“L/C Related Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered into by any Issuing
Bank and the Borrower or in favor of any Issuing Bank 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, licenses, authorizations and permits of, and
agreements with, any Governmental Authority.



“Lenders” means the Initial Lenders, each Issuing Bank, each Assuming Lender that
shall become a party hereto pursuant to Section 2.18 and each Person that shall become a party
hereto pursuant to Section 8.07.




“Letter of Credit” has the meaning specified in Section 2.01(b).



“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 any Issuing Bank.



“Letter of Credit Commitment” means, with respect to each Issuing Bank, the obligation
of such Issuing Bank to issue Letters of Credit for the account of the Borrower from time to time
in an aggregate amount equal to (a) for each of the Initial Issuing Banks, $100,000,000 and (b) for
any other Issuing Bank, as separately agreed to by such Issuing Bank and the Borrower. The Letter
of Credit Commitment is part of, and not in addition to, the Revolving Credit Commitments.



“Letter of Credit Expiration Date” means the day that is five Business Days prior to
the Termination Date.



“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or otherwise), charge or other security interest or preferential
arrangement that has the practical effect of creating a security interest, including, without



 


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limitation, the lien or retained security title of a conditional vendor and any easement,
right of way or other encumbrance on title to real property, and any Capital Lease having
substantially the same economic effect as any of the foregoing.



“Loan Documents” mean this Agreement, each Note, each L/C Related Document and the Fee
Letters.



“Material Adverse Effect” means a material adverse effect on (a) the financial
condition or financial prospects of the Borrower and its Subsidiaries (excluding SunCor Development
Company and its Subsidiaries) taken as a whole, (b) the rights and remedies of the Agent or any
Lender under this Agreement or any Note or (c) the ability of the Borrower to perform its
obligations under this Agreement or any Note.



“Material Subsidiary” means APS and, at any time, each other Subsidiary of the
Borrower (excluding SunCor Development Company and its Subsidiaries) which as of such time meets
the definition of a “significant subsidiary” in Regulation S-X of the Securities and Exchange
Commission or whose assets at such time exceed 10% of the assets of the Borrower and the
Subsidiaries (on a consolidated basis).




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



“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 of the Borrower payable to the order of any Lender,
delivered pursuant to a request made under Section 2.16 in substantially the form of Exhibit
A hereto.




“Notice of Borrowing” has the meaning specified in Section 2.02(a).



“Obligations” means all advances to, and debts, liabilities, obligations, covenants
and duties of, the Borrower arising under any Loan Document or otherwise with respect to any
Advance or Letter of Credit, 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 under any Loan Document after the commencement by or against the
Borrower of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.



“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.



“PBGC” means the Pension Benefit Guaranty Corporation.


 


12









 





“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.



“Person” means an individual, partnership, corporation (including a business trust),
joint stock company, trust, unincorporated association, joint venture, limited liability company or
other entity, or a government or any political subdivision or agency thereof.



“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 Internal Revenue Code or Title IV of ERISA, any ERISA Affiliate.



“Public Debt Rating” means, as of any date, the rating that has been most recently
announced by either S&P or Moody’s, as the case may be, for any class of non-credit enhanced
long-term senior unsecured debt issued by the Borrower or, if any such rating agency shall have
issued more than one such rating, the lowest such rating issued by such rating agency. For
purposes of the foregoing, (a) if only one of S&P and Moody’s shall have in effect a Public Debt
Rating, the Applicable Rate shall be determined by reference to the available rating; (b) if
neither S&P nor Moody’s shall have in effect a Public Debt Rating, the Applicable Rate will be set
in accordance with Level 5 under the definition of “Applicable Rate”; (c) if the ratings
established by S&P and Moody’s shall fall within different levels, the Applicable Rate shall be
based upon the higher rating unless such ratings differ by two or more levels, in which case the
applicable level will be deemed to be one level below the higher of such levels; (d) if any rating
established by S&P or Moody’s shall be changed (other than as a result of a change in the basis on
which ratings are established), such change shall be effective as of the date on which such change
is first announced publicly by the rating agency making such change; and (e) if S&P or Moody’s
shall change the basis on which ratings are established, each reference to the Public Debt Rating
announced by S&P or Moody’s, as the case may be, shall refer to the then equivalent rating by S&P
or Moody’s, as the case may be.



“Ratable Share” of any amount means, with respect to any Lender at any time but
subject to the provisions of Section 2.19, the product of such amount times a fraction the
numerator of which is the amount of such Lender’s Revolving Credit Commitment at such time (or, if
the Revolving Credit Commitments shall have been terminated pursuant to Section 2.05 or 6.01, such
Lender’s Revolving Credit Commitment as in effect immediately prior to such termination) and the
denominator of which is the aggregate amount of all Revolving Credit Commitments at such time (or,
if the Revolving Credit Commitments shall have been terminated pursuant to Section 2.05 or 6.01,
the aggregate amount of all Revolving Credit Commitments as in effect immediately prior to such
termination).



“Register” has the meaning specified in Section 8.07(c).


 


13









 





“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 under the final regulations
issued under Section 4043, as in effect as of the date of this Agreement (the “Section 4043
Regulations”). Any changes made to the Section 4043 Regulations that become effective after the
Effective Date shall have no impact on the definition of Reportable Event as used herein unless
otherwise amended by the Borrower and the Required Lenders.



“Required Lenders” means, at any time, but subject to Section 2.19, Lenders holding in
the aggregate more than 50% of (a) the Revolving Credit Commitments or (b) if the Revolving Credit
Commitments have been terminated, the Total Outstandings.



“Revolving Credit Commitment” means, as to any Lender, its obligation to (a) make
Advances to the Borrower pursuant to Section 2.01 and 2.03(c), and (b) purchase participations in
L/C Obligations, in an aggregate principal amount at any one time outstanding not to exceed the
amount set forth opposite such Lender’s name on Schedule 1.01 under the column “Revolving
Credit Commitment” or if such Lender has become a Lender hereunder pursuant to an Assumption
Agreement or if such Lender has entered into any Assignment and Assumption, the amount set forth
for such Lender in the Register, in each case as such amount may be reduced pursuant to Section
2.05 or increased pursuant to Section 2.18.



“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.



“Sale Leaseback Obligation Bonds” means PVNGS II Funding Corp.’s (a) 8.00% Secured
Lease Obligation Bonds, Series 1993, due 2015; (b) any other bonds issued by or on behalf of the
Borrower in connection with a sale/leaseback transaction; and (c) any refinancing or refunding of
the obligations specified in subclauses (a) and (b) above.



“SEC Reports” means the Borrower’s (i) Form 10-K Report for the year ended December
31, 2008, (ii) Form 10-Q Reports for the quarters ended March 31, 2009, June 30, 2009 and September
30, 2009 and (iii) Form 8-K Reports filed on January 26, 2009, February 20, 2009, February 25,
2009, March 3, 2009, March 24, 2009, March 24, 2009, April 2, 2009, April 22, 2009, May 4, 2009,
May 5, 2009, June 2, 2009, June 15, 2009, July 1, 2009, August 4, 2009, September 25, 2009, October
29, 2009, November 2, 2009, November 18, 2009, December 17, 2009, December 21, 2009, January 25,
2010 and February 1, 2010.



“Subsidiary” of any Person means any corporation, partnership, joint venture, limited
liability company, trust or estate of which (or in which) more than 50% of (a) the issued and
outstanding Voting Stock, (b) the interest in the capital or profits of such limited liability
company, partnership or joint venture or (c) the beneficial interest in such trust or estate, is at
the time directly or indirectly owned or controlled by such Person, by such Person and one or more
of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.


 


14









 





“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.



“Termination Date” means the earlier of (a) February 12, 2013 and (b) the date of
termination in whole of the Commitments pursuant to Section 2.05 or 6.01.



“Total Outstandings” means the sum of (a) the aggregate principal amount of all
Advances plus (b) all L/C Obligations outstanding.




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



“Unissued Letter of Credit Commitment” means, with respect to any Issuing Bank, the
obligation of such Issuing Bank to issue Letters of Credit for the account of the Borrower in an
amount equal to the excess of (a) the amount of its Letter of Credit Commitment over (b) the
aggregate Available Amount of all Letters of Credit issued by such Issuing Bank.



“Unused Commitment” means, with respect to each Lender at any time, (a) such Lender’s
Revolving Credit Commitment at such time minus (b) the sum of (i) the aggregate principal
amount of all Advances made by such Lender (in its capacity as a Lender) and outstanding at such
time and (ii) such Lender’s Ratable Share of the aggregate L/C Obligations outstanding at such
time.



“Voting Stock” means capital stock issued by a corporation, or equivalent interests in
any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar functions) of such Person, even
if the right so to vote has been suspended by the happening of such a contingency.



Section 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:



(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 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 permitted successors and permitted 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



 


15









 






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.



Section 1.03 Accounting Terms. Unless otherwise specified herein, all accounting
terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared, in accordance with
generally accepted accounting principles as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the Borrower’s independent public accountants) with
the most recent audited Consolidated financial statements of the Borrower delivered to the Agent
(“GAAP”). If at any time any change in GAAP or in the interpretation thereof 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 Agent, the Lenders and 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 or in the interpretation thereof (subject to the approval
of the Required Lenders); provided that, until so amended, such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such change therein.



Section 1.04 Rounding. Any financial ratios required to be maintained by the Borrower
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).



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



ARTICLE II




AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT





Section 2.01 The Advances and Letters of Credit.



(a) The Advances. Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make Advances in Dollars to the Borrower from time to time on any
Business Day during the period from the Effective Date until the Termination Date in an amount not
to exceed such Lender’s Unused Commitment. Each Borrowing shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and shall consist



 


16









 






of Advances of the same Type made on the same day by the Lenders ratably according to their
respective Revolving Credit Commitments. Within the limits of each Lender’s Revolving Credit
Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under
this Section 2.01(a), prepay pursuant to Section 2.10 and reborrow under this Section 2.01(a).



(b) Letters of Credit. Each Issuing Bank agrees, on the terms and conditions
hereinafter set forth, in reliance upon the agreements of the other Lenders set forth in this
Agreement, to issue letters of credit (each, a “Letter of Credit”) for the account of the
Borrower from time to time on any Business Day during the period from the Effective Date until 30
days before the Termination Date in an aggregate Available Amount for all Letters of Credit issued
by each Issuing Bank not to exceed at any time such Issuing Bank’s Letter of Credit Commitment,
provided that after giving effect to the issuance of any Letter of Credit, (i) the Total
Outstandings shall not exceed the aggregate Revolving Credit Commitments and (ii) each Lender’s
Ratable Share of the Total Outstandings shall not exceed such Lender’s Revolving Credit Commitment.
No Letter of Credit shall have an expiration date (including all rights of the Borrower or the
beneficiary to require renewal) later than the Letter of Credit Expiration Date. Within the limits
referred to above, the Borrower may from time to time request the issuance of Letters of Credit
under this Section 2.01(b). The terms “issue”, “issued”, “issuance” and all similar terms, when
applied to a Letter of Credit, shall include any renewal, extension or amendment thereof.




Section 2.02 Making the Advances.



(a) Except as otherwise provided in Section 2.03(c), each Borrowing shall be made on notice,
given not later than (x) 12:00 noon on the third Business Day prior to the date of the proposed
Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances or (y) 12:00 noon on
the date of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by
the Borrower to the Agent, which shall give to each Lender prompt notice thereof by facsimile.
Each such notice of a Borrowing (a “Notice of Borrowing”) shall be in writing or by
facsimile in substantially the form of Exhibit B hereto, specifying therein the requested
(i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate amount
of such Borrowing, and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances,
initial Interest Period for each such Advance. Each Lender shall, in the case of a Borrowing
consisting of Base Rate Advances, before 2:00 p.m. on the date of such Borrowing, and in the case
of a Borrowing consisting of Eurodollar Rate Advances, before 11:00 a.m. on date of such Borrowing,
make available for the account of its Applicable Lending Office to the Agent at the Agent’s
Account, in same day funds, such Lender’s Ratable Share of such Borrowing. After the Agent’s
receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III,
the Agent will make such funds available to the Borrower at the Agent’s address referred to in
Section 8.02 or as requested by the Borrower in the applicable Notice of Borrowing.



(b) Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not
select Eurodollar Rate Advances for any Borrowing if the aggregate amount of such Borrowing is less
than $10,000,000 or if the obligation of the Lenders to make Eurodollar Rate Advances shall then be
suspended pursuant to Section 2.08 or 2.12 and (ii) at no



 


17









 






time shall there be more than fifteen different Interest Periods outstanding for Eurodollar
Rate Advances.



(c) Each Notice of Borrowing shall be irrevocable and binding on the Borrower. In the case of
any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower shall indemnify each Lender against any loss, cost or expense reasonably
incurred by such Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (excluding loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.



(d) Unless the Agent shall have received notice from a Lender prior to the time of the
applicable Borrowing that such Lender will not make available to the Agent such Lender’s Ratable
Share of such Borrowing, the Agent may assume that such Lender has made such portion available to
the Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and
the Agent may, in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so made such Ratable
Share available to the Agent, such Lender and the Borrower severally agree to repay to the Agent
within one Business Day after demand for such Lender and within three Business Days after demand
for the Borrower such corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to Advances
comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If the
Borrower and such Lender shall pay such interest to the Agent for the same or an overlapping
period, the Agent shall promptly remit to the Borrower the amount of such interest paid by the
Borrower for such period. If such Lender shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Lender’s Advance as part of such Borrowing for purposes of
this Agreement.



(e) The failure of any Lender to make the Advance to be made by it as part of any Borrowing
shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the
date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on the date of any Borrowing.




Section 2.03 Letters of Credit.




(a) General.




(i) No Issuing Bank shall issue any Letter of Credit, if 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.




(ii) No Issuing Bank shall be under any obligation to issue any Letter of Credit if:


 


18









 






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




(B) except as otherwise agreed by the Borrower and such Issuing Bank, such
Letter of Credit is in an initial stated amount less than $50,000, in the case of a
commercial Letter of Credit, or $500,000, in the case of a standby Letter of Credit;




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




(D) such Letter of Credit contains any provisions for automatic reinstatement
of the stated amount after any drawing thereunder;




(E) 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; or




(F) any Lender is at such time an Affected Lender hereunder, unless the
applicable Issuing Bank is satisfied that the related exposure will be 100% covered
by the Commitments of the non-Affected Lenders or, if not so covered, until such
Issuing Bank has entered into arrangements satisfactory to it in its sole discretion
with the Borrower or such Affected Lender to eliminate such Issuing Bank’s risk with
respect to such Affected Lender, and participating interests in any such newly
issued Letter of Credit shall be allocated among non-Affected Lenders in a manner
consistent with Section 2.19(c)(i) (and Affected Lenders shall not participate
therein);




(iii) No Issuing Bank shall amend any Letter of Credit if such Issuing Bank would not
be permitted at such time to issue such Letter of Credit in its amended form under the terms
hereof.




(iv) No Issuing Bank shall be under any obligation to amend any Letter of Credit if (A)
such Issuing Bank 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.


 


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(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 applicable Issuing Bank (with a copy to the Agent)
in the form of a Letter of Credit Application, appropriately completed and signed by an
Authorized Officer of the Borrower. Such Letter of Credit Application must be received by
such Issuing Bank and the Agent not later than 11:00 a.m. at least two Business Days (or
such later date and time as the Agent and such Issuing Bank 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
applicable Issuing Bank: (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 such Issuing Bank 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
applicable Issuing Bank (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment;
and (D) such other matters as such Issuing Bank may require. Additionally, the Borrower
shall furnish to the applicable Issuing Bank and the Agent such other documents and
information pertaining to such requested Letter of Credit issuance or amendment, including
any L/C Related Documents, as the applicable Issuing Bank or the Agent may require. In the
event and to the extent that the provisions of any Letter of Credit Application or other L/C
Related Document shall conflict with this Agreement, the provisions of this Agreement shall
govern. Without limitation of the immediately preceding sentence, no such Letter of Credit
Application or other L/C Related Document may impose any additional conditions on the
issuance or maintenance of a Letter of Credit, any additional default provisions, collateral
requirements or other obligations of the Borrower to any Issuing Bank, other than as stated
in this Agreement.




(ii) Promptly after receipt of any Letter of Credit Application, the applicable Issuing
Bank will confirm with the Agent (by telephone or in writing) that the Agent has received a
copy of such Letter of Credit Application from the Borrower and, if not, such Issuing Bank
will provide the Agent with a copy thereof. Unless the applicable Issuing Bank has received
written notice from the Required Lenders, the 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 III shall not then be satisfied,
then, subject to the terms and conditions hereof, such Issuing Bank shall, on the requested
date, issue a Letter of Credit for the account of the Borrower or enter into the applicable
amendment, as the case may be, in each case in accordance with such Issuing Bank’s usual and
customary business practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably


 


20









 






and unconditionally agrees to, purchase from such Issuing Bank a risk participation in
such Letter of Credit in an amount equal to the product of such Lender’s Ratable Share times
the amount of such Letter of Credit.




(iii) If the Borrower so requests in any applicable Letter of Credit Application, the
applicable Issuing Bank 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
such Issuing Bank 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.
Unless otherwise directed by the applicable Issuing Bank, the Borrower shall not be
required to make a specific request to the applicable Issuing Bank 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 applicable Issuing Bank 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 applicable Issuing Bank shall
not permit any such extension (or may issue a Notice of Non-Extension) if (A) such Issuing
Bank has determined that it would not be permitted at such time to issue such Letter of
Credit in its revised form (as extended) by reason of the provisions of clause (i) of
Section 2.03(a) (or would have no obligation to issue such Letter of Credit by reason of the
provisions of clause (ii) of Section 2.03(a)), 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
Non-Extension Notice Date (1) from the Agent that the Required Lenders have elected not to
permit such extension pursuant to Section 6.02 or (2) from the Agent, the Required Lenders
or the Borrower that one or more of the applicable conditions specified in Section 3.02 is
not then satisfied, and in each such case directing such Issuing Bank 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
applicable Issuing Bank will also deliver to the Borrower and the Agent a true and complete
copy of such Letter of Credit or amendment.




(c) Drawings and Reimbursements; Funding of Participations.




(i) Subject to the provisions below, not later than 2:30 p.m. on the date (the
“Honor Date”) that any Issuing Bank makes any payment on a drawing on any Letter of
Credit, if the Borrower shall have received notice of such payment prior to 11:30 a.m. on
such date, or, if such notice has not been received by the Borrower prior to such time on
such date, then not later than 2:30 p.m. on the next Business Day, the Borrower shall
reimburse such Issuing Bank through the Agent in an amount equal to the amount of such
drawing together with interest thereon. If the Borrower fails to so reimburse such Issuing
Bank by such time, unless the Borrower shall have advised the Agent that it does not meet
the conditions specified in clause (B) below, the Agent shall promptly notify each Lender of
the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed 


 


21









 






Amount”), and the amount of such Lender’s Ratable Share thereof. In such
event, the Borrower shall be deemed to have requested a Base Rate Advance 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 2.01(a) or the delivery of a Notice of Borrowing, but
subject to (A) the amount of the aggregate Unused Commitments and (B) no Event of Default
having occurred and be continuing, or resulting therefrom and, to the extent so financed,
the Borrower’s obligation to satisfy the reimbursement obligation created by such payment by
the Issuing Bank on the Honor Date shall be discharged and replaced by the resulting Base
Rate Advance. Any notice given by any Issuing Bank or the 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 to the Agent for the account of the applicable Issuing Bank at the Agent’s Office
in an amount equal to its Ratable Share of the Unreimbursed Amount not later than 4:00 p.m.
on the Business Day specified in such notice by the 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 Advance to the Borrower in such amount. The Agent shall
remit the funds so received to the applicable Issuing Bank.




(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Base
Rate Advance because any of the conditions set forth in clauses (A), (B) or (C) of Section
2.03(c)(i) cannot be satisfied or for any other reason, then not later than 2:30 p.m. on the
next Business Day after the day notice of the drawing is given to the Borrower, in the case
of a failure to meet any such condition, or in any other case, after notice of the event
resulting in the outstanding Unreimbursed Amount, the Borrower shall reimburse such Issuing
Bank through the Agent in an amount equal to the amount of such outstanding Unreimbursed
Amount with interest thereon. If the Borrower fails to so reimburse such Issuing Bank by
such time, the Borrower shall be deemed to have incurred from the applicable Issuing Bank 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 Base Rate in effect from time to time plus the Applicable Rate for Base Rate
Advances in effect from time to time plus 2% per annum. In such event, each Lender’s
payment to the Agent for the account of the applicable Issuing Bank 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 Base Rate Advance or L/C Advance pursuant to this
Section 2.03(c) to reimburse the applicable Issuing Bank for any amount drawn under any
Letter of Credit, interest in respect of such Lender’s Ratable Share of such amount shall be
solely for the account of the applicable Issuing Bank.




(v) Each Lender’s obligation to make Base Rate Advances or L/C Advances to reimburse
the applicable Issuing Bank for amounts drawn under Letters of Credit, as


 


22









 






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 such Issuing Bank, 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 Base
Rate Advances pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 2.03(c)(i). No such making of an L/C Advance shall relieve or otherwise impair the
obligation of the Borrower to reimburse the applicable Issuing Bank for the amount of any
payment made by such Issuing Bank under any Letter of Credit, together with interest as
provided herein.




(vi) If any Lender fails to make available to the Agent for the account of the
applicable Issuing Bank 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),
such Issuing Bank shall be entitled to recover from such Lender (acting through the 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 such Issuing Bank at
a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by
such Issuing Bank in accordance with banking industry rules on interbank compensation, plus
any administrative, processing or similar fees customarily charged by such Issuing Bank 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 Base Rate Advance included in
the relevant Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case
may be. A certificate of the applicable Issuing Bank submitted to any Lender (through the
Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent
manifest error.




(d) Repayment of Participations.




(i) At any time after the applicable Issuing Bank 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 Agent receives for the account of such
Issuing Bank any payment in respect of the related Unreimbursed Amount or interest thereon
(whether directly from the Borrower or otherwise, including proceeds of Cash Collateral (as
defined in Section 2.03(h)) applied thereto by the Agent), the Agent will distribute to such
Lender its Ratable Share thereof in the same funds as those received by the Agent.




(ii) If any payment received by the Agent for the account of the applicable Issuing
Bank pursuant to Section 2.03(c)(i) is required to be returned under any of the
circumstances described in Section 8.12 (including pursuant to any settlement entered into
by such Issuing Bank in its discretion), each Lender shall pay to the Agent for the account
of such Issuing Bank its Ratable Share thereof on demand of the 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.


 


23









 






The obligations of the Lenders under this clause shall survive the payment in full of
the Obligations and the termination of this Agreement.



(e) Failure to Make Advances. The failure of any Lender to make the Advance to be
made by it on the date specified in Section 2.03(c) or any L/C Advance shall not relieve any other
Lender of its obligation hereunder to make its Advance or L/C Advance, as the case may be, to be
made by such other Lender on such date.



(f) Obligations Absolute. The obligation of the Borrower to reimburse the applicable
Issuing Bank 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 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),
any Issuing Bank 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 applicable Issuing Bank 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 applicable Issuing Bank 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 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.




provided, however, that nothing in this Section 2.03(f) shall limit the
rights of the Borrower under Section 2.03(g).



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 that is known to the Borrower in connection with



 


24









 






any draw under such Letter of Credit of which the Borrower has reasonable notice, the Borrower
will immediately notify the applicable Issuing Bank. To the extent allowed by applicable Law,
Borrower shall be conclusively deemed to have waived any such claim against the applicable Issuing
Bank and its correspondents unless such notice is given as aforesaid. Nothing herein shall require
the Borrower to make any determination as to whether the drawing is in accordance with the
requirements of the Letter of Credit, provided that the Borrower may waive any discrepancies in the
drawing on any such Letter of Credit.



(g) Role of Issuing Bank. Each Lender and the Borrower agree that, in paying any
drawing under a Letter of Credit, the applicable Issuing Bank 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
applicable Issuing Bank, the Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of such Issuing Bank 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 L/C Related
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 applicable Issuing Bank, the Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of such Issuing Bank shall be liable or responsible for any
of the matters described in clauses (i) through (v) of Section 2.03(f); provided,
however, that anything in such clauses to the contrary notwithstanding, the Borrower may
have a claim against the applicable Issuing Bank, and such Issuing Bank 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 such Issuing
Bank’s willful misconduct or gross negligence or such Issuing Bank’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 applicable Issuing Bank may accept
documents that appear on its face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and such Issuing Bank 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.



(h) Cash Collateral. Upon the request of the Agent, 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 L/C Obligations. Section 6.02 sets forth
certain additional requirements to deliver Cash Collateral hereunder. For purposes of this Section
2.03 and Section 6.02, “Cash Collateralize” means to pledge and deposit with or deliver to the
Agent, for the benefit of the Issuing Banks and the Lenders, as collateral for the L/C Obligations,
cash or deposit account balances pursuant to documentation in form and



 


25









 






substance satisfactory to the Agent and each Issuing Bank (which documents are hereby
consented to by the Lenders). Derivatives of such term have corresponding meanings. The Borrower
hereby grants to the Agent, for the benefit of the Issuing Banks and the Lenders, a security
interest in all such cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts
with the Agent.



(i) Applicability of ISP and UCP. Unless otherwise expressly agreed by the
applicable Issuing Bank and the Borrower when a Letter of Credit is issued, (i) the rules of the
ISP shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the International Chamber of
Commerce at the time of issuance shall apply to each commercial Letter of Credit.



(j) Letter of Credit Reports. Each Issuing Bank shall furnish (A) to the Agent on the
first Business Day of each month a written report summarizing issuance and expiration dates of
Letters of Credit issued by such Issuing Bank during the preceding month and drawings during such
month under all such Letters of Credit and (B) to the Agent on the first Business Day of each
calendar quarter a written report setting forth the average daily aggregate Available Amount during
the preceding calendar quarter of all Letters of Credit issued by such Issuing Bank.



(k) Interim Interest. Except as provided in Section 2.03(c)(ii) with respect to
Unreimbursed Amounts refinanced as Base Rate Advances and Section 2.03(c)(iii) with respect to L/C
Borrowings, unless the Borrower shall reimburse each payment by an Issuing Bank pursuant to a
Letter of Credit in full on the Honor Date, the Unreimbursed Amount thereof shall bear interest,
for each day from and including the Honor Date to but excluding the date that the Borrower
reimburses such Issuing Bank for the Unreimbursed Amount in full, at the rate per annum equal to
(i) the Base Rate in effect from time to time plus the Applicable Rate for Base Rate Advances in
effect from time to time, to but excluding the next Business Day after the Honor Date and (ii) from
and including the next Business Day after the Honor Date, the Base Rate in effect from time to time
plus the Applicable Rate for Base Rate Advances in effect from time to time plus 2% per annum.




Section 2.04 Fees.



(a) Commitment Fee. The Borrower agrees to pay to the Agent for the account of each
Lender a commitment fee on such Lender’s Unused Commitment from the Effective Date in the case of
each Initial Lender and from the effective date specified in the Assumption Agreement or in the
Assignment and Assumption pursuant to which it became a Lender in the case of each other Lender
until the Termination Date at a rate per annum equal to the Applicable Rate for Commitment Fees in
effect from time to time, payable in arrears quarterly on the last day of each March, June,
September and December, commencing March 31, 2010, and on the Termination Date, provided that no
commitment fee shall accrue with respect to the Unused Commitment of an Affected Lender so long as
such Lender shall be an Affected Lender.


 


26









 






(b) Letter of Credit Fees.




(i) The Borrower shall pay to the Agent for the account of each Lender a commission on
such Lender’s Ratable Share of the average daily aggregate Available Amount of all Letters
of Credit outstanding from time to time at a rate per annum equal to the Applicable Rate for
Eurodollar Rate Advances in effect from time to time, during such calendar quarter, payable
in arrears quarterly on the last day of each March, June, September and December, commencing
with the quarter ended March 31, 2010, and on the Termination Date; provided that
the Applicable Rate for Eurodollar Rate Advances shall be 2% above such Applicable Rate in
effect upon the occurrence and during the continuation of an Event of Default if the
Borrower is required to pay default interest pursuant to Section 2.07(b).




(ii) The Borrower shall pay to each Issuing Bank, for its own account, a fronting fee
with respect to each Letter of Credit issued by such Issuing Bank, payable in the amounts
and at the times specified in the applicable Fee Letter between the Borrower and such
Issuing Bank, and such other commissions, issuance fees, transfer fees and other fees and
charges in connection with the issuance or administration of each Letter of Credit as the
Borrower and such Issuing Bank shall agree promptly following receipt of an invoice
therefor.



(c) Agent’s Fees. The Borrower shall pay to the Agent for its own account such fees
as are agreed between the Borrower and the Agent pursuant to the Fee Letter between the Borrower
and the Agent.




Section 2.05 Optional Termination or Reduction of the Commitments.



(a) The Borrower shall have the right, upon at least three Business Days’ notice to the Agent,
to terminate in whole or permanently reduce ratably in part the Unused Commitments or the Unissued
Letter of Credit Commitments, provided that each partial reduction shall be in the
aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.



(b) So long as no Default or Event of Default shall be continuing, the Borrower shall have the
right, at any time, upon at least ten Business Days’ notice to an Affected Lender (with a copy to
the Agent), to terminate in whole such Lender’s Revolving Credit Commitment and, if applicable, its
Letter of Credit Commitment, without affecting the Commitments of any other Lender. Such
termination shall be effective, (x) with respect to such Lender’s Unused Commitment, on the date
set forth in such notice, provided, however, that such date shall be no earlier
than ten Business Days after receipt of such notice and (y) with respect to each Advance
outstanding to such Lender, in the case of Base Rate Advances, on the date set forth in such notice
and, in the case of Eurodollar Rate Advances, on the last day of the then current Interest Period
relating to such Advance. Upon termination of a Lender’s Commitments under this Section 2.05(b),
the Borrower will pay or cause to be paid all principal of, and interest accrued to the date of
such payment on, Advances owing to such Lender and, subject to Section 2.19, pay any accrued
commitment fees or Letter of Credit fees payable to such Lender pursuant to the provisions of
Section 2.04, and all other amounts payable to such Lender hereunder (including, but not limited
to, any increased costs or other amounts owing under Section 2.11 and any



 


27









 






indemnification for Taxes under Section 2.14); and, if such Lender is an Issuing Bank, shall
pay to such Issuing Bank for deposit in an escrow account an amount equal to the Available Amount
of all Letters of Credit issued by such Issuing Bank, whereupon all Letters of Credit issued by
such Issuing Bank shall be deemed to have been issued outside of this Agreement on a bilateral
basis and shall cease for all purposes to constitute a Letter of Credit issued under this
Agreement, and upon such payments, except as otherwise provided below, the obligations of such
Lender hereunder shall, by the provisions hereof, be released and discharged; provided,
however, that (i) such Lender’s rights under Sections 2.11, 2.14 and 8.04, and, in the case
of an Issuing Bank, Section 8.04(c), and its obligations under Section 8.04 and 8.08, in each case
in accordance with the terms thereof, shall survive such release and discharge as to matters
occurring prior to such date and (ii) such escrow agreement shall be in a form reasonably agreed to
by the Borrower and such Issuing Bank, but in no event shall either the Borrower or such Issuing
Bank require any waivers, covenants, events of default or other provisions that are more
restrictive than or inconsistent with the provisions of this Agreement. Subject to Section 2.18,
the aggregate amount of the Commitments of the Lenders once reduced pursuant to this Section
2.05(b) may not be reinstated. The termination of the Commitments of an Affected Lender pursuant
to this Section 2.05(b) will not be deemed to be a waiver of any right that the Borrower, the
Agent, any Issuing Bank or any other Lender may have against the Affected Lender that arose prior
to the date of such termination. Upon any such termination, the Ratable Share of each remaining
Lender will be revised.



Section 2.06 Repayment of Advances. The Borrower shall repay to the Agent for the
ratable account of the Lenders on the Termination Date the aggregate principal amount of the
Advances made by such Lender and then outstanding.




Section 2.07 Interest on Advances.



(a) Scheduled Interest. The Borrower shall pay interest on the unpaid principal
amount of each Advance owing to each Lender from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:




(i) Base Rate Advances. During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the sum of (x) the Base Rate in effect from
time to time plus (y) the Applicable Rate for Base Rate Advances in effect from time
to time, payable in arrears quarterly on the last day of each March, June, September and
December during such periods and on the date such Base Rate Advance shall be Converted or
paid in full.




(ii) Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for
such Advance to the sum of (x) the Eurodollar Rate for such Interest Period for such Advance
plus (y) the Applicable Rate for Eurodollar Rate Advances in effect from time to
time, payable in arrears on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day that occurs during such
Interest Period every three months from the first day of such Interest Period and on the
date such Eurodollar Rate Advance shall be Converted or paid in full.


 


28









 





(b) Default Interest. Upon the occurrence and during the continuance of an Event of
Default under Section 6.01(a), the Agent may, and upon the request of the Required Lenders shall,
require the Borrower to pay interest (“Default Interest”) on (i) the unpaid principal
amount of each Advance owing to each Lender, payable in arrears on the dates referred to in clause
(a)(i) or (a)(ii) above, at a rate per annum equal at all times to 2% per annum above the rate per
annum required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to
the fullest extent permitted by Law, the amount of any interest, fee or other amount payable
hereunder that is not paid when due, from the date such amount shall be due until such amount shall
be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at
a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on
Base Rate Advances pursuant to clause (a)(i) above, provided, however, that
following acceleration of the Advances pursuant to Section 6.01, Default Interest shall accrue and
be payable hereunder whether or not previously required by the Agent.



(c) Interest Rate Limitation. Nothing contained in this Agreement or in any other
Loan Document shall be deemed to establish or require the payment of interest to any Lender at a
rate in excess of the maximum rate permitted by applicable Law. If the amount of interest payable
for the account of any Lender on any interest payment date would exceed the maximum amount
permitted by applicable Law to be charged by such Lender, the amount of interest payable for its
account on such interest payment date shall be automatically reduced to such maximum permissible
amount. In the event of any such reduction affecting any Lender, if from time to time thereafter
the amount of interest payable for the account of such Lender on any interest payment date would be
less than the maximum amount permitted by applicable Law to be charged by such Lender, then the
amount of interest payable for its account on such subsequent interest payment date shall be
automatically increased to such maximum permissible amount, provided that at no time shall the
aggregate amount by which interest paid for the account of any Lender has been increased pursuant
to this sentence exceed the aggregate amount by which interest paid for its account has theretofore
been reduced pursuant to the previous sentence.




Section 2.08 Interest Rate Determination.



(a) The Agent shall give prompt notice to the Borrower and the Lenders of the applicable
interest rate determined by the Agent for purposes of Section 2.07(a).



(b) If the Required Lenders determine that for any reason in connection with any request for a
Eurodollar Rate Advance 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 Advance, (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 Advance, or (c) the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Advance does not adequately and fairly reflect the cost to such
Lenders of funding such Advance, the Agent will promptly so notify the Borrower and each Lender,
whereupon each Eurodollar Rate Advance will automatically on the last day of the then existing
Interest Period therefor Convert into a Base Rate Advance. Thereafter, the obligation of the
Lenders to make or maintain Eurodollar Rate Advances shall be suspended until the Agent (upon the
instruction of the Required Lenders)



 


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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 Advances or, failing that,
will be deemed to have Converted such request into a request for a Base Rate Advance in the amount
specified therein.



(c) If the Borrower shall fail to select the duration of any Interest Period for any
Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest
Period” in Section 1.01, the Agent will forthwith so notify the Borrower and the Lenders and such
Advances will automatically, on the last day of the then existing Interest Period therefor, Convert
into Base Rate Advances.



(d) On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances
comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than
$10,000,000, such Advances shall automatically Convert into Base Rate Advances.




(e) Upon the occurrence and during the continuance of any Event of Default,




(i) with respect to Eurodollar Rate Advances, each such Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance
(or if such Advance is then a Base Rate Advance, will continue as a Base Rate Advance); and




(ii) the obligation of the Lenders to make Eurodollar Rate Advances or to Convert
Advances into Eurodollar Rate Advances shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no longer exist.



Section 2.09 Optional Conversion of Advances. The Borrower may on any Business Day,
upon notice given to the Agent not later than 12:00 noon on the third Business Day prior to the
date of the proposed Conversion and subject to the provisions of Sections 2.08 and 2.12, Convert
all Advances of one Type comprising the same Borrowing into Advances of the other Type;
provided, however, that (a) any Conversion of Eurodollar Rate Advances into Base
Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate
Advances, (b) any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an
amount not less than the minimum amount specified in Section 2.02(b) and (c) no Conversion of any
Advances shall result in more separate Borrowings than permitted under Section 2.02(b). Each such
notice of a Conversion shall, within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted, and (iii) if such Conversion is into Eurodollar Rate
Advances, the duration of the initial Interest Period for each such Advance. Each notice of
Conversion shall be irrevocable and binding on the Borrower.




Section 2.10 Prepayments of Advances.



(a) Optional. At any time and from time to time, the Borrower shall have the right to
prepay the Advances, in whole or in part, without premium or penalty (except as provided in clause
(y) below), upon notice at least two Business Days’ prior to the date of such prepayment, in the
case of Eurodollar Rate Advances, and not later than 11:00 a.m. on the date of such prepayment, in
the case of Base Rate Advances, to the Agent specifying the proposed date of



 


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such prepayment and the aggregate principal amount and Type of the Advances to be prepaid
(and, in the case of Eurodollar Rate Advances, the Interest Period of the Borrowing pursuant to
which made); provided, however, that (x) each partial prepayment shall be in an
aggregate principal amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof
and (y) in the event of any such prepayment of a Eurodollar Rate Advance, the Borrower shall be
obligated to reimburse the Lenders in respect thereof pursuant to Section 8.04(e).




(b) Mandatory.




(i) The Borrower shall prepay the aggregate principal amount of the Advances, together
with accrued interest to the date of prepayment on the principal amount prepaid, without
requirement of demand therefor, or shall pay or prepay any other Indebtedness then
outstanding at any time, when and to the extent required to comply with applicable Laws of
any Governmental Authority or applicable resolutions of the Board of Directors of the
Borrower.




(ii) If for any reason the Total Outstandings at any time exceed the aggregate
Commitments then in effect, the Borrower shall, within one Business Day after notice
thereof, prepay Advances and/or 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 2.10(b)
unless, after the prepayment in full of the Advances, the Total Outstandings exceed the
aggregate Commitments then in effect.




Section 2.11 Increased Costs.




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




(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 2.11(e)) or any Issuing Bank; or




(ii) impose on any Lender or any Issuing Bank 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 Eurodollar Rate Advance (or of maintaining its obligation to make any such
Advance), or to increase the cost to such Lender or such Issuing Bank 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
such Issuing Bank hereunder (whether of principal, interest or any other amount) then, upon request
of such Lender or such Issuing Bank, the Borrower will pay to such Lender or such Issuing Bank, as
the case may be, such additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction suffered.


 


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



(c) Certificates for Reimbursement. A certificate of a Lender or an Issuing Bank
setting forth the amount or amounts necessary to compensate such Lender or such Issuing Bank 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 such Issuing Bank, as the case may be, the amount shown as due on any such certificate
within 30 days after receipt thereof.



(d) Delay in Requests. Failure or delay on the part of any Lender or any Issuing Bank
to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a
waiver of such Lender’s or such Issuing Bank’s right to demand such compensation, provided
that the Borrower shall not be required to compensate a Lender or an Issuing Bank pursuant to the
foregoing provisions of this Section for any increased costs incurred or reductions suffered more
than three months prior to the date that such Lender or such Issuing Bank, 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 such Issuing Bank’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
three-month period referred to above shall be extended to include the period of retroactive effect
thereof).



(e) Reserves on Eurodollar Rate Loans. 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 “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Advance
equal to the actual costs of such reserves allocated to such Advance by such Lender (as determined
by such Lender in good faith, which determination shall be conclusive absent manifest error), which
shall be due and payable on each date on which interest is payable on such Loan, provided
the Borrower shall have received at least 30 days’ prior notice (with a copy to the Agent) of such
additional interest from such Lender. If a Lender fails to give notice 30 days prior to the
relevant interest payment date, such additional interest shall be due and payable 30 days from
receipt of such notice.


 


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Section 2.12 Illegality. If any Lender shall have determined in good faith that the
introduction of or any change in any applicable Law or in the interpretation or administration
thereof by any Governmental Authority charged with the interpretation or administration thereof, or
compliance with any guideline or request from any such Governmental Authority (whether or not
having the force of law), for any Lender or its Applicable Lending Office to make, maintain or fund
Eurodollar Rate Advances, or to determine or charge interest rates based upon the Eurodollar Rate,
or any 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 Agent, any obligation of such Lender to make or
continue Eurodollar Rate Advances or to convert Base Rate Advances to Eurodollar Rate Advances
shall be suspended until such Lender notifies the Agent and the Borrower that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower
shall, upon demand from such Lender (with a copy to the Agent), prepay or, if applicable, convert
all Eurodollar Rate Advances of such Lender to Base Rate Advances, either on the last day of the
Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate
Advances to such day, or immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Advances. Upon any such prepayment or conversion, the Borrower shall also pay
accrued interest on the amount so prepaid or converted.




Section 2.13 Payments and Computations.



(a) All payments to be made by the Borrower shall be made without condition or deduction for
any counterclaim, defense, recoupment or setoff. The Borrower shall make each payment hereunder
not later than 1:00 p.m. on the day when due in U.S. dollars to the Agent at the Agent’s Account in
same day funds. The Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal, interest, fees or commissions ratably (other than amounts payable
pursuant to Section 2.05(b), 2.11, 2.12, 2.14, 2.20 or 8.04(e)) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon any Assuming Lender
becoming a Lender hereunder as a result of a Commitment Increase pursuant to Section 2.18, and upon
the Agent’s receipt of such Lender’s Assumption Agreement and recording of the information
contained therein in the Register, from and after the applicable Increase Date, the Agent shall
make all payments hereunder and under any Notes issued in connection therewith in respect of the
interest assumed thereby to the Assuming Lender. Upon its acceptance of an Assignment and
Assumption and recording of the information contained therein in the Register pursuant to Section
8.07(c), from and after the effective date specified in such Assignment and Assumption, the Agent
shall make all payments hereunder and under the Notes in respect of the interest assigned thereby
to the Lender assignee thereunder, and the parties to such Assignment and Assumption shall make all
appropriate adjustments in such payments for periods prior to such effective date directly between
themselves.



(b) All computations of interest based on the Base Rate or the Federal Funds Rate shall be
made by the Agent on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurodollar Rate and of fees and Letter of Credit



 


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commissions shall be made by the Agent on the basis of a year of 360 days, in each case for
the actual number of days (including the first day but excluding the last day) occurring in the
period for which such interest, fees or commissions are payable. Each determination by the Agent
of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest
error.



(c) Whenever any payment hereunder or under the Notes shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment of interest, fees or
commissions, as the case may be; provided, however, that, if such extension would
cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding Business Day.



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




Section 2.14 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 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 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 Agent shall be required by the Internal Revenue Code to
withhold or deduct any Taxes, including both United States Federal backup withholding and
withholding taxes, from any payment, then (A) the Agent shall withhold or make such
deductions as are determined by the Agent to be required based upon the information and
documentation it has received pursuant to subsection (e) below, (B) the Agent shall timely
pay the full amount withheld or deducted to the relevant Governmental Authority in
accordance with the Internal Revenue 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 Agent, Lender or Issuing Bank, as the case may be, receives
an amount equal to the sum it would have received had no such withholding or deduction been
made.


 


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(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.




(i) Without limiting the provisions of subsection (a) or (b) above, the Borrower shall,
and does hereby, indemnify the Agent, each Lender and each Issuing Bank, and shall make
payment in respect thereof within 30 days after written 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 Agent or paid by the Agent, such Lender or such Issuing Bank, 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 Agent, and shall make payment in respect thereof within
10 days after demand therefor, for any amount which a Lender or an Issuing Bank for any
reason fails to pay indefeasibly to the 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 an Issuing Bank (with a copy to the Agent), or by the Agent on its own behalf
or on behalf of a Lender or an Issuing Bank, shall be conclusive absent manifest error.




(ii) Without limiting the provisions of subsection (a) or (b) above, each Lender and
each Issuing Bank shall, and does hereby, indemnify the Borrower and the Agent, and shall
make payment in respect thereof within 30 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 Agent)
incurred by or asserted against the Borrower or the Agent by any Governmental Authority as a
result of the failure by such Lender or such Issuing Bank, 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 such Issuing Bank, as the case may be, to the Borrower or the
Agent pursuant to subsection (e). Each Lender and each Issuing Bank hereby authorizes the
Agent to set off and apply any and all amounts at any time owing to such Lender or such
Issuing Bank, as the case may be, under this Agreement or any other Loan Document against
any amount due to the Agent under this clause (ii). The agreements in this clause (ii)
shall survive the resignation and/or replacement of the Agent, any assignment of rights by,
or the replacement of, a Lender or an Issuing Bank, the termination of the Commitments and
the repayment, satisfaction or discharge of all other Obligations.



(d) Evidence of Payments. Upon request by the Borrower or the Agent, as the case may
be, after any payment of Taxes by the Borrower or by the Agent to a Governmental Authority as
provided in this 2.14, the Borrower shall deliver to the Agent or the 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



 


35









 






to report such payment or other evidence of such payment reasonably satisfactory to the
Borrower or the Agent, as the case may be.




(e) Status of Lenders; Tax Documentation.




(i) Each Lender shall deliver to the Borrower and to the Agent, at the time or times
prescribed by applicable Laws or when reasonably requested by the Borrower or the 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 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 Internal Revenue Code shall deliver to the Borrower and the 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 Agent as will enable the Borrower or the 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 Internal Revenue 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 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
Agent, but only if such Foreign Lender is legally entitled to do so), whichever of
the following is applicable:




(1) 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,




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




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


 


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(4) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Internal
Revenue Code, (x) a certificate to the effect that such Foreign Lender is
not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Internal
Revenue Code, (B) a “10 percent shareholder” of the Borrower within the
meaning of section 881(c)(3)(B) of the Internal Revenue Code, or (C) a
“controlled foreign corporation” described in section 881(c)(3)(C) of the
Internal Revenue Code and (y) executed originals of Internal Revenue
Service Form W-8BEN, or




(5) 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 Agent to
determine the withholding or deduction required to be made.




(iii) Each Lender shall promptly (A) notify the Borrower and the 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 Applicable Lending Office) to avoid any requirement of applicable Laws of any
jurisdiction that the Borrower or the 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 Agent have any obligation to file for or otherwise pursue on behalf of a Lender or an
Issuing Bank, or have any obligation to pay to any Lender or any Issuing Bank, any refund of Taxes
withheld or deducted from funds paid for the account of such Lender or such Issuing Bank, as the
case may be. If the Agent, any Lender or any Issuing Bank 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 reasonable
out-of-pocket expenses incurred by the Agent, such Lender or such Issuing Bank, 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 Agent, such
Lender or such Issuing Bank, 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 Agent,
such Lender or such Issuing Bank in the event the Agent, such Lender or such Issuing Bank is
required to repay such refund to such Governmental Authority. This subsection shall not be
construed to require the Agent, any Lender or any Issuing Bank 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.


 


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(g) Payments. Failure or delay on the part of the Agent, any Lender or any Issuing
Bank to demand compensation pursuant to the foregoing provisions of this Section 2.14 shall not
constitute a waiver of the Agent’s, such Lender’s or such Issuing Bank’s right to demand such
compensation, provided that the Borrower shall not be required to compensate the Agent, a
Lender or an Issuing Bank pursuant to the foregoing provisions of this Section 2.14 for any
Indemnified Taxes or Other Taxes imposed or asserted by the relevant Governmental Authority more
than three months prior to the date that the Agent, such Lender or such Issuing Bank, as the case
may be, claims compensation with respect thereto (except that, if a Change in Law giving rise to
such Indemnified Taxes or Other Taxes is retroactive, then the three-month period referred to above
shall be extended to include the period of retroactive effect thereof).



(h) Each of the Agent, any Issuing Bank or any Lender agrees to cooperate with any reasonable
request made by the Borrower in respect of a claim of a refund in respect of Indemnified 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 2.14 if (i) the Borrower has agreed in writing to pay
all of the Agent’s or such Issuing Bank’s or such Lender’s reasonable out-of-pocket costs and
expenses relating to such claim, (ii) the Agent or such Issuing Bank or such Lender determines, in
its good faith judgment, that it would not be disadvantaged, unduly burdened or prejudiced as a
result of such claim and (iii) the Borrower furnishes, upon request of the Agent, or such Issuing
Bank or such Lender, an opinion of tax counsel (such opinion, which can be reasoned, and such
counsel to be reasonably acceptable to such Lender, or such Issuing Bank or the Agent) that the
Borrower is likely to receive a refund or credit.



Section 2.15 Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on
account of the Advances or L/C Advances owing to it (other than pursuant to Section 2.05(b), 2.11,
2.12, 2.14, 2.20 or 8.04(e) or any payment obtained by a Lender as consideration for the assignment
of or sale of a participation in any of its Advances or participations in Letters of Credit to any
assignee or participant, other than to the Borrower or any Subsidiary thereof if permitted hereby
(as to which the provisions of this Section 2.15 shall apply) in excess of its Ratable Share of
payments on account of the Advances obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders (for cash at face value) such participations in the Advances owing
to them as shall be necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall
be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent
of such recovery together with an amount equal to such Lender’s Ratable Share (according to the
proportion of (i) the amount of such Lender’s required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section 2.15 may, to the fullest
extent permitted by Law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct creditor of the Borrower
in the amount of such participation.


 


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Section 2.16 Evidence of Debt.



(a) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder in respect of Advances. The Borrower agrees that upon
notice by any Lender to the Borrower (with a copy of such notice to the Agent) to the effect that a
Note is required or appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement or otherwise) the Advances owing to, or to be made by, such Lender, the
Borrower shall promptly execute and deliver to such Lender a Note payable to the order of such
Lender in a principal amount up to the Revolving Credit Commitment of such Lender.



(b) The Register maintained by the Agent pursuant to Section 8.07(c) shall include a control
account, and a subsidiary account for each Lender, in which accounts (taken together) shall be
recorded (i) the date and amount of each Borrowing made hereunder, the Type of Advances comprising
such Borrowing and, if appropriate, the Interest Period applicable thereto, (ii) the terms of each
Assumption Agreement and each Assignment and Assumption delivered to and accepted by it, (iii) the
amount of any principal or interest due and payable or to become due and payable from the Borrower
to each Lender hereunder and (iv) the amount of any sum received by the Agent from the Borrower
hereunder and each Lender’s share thereof.



(c) Entries made in good faith by the Agent in the Register pursuant to subsection (b) above,
and by each Lender in its account or accounts pursuant to subsection (a) above, shall be
prima facie evidence of the amount of principal and interest due and payable or to
become due and payable from the Borrower to, in the case of the Register, each Lender and, in the
case of such account or accounts, such Lender, under this Agreement, absent manifest error;
provided, however, that the failure of the Agent or such Lender to make an entry,
or any finding that an entry is incorrect, in the Register or such account or accounts shall not
limit or otherwise affect the obligations of the Borrower under this Agreement.



Section 2.17 Use of Proceeds. The proceeds of the Advances shall be available (and
the Borrower agrees that it shall use such proceeds) solely to refinance Indebtedness of the
Borrower from time to time and for other general corporate purposes of the Borrower.




Section 2.18 Increase in the Aggregate Revolving Credit Commitments.



(a) The Borrower may, at any time prior to the Termination Date, by notice to the Agent,
request that the aggregate amount of the Revolving Credit Commitments be increased by an amount of
$10,000,000 or an integral multiple thereof (each a “Commitment Increase”) to be effective
as of a date that is at least 90 days prior to the Termination Date (the “Increase Date”)
as specified in the related notice to the Agent; provided, however that (i) in no
event shall the aggregate amount of the Revolving Credit Commitments at any time exceed
$300,000,000 or the aggregate amount of Commitment Increases exceed $100,000,000 and (ii) on the
date of any request by the Borrower for a Commitment Increase and on the related Increase Date, the
applicable conditions set forth in this Section 2.18 shall be satisfied.


 


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(b) The Agent shall promptly notify the Lenders of a request by the Borrower for a Commitment
Increase, which notice shall include (i) the proposed amount of such requested Commitment Increase,
(ii) the proposed Increase Date and (iii) the date by which Lenders wishing to participate in the
Commitment Increase must commit to an increase in the amount of their respective Revolving Credit
Commitments (the “Commitment Date”). Each Lender that is willing to participate in such
requested Commitment Increase (each an “Increasing Lender”) shall, in its sole discretion,
give written notice to the Agent on or prior to the Commitment Date of the amount by which it is
willing to increase its Revolving Credit Commitment. If the Lenders notify the Agent that they are
willing to increase the amount of their respective Revolving Credit Commitments by an aggregate
amount that exceeds the amount of the requested Commitment Increase, the requested Commitment
Increase shall be allocated among the Lenders willing to participate therein in such amounts as are
agreed between the Borrower and the Agent.



(c) Promptly following each Commitment Date, the Agent shall notify the Borrower as to the
amount, if any, by which the Lenders are willing to participate in the requested Commitment
Increase. If the aggregate amount by which the Lenders are willing to participate in any requested
Commitment Increase on any such Commitment Date is less than the requested Commitment Increase,
then the Borrower may extend offers to one or more Eligible Assignees to participate in any portion
of the requested Commitment Increase that has not been committed to by the Lenders as of the
applicable Commitment Date; provided, however, that the Revolving Credit Commitment
of each such Eligible Assignee shall be in an amount of not less than $10,000,000.



(d) On each Increase Date, each Eligible Assignee that accepts an offer to participate in a
requested Commitment Increase in accordance with Section 2.18(b) (each such Eligible Assignee, an
“Assuming Lender”) shall become a Lender party to this Agreement as of such Increase Date
and the Revolving Credit Commitment of each Increasing Lender for such requested Commitment
Increase shall be so increased by the amount by which the Increasing Lender agreed to increase its
Revolving Credit Commitment (or by the amount allocated to such Lender pursuant to the last
sentence of Section 2.18(b)) as of such Increase Date; provided, however, that the
Agent shall have received on or before such Increase Date the following, each dated such date:




(i) (A) certified copies of resolutions of the Board of Directors of the Borrower
approving the Commitment Increase and the corresponding modifications to this Agreement, (B)
an opinion of counsel for the Borrower (which may be in-house counsel), in form and
substance reasonably acceptable to the Required Lenders and (C) a certificate from a duly
authorized officer of the Borrower, stating that the conditions set forth in Section 3.02(a)
and (b) are satisfied;




(ii) an assumption agreement from each Assuming Lender, if any, in form and substance
satisfactory to the Borrower and the Agent (each an “Assumption Agreement”), duly
executed by such Assuming Lender, the Agent and the Borrower; and


 


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(iii) confirmation from each Increasing Lender of the increase in the amount of its
Revolving Credit Commitment in a writing satisfactory to the Borrower and the Agent.



On each Increase Date, upon fulfillment of the conditions set forth in the immediately preceding
sentence of this Section 2.18(d), the Agent shall notify the Lenders (including, without
limitation, each Assuming Lender) and the Borrower, on or before 1:00 p.m., by telecopier, of the
occurrence of the Commitment Increase to be effected on such Increase Date and shall record in the
Register the relevant information with respect to each Increasing Lender and each Assuming Lender
on such date. Each Increasing Lender and each Assuming Lender shall, before 2:00 p.m. on the
Increase Date, make available for the account of its Applicable Lending Office to the Agent at the
Agent’s Account, in same day funds, in the case of such Assuming Lender, an amount equal to such
Assuming Lender’s Ratable Share of the Borrowings then outstanding (calculated based on its
Revolving Credit Commitment as a percentage of the aggregate Revolving Credit Commitments
outstanding after giving effect to the relevant Commitment Increase) and, in the case of such
Increasing Lender, an amount equal to the excess of (i) such Increasing Lender’s Ratable Share of
the Borrowings then outstanding (calculated based on its Revolving Credit Commitment as a
percentage of the aggregate Revolving Credit Commitments outstanding after giving effect to the
relevant Commitment Increase) over (ii) such Increasing Lender’s Ratable Share of the Borrowings
then outstanding (calculated based on its Revolving Credit Commitment (without giving effect to the
relevant Commitment Increase) as a percentage of the aggregate Revolving Credit Commitments
(without giving effect to the relevant Commitment Increase). After the Agent’s receipt of such
funds from each such Increasing Lender and each such Assuming Lender, the Agent will promptly
thereafter cause to be distributed like funds to the other Lenders for the account of their
respective Applicable Lending Offices in an amount to each other Lender such that the aggregate
amount of the outstanding Advances owing to each Lender after giving effect to such distribution
equals such Lender’s Ratable Share of the Borrowings then outstanding (calculated based on its
Revolving Credit Commitment as a percentage of the aggregate Revolving Credit Commitments
outstanding after giving effect to the relevant Commitment Increase).



Section 2.19 Affected Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes an Affected Lender, then the following provisions shall apply for
so long as such Lender is an Affected Lender:



(a) fees shall cease to accrue on the Unused Commitment of such Affected Lender pursuant to
Section 2.04(a);



(b) the Revolving Credit Commitment and Advances of such Affected Lender shall not be included
in determining whether the Required Lenders have taken or may take any action hereunder (including
any consent to any amendment or waiver pursuant to Section 8.01), other than any waiver, amendment
or modification requiring the consent of all Lenders or of each Lender affected;



(c) if there shall be any Available Amount under any outstanding Letter of Credit during any
time a Lender is an Affected Lender, then:


 


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(i) all or any part of the Available Amount of all such Letters of Credit shall be
reallocated among the non-Affected Lenders in accordance with their respective Ratable
Shares (disregarding any Affected Lender’s Revolving Credit Commitment) but only to the
extent that with respect to each non-Affected Lender the sum of (A) the aggregate principal
amount of all Advances made by such non-Affected Lender (in its capacity as a Lender) and
outstanding at such time plus (B) such non-Affected Lender’s Ratable Share (after giving
effect to the reallocation contemplated in this Section 2.19(c)(i)) of the outstanding L/C
Obligations, does not exceed such non-Affected Lender’s Revolving Credit Commitment;




(ii) if the Ratable Share of the Available Amount of outstanding Letters of Credit of
the non-Affected Lenders is reallocated pursuant to Section 2.19(c), then the fees payable
to the Lenders pursuant to Section 2.04(a) and Section 2.04(b) shall be adjusted in
accordance with such non-Affected Lenders’ Ratable Shares; and




(iii) if the Affected Lender’s Ratable Share (the “Affected Lender Share”) of
the Available Amount of all outstanding Letters of Credit is not reallocated pursuant to
Section 2.19(c), then, without prejudice to any rights or remedies of any Issuing Bank or
any Lender hereunder, the fee payable under Section 2.04(b) with respect to such Affected
Lender Share shall be payable to the Issuing Bank until such Affected Lender Share is
reallocated;



(d) to the extent the Agent receives any payments or other amounts for the account of an
Affected Lender under this Agreement, such Affected Lender shall be deemed to have requested that
the Agent use such payment or other amount to fulfill such Affected Lender’s previously unsatisfied
obligations to fund an Advance under Section 2.03(c) or L/C Advance or any other unfunded payment
obligation of such Affected Lender under this Agreement; and



(e) for the avoidance of doubt, the Borrower, each Issuing Bank, the Agent and each other
Lender shall retain and reserve its other rights and remedies respecting each Affected Lender.



In the event that the Agent, the Borrower and the Issuing Banks each agrees that an Affected
Lender has adequately remedied all matters that caused such Lender to be an Affected Lender, then
the Ratable Shares of the Lenders shall be readjusted to reflect the inclusion of such Lender’s
Revolving Credit Commitment and on such date such Lender shall purchase at par such of the Advances
of the other Lenders as the Agent shall determine may be necessary in order for such Lender to hold
such Advances in accordance with its Ratable Share. In addition, at such time as the Affected
Lender is replaced by another Lender pursuant to Section 2.20, the Ratable Shares of the Lenders
will be readjusted to reflect the inclusion of the replacing Lender’s Commitment in accordance with
Section 2.20. In either such case, this Section 2.19 will no longer apply.



Section 2.20 Replacement of Lenders. If any Lender requests compensation under
Section 2.11, 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 2.14, or if any Lender is
an Affected Lender, then the Borrower may, at its sole expense and effort, upon notice to such



 


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Lender and the 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
8.07), all of its interests, rights and obligations under this Agreement and the related Loan
Documents to one or more assignees that shall assume such obligations (which any such assignee may
be another Lender, if a Lender accepts such assignment), provided that:




(a) the Borrower shall have paid to the Agent the assignment fee specified in Section 8.07(b);



(b) such Lender shall have received payment of an amount equal to the outstanding principal of
its Advances 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 8.04(e))
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
2.11 or payments required to be made pursuant to Section 2.14, 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.



ARTICLE III




CONDITIONS PRECEDENT




Section 3.01 Conditions Precedent to Effectiveness. This Agreement shall become
effective on and as of the first date (the “Effective Date”) on which the following
conditions precedent have been satisfied:



(a) The Lenders shall have been given such access to the management, records, books of
account, contracts and properties of the Borrower and its Subsidiaries as they shall have
requested.



(b) The Borrower shall have paid all accrued fees and agreed expenses of the Agent, the
Arrangers and the Lenders and the reasonable accrued fees and expenses of counsel to the Agent that
have been invoiced at least one Business Day prior to the Effective Date.



(c) On the Effective Date, the following statements shall be true and the Agent shall have
received a certificate signed by a duly authorized officer of the Borrower, dated the Effective
Date, stating that:




(i) The representations and warranties contained in Section 4.01 are true and correct
on and as of the Effective Date, and


 


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(ii) No event has occurred and is continuing that constitutes a Default.



(d) The Agent shall have received on or before the Effective Date the following, each dated
such day, in form and substance satisfactory to the Agent and the Lenders:




(i) Receipt by the Agent of executed counterparts of this Agreement properly executed
by a duly authorized officer of the Borrower and by each Lender.




(ii) The Notes, payable to the order of the Lenders to the extent requested by any
Lender pursuant to Section 2.16.




(iii) The articles of incorporation of the Borrower certified to be true and complete
as of a recent date by the appropriate governmental authority of the state or other
jurisdiction of its incorporation and certified by a secretary, assistant secretary or
associate secretary of the Borrower to be true and correct as of the Effective Date.




(iv) The bylaws of the Borrower certified by a secretary, assistant secretary or
associate secretary of the Borrower to be true and correct as of the Effective Date.




(v) Certified copies of the resolutions of the Board of Directors of the Borrower
approving this Agreement and the Notes, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this Agreement and the
Notes.




(vi) A certificate of the secretary, assistant secretary or associate secretary of the
Borrower certifying the names and true signatures of the officers of the Borrower authorized
to sign this Agreement and the Notes and the other documents to be delivered hereunder.




(vii) A certificate as of a recent date from the Borrower’s state of incorporation
evidencing that the Borrower is in good standing in its state of organization or formation.




(viii) A favorable opinion of Snell & Wilmer L.L.P., counsel for the Borrower, in form
and substance reasonably acceptable to the Lenders.



(e) Concurrently with or before the Effective Date, (i) all principal, interest and other
amounts outstanding under the Borrower’s existing Amended and Restated Credit Agreement dated as of
December 9, 2005 (the “Existing Senior Credit Agreement”) shall be repaid and satisfied in
full, (ii) all commitments to extend credit under the Existing Senior Credit Agreement shall be
terminated and (iii) any letters of credit outstanding under the Existing Senior Credit Agreement
shall have been terminated, canceled or replaced; and the Agent shall have received evidence of the
foregoing satisfactory to it, including an escrow agreement or payoff letter executed by the
lenders or the agent under the Existing Senior Credit Agreement.



Section 3.02 Conditions Precedent to Each Credit Extension and Commitment Increase.
The obligation of each Lender to make an Advance (other than an L/C Advance or a Base Rate Advance
made pursuant to Section 2.03(c)) on the occasion of each Borrowing, the obligation of each Issuing
Bank to issue a Letter of Credit, and each Commitment Increase shall be subject to



 


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the conditions precedent that the Effective Date shall have occurred and on the date of such
Borrowing or such issuance (as the case may be), or the applicable Increase Date, the following
statements shall be true (and each of the giving of the applicable Notice of Borrowing or request
for issuance and the acceptance by the Borrower of the proceeds of such Borrowing shall constitute
a representation and warranty by the Borrower that on the date of such Borrowing or date of such
issuance such statements are true):



(a) the representations and warranties contained in Section 4.01 (other than Section 4.01(k),
and in the case of a Borrowing or issuance, Section 4.01(e)(ii) and 4.01(f)(ii)) are correct on and
as of such date, before and after giving effect to such Borrowing or issuance, or such Commitment
Increase and to the application of the proceeds therefrom, as though made on and as of such date;
and



(b) no event has occurred and is continuing, or would result from such Borrowing or issuance,
or such Commitment Increase or from the application of the proceeds therefrom, that constitutes a
Default.



Each request for Credit Extension (which shall not include a Conversion or a continuation of
Eurodollar Rate Advances) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 3.02(a) and (b) have been satisfied on and as of
the date of the applicable Credit Extension.



Section 3.03 Determinations Under Section 3.01. For purposes of determining
compliance with the conditions specified in Section 3.01 and the satisfaction of each Lender with
respect to letters delivered to it from the Borrower as set forth in Sections 4.01(a), 4.01(e) and
4.01(f), 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 the Lenders unless an officer of the
Agent responsible for the transactions contemplated by this Agreement shall have received notice
from such Lender prior to the date that the Borrower designates as the proposed Effective Date,
specifying its objection thereto. The Agent shall promptly notify the Lenders and the Borrower of
the occurrence of the Effective Date.



ARTICLE IV




REPRESENTATIONS AND WARRANTIES




Section 4.01 Representations and Warranties of the Borrower. The Borrower represents
and warrants as follows:



(a) Each of the Borrower and each Material Subsidiary: (i) is a corporation or other entity
duly organized and validly existing under the Laws of the jurisdiction of its incorporation or
organization; (ii) has all requisite corporate or if the Material Subsidiary is not a corporation,
other comparable power necessary to own its assets and carry on its business as presently
conducted; (iii) has all governmental licenses, authorizations, consents and approvals necessary to
own its assets and carry on its business as presently conducted, if the failure to have any such
license, authorization, consent or approval is reasonably likely to have a Material Adverse Effect



 


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and except as disclosed to the Agent in the SEC Reports or by means of a letter from the
Borrower to the Lenders (such letter, if any, to be delivered to the Agent for prompt distribution
to the Lenders) delivered prior to the execution and delivery of this Agreement (which, in each
case, shall be satisfactory to each Lender in its sole discretion) and except that (A) APS from
time to time may make minor extensions of its lines, plants, services or systems prior to the time
a related franchise, certificate of convenience and necessity, license or permit is procured, (B)
from time to time communities served by APS may become incorporated and considerable time may
elapse before such a franchise is procured, (C) certain such franchises may have expired prior to
the renegotiation thereof, (D) certain minor defects and exceptions may exist which, individually
and in the aggregate, are not material and (E) certain franchises, certificates, licenses and
permits may not be specific as to their geographical scope); and (iv) is qualified to do business
in all jurisdictions in which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify is reasonably likely to have a Material Adverse Effect.



(b) The execution, delivery and performance by the Borrower of this Agreement and the other
Loan Documents, and the consummation of the transactions contemplated hereby, are within the
Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do
not (i) contravene the Borrower’s articles of incorporation or by-laws, (ii) contravene any Law,
decree, writ, injunction or determination of any Governmental Authority, in each case applicable to
or binding upon the Borrower or any of its properties, (iii) contravene any contractual restriction
binding on or affecting the Borrower or (iv) cause the creation or imposition of any Lien upon the
assets of the Borrower or any Material Subsidiary, except for Liens created under this Agreement
and except where such contravention or creation or imposition of such Lien is not reasonable likely
to have a Material Adverse Effect.



(c) No authorization or approval or other action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery and performance by the Borrower
of this Agreement or the Notes to be delivered by it.



(d) This Agreement has been, and each of the other Loan Documents upon execution and delivery
will have been, duly executed and delivered by the Borrower. This Agreement is, and each of the
other Loan Documents upon execution and delivery will be, the legal, valid and binding obligation
of the Borrower enforceable against the Borrower in accordance with their respective terms,
subject, however, to the application by a court of general principles of equity and to the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting
creditors’ rights generally.



(e) (i) The Consolidated balance sheet of the Borrower as of December 31, 2008, and the
related Consolidated statements of income and cash flows of the Borrower for the fiscal year then
ended, accompanied by an opinion thereon of Deloitte & Touche LLP, independent registered public
accountants, and the Consolidated balance sheet of the Borrower as of September 30, 2009, and the
related Consolidated statements of income and cash flows of the Borrower for the nine months then
ended, duly certified by the chief financial officer of the Borrower, copies of which have been
furnished to the Agent, fairly present in all material respects, subject, in the case of said
balance sheet as of September 30, 2009, and said statements of income and cash flows for the nine
months then ended, to year-end audit adjustments, the



 


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Consolidated financial condition of the Borrower as at such dates and the Consolidated results
of the operations of the Borrower for the periods ended on such dates, all in accordance with GAAP
(except as disclosed therein). (ii) Except as disclosed to the Agent in the SEC Reports or by
means of a letter from the Borrower to the Lenders (such letter, if any, to be delivered to the
Agent for prompt distribution to the Lenders) delivered prior to the execution and delivery of this
Agreement (which, in each case, shall be satisfactory to each Lender in its sole discretion), since
December 31, 2008, there has been no Material Adverse Effect.



(f) There is no pending or, to the knowledge of an Authorized Officer of the Borrower,
threatened action, suit, investigation, litigation or proceeding, including, without limitation,
any Environmental Action, affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator that (i) purports to affect the legality, validity or
enforceability of this Agreement or any other Loan Document or the consummation of the transactions
contemplated hereby or (ii) would be reasonably likely to have a Material Adverse Effect (except as
disclosed to the Agent in the SEC Reports or by means of a letter from the Borrower to the Lenders
(such letter, if any, to be delivered to the Agent for prompt distribution to the Lenders)
delivered prior to the execution and delivery of this Agreement (which, in each case, shall be
satisfactory to each Lender in its sole discretion) delivered prior to the execution and delivery
of this Agreement) and there has been no adverse change in the status, or financial effect on the
Borrower or any of its Subsidiaries, of such disclosed litigation that would be reasonably likely
to have a Material Adverse Effect.



(g) No proceeds of any Advance will be used to acquire any equity security not issued by the
Borrower of a class that is registered pursuant to Section 12 of the Securities Exchange Act of
1934.



(h) The Borrower is not engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), and no proceeds of any Advance will be used to purchase
or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock, in any case in violation of Regulation U.



(i) The Borrower and its Material Subsidiaries have filed all United States Federal income tax
returns and all other material tax returns which are required to be filed by them and have paid all
taxes due pursuant to such returns or pursuant to any assessment received by the Borrower or any of
its Subsidiaries, except to the extent that (i) such taxes are being contested in good faith and by
appropriate proceedings and that appropriate reserves for the payment thereof have been maintained
by the Borrower and its Subsidiaries in accordance with GAAP or (ii) the failure to make such
filings or such payments is not reasonably likely to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Borrower and its Material Subsidiaries as set forth in
the most recent financial statements of the Borrower delivered to the Agent pursuant to Section
4.01(e) or Section 5.01(h)(i) or (ii) hereof in respect of taxes and other governmental charges
are, in the opinion of the Borrower, adequate.



(j) Set forth on Schedule 4.01(j) hereto (as such schedule may be modified from time
to time by the Borrower by written notice to the Agent) is a complete and accurate list of all the
Material Subsidiaries of the Borrower.


 


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(k) Set forth on Schedule 4.01(k) hereto is a complete and accurate list identifying
any Indebtedness of the Borrower outstanding in a principal amount equal to or exceeding $5,000,000
and which is not described in the financial statements referred to in Section 4.01(e).



(l) The Borrower is not an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended.



(m) No report, certificate or other written information furnished by the Borrower or any of
its Subsidiaries to any Agent or any Lender in connection with the transactions contemplated hereby
and the negotiation of this Agreement or delivered hereunder or any other Loan Document (as
modified or supplemented by other information so furnished) at the time so furnished, when taken
together as a whole with all such written information so furnished, contains an untrue statement of
a material fact or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading, except as
would not reasonably be expected to result in a Material Adverse Effect; provided that with
respect to any projected financial information, forecasts, estimates or forward-looking
information, the Borrower represents only that such information and materials have been prepared in
good faith on the basis of assumptions believed to be reasonable at the time of preparation of such
forecasts, and no representation or warranty is made as to the actual attainability of any such
projections, forecasts, estimates or forward-looking information.



ARTICLE V




COVENANTS OF THE BORROWER




Section 5.01 Affirmative Covenants. So long as any Advance shall remain unpaid, any
Letter of Credit shall remain outstanding or any Lender shall have any Commitment hereunder, the
Borrower shall:



(a) Compliance with Laws, Etc. (i) Comply, and cause each of its Material
Subsidiaries to comply, in all material respects, with all applicable Laws of Governmental
Authorities, such compliance to include, without limitation, compliance with ERISA and
Environmental Laws, unless the failure to so comply is not reasonably likely to have a Material
Adverse Effect and (ii) comply at all times with all Laws, orders, decrees, writs, injunctions or
determinations of any Governmental Authority relating to the incurrence or maintenance of
Indebtedness by the Borrower, unless the failure to so comply is not reasonably likely to have a
Material Adverse Effect.



(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its Material
Subsidiaries to pay and discharge, before the same shall become delinquent, all taxes, assessments
and governmental charges or levies imposed upon it or upon its property; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, charge or levy (i) that is being contested in good faith and by
proper proceedings and as to which appropriate reserves are being maintained in accordance with
GAAP or (ii) if the failure to pay such tax, assessment, charge or levy is not reasonably likely to
have a Material Adverse Effect.


 


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(c) Maintenance of Insurance. Maintain, and cause each of its Material Subsidiaries
to maintain, insurance with responsible and reputable insurance companies or associations in such
amounts and covering such risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the Borrower or such Subsidiary
operates; provided, however, that the Borrower and its Subsidiaries may self-insure
to the same extent as other companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiary operates and to the extent
consistent with prudent business practice.



(d) Preservation of Corporate Existence, Etc. Preserve and maintain, and cause each
of its Material Subsidiaries to preserve and maintain, its corporate existence, rights (charter and
statutory) and franchises (other than “franchises” as described in Arizona Revised Statutes,
Section 40-283 or any successor provision) reasonably necessary in the normal conduct of its
business, if the failure to maintain such rights or privileges is reasonably likely to have a
Material Adverse Effect, and, in the case of APS, will cause APS to use its commercially reasonable
efforts to preserve and maintain such franchises reasonably necessary in the normal conduct of its
business, except that (i) APS from time to time may make minor extensions of its lines, plants,
services or systems prior to the time a related franchise, certificate of convenience and
necessity, license or permit is procured, (ii) from time to time communities served by APS may
become incorporated and considerable time may elapse before such a franchise is procured, (iii)
certain such franchises may have expired prior to the renegotiation thereof, (iv) certain minor
defects and exceptions may exist which, individually and in the aggregate, are not material and
(v) certain franchises, certificates, licenses and permits may not be specific as to their
geographical scope; provided, however, that the Borrower and its Subsidiaries may
consummate any merger or consolidation permitted under Section 5.02(b).



(e) Visitation Rights. At any reasonable time and from time to time, permit and cause
each of its Subsidiaries to permit the Agent or any of the Lenders or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and books of account of, and
visit the properties of, the Borrower and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrower and any of its Subsidiaries with any of their officers or
directors; provided, however, that the Borrower and its Subsidiaries reserve the
right to restrict access to any of its properties in accordance with reasonably adopted procedures
relating to safety and security; and provided further that the costs and expenses
incurred by such Lender or agents or representatives in connection with any such examinations,
copies, abstracts, visits or discussions shall be, upon the occurrence and during the continuation
of a Default, for the account of the Borrower and, in all other circumstances, for the account of
such Lender.



(f) Keeping of Books. Keep, and cause each of its Material Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Borrower and each such Subsidiary in a
manner that permits the preparation of financial statements in accordance with GAAP.



(g) Maintenance of Properties, Etc. Keep, and cause each Material Subsidiary to keep,
all property useful and necessary in its business in good working order and condition (ordinary
wear and tear excepted), if the failure to do so is reasonably likely to have a Material



 


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Adverse Effect, it being understood that this covenant relates only to the working order and
condition of such properties and shall not be construed as a covenant not to dispose of properties.




(h) Reporting Requirements. Furnish to the Agent:




(i) as soon as available and in any event within 50 days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower, (A) for each such fiscal
quarter of the Borrower, statements of income and cash flows of the Borrower and its
Consolidated Subsidiaries for such fiscal quarter setting forth in each case in comparative
form the corresponding figures for the corresponding fiscal quarter in the preceding fiscal
year and (B) for the period commencing at the end of the previous fiscal year and ending
with the end of each fiscal quarter, statements of income and cash flows of the Borrower and
its Consolidated Subsidiaries for such period setting forth in each case in comparative form
the corresponding figures for the corresponding period in the preceding fiscal year;
provided that so long as the Borrower remains subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended, the Borrower may provide, in
satisfaction of the requirements of this first sentence of this Section 5.01(h)(i), its
report on Form 10-Q for such fiscal quarter. Each set of financial statements provided
under this Section 5.01(h)(i) shall be accompanied by a certificate of an Authorized
Officer, which certificate shall state that said financial statements fairly present in all
material respects the financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries in accordance with GAAP (except as disclosed therein) as at the
end of, and for, such period (subject to normal year-end audit adjustments) and shall set
forth reasonably detailed calculations demonstrating compliance with Section 5.03;




(ii) as soon as available and in any event within 90 days after the end of each fiscal
year of the Borrower, statements of income and cash flows of the Borrower and its
Consolidated Subsidiaries for such year and the related balance sheet of the Borrower and
its Consolidated Subsidiaries as at the end of such year, setting forth in each case in
comparative form the corresponding figures for the preceding fiscal year; provided
that, so long as the Borrower remains subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended, the Borrower may provide, in satisfaction of
the requirements of this first sentence of this Section 5.01(h)(ii), its report on Form 10-K
for such fiscal year. Each set of financial statements provided pursuant to this Section
5.01(h)(ii) shall be accompanied by (A) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state that said financial
statements fairly present in all material respects the financial condition and results of
operations of the Borrower and its Consolidated Subsidiaries as at the end of, and for, such
fiscal year, in accordance with GAAP (except as disclosed therein) and (B) a certificate of
an Authorized Officer, which certificate shall set forth reasonably detailed calculations
demonstrating compliance with Section 5.03;




(iii) as soon as possible and in any event within five days after any Authorized
Officer of the Borrower knows of the occurrence of each Default continuing on the date of
such statement, a statement of an Authorized Officer of the Borrower setting forth


 


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details of such Default and the action that the Borrower has taken and proposes to take
with respect thereto;




(iv) promptly after the sending or filing thereof, copies of all reports and
registration statements (other than exhibits thereto and registration statements on Form S-8
or its equivalent) that the Borrower or any Subsidiary files with the Securities and
Exchange Commission;




(v) promptly after an Authorized Officer becomes aware of the commencement thereof,
notice of all actions and proceedings before any court, governmental agency or arbitrator
affecting the Borrower or any of its Subsidiaries of the type described in Section 4.01(f),
except, with respect to any matter referred to in Section 4.01(f)(ii), to the extent
disclosed in a report on Form 8-K, Form 10-Q or Form 10-K of the Borrower;




(vi) promptly after an Authorized Officer becomes aware of the occurrence thereof,
notice of any change by Moody’s or S&P of their respective Public Debt Rating or of the
cessation (or subsequent commencement) by Moody’s or S&P of publication of their respective
Public Debt Rating;




(vii) the occurrence of any ERISA Event, together with (x) a written statement of an
Authorized Officer of the Borrower specifying the details of such ERISA Event and the action
that the Borrower has taken and proposes to take with respect thereto, (y) a copy of any
notice with respect to such ERISA Event that may be required to be filed with the PBGC and
(z) a copy of any notice delivered by the PBGC to the Borrower or an ERISA Affiliate with
respect to such ERISA Event; and




(viii) such other information respecting the Borrower or any of its Subsidiaries as any
Lender through the Agent may from time to time reasonably request.



Information required to be delivered pursuant to Sections 5.01(h)(i), (ii) and (iv) above
shall be deemed to have been delivered on the date on which the Borrower provides notice to the
Agent that such information has been posted on the Borrower’s website on the Internet at
www.pinnaclewest.com, at sec.gov/edaux/searches.htm or at another website identified in such notice
and accessible by the Lenders without charge; provided that (i) such notice may be included
in a certificate delivered pursuant to Section 5.01(h)(i) or (ii) and (ii) the Borrower shall
deliver paper copies of the information referred to in Section 5.01(h)(i), (ii), and (iv) to any
Lender which requests such delivery.



(i) Change in Nature of Business. Conduct directly or through its Subsidiaries the
same general type of business conducted by the Borrower and its Material Subsidiaries on the date
hereof.



Section 5.02 Negative Covenants. So long as any Advance shall remain unpaid, any
Letter of Credit shall remain outstanding or any Lender shall have any Commitment hereunder, the
Borrower shall not:


 


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(a) Liens, Etc. Directly or indirectly create, incur, assume or permit to exist any
Lien securing Indebtedness for borrowed money on or with respect to any property or asset
(including, without limitation, the capital stock of APS) of the Borrower, whether now owned or
held or hereafter acquired (unless it makes, or causes to be made, effective provision whereby the
Obligations will be equally and ratably secured with any and all other obligations thereby secured
so long as such other Indebtedness shall be so secured, such security to be pursuant to an
agreement reasonably satisfactory to the Required Lenders); provided, however, that
this Section 5.02(a) shall not apply to Liens securing Indebtedness for borrowed money (other than
Indebtedness for borrowed money secured by the capital stock of APS) which do not in the aggregate
exceed at any time outstanding the principal amount of $50,000,000.



(b) Mergers, Etc. Merge or consolidate with or into any Person, or permit any of its
Material Subsidiaries to do so, except that (i) any Material Subsidiary of the Borrower may merge
or consolidate with or into any other Material Subsidiary of the Borrower, (ii) any Subsidiary of
the Borrower may merge into the Borrower or any Material Subsidiary of the Borrower and (iii) the
Borrower or any Material Subsidiary may merge with any other Person so long as the Borrower or such
Material Subsidiary is the surviving corporation, provided, in each case, that no Default
shall have occurred and be continuing at the time of such proposed transaction or would result
therefrom.



(c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of, or permit
any of its Material Subsidiaries to sell, lease, transfer or otherwise dispose of, any assets, or
grant any option or other right to purchase, lease or otherwise acquire any assets to any Person
other than the Borrower or any Subsidiary of the Borrower, except (i) dispositions in the ordinary
course of business, including, without limitation, sales or other dispositions of electricity and
related and ancillary services, other commodities, emissions credits and similar mechanisms for
reducing pollution, and damaged, obsolete, worn out or surplus property no longer required or
useful in the business or operations of the Borrower or any of its Subsidiaries, (ii) sale or other
disposition of patents, copyrights, trademarks or other intellectual property that are, in the
Borrower’s reasonable judgment, no longer economically practicable to maintain or necessary in the
conduct of the business of the Borrower or its Subsidiaries and any license or sublicense of
intellectual property that does not interfere with the business of the Borrower or any Material
Subsidiary, (iii) in a transaction authorized by subsection (b) of this Section, (iv) individual
dispositions occurring in the ordinary course of business which involve assets with a book value
not exceeding $5,000,000, (v) sales of assets during the term of this Agreement having an aggregate
book value not to exceed 30% of the total of all assets properly appearing on the most recent
balance sheet of the Borrower provided pursuant to Section 4.01(e)(i) or 5.01(h)(ii) hereof and
(vi) any Lien permitted under Section 5.02(a).



(d) Ownership of APS. Except to the extent permitted under Section 5.02(b), the
Borrower will at all times continue to own directly or indirectly at least 80% of the outstanding
capital stock of APS.



Section 5.03 Financial Covenant. So long as any Advance shall remain unpaid, any
Letter of Credit shall remain outstanding or any Lender shall have any Commitment hereunder, the
Borrower will maintain a ratio of (a) Consolidated Indebtedness to (b) the sum of Consolidated
Indebtedness plus Consolidated Net Worth of not greater than 0.65 to 1.


 


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ARTICLE VI




EVENTS OF DEFAULT




Section 6.01 Events of Default. If any of the following events (“Events of
Default”) shall occur and be continuing:



(a) The Borrower shall fail to pay when due (i) any principal of any Advance, (ii) any drawing
under any Letter of Credit, or (iii) any interest on any Advance or any other fees or other amounts
payable under this Agreement or any other Loan Documents, and (in the case of this clause (iii)
only), such failure shall continue for a period of three Business Days; or



(b) Any representation or warranty made by the Borrower herein or by the Borrower (or any of
its officers) in any certificate or other document delivered in connection with this Agreement or
any other Loan Document shall prove to have been incorrect in any material respect when made or
deemed made or furnished; or



(c) (i) The Borrower shall fail to perform or observe any term, covenant or agreement
contained in Section 5.01(d) (as to the corporate existence of the Borrower), (h)(iii) or (h)(vi),
5.02 or 5.03, or (ii) the Borrower shall fail to perform or observe any other term, covenant or
agreement contained in Section 5.01(e) if such failure shall remain unremedied for 15 days after
written notice thereof shall have been given to the Borrower by the Agent or any Lender or (iii)
the Borrower shall fail to perform or observe any other term, covenant or agreement contained in
this Agreement or any other Loan Document on its part to be performed or observed if such failure
shall remain unremedied for 30 days after written notice thereof shall have been given to the
Borrower by the Agent or any Lender; or



(d) (i) The Borrower or any of its Material Subsidiaries shall fail to pay (A) any principal
of or premium or interest on any Indebtedness that is outstanding in a principal amount of at least
$35,000,000 in the aggregate (but excluding Indebtedness outstanding hereunder), or (B) an amount,
or post collateral as contractually required in an amount, of at least $35,000,000 in respect of
any Hedge Agreement, of the Borrower or such Material Subsidiary (as the case may be), in each
case, when the same becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such Indebtedness or Hedge
Agreement; or (ii) any event of default shall exist under any agreement or instrument relating to
any such Indebtedness and shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such event is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or



(e) The Borrower or any of its Material Subsidiaries shall fail to pay any principal of or
premium or interest in respect of any operating lease in respect of which the payment obligations
of the Borrower have a present value of at least $35,000,000, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified in such operating
lease, if the effect of such failure is to terminate, or to permit the termination of, such
operating lease; or


 


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(f) The Borrower or any of its Material Subsidiaries shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts generally, or shall make
a general assignment for the benefit of creditors; or any proceeding shall be instituted by or
against the Borrower or any of its Material Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any Debtor Relief Law, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other similar official for
it or for any substantial part of its property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed
for a period of 60 days, or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its property) shall
occur; or the Borrower or any of its Material Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this subsection (f); or



(g) Judgments or orders for the payment of money that exceeds any applicable insurance
coverage (the insurer of which shall be rated at least “A” by A.M. Best Company) by more than
$35,000,000 in the aggregate shall be rendered against the Borrower or any Material Subsidiary and
such judgments or orders shall continue unsatisfied or unstayed for a period of 45 days; or



(h) (i) 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 30% or more of the
equity securities of the Borrower entitled to vote for members of the board of directors of the
Borrower; or (ii) during any period of 24 consecutive months, a majority of the members of the
board of directors of the Borrower cease (other than due to death or disability) to be composed of
individuals (A) who were members of that board on the first day of such period, (B) whose election
or nomination to that board was approved by individuals referred to in clause (A) above
constituting at the time of such election or nomination at least a majority of that board or (C)
whose election or nomination to that board was approved by individuals referred to in clauses (A)
and (B) above constituting at the time of such election or nomination at least a majority of that
board; or



(i) (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
$35,000,000, 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 $35,000,000;



then, and in any such event, the Agent shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, (i) declare the obligation of each Lender to make
Advances (other than L/C Advances) and of the Issuing Banks to issue Letters of Credit to be



 


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terminated, whereupon the same shall forthwith terminate, (ii) declare the Advances, all interest
thereon and all other amounts payable under this Agreement to be forthwith due and payable,
whereupon the Advances, all such interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided, however, that in the event of an
actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy
Code of the United States, (A) the obligation of each Lender to make Advances (other than L/C
Advances) and of the Issuing Banks to issue Letters of Credit shall automatically be terminated and
(B) the Advances, all such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower and (iii) exercise all rights and remedies available to it under
this Agreement, the other Loan Documents and applicable Law.



Section 6.02 Actions in Respect of Letters of Credit upon Default. If any Event of
Default shall have occurred and be continuing, the Agent may with the consent, or shall at the
request, of the Required Lenders, irrespective of whether it is taking any of the actions described
in Section 6.01 or otherwise, (a) make demand upon the Borrower to, and forthwith upon such demand
the Borrower will Cash Collateralize the aggregate Available Amount of all Letters of Credit then
outstanding (whether or not any beneficiary under any Letter of Credit shall have drawn or be
entitled at such time to draw thereunder) or (b) make such other arrangements in respect of the
outstanding Letters of Credit as shall be acceptable to the Required Lenders, provided,
however, that in the event 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 Borrower will Cash
Collateralize the aggregate Available Amount of all Letters of Credit then outstanding, without
presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower. If at any time the Agent determines that any funds held in the L/C Cash Deposit
Account are subject to any right or interest of any Person other than the Agent, the Issuing Banks
and the Lenders or that the total amount of such funds is less than the aggregate Available Amount
of all Letters of Credit, the Borrower will, forthwith upon demand by the Agent, pay to the Agent,
as additional funds to be deposited and held in the L/C Cash Deposit Account, an amount equal to
the excess of (a) such aggregate Available Amount over (b) the total amount of funds, if any, then
held in the L/C Cash Deposit Account that are free and clear of any such right and interest. Upon
the drawing of any Letter of Credit, to the extent funds are on deposit in the L/C Cash Deposit
Account, such funds shall be applied to reimburse the Issuing Banks to the extent permitted by
applicable Law, or each Lender to the extent such Lender has funded an Advance in respect of such
Letter of Credit. The Borrower hereby grants to the Agent, for the benefit of the Issuing Banks
and the Lenders, a Lien upon and security interest in the L/C Cash Deposit Account and all amounts
held therein from time to time as security for the L/C Obligations, and for application to the
Borrower’s reimbursement obligations as and when the same shall arise. The Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal, over such account.
After all such Letters of Credit shall have expired or been fully drawn upon and all other
obligations of the Borrower hereunder and under the other Loan Documents shall have been paid in
full, the balance, if any, in such L/C Cash Deposit Account shall be promptly returned to the
Borrower.


 


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ARTICLE VII




THE AGENT




Section 7.01 Appointment and Authority. Each of the Lenders (for purposes of this
Article, references to the Lenders shall also mean the Issuing Banks) hereby irrevocably appoints
Bank of America to act on its behalf as the Agent hereunder and under the other Loan Documents and
authorizes the Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Agent by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. Except as set forth in Section 7.06, the provisions of this Article
are solely for the benefit of the Agent and the Lenders, and neither the Borrower nor any of its
Affiliates shall have rights as a third party beneficiary of any of such provisions.



Section 7.02 Rights as a Lender. The Person serving as the 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 Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person serving as the
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 Agent hereunder and without any duty to account therefor to
the Lenders.



Section 7.03 Exculpatory Provisions. The 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 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 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),
provided that the Agent shall not be required to take any action that, in its opinion or
the opinion of its counsel, may expose the 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 Agent or any of its Affiliates in any capacity.



The 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 Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Section 6.01 and 8.01) or (ii) in the absence of its own gross



 


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negligence or willful misconduct. The Agent shall be deemed not to have knowledge of any
Default unless and until notice describing such Default is given to the Agent by the Borrower or a
Lender.



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



Section 7.04 Reliance by Agent. The 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 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 any Advance, or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender or an Issuing Bank, the Agent may presume that
such condition is satisfactory to such Lender or such Issuing Bank unless the Agent shall have
received notice to the contrary from such Lender or such Issuing Bank prior to the making of such
Advance or the issuance of such Letter of Credit. The 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 good faith in accordance with the
advice of any such counsel, accountants or experts.



Section 7.05 Delegation of Duties. The 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 Agent. The 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 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 Agent.



Section 7.06 Resignation of Agent. The Agent may at any time give notice of its
resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the
Required Lenders shall have the right, with the consent of the Borrower so long as no Event of
Default has occurred and is continuing, 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 45 days after the retiring Agent gives notice of its resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent meeting the



 


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qualifications set forth above; provided that if the 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 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 Agent on behalf of the Lenders under any of
the Loan Documents, the retiring Agent shall continue to hold such collateral security until such
time as a successor Agent is appointed) and (2) all payments, communications and determinations
provided to be made by, to or through the Agent shall instead be made by or to each Lender
directly, until such time as the Required Lenders appoint a successor Agent as provided for above
in this Section. Upon the acceptance of a successor’s appointment as Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers, privileges and duties
of the retiring (or retired) Agent, and the retiring 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
Agent shall be as agreed between the Borrower and such successor. After the retiring Agent’s
resignation hereunder and under the other Loan Documents, the provisions of this Article and
Section 8.04 shall continue in effect for the benefit of such retiring 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 Agent was acting as Agent.



Section 7.07 Non-Reliance on Agent and Other Lenders. Each Lender acknowledges that
it has, independently and without reliance upon the 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 also acknowledges that
it will, independently and without reliance upon the 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.



Section 7.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding,
none of the Arrangers, Syndication Agent, Documentation Agent or other agents listed on the 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 Agent or a Lender hereunder.



Section 7.09 Issuing Banks. Each Issuing Bank shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents associated therewith, and each
Issuing Bank shall have all of the benefits and immunities provided in this Article VII (other than
Section 7.02) to the same extent as such provisions apply to the Agent.


 


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ARTICLE VIII




MISCELLANEOUS




Section 8.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the Required Lenders,
and then such waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver or
consent shall



(a) unless agreed to by each Lender directly affected thereby, (i) reduce or forgive the
principal amount of any Advance or the Borrower’s obligations to reimburse any drawing on a Letter
of Credit, reduce the rate of or forgive any interest thereon (provided that only the
consent of the Required Lenders shall be required to waive the applicability of any post-default
increase in interest rates), or reduce or forgive any fees hereunder (other than fees payable to
the Agent, the Arrangers or any Issuing Bank for their own respective accounts), (ii) extend the
final scheduled maturity date or any other scheduled date for the payment of any principal of or
interest on any Advance, extend the time of payment of any obligation of the Borrower to reimburse
any drawing on any Letter of Credit or any interest thereon, extend the expiry date of any Letter
of Credit beyond the fifth Business Day prior to the Termination Date, or extend the time of
payment of any fees hereunder (other than fees payable to the Agent, the Arrangers or any Issuing
Bank for their own respective accounts), or (iii) increase any Revolving Credit Commitment of any
such Lender over the amount thereof in effect or extend the maturity thereof (it being understood
that a waiver of any condition precedent set forth in Section 3.02 or of any Default, if agreed to
by the Required Lenders or all Lenders (as may be required hereunder with respect to such waiver),
shall not constitute such an increase);



(b) unless agreed to by all of the Lenders, (i) reduce the percentage of the aggregate
Revolving Credit Commitments or of the aggregate unpaid principal amount of the Advances, or the
number or percentage of Lenders, that shall be required for the Lenders or any of them to take or
approve, or direct the Agent to take, any action hereunder or under any other Loan Document
(including as set forth in the definition of “Required Lenders”), (ii) change any other provision
of this Agreement or any of the other Loan Documents requiring, by its terms, the consent or
approval of all the Lenders for such amendment, modification, waiver, discharge, termination or
consent, or (iii) change or waive any provision of Section 2.15, any other provision of this
Agreement or any other Loan Document requiring pro rata treatment of any Lenders, or this Section
8.01 or Section 2.19(b); and



(c) unless agreed to by the Issuing Banks or the Agent in addition to the Lenders required as
provided hereinabove to take such action, affect the respective rights or obligations of the
Issuing Banks or the Agent, as applicable, hereunder or under any of the other Loan Documents.



Section 8.02 Notices, Etc.


 


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(a) All notices and other communications provided for hereunder shall be either (x) in writing
(including facsimile communication) and mailed, faxed or delivered or (y) as and to the extent set
forth in Sections 8.02(b) and (c) and in the proviso to this Section 8.02(a), if to the Borrower,
at the address specified on Schedule 8.02; if to any Lender, at its Domestic Lending
Office; if to the Agent, at the address specified on Schedule 8.02; and if to any Issuing
Bank, at the address specified on Schedule 8.02 or, as to the Borrower or the Agent, at
such other address as shall be designated by such party in a written notice to the other parties
and, as to each other party, at such other address as shall be designated by such party in a
written notice to the Borrower and the Agent. All such notices and communications shall, when
mailed or faxed, be effective when deposited in the mails or faxed, respectively, except that
notices and communications to the Agent pursuant to Article II, III or VII shall not be effective
until received by the Agent. Delivery by facsimile of an executed counterpart of any amendment or
waiver of any provision of this Agreement or the Notes or of any Exhibit hereto to be executed and
delivered hereunder shall be effective as delivery of a manually executed counterpart thereof.
Notices delivered through electronic communications to the extent provided in subsection (b) below,
shall be effective as provided in such subsection (b). Upon request of the Borrower, the Agent
will provide to the Borrower (i) copies of each Administrative Questionnaire or (ii) the address of
each Lender.



(b) Notices and other communications to the Lenders, the Agent and the Issuing Banks hereunder
may be delivered or furnished by electronic communication (including e-mail and Internet or
intranet websites) pursuant to procedures approved by the Agent and agreed to by the Borrower,
provided that the foregoing shall not apply to notices to any Lender or the Issuing Banks
pursuant to Article II if such Lender or the Issuing Banks, as applicable, has notified the
Agent and the Borrower that it is incapable of receiving notices under such Article by electronic
communication. The 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 Agent and the Borrower otherwise agree, (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 Borrower agrees that the Agent may make materials delivered to the Agent pursuant to
Sections 5.01(h)(i), (ii) and (iv), as well as any other written information, documents,
instruments and other material relating to the Borrower or any of its Subsidiaries and relating to
this Agreement, the Notes or the transactions contemplated hereby, or any other materials or
matters relating to this Agreement, the Notes or any of the transactions contemplated hereby
(collectively, the “Communications”) available to the Lenders by posting such notices on
Intralinks or a substantially similar electronic system (the “Platform”). The Borrower
acknowledges that (i) the distribution of material through an electronic medium is not necessarily



 


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secure and that there are confidentiality and other risks associated with such distribution,
(ii) the Platform is provided “as is” and “as available” and (iii) neither the Agent nor any of its
Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform
and each expressly disclaims liability for errors or omissions in the Communications or the
Platform. No warranty of any kind, express, implied or statutory, including, without limitation,
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 the Agent or any of its Affiliates
in connection with the Platform.



(d) Each Lender agrees that notice to it (as provided in the next sentence) (a
“Notice”) specifying that any Communications have been posted to the Platform shall
constitute effective delivery of such information, documents or other materials to such Lender for
purposes of this Agreement; provided that if requested by any Lender the Agent shall
deliver a copy of the Communications to such Lender by e-mail, facsimile or mail. Each Lender
agrees (i) to notify the Agent in writing of such Lender’s e-mail address to which a Notice may be
sent by electronic transmission (including by electronic communication) on or before the date such
Lender becomes a party to this Agreement (and from time to time thereafter to ensure that the Agent
has on record an effective e-mail address for such Lender) and (ii) that any Notice may be sent to
such e-mail address.



(e) The Borrower hereby acknowledges that certain of the Lenders may be “public-side” Lenders
(i.e., Lenders that do not wish to receive material non-public information with respect to the
Borrower or its securities) (each, a “Public Lender”). The Borrower hereby agrees that (w)
all Communications that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which shall mean that the word “PUBLIC” shall appear prominently on
the first page thereof; (x) by marking Communications “PUBLIC,” the Borrower shall be deemed to
have authorized the Agent, the Arranger and the Lenders to treat such Communications 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; (y) all Communications marked “PUBLIC”
are permitted to be made available through a portion of the Platform designated as “Public
Investor;” and (z) the Agent and the Arranger shall be entitled to treat any Communications that
are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not marked
as “Public Investor.” Notwithstanding the foregoing, the Borrower shall be under no obligation to
mark any Communications “PUBLIC.” Notwithstanding anything to the contrary herein, the Borrower
need not provide to any Public Lender any information, notice, or other document hereunder that is
not public information, including without limitation, the Notice of Borrowing and any notice of
Default.



Section 8.03 No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender,
any Issuing Bank or the 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.


 


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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
Borrower 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 Agent in accordance with
Article VI for the benefit of all the Lenders and the Issuing Banks; provided,
however, that the foregoing shall not prohibit (a) the Agent from exercising on its own
behalf the rights and remedies that inure to its benefit (solely in its capacity as Agent)
hereunder and under the other Loan Documents, (b) any Issuing Bank from exercising the rights and
remedies that inure to its benefit (solely in its capacity as an Issuing Bank) hereunder and under
the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section
8.05 (subject to the terms of Section 2.15), or (d) any Lender from filing proofs of claim or
appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to
the Borrower under any Debtor Relief Law; and provided, further, that if at any
time there is no Person acting as Agent hereunder and under the other Loan Documents, then (i) the
Required Lenders shall have the rights otherwise ascribed to the Agent pursuant to Article VI and
(ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and
subject to Section 2.15, 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.




Section 8.04 Costs and Expenses; Indemnity; Damage Waiver.



(a) The Borrower agrees to pay on demand all costs and expenses of the Agent in connection
with the administration, modification and amendment of this Agreement, the Notes and the other Loan
Documents to be delivered hereunder, including, without limitation, the reasonable fees and
expenses of counsel for the Agent with respect thereto and with respect to advising the Agent as to
its rights and responsibilities under this Agreement. The Borrower further agrees to pay on demand
all costs and expenses of the Agent and the Lenders, if any (including, without limitation,
reasonable counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes and the other Loan
Documents to be delivered hereunder, including, without limitation, reasonable fees and expenses of
counsel for the Agent and each Lender in connection with the enforcement of rights under this
Section 8.04(a).



(b) The Borrower agrees to indemnify and hold harmless the Agent (and any sub-agent thereof),
each Lender, and each Related Party of any of the foregoing (each, an “Indemnified Party”)
from and against any and all claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation or proceeding or preparation
of a defense in connection therewith, whether based on contract, tort or any other theory,) (i) the
Notes, this Agreement, any of the transactions contemplated herein or the actual or proposed use of
the proceeds of any Advance or Letter of Credit (including any refusal by any Issuing Bank to honor
a demand for payment under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit), or (ii) the actual or
alleged presence of Hazardous Materials on any property of the Borrower or any of its Subsidiaries
or any Environmental Action relating in any way to the Borrower or any of its Subsidiaries,
provided that such indemnity shall not, as



 


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to any Indemnified Party, be available to the extent (a) such fees and expenses are expressly
stated in this Agreement to be payable by the Indemnified Party, included expenses payable under
Section 2.14, Section 5.01(e) and Section 8.07(b) or (b) such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence, willful misconduct or material breach of
its obligations under this Agreement, in which case any fees and expenses previously paid or
advanced by the Borrower to such Indemnified Party in respect of such indemnified obligation will
be returned by such Indemnified Party. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 8.04(b) applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought by the Borrower,
its directors, equityholders or creditors or an Indemnified Party or any other Person, whether or
not any Indemnified Party is otherwise a party thereto, and whether or not the transactions
contemplated hereby are consummated, provided that if the Borrower and such Indemnified
Party are adverse parties in any such litigation or proceeding, and the Borrower prevails in a
final, non-appealable judgment by a court of competent jurisdiction, any fees or expenses
previously paid or advanced by the Borrower to such Indemnified Party pursuant to this Section
8.04(b) will be returned by such Indemnified Party.



(c) To the extent that the Borrower for any reason fails to indefeasibly pay any amount
required under subsection (a) or (b) of this Section to be paid by it to the Agent (or any
sub-agent thereof), any Issuing Bank or any Related Party of any of the foregoing (and without
limiting its obligation to do so), each Lender severally agrees to pay to the Agent (or any such
sub-agent), such Issuing Bank or such Related Party, as the case may be, such Lender’s Ratable
Share (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 Agent (or any such sub-agent) or such Issuing Bank in its capacity as such, or against
any Related Party of any of the foregoing acting for the Agent (or any such sub-agent) or such
Issuing Bank in connection with such capacity.



(d) Each party hereto also agrees not to assert any claim for special, indirect, consequential
or punitive damages against the other parties hereto, or any Related Person any party hereto, on
any theory of liability, arising out of or otherwise relating to the Notes, this Agreement, any of
the transactions contemplated herein or the actual or proposed use of the proceeds of the Advances
or the Letters of Credit. No Indemnified Party shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems (including Intralinks,
SyndTrak or similar systems) in connection with this Agreement or the other Loan Documents,
provided that such indemnity shall not, as to any Indemnified Party, be available to the extent
such damages are found in a final, non-appealable judgment by a court of competent jurisdiction to
have resulted from such Indemnified Party’s gross negligence or willful misconduct.



(e) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by
the Borrower to or for the account of a Lender other than on the last day of the Interest Period
for such Advance, as a result of a payment or Conversion pursuant to Section 2.08(d) or (e), 2.10
or 2.12, acceleration of the maturity of the Advances pursuant to Section 6.01 or for any



 


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other reason, or by an Eligible Assignee to a Lender other than on the last day of the
Interest Period for such Advance upon an assignment of rights and obligations under this Agreement
pursuant to Section 8.07 as a result of a demand by the Borrower pursuant to Section 8.07(a), the
Borrower shall, upon demand by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses that it may reasonably incur as a result of such payment or
Conversion, including, without limitation, any loss (excluding loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.



(f) Without prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in Sections 2.11, 2.14 and 8.04 shall survive
the payment in full of principal, interest and all other amounts payable hereunder and under the
Notes.



Section 8.05 Right of Set-off. Upon (i) the occurrence and during the continuance of
any Event of Default and (ii) the making of the request or the granting of the consent specified by
Section 6.01 to authorize the Agent to declare the Advances due and payable pursuant to the
provisions of Section 6.01, each Lender, each Issuing Bank and each of their respective Affiliates
is hereby authorized at any time and from time to time, to the fullest extent permitted by Law, to
set off and apply any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender, such Issuing Bank 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 Issuing Bank, whether or not such Lender or Issuing Bank shall have made
any demand under this Agreement or such Note and although such obligations may be contingent or
unmatured or are owed to a branch or office of such Lender or such Issuing Bank different from the
branch or office holding such deposit or obligated on such indebtedness. Each Lender and each
Issuing Bank agrees promptly to notify the Borrower after any such set-off and application,
provided that the failure to give such notice shall not affect the validity of such set-off
and application. The rights of each Lender and each Issuing Bank under this Section are in
addition to other rights and remedies (including, without limitation, other rights of set-off) that
such Lender may have.



Section 8.06 Binding Effect. Except as provided in Section 3.01, this Agreement shall
become effective when it shall have been executed by the Borrower and the Agent and when the Agent
shall have been notified by each Initial Lender that such Initial Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the Agent and each
Lender and their respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior written consent of
the Lenders.




Section 8.07 Successors and Assigns.



(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby, except that the
Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without



 


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the prior written consent of the Agent and each Lender (and any purported assignment or
transfer without such consent shall be null and void) 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. 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 Agent, the Issuing Banks and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.



(b) 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 Revolving Credit Commitment
and the Advances (including for purposes of this subsection (b), participations in L/C Obligations)
at the time owing to it); provided 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 Revolving Credit Commitment and the Advances at the time owing to
it or in the case of an assignment to a Lender, 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 Revolving Credit Commitment (which for this purpose includes
Advances outstanding thereunder) or, if the Revolving Credit Commitment is not then
in effect, the principal outstanding balance of the Advances of the assigning Lender
subject to each such assignment, determined as of the date the Assignment and
Assumption with respect to which such assignment is delivered to the 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 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).




(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 Advances, L/C Obligations or the Revolving Credit
Commitment assigned, and each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement;




(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:


 


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(A) the consent of the Borrower (such consent not to be unreasonably withheld
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 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 each Issuing Bank (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters of
Credit (whether or not then outstanding);.




(iv) Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Agent an Assignment and Assumption, together with a processing and
recordation fee in the amount of $3,500; provided, however, that no such fee
shall be payable in the case of an assignment made at the request of the Borrower to an
existing Lender. The assignee, if it is not a Lender, shall deliver to the Agent an
Administrative Questionnaire.




(v) No Assignment to Borrower. No such assignment shall be made to the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.




(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.



Subject to acceptance and recording thereof by the Agent pursuant to subsection (c) of this
Section and notice thereof to the Borrower, 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 2.11, 2.14 and 8.04 with respect to facts
and circumstances occurring prior to the effective date of such assignment. 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 Agent shall maintain at the 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 Revolving Credit Commitments of, and principal amounts of



 


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the Advances 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, absent manifest
error, and the Borrower, the Agent and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.



(d) Participations. Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Agent, sell participations to any Person (other than a natural person 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 Revolving Credit Commitment and/or the Advances (including such Lender’s
participations in L/C Obligations) 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, (iii) the
Borrower, the Agent, the Lenders and the Issuing Banks shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under this Agreement and
(iv) no participant under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Note, or any consent to any departure by the
Borrower therefrom, except to the extent that such amendment, waiver or consent would reduce the
principal of, or interest on, any Obligations or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, or postpone any date fixed for any payment
of principal of, or interest on, any Obligations or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation.



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 addressing the matters set forth
in clause (iv) above to the extent subject to such participation. Subject to subsection (e) of
this Section, the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.11, 2.14 and 8.04(e) 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 8.05 as though it were a Lender,
provided such Participant agrees to be subject to Section 2.15 as though it were a Lender.



(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 2.11 or 2.14 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower’s prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.14 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
2.14(e) as though it were a Lender.


 


67









 





(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, 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 an Issuing Bank after Assignment. Notwithstanding anything to the
contrary contained herein, if at any time any Issuing Bank assigns all of its Revolving Credit
Commitment and Advances pursuant to subsection (b) above, such Issuing Bank may, upon 30 days’
notice to the Borrower and the Lenders, resign as an Issuing Bank. If any Issuing Bank resigns, it
shall retain all the rights, powers, privileges and duties of an Issuing Bank hereunder with
respect to all Letters of Credit outstanding as of the effective date of its resignation as an
Issuing Bank and all L/C Obligations with respect thereto (including the right to require the
Lenders to make Base Rate Advances or fund risk participations in Unreimbursed Amounts pursuant to
Section 2.03(c)).



(h) The words “execution,” “signed,” “signature,” and words of like import in any Assignment
and Assumption 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.



Section 8.08 Confidentiality. Neither the Agent nor any Lender may disclose to any
Person any confidential, proprietary or non-public information of the Borrower furnished to the
Agent or the Lenders by the Borrower (such information being referred to collectively herein as the
“Borrower Information”), except that each of the Agent and each of the Lenders may disclose
Borrower Information (i) to its and its affiliates’ employees, officers, directors, agents and
advisors having a need to know in connection with this Agreement (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential nature of such
Borrower Information and instructed to keep such Borrower Information confidential on substantially
the same terms as provided herein), (ii) to the extent requested by any regulatory authority, (iii)
to the extent required by applicable Laws or regulations or by any subpoena or similar legal
process, (iv) to any other party to this Agreement, (v) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (vi) subject to an agreement containing provisions substantially the same as
those of this Section 8.08, to any assignee or participant or prospective assignee or participant,
(vii) to the extent such Borrower Information (A) is or becomes generally available to the public
on a non-confidential basis other than as a result of a breach of this Section 8.08 by the Agent or
such Lender or their Related Parties, or (B) is or becomes available to the Agent or such Lender on
a nonconfidential basis from a source other than the Borrower (provided that the source of such
information was not known by the recipient after inquiry to be bound by a confidentiality agreement
with or other contractual, legal or fiduciary obligation of confidentiality to the Borrower or any
other Person with respect to such information) and (viii)



 


68









 






with the consent of the Borrower. The obligations under this Section 8.08 shall survive for
two calendar years after the date of the termination of this Agreement.



Section 8.09 Governing Law. This Agreement and the Notes shall be governed by, and
construed in accordance with, the Laws of the State of New York (including Sections 5-1401 and
5-1402 of the General Obligations Law but otherwise without regard to conflict of law principles).



Section 8.10 Counterparts; Integration; Effectiveness. This Agreement 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 3.01, this Agreement shall become effective when it shall have been executed by the Agent
and when the Agent shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery
of a manually executed counterpart of this Agreement.




Section 8.11 Jurisdiction, Etc.



(a) Each of the parties hereto hereby submits to the non-exclusive jurisdiction of any New
York State court or federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby agrees that all claims in respect of any such action or proceeding may
be heard and determined in any such New York State court or, to the extent permitted by Law, in
such federal court. Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or the Notes in the courts of any
jurisdiction.



(b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement or the
Notes in any New York State or federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.



Section 8.12 Payments Set Aside. To the extent that any payment by or on behalf of
the Borrower is made to the Agent, any Issuing Bank or any Lender, or the Agent, any Issuing Bank
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 Agent, such Issuing Bank 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



 


69









 






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 each Issuing Bank severally agrees to pay to the Agent upon
demand its applicable share (without duplication) of any amount so recovered from or repaid by the
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 Issuing Banks under clause (b) of the preceding sentence shall survive the payment
in full of the Obligations and the termination of this Agreement.



Section 8.13 Patriot Act. Each Lender hereby notifies the Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that identifies
each borrower, guarantor or grantor (the “Loan Parties”), which information includes the
name and address of each Loan Party and other information that will allow such Lender to identify
such Loan Party in accordance with the Act. The Borrower shall provide, to the extent commercially
reasonable, such information and take such actions as are reasonably requested by the Agent or any
Lender in order to assist the Agent and such Lender in maintaining compliance with the Act.



Section 8.14 Waiver of Jury Trial. EACH OF THE BORROWER, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTES OR ANY OTHER LOAN DOCUMENT OR THE ACTIONS OF THE BORROWER, THE AGENT OR ANY LENDER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.



Section 8.15 No Advisory or Fiduciary Responsibility. In connection with all aspects
of each transaction contemplated hereby, the Borrower acknowledges and agrees that: (i) the credit
facilities provided for hereunder and any related arranging or other services in connection
therewith (including in connection with any amendment, waiver or other modification hereof or of
any other Loan Document) are an arm’s-length commercial transaction between the Borrower, on the
one hand, and the Agent, each of the Lenders and each of the Arrangers, on the other hand, and the
Borrower is capable of evaluating and understanding and understands and accepts the terms, risks
and conditions of the transactions contemplated hereby and by the other Loan Documents (including
any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process
leading to such transaction, each of the Agent, the Lenders and the Arrangers is and has been
acting solely as a principal and is not the financial advisor, agent or fiduciary, for the Borrower
or any of its Affiliates, stockholders, creditors or employees or any other Person; (iii) neither
the Agent nor any Lender or Arranger has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of the Borrower with respect to any of the transactions contemplated hereby
or the process leading thereto, including with respect to any amendment, waiver or other
modification hereof or of any other Loan Document (irrespective of whether the Agent or any Lender
or Arranger has advised or is currently advising the Borrower or any of its Affiliates on other
matters) and neither the Agent nor any Lender or Arranger has any obligation to the Borrower with
respect to the transactions contemplated hereby except those obligations expressly set forth herein
and in the other Loan Documents; (iv) the Agent, each of the Lenders and the Arrangers 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



 


70









 






neither the Agent nor any Lender or Arranger has any obligation to disclose any of such
interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Agent and each
Lender and Arranger have not provided and will not provide any legal, accounting, regulatory or tax
advice with respect to any of the transactions contemplated hereby (including any amendment, waiver
or other modification hereof or of any other Loan Document) and the Borrower has consulted its own
legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. The
Borrower hereby waives and releases, to the fullest extent permitted by Law, any claims that it may
have against the Agent and each Lender and Arranger with respect to any breach or alleged breach of
agency or fiduciary duty in connection with the Loan Documents.



Section 8.16 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
Agent and each Lender, regardless of any investigation made by the Agent or any Lender or on their
behalf, and shall continue in full force and effect as long as any Advance or any other Obligation
hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.



Section 8.17 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 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.




 


71











 




IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above written.



	 	 	 	 	 
	 	PINNACLE WEST CAPITAL CORPORATION

 	 
	 	By  	/s/ James R. Hatfield
 	 
	 	 	Name:  	James R. Hatfield 	 
	 	 	Title:  	Senior Vice President, Chief
Financial Officer and Treasurer 	 



 


 









 






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

 	 
	 	By  	/s/ Sri Kalyana C. Popuri
 	 
	 	 	Name:  	Sri Kalyana C. Popuri 	 
	 	 	Title:  	Vice President 	 



 


 









 





	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL

ASSOCIATION, as Co-Syndication Agent,

Issuing Bank and as a Lender

 	 
	 	By  	/s/ Yann Blindert
 	 
	 	 	Name:  	Yann Blindert 	 
	 	 	Title:  	Vice President 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	BARCLAYS BANK PLC, as Co-Syndication

Agent and as Lender

 	 
	 	By  	/s/ Alicia Borys
 	 
	 	 	Name:  	Alicia Borys 	 
	 	 	Title:  	Assistant Vice President 	 



 


 









 





	 	 	 	 	 
	 	CREDIT SUISSE AG, CAYMAN ISLANDS

BRANCH, as Co-Syndication Agent and as a

Lender

 	 
	 	By  	/s/ Shaheen Malik
 	 
	 	 	Name:  	Shaheen Malik 	 
	 	 	Title:  	Vice President 	 
	 	 	 
	 	By  	                     /s/ Kevin Buddhdew
 	 
	 	 	Name:  	Kevin Buddhdew 	 
	 	 	Title:  	Associate 	 



 


 









 






	 	 	 	 	 
	 	DEUTSCHE BANK AG NEW YORK

BRANCH, as a Lender

 	 
	 	By  	/s/ Rainer Meier
 	 
	 	 	Name:  	Rainer Meier 	 
	 	 	Title:  	Director 	 
	 	 	 
	 	By  	                     /s/ Ming K. Chu
 	 
	 	 	Name:  	Ming K. Chu 	 
	 	 	Title:  	Vice President 	 



 


 









 





	 	 	 	 	 
	 	GOLDMAN SACHS BANK USA, as a Lender

 	 
	 	By  	/s/ Mark Walton
 	 
	 	 	Name:  	Mark Walton 	 
	 	 	Title:  	Authorized Signatory 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION, as a

Lender

 	 
	 	By  	/s/ Keven D. Smith
 	 
	 	 	Name:  	Keven D. Smith 	 
	 	 	Title:  	Senior Vice President 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	MIZUHO CORPORATE BANK, LTD., as a

Lender

 	 
	 	By  	/s/ Raymond Ventura
 	 
	 	 	Name:  	Raymond Ventura 	 
	 	 	Title:  	Deputy General Mgr. 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	SCOTIABANC INC., as a Lender

 	 
	 	By  	/s/ J. F. Todd
 	 
	 	 	Name:  	J. F. Todd 	 
	 	 	Title:  	Managing Director 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	SUNTRUST BANK, as a Lender

 	 
	 	By  	/s/ Andrew Johnson
 	 
	 	 	Name:  	Andrew Johnson 	 
	 	 	Title:  	Director 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	THE ROYAL BANK OF SCOTLAND PLC,

as a Lender

 	 
	 	By  	/s/ Belinda Tucker
 	 
	 	 	Name:  	Belinda Tucker 	 
	 	 	Title:  	Senior Vice President 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as a

Lender

 	 
	 	By  	/s/ Raymond J. Palmer
 	 
	 	 	Name:  	Raymond J. Palmer 	 
	 	 	Title:  	Senior Vice President 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	UBS AG, Stamford Branch, as a Lender

 	 
	 	By  	/s/ Irja R. Otsa
 	 
	 	 	Name:  	Irja R. Otsa 	 
	 	 	Title:  	Associate Director 	 
	 
	 	 	 
	 	By  	                   /s/ Marie Haddad
 	 
	 	 	Name:  	Marie Haddad 	 
	 	 	Title:  	Associate Director 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	UNION BANK, N.A., as a Lender

 	 
	 	By  	/s/ Efrain Soto
 	 
	 	 	Name:  	Efrain Soto 	 
	 	 	Title:  	Vice President 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	CITIBANK, N.A., as a Lender

 	 
	 	By  	/s/ Todd C. Davis
 	 
	 	 	Name:  	Todd C. Davis 	 
	 	 	Title:  	Vice President 	 



 


 









 





	 	 	 	 	 



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

 	 
	 	By  	/s/ Nancy R. Barwig
 	 
	 	 	Name:  	Nancy R. Barwig 	 
	 	 	Title:  	Vice President 	 



 


 









 





	 	 	 	 	 



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

 	 
	 	By  	/s/ Ryan Vetsch
 	 
	 	 	Name:  	Ryan Vetsch 	 
	 	 	Title:  	Authorized Signatory 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	NATIONAL BANK OF ARIZONA, as a Lender

 	 
	 	By  	/s/ Abran Villegas
 	 
	 	 	Name:  	Abran Villegas 	 
	 	 	Title:  	Vice President 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON,

as a Lender

 	 
	 	By  	/s/ Richard A. Matthews
 	 
	 	 	Name:  	Richard A. Matthews 	 
	 	 	Title:  	Managing Director 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	BANK OF COMMUNICATIONS CO.,

LTD., NEW YORK BRANCH, as a Lender

 	 
	 	By  	/s/ Shelley He
 	 
	 	 	Name:  	Shelley He 	 
	 	 	Title:  	Deputy General Manager 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	BANK OF TAIWAN, LOS ANGELES

BRANCH, as a Lender

 	 
	 	By  	/s/ Chwan-Ming Ho
 	 
	 	 	Name:  	Chwan-Ming Ho 	 
	 	 	Title:  	VP & General Manager 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	CIBC INC., as a Lender

 	 
	 	By  	/s/ Robert W. Casey, Jr.
 	 
	 	 	Name:  	Robert W. Casey, Jr. 	 
	 	 	Title:  	Executive Director 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	FIRST COMMERCIAL BANK, NEW

YORK AGENCY, as a Lender

 	 
	 	By  	/s/ Jenn-Hwa Wang
 	 
	 	 	Name:  	Jenn-Hwa Wang 	 
	 	 	Title:  	General Manager 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	SUMITOMO MITSUI BANKING CORP.,

NEW YORK, as a Lender

 	 
	 	By  	/s/ William M. Ginn
 	 
	 	 	Name:  	William M. Ginn 	 
	 	 	Title:  	General Manager 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	TAIWAN BUSINESS BANK, as a Lender

 	 
	 	By  	/s/ Alex Wang
 	 
	 	 	Name:  	Alex Wang 	 
	 	 	Title:  	S.V.P. & General Manager 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	TAIWAN COOPERATIVE BANK, LOS

ANGELES BRANCH, as a Lender

 	 
	 	By  	/s/ Li-Hua Huang
 	 
	 	 	Name:  	Li-Hua Huang 	 
	 	 	Title:  	AVP & General Manager 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	THE BANK OF EAST ASIA, LIMITED,

LOS ANGELES BRANCH, as a Lender

 	 
	 	By  	/s/ Chong Tan
 	 
	 	 	Name:  	Chong Tan 	 
	 	 	Title:  	VP & Credit Manager 	 
	 
	 	 	 
	 	By  	                   /s/ Victor Li
 	 
	 	 	Name:  	Victor Li 	 
	 	 	Title:  	General Manager 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	THE NORTHERN TRUST COMPANY, as a

Lender

 	 
	 	By  	/s/ John Lascody
 	 
	 	 	Name:  	John Lascody 	 
	 	 	Title:  	Second Vice President 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	UMB BANK ARIZONA, N.A., as a Lender

 	 
	 	By  	/s/ Julie Stevens
 	 
	 	 	Name:  	Julie Stevens 	 
	 	 	Title:  	Vice President 	 



 


 









 





	 	 	 	 	 



SCHEDULE 1.01

COMMITMENTS AND RATABLE SHARES




	 	 	 	 	 	 	 	 	 
	 	 	Revolving Credit	 	 	 	 
	Bank	 	Commitment	 	 	Ratable Share	 
	Bank of America, N.A.
	 	$	10,000,000.00	 	 	 	5.000000000	%
	Wells Fargo Bank, National Association
	 	$	10,000,000.00	 	 	 	5.000000000	%
	Barclays Bank PLC
	 	$	10,000,000.00	 	 	 	5.000000000	%
	Credit Suisse AG, Cayman Islands Branch
	 	$	10,000,000.00	 	 	 	5.000000000	%
	Deutsche Bank AG New York Branch
	 	$	7,714,285.71	 	 	 	3.857142855	%
	Goldman Sachs Bank USA
	 	$	7,714,285.71	 	 	 	3.857142855	%
	KeyBank National Association
	 	$	7,714,285.71	 	 	 	3.857142855	%
	Mizuho Corporate Bank, Ltd.
	 	$	7,714,285.71	 	 	 	3.857142855	%
	Scotiabanc Inc.
	 	$	7,714,285.71	 	 	 	3.857142855	%
	SunTrust Bank
	 	$	7,714,285.71	 	 	 	3.857142855	%
	The Royal Bank of Scotland plc
	 	$	7,714,285.71	 	 	 	3.857142855	%
	U.S. Bank National Association
	 	$	7,714,285.71	 	 	 	3.857142855	%
	UBS AG, Stamford Branch
	 	$	7,714,285.71	 	 	 	3.857142855	%
	Union Bank, N.A.
	 	$	7,714,285.71	 	 	 	3.857142855	%
	Citibank, N.A.
	 	$	6,571,428.58	 	 	 	3.285714290	%
	JPMorgan Chase Bank, N.A.
	 	$	6,571,428.58	 	 	 	3.285714290	%
	Morgan Stanley Bank, N.A.
	 	$	6,571,428.58	 	 	 	3.285714290	%
	National Bank of Arizona
	 	$	6,571,428.58	 	 	 	3.285714290	%
	The Bank of New York Mellon
	 	$	6,571,428.58	 	 	 	3.285714290	%
	Bank of Communications Co., Ltd., New York Branch
	 	$	5,000,000.00	 	 	 	2.500000000	%
	Bank of Taiwan, Los Angeles Branch
	 	$	5,000,000.00	 	 	 	2.500000000	%
	CIBC Inc.
	 	$	5,000,000.00	 	 	 	2.500000000	%
	First Commercial Bank, New York Agency
	 	$	5,000,000.00	 	 	 	2.500000000	%
	Sumitomo Mitsui Banking Corp., New York
	 	$	5,000,000.00	 	 	 	2.500000000	%
	Taiwan Business Bank
	 	$	5,000,000.00	 	 	 	2.500000000	%
	Taiwan Cooperative Bank, Los Angeles Branch
	 	$	5,000,000.00	 	 	 	2.500000000	%
	The Bank of East Asia, Limited, Los Angeles Branch
	 	$	5,000,000.00	 	 	 	2.500000000	%
	The Northern Trust Company
	 	$	5,000,000.00	 	 	 	2.500000000	%
	UMB Bank Arizona, N.A.
	 	$	5,000,000.00	 	 	 	2.500000000	%
	 	 	 	 	 	 	 
	TOTAL
	 	$	200,000,000.00	 	 	 	100.000000000	%
	 	 	 	 	 	 	 






 


 









 





SCHEDULE 4.01(j)

SUBSIDIARIES




Arizona Public Service Company





 


 









 







SCHEDULE 4.01(k)

EXISTING INDEBTEDNESS




None.


 


 









 





SCHEDULE 8.02

CERTAIN ADDRESSES FOR NOTICES



Omitted



 












 





EXHIBIT A — FORM OF

PROMISSORY NOTE




                                        , 200__




FOR VALUE RECEIVED, the undersigned, PINNACLE WEST CAPITAL CORPORATION, an Arizona corporation
(the “Borrower”), hereby promises to pay to the order of
 _____ 
or its registered assigns
(the “Lender”), in accordance with the provisions of the Credit Agreement (as hereinafter
defined), the principal amount of each Advance from time to time made by the Lender to the Borrower
pursuant to the Three-Year Credit Agreement dated as of February 12, 2010 among the Borrower, the
Lender and certain other lenders parties thereto, the Arrangers, and Bank of America, N.A., as
Agent for the Lender and such other lenders, and the issuing banks and other agents party thereto
(as amended or modified from time to time, the “Credit Agreement”; the terms defined
therein being used herein as therein defined) outstanding on such date.



The Borrower promises to pay interest on the unpaid principal amount of each Advance from the
date of such Advance until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.



Both principal and interest are payable in lawful money of the United States of America to the
Agent for the account of the Lender in same day funds at the address and account specified on
Schedule 8.02. Each Advance owing to the Lender by the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this
Promissory Note.



This Promissory Note is one of the Notes referred to in, and is entitled to the benefits of,
the Credit Agreement. The Credit Agreement, among other things, (i) provides for the making of
Advances by the Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time the Lender’s Unused Commitment, the indebtedness of the Borrower resulting from each such
Advance being evidenced by this Promissory Note and (ii) contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events and also for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and conditions therein specified.



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



	 	 	 	 	 
	 	PINNACLE WEST CAPITAL CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


A-1









 






ADVANCES AND PAYMENTS OF PRINCIPAL




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Amount of	 	 	 	 	 	 	 
	 	 	Amount of	 	 	Principal Paid	 	 	Unpaid Principal	 	 	Notation	 
	Date	 	Advance	 	 	or Prepaid	 	 	Balance	 	 	Made By	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 






 


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EXHIBIT B — FORM OF NOTICE OF

BORROWING




Bank of America, N.A., as Agent



for the Lenders parties

to the Credit Agreement

referred to below





Attention: Bank Loan Syndications Department



[Date]




Ladies and Gentlemen:



The undersigned, Pinnacle West Capital Corporation, refers to the Three-Year Credit Agreement,
dated as of February 12, 2010 (as amended or modified from time to time, the “Credit
Agreement”, the terms defined therein being used herein as therein defined), among the
undersigned, certain Lenders parties thereto, the Arrangers, Bank of America, N.A., as Agent for
said Lenders and the issuing banks and other agents party thereto, and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby requests
a Borrowing under the Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the “Proposed Borrowing”) as required by Section 2.02(a) of the
Credit Agreement:




	 	(i)	 	The Business Day of the Proposed Borrowing
is          
           , 20_____.

	 
	 	(ii)	 	The Type of Advances comprising the Proposed Borrowing is [Base Rate Advances]
[Eurodollar Rate Advances].

	 
	 	(iii)	 	The aggregate amount of the Proposed Borrowing is $                    .

	 
	 	[(iv)	 	The initial Interest Period for each Eurodollar Rate Advance made as part of
the Proposed Borrowing is
 _____ 
month[s].]






The undersigned hereby certifies that the following statements are true on the date hereof,
and will be true on the date of the Proposed Borrowing:



(A) the representations and warranties contained in Section 4.01 (other than Sections 4.01(k),
4.01(e)(ii) and 4.01(f)(ii)) of the Credit Agreement are correct, before and after giving effect to
the Proposed Borrowing and to the application of the proceeds therefrom, as though made on and as
of such date;



(B) no event has occurred and is continuing, or would result from such Proposed Borrowing or
from the application of the proceeds therefrom, that constitutes a Default; and



(C) after giving effect to the Proposed Borrowing, the Indebtedness of the Borrower does not
exceed that permitted by (A) applicable resolutions of the Board of Directors of the Borrower or
(B) applicable Laws of any Governmental Authority.


 


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	 	Very truly yours,




PINNACLE WEST CAPITAL CORPORATION

 	 
	 	By  	 	 
	 	 	Title:. 	 
	 	 	 	 



 


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EXHIBIT C — FORM OF

ASSIGNMENT AND ASSUMPTION





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



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




	 	1.	 	Assignor:       
            
           
             
               
              
         

	 
	 	2.	 	Assignee:      
             
            
             
              
             
          







	 	 	 	[and is an Affiliate of [identify Bank]1]







	 	3.	 	Borrower: Pinnacle West Capital Corporation

	 
	 	4.	 	Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement

	 
	 	5.	 	Credit Agreement: The Three-Year Credit
Agreement dated as of February 12, 2010, by
and among the Borrower, the Lenders party thereto, the Arrangers, the Agent and the Issuing
Banks and other agents party thereto.

	 
	 	6.	 	Assigned Interest:





 





	 	 	 
	1	 	Select as applicable.




 


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	Aggregate Amount	 	Amount of	 	 	Percentage	 	 	 	 
	of Commitment for	 	Commitment	 	 	Assigned of	 	 	CUSIP	 
	all Lenders	 	Assigned	 	 	Commitment2	 	 	Number	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	$                    
	 	$	                    	 	 	 	                    	%	 	 	 	 






[7. Trade Date: ]3



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



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



	 	 	 	 	 
	 	ASSIGNOR

[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 	ASSIGNEE

[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 



	 	 	 	 	 
	[Consented to and]4 Accepted:

BANK OF AMERICA, N.A. as Agent 

 	 
	By  	 	 
	 	 	Title: 	 


 





	 	 	 
	2	 	Set forth, to at least 9 decimals, as a percentage of
the Commitment of all Banks thereunder.

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

	 
	4	 	To be added only if the consent of the Agent is
required by the terms of the Credit Agreement.




 


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	[Consented to:]5	 	 
	[WELLS FARGO BANK, NATIONAL ASSOCIATION as Issuing Bank]	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 

	 	 
	 
	 	Name:	 	 
	 
	 	Title:	 	 
	 
	 	 	 	 
	[BANK OF AMERICA, N.A., as Issuing Bank]	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 

	 	 
	 
	 	Name:	 	 
	 
	 	Title:	 	 
	 
	 	 	 	 
	PINNACLE WEST CAPITAL CORPORATION	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 

	 	 
	 
	 	Name:	 	 
	 
	 	Title:	 	 





 





	 	 	 
	5	 	To be added only if the consent of the Borrowers and/or
other parties (e.g. Issuing Bank) is required by the terms of the Credit
Agreement.




 


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ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION




1. Representations and Warranties.



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



1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all the requirements to be an Eligible Assignee under Section 8.07
of the Credit Agreement (subject to such consents, if any, as may be required under Section 8.07 of
the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions
of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall
have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to
acquire assets of the type represented by the Assigned Interest and either it, or the Person
exercising discretion in making its decision to acquire the Assigned Interest, is experienced in
acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received
or has been accorded the opportunity to receive copies of the most recent financial statements
delivered pursuant to Section 4.01(e) or 5.01(h), as applicable, thereof, as applicable, and such
other documents and information as it deems appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the Assigned Interest, (vi)
it has, independently and without reliance upon the Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit analysis and decision
to enter into this Assignment and Assumption and to purchase the Assigned Interest, and (vi) if it
is a foreign lender, attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the
Assignee; and (b) agrees that (i) it will, independently and without reliance on the Agent, the
Assignor or any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be performed by it as a
Lender.



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


 


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




 


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