Amended and Restated Credit Agreement (TEP)


     

    Exhibit
      4.3

     

    [EXECUTION
      COPY]

    


    


    


    


    


    
      
        

        

      

       

    

     

    AMENDED
      AND RESTATED CREDIT AGREEMENT

     

    dated
      as
      of

     

    August
      11, 2006

     

    among

     

    TUCSON
      ELECTRIC POWER COMPANY,

    as
      Borrower,

    


    THE
      LENDERS PARTY HERETO,

    


    THE
      ISSUING BANKS PARTY HERETO,

    


    THE
      BANK OF NEW YORK and JPMORGAN CHASE BANK, N.A.,

    as
      Co-Syndication Agents,

    


    WELLS
      FARGO BANK, NATIONAL ASSOCIATION and ABN AMRO BANK N.V.,

    as
      Co-Documentation Agents,

     

    and

     

    UNION
      BANK OF CALIFORNIA, N.A.,

     

    as
      Administrative Agent

     

     

     

    
      

      

    

     

    


    UNION
      BANK OF CALIFORNIA, N.A.,

    as
      Lead Arranger

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF
      CONTENTS

     

    Page

    
      

        
          
            
              
                	
                         

                        ARTICLE
                          I    Definitions

                         

                      	
                         

                        1

                         

                      
	
                        SECTION
                          1.01.

                      	
                        Defined
                          Terms

                      	
                        1

                      
	
                        SECTION
                          1.02.

                      	
                        Classification
                          of Loans and Borrowings

                      	
                        18

                      
	
                        SECTION
                          1.03.

                      	
                        Terms
                          Generally

                      	
                        18

                      
	
                        SECTION
                          1.04.

                      	
                        Accounting
                          Terms; GAAP

                      	
                        18

                      
	
                        SECTION
                          1.05.

                      	
                        Pro
                          Forma Calculations

                      	
                        19

                      
	
                         

                        ARTICLE
                          II    The
                          Credits

                         

                      	
                         

                        19

                         

                      
	
                        SECTION
                          2.01.

                      	
                        Revolving
                          Commitments

                      	
                        19

                      
	
                        SECTION
                          2.02.

                      	
                        Loans
                          and Borrowings

                      	
                        19

                      
	
                        SECTION
                          2.03.

                      	
                        Requests
                          for Revolving Borrowings

                      	
                        20

                      
	
                        SECTION
                          2.04.

                      	
                        Letters
                          of Credit

                      	
                        20

                      
	
                        SECTION
                          2.05.

                      	
                        Funding
                          of Borrowings

                      	
                        28

                      
	
                        SECTION
                          2.06.

                      	
                        Interest
                          Elections

                      	
                        29

                      
	
                        SECTION
                          2.07.

                      	
                        Termination
                          and Reduction of Commitments

                      	
                        30

                      
	
                        SECTION
                          2.08.

                      	
                        Repayment
                          of Loans; Evidence of Debt

                      	
                        31

                      
	
                        SECTION
                          2.09.

                      	
                        Prepayment
                          of Loans

                      	
                        32

                      
	
                        SECTION
                          2.10.

                      	
                        Fees

                      	
                        33

                      
	
                        SECTION
                          2.11.

                      	
                        Interest

                      	
                        34

                      
	
                        SECTION
                          2.12.

                      	
                        Alternate
                          Rate of Interest

                      	
                        34

                      
	
                        SECTION
                          2.13.

                      	
                        Increased
                          Costs

                      	
                        35

                      
	
                        SECTION
                          2.14.

                      	
                        Break
                          Funding Payments

                      	
                        36

                      
	
                        SECTION
                          2.15.

                      	
                        Taxes

                      	
                        37

                      
	
                        SECTION
                          2.16.

                      	
                        Payments
                          Generally; Pro Rata Treatment; Sharing of Set-offs

                      	
                        37

                      
	
                        SECTION
                          2.17.

                      	
                        Mitigation
                          Obligations; Replacement of Lenders

                      	
                        39

                      
	
                        SECTION
                          2.18.

                      	
                        New
                          Lenders

                      	
                        40

                      
	
                         

                        ARTICLE
                          III    Representations
                          and Warranties

                         

                      	
                         

                        40

                         

                      
	
                        SECTION
                          3.01.

                      	
                        Organization;
                          Powers

                      	
                        40

                      
	
                        SECTION
                          3.02.

                      	
                        Authorization;
                          Enforceability

                      	
                        41

                      
	
                        SECTION
                          3.03.

                      	
                        Governmental
                          Approvals; No Conflicts

                      	
                        41

                      
	
                        SECTION
                          3.04.

                      	
                        Financial
                          Condition; No Material Adverse Change; Secured
                          Indebtedness

                      	
                        41

                      
	
                        SECTION
                          3.05.

                      	
                        Properties

                      	
                        42

                      
	
                        SECTION
                          3.06.

                      	
                        Litigation
                          and Environmental Matters

                      	
                        42

                      
	
                        SECTION
                          3.07.

                      	
                        Compliance
                          with Laws and Agreements

                      	
                        43

                      
	
                        SECTION
                          3.08.

                      	
                        Federal
                          Regulations

                      	
                        43

                      
	
                        SECTION
                          3.09.

                      	
                        Investment
                          Company Status

                      	
                        43

                      
	
                        SECTION
                          3.10.

                      	
                        Taxes

                      	
                        43

                      
	
                        SECTION
                          3.11.

                      	
                        ERISA

                      	
                        43

                      


              

               

              
                
                  
                  

                

                
                  i

                  
                    

                  

                

                
                  
                  

                

              

               

              Page

               

              
                	
                        SECTION
                          3.12.

                      	
                        Security
                          Documents

                      	
                        44

                      
	
                        SECTION
                          3.13.

                      	
                        Disclosure

                      	
                        44

                      
	
                        SECTION
                          3.14.

                      	
                        Solvency

                      	
                        45

                      
	
                        SECTION
                          3.15.

                      	
                        Labor
                          Matters

                      	
                        45

                      
	
                        SECTION
                          3.16.

                      	
                        Anti-Terrorism
                          Laws

                      	
                        45

                      
	
                         

                        ARTICLE
                          IV    Conditions

                         

                      	
                         

                        46

                         

                      
	
                        SECTION
                          4.01.

                      	
                        Effective
                          Date

                      	
                        46

                      
	
                        SECTION
                          4.02.

                      	
                        Each
                          Credit Event

                      	
                        47

                      
	
                         

                        ARTICLE
                          V    Affirmative
                          Covenants

                         

                      	
                         

                        48

                         

                      
	
                        SECTION
                          5.01.

                      	
                        Financial
                          Statements and Other Information

                      	
                        49

                      
	
                        SECTION
                          5.02.

                      	
                        Notices
                          of Material Events

                      	
                        51

                      
	
                        SECTION
                          5.03.

                      	
                        Existence;
                          Conduct of Business

                      	
                        51

                      
	
                        SECTION
                          5.04.

                      	
                        Payment
                          of Obligations

                      	
                        52

                      
	
                        SECTION
                          5.05.

                      	
                        Maintenance
                          of Properties; Insurance

                      	
                        52

                      
	
                        SECTION
                          5.06.

                      	
                        Books
                          and Records; Inspection Rights

                      	
                        52

                      
	
                        SECTION
                          5.07.

                      	
                        Compliance
                          with Laws and Agreements

                      	
                        52

                      
	
                        SECTION
                          5.08.

                      	
                        Use
                          of Proceeds and Letters of Credit

                      	
                        52

                      
	
                        SECTION
                          5.09.

                      	
                        Environmental
                          Laws

                      	
                        53

                      
	
                        SECTION
                          5.10.

                      	
                        Further
                          Assurances

                      	
                        53

                      
	
                         

                        ARTICLE
                          VI    Negative
                          Covenants

                         

                      	
                         

                        53

                         

                      
	
                        SECTION
                          6.01.

                      	
                        Indebtedness

                      	
                        54

                      
	
                        SECTION
                          6.02.

                      	
                        Liens

                      	
                        54

                      
	
                        SECTION
                          6.03.

                      	
                        Fundamental
                          Changes

                      	
                        54

                      
	
                        SECTION
                          6.04.

                      	
                        Sale
                          of Assets

                      	
                        55

                      
	
                        SECTION
                          6.05.

                      	
                        Restricted
                          Payments

                      	
                        56

                      
	
                        SECTION
                          6.06.

                      	
                        Cash
                          Coverage Ratio

                      	
                        57

                      
	
                        SECTION
                          6.07.

                      	
                        Leverage
                          Test

                      	
                        57

                      
	
                        SECTION
                          6.08.

                      	
                        Amendments
                          to Documents

                      	
                        57

                      
	
                        SECTION
                          6.09.

                      	
                        Sale
                          Leaseback Transactions

                      	
                        57

                      
	
                        SECTION
                          6.10.

                      	
                        Release
                          of Collateral under the Mortgage Indenture

                      	
                        57

                      
	
                        SECTION
                          6.11.

                      	
                        Transactions
                          with Affiliates

                      	
                        58

                      
	
                        SECTION
                          6.12.

                      	
                        Limitation
                          on Hedge Agreements

                      	
                        58

                      
	
                        SECTION
                          6.13.

                      	
                        Restrictive
                          Agreements

                      	
                        58

                      
	
                         

                        ARTICLE
                          VII    Events
                          of Default

                         

                      	
                         

                        58

                         

                      
	
                         

                        ARTICLE
                          VIII    The
                          Administrative Agent

                         

                      	
                         

                        61

                         

                      
	
                         

                        ARTICLE
                          IX     Miscellaneous

                         

                      	
                         

                        64

                         

                      


              

               

              
                
                  
                  

                

                
                  ii

                  
                    

                  

                

                
                  
                  

                

              

               

              Page

               

              
                	
                        SECTION
                          9.01.

                      	
                        Notices

                      	
                        64

                      
	
                        SECTION
                          9.02.

                      	
                        Waivers;
                          Amendments

                      	
                        64

                      
	
                        SECTION
                          9.03.

                      	
                        Expenses;
                          Indemnity; Damage Waiver

                      	
                        66

                      
	
                        SECTION
                          9.04.

                      	
                        Successors
                          and Assigns

                      	
                        67

                      
	
                        SECTION
                          9.05.

                      	
                        Survival

                      	
                        70

                      
	
                        SECTION
                          9.06.

                      	
                        Counterparts;
                          Integration; Effectiveness

                      	
                        71

                      
	
                        SECTION
                          9.07.

                      	
                        Severability

                      	
                        71

                      
	
                        SECTION
                          9.08.

                      	
                        Right
                          of Setoff

                      	
                        71

                      
	
                        SECTION
                          9.09.

                      	
                        Governing
                          Law; Jurisdiction; Consent to Service of Process

                      	
                        71

                      
	
                        SECTION
                          9.10.

                      	
                        WAIVER
                          OF JURY TRIAL

                      	
                        72

                      
	
                        SECTION
                          9.11.

                      	
                        Headings

                      	
                        72

                      
	
                        SECTION
                          9.12.

                      	
                        Confidentiality

                      	
                        72

                      
	
                        SECTION
                          9.13.

                      	
                        Interest
                          Rate Limitation

                      	
                        73

                      
	
                        SECTION
                          9.14.

                      	
                        Patriot
                          Act Notice

                      	
                        73

                      


              

            

          

        

      

    

     

    SCHEDULES:

     

    Schedule
      1.01 --
      Pricing Schedule

    Schedule
      2.01 -- Commitments 

    Schedule
      2.04 -- Letters of Credit 

     

    EXHIBITS:

     

    Exhibit
      A
      -- Form
      of
      Assignment and Assumption

    Exhibit
      B
      -- Form
      of
      Bond Delivery Agreement

    Exhibit
      C-1 -- Form
      of
      Revenue Bond Pledge Agreement 

    Exhibit
      C-2 -- Form
      of
      Revenue Bond Pledge Agreement (Custodian)

    Exhibit
      D-1 -- Sixth
      Supplemental Indenture

    Exhibit
      D-2 -- Form
      of
      Seventh Supplemental Indenture

    Exhibit
      E-1 -- Form
      of
      Opinion of Raymond S. Heyman, Esq., General Counsel for the Borrower


    Exhibit
      E-2 -- Form
      of
      Opinion of Thelen Reid & Priest LLP, New York counsel for the
      Borrower

    Exhibit
      E-3 -- Form
      of
      Opinion of Rodey, Dickason, Sloan, Akin & Robb, PA, special New Mexico
      counsel for the Borrower

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    This
      AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 11, 2006, among TUCSON
      ELECTRIC POWER COMPANY, an Arizona corporation, the lenders listed on the
      signature pages hereto as “Existing Lenders” (the “Existing
      Lenders”),
      the
      lenders listed on the signature pages hereto as “New Lenders” (the “New
      Lenders”),
      the
      other LENDERS from time to time party hereto, the ISSUING BANKS party hereto,
      THE BANK OF NEW YORK and JPMORGAN CHASE BANK, N.A., as Co-Syndication Agents,
      WELLS FARGO BANK, NATIONAL ASSOCIATION and ABN AMRO BANK N.V., as
      Co-Documentation Agents, and UNION BANK OF CALIFORNIA, N.A., as Administrative
      Agent.

     

    RECITALS

     

    The
      Borrower, the Existing Lenders, the issuing banks party thereto, Wells Fargo
      Bank, National Association, as syndication agent, Allied Irish Banks, p.l.c.,
      as
      documentation agent, and Union Bank of California, N.A., as administrative
      agent, previously entered into that certain Credit Agreement, dated as of May
      4,
      2005 (as amended, supplemented or otherwise modified from time to time prior
      to
      the date hereof, the “Existing
      Credit Agreement”).
      The
      parties hereto desire to amend and restate the Existing Credit Agreement, on
      the
      terms and conditions set forth herein.

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants herein
      contained, the parties hereto hereby agree that
      the
      Existing Credit Agreement is hereby amended and restated in its entirety,
      without novation, as follows:

     

    ARTICLE
      I

    Definitions

     

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

     

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

     

    “ACC”
means
      the Arizona Corporation Commission.

     

    “Adjusted
      LIBO Rate”
means,
      with respect to any Eurodollar Borrowing for any Interest Period, an interest
      rate per
      annum
      equal to
      (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory
      Reserve Rate.

     

    “Administrative
      Agent”
means
      Union Bank, in its capacity as administrative agent for the
      Lenders.

     

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

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

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

     

    “Agents”
means
      the Co-Documentation Agents, the Co-Syndication Agents and the Administrative
      Agent.

     

    “Aggregate
      Commitment”
means,
      with respect to each Lender, such Lender’s Revolving Commitment and Revenue Bond
      Commitment, in an aggregate amount no greater than (i) the amount set forth
      opposite such Lender’s name on Schedule 2.01, or (ii) if such Lender has entered
      into one or more Assignment and Assumptions, the amount set forth for such
      Lender in the Register maintained by the Administrative Agent pursuant to
      Section 9.04(c), in each case as such amount may be reduced from time to time
      pursuant to Section 2.07. “Aggregate
      Commitments”
means
      the total of the Lenders’ Aggregate Commitments hereunder. The
      Aggregate Commitments shall in no event exceed $490,587,047.19.

     

    “Agreement”
means
      this Amended and Restated Credit Agreement, dated as of August 11, 2006, by
      and
      among the Borrower, the Lenders party hereto, the Issuing Banks party hereto,
      the Co-Documentation Agents, the Co-Syndication Agents and the Administrative
      Agent.

     

    “Alternate
      Base Rate”
means,
      for any day, a rate per
      annum
      equal to
      the greater of (a) the Reference Rate in effect on such day and (b) the Federal
      Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
      Alternate Base Rate due to a change in the Reference Rate or the Federal Funds
      Effective Rate shall be effective from and including the effective date of
      such
      change in the Reference Rate or the Federal Funds Effective Rate,
      respectively.

     

    “Anti-Terrorism
      Laws”
has
      the
      meaning provided in Section 3.16(a).

     

    “Applicable
      Margin”
means,
      for any day, with respect to any Eurodollar Loan or ABR Loan, as the case may
      be, the applicable percentage per
      annum
      determined in accordance with the Pricing Schedule attached hereto as Schedule
      1.01. 

     

    “Applicable
      Percentage”
means
      (i) for any Revenue Bond Lender on any date of determination, the percentage
      obtained by dividing such Revenue Bond Lender’s Revenue Bond Commitment on such
      date by the total of the Revenue Bond Commitments on such date, and multiplying
      the quotient so obtained by 100%; provided,
      that in
      the event that the Revenue Bond Commitments have been terminated, each Revenue
      Bond Lender’s Applicable Percentage shall be calculated on the basis of the
      Revenue Bond Commitments in effect immediately prior to such termination; and
      (ii) for any Revolving Lender on any date of determination, the percentage
      obtained by dividing such Revolving Lender’s Revolving Commitment on such date
      by the total of the Revolving Commitments on such date, and multiplying the
      quotient so obtained by 100%; provided,
      that in
      the event that the Revolving Commitments have been terminated, each Revolving
      Lender’s Applicable Percentage shall be calculated on the basis of the Revolving
      Commitments in effect immediately prior to such termination, giving effect
      to
      any assignments.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Applicable
      Rate”
      means:

     

    (i) in
      the
      case of each ABR Loan, a rate per
      annum
      equal at
      all times to the sum of the Alternate Base Rate in effect from time to time
      plus
      the
      Applicable Margin in effect from time to time; and 

     

    (ii) in
      the
      case of each Eurodollar Loan, a rate per
      annum
      during
      each Interest Period equal at all times to the sum of the Adjusted LIBO Rate
      for
      such Interest Period plus
      the
      Applicable Margin in effect from time to time during such Interest
      Period.

     

    “Approved
      Fund”
means,
      with respect to any Lender that is a fund that invests in commercial loans,
      any
      other fund that invests in commercial loans and is managed or advised by the
      same investment advisor as such Lender or by an Affiliate of such investment
      advisor.

     

    “Arranger”
means
      Union Bank, as Lead Arranger for the credit facilities established by this
      Agreement.

     

    “Assignment
      and Assumption”
means
      an Assignment and Assumption entered into by a Lender and an assignee (with
      the
      consent of any party whose consent is required by Section 9.04), and accepted by
      the Administrative Agent, in the form of Exhibit A or any other form approved
      by
      the Administrative Agent.

     

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

     

    “Bond
      Delivery Agreement”
means,
      collectively, the Bond Delivery Agreement, dated as of May 4, 2005, between
      the
      Borrower and the Administrative Agent, and any additional or replacement Bond
      Delivery Agreement between the Borrower and the Administrative Agent,
      substantially in the form of Exhibit B, executed and delivered pursuant to
      the terms of this Agreement in connection with any issuance of Collateral
      Mortgage Bonds after the Effective Date.

     

    “Borrower”
means
      Tucson Electric Power Company, an Arizona corporation.

     

    “Borrowing”
means
      Loans of the same Type, made (or deemed made), converted or continued on the
      same date and, in the case of Eurodollar Loans, as to which a single Interest
      Period is in effect.

     

    “Borrowing
      Request”
means
      a
      request by the Borrower for a Revolving Borrowing in accordance with Section
      2.03.

     

    “Business
      Day”
means
      any day that is not a Saturday, Sunday or other day on which commercial banks
      in
      New York City or Los Angeles, California are authorized or required by law
      to
      remain closed; provided
      that,
      when used in connection with a Eurodollar Loan, the term “Business
      Day”
shall
      also exclude any day on which banks are not open for dealings in dollar deposits
      in the London interbank market.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Capital
      Lease Investment”
of
      any
      Person means the aggregate outstanding capitalized amount of Capital Lease
      Obligations of the Borrower and the Consolidated Subsidiaries that are owned
      by
      such Person and in respect of which such Person has the right to receive all
      future payments to be made.

     

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

     

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

     

    “Change
      in Law”
means
      (a) the adoption of any law, rule or regulation after the date of this
      Agreement, (b) any change in any law, rule or regulation or in the
      interpretation or application thereof by any Governmental Authority after the
      date of this Agreement or (c) compliance by any Lender or any Issuing Bank
      (or,
      for purposes of Section 2.13(b), by any lending office of such Lender or by
      such
      Lender’s or such Issuing Bank’s holding company, if any) with any request,
      guideline or directive (whether or not having the force of law) of any
      Governmental Authority made or issued after the date of this
      Agreement.

     

    “Change
      in Control”
means
      the failure of UniSource Energy to own and control, of record and beneficially,
      directly or indirectly, Capital Stock of the Borrower representing 100% of
      the
      aggregate ordinary voting power of the Borrower, free and clear of all
      Liens.

     

    “Class”,
      when
      used in reference to any Loan or Borrowing, refers to whether such Loan, or
      the
      Loans comprising such Borrowing, are Revolving Loans or Revenue Bond Loans,
      and
      when used in reference to any Commitment, refers to whether such Commitment
      is a
      Revolving Commitment or a Revenue Bond Commitment.

     

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

     

    “Co-Documentation
      Agents”
means
      Wells Fargo Bank, National Association and ABN AMRO Bank N.V., in their capacity
      as co-documentation agents for the Lenders.

     

    “Collateral”
means
      the Collateral Mortgage Bonds and any and all “Collateral”, as defined in any
      applicable Security Document.

     

    “Collateral
      Mortgage Bonds”
means
      the Second Mortgage Bonds, Collateral Series E, substantially in the form
      attached to the Sixth Supplemental Indenture, and any replacement Mortgage
      Bonds
      issued after the Effective Date pursuant to the terms of this Agreement and
      the
      Seventh Supplemental Indenture and delivered to the Administrative Agent
      pursuant to a Bond Delivery Agreement.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Commitment
      Fee Rate”
means,
      for any day, the applicable percentage per
      annum
      determined in accordance with the Pricing Schedule attached hereto as Schedule
      1.01. 

     

    “Consolidated
      EBITDA”
means,
      for any fiscal period, with respect to the Borrower and the Consolidated
      Subsidiaries, Consolidated Net Income for such period plus,
      to the
      extent deducted in computing such Consolidated Net Income, without duplication,
      the sum of (a) income tax expense, (b) interest expense, (c) depreciation and
      amortization expense, (d) any extraordinary or non-recurring losses and (e)
      other noncash items reducing Consolidated Net Income, minus,
      to the
      extent added in computing such Consolidated Net Income, without duplication,
      the
      sum of (i) interest income, (ii) any extraordinary or non-recurring gains and
      (iii) other noncash items increasing Consolidated Net Income, all as determined
      on a consolidated basis in accordance with GAAP.

     

    “Consolidated
      Interest Expense”
means,
      for any fiscal period, the aggregate of all payments by the Borrower and the
      Consolidated Subsidiaries for such period that, in accordance with GAAP, are
      or
      should be included in “interest paid, net of amounts capitalized” and “capital
      lease interest paid” reflected in the statement of cash flows for the Borrower
      and the Consolidated Subsidiaries, less the amount of capital lease interest
      income paid to the Borrower or any Consolidated Subsidiary for such period
      that
      is not reflected in Consolidated EBITDA for such period, all as determined
      on a
      consolidated basis in accordance with GAAP.

     

    “Consolidated
      Net Income”
means,
      for any fiscal period, net income of the Borrower and the Consolidated
      Subsidiaries for such period, determined on a consolidated basis in accordance
      with GAAP.

     

    “Consolidated
      Subsidiary”
means,
      at any date, each Subsidiary the accounts of which would be consolidated with
      those of the Borrower in the Borrower’s consolidated financial statements if
      such financial statements were prepared in accordance with GAAP as of such
      date.

     

    “Consolidated
      Total Indebtedness”
means,
      as of the last day of any fiscal quarter, (a) the sum (without duplication)
      for
      the Borrower and the Consolidated Subsidiaries as of such day of (i) the
      aggregate outstanding principal amount of the Loans and LC Disbursements, (ii)
      the aggregate outstanding principal amount of other Indebtedness for borrowed
      money (including Guarantees thereof), (iii) the principal amount of all
      obligations in respect of Hedging Agreements of the Borrower and the
      Consolidated Subsidiaries (computed as set forth in the penultimate sentence
      of
      the definition of “Material Indebtedness”) and (iv) the aggregate outstanding
      capitalized amount of Capital Lease Obligations, minus
      (b) the
      sum (without duplication) as of such day of (i) the aggregate outstanding
      capitalized amount of the Capital Lease Investments of the Borrower and the
      Consolidated Subsidiaries as of such day and (ii) to the extent included in
      clause (a)(ii) above, any Treasury Indebtedness of the Borrower and the
      Consolidated Subsidiaries as of such day, all as determined on a consolidated
      basis in accordance with GAAP.

     

    “Control”
means
      the possession, directly or indirectly, of the power to direct or cause the
      direction of the management or policies of a Person, whether through the ability
      to

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    exercise
      voting power, by contract or otherwise. “Controlling”
and
      “Controlled”
have
      meanings correlative thereto.

     

    “Co-Syndication
      Agents”
means
      The Bank of New York and JPMorgan Chase Bank, N.A., in their capacity as
      co-syndication agents for the Lenders. 

     

    “Credit
      Exposure”
means,
      with respect to any Lender at any time, the sum of such Lender’s Revolving
      Credit Exposure and its Revenue Bond Credit Exposure at such time.

     

    “Default”
means
      any event or condition which constitutes an Event of Default or which upon
      notice, lapse of time or both would, unless cured or waived, become an Event
      of
      Default.

     

    “Disclosure
      Documents”
means
      (i) the Borrower’s Annual Report on Form 10-K for the fiscal year ended December
      31, 2005, as filed with the Securities and Exchange Commission, (ii) the
      Borrower’s Quarterly Reports on Form 10-Q for the fiscal quarters ended March
      31, 2006 and June 30, 2006, as filed with the Securities and Exchange
      Commission, and (iii) the Current Reports on Form 8-K of the Borrower as filed
      with the Securities and Exchange Commission on May 25, 2006, June 6, 2006,
      June
      12, 2006, June 26, 2006, June 27, 2006, July 5, 2006 and August 8,
      2006.

     

    “dollars”
or
      “$”
refers
      to lawful money of the United States of America.

     

    “Effective
      Date”
means
      the date on which the conditions specified in Section 4.01 are satisfied (or
      waived in accordance with Section 9.02).

     

    “Environmental
      Laws”
means
      all laws, rules, regulations, codes, ordinances, orders, decrees, judgments,
      injunctions, notices or binding agreements issued, promulgated or entered into
      by any Governmental Authority, relating in any way to the environment,
      preservation or reclamation of natural resources, the management, release or
      threatened release of any Hazardous Material or to health and safety
      matters.

     

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

     

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

     

    “ERISA
      Affiliate”
means
      any trade or business (whether or not incorporated) that, together with the
      Borrower, is treated as a single employer under Section 414(b) or (c) of the
      Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
      Code, is treated as a single employer under Section 414 of the
      Code.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “ERISA
      Event”
means
      (a) any “reportable event”, as defined in Section 4043 of ERISA or the
      regulations issued thereunder with respect to a Plan (other than an event for
      which the 30-day notice period is waived); (b) the existence with respect to
      any
      Plan of an “accumulated funding deficiency” (as defined in Section 412 of the
      Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant
      to
      Section 412(d) of the Code or Section 303(d) of ERISA of an application for
      a
      waiver of the minimum funding standard with respect to any Plan; (d) the
      incurrence by the Borrower or any of its ERISA Affiliates of any liability
      under
      Title IV of ERISA with respect to the termination of any Plan; (e) the receipt
      by the Borrower or any ERISA Affiliate from the PBGC of any notice of its intent
      to institute proceedings to terminate any Plan or to appoint a trustee to
      administer any Plan under Section 4042 of ERISA or the providing of notice
      by a
      plan administrator of the intent to terminate any Plan under Section 4041 of
      ERISA; (f) the incurrence by the Borrower or any of its ERISA Affiliates of
      any
      liability with respect to the withdrawal or partial withdrawal from any Plan
      or
      Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate
      of
      any notice, or the receipt by any Multiemployer Plan from the Borrower or any
      ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
      or a determination that a Multiemployer Plan is, or is expected to be, insolvent
      or in reorganization, within the meaning of Title IV of ERISA.

     

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

     

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

     

    “Excluded
      Taxes”
means,
      with respect to the Administrative 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) income or franchise taxes imposed on (or measured
      by) its net income by the United States of America, or by the jurisdiction
      under
      the laws of which such recipient is organized or in which its principal office
      is located or, in the case of any Lender, in which its applicable lending office
      is located, (b) any branch profits taxes imposed by the United States of America
      or any similar tax imposed by any other jurisdiction in which such recipient
      is
      located and (c) in the case of a Foreign Lender (other than an assignee pursuant
      to a request by the Borrower under Section 2.17(b)), any withholding tax that
      is
      imposed by the United States of America on amounts payable to such Foreign
      Lender at the time such Foreign Lender becomes a party to this Agreement (or
      designates a new lending office) or is attributable to such Foreign Lender’s
      failure to comply with Section 2.15(d).

     

    “Executive
      Order”
has
      the
      meaning provided in Section 3.16(a).

     

    “Existing
      Credit Agreement”
has
      the
      meaning assigned to such term in the recitals to this Agreement. 

     

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

     

    “Existing
      Letters of Credit”
means
      the Letters of Credit set forth on Schedule 2.04.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Fair
      Value”
means,
      with respect to any assets or property owned by the Borrower or any of the
      Consolidated Subsidiaries, the fair market value thereof as determined from
      time
      to time by the Board of Directors (or a duly constituted committee thereof)
      of
      the Borrower or such Consolidated Subsidiary in good faith.

     

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

     

    “Final
      Maturity Date”
means
      the later to occur of (i) May 4, 2010 and (ii) if (and only if) the conditions
      set forth in Section 4.02(c) have been satisfied, August 11,
      2011.

     

    “Financial
      Officer”
means
      the chief financial officer, principal accounting officer, treasurer or
      controller of the Borrower.

     

    “Foreign
      Lender”
means
      any Lender that is organized under the laws of a jurisdiction other than the
      United States of America.

     

    “GAAP”
means
      generally accepted accounting principles in the United States of
      America.

     

    “Governmental
      Authority”
means
      the government of the United States of America, any other nation or 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.

     

    “Guarantee”
of
      or
      by any Person (the “guarantor”)
      means
      any obligation, contingent or otherwise, of the guarantor guaranteeing or having
      the economic effect of guaranteeing any Indebtedness or other obligation of
      any
      other Person (the “primary
      obligor”)
      in any
      manner, whether directly or indirectly, and including any obligation of the
      guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
      funds for the purchase or payment of) such Indebtedness or other obligation
      or
      to purchase (or to advance or supply funds for the purchase of) any security
      for
      the payment thereof, (b) to purchase or lease property, securities or services
      for the purpose of assuring the owner of such Indebtedness or other obligation
      of the payment thereof, (c) to maintain working capital, equity capital or
      any
      other financial statement condition or liquidity of the primary obligor so
      as to
      enable the primary obligor to pay such Indebtedness or other obligation or
      (d)
      as an account party in respect of any letter of credit or letter of guaranty
      issued to support such Indebtedness or obligation; provided,
      that
      the term Guarantee shall not include endorsements for collection or deposit
      in
      the ordinary course of business.

     

    “Hazardous
      Materials”
means
      all explosive or radioactive substances or wastes and all hazardous or toxic
      substances, wastes or other pollutants, including petroleum or petroleum
      distillates, asbestos or asbestos containing materials, polychlorinated
      biphenyls, radon

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    gas,
      infectious or medical wastes and all other substances or wastes of any nature
      regulated pursuant to any Environmental Law.

     

    “Hedging
      Agreement”
means
      any interest rate protection agreement, foreign currency exchange agreement
      or
      other interest or currency exchange rate hedging arrangement.

     

    “Increasing
      Existing Lender”
has
      the
      meaning assigned to such term in Section 2.18.

     

    “Indebtedness”
of
      any
      Person means, without duplication, (a) all obligations of such Person for
      borrowed money or with respect to deposits or advances of any kind, (b) all
      obligations of such Person evidenced by bonds, debentures, notes or similar
      instruments, (c) all obligations of such Person upon which interest charges
      are
      customarily paid, (d) all obligations of such Person under conditional sale
      or
      other title retention agreements relating to property acquired by such Person,
      (e) all obligations of such Person in respect of the deferred purchase price
      of
      property or services (excluding current accounts payable incurred in the
      ordinary course of business), (f) all Indebtedness of others secured by (or
      for
      which the holder of such Indebtedness has an existing right, contingent or
      otherwise, to be secured by) any Lien on property owned or acquired by such
      Person, whether or not the Indebtedness secured thereby has been assumed, (g)
      all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
      Obligations of such Person, (i) all obligations, contingent or otherwise, of
      such Person as an account party in respect of letters of credit and letters
      of
      guaranty and (j) all obligations, contingent or otherwise, of such Person in
      respect of bankers’ acceptances. The Indebtedness of any Person shall include
      the Indebtedness of any other entity (including any partnership in which such
      Person is a general partner) to the extent such Person is liable therefor as
      a
      result of such Person’s ownership interest in or other relationship with such
      entity, except to the extent the terms of such Indebtedness provide that such
      Person is not liable therefor.

     

    “Indemnified
      Taxes”
means
      Taxes other than Excluded Taxes. 

     

    “Index
      Debt”
means
      the long-term, senior secured Indebtedness of the Borrower issued under the
      Mortgage Indenture that is not guaranteed by any other Person or subject to
      any
      other credit enhancement.

     

    “Information
      Memorandum”
means
      the Confidential Information Memorandum dated July 2006 relating to the Borrower
      and the Transactions.

     

    “Interest
      Election Request”
means
      a
      request by the Borrower to convert or continue a Loan in accordance with Section
      2.06.

     

    “Interest
      Payment Date”
means
      (a) with respect to any ABR Loan, the last Business Day of each March, June,
      September and December, commencing with September 29, 2006, and (b) with
      respect to any Eurodollar Loan, the last day of the Interest Period applicable
      to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
      Borrowing with an Interest Period of more than three months’ duration, each day
      prior to the last day of such Interest Period that occurs at intervals of three
      months’ duration after the first day of such Interest Period.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “Interest
      Period”
means,
      with respect to any Eurodollar Borrowing, the period commencing on the date
      of
      such Borrowing (which initially shall be the date on which such Borrowing is
      made and thereafter shall be the effective date of the most recent conversion
      or
      continuation of such Borrowing) and ending on the numerically corresponding
      day
      in the calendar month that is one, two, three or six months thereafter, as
      the
      Borrower may elect; provided,
      that
      (i) if any Interest Period would end on a day other than a Business Day, such
      Interest Period shall be extended to the next succeeding Business Day unless
      such next succeeding Business Day would fall in the next calendar month, in
      which case such Interest Period shall end on the next preceding Business Day
      and
      (ii) any Interest Period that commences on the last Business Day of a calendar
      month (or on a day for which there is no numerically corresponding day in the
      last calendar month of such Interest Period) shall end on the last Business
      Day
      of the last calendar month of such Interest Period.

     

    “Issuing
      Bank”
means
      each Lender (or other commercial bank or financial institution satisfactory
      to
      the Administrative Agent) executing this Agreement as an Issuing Bank, in its
      capacity as an issuer of Letters of Credit hereunder, and each of its successors
      in such capacity as provided in Section 2.04(j).

     

    “LC
      Disbursement”
means
      either a Revolving LC Disbursement or a Revenue Bond LC Disbursement.
“LC
      Disbursements”
means
      the Revolving LC Disbursements and the Revenue Bond LC
      Disbursements.

     

    “Lenders”
means
      the Persons listed on Schedule 2.01 and any other Person that shall have become
      a party hereto pursuant to an Assignment and Assumption, other than any such
      Person that ceases to be a party hereto pursuant to an Assignment and
      Assumption.

     

    “Letter
      of Credit”
means
      any letter of credit issued pursuant to this Agreement (including any Revolving
      Letter of Credit and each Revenue Bond Letter of Credit).

     

    “LIBO
      Rate”
means,
      with respect to any Eurodollar Borrowing for any Interest Period, the rate
      per
      annum
      determined by the Administrative Agent at approximately 11:00 a.m., London
      time,
      on the date that is two Business Days prior to the commencement of such Interest
      Period by reference to the British Bankers’ Association Interest Settlement
      Rates for deposits in dollars (as set forth by the Bloomberg Information Service
      or any successor thereto or any other service selected by the Administrative
      Agent which has been nominated by the British Bankers’ Association as an
      authorized information vendor for the purpose of displaying such rates) for
      a
      period equal to such Interest Period; provided
      that, to
      the extent that an interest rate is not ascertainable pursuant to the foregoing
      provisions of this definition, the “LIBO
      Rate”
with
      respect to such Eurodollar Borrowing for such Interest Period shall be the
      rate
per
      annum
      at which
      dollar deposits of $5,000,000 and for a maturity comparable to such Interest
      Period would be offered to the Administrative Agent in the London interbank
      market at approximately 12:00 noon, London time, on the date that is two
      Business Days prior to the beginning of such Interest Period.

     

    “Lien”
means,
      with respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
      hypothecation, encumbrance, charge or security interest in, on or of such asset,
      (b) the interest of a vendor or a lessor under any conditional sale agreement,
      capital lease or title 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    retention
      agreement (or any financing lease having substantially the same economic effect
      as any of the foregoing) relating to such asset and (c) in the case of
      securities, any purchase option, call or similar right of a third party with
      respect to such securities.

     

    “Lien
      of the Mortgage Indenture”
has
      the
      meaning assigned to the phrases “Lien of this Indenture” and “lien hereof” in
      the Mortgage Indenture.

     

    “Loan
      Documents”
means
      this Agreement, any promissory notes delivered pursuant to Section 2.08(e),
      the
      Bond Delivery Agreement, the Sixth Supplemental Indenture (until the
      effectiveness of the Seventh Supplemental Indenture), the Seventh Supplemental
      Indenture (upon the execution and delivery thereof pursuant to the terms of
      this
      Agreement), the Collateral Mortgage Bonds, the Revenue Bond Pledge Agreements
      and the other Security Documents.

     

    “Loans”
means
      the loans made (or deemed made) by the Lenders to the Borrower pursuant to
      this
      Agreement, including any Revolving Loans and any Revenue Bond
      Loans.

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (a) the financial condition, results of operations,
      business or prospects of the Borrower and the Subsidiaries taken as a whole,
      (b)
      the ability of the Borrower to perform any of its obligations under any Loan
      Document or the Mortgage Indenture or (c) the rights of or benefits available
      to
      the Lenders under any Loan Document or the Mortgage Indenture.

     

    “Material
      Indebtedness”
means
      Indebtedness (other than the Loans, LC Disbursements and Letters of Credit),
      or
      obligations in respect of one or more Hedging Agreements, of any one or more
      of
      the Borrower and the Significant Subsidiaries in an aggregate principal amount
      exceeding $20,000,000. For purposes of determining Material Indebtedness, the
      “principal amount” of the obligations of the Borrower or any Subsidiary in
      respect of any Hedging Agreement at any time shall be the maximum aggregate
      amount (giving effect to any netting agreements) that the Borrower or such
      Subsidiary would be required to pay if such Hedging Agreement were terminated
      at
      such time. “Material Indebtedness” shall not include at any time any
      Indebtedness that is non-recourse to the Borrower and its Significant
      Subsidiaries.

     

    “Moody’s”
means
      Moody’s Investors Service, Inc., and its successors.

     

    “Mortgage
      Bonds”
means
      the Borrower’s Mortgage Bonds issued under the Mortgage Indenture.

     

    “Mortgage
      Indenture”
means
      the Indenture of Mortgage and Deed of Trust, dated as of December 1, 1992,
      between the Borrower and The Bank of New York (as successor in trust to Bank
      of
      Montreal Trust Company), as trustee, as amended, supplemented or otherwise
      modified from time to time.

     

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

     

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

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    “Obligations”
means
      (a)(i) the principal of and premium, if any, and interest (including interest
      accruing during the pendency of any bankruptcy, insolvency, receivership or
      other similar proceeding, regardless of whether allowed or allowable in such
      proceeding) on the Loans and LC Disbursements, when and as due, whether at
      maturity, by acceleration, upon one or more dates set for prepayment or
      otherwise, (ii) each other payment required to be made by the Borrower under
      this Agreement in respect of any Letter of Credit, when and as due, and (iii)
      all other monetary obligations, including fees, costs, expenses and indemnities,
      whether primary, secondary, direct, contingent, fixed or otherwise (including
      monetary obligations incurred during the pendency of any bankruptcy, insolvency,
      receivership or other similar proceeding, regardless of whether allowed or
      allowable in such proceeding), of the Borrower under this Agreement and the
      other Loan Documents; and (b) the due and punctual performance of all other
      covenants, agreements, obligations and liabilities of the Borrower under or
      pursuant to this Agreement and the other Loan Documents.

     

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

     

    “Participant”
has
      the
      meaning assigned to such term in Section 9.04(e).

     

    “Patriot
      Act”
has
      the
      meaning assigned to such term in Section 9.14.

     

    “PBGC”
means
      the Pension Benefit Guaranty Corporation referred to and defined in ERISA and
      any successor entity performing similar functions.

     

    “Percentage”
means,
      for any Lender on any date of determination, the percentage obtained by dividing
      such Lender’s Aggregate Commitment on such date by the total of the Aggregate
      Commitments on such date, and multiplying the quotient so obtained by 100%.
      In
      the event that the Aggregate Commitments have been terminated, each Lender’s
      Percentage shall be calculated on the basis of the Aggregate Commitments in
      effect immediately prior to such termination, giving effect to any
      assignments.

     

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

     

    “Plan”
means
      any employee pension benefit plan (other than a Multiemployer Plan) subject
      to
      the provisions of Title IV of ERISA or Section 412 of the Code or Section 302
      of
      ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or,
      if
      such plan were terminated, would under Section 4069 of ERISA be deemed to be)
      an
“employer” as defined in Section 3(5) of ERISA. 

     

    “PPD
      Repayment Date”
has
      the
      meaning assigned to such term in Section 2.04(f)(ii).

     

    “Purchase
      Price Disbursement”
has
      the
      meaning assigned to such term in Section 2.04(f)(ii).

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    “Rating
      Agencies”
means
      each of Moody’s and S&P.

     

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

     

    “Register”
has
      the
      meaning set forth in Section 9.04(c). 

     

    “Regulation
      D”
means
      Regulation D of the Board as in effect from time to time.

     

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

     

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

     

    “Required
      Lenders”
means,
      at any time, Lenders having Credit Exposures and unused Aggregate Commitments
      representing a majority of the sum of the total Credit Exposures and the total
      unused Aggregate Commitments at such time.

     

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

     

    “Restricted
      Payment”
means
      any dividend or other distribution (whether in cash, securities or other
      property) with respect to any shares of any class of Capital Stock of the
      Borrower, or any payment (whether in cash, securities or other property),
      including any sinking fund or similar deposit, on account of the purchase,
      redemption, retirement, acquisition, cancellation or termination of any such
      shares of Capital Stock of the Borrower or any option, warrant or other right
      to
      acquire any such shares of Capital Stock of the Borrower.

     

    “Revenue
      Bond Commitment”
means,
      with respect to each Revenue Bond Lender, the commitment of such Lender to
      participate in the Revenue Bond Letters of Credit and all Revenue Bond LC
      Disbursements and to make Revenue Bond Loans hereunder, expressed as an amount
      representing the maximum aggregate permitted amount of such Lender’s Revenue
      Bond Credit Exposure hereunder, as such commitment may be (a) reduced from
      time
      to time pursuant to Section 2.07 and (b) reduced or increased from time to
      time
      pursuant to assignments by or to such Lender pursuant to Section 9.04. The
      initial amount of each Revenue Bond Lender’s Revenue Bond Commitment is set
      forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which
      such Revenue Bond Lender shall have assumed its Revenue Bond 

     

    
      
        
        

      

      
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    Commitment,
      as applicable. The initial aggregate amount of the Revenue Bond Commitments
      is
      $340,587,047.19.

     

    “Revenue
      Bond Credit Exposure”
means,
      at any time, the sum of (a) the aggregate outstanding principal amount of
      Revenue Bond Loans at such time plus
      (b) the
      Revenue Bond LC Exposure at such time. The Revenue Bond Credit Exposure of
      any
      Revenue Bond Lender at any time shall be its Applicable Percentage of the total
      Revenue Bond Credit Exposure at such time.

     

    “Revenue
      Bond Indenture”
means,
      with respect to any Revenue Bond Letter of Credit, the Revenue Bond Indenture,
      as amended and supplemented from time to time, in respect of the Revenue Bonds
      referenced on Schedule 2.04 for such Revenue Bond Letter of Credit, as
      applicable.

     

    “Revenue
      Bond Issuing Bank”
means,
      with respect to each outstanding Revenue Bond Letter of Credit, the Issuing
      Bank
      that has issued such Revenue Bond Letter of Credit.

     

    “Revenue
      Bond LC Disbursement”
means
      a
      payment made by a Revenue Bond Issuing Bank pursuant to a Revenue Bond Letter
      of
      Credit.

     

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

     

    “Revenue
      Bond Lender”
means
      a
      Lender having a Revenue Bond Commitment.

     

    “Revenue
      Bond Letters of Credit”
means
      the Letters of Credit issued (or deemed issued) pursuant to Section
      2.04(a)(ii).

     

    “Revenue
      Bond Loan”
has
      the
      meaning set forth in Section 2.04(f)(iii) hereof.

     

    “Revenue
      Bond Loan Agreement”
means,
      with respect to any Revenue Bond Letter of Credit, the Revenue Bond Loan
      Agreement in respect of the Revenue Bonds referenced on Schedule 2.04 for such
      Revenue Bond Letter of Credit, as applicable.

     

    “Revenue
      Bond Pledge Agreement”
means,
      individually, any pledge agreement in substantially the form of Exhibit C-1
      or
      Exhibit C-2 (as applicable) and otherwise satisfactory to the applicable Issuing
      Bank and the Administrative Agent. “Revenue
      Bond Pledge Agreements”
means,
      collectively, all Revenue Bond Pledge Agreements.

     

    “Revenue
      Bonds”
means,
      with respect to any Revenue Bond Letter of Credit, the Revenue Bonds referenced
      on Schedule 2.04 for such Revenue Bond Letter of Credit.

     

    
      
        
        

      

      
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    “Revenue
      Bond Trustee”
means,
      with respect to any Revenue Bond Letter of Credit, the trustee and/or agent,
      as
      applicable, named in such Revenue Bond Letter of Credit’s Revenue Bond
      Indenture, and any successor or assign thereof.

     

    “Revolving
      Availability Period”
means
      the period from and including the Effective Date to but excluding the earlier
      to
      occur of (a) the Final Maturity Date and (b) the date of the termination of
      the
      Revolving Commitments.

     

    “Revolving
      Commitment”
means,
      with respect to each Revolving Lender, the commitment of such Lender to make
      Revolving Loans hereunder and to participate in Revolving Letters of Credit
      and
      Revolving LC Disbursements, expressed as an amount representing the maximum
      aggregate permitted amount of such Lender’s Revolving Credit Exposure hereunder,
      as such commitment may be (a) reduced from time to time pursuant to Section
      2.07
      and (b) reduced or increased from time to time pursuant to assignments by or
      to
      such Lender pursuant to Section 9.04. The initial amount of each Revolving
      Lender’s Revolving Commitment is set forth on Schedule 2.01, or in the
      Assignment and Assumption pursuant to which such Revolving Lender shall have
      assumed its Revolving Commitment, as applicable. The initial aggregate amount
      of
      the Revolving Commitments is $150,000,000.

     

    “Revolving
      Credit Exposure”
means,
      at any time, the sum of (a) the aggregate outstanding principal amount of
      Revolving Loans at such time plus
      (b) the
      Revolving LC Exposure at such time. The Revolving Credit Exposure of any
      Revolving Lender at any time shall be its Applicable Percentage of the total
      Revolving Credit Exposure at such time.

     

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

     

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

     

    “Revolving
      Lender”
means
      a
      Lender having a Revolving Commitment. 

     

    “Revolving
      Letters of Credit”
means
      the Letters of Credit issued pursuant to Section 2.04(a)(i).

     

    “Revolving
      Loan”
means
      a
      Loan made by a Revolving Lender pursuant to Sections 2.01 and 2.03.


     

    “Sale
      Leaseback”
means
      any transaction or series of related transactions pursuant to which the Borrower
      or any of its Subsidiaries sells, transfers or otherwise disposes of any
      property, real or personal, whether now owned or hereafter acquired, and
      thereafter rents or leases such property or other property that it intends
      to
      use for substantially the same purpose or purposes as the property being sold,
      transferred or disposed of.

     

    “San
      Carlos”
means
      San Carlos Resources Inc., an Arizona corporation.

     

    
      
        
        

      

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

     

    “Security
      Documents”
means
      the Mortgage Indenture, the Sixth Supplemental Indenture (until the
      effectiveness of the Seventh Supplemental Indenture), the Seventh Supplemental
      Indenture (upon the execution and delivery thereof pursuant to the terms of
      this
      Agreement), the Collateral Mortgage Bonds, the Bond Delivery Agreement, the
      Revenue Bond Pledge Agreements, and each other security agreement or other
      instrument or document executed and delivered pursuant to Section 4.02(c) or
      5.10 or pursuant to any of the foregoing documents to secure any of the
      Obligations.

     

    “Seventh
      Supplemental Indenture”
means
      Supplemental Indenture No. 7 under the Mortgage Indenture, substantially in
      the form of Exhibit D-2.

     

    “Significant
      Subsidiary”
means
      (a) San Carlos, (b) any Subsidiary that directly or indirectly owns or Controls
      any other Significant Subsidiary and (c) any other Subsidiary of the Borrower
      whose direct or indirect proportionate share of consolidated total assets as
      of
      the end of the most recent fiscal quarter for which financial statements have
      been delivered pursuant to Section 5.01 was greater than or equal to 15% of
      the
      consolidated total assets as of such date of the Borrower and the Consolidated
      Subsidiaries, taken as a whole. For purposes of making the determinations
      required by this definition, revenues and assets of foreign Subsidiaries shall
      be converted into dollars at the rates used in preparing the consolidated
      balance sheet of the Borrower included in the applicable financial
      statements.

     

    “Sixth
      Supplemental Indenture”
means
      Supplemental Indenture No. 6, dated as of May 1, 2005, between the Borrower
      and The Bank of New York (as successor in trust to Bank of Montreal Trust
      Company), as trustee, a copy of which is attached hereto as Exhibit
      D-1.

     

    “Solvent”
means,
      with respect to any Person, as of any date of determination, that (a) the
      amount of the “present fair saleable value” of the assets of such Person will,
      as of such date, exceed the amount of all “liabilities of such Person,
      contingent or otherwise”, as of such date, as such quoted terms are determined
      in accordance with applicable federal and state laws governing determinations
      of
      the insolvency of debtors, (b) the present fair saleable value of the assets
      of
      such Person will, as of such date, be greater than the amount that will be
      required to pay the liability of such Person on its debts as such debts become
      absolute and matured, (c) such Person will not have, as of such date, an
      unreasonably small amount of capital with which to conduct its business, and
      (d)
      such Person will be able to pay its debts as they mature. For purposes of this
      definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any
      (x) right to payment, whether or not such a right is reduced to judgment,
      liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
      undisputed, legal, equitable, secured or unsecured or (y) right to an equitable
      remedy for breach of performance if such breach gives rise to a right to
      payment, whether or not such right to an equitable remedy is reduced to
      judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
      or unsecured.

     

    “Statutory
      Reserve Rate”
means
      a
      fraction (expressed as a decimal), the numerator of which is the number one
      and
      the denominator of which is the number one minus the aggregate of the maximum
      reserve percentages (including any marginal, special, emergency 

     

    
      
        
        

      

      
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    or
      supplemental reserves) expressed as a decimal established by the Board with
      respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
      to as “Eurocurrency Liabilities” in Regulation D). Such reserve percentages
      shall include those imposed pursuant to Regulation D. Eurodollar Loans shall
      be
      deemed to constitute eurocurrency funding and to be subject to such reserve
      requirements without benefit of or credit for proration, exemptions or offsets
      that may be available from time to time to any Lender under Regulation D or
      any
      comparable regulation. The Statutory Reserve Rate shall be adjusted
      automatically on and as of the effective date of any change in any reserve
      percentage.

     

    “subsidiary”
means,
      with respect to any Person (the “parent”)
      at any
      date, any corporation, limited liability company, partnership, association
      or
      other entity the accounts of which would be consolidated with those of the
      parent in the parent’s consolidated financial statements if such financial
      statements were prepared in accordance with GAAP as of such date, as well as
      any
      other corporation, limited liability company, partnership, association or other
      entity (a) of which securities or other ownership interests representing more
      than 50% of the equity or more than 50% of the ordinary voting power or, in
      the
      case of a partnership, more than 50% of the general partnership interests are,
      as of such date, owned, controlled or held, or (b) that is, as of such
      date, otherwise Controlled, by the parent or one or more subsidiaries of the
      parent.

     

    “Subsidiary”
means
      any subsidiary of the Borrower.

     

    “Taxes”
means
      any and all present or future taxes, levies, imposts, duties, deductions,
      charges or withholdings imposed by any Governmental Authority.

     

    “Transactions”
means
      the execution, delivery and performance by the Borrower of this Agreement and
      the other Loan Documents, the borrowing of Loans, the use of the proceeds
      thereof, the issuance of Letters of Credit, the issuance of Collateral Mortgage
      Bonds to the Administrative Agent under the Sixth Supplemental Indenture and
      the
      corresponding Bond Delivery Agreement, and the issuance (if any) of Collateral
      Mortgage Bonds to the Administrative Agent under the Seventh Supplemental
      Indenture and the corresponding Bond Delivery Agreement.

     

    “Treasury
      Indebtedness”
means,
      with respect to any Person, the aggregate outstanding principal amount of
      Indebtedness of such Person and its subsidiaries that is owned by such Person
      or
      its subsidiaries and in respect of which such Person or one or more of its
      subsidiaries has the right to receive, pursuant to the terms of such
      Indebtedness, all future principal, interest and other payments to be made
      with
      respect thereto.

     

    “Type”,
      when
      used in reference to any Loan or Borrowing, refers to whether the rate of
      interest on such Loan, or on the Loans comprising such Borrowing, is determined
      by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

     

    “Union
      Bank”
means
      Union Bank of California, N.A., a national banking association.

     

    “UniSource
      Energy”
means
      UniSource Energy Corporation, an Arizona corporation.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    “Utility
      Business”
means
      the business of producing, developing, generating, transmitting, distributing,
      selling or supplying electrical energy for any purpose, or any business
      incidental thereto or necessary in connection therewith, or any business
      reasonably desirable in connection therewith which the ACC or other utility
      regulatory body shall have authorized the Borrower to enter.

     

    “Withdrawal
      Liability”
means
      liability to a Multiemployer Plan as a result of a complete or partial
      withdrawal from such Multiemployer Plan, as such terms are defined in Part
      I of
      Subtitle E of Title IV of ERISA.

     

    SECTION
      1.02. Classification
      of Loans and Borrowings.
      For
      purposes of this Agreement, Loans may be classified and referred to by Class
      (e.g.,
      a
“Revolving
      Loan”)
      or by
      Type (e.g.,
      a
“Eurodollar
      Loan”)
      or by
      Class and Type (e.g.,
      a
“Eurodollar
      Revolving Loan”).
      Borrowings also may be classified and referred to by Class (e.g.,
      a
“Revolving
      Borrowing”)
      or by
      Type (e.g.,
      a
“Eurodollar
      Borrowing”)
      or by
      Class and Type (e.g.,
      a
“Eurodollar
      Revolving Borrowing”).

     

    SECTION
      1.03. Terms
      Generally.
      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
      (a) any definition of or reference to any agreement, instrument or other
      document herein 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), (b) any reference herein to any Person shall be construed
      to
      include such Person’s successors and assigns, (c) the words “herein”, “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
      this Agreement in its entirety and not to any particular provision hereof,
      (d)
      all references herein to Articles, Sections, Exhibits and Schedules shall be
      construed to refer to Articles and Sections of, and Exhibits and Schedules
      to,
      this Agreement and (e) 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.

     

    SECTION
      1.04. Accounting
      Terms; GAAP.
      Except
      as otherwise expressly provided herein, all terms of an accounting or financial
      nature shall be construed in accordance with GAAP, as in effect from time to
      time; provided
      that, if
      the Borrower notifies the Administrative Agent that the Borrower requests an
      amendment to any provision hereof (including the effects of the application
      or
      discontinuance of the application of accounting for the effects of regulation
      to
      all or any portion of the Borrower’s operations) to eliminate the effect of any
      change occurring after the date hereof in GAAP or in the application thereof
      on
      the operation of such provision (or if the Administrative Agent notifies the
      Borrower that the Required Lenders request an amendment to any provision hereof
      for such purpose), regardless of whether any such notice is given before or
      after such change in GAAP or in the application thereof, then such provision
      shall be interpreted on the basis of GAAP as in effect and applied
      immediately

     

    
      
        
        

      

      
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    before
      such change shall have become effective until such notice shall have been
      withdrawn or such provision amended in accordance herewith.

     

    SECTION
      1.05. Pro
      Forma
      Calculations.
      All
pro
      forma
      calculations permitted or required to be made by the Borrower or any Subsidiary
      pursuant to this Agreement shall (a) include only those adjustments that would
      be permitted or required by Regulation S-X under the Securities Act of 1933,
      as
      amended, and (b) be certified to by a Financial Officer as having been prepared
      in good faith based upon assumptions believed to be reasonable.

     

    ARTICLE
      II

    The
      Credits

     

    SECTION
      2.01. Revolving
      Commitments.
      Subject
      to the terms and conditions set forth herein, each Revolving Lender agrees
      to
      make Revolving Loans to the Borrower from time to time during the Revolving
      Availability Period in an aggregate principal amount that will not result in
      (a)
      such Revolving Lender’s Revolving Credit Exposure exceeding its Revolving
      Commitment, (b) the aggregate Revolving Credit Exposures exceeding the aggregate
      Revolving Commitments or (c) until the conditions set forth in Section 4.02(c)
      have been satisfied, the aggregate Revolving Credit Exposures exceeding
      $60,000,000. Within the foregoing limits and subject to the terms and conditions
      set forth herein, the Borrower may borrow, prepay and reborrow Revolving
      Loans.

     

    SECTION
      2.02. Loans
      and Borrowings.

     

    (a)    Each
      Revolving Loan shall be made as part of a Borrowing consisting of Revolving
      Loans made by the Revolving Lenders ratably in accordance with their respective
      Revolving Commitments. The failure of any Revolving Lender to make any Revolving
      Loan required to be made by it shall not relieve any other Revolving Lender
      of
      its obligations hereunder; provided
      that the
      Revolving Commitments of the Revolving Lenders are several and no Revolving
      Lender shall be responsible for any other Revolving Lender’s failure to make
      Revolving Loans as required.

     

    (b)    Subject
      to Section 2.12, each Revolving Borrowing shall be comprised entirely of ABR
      Revolving Loans or Eurodollar Revolving Loans as the Borrower may request in
      accordance herewith. Each Lender at its option may make any Eurodollar Loan
      by
      causing any domestic or foreign branch or Affiliate of such Lender to make
      such
      Loan; provided
      that any
      exercise of such option shall not affect the obligation of the Borrower to
      repay
      such Loan in accordance with the terms of this Agreement.

     

    (c)    At
      the
      commencement of each Interest Period for any Eurodollar Borrowing, such
      Borrowing shall be in an aggregate amount that is an integral multiple of
      $1,000,000 and not less than $5,000,000. At the time that each ABR Revolving
      Borrowing is made, such Borrowing shall be in an aggregate amount that is an
      integral multiple of $1,000,000 and not less than $1,000,000; provided
      that an
      ABR Revolving Borrowing may be in an aggregate amount that is equal to the
      entire unused balance of the total Revolving Commitments or that is required
      to
      finance the reimbursement of a Revolving LC Disbursement as contemplated by
      Section 2.04(f)(i)(A). Borrowings of more than one Type may be
      outstanding

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    at
      the
      same time; provided
      that
      there shall not at any time be more than a total of ten (10) Eurodollar
      Borrowings outstanding.

     

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

     

    SECTION
      2.03. Requests
      for Revolving Borrowings.
      To
      request a Revolving Borrowing, the Borrower shall notify the Administrative
      Agent of such request by telephone (a) in the case of a Eurodollar Borrowing,
      not later than 11:00 a.m., Los Angeles, California time, three Business Days
      before the date of the proposed Borrowing or (b) in the case of an ABR
      Borrowing, not later than 11:00 a.m., Los Angeles, California time, one Business
      Day before the date of the proposed Borrowing; provided
      that any
      such notice of an ABR Revolving Borrowing to finance the reimbursement of an
      LC
      Disbursement as contemplated by Section 2.04(f)(i) may be given not later than
      9:00 a.m., Los Angeles, California time, on the date of the proposed Borrowing.
      Each such telephonic Borrowing Request shall be irrevocable and shall be
      confirmed promptly by hand delivery or telecopy to the Administrative Agent
      of a
      written Borrowing Request in a form approved by the Administrative Agent and
      signed by the Borrower. Each such telephonic and written Borrowing Request
      shall
      specify the following information in compliance with Section 2.02:

     

    (i)    the
      aggregate amount of the requested Borrowing;

     

    (ii)    the
      date
      of such Borrowing, which shall be a Business Day;

     

    (iii)   whether
      such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

     

    (iv)  
in
      the
      case of a Eurodollar Borrowing, the initial Interest Period to be applicable
      thereto, which shall be a period contemplated by the definition of the term
      “Interest Period”; and

     

    (v)   the
      location and number of the Borrower’s account to which funds are to be
      disbursed, which shall comply with the requirements of Section
      2.05.

     

    If
      no
      election as to the Type of Revolving Borrowing is specified, then the requested
      Revolving Borrowing shall be an ABR Revolving Borrowing. If no Interest Period
      is specified with respect to any requested Eurodollar Revolving Borrowing,
      then
      the Borrower shall be deemed to have selected an Interest Period of one month’s
      duration. Promptly following receipt of a Borrowing Request in accordance with
      this Section, the Administrative Agent shall advise each Revolving Lender of
      the
      details thereof and of the amount of such Revolving Lender’s Loan to be made as
      part of the requested Borrowing.

     

    SECTION
      2.04. Letters
      of Credit.

     

    (a)    General.
      (i)
      Subject to the terms and conditions set forth herein, the Borrower may request
      the issuance of Revolving Letters of Credit for its own account, in a form
      reasonably acceptable to the Administrative Agent and the applicable Issuing
      Bank, at any time

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    and
      from
      time to time during the period from the Effective Date through and including
      the
      date that occurs ten (10) Business Days prior to the end of the Revolving
      Availability Period. In the event of any inconsistency between the terms and
      conditions of this Agreement and the terms and conditions of any form of letter
      of credit application or other agreement submitted by the Borrower to, or
      entered into by the Borrower with, any Issuing Bank relating to any Revolving
      Letter of Credit, the terms and conditions of this Agreement shall control.
      

     

    (ii)    Subject
      to the terms and conditions set forth herein, the Borrower may request the
      issuance (or, in the case of the Existing Letters of Credit, the amendment)
      of
      Revenue Bond Letters of Credit on the Effective Date for its own account, in
      a
      form reasonably acceptable to the Administrative Agent and the applicable
      Issuing Bank. In the event of any inconsistency between the terms and conditions
      of this Agreement and the terms and conditions of any form of letter of credit
      application or other agreement submitted by the Borrower to, or entered into
      by
      the Borrower with, any Issuing Bank relating to any Revenue Bond Letter of
      Credit, the terms and conditions of this Agreement shall control. In addition,
      as of the Effective Date, each of the Existing Letters of Credit shall be deemed
      to be issued under this Agreement as a Revenue Bond Letter of
      Credit.

     

    (b)   Issuance
      and Amendment.
      (i) To
      request the issuance of a Revolving Letter of Credit (or the amendment, renewal
      or extension of an outstanding Revolving Letter of Credit), the Borrower shall
      hand deliver or telecopy (or transmit by electronic communication, if
      arrangements for doing so have been approved by the applicable Issuing Bank)
      to
      the applicable Issuing Bank and the Administrative Agent (reasonably in advance
      of the requested date of issuance, amendment, renewal or extension) a notice
      requesting the issuance of a Revolving Letter of Credit, or identifying the
      Revolving Letter of Credit to be amended, renewed or extended, and specifying
      the date of issuance, amendment, renewal or extension (which shall be a Business
      Day), the date on which such Revolving Letter of Credit is to expire (which
      shall comply with paragraph (d) of this Section), the amount of such Revolving
      Letter of Credit, the name and address of the beneficiary thereof and such
      other
      information as shall be necessary to prepare, amend, renew or extend such
      Revolving Letter of Credit. The Administrative Agent shall, promptly after
      its
      receipt thereof, distribute a copy of each such notice to the Lenders. If
      requested by the applicable Issuing Bank, the Borrower also shall submit a
      letter of credit application on such Issuing Bank’s standard form in connection
      with any request for a Revolving Letter of Credit. Upon the issuance, amendment,
      renewal or extension of any Revolving Letter of Credit, the applicable Issuing
      Bank shall provide notice and a copy thereof to the Administrative Agent, which
      shall promptly furnish copies thereof to the Lenders.

     

    (ii)    Any
      Revenue Bond Letter of Credit may be amended by the applicable Issuing Bank
      at
      the request of the Borrower and with the consent of the Administrative Agent;
      provided,
      that no
      such amendment shall increase the stated amount of a Revenue Bond Letter of
      Credit or extend the expiration date thereof beyond the last permissible date
      referred to in paragraph (d) below. To request an amendment to an outstanding
      Revenue Bond Letter of Credit, the Borrower shall hand deliver or telecopy
      to
      the applicable Issuing Bank and the Administrative Agent (no less than three
      Business Days (or such shorter period of time as acceptable to the applicable
      Issuing Bank and the Administrative Agent) in advance of the requested date
      of
      amendment) a notice identifying the Revenue Bond Letter of Credit to be amended
      and specifying the date of amendment (which shall be a Business Day), the amount
      of

     

    
      
        
        

      

      
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    such
      Revenue Bond Letter of Credit, the name and address of the beneficiary thereof
      and such other information as shall be necessary to amend such Revenue Bond
      Letter of Credit. The Administrative Agent shall, promptly after its receipt
      thereof, distribute a copy of each such notice to the Lenders. Upon the
      amendment of any Revenue Bond Letter of Credit, the applicable Issuing Bank
      shall provide notice and a copy thereof to the Administrative Agent, which
      shall
      promptly furnish copies thereof to the Lenders.

     

    (c)    Limitation
      of Amount.
      A
      Letter of Credit shall be issued, amended or extended only if (and upon
      issuance, amendment or extension of each Letter of Credit the Borrower shall
      be
      deemed to represent and warrant that), after giving effect to such issuance,
      amendment or extension (i) the Revolving Credit Exposure shall not exceed the
      aggregate amount of the Revolving Commitments, (ii) the Revenue Bond Credit
      Exposure shall not exceed the aggregate amount of the Revenue Bond Commitments
      and (iii) until the conditions set forth in Section 4.02(c) have been satisfied,
      the Revolving Credit Exposure shall not exceed $60,000,000.

     

    (d)    Expiration
      Date.
      Each
      Revolving Letter of Credit shall expire at or prior to the close of business
      on
      the earlier to occur of (i) the date one year after the date of the issuance
      of
      such Revolving Letter of Credit (or, in the case of any renewal or extension
      thereof, one year after such renewal or extension) and (ii) the date that is
      five Business Days prior to the Final Maturity Date; provided
      that any
      Revolving Letter of Credit with a one-year term may provide for the renewal
      thereof for additional one-year periods (which shall in no event extend beyond
      the date referred to in clause (ii) above). Each Revenue Bond Letter of Credit
      shall expire not later than the close of business on the Final Maturity Date
      (and, upon the satisfaction of the conditions set forth in Section 4.02(c),
      each
      Revenue Bond Letter of Credit shall be promptly amended by the applicable
      Issuing Bank to extend the stated expiration date thereof to August 11, 2011
      (or
      such earlier date as may be requested by the Borrower)).

    


    (e)    (i) Participations
      of Revolving Lenders.
      On the
      Effective Date, without any further action on the part of any Issuing Bank
      or
      the Revolving Lenders, each Issuing Bank issuing one or more Revolving Letters
      of Credit (whether on the Effective Date or at any time thereafter) pursuant
      to
      this Section hereby grants to each Revolving Lender, and each Revolving Lender
      hereby acquires from such Issuing Bank, a participation in each such Revolving
      Letter of Credit equal to such Revolving Lender’s Applicable Percentage of the
      aggregate amount available to be drawn under such Revolving Letter of Credit.
      In
      consideration and in furtherance of the foregoing, each Revolving Lender hereby
      absolutely and unconditionally agrees to pay to the Administrative Agent, for
      the account of the applicable Issuing Bank, such Revolving Lender’s Applicable
      Percentage of each Revolving LC Disbursement made by such Issuing Bank and
      not
      reimbursed by the Borrower on the date due as provided in paragraph (f)(i)(A)
      of
      this Section, or of any reimbursement payment in respect of a Revolving LC
      Disbursement required to be refunded to the Borrower for any reason. Each
      Revolving Lender acknowledges and agrees that its obligation to acquire and
      fund
      participations in respect of Revolving Letters of Credit pursuant to this
      subparagraph (i) is absolute, unconditional and irrevocable and shall not be
      affected by any circumstance whatsoever, including any amendment, renewal or
      extension of any Revolving Letter of Credit or the occurrence and continuance
      of
      a Default or the reduction or termination of the Revolving Commitments, and
      that
      each such payment shall be made without any offset, abatement, withholding
      or
      reduction whatsoever. For the avoidance of doubt, the

     

    
      
        
        

      

      
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    parties
      hereto acknowledge and agree that the funding by a Revolving Lender of its
      participation interest in any Revolving LC Disbursement shall not constitute
      a
      reimbursement by the Borrower of such Revolving LC Disbursement.

     

    (ii)    Participations
      of Revenue Bond Lenders.
      On the
      Effective Date, without any further action on the part of any Issuing Bank
      or
      the Revenue Bond Lenders, each Issuing Bank issuing (or deemed to be issuing)
      one or more Revenue Bond Letters of Credit hereby grants to each Revenue Bond
      Lender, and each Revenue Bond Lender hereby acquires from such Issuing Bank,
      a
      participation in each such Revenue Bond Letter of Credit equal to such Revenue
      Bond Lender’s Applicable Percentage of the aggregate amount available to be
      drawn under such Revenue Bond Letter of Credit. In consideration and in
      furtherance of the foregoing, each Revenue Bond Lender hereby absolutely and
      unconditionally agrees to pay to the Administrative Agent, for the account
      of
      the applicable Issuing Bank, such Revenue Bond Lender’s Applicable Percentage of
      each Revenue Bond LC Disbursement made by such Issuing Bank and not reimbursed
      by the Borrower on the date due as provided in paragraph (f)(i)(B) of this
      Section (without giving effect to paragraph (f)(ii) of this Section), or of
      any
      reimbursement payment in respect of a Revenue Bond LC Disbursement required
      to
      be refunded to the Borrower for any reason. Each Revenue Bond Lender
      acknowledges and agrees that its obligation to acquire and fund participations
      in respect of Revenue Bond Letters of Credit pursuant to this subparagraph
      (ii)
      is absolute, unconditional and irrevocable and shall not be affected by any
      circumstance whatsoever, including any amendment, renewal or extension of any
      Revenue Bond Letter of Credit or the occurrence and continuance of a Default
      or
      the reduction or termination of the Revenue Bond Commitments, and that each
      such
      payment shall be made without any offset, abatement, withholding or reduction
      whatsoever. For the avoidance of doubt, the parties hereto acknowledge and
      agree
      that the funding by a Revenue Bond Lender of its participation interest in
      any
      Revenue Bond LC Disbursement shall not constitute a reimbursement by the
      Borrower of such Revenue Bond LC Disbursement.

     

    (f)    Reimbursement.
      (i)  (A) If any Issuing Bank shall make any Revolving LC Disbursement,
      the Borrower shall reimburse such Revolving LC Disbursement by paying to the
      Administrative Agent an amount equal to such Revolving LC Disbursement not
      later
      than 11:00 a.m., Los Angeles, California time, on the date that such Revolving
      LC Disbursement is made, if the Borrower shall have received notice of such
      Revolving LC Disbursement prior to 9:00 a.m., Los Angeles, California time,
      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 11:00 a.m., Los Angeles, California
      time, on the Business Day immediately following the day that the Borrower
      receives such notice; provided
      that the
      Borrower may, subject to the conditions to borrowing set forth herein, request
      in accordance with Sections 2.01 and 2.03 that such payment be financed with
      an
      ABR Revolving Borrowing in an equivalent amount and, to the extent so financed,
      the Borrower’s obligation to make such payment shall be discharged and replaced
      by the resulting ABR Revolving Borrowing.

     

    (B)    If
      any
      Issuing Bank shall make any Revenue Bond LC Disbursement, the Borrower shall,
      except as provided in paragraph (ii) below, reimburse such Revenue Bond LC
      Disbursement by paying to the Administrative Agent an amount equal to such
      Revenue Bond LC Disbursement not later than 11:00 a.m., Los Angeles, California
      time, on the date that such Revenue Bond LC Disbursement is made, if the
      Borrower shall have received

     

    
      
        
        

      

      
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    notice
      of
      such Revenue Bond LC Disbursement prior to 9:00 a.m., Los Angeles, California
      time, 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 11:00 a.m., Los Angeles,
      California time, on the Business Day immediately following the day that the
      Borrower receives such notice; provided
      that the
      Borrower may, subject to the conditions to borrowing set forth herein, request
      in accordance with Sections 2.01 and 2.03 that such payment be financed with
      an
      ABR Revolving Borrowing in an equivalent amount and, to the extent so financed,
      the Borrower’s obligation to make such payment shall be discharged and replaced
      by the resulting ABR Revolving Borrowing.

     

    (ii)    In
      the
      case of any Revenue Bond LC Disbursement to fund the payment of the purchase
      price (to the extent such purchase price is attributable to the principal of
      a
      Revenue Bond) of any Revenue Bond that the Borrower is unable to remarket prior
      to the day on which payment of the purchase price of such Revenue Bond is due
      to
      the holder or owner thereof (a “Purchase
      Price Disbursement”),
      the
      Borrower shall reimburse such Purchase Price Disbursement (to the extent not
      reimbursed by a Revenue Bond Loan pursuant to paragraph (iii) below) on or
      prior
      to the earliest to occur of (A) the Final Maturity Date, (B) the date on which
      such Revenue Bond is redeemed or cancelled pursuant to the applicable Revenue
      Bond Indenture, (C) the date on which such Revenue Bond is remarketed pursuant
      to the applicable Revenue Bond Indenture, and (D) the date on which the
      applicable Revenue Bond Letter of Credit is replaced by an alternate letter
      of
      credit or other security arrangement in accordance with the terms of the
      applicable Revenue Bond Indenture (such earliest date being referred to herein
      as the “PPD
      Repayment Date”);
      provided
      that (x)
      such Revenue Bond shall be promptly delivered to the applicable Issuing Bank
      (or
      to its bailee or custodian, if applicable) and pledged to the applicable Issuing
      Bank under a Revenue Bond Pledge Agreement, (y) any portion of such Purchase
      Price Disbursement may be reimbursed at any time by or on behalf of the Borrower
      on one Business Day’s notice stating the amount to be reimbursed (which shall be
      $100,000 or a whole multiple thereof) and directing such Issuing Bank to deliver
      Revenue Bonds held by or for the account of such Issuing Bank to or upon the
      order of the Borrower against repayment of the portion of such Purchase Price
      Disbursement attributable to such Revenue Bonds with the proceeds of the
      remarketing of such Revenue Bonds and specifying the principal amount of Revenue
      Bonds to be so delivered (provided,
      however,
      that if
      all or any portion of such Purchase Price Disbursement was reimbursed with
      the
      proceeds of a Revenue Bond Loan pursuant to paragraph (iii) below, such Issuing
      Bank shall deliver such Revenue Bonds pursuant to this clause (y) only if and
      to
      the extent that such Revenue Bond Loan has been repaid or prepaid by the
      Borrower in accordance with the terms of this Agreement (including, without
      limitation, Sections 2.09(d)) with the proceeds of such remarketing), and (z)
      upon payment to the Administrative Agent for the account of such Issuing Bank
      of
      the amount of any such repayment, together with accrued interest to the date
      of
      such repayment on the amount of the Purchase Price Disbursement to be
      reimbursed, the outstanding obligations of the Borrower in respect of such
      Purchase Price Disbursement shall be reduced by the amount of such
      reimbursement, interest shall cease to accrue on the amount so reimbursed and
      such Issuing Bank shall release to or upon the order of the Borrower from the
      pledge and security interest created by the applicable Revenue Bond Pledge
      Agreement a principal amount of Revenue Bonds held under such Revenue Bond
      Pledge Agreement equal to the amount of such repayment; provided
      that,
      prior to the release of such Revenue Bonds, (1) the Borrower shall have paid
      to
      the Administrative Agent the amount of any Revenue Bond LC Disbursement made
      in
      connection with the purchase of such Revenue Bonds to pay the interest portion
      of the purchase price thereof and (2) the

     

    
      
        
        

      

      
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    Borrower
      shall have repaid or prepaid, in accordance with the terms of this Agreement
      (including, without limitation, Sections 2.09(d)), all Revenue Bond Loans the
      proceeds of which were used to reimburse such Purchase Price Disbursement,
      together with accrued interest thereon to the date of such repayment or
      prepayment and any amounts required to be paid pursuant to Section 2.14 in
      connection with such repayment or prepayment. The provisions of Section
      2.04(f)(i)(B) shall apply with respect to any portion of any such Revenue Bond
      LC Disbursement made on the Final Maturity Date, as if it were a Revenue Bond
      LC
      Disbursement in respect of which the Borrower received notice prior to 9:00
      a.m., Los Angeles, California time, on the Final Maturity Date. Whenever an
      Issuing Bank is holding Revenue Bonds pursuant to a Revenue Bond Pledge
      Agreement in respect of a Revenue Bond Letter of Credit and accordingly receives
      a payment of interest on such pledged Revenue Bonds, such Issuing Bank shall
      promptly deliver such interest so received to the Administrative Agent for
      application to (I) the payment of accrued and unpaid interest on all outstanding
      Purchase Price Disbursements of such Issuing Bank in respect of such Revenue
      Bond Letter of Credit or (II) to the extent the Revenue Bond Banks have
      reimbursed such Issuing Bank for such Purchase Price Disbursements pursuant
      to
      paragraph (iii) below, the payment of accrued and unpaid interest on all
      outstanding Revenue Bond Loans made by the Revenue Bond Banks in respect of
      such
      Purchase Price Disbursements. If the amount of interest so received exceeds
      the
      amount of accrued and unpaid interest on such Purchase Price Disbursements
      or
      Revenue Bond Loans (as the case may be) on the date of receipt, such Issuing
      Bank shall promptly deliver all such interest received to the Administrative
      Agent and the Administrative Agent shall hold the unused balance of such
      interest and apply it on a daily basis to interest accrued on such Purchase
      Price Disbursements or Revenue Bond Loans (as the case may be). 

     

    (iii)    If
      the
      Borrower fails to make any payment due under paragraph (i)(A) above with respect
      to a Revolving LC Disbursement, the Administrative Agent shall notify each
      Revolving Lender of the applicable Revolving LC Disbursement and such Revolving
      Lender’s Applicable Percentage thereof. Upon receipt of such notice, each
      Revolving Lender shall make available to the Administrative Agent such Revolving
      Lender’s Applicable Percentage of the payment then due from the Borrower, in
      immediately available funds, by 10:00 a.m., Los Angeles, California time,
      on the next succeeding Business Day after the date of such notice, in the same
      manner as provided in Section 2.05 with respect to Revolving Loans made by
      Revolving Lenders, and the Administrative Agent shall promptly pay to the
      applicable Issuing Bank the amounts so received by it from the Revolving
      Lenders. If the Borrower fails to reimburse the applicable Issuing Bank for
      any
      Revenue Bond LC Disbursement (including any Purchase Price Disbursement) at
      or
      prior to 11:00 a.m., Los Angeles, California time, on the Business Day
      immediately following the date of such Revenue Bond LC Disbursement, the
      Administrative Agent shall notify each Revenue Bond Lender of the applicable
      Revenue Bond LC Disbursement and such Revenue Bond Lender’s Applicable
      Percentage thereof. Upon receipt of such notice, each Revenue Bond Lender shall
      make available to the Administrative Agent such Revenue Bond Lender’s Applicable
      Percentage of the payment then due from the Borrower, in immediately available
      funds, by 10:00 a.m., Los Angeles, California time, on the next succeeding
      Business Day after the date of such notice, in the same manner as provided
      in
      Section 2.05 with respect to Revolving Loans made by Revolving Lenders, and
      the
      Administrative Agent shall promptly pay to the applicable Issuing Bank the
      amounts so received by it from the Revenue Bond Lenders. Promptly following
      receipt by the Administrative Agent of any payment pursuant to paragraph (i)
      or
      (ii) above in respect of any LC Disbursement, the

     

    
      
        
        

      

      
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    Administrative
      Agent shall distribute such payment to the applicable Issuing Bank or, (A)
      to
      the extent that Revolving Lenders have made payments pursuant to this paragraph
      to reimburse such Issuing Bank in connection with an unreimbursed Revolving
      LC
      Disbursement, then to such Revolving Lenders as their interests may appear,
      and
      (B) to the extent that Revenue Bond Lenders have made payments pursuant to
      this
      paragraph to reimburse such Issuing Bank in connection with an unreimbursed
      Revenue Bond LC Disbursement, then to such Revenue Bond Lenders as their
      interests may appear. Any payment made by a Lender pursuant to this paragraph
      to
      reimburse an Issuing Bank for any LC Disbursement shall not constitute a Loan
      and shall not relieve the Borrower of its obligation, if any, to reimburse
      such
      LC Disbursement; provided,
      however,
      that on
      the date that the Revenue Bond Lenders reimburse the applicable Issuing Bank
      for
      a Purchase Price Disbursement, that portion of such reimbursement payment equal
      to the principal amount of the Revenue Bonds purchased with the proceeds of
      such
      Purchase Price Disbursement shall be deemed to constitute a loan made by the
      Revenue Bond Lenders to the Borrower on such date in the amount of such
      principal amount (each such loan being a “Revenue
      Bond Loan”),
      and
      the Borrower’s obligation to reimburse such Purchase Price Disbursement shall be
      discharged and replaced by such Revenue Bond Loan (it being understood and
      agreed that any Purchase Price Disbursement so discharged and replaced shall
      no
      longer constitute an unreimbursed Revenue Bond LC Disbursement hereunder).
      Each
      Revenue Bond Loan shall initially bear interest at the Applicable Rate for
      ABR
      Loans, and thereafter may be converted or continued pursuant to Section 2.06.
      

     

    (g)    Obligations
      Absolute.
      The
      Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (f)
      above shall be absolute, unconditional and irrevocable, and shall be performed
      strictly in accordance with the terms of this Agreement under any and all
      circumstances whatsoever and irrespective of (i) any lack of validity or
      enforceability of any Letter of Credit, this Agreement or any other Loan
      Document, or any term or provision therein, (ii) any draft or other document
      presented under a Letter of Credit proving to be forged, fraudulent or invalid
      in any respect or any statement therein being untrue or inaccurate in any
      respect, (iii) payment by an Issuing Bank under a Letter of Credit against
      presentation of a draft or other document that does not comply with the terms
      of
      such Letter of Credit, or (iv) any other event or circumstance whatsoever,
      whether or not similar to any of the foregoing, that might, but for the
      provisions of this Section, constitute a legal or equitable discharge of, or
      provide a right of setoff against, the Borrower’s obligations hereunder. None of
      the Administrative Agent, the Revolving Lenders, the Revenue Bond Lenders,
      the
      Issuing Banks or any of their Related Parties shall have any liability or
      responsibility by reason of or in connection with the issuance or transfer
      of
      any Letter of Credit or any payment or failure to make any payment thereunder
      (irrespective of any of the circumstances referred to in the preceding
      sentence), or any error, omission, interruption, loss or delay in transmission
      or delivery of any draft, notice or other communication under or relating to
      any
      Letter of Credit (including any document required to make a drawing thereunder),
      any error in interpretation of technical terms or any consequence arising from
      causes beyond the control of the applicable Issuing Bank; provided
      that the
      foregoing shall not be construed to excuse such Issuing Bank from liability
      to
      the Borrower to the extent of any direct damages (as opposed to consequential
      damages, claims in respect of which are hereby waived by the Borrower to the
      extent permitted by applicable law) suffered by the Borrower that are caused
      by
      such Issuing Bank’s failure to exercise care when determining whether drafts and
      other documents presented under a Letter of Credit comply with the terms
      thereof. The parties hereto expressly agree that, in the absence of gross
      negligence or willful

     

    
      
        
        

      

      
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    misconduct
      on the part of an Issuing Bank (as finally determined by a court of competent
      jurisdiction), such Issuing Bank shall be deemed to have exercised care in
      each
      such determination. In furtherance of the foregoing and without limiting the
      generality thereof, the parties agree that, with respect to documents presented
      which appear on their face to be in substantial compliance with the terms of
      a
      Letter of Credit, the applicable Issuing Bank may, in its sole discretion,
      either accept and make payment upon such documents without responsibility for
      further investigation, regardless of any notice or information to the contrary,
      or refuse to accept and make payment upon such documents if such documents
      are
      not in strict compliance with the terms of such Letter of Credit.

     

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

     

    (i)    Interim
      Interest.
      If an
      Issuing Bank shall make any LC Disbursement, then, (i) in the case of any
      Revolving LC Disbursements, unless the Borrower shall reimburse such Revolving
      LC Disbursement in full on the date such Revolving LC Disbursement is made
      or
      (ii) in the case of any Revenue Bond LC Disbursements, unless the Borrower
      shall
      reimburse such Revenue Bond LC Disbursement in full on the date such Revenue
      Bond LC Disbursement is made, in each case the unpaid amount thereof shall
      bear
      interest, for each day from and including the date such LC Disbursement is
      made
      to but excluding the date that the Borrower reimburses such LC Disbursement
      (or
      such reimbursement obligation of the Borrower has been discharged pursuant
      to
      the terms of Section 2.04(f)(i) or (iii)), at a fluctuating interest rate
per
      annum
      equal to
      the Applicable Rate for ABR Loans; provided,
      that,
      if the Borrower fails to reimburse such LC Disbursement when due pursuant to
      paragraph (f) of this Section, then Section 2.11(b) shall apply. Interest
      accrued pursuant to this paragraph shall be for the account of the applicable
      Issuing Bank, except that interest accrued on and after the date of payment
      by
      any Revolving Lender or any Revenue Bond Lender, as the case may be, to
      reimburse an Issuing Bank shall be for the account of such Revolving Lender
      or
      Revenue Bond Lender, as applicable, to the extent of such payment.

     

    (j)    Replacement
      of an Issuing Bank.
      Any
      Issuing Bank may be replaced at any time by written agreement among the Borrower
      and the Administrative Agent; provided,
      however,
      that
      (i) each Issuing Bank shall be (A) a Lender or (B) another commercial bank
      or
      other financial institution satisfactory to the Administrative Agent, and (ii)
      the Administrative Agent shall review any such proposed agreement for form
      only
      and not with respect to the identity of any successor Issuing Bank or the
      identity of the Issuing Bank to be replaced. The Administrative Agent shall
      notify the Lenders of any such replacement of an Issuing Bank. At the time
      any
      such replacement shall become effective, the Borrower shall pay all unpaid
      fees
      accrued for the account of the replaced Issuing Bank pursuant to Section 2.10(b)
      and shall return to such Issuing Bank each Letter of Credit issued by such
      Issuing Bank. From and after the effective date of any such replacement, (1)
      the
      successor Issuing Bank shall have all the rights

     

    
      
        
        

      

      
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    and
      obligations of an Issuing Bank under this Agreement with respect to Letters
      of
      Credit to be issued by it on such effective date or thereafter and (2)
      references herein to the term “Issuing Bank” shall be deemed to refer to such
      successor or to any previous Issuing Bank, or to such successor and all previous
      Issuing Banks, as the context shall require. After the replacement of an Issuing
      Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall
      continue to have all the rights and obligations of an Issuing Bank under this
      Agreement with respect to Letters of Credit issued by it prior to such
      replacement, but shall not be required to issue additional Letters of
      Credit.

     

    (k)    Acceleration
      of Revenue Bonds.
      If any
      Event of Default shall occur and be continuing, the Administrative Agent may,
      and at the request of the Required Lenders shall, direct the applicable Issuing
      Bank to take such steps as are required and available to it under any Revenue
      Bond Indenture to cause the Revenue Bond Trustee thereunder to declare the
      principal amount of all Revenue Bonds then outstanding thereunder to be
      immediately due and payable and, to the extent necessary to make all payments
      then due and payable on the Revenue Bonds, require all necessary drawings under
      the applicable Letter of Credit to be made in respect thereof, whereupon such
      Issuing Bank shall pay from its general funds the amounts so drawn and such
      amounts, all interest thereon and all other amounts payable by the Borrower
      hereunder in respect thereof shall automatically be forthwith due and
      payable.

     

    SECTION
      2.05. Funding
      of Borrowings.

     

    (a)    Each
      Lender shall make each Loan to be made by it hereunder on the proposed date
      thereof by wire transfer of immediately available funds by 10:00 a.m., Los
      Angeles, California time, to the account of the Administrative Agent most
      recently designated by it for such purpose by notice to the Lenders. In the
      case
      of Revolving Loans, the Administrative Agent will make such Loans available
      to
      the Borrower by promptly crediting the amounts so received, in like funds,
      to an
      account of the Borrower designated by the Borrower in the applicable Borrowing
      Request; provided
      that
      Loans made to finance the reimbursement of an LC Disbursement as provided in
      Section 2.04(f) shall be remitted by the Administrative Agent to the applicable
      Issuing Bank.

     

    (b)    Unless
      the Administrative Agent shall have received notice from a Revolving Lender
      prior to the proposed date of any Revolving Borrowing that such Revolving Lender
      will not make available to the Administrative Agent such Revolving Lender’s
      share of such Borrowing, the Administrative Agent may in its sole discretion
      assume that such Revolving Lender has made such share available on such date
      in
      accordance with paragraph (a) of this Section and may, in reliance upon such
      assumption, make available to the Borrower a corresponding amount. In such
      event, if a Revolving Lender has not in fact made its share of the applicable
      Borrowing available to the Administrative Agent, then the applicable Revolving
      Lender and the Borrower severally agree to pay to the Administrative Agent
      forthwith on demand such corresponding amount with interest thereon, for each
      day from and including the date such amount is made available to the Borrower
      to
      but excluding the date of payment to the Administrative Agent, at (i) in the
      case of such Revolving Lender, the greater of the Federal Funds Effective Rate
      and a rate determined by the Administrative Agent in accordance with banking
      industry rules on interbank compensation or (ii) in the case of the Borrower,
      the interest rate applicable to ABR Loans. If such Revolving Lender pays such
      amount to the

     

    
      
        
        

      

      
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    Administrative
      Agent, then such amount shall constitute such Revolving Lender’s Loan included
      in such Borrowing.

     

    SECTION
      2.06. Interest
      Elections.

     

    (a)    Each
      Borrowing of (i) Revolving Loans initially shall be of the Type specified in
      the
      applicable Borrowing Request and, in the case of a Eurodollar Revolving
      Borrowing, shall have an initial Interest Period as specified in such Borrowing
      Request, and (ii) Revenue Bond Loans initially shall be an ABR Borrowing.
      Thereafter, the Borrower may elect to convert such Borrowing to a different
      Type
      or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
      elect Interest Periods therefor, all as provided in this Section. The Borrower
      may elect different options with respect to different portions of the affected
      Borrowing, in which case each such portion shall be allocated ratably among
      the
      Lenders holding the Loans comprising such Borrowing, and the Loans comprising
      each such portion shall be considered a separate Borrowing.

     

    (b)    To
      make
      an election pursuant to this Section, the Borrower shall notify the
      Administrative Agent of such election by telephone by the time that a Borrowing
      Request would be required under Section 2.03 if the Borrower were requesting
      a
      Borrowing of the Type resulting from such election to be made on the effective
      date of such election. Each such telephonic Interest Election Request shall
      be
      irrevocable and shall be confirmed promptly by hand delivery or telecopy to
      the
      Administrative Agent of a written Interest Election Request in a form approved
      by the Administrative Agent and signed by the Borrower.

     

    (c)    Each
      telephonic and written Interest Election Request shall specify the following
      information in compliance with Section 2.02:

     

    (i)    the
      Borrowing to which such Interest Election Request applies and, if different
      options are being elected with respect to different portions thereof, the
      portions thereof to be allocated to each resulting Borrowing (in which case
      the
      information to be specified pursuant to clauses (iii) and (iv) below shall
      be
      specified for each resulting Borrowing); 

     

    (ii)    the
      effective date of the election made pursuant to such Interest Election Request,
      which shall be a Business Day;

     

    (iii)    whether
      the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
      and

     

    (iv)    if
      the
      resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
      applicable thereto after giving effect to such election, which shall be a period
      contemplated by the definition of the term “Interest Period”.

     

    If
      any
      such Interest Election Request requests a Eurodollar Borrowing but does not
      specify an Interest Period, then the Borrower shall be deemed to have selected
      an Interest Period of one month’s duration.

     

    
      
        
        

      

      
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    (d)    Promptly
      following receipt of an Interest Election Request, the Administrative Agent
      shall advise each Lender of the details thereof and of such Lender’s portion of
      each resulting Borrowing.

     

    (e)    If
      the
      Borrower fails to deliver a timely Interest Election Request with respect to
      a
      Eurodollar Borrowing prior to the end of the Interest Period applicable thereto,
      then, unless such Borrowing is repaid as provided herein, at the end of such
      Interest Period such Borrowing shall be converted to an ABR Borrowing.
      Notwithstanding any contrary provision hereof, (i) if an Event of Default has
      occurred and is continuing (A) no outstanding Borrowing may be converted to
      or
      continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
      Borrowing shall be converted to an ABR Borrowing at the end of the Interest
      Period applicable thereto.

     

    SECTION
      2.07. Termination
      and Reduction of Commitments.

     

    (a)    Unless
      previously terminated, each of the Revolving Commitments and the Revenue Bond
      Commitments shall terminate on the Final Maturity Date. If any Letter of Credit
      remains outstanding on the Final Maturity Date, the Borrower will deposit with
      the Administrative Agent an amount in cash equal to 105% of the aggregate
      undrawn amount of such Letter of Credit to secure the Borrower’s reimbursement
      obligations with respect to any drawings that may occur thereunder.


     

    (b)    The
      Borrower may at any time terminate, or from time to time reduce, the Revolving
      Commitments; provided
      that (i)
      each reduction of the Revolving Commitments shall be in an amount that is an
      integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the
      Borrower shall not terminate or reduce any Revolving Commitments if, after
      giving effect to such termination or reduction and any concurrent prepayment
      of
      the Revolving Loans in accordance with Section 2.09, the aggregate Revolving
      Credit Exposures would exceed the aggregate Revolving Commitments. The Borrower
      may at any time terminate, or from time to time reduce, the Revenue Bond
      Commitments; provided
      that (i)
      each reduction of the Revenue Bond Commitments shall be in an amount that is
      an
      integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the
      Borrower shall not terminate or reduce any Revenue Bond Commitments if, after
      giving effect to such termination or reduction and any concurrent prepayment
      of
      the Revenue Bond Loans in accordance with Section 2.09, the aggregate Revenue
      Bond Credit Exposure would exceed the aggregate Revenue Bond Commitments.


     

    (c)    In
      the
      event that any Revenue Bonds shall be redeemed, repaid or otherwise retired,
      the
      Borrower shall, to the extent permitted under the documentation for such Revenue
      Bonds, and after reimbursement of any LC Disbursement made in connection with
      such redemption, repayment or retirement, permanently reduce the stated amount
      of the applicable Letter of Credit and, if such reduction is with respect to
      a
      Revenue Bond Letter of Credit, the Revenue Bond Commitments hereunder shall
      be
      automatically and permanently ratably reduced by an aggregate amount equal
      to
      the amount of such reduction as of the date such reduction becomes effective.
      

     

    (d)    The
      Borrower shall notify the Administrative Agent of any election or requirement
      to
      terminate or reduce the Revolving Commitments or the Revenue Bond

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    Commitments
      under paragraph (b) or (c) of this Section at least three Business Days prior
      to
      the effective date of such termination or reduction (or as soon as practicable
      but in any event no later than such effective date, in the case of a reduction
      under paragraph (c)), specifying such election and the effective date thereof.
      Promptly following receipt of any notice, the Administrative Agent shall advise
      the Lenders of the contents thereof. Each notice delivered by the Borrower
      pursuant to this Section shall be irrevocable; provided
      that a
      notice of termination of the Revolving Commitments or the Revenue Bond
      Commitments delivered by the Borrower may state that such notice is conditioned
      upon the effectiveness of other credit facilities, in which case such notice
      may
      be revoked by the Borrower (by notice to the Administrative Agent on or prior
      to
      the specified effective date) if such condition is not satisfied. Any
      termination or reduction of the Revolving Commitments or the Revenue Bond
      Commitments shall be permanent. Each reduction of the Revolving Commitments
      or
      the Revenue Bond Commitments shall be made ratably among the Revolving Lenders
      or Revenue Bond Lenders, as the case may be, ratably in accordance with their
      Applicable Percentages.

     

    SECTION
      2.08. Repayment
      of Loans; Evidence of Debt.

     

    (a)    The
      Borrower hereby unconditionally promises to pay to the Administrative Agent
      (i)
      for the account of each Revolving Lender the then unpaid principal amount of
      each Revolving Loan on the Final Maturity Date, (ii) for the account of each
      Revenue Bond Lender the unpaid principal amount of each Revenue Bond Loan on
      the
      applicable PPD Repayment Date and (iii) for the account of each Lender all
      accrued and unpaid interest on the Loans and all other Obligations on the Final
      Maturity Date. 

     

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

     

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

     

    (d)    The
      entries made in the accounts maintained pursuant to paragraph (b) or (c) of
      this
      Section shall be prima facie
      evidence
      of the existence and amounts of the obligations recorded therein; provided
      that the
      failure of any Lender, any Issuing Bank or the Administrative Agent to maintain
      such accounts or any error therein shall not in any manner affect the obligation
      of the Borrower to repay the Loans and LC Disbursements in accordance with
      the
      terms of this Agreement.

     

    
      
        
        

      

      
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    (e)    Any
      Lender may request that Loans of any Class made by it be evidenced by a
      promissory note. In such event, the Borrower shall prepare, execute and deliver
      to such Lender a promissory note payable to the order of such Lender (or, if
      requested by such Lender, to such Lender and its registered assigns) and in
      a
      form approved by the Administrative Agent. Thereafter, the Loans evidenced
      by
      such promissory note and interest thereon shall at all times (including after
      assignment pursuant to Section 9.04) be represented by one or more promissory
      notes in such form payable to the order of the payee named therein (or, if
      such
      promissory note is a registered note, to such payee and its registered
      assigns).

     

    SECTION
      2.09. Prepayment
      of Loans.

     

    (a)    The
      Borrower shall have the right at any time and from time to time to prepay any
      Borrowing, in whole or in part, without premium or penalty (subject, in the
      case
      of any prepayment of a Eurodollar Borrowing, to Section 2.14), subject to prior
      notice in accordance with paragraph (d) of this Section.

     

    (b)    On
      the
      date of any termination of the Revolving Commitments, the Borrower shall repay
      or prepay all outstanding Revolving Borrowings. If, as a result of any partial
      reduction of the Revolving Commitments, the sum of the Revolving Credit
      Exposures would exceed the total Revolving Commitments after giving effect
      thereto, then the Borrower shall, on the date of such reduction, repay or prepay
      Revolving Borrowings in an amount equal to such excess.

     

    (c)    Prior
      to
      any optional or mandatory prepayment of Borrowings hereunder, the Borrower
      shall
      select the Borrowing or Borrowings to be prepaid and shall specify such
      selection in the notice of such prepayment pursuant to paragraph (d) of this
      Section.

     

    (d)    The
      Borrower shall notify the Administrative Agent by telephone (confirmed by
      telecopy) of any prepayment hereunder (i) in the case of prepayment of a
      Eurodollar Borrowing, not later than 11:00 a.m., Los Angeles, California time,
      three Business Days before the date of prepayment or (ii) in the case of
      prepayment of an ABR Borrowing, not later than 11:00 a.m., Los Angeles,
      California time, one Business Day before the date of prepayment. Each such
      notice shall be irrevocable and shall specify the prepayment date and the
      principal amount of each Borrowing or portion thereof to be prepaid;
provided,
      that if
      a notice of prepayment is given in connection with a conditional notice of
      termination of the Revolving Commitments or the Revenue Bond Commitments as
      contemplated by Section 2.07, then such notice of prepayment may be revoked
      if
      such notice of termination is revoked in accordance with Section 2.07. Promptly
      following receipt of any such notice, the Administrative Agent shall advise
      the
      Lenders of the contents thereof. Each partial prepayment of any Borrowing shall
      be in an amount that would be permitted in the case of an advance of a Borrowing
      of the same Type as provided in Section 2.02. Each prepayment of a Borrowing
      shall be applied ratably to the Loans included in the prepaid Borrowing.
      Prepayments shall be accompanied by accrued interest to the extent required
      by
      Section 2.11 and by any amounts required to be paid pursuant to Section 2.14
      in
      connection with such prepayment.

     

    
      
        
        

      

      
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    SECTION
      2.10. Fees.

     

    (a)    The
      Borrower agrees to pay to the Administrative Agent for the account of each
      Revolving Lender a commitment fee, which shall accrue at a rate per
      annum
      equal to
      the Commitment Fee Rate in effect from time to time on the daily unused amount
      of the Revolving Commitment of such Revolving Lender during the period from
      and
      including the Effective Date to but excluding the date on which such Revolving
      Commitment terminates. Accrued commitment fees shall be payable in arrears
      on
      the last Business Day of March, June, September and December of each year,
      commencing with September 29, 2006, and on the date on which the Revolving
      Commitments terminate. All commitment fees shall be computed on the basis of
      a
      year of 360 days and shall be payable for the actual number of days elapsed
      (including the first day but excluding the last day).

     

    (b)    The
      Borrower agrees to pay (i) to the Administrative Agent for the account of each
      Lender a participation fee with respect to its participations in Letters of
      Credit, which participation fee shall accrue at a rate per
      annum
      equal to
      the Applicable Margin in effect from time to time for Eurodollar Loans, on
      the
      daily aggregate amount of the sum of (A) such Lender’s Revolving LC Exposure
      (excluding any portion thereof attributable to unreimbursed Revolving LC
      Disbursements) and (B) such Lender’s Revenue Bond LC Exposure (excluding any
      portion thereof attributable to unreimbursed Revenue Bond LC Disbursements),
      during the period from and including the Effective Date to but excluding the
      Final Maturity Date, and (ii) to each Issuing Bank, for its own account, a
      fronting fee payable in the amounts and at the times separately agreed upon
      by
      the Borrower and such Issuing Bank, as well as such Issuing Bank’s standard fees
      with respect to the issuance, amendment, renewal or extension of any Letter
      of
      Credit or processing of drawings thereunder. Accrued participation fees in
      respect of Letters of Credit shall be due and payable on the last Business
      Day
      of March, June, September and December of each year, commencing with
      September 29, 2006; provided
      that (1)
      all such fees payable in respect of the Revolving Letters of Credit shall be
      payable on the date on which the Revolving Commitments terminate, and any such
      fees accruing after the date on which the Revolving Commitments terminate shall
      be payable on demand, and (2) all such fees payable in respect of the Revenue
      Bond Letters of Credit shall be payable on the date on which the Revenue Bond
      Commitments terminate, and any such fees accruing after the date on which the
      Revenue Bond Commitments terminate shall be payable on demand; provided,
      further,
      that
      upon the occurrence and during the continuance of an Event of Default, the
      participation fees payable pursuant to clause (i) above shall be increased
      by
      200 basis points per
      annum.
      Any
      other fees payable to any Issuing Bank pursuant to this paragraph shall be
      payable within ten (10) days after demand. All participation fees and fronting
      fees shall be computed on the basis of a year of 360 days and shall be payable
      for the actual number of days elapsed (including the first day but excluding
      the
      last day).

     

    (c)    The
      Borrower agrees to pay to the Administrative Agent, for its own account, fees
      payable in the amounts and at the times separately agreed upon by the Borrower
      and the Administrative Agent.

     

    (d)    All
      fees
      payable hereunder shall be paid on the dates due, in immediately available
      funds, to the Administrative Agent (or to the applicable Issuing Bank, in the
      case of

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    fees
      payable to any Issuing Bank) for distribution, in the case of commitment fees
      and participation fees, to the Lenders. Fees paid shall not be refundable under
      any circumstances.

     

    SECTION
      2.11. Interest.

     

    (a)    The
      Borrower shall pay interest on the unpaid principal amount of each Loan owing
      to
      each Lender from the date of such Loan until such principal amount shall be
      paid
      in full, at the Applicable Rate for such Loan.

     

    (b)    Notwithstanding
      the foregoing, upon the occurrence and during the continuance of an Event of
      Default, (i) each ABR Loan shall bear interest at a rate of 2.0% per
      annum
      in
      excess of the rate set forth in paragraph (a) of this Section and (ii) each
      Eurodollar Loan shall bear interest at a rate of 2.0% per
      annum
      in
      excess of the rate set forth in paragraph (a) of this Section until the
      Interest Period applicable thereto shall have expired and thereafter at a
per annum
      rate
      equal to the Applicable Rate for ABR Loans plus 2.0%.
      In addition, if any principal of or interest on any Loan or LC Disbursement
      or
      any fee or other amount payable by the Borrower hereunder is not paid when
      due,
      whether at stated maturity, upon acceleration or otherwise, such overdue amount
      shall bear interest, after as well as before judgment, at a rate per
      annum
      equal to
      (A) in the case of overdue principal of any Loan, 2.0% plus
      the rate
      otherwise applicable to such Loan as provided in paragraph (a) of this Section
      or (B) in the case of any other amount, 2.0% plus
      the
      Applicable Rate for ABR Loans.

     

    (c)    Accrued
      interest on each Loan shall be payable in arrears on each Interest Payment
      Date
      for such Loan and (i) in the case of Revolving Loans, upon termination of the
      Revolving Commitments, and (ii) in the case of Revenue Bond Loans, upon
      termination of the Revenue Bond Commitments, and accrued interest on each LC
      Disbursement that bears interest at the Applicable Rate for ABR Loans shall
      be
      payable in arrears on each Interest Payment Date applicable to ABR Loans;
provided
      that (A)
      interest accrued pursuant to paragraph (b) of this Section shall be payable
      on
      demand, (B) in the event of any repayment or prepayment of any Loan or LC
      Disbursement, accrued interest on the principal amount repaid or prepaid shall
      be payable on the date of such repayment or prepayment and (C) in the event
      of
      any conversion of any Eurodollar Loan prior to the end of the current Interest
      Period therefor, accrued interest on such Loan shall be payable on the effective
      date of such conversion.

     

    (d)    All
      interest hereunder shall be computed on the basis of a year of 360 days, except
      that interest computed by reference to the Alternate Base Rate at times when
      the
      Alternate Base Rate is based on the Reference Rate shall be computed on the
      basis of a year of 365 days (or 366 days in a leap year), and in each case
      shall
      be payable for the actual number of days elapsed (including the first day but
      excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO
      Rate shall be determined by the Administrative Agent, and such determination
      shall be conclusive absent manifest error.

     

    SECTION
      2.12. Alternate
      Rate of Interest.
      If
      prior to the commencement of any Interest Period for a Eurodollar
      Borrowing:

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (a)    the
      Administrative Agent determines (which determination shall be conclusive absent
      manifest error) that adequate and reasonable means do not exist for ascertaining
      the Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period;
      or

     

    (b)    the
      Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
      Rate or LIBO Rate, as applicable, for such Interest Period will not adequately
      and fairly reflect the cost to such Lenders of making or maintaining their
      Loans
      included in such Borrowing for such Interest Period;

     

    then
      the
      Administrative Agent shall give notice thereof to the Borrower and the Lenders
      by telephone or telecopy as promptly as practicable thereafter and, until the
      Administrative Agent notifies the Borrower and the Lenders that the
      circumstances giving rise to such notice no longer exist, (i) any Interest
      Election Request that requests the conversion of any Borrowing to, or
      continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
      and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
      Borrowing shall be made as an ABR Borrowing.

     

    SECTION
      2.13. Increased
      Costs.
      

     

    (a)    If
      any
      Change in Law shall:

     

    (i)    impose,
      modify or deem applicable any reserve, special deposit or similar requirement
      against assets of, deposits with or for the account of, or credit extended
      by,
      any Lender or the Administrative Agent (except any such reserve requirement
      reflected in the Adjusted LIBO Rate, where applicable) or any Issuing Bank;
      or

     

    (ii)    impose
      on
      any Lender, any Issuing Bank, the Administrative Agent or the London interbank
      market any other condition affecting this Agreement or Eurodollar 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 Loan (or of maintaining its obligation
      to
      make any such Loan) or to increase the cost to such Lender, such Issuing Bank
      or
      the Administrative Agent of participating in, issuing or maintaining any Letter
      of Credit or to reduce the amount of any sum received or receivable by such
      Lender, such Issuing Bank or the Administrative Agent hereunder (whether of
      principal, interest or otherwise), then the Borrower will pay to such Lender,
      such Issuing Bank or the Administrative Agent, as the case may be, such
      additional amount or amounts as will compensate such Lender, such Issuing Bank
      or the Administrative Agent, as the case may be, for such additional costs
      incurred or reduction suffered.

     

    (b)    If
      any
      Lender or any Issuing Bank determines that any Change in Law 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
      or the Loans 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

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    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)    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 paragraph (a) or (b) of this Section shall
      be delivered to the Borrower and 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 ten (10) days after
      receipt thereof.

     

    (d)    Failure
      or delay on the part of any Lender or any Issuing Bank to demand compensation
      pursuant to 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 this Section for any increased costs or reductions incurred more
      than 270 days 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; provided further
      that, if
      the Change in Law giving rise to such increased costs or reductions is
      retroactive, then the 270-day period referred to above shall be extended to
      include the period of retroactive effect thereof.

     

    SECTION
      2.14. Break
      Funding Payments.
      In the
      event of (a) the payment of any principal of any Eurodollar Loan other than
      on
      the last day of an Interest Period applicable thereto (including as a result
      of
      an Event of Default), (b) the conversion of any Eurodollar Loan other than
      on
      the last day of the Interest Period applicable thereto, (c) the failure to
      borrow, convert, continue or prepay any Loan or LC Disbursement on the date
      specified in any notice delivered pursuant hereto (regardless of whether such
      notice may be revoked under Section 2.09(b) and is revoked in accordance
      therewith), (d) the assignment of any Eurodollar Loan other than on the last
      day
      of the Interest Period applicable thereto as a result of a request by the
      Borrower pursuant to Section 2.17, or (e) the revocation of any notice of
      prepayment pursuant to Sections 2.07 and 2.09, then, in any such event, the
      Borrower shall compensate each applicable Lender for the loss, cost and expense
      attributable to such event. In the case of a Eurodollar Loan, such loss, cost
      or
      expense to any applicable Lender shall be deemed to include an amount determined
      by such Lender to be the excess, if any, of (i) the amount of interest which
      would have accrued on the principal amount of such Loan had such event not
      occurred, at the Adjusted LIBO Rate that would have been applicable to such
      Loan, for the period from the date of such event to the last day of the then
      current Interest Period therefor (or, in the case of a failure to borrow,
      convert or continue, for the period that would have been the Interest Period
      for
      such Loan), over (ii) the amount of interest which would accrue on such
      principal amount for such period at the interest rate which such Lender would
      bid were it to bid, at the commencement of such period, for dollar deposits
      of a
      comparable amount and period from other banks in the Eurodollar market. A
      certificate of any Lender setting forth any amount or amounts that such Lender
      is entitled to receive pursuant to this Section shall be delivered to the
      Borrower and shall be conclusive absent manifest error. The Borrower shall
      pay
      such Lender the amount shown as due on any such certificate within ten
      (10) days after receipt thereof.

     

    
      
        
        

      

      
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    SECTION
      2.15. Taxes.

     

    (a)    Any
      and
      all payments by or on account of any obligation of the Borrower hereunder or
      under any other Loan Document shall be made free and clear of and without
      deduction for any Indemnified Taxes or Other Taxes; provided
      that if
      the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes
      from such payments, then (i) the sum payable shall be increased as necessary
      so
      that after making all required deductions (including deductions applicable
      to
      additional sums payable under this Section) the Administrative Agent, Lender
      or
      Issuing Bank (as the case may be) receives an amount equal to the sum it would
      have received had no such deductions been made, (ii) the Borrower shall make
      such deductions and (iii) the Borrower shall pay the full amount deducted to
      the
      relevant Governmental Authority in accordance with applicable law.

     

    (b)    The
      Borrower shall indemnify the Administrative Agent, each Lender and each Issuing
      Bank, within ten (10) days after written demand therefor, for the full
      amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
      such Lender or such Issuing Bank, as the case may be, on or with respect to
      any
      payment by or on account of any obligation of the Borrower hereunder or under
      any other Loan Document (including Indemnified Taxes or Other Taxes imposed
      or
      asserted on or attributable to amounts payable under this Section) 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. A
      certificate as to the amount of such payment or liability delivered to the
      Borrower by a Lender or an Issuing Bank, or by the Administrative Agent on
      its
      own behalf or on behalf of a Lender or an Issuing Bank, shall be conclusive
      absent manifest error.

     

    (c)    As
      soon
      as practicable after any payment of Indemnified Taxes or Other Taxes by the
      Borrower to a Governmental Authority, the Borrower shall deliver to the
      Administrative Agent the original or a certified copy of a receipt issued by
      such Governmental Authority evidencing such payment, a copy of the return
      reporting such payment or other evidence of such payment reasonably satisfactory
      to the Administrative Agent.

     

    (d)    Any
      Foreign Lender shall deliver to the Borrower (with a copy to the Administrative
      Agent), at the time or times prescribed by applicable law, such properly
      completed and executed documentation prescribed by the law of the jurisdiction
      in which the Borrower is located, or any treaty to which such jurisdiction
      is a
      party, or reasonably requested by the Borrower as will permit such payments
      to
      be made without withholding.

     

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

     

    SECTION
      2.16. Payments
      Generally; Pro Rata Treatment; Sharing of Set-offs.

     

    (a)    The
      Borrower shall make each payment required to be made by it hereunder or under
      any other Loan Document (whether of principal, interest, fees or reimbursement
      of LC Disbursements, or of amounts payable under Section 2.13, 2.14 or 2.15,
      or
      otherwise) prior to 10:00 a.m., Los Angeles, California time, on the date when
      due, in

     

    
      
        
        

      

      
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    immediately
      available funds, without set-off, counterclaim, recoupment or deduction of
      any
      kind. Any amounts received after such time on any date may, in the discretion
      of
      the Administrative Agent, be deemed to have been received on the next succeeding
      Business Day for purposes of calculating interest thereon. All such payments
      shall be made to the Administrative Agent at its offices located at 445 South
      Figueroa Street, Los Angeles, California 90071 (or such other office as the
      Administrative Agent shall from time to time designate to the Borrower), except
      payments to be made directly to an Issuing Bank as expressly provided herein
      and
      except that payments pursuant to Sections 2.13, 2.14, 2.15 and 9.03 shall be
      made directly to the Persons entitled thereto and payments pursuant to other
      Loan Documents shall be made to the Persons specified therein. The
      Administrative Agent shall distribute any such payments received by it for
      the
      account of any other Person to the appropriate recipient promptly following
      receipt thereof. If any payment hereunder or under any other Loan Document
      shall
      be due on a day that is not a Business Day, the date for payment shall be
      extended to the next succeeding Business Day, and, in the case of any fees
      payable pursuant to Section 2.10 or any payment accruing interest, such fees
      and
      such interest shall be payable for the period of such extension. All payments
      under each Loan Document shall be made in dollars.

     

    (b)    If
      at any
      time insufficient funds are received by and available to the Administrative
      Agent to pay fully all amounts of principal, unreimbursed LC Disbursements,
      interest and fees then due hereunder, such funds shall be applied (i) first,
      towards payment of interest and fees then due hereunder, ratably among the
      parties entitled thereto in accordance with the amounts of interest and fees
      then due to such parties, and (ii) second, towards payment of principal and
      unreimbursed LC Disbursements then due hereunder, ratably among the parties
      entitled thereto in accordance with the amounts of principal and unreimbursed
      LC
      Disbursements then due to such parties.

     

    (c)    If
      any
      Lender shall, by exercising any right of set-off or counterclaim or otherwise,
      obtain payment in respect of any principal of or interest on any of its Loans
      or
      participations in LC Disbursements resulting in such Lender receiving payment
      of
      a greater proportion of the aggregate amount of its Loans and participations
      in
      LC Disbursements and accrued interest thereon than the proportion received
      by
      any other Lender, then the Lender receiving such greater proportion shall
      purchase (for cash at face value) participations in the Loans and participations
      in LC Disbursements of other Lenders to the extent necessary so that the benefit
      of all such payments shall be shared by the Lenders ratably in accordance with
      the aggregate amount of principal of and accrued interest on their respective
      Loans and participations in LC Disbursements; provided
      that (i)
      if any such participations are purchased and all or any portion of the payment
      giving rise thereto is recovered, such participations shall be rescinded and
      the
      purchase price restored to the extent of such recovery, without interest, and
      (ii) the provisions of this paragraph shall not be construed to apply to any
      payment made by the Borrower pursuant to and in accordance with the express
      terms of this Agreement or any payment obtained by a Lender as consideration
      for
      the assignment of or sale of a participation in any of its Loans or
      participations in LC Disbursements to any assignee or participant, other than
      to
      the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
      of this paragraph shall apply). The Borrower consents to the foregoing and
      agrees, to the extent it may effectively do so under applicable law, that any
      Lender acquiring a participation pursuant to the foregoing arrangements may
      exercise against the Borrower rights of set-off and counterclaim

     

    
      
        
        

      

      
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    with
      respect to such participation as fully as if such Lender were a direct creditor
      of the Borrower in the amount of such participation.

     

    (d)    Unless
      the Administrative Agent shall have received notice from the Borrower prior
      to
      the date on which any payment is due to the Administrative Agent for the account
      of the Lenders or any Issuing Bank hereunder that the Borrower will not make
      such payment, the Administrative Agent may assume that the Borrower has made
      such payment on such date in accordance herewith and may, in reliance upon
      such
      assumption, distribute to the Lenders or such Issuing Bank, as the case may
      be,
      the amount due. In such event, if the Borrower has not in fact made such
      payment, then each of the Lenders and each of the Issuing Banks, as the case
      may
      be, severally agrees to repay to the Administrative Agent forthwith on demand
      the amount so distributed to such Lender or such Issuing Bank with interest
      thereon, for each day from and including the date such amount is distributed
      to
      it to but excluding the date of payment to the Administrative Agent, at the
      greater of the Federal Funds Effective Rate and a rate determined by the
      Administrative Agent in accordance with banking industry rules on interbank
      compensation.

     

    (e)    If
      any
      Lender shall fail to make any payment required to be made by it pursuant to
      Section 2.04(e) or (f), 2.05(b) or 2.16(d), then the Administrative Agent may,
      in its discretion (notwithstanding any contrary provision hereof), apply any
      amounts thereafter received by the Administrative Agent for the account of
      such
      Lender to satisfy such Lender’s obligations under such Sections until all such
      unsatisfied obligations are fully paid.

     

    SECTION
      2.17. Mitigation
      Obligations; Replacement of Lenders.

     

    (a)    If
      any
      Lender requests compensation under Section 2.13, 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 2.15, then such Lender shall use
      reasonable efforts to designate a different lending office for funding or
      booking its Loans hereunder or to assign its rights and obligations hereunder
      to
      another of its offices, branches or affiliates, if, in the judgment of such
      Lender, such designation or assignment (i) would eliminate or reduce amounts
      payable pursuant to Section 2.13 or 2.15, as the case may be, in the future
      and
      (ii) would not subject such Lender to any unreimbursed cost or expense and
      would
      not otherwise be disadvantageous to such Lender. The Borrower hereby agrees
      to
      pay all reasonable costs and expenses incurred by any Lender in connection
      with
      any such designation or assignment.

     

    (b)    If
      (i)
      any Lender requests compensation under Section 2.13, (ii) 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 2.15, (iii) any
      Lender defaults in its obligation to fund Loans hereunder, or (iv) any Lender
      has not consented to a proposed amendment, waiver or modification under this
      Agreement that requires the consent of all Lenders and which has been approved
      by Required Lenders, then the Borrower may, at its sole expense and effort,
      upon
      notice to such Lender and the Administrative Agent, require such Lender to
      assign and delegate, without recourse (in accordance with and subject to the
      restrictions contained in Section 9.04), all its interests, rights and
      obligations under this Agreement to an assignee that shall assume such
      obligations (which assignee may be another Lender, if a Lender accepts such
      assignment); provided
      that (i)
      the Borrower shall have received the prior written consent of the
      Administrative

     

    
      
        
        

      

      
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    Agent
      and
      each Issuing Bank, which consent shall not unreasonably be withheld, (ii) such
      Lender shall have received payment of an amount equal to the outstanding
      principal of its Loans and participations in LC Disbursements, accrued interest
      thereon, accrued fees and all other amounts payable to it hereunder, 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) and (iii) in the case
      of any such assignment resulting from a claim for compensation under Section
      2.13 or payments required to be made pursuant to Section 2.15, such assignment
      will result in a reduction in such compensation or payments. A Lender shall
      not
      be required to make any such assignment and 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.

     

    SECTION
      2.18. New
      Lenders.
      On the
      Effective Date, each New Lender and Increasing Existing Lender (as hereinafter
      defined) shall purchase by assignment from the Existing Lenders such portion
      of
      the Loans (if any) owing to them as shall be designated by the Administrative
      Agent such that, after giving effect to all such purchases and assignments,
      (a)
      the outstanding Revolving Loans owing to each Revolving Lender shall equal
      such
      Revolving Lender’s Applicable Percentage of the aggregate amount of Revolving
      Loans owing to all Revolving Lenders and (b) the outstanding Revenue Bond Loans
      owing to each Revenue Bond Lender shall equal such Revenue Bond Lender’s
      Applicable Percentage of the aggregate amount of Revenue Bond Loans owing to
      all
      Revenue Bond Lenders. In
      addition, on the Effective Date, each New Lender and Increasing Existing Lender
      shall be deemed to have purchased by assignment from the Existing Lenders (and
      the Existing Lenders shall be deemed to have assigned to the New Lenders and
      the
      Increasing Existing Lenders) a portion of the participations (if any) then
      held
      by the Existing Lenders in each outstanding Letter of Credit and LC
      Disbursement, such that, after giving effect to all such deemed purchases and
      assignments, (i) each Revolving Lender’s participations in outstanding Revolving
      Letters of Credit and Revolving LC Disbursements shall equal such Revolving
      Lender’s Applicable Percentage of the aggregate amount of such participations
      held by all of the Revolving Lenders and (ii) each Revenue Bond Lender’s
      participations in outstanding Revenue Bond Letters of Credit and Revenue Bond
      LC
      Disbursements shall equal such Revenue Bond Lender’s Applicable Percentage of
      the aggregate amount of such participations held by all of the Revenue Bond
      Lenders.
      As used
      herein, the term “Increasing
      Existing Lender”
means
      each Existing Lender whose Aggregate Commitment (as set forth on Schedule 2.01)
      exceeds its Aggregate Commitment (as defined in the Existing Credit Agreement)
      under the Existing Credit Agreement.

     

    ARTICLE
      III

    Representations
      and Warranties

     

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

     

    SECTION
      3.01. Organization;
      Powers.
      The
      Borrower and each of its Consolidated Subsidiaries is duly organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      organization, has all requisite corporate, partnership, limited liability
      company or other applicable organizational power and authority to carry on
      its
      business as now 

     

    
      
        
        

      

      
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    conducted
      and, except where the failure to do so, individually or in the aggregate, could
      not reasonably be expected to result in a Material Adverse Effect, is qualified
      to do business, in and is in good standing, in every jurisdiction where such
      qualification is required.

     

    SECTION
      3.02. Authorization;
      Enforceability.
      The
      Transactions are within the Borrower’s organizational powers and have been duly
      authorized by all necessary corporate and, if required, stockholder action.
      This
      Agreement has been duly executed and delivered by the Borrower and constitutes,
      the Mortgage Indenture constitutes, and each other Loan Document to which the
      Borrower is to be a party, when executed and delivered by the Borrower (and,
      in
      the case of the Collateral Mortgage Bonds, authenticated by the trustee
      therefor), will constitute, a legal, valid and binding obligation of the
      Borrower, enforceable in accordance with its terms, subject to applicable
      bankruptcy, insolvency, reorganization, moratorium or other laws affecting
      creditors’ rights generally and subject to general principles of equity,
      regardless of whether considered in a proceeding in equity or at
      law.

     

    SECTION
      3.03. Governmental
      Approvals; No Conflicts.
      The
      Transactions (a) do not require any consent or approval of, registration or
      filing with, or any other action by, any Governmental Authority, except for
      (i)
      until the satisfaction of the conditions set forth in Section 4.02(c)(i), the
      approval of the ACC that is required for the extension of the Final Maturity
      Date from May 4, 2010 to August 11, 2011 and the increase in the Aggregate
      Commitments above $400,587,047.19,
      (ii) such other approvals of the
      ACC
      that have been obtained and are in full force and effect, and (iii) filings
      necessary to perfect Liens created under the Loan Documents (other than the
      Lien
      of the Mortgage Indenture, in respect of which all requisite filings have been
      made), (b) will not violate any Requirement of Law, (c) will not violate or
      result in a default under any indenture, agreement or other instrument binding
      upon the Borrower or any of its Consolidated Subsidiaries or its assets, or
      give
      rise to a right thereunder to require any payment to be made by the Borrower
      or
      any of its Consolidated Subsidiaries, and (d) will not result in the creation
      or
      imposition of any Lien on any asset of the Borrower or any of its Consolidated
      Subsidiaries, except Liens created under the Loan Documents or under the
      Mortgage Indenture.

     

    SECTION
      3.04. Financial
      Condition; No Material Adverse Change; Secured Indebtedness.

     

    (a)    The
      audited consolidated balance sheet and related statements of income,
      stockholders’ equity and cash flows of the Borrower and its Consolidated
      Subsidiaries for the fiscal year ended December 31, 2005 and the most recent
      financial statements delivered by the Borrower pursuant to Section 5.01(a)
      or
      (b), in each case, present fairly, in all material respects, the financial
      position and results of operations and cash flows of the Borrower and its
      Consolidated Subsidiaries as of such dates and for such periods in accordance
      with GAAP, subject to year-end audit adjustments and the absence of footnotes
      in
      the case of the statements delivered pursuant to Section 5.01(a). Neither the
      Borrower nor any of its Consolidated Subsidiaries had, at the date of the most
      recent balance sheet referred to above, any Guarantee, contingent liability
      or
      liability for taxes, or any long-term lease or unusual forward or long-term
      commitment, including any interest rate or foreign currency swap or exchange
      transaction, which, in any case, is material to the Borrower and its
      Consolidated Subsidiaries, taken as a whole, and which is not reflected in
      the
      foregoing statements or in the notes thereto. During the period from
      December 31, 2005 to and including the Effective Date there has been no
      sale,

     

    
      
        
        

      

      
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    transfer
      or other disposition by the Borrower or any of its Consolidated Subsidiaries
      of
      any part of its business or property, and no purchase or other acquisition
      of
      any business or property (including any Capital Stock of any other Person),
      which, in either case, is material in relation to the consolidated financial
      condition of the Borrower and its Consolidated Subsidiaries taken as a whole
      at
      December 31, 2005.

     

    (b)    Except
      to
      the extent that any specific change is explicitly disclosed in the Disclosure
      Documents, since December 31, 2005, there has been no material adverse
      change in the financial condition, results of operations, business or prospects
      of the Borrower and its Consolidated Subsidiaries, taken as a
      whole.

     

    (c)    As
      of the
      Effective Date, there is $538,900,000 in aggregate principal amount of Mortgage
      Bonds outstanding.

     

    SECTION
      3.05. Properties.

     

    (a)    Other
      than as explicitly disclosed in the Disclosure Documents, each of the Borrower
      and its Consolidated Subsidiaries has good title to, or valid leasehold
      interests in, and enjoys peaceful and undisturbed possession of, all its real
      and personal property material to its business, except for minor defects in
      title that do not interfere with its ability to conduct its business as
      currently conducted or to utilize such properties for their intended
      purposes.

     

    (b)    Each
      of
      the Borrower and its Consolidated Subsidiaries owns, or is licensed to use,
      all
      trademarks, tradenames, copyrights, patents and other intellectual property
      material to its business, and the use thereof by the Borrower and its
      Subsidiaries does not infringe upon the rights of any other Person, except
      for
      any such infringements that, individually or in the aggregate, could not
      reasonably be expected to result in a Material Adverse Effect.

     

    SECTION
      3.06. Litigation
      and Environmental Matters.

     

    (a)    Except
      as
      explicitly disclosed in the Disclosure Documents, there are no actions, suits
      or
      proceedings by or before any arbitrator or Governmental Authority pending
      against or, to the knowledge of the Borrower, threatened against or affecting
      the Borrower or any of its Consolidated Subsidiaries (i) as to which there
      is a
      reasonable possibility of an adverse determination and that, if adversely
      determined, would, individually or in the aggregate, result in a Material
      Adverse Effect or (ii) that involve any of the Loan Documents, the Mortgage
      Indenture or the Transactions.

     

    (b)    Except
      as
      explicitly disclosed in the Disclosure Documents, and except with respect to
      any
      other matters that, individually or in the aggregate, could not reasonably
      be
      expected to result in a Material Adverse Effect, neither the Borrower nor any
      of
      its Consolidated Subsidiaries (i) has failed to comply with any Environmental
      Law or to obtain, maintain or comply with any permit, license or other approval
      required under any Environmental Law, (ii) has become subject to any
      Environmental Liability, (iii) has received notice of any claim with respect
      to
      any Environmental Liability or (iv) knows of any basis for any Environmental
      Liability.

     

    
      
        
        

      

      
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    (c)    Since
      the
      date of this Agreement, there has been no change in the status of any matter
      disclosed in the Disclosure Documents that, individually or in the aggregate,
      has resulted in, or materially increased the likelihood of, a Material Adverse
      Effect.

     

    SECTION
      3.07. Compliance
      with Laws and Agreements.
      Except
      as explicitly disclosed in the Disclosure Documents, each of the Borrower and
      its Consolidated Subsidiaries is in compliance with all Requirements of Law,
      including the Fair Labor Standards Act, the Americans with Disabilities Act,
      the
      Foreign Corrupt Practices Act and Anti-Terrorism Laws, applicable to it or
      its
      property and all indentures, agreements and other instruments binding upon
      it or
      its property, except where the failure to be in compliance, individually or
      in
      the aggregate, could not reasonably be expected to result in a Material Adverse
      Effect. No Default has occurred and is continuing.

     

    SECTION
      3.08. Federal
      Regulations.
      No part
      of the proceeds of any Loans will be used for “purchasing” or “carrying” any
“margin stock” within the respective meanings of each of the quoted terms under
      Regulation U as now and from time to time hereafter in effect or for any purpose
      that violates the provisions of the regulations of the Board. If requested
      by
      any Lender or the Administrative Agent, the Borrower will furnish to the
      Administrative Agent and each Lender a statement to the foregoing effect in
      conformity with the requirements of FR Form G-3 or FR Form U-1 referred to
      in
      Regulation U.

     

    SECTION
      3.09. Investment
      Company Status.

     

    (a)    Neither
      the Borrower nor any of its Consolidated Subsidiaries is an “investment company”
or a company “controlled” by an “investment company” as defined in, or subject
      to regulation under, the Investment Company Act of 1940.

     

    (b)    The
      Borrower is not subject to regulation under any Requirement of Law (other than
      Regulation X of the Board and Requirements of Law pertaining to utility
      regulation) which limits its ability to incur Indebtedness.

     

    SECTION
      3.10. Taxes.
      Each of
      the Borrower and its Consolidated Subsidiaries has timely filed or caused to
      be
      filed all Tax returns and reports required to have been filed and has paid
      or
      caused to be paid all Taxes required to have been paid by it, except (a) Taxes
      that are being contested in good faith by appropriate proceedings and for which
      the Borrower or such Subsidiary, as applicable, has set aside on its books
      adequate reserves or (b) to the extent that the failure to do so could not
      reasonably be expected to result in a Material Adverse Effect.

     

    SECTION
      3.11. ERISA.
      No
      ERISA Event has occurred or is reasonably expected to occur that, when taken
      together with all other such ERISA Events for which liability is reasonably
      expected to occur, could reasonably be expected to result in a Material Adverse
      Effect. The present value of all accumulated benefit obligations under each
      Plan
      (based on the assumptions used for purposes of Statement of Financial Accounting
      Standards No. 87) did not, as of the date of the most recent financial
      statements reflecting such amounts, exceed the fair market value of the assets
      of such Plan by an amount that has resulted or could reasonably be expected
      to
      result in a Material Adverse Effect. The present value of all accumulated
      benefit obligations of all underfunded Plans (based on the assumptions used
      for
      purposes of Statement of

     

    
      
        
        

      

      
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    Financial
      Accounting Standards No. 87) did not, as of the date of the most recent
      financial statements reflecting such amounts, exceed the fair market value
      of
      the assets of all such underfunded Plans by an amount that has resulted or
      could
      reasonably be expected to result in a Material Adverse Effect.

     

    SECTION
      3.12. Security
      Documents.

     

    (a)    The
      Collateral Mortgage Bonds are entitled to the benefits of the Mortgage Indenture
      and secured by the Lien of the Mortgage Indenture. Upon delivery of the
      Collateral Mortgage Bonds to the Administrative Agent under a Bond Delivery
      Agreement and at all times thereafter, the Collateral Mortgage Bonds will be
      “Outstanding” and the Administrative Agent will be the “Holder” of the
      Collateral Mortgage Bonds for all purposes of the Mortgage Indenture. The
      Mortgage Indenture constitutes a valid mortgage lien on and a valid and
      perfected security interest in the properties or franchises described therein
      as
      being subject to the Lien of the Mortgage Indenture. As of the Effective Date
      no
      material properties or franchises subject to the Lien of the Mortgage Indenture
      have been released from such Lien, and, as of any subsequent date, no such
      properties or franchises shall have been released from the Lien of the Mortgage
      Indenture except in accordance with the terms thereof and hereof.

     

    (b)    The
      provisions of the Security Documents not covered by paragraph (a) above are
      effective to create, in favor of the Administrative Agent for the benefit of
      the
      secured parties thereunder, legal, valid and enforceable Liens on or in all
      of
      the Collateral subject thereto, and all necessary deliveries of property to
      the
      Administrative Agent and all necessary and appropriate recordings and filings
      have been made in all necessary and appropriate public offices so that the
      Liens
      created by such Security Documents constitute perfected Liens on or in all
      rights, titles, estates and interests of the Borrower and any applicable
      Subsidiaries in the Collateral covered thereby, prior and superior to all other
      Liens and all necessary and appropriate consents to the creation and perfection
      of such Liens have been obtained. No mortgage or financing statement or other
      instrument or recordation covering all or any part of the Collateral is on
      file
      in any recording office which has not been terminated or released, except as
      may
      have been filed in favor of the Administrative Agent.

     

    SECTION
      3.13. Disclosure.
      The
      Borrower has disclosed to the Lenders all agreements, instruments and corporate
      or other restrictions to which it or any of its Subsidiaries is subject, and
      all
      other matters known to it, that, individually or in the aggregate, could
      reasonably be expected to result in a Material Adverse Effect. Neither the
      Information Memorandum nor any of the other reports, financial statements,
      certificates or other information furnished by or on behalf of the Borrower
      to
      the Administrative Agent or any Lender in connection with the negotiation of
      this Agreement or any other Loan Document or delivered hereunder (as modified
      or
      supplemented by, and taken together with, other information so furnished)
      contains any misstatement of a material fact or omits to state any material
      fact
      necessary to make the statements therein, in the light of the circumstances
      under which they were made, not misleading; provided
      that,
      with respect to forward looking statements, the Borrower represents only that
      such information was prepared in good faith based upon assumptions believed
      to
      be reasonable at the time and notes that there can be no assurance that such
      expectations, beliefs or projections will be achieved or accomplished and that
      such projections are subject to an increasing degree of uncertainty as they
      relate to later periods of time.

     

    
      
        
        

      

      
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    SECTION
      3.14. Solvency.
      On the
      Effective Date, the Borrower is Solvent.

     

    SECTION
      3.15. Labor
      Matters.
      There
      are no strikes or other labor disputes against the Borrower or any of its
      Subsidiaries pending or, to the knowledge of the Borrower, threatened that
      (individually or in the aggregate) could reasonably be expected to have a
      Material Adverse Effect. Hours worked by and payment made to employees of the
      Borrower and its Subsidiaries have not been in violation of the Fair Labor
      Standards Act or any other applicable Requirement of Law dealing with such
      matters that (individually or in the aggregate) could reasonably be expected
      to
      have a Material Adverse Effect. All payments due from the Borrower or any of
      its
      Subsidiaries on account of employee health and welfare insurance that
      (individually or in the aggregate) could reasonably be expected to have a
      Material Adverse Effect if not paid have been paid or accrued as a liability
      on
      the books of the Borrower or the relevant Subsidiary.

     

    SECTION
      3.16. Anti-Terrorism
      Laws.

     

    (a)    Neither
      the Borrower nor, to the knowledge of the Borrower, any of its Affiliates is
      in
      violation of any Requirement of Law relating to terrorism or money laundering
      (“Anti-Terrorism
      Laws”),
      including Executive Order No. 13224 on Terrorist Financing, effective
      September 24, 2001 (the “Executive
      Order”),
      and
      the Uniting and Strengthening America by Providing Appropriate Tools Required
      to
      Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.

     

    (b)    Neither
      the Borrower nor, to the knowledge of the Borrower, any of its Affiliates is
      any
      of the following:

     

    (i)    a
      Person
      that is listed in the annex to, or is otherwise subject to the provisions of,
      the Executive Order;

     

    (ii)    a
      Person
      owned or controlled by, or acting for or on behalf of, any Person that is listed
      on the Annex to, or is otherwise subject to the provisions of, the Executive
      Order;

     

    (iii)    a
      Person
      with whom the Borrower is prohibited from dealing or otherwise engaging in
      any
      transaction by any Anti-Terrorism Law;

     

    (iv)    a
      Person
      who commits, threatens or conspires to commit or supports “terrorism” as defined
      in the Executive Order; or

     

    (v)    a
      Person
      that is named as a “specially designated national or blocked person” on the most
      current list published by the U.S. Treasury Department Office of Foreign Assets
      Control at its official website or any replacement website or other replacement
      official publication of such list.

     

    (c)    Neither
      the Borrower nor, to the knowledge of the Borrower, any of its Affiliates (i)
      conducts any business or engages in making or receiving any contribution of
      funds, goods or services to or for the benefit of any Person described in clause
      (b)(i), (ii), (iii) or (v) above or, to the knowledge of the Borrower, clause
      (b)(iv) above; (ii) deals in, or otherwise engages in any transaction relating
      to, any property or interest in property blocked pursuant to

     

    
      
        
        

      

      
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    the
      Executive Order; or (iii) engages in or conspires to engage in any transaction
      that evades or avoids, or has the purposes of evading or avoiding, or attempts
      to violate, any of the prohibitions set forth in any Anti-Terrorism
      Law.

     

    (d)    No
      broker
      or other agent (other than the Arranger) is acting for the benefit of the
      Borrower or any of its Affiliates, or benefiting in any capacity, in each case
      in connection with the Loan Documents.

     

    ARTICLE
      IV

    Conditions

     

    SECTION
      4.01. Effective
      Date.
      This
      Agreement, and the obligations of the Lenders to make Loans and acquire
      participations in Letters of Credit, and the obligations of the Issuing Banks
      to
      issue Letters of Credit hereunder, shall not become effective until the date
      on
      which each of the following conditions is satisfied (or waived in accordance
      with Section 9.02):

     

    (a)    The
      Administrative Agent (or its counsel) shall have received from each party hereto
      either (i) a counterpart of this Agreement signed on behalf of such party or
      (ii) evidence satisfactory to the Administrative Agent (which may include
      telecopy transmission of a signed signature page of this Agreement) that such
      party has signed a counterpart of this Agreement.

     

    (b)    The
      Administrative Agent shall have received a favorable written opinion (addressed
      to the Administrative Agent, the Issuing Banks and the Lenders and dated the
      Effective Date) of each of (i) Raymond S. Heyman, Esq., General Counsel for
      the
      Borrower, substantially in the form of Exhibit E-1, (ii) Thelen Reid &
Priest LLP, New York counsel for the Borrower, substantially in the form of
      Exhibit E-2, and (iii) Rodey, Dickason, Sloan, Akin & Robb, PA, special New
      Mexico counsel for the Borrower, substantially in the form of Exhibit E-3,
      and
      covering such other matters relating to the Borrower, the Loan Documents, the
      Mortgage Indenture, the Lien of the Mortgage Indenture or the Transactions
      as
      the Required Lenders shall reasonably request. The Borrower hereby requests
      such
      counsel to deliver such opinions.

     

    (c)    The
      Administrative Agent shall have received such documents and certificates as
      the
      Administrative Agent or its counsel may reasonably request relating to the
      organization, existence and good standing of the Borrower, the authorization
      of
      the Transactions and any other legal matters relating to the Borrower, the
      Loan
      Documents, the Mortgage Indenture, the Lien of the Mortgage Indenture or the
      Transactions, all in form and substance satisfactory to the Administrative
      Agent
      and its counsel.

     

    (d)    The
      conditions set forth in paragraphs (a) and (b) of Section 4.02 shall be
      satisfied, and the Administrative Agent shall have received a certificate,
      dated
      the Effective Date and signed by the President, a Vice President or a Financial
      Officer, confirming compliance with such conditions as of the Effective
      Date.

     

    (e)    The
      Administrative Agent and the Arranger shall have received all fees and other
      amounts due and payable on or prior to the Effective Date, including all
      up-front fees

     

    
      
        
        

      

      
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    and,
      to
      the extent invoiced, reimbursement or payment of all out-of-pocket expenses
      required to be reimbursed or paid by the Borrower hereunder or under any other
      Loan Document.

     

    (f)    The
      Administrative Agent shall have received (i) counterparts of each Revenue Bond
      Pledge Agreement, in each case signed on behalf of the Borrower and any other
      parties thereto; and (ii) copies of any amendments or supplements, entered
      into
      at any time after May 4, 2005, to the Mortgage Indenture, the Revenue Bond
      Indentures, the Revenue Bond Loan Agreements and all related agreements with
      respect to the Revenue Bonds, certified by an authorized officer of the Borrower
      as being a true, correct and complete copy thereof and as being in full force
      and effect.

     

    (g)    On
      the
      Effective Date, all accrued and unpaid interest and fees payable by the Borrower
      under the Existing Credit Agreement shall have been paid in full.

     

    (h)    The
      Borrower and its Subsidiaries shall have outstanding no indebtedness or
      preferred stock other than (a) the Obligations, and (b) the Indebtedness
      described in the most recent financial statements of the Borrower and its
      Consolidated Subsidiaries referenced in Section 3.04(a).

     

    (i)    Except
      as
      contemplated in Section 4.02(c)(i), all requisite Governmental Authorities
      (including, without limitation, the ACC and all other regulatory authorities)
      and third parties shall have approved or consented to this Agreement and the
      other Loan Documents and the other transactions contemplated hereby and thereby
      to the extent required, no stay of any applicable regulatory approval shall
      have
      been issued and there shall be no litigation or other governmental,
      administrative or judicial action, actual or threatened, that could reasonably
      be expected to restrain, prevent or impose burdensome conditions on this
      Agreement and the other Loan Documents or the Transactions.

     

    (j)    The
      Administrative Agent, the Issuing Banks and the Lenders shall have received
      all
      documentation and other information required by bank regulatory authorities
      under applicable “know your customer” and anti-money laundering rules and
      regulations, including without limitation the Patriot Act.

     

    (k)    The
      Capital Stock of the Borrower (to the extent owned by UniSource Energy, which
      owns all Capital Stock of the Borrower) shall all be free and clear of any
      Liens.

     

    SECTION
      4.02. Each
      Credit Event.
      The
      obligation of an Issuing Bank to issue a Letter of Credit (or to issue any
      amendment of a Letter of Credit having the effect of extending the stated
      expiration date thereof, increasing the amount available for drawing thereunder
      or otherwise altering any of the material terms or conditions thereof), and
      the
      obligation of each Revolving Lender to make a Revolving Loan on the occasion
      of
      any Borrowing that increases the amount of the Revolving Loans of any Revolving
      Lender outstanding, shall be subject to the satisfaction of the following
      conditions:

     

    (a)    The
      representations and warranties of the Borrower set forth in this Agreement
      and
      the other Loan Documents shall be true and correct on and as of the date of
      such
      issuance or Borrowing, as the case may be, both before and after giving effect
      thereto and (in the case of any Borrowing) the application of the proceeds
      thereof, as though made on and as of such

     

    
      
        
        

      

      
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    date
      (except where such representations and warranties expressly relate to an earlier
      date, in which case such representations and warranties shall have been true
      and
      correct as of such earlier date).

     

    (b)    At
      the
      time of and immediately after giving effect to such issuance or Borrowing (as
      the case may be), no Default or Event of Default shall have occurred and be
      continuing.

     

    (c)    In
      the
      case of any Revolving Borrowing and/or issuance of a Revolving Letter of Credit
      (or issuance of any amendment of a Revolving Letter of Credit having the effect
      of increasing the amount available for drawing thereunder) that would result
      in
      the utilization of greater than $60,000,000 of the Revolving Commitments, the
      Administrative Agent shall have received on or before the date thereof:
      (i) a copy of an order of the ACC, in form and substance satisfactory to
      the Administrative Agent, authorizing (A) the increase in the aggregate amount
      of the Revolving Commitments provided by this Agreement, (B) the extension
      of
      the maturity date of the credit facilities established by this Agreement, and
      (C) the issuance of Collateral Mortgage Bonds in an aggregate principal amount
      not less than the Aggregate Commitments, certified by an officer of the Borrower
      as being a true, correct and complete copy thereof and as being in full force
      and effect; (ii) new Collateral Mortgage Bonds issued pursuant to the Seventh
      Supplemental Indenture in an aggregate principal amount not less than the
      Aggregate Commitments, in replacement of the previously issued Collateral
      Mortgage Bonds (which shall be returned by the Administrative Agent to the
      Borrower for cancellation), duly issued and authenticated under the Mortgage
      Indenture, together with a Bond Delivery Agreement duly executed by the Borrower
      with respect to such new Collateral Mortgage Bonds; (iii) a duly executed
      copy of the Seventh Supplemental Indenture and all other documents, instruments
      and filings relating to the issuance and authentication of such new Collateral
      Mortgage Bonds under the Mortgage Indenture; and (iv) a favorable written
      opinion of counsel to the Borrower with respect to such ACC order and such
      new
      Collateral Mortgage Bonds, in form and substance satisfactory to the
      Administrative Agent.

     

    Each
      Revolving Borrowing and issuance of a Letter of Credit (or any amendment of
      a
      Letter of Credit having the effect of extending the stated expiration date
      thereof, increasing the amount available for drawing thereunder or otherwise
      altering any of the material terms or conditions thereof) shall be deemed to
      constitute a representation and warranty by the Borrower on the date thereof
      as
      to the matters specified in paragraphs (a) and (b) of this Section.

     

    ARTICLE
      V

    Affirmative
      Covenants

     

    Until
      the
      Aggregate Commitments have expired or been terminated, the principal of and
      interest on each Loan and all fees and other amounts payable hereunder have
      been
      paid in full, all Letters of Credit have expired or terminated and all LC
      Disbursements have been reimbursed in full, the Borrower covenants and agrees
      with the Administrative Agent, the Issuing Banks and the Lenders
      that:


      
      


     

    
      
        
        

      

      
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    SECTION
      5.01. Financial
      Statements and Other Information.
      The
      Borrower will furnish to the Administrative Agent (and the Administrative Agent
      will, promptly after its receipt thereof, forward such copies to the
      Lenders):

     

    (a)    as
      soon
      as available and in any event within 60 days after the end of each of the first
      three fiscal quarterly periods of each fiscal year of the Borrower, or 15 days
      after the date on which its quarterly report for such fiscal quarterly period
      is
      required to be filed with the Securities and Exchange Commission, whichever
      is
      later, consolidated statements of income of the Borrower and its Consolidated
      Subsidiaries for such period and for the period from the beginning of the
      respective fiscal year to the end of such period, consolidated statements of
      cash flows of the Borrower and its Consolidated Subsidiaries from the beginning
      of the applicable fiscal year to the end of such period and the related
      consolidated balance sheets as of the end of such period, setting forth in
      each
      case in comparative form the corresponding consolidated figures for the
      corresponding period in the preceding fiscal year, accompanied by a certificate
      of a Financial Officer of the Borrower, which certificate shall state that
      the
      financial statements fairly present in all material respects the consolidated
      financial condition and results of operations, as the case may be, of the
      Borrower and its Consolidated Subsidiaries in accordance with GAAP, consistently
      applied (except where noted), as of the end of, and for, such period (subject
      to
      normal year-end audit adjustments and the absence of footnotes);

     

    (b)    as
      soon
      as available and in any event within 105 days after the end of each fiscal
      year
      of the Borrower, or 15 days after the date on which its annual report for such
      fiscal year is required to be filed with the Securities and Exchange Commission,
      whichever is later, consolidated statements of income and cash flows of the
      Borrower and its Consolidated Subsidiaries for such year and the related
      consolidated balance sheets as of the end of such year, setting forth in each
      case in comparative form the corresponding consolidated figures for the
      preceding fiscal year, and accompanied by an opinion of independent public
      accountants of recognized national standing selected by the Borrower, which
      opinion shall not contain any qualification or exception as to the scope of
      such
      audit and shall state that the consolidated financial statements fairly present
      in all material respects the consolidated financial condition and results of
      operations of the Borrower and its Consolidated Subsidiaries as of the end
      of,
      and for, such fiscal year and have been prepared in accordance with GAAP,
      consistently applied (except where noted);

     

    (c)    concurrently
      with any delivery of financial statements under clause (a) or (b) above, a
      certificate of a Financial Officer of the Borrower (i) certifying as to whether
      a Default has occurred and, if a Default has occurred, specifying the details
      thereof and any action taken or proposed to be taken with respect thereto,
      (ii)
      setting forth reasonably detailed calculations demonstrating compliance with
      Sections 6.06 and 6.07 and (iii) stating whether any change in GAAP or in the
      application thereof not disclosed in any prior such certificate has occurred
      since December 31, 2005 and, if any such change has occurred, specifying the
      effect of such change on the financial statements accompanying such
      certificate;

     

    (d)    concurrently
      with any delivery of financial statements under clause (b) above, a certificate
      of the accounting firm that reported on such financial statements stating
      whether they obtained knowledge during the course of their examination of such
      financial 

     

    
      
        
        

      

      
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    statements
      of any Default (which certificate may be limited to the extent required by
      accounting rules or guidelines);

     

    (e)    promptly
      upon their becoming available, copies of all registration statements (other
      than
      on Form S-8 or any successor form) and regular periodic reports, if any, that
      the Borrower shall have filed pursuant to Section 13(a) or 15 of the Securities
      Exchange Act of 1934, as amended, with the Securities and Exchange Commission
      (or any governmental agency substituted therefor) or filed with any national
      securities exchange;

     

    (f)    promptly
      upon the mailing thereof to the shareholders of the Borrower generally, copies
      of all financial statements, reports and proxy statements so
      mailed;

     

    (g)    promptly
      upon their becoming available, copies of all current reports on Form 8-K filed
      by the Borrower with the Securities and Exchange Commission, and all similar
      reports filed with any national securities exchange;

     

    (h)    promptly
      upon their becoming available, copies of (i) any certified resolutions of the
      Board of Directors of the Borrower and net earnings certificates delivered
      under
      the Mortgage Indenture in connection with the issuance of Bonds upon the basis
      of net property additions or deposits of cash; any certificates of a Financial
      Officer under either Indenture with respect to amounts charged to replacement
      reserve, detailing insurance on the Borrower’s property or showing compliance by
      the Borrower with the covenants contained in such Indenture; any supplemental
      indentures to either Indenture; any redemption notices under either Indenture;
      and any notices of defaults under either Indenture or accelerations of Bonds;
      (ii) any notices of default under the documentation for any Sale Leaseback
      of
      the Borrower or any Consolidated Subsidiary, any notices of non-payment of
      rent
      or any other material amounts owing under any such Sale Leaseback documentation
      and any notices of acceleration of any amounts due under any such Sale Leaseback
      documentation; and (iii) any written notices from the ACC of non-compliance
      by
      the Borrower or any of its Consolidated Subsidiaries with any material ACC
      decision or with any other rules, regulations or orders of the ACC, and any
      written notices of any extraordinary audit or investigation by the ACC into
      the
      business, affairs or operations of the Borrower or any of its Consolidated
      Subsidiaries;

     

    (i)    
as
      soon
      as practicable and in any event within five Business Days after the Borrower
      receives written notice of an upgrading or a downgrading of the Index Debt
      by
      any Rating Agency, a notice of such upgrading or downgrading;

     

    (j)    
if
      requested by the Administrative Agent, concurrently with any delivery of
      financial statements under clause (a) or (b) above, consolidating statements
      of
      income and cash flows for the applicable periods and the consolidating balance
      sheets as of the end of such periods, accompanied (i) in the case of a delivery
      of financial statements under clause (a) above, by a certificate of a Financial
      Officer of the Borrower, which certificate shall state that such financial
      statements fairly present in all material respects the consolidating financial
      condition and results of operations, as the case may be, of the Borrower and
      its
      Consolidated Subsidiaries in accordance with GAAP, consistently applied (except
      where noted), as of the end of, and for, the applicable period (subject to
      normal year-end audit adjustments), and (ii) in the case of a delivery of
      financial statements under clause (b) above, by (A) a certificate of a Financial
      Officer

     

    
      
        
        

      

      
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    of
      the
      Borrower, which certificate shall state that such consolidating financial
      statements fairly present in all material respects the financial condition
      and
      results of operations of the Borrower and its Consolidated Subsidiaries as
      of
      the end of, and for, the applicable fiscal year and have been prepared in
      accordance with GAAP, consistently applied (except where noted), and (B) a
      certificate of the independent public accountants referred to in clause (i)
      of
      paragraph (b) above, which certificate should state that such consolidating
      financial statements are the consolidating financial statements that served
      as
      the basis for the audited consolidated financial statements in respect of which
      such accountants delivered the opinion referred to in such clause (i);
      and

     

    (k)    promptly
      following any request therefor, such other information regarding the operations,
      business affairs and financial condition of the Borrower or any Subsidiary,
      or
      compliance with the terms of any Loan Document or the Mortgage Indenture, as
      the
      Administrative Agent or any Lender may reasonably request.

     

    So
      long
      as the Borrower is subject to the financial reporting requirements of the
      Securities Exchange Act of 1934, as amended, and the financial statements
      contained in any quarterly or annual reports filed with the Securities and
      Exchange Commission in accordance with such Act and the rules and regulations
      promulgated thereunder, such financial statements may be delivered by the
      Borrower in satisfaction of its obligations to deliver consolidated financial
      statements pursuant to clauses (a) or (b), as the case may be, of this Section
      5.01.

     

    SECTION
      5.02. Notices
      of Material Events.
      The
      Borrower will furnish to the Administrative Agent and each Lender prompt written
      notice of the following:

     

    (a)    the
      occurrence of any Default;

     

    (b)    the
      filing or commencement of any action, suit or proceeding by or before any
      arbitrator or Governmental Authority against or affecting the Borrower or any
      Affiliate thereof as to which there is a reasonable possibility of an adverse
      determination and that, if adversely determined, could reasonably be expected
      to
      result in a Material Adverse Effect;

     

    (c)    the
      occurrence of any ERISA Event that, alone or together with any other ERISA
      Events that have occurred, could reasonably be expected to result in liability
      of the Borrower and its Subsidiaries in an aggregate amount exceeding
      $25,000,000; and

     

    (d)    any
      other
      development that results in, or could reasonably be expected to result in,
      a
      Material Adverse Effect.

     

    Each
      notice delivered under this Section shall be accompanied by a statement of
      a
      Financial Officer or other executive officer of the Borrower setting forth
      the
      details of the event or development requiring such notice and any action taken
      or proposed to be taken with respect thereto.

     

    SECTION
      5.03. Existence;
      Conduct of Business.
      The
      Borrower will, and will cause each of its Consolidated Subsidiaries to, do
      or
      cause to be done all things necessary to preserve, renew and keep in full force
      and effect its legal existence and the rights, licenses, permits, privileges
      and
      franchises material to the conduct of its business, except to the extent the
      failure to do so could not reasonably be expected to result in a Material
      Adverse Effect; provided

     

    
      
        
        

      

      
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    that
      the
      foregoing shall not prohibit any merger, consolidation, liquidation or
      dissolution permitted under Section 6.03.

     

    SECTION
      5.04. Payment
      of Obligations.
      The
      Borrower will, and will cause each of its Consolidated Subsidiaries to, pay
      its
      obligations, including Tax liabilities and assessments (including water
      assessments by the Arizona State Land Department), that, if not paid, could
      reasonably be expected to result in a Material Adverse Effect, before the same
      shall become delinquent or in default, except where (a) the validity or amount
      thereof is being contested in good faith by appropriate proceedings, (b) the
      Borrower or such Subsidiary has set aside on its books adequate reserves with
      respect thereto to the extent required by and otherwise in accordance with
      GAAP
      and (c) the failure to make payment pending such contest could not reasonably
      be
      expected to result in a Material Adverse Effect.

     

    SECTION
      5.05. Maintenance
      of Properties; Insurance.
      The
      Borrower will, and will cause each of its Consolidated Subsidiaries to, (a)
      keep
      and maintain all property material to the conduct of its business in good
      working order and condition, ordinary wear and tear excepted; provided
      that the
      Borrower or any of its Consolidated Subsidiaries may discontinue the operation
      of any of its properties to the extent, in the judgment of the Borrower, it
      is
      no longer advisable to operate such property, or to the extent the Borrower
      or
      such Subsidiary intends to sell or otherwise dispose of such property, which
      disposition is not prohibited by Section 6.04; and (b) maintain, with
      financially sound and reputable insurance companies, or through its own program
      of self-insurance, insurance in such amounts and against such risks as are
      customarily maintained by companies engaged in the same or similar businesses
      operating in the same or similar locations.

     

    SECTION
      5.06. Books
      and Records; Inspection Rights.
      The
      Borrower will, and will cause each of its Consolidated Subsidiaries to, keep
      proper books of record and account in which entries are made of all dealings
      and
      transactions in relation to its business and activities, all in accordance
      with
      customary and prudent business practices. The Borrower will, and will cause
      each
      of its Subsidiaries to, permit any representatives designated by the
      Administrative Agent or any Lender, upon reasonable prior notice, to visit
      and
      inspect its properties, and, subject to contractual or statutory limitations
      regarding confidential or proprietary information, to examine and make extracts
      from its books and records, and to discuss its affairs, finances and condition
      with its officers, all at such reasonable times and as often as reasonably
      requested.

     

    SECTION
      5.07. Compliance
      with Laws and Agreements.
      The
      Borrower will, and will cause each of its Subsidiaries to, comply with (a)
      all
      laws, rules, regulations and orders of any Governmental Authority applicable
      to
      it or its property (including, without limitation, ERISA and Environmental
      Laws)
      and (b) the Revenue Bond Loan Agreements, in each case except where the failure
      to do so, individually or in the aggregate, could not reasonably be expected
      to
      result in a Material Adverse Effect.

     

    SECTION
      5.08. Use
      of
      Proceeds and Letters of Credit.
      The
      proceeds of the Loans and the Revolving Letters of Credit will be used only
      for
      general corporate purposes.
      No
      part
      of the proceeds of any Loan or of any Letter of Credit will be used, whether
      directly or indirectly, for any purpose that entails a violation of any of
      the
      regulations of the Board, including Regulations U and X. Each Revenue Bond
      Letter of Credit will be issued only to

     

    
      
        
        

      

      
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    support
      the Revenue Bonds set forth on Schedule 2.04 corresponding to such Revenue
      Bond
      Letter of Credit.

     

    SECTION
      5.09. Environmental
      Laws.

     

    (a)    The
      Borrower will, and will cause each of its Consolidated Subsidiaries to, comply
      with, and use commercially reasonable efforts to insure compliance by all
      tenants and subtenants, if any, with, all Environmental Laws, and will, and
      will
      cause each of its Consolidated Subsidiaries to, obtain and comply with and
      maintain, and use commercially reasonable efforts to insure that all tenants
      and
      subtenants obtain and comply with and maintain, any and all licenses, approvals,
      registrations or permits required by Environmental Laws, except to the extent
      that failure to do so could not reasonably be expected to have a Material
      Adverse Effect;

     

    (b)    The
      Borrower will, and will cause each of its Consolidated Subsidiaries to, conduct
      and complete all investigations, studies, sampling and testing, and all
      remedial, removal and other actions required under Environmental Laws, except
      to
      the extent that the failure to take such actions could not reasonably be
      expected to have a Material Adverse Effect, and promptly comply with all lawful
      orders and directives of all Governmental Authorities respecting Environmental
      Laws, except to the extent that the same are being contested in good faith
      by
      appropriate proceedings and the pendency of such proceedings could not
      reasonably be expected to have a Material Adverse Effect.

     

    SECTION
      5.10. Further
      Assurances.
      The
      Borrower will, and will cause each of its Consolidated Subsidiaries to, execute
      any and all further documents, financing statements, agreements and instruments,
      and take all such further actions (including the filing and recording of
      financing statements, fixture filings, mortgages, deeds of trust and other
      documents), which may be required under any applicable law, or which the
      Administrative Agent or the Required Lenders may reasonably request, to
      effectuate the transactions contemplated by the Loan Documents or under the
      Mortgage Indenture or to grant, preserve, protect or perfect the Liens created
      or intended to be created by the Mortgage Indenture or the Security Documents
      or
      the validity or priority of any such Lien, all at the expense of the Borrower.
      The Borrower also agrees to provide to the Administrative Agent, from time
      to
      time upon request, evidence reasonably satisfactory to the Administrative Agent
      as to the perfection and priority of the Liens created or intended to be created
      by the Security Documents or by or under the Mortgage Indenture.

     

    ARTICLE
      VI

    Negative
      Covenants

     

    Until
      the
      Aggregate Commitments have expired or been terminated, the principal of and
      interest on each Loan and all fees and other amounts payable hereunder have
      been
      paid in full, all Letters of Credit have expired or terminated and all LC
      Disbursements have been reimbursed in full, the Borrower covenants and agrees
      with the Administrative Agent, the Issuing Banks and the Lenders
      that:

     

    
      
        
        

      

      
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    SECTION
      6.01. Indebtedness.
      The
      Borrower will not permit:

     

    (a)    the
      aggregate principal amount of Mortgage Bonds outstanding at any time to exceed
      the sum of (i) $750,000,000 plus
      (ii) the excess, if any, of (x) the aggregate amount of the Revolving
      Commitments over (y) $60,000,000; provided
      that
      there shall be disregarded for purposes of any determination under this
      paragraph the principal amount of any outstanding Mortgage Bonds which (A)
      are
      to be redeemed or paid at maturity within 90 days after the date of such
      determination or (B) evidence or secure the Borrower’s obligations in respect of
      industrial development revenue bonds of the same principal amount (or related
      reimbursement obligations) which are to be redeemed or paid at maturity within
      90 days after the date of such determination; provided,
      however,
      that
      (1) in the case of any such redemption, either irrevocable and unconditional
      notice of redemption shall have been given or irrevocable and unconditional
      instructions shall have been given to the related trustee to give such notice
      of
      redemption and (2) in the case of any such redemption or payment, cash in an
      amount sufficient to redeem or repay the Mortgage Bonds to be disregarded (or
      the obligations evidenced or secured thereby) shall have been deposited with
      the
      applicable trustee for the redemption or payment thereof; or

     

    (b)    the
      aggregate amount of Guarantees by the Borrower and the Consolidated Subsidiaries
      (other than Guarantees of the Obligations and other than Guarantees by the
      Borrower or any Consolidated Subsidiary of Indebtedness or obligations of the
      Borrower or a Consolidated Subsidiary) outstanding at any time to exceed
      $30,000,000.

     

    SECTION
      6.02. Liens.
      The
      Borrower will not, and will not permit any Subsidiary to, create, incur, assume
      or permit to exist any Lien on the Mortgaged Property (as defined in the
      Mortgage Indenture) now owned or hereafter acquired by the Borrower, or any
      income therefrom, prior to the Lien of the Mortgage Indenture, except Permitted
      Encumbrances and Prepaid Liens (as such terms are defined in the Mortgage
      Indenture) and any other Liens expressly permitted pursuant to Section 5 of
      Article IV of the Mortgage Indenture.

     

    SECTION
      6.03. Fundamental
      Changes.

     

    (a)    The
      Borrower will not, and will not permit any of its Consolidated Subsidiaries
      to,
      merge into or consolidate with any other Person, or permit any other Person
      to
      merge into or consolidate with it, or sell, transfer, lease or otherwise dispose
      of (in one transaction or in a series of transactions) its assets as an entirety
      or substantially as an entirety, or all or substantially all of the Capital
      Stock of any of its Consolidated Subsidiaries (in each case, whether now owned
      or hereafter acquired), or liquidate or dissolve, except that, if at the time
      thereof and immediately after giving effect thereto no Default shall have
      occurred and be continuing (i) any Person may merge into the Borrower in a
      transaction in which the Borrower is the surviving corporation, (ii) any
      Consolidated Subsidiary may merge with any other Consolidated Subsidiary, and
      (iii) the Borrower may merge with or into or consolidate with or transfer its
      assets as an entirety or substantially as an entirety to any Person, so long
      as
      (A) immediately prior to and immediately after giving effect to such merger,
      consolidation or transfer, the Person with or into which the Borrower shall
      ultimately merge or consolidate or to whom the Borrower shall ultimately
      transfer its assets as an entirety or substantially as an entirety is in the
      Utility Business; (B) the Required Lenders shall have determined (so long
      as

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    such
      determination is exercised in good faith and after consultation with the
      Borrower) that the rating of the first mortgage bonds (or bonds otherwise
      denominated that benefit from a first Lien on such Person’s utility assets, or,
      if such Person has no first mortgage bonds, the rating of the senior unsecured
      long-term Indebtedness of such Person that is not guaranteed and does not
      benefit from any other credit enhancement) of the surviving Person of any such
      merger, consolidation, acquisition or transfer of assets shall be at least
      BBB-
      or higher by S&P and Baa3 or higher by Moody’s (unless the requirements of
      this clause (B) shall have been waived by the Required Lenders); provided
      that the
      requirement of this clause (B) shall be deemed to have been satisfied if, prior
      to the consummation of any such merger, consolidation or transfer, the Borrower
      shall have delivered written evidence from each such Rating Agency to the effect
      that, upon such merger, consolidation or transfer, the applicable rating of
      such
      surviving Person would be equal to or higher than the ratings specified in
      this
      clause (B); (C) in the case of any merger or consolidation or transfer of assets
      in which the Borrower is not the surviving corporation, the Person formed by
      any
      such consolidation or transfer of assets or into which the Borrower shall be
      merged or consolidated or to which such assets are transferred shall have
      executed an agreement in form reasonably satisfactory to the Administrative
      Agent containing an assumption by the surviving Person of the due and punctual
      performance of each obligation, agreement, covenant and condition of each of
      the
      Loan Documents and the Mortgage Indenture to be performed or complied with
      by
      the Borrower; and (D) the Administrative Agent shall have received an opinion
      of
      counsel, in form and substance reasonably satisfactory to the Administrative
      Agent and its counsel, with respect to the due authorization, execution,
      delivery, validity and enforceability of the assumption agreement referred
      to in
      clause (C) of this Section 6.03, of the enforceability and continuation of
      the
      Liens created pursuant to the Security Documents and such other matters as
      the
      Required Lenders may reasonably require.

     

    (b)    The
      Borrower will not, and will not permit any of its Consolidated Subsidiaries
      to,
      engage to any material extent in any business other than the Utility
      Business.

     

    SECTION
      6.04. Sale
      of Assets.

     

    (a)    The
      Borrower will not, and will not permit any of its Consolidated Subsidiaries
      to,
      convey, sell, lease, assign, transfer or otherwise dispose of any of its
      property, business or assets (including leasehold interests), whether now owned
      or hereafter acquired, except:

     

    (i)    
inventory
      and other property in the ordinary course of business; 

     

    (ii)    sales
      of
      accounts receivable;

     

    (iii)   property,
      businesses or assets (including receivables and leasehold interests) with an
      aggregate Fair Value not in excess of $250,000,000; provided
      that the
      aggregate Fair Value of such property, businesses or assets permitted to be
      disposed of pursuant to this clause (iii) shall be increased on a dollar for
      dollar basis by the aggregate amount of each reduction of the Aggregate
      Commitments in respect of which the Borrower shall have given the Administrative
      Agent, for the benefit of the Lenders, written evidence of the Borrower’s
      agreement not to issue Indebtedness under the Mortgage Indenture based upon
      the
      Mortgage Bonds retired in connection with such reduction;

     

    
      
        
        

      

      
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    (iv)  
property
      in connection with any securitization (e.g.,
      stranded costs) or sale of assets required by law; and

     

    (v)   any
      sale
      of the Borrower’s assets as an entirety or substantially as an entirety in
      accordance with Section 6.03, provided
      that any
      assets of the Borrower not included in such sale shall be deemed to have been
      disposed of in a transaction subject to the limitations of this Section 6.04,
      including the dollar limit set forth in clause (iii) above;

     

    provided,
      that
      any Consolidated Subsidiary may convey, sell, lease, assign, transfer or
      otherwise dispose of any of its property, business or assets to the Borrower
      or
      any other Consolidated Subsidiary. Investments by the Borrower and the
      Consolidated Subsidiaries in, and contributions by the Borrower and the
      Consolidated Subsidiaries to, Consolidated Subsidiaries shall be deemed not
      to
      constitute transfers of assets subject to the limitations of this Section 6.04
      to the extent such investments or contributions are made in cash.

     

    (b)    Without
      limitation of subsection (a) above, the Borrower will not, and will not permit
      any of its Consolidated Subsidiaries to, convey, sell, lease, assign, transfer
      or otherwise dispose of all or substantially all of its generating assets
      (including leasehold interests), whether now owned or hereafter acquired, except
      as required by applicable law.

     

    SECTION
      6.05. Restricted
      Payments.

     

    (a)    The
      Borrower will not declare or make, or agree to pay or make, directly or
      indirectly, any Restricted Payment at any time that any Default has occurred
      and
      is continuing or would occur as a result of such action, except that (i) the
      Borrower may declare and pay dividends with respect to its capital stock payable
      solely in additional shares of its common stock and (ii) the Borrower may make
      Restricted Payments pursuant to and in accordance with stock option plans or
      other benefit plans for management or employees of the Borrower and its
      Subsidiaries.

     

    (b)    The
      Borrower will not, and will not permit any Consolidated Subsidiary to, directly
      or indirectly, purchase or acquire any Capital Stock, evidences of indebtedness
      or other securities (including any option, warrant or other right to acquire
      any
      of the foregoing) of, make any loans or advances to, Guarantee any obligations
      of, or make any investment or otherwise acquire any other interest in, any
      Affiliate of the Borrower (other than a Consolidated Subsidiary) (each of the
      foregoing, an “Affiliate
      Investment”),
      at
      any time that a Default has occurred and is continuing or, as a result of the
      making of such Affiliate Investment, would occur or would be deemed to occur
      pursuant to the next sentence. For purposes of determining whether a Default
      would be deemed to occur under Section 6.06 or 6.07 as a result of an Affiliate
      Investment, the applicable computations shall be made as if the Affiliate
      Investment were a dividend and did not result in the creation of any
      asset.

     

    
      
        
        

      

      
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    SECTION
      6.06. Cash
      Coverage Ratio.
      The
      Borrower will not permit the ratio of (a) Consolidated EBITDA to (b)
      Consolidated Interest Expense, in each case for the twelve-month period ended
      on
      the last day of any fiscal quarter commencing with the fiscal quarter ended
      June
      30, 2006, to be less than 2.25 to 1.0.

     

    SECTION
      6.07. Leverage
      Test.
      The
      Borrower will not permit the ratio of (a) Consolidated Total Indebtedness at
      the
      end of any fiscal quarter to (b) Consolidated EBITDA for the twelve-month period
      ended on such date to be greater than the amount specified in the chart below
      for the period in which such date shall occur:

    


    
      	
              Period

            	
              Maximum
                Ratio

            
	
              From
                the Effective Date through and including December 31, 2006

            	
              4.50

            
	
              From
                January 1, 2007 through and including December 31, 2007

            	
              4.25

            
	
              From
                and after January 1, 2008

            	
              4.00

            


    

     

    SECTION
      6.08. Amendments
      to Documents.
      The
      Borrower will not, and will not permit any Consolidated Subsidiary to, amend,
      modify or change, or consent or agree to any amendment, modification or change
      to, the Mortgage Indenture, the Sixth Supplemental Indenture, the Seventh
      Supplemental Indenture (upon the execution and delivery thereof pursuant to
      the
      terms of this Agreement), any Revenue Bond Indenture, any Revenue Bond Loan
      Agreement or any Revenue Bonds without the prior written consent of the Required
      Lenders and any Issuing Bank affected thereby, provided
      that (i)
      such consent shall not be required in connection with any amendment of the
      Mortgage Indenture for which the Mortgage Indenture does not require the consent
      of any bondholder, (ii) such consent shall not be unreasonably withheld with
      respect to any amendment of the Mortgage Indenture that has been approved by
      bondholders entitled to vote under the Mortgage Indenture who hold bonds in
      an
      aggregate principal amount greater than the principal amount of the Collateral
      Mortgage Bonds and (iii) such consent shall not be required in connection with
      any amendment of any Revenue Bond Indenture, any Revenue Bond Loan Agreement
      or
      any Revenue Bonds to provide for a mandatory tender of Revenue Bonds at any
      time
      when such Revenue Bonds are currently subject to mandatory redemption at a
      purchase price which does not exceed the applicable redemption
      price.

     

    SECTION
      6.09. Sale
      Leaseback Transactions.
      The
      Borrower will not, and will not permit any of its Subsidiaries to, enter into
      any Sale Leaseback if the aggregate annual basic rent payments under all Sale
      Leasebacks entered into by the Borrower and its Subsidiaries after the date
      hereof would exceed $20,000,000 in any fiscal year after giving effect to such
      Sale Leaseback.

     

    SECTION
      6.10. Release
      of Collateral under the Mortgage Indenture.
      The
      Borrower will not, and will not permit any of its Subsidiaries to, permit any
      asset (including any

     

    
      
        
        

      

      
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    cash)
      to
      be released from the Lien of the Mortgage Indenture other than in accordance
      with the terms and provisions of the Mortgage Indenture.

     

    SECTION
      6.11. Transactions
      with Affiliates.
      The
      Borrower will not, and will not permit any of the Consolidated Subsidiaries
      to,
      sell, lease or otherwise transfer any property or assets to, or purchase, lease
      or otherwise acquire any property or assets from, or otherwise engage in any
      other transactions with, any of its Affiliates which are not Consolidated
      Subsidiaries, except (a) at prices and on terms and conditions not less
      favorable to the Borrower or such Subsidiary than could be obtained on an
      arm’s-length basis from unrelated third parties, (b) transactions between or
      among the Borrower and the Consolidated Subsidiaries not involving any other
      Affiliate, (c) any Restricted Payment permitted by Section 6.05(a), (d) shared
      corporate or administrative services and staffing with Affiliates, including
      accounting, legal, human resources and treasury operations, provided on
      customary terms for similarly situated companies, (e) tax sharing arrangements
      on customary terms for similarly situated companies, (f) customary fees paid
      to
      members of the board of directors of the Borrower and the Consolidated
      Subsidiaries who are not officers of the Borrower or any Subsidiary and (g)
      transactions to acquire, either through asset purchases, mergers or purchases
      of
      Capital Stock, the business and operations of Southwest Energy Solutions, Inc.
      or Millennium Environmental Group, Inc.

     

    SECTION
      6.12. Limitation
      on Hedge Agreements.
      The
      Borrower will not, and will not permit any of the Consolidated Subsidiaries
      to,
      enter into any Hedge Agreement other than Hedge Agreements entered into in
      the
      ordinary course of business.

     

    SECTION
      6.13. Restrictive
      Agreements.
      The
      Borrower will not, and will not permit any of its Consolidated Subsidiaries
      to,
      directly or indirectly, enter into, incur or permit to exist any agreement
      or
      other arrangement that prohibits, restricts or imposes any condition upon the
      ability of any Consolidated Subsidiary to pay dividends or other distributions
      with respect to any shares of its Capital Stock or to make or repay loans or
      advances to the Borrower or any other Consolidated Subsidiary or to Guarantee
      Indebtedness of the Borrower or any other Consolidated Subsidiary; provided
      that the
      foregoing shall not apply to restrictions and conditions (i) imposed by law,
      (ii) imposed by any Loan Document, (iii) contained in agreements entered into
      after the Effective Date which contain restrictions no more restrictive than
      those contained in the Loan Documents and (iv) contained in agreements relating
      to the sale of a Subsidiary pending such sale; provided
      in the
      case of this clause (iv) such restrictions and conditions apply only to the
      Subsidiary that is to be sold and such sale is permitted hereunder.


     

    ARTICLE
      VII

    Events
      of Default

     

    If
      any of
      the following events (“Events
      of Default”)
      shall
      occur:

     

    (a)    the
      Borrower shall fail to pay any principal of any Loan or any reimbursement
      obligation in respect of any LC Disbursement when and as the same shall become
      due and payable, whether at the due date thereof or at a date fixed for
      prepayment thereof or otherwise, subject in the case of any such reimbursement
      obligation to a grace period of two days;

     

    
      
        
        

      

      
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    (b)    the
      Borrower shall fail to pay any interest on any Loan or any fee or any other
      amount (other than an amount referred to in clause (a) of this Article) payable
      under this Agreement or any other Loan Document, when and as the same shall
      become due and payable, and such failure shall continue unremedied for a period
      of five days;

     

    (c)    any
      representation or warranty made or deemed made by or on behalf of the Borrower
      or any Consolidated Subsidiary in or in connection with any Loan Document or
      any
      amendment or modification thereof or waiver thereunder, or in any report,
      certificate, financial statement or other document furnished pursuant to or
      in
      connection with any Loan Document or any amendment or modification thereof
      or
      waiver thereunder, shall prove to have been incorrect in any material respect
      when made or deemed made;

     

    (d)    the
      Borrower shall fail to observe or perform any covenant, condition or agreement
      contained in Section 5.02, 5.03 (with respect to the Borrower’s existence) or
      5.08 or in Article VI;

     

    (e)    the
      Borrower shall fail to observe or perform any covenant, condition or agreement
      contained in any Loan Document (other than those specified in clause (a), (b)
      or
      (d) of this Article), and such failure shall continue unremedied for a period
      of
      30 days after notice thereof from the Administrative Agent to the Borrower
      (which notice will be given at the request of any Lender);

     

    (f)    the
      Borrower or any Significant Subsidiary shall fail to make any payment of
      principal (regardless of amount) in respect of any Material Indebtedness, when
      and as the same shall become due and payable;

     

    (g)    any
      event
      or condition occurs that results in any Material Indebtedness becoming due
      prior
      to its scheduled maturity or that enables or permits (with or without the giving
      of notice, the lapse of time or both) the holder or holders of any Material
      Indebtedness or any trustee or agent on its or their behalf to cause any
      Material Indebtedness to become due, or to require the prepayment, repurchase,
      redemption (other than pursuant to provisions permitting the tendering of such
      Indebtedness from time to time for repurchase or redemption without regard
      to
      the occurrence or non-occurrence of any event or condition) or defeasance
      thereof, prior to its scheduled maturity; provided
      that
      this clause (g) shall not apply to secured Indebtedness that becomes due as
      a
      result of the voluntary sale or transfer of the property or assets securing
      such
      Indebtedness;

     

    (h)    an
      involuntary proceeding shall be commenced or an involuntary petition shall
      be
      filed seeking (i) liquidation, reorganization or other relief in respect of
      the
      Borrower or any Significant Subsidiary or its debts, or of a substantial part
      of
      its assets, under any Federal, state or foreign bankruptcy, insolvency,
      receivership or similar law now or hereafter in effect or (ii) the appointment
      of a receiver, trustee, custodian, sequestrator, conservator or similar official
      for the Borrower or any Significant Subsidiary or for a substantial part of
      its
      assets, and, in any such case, such proceeding or petition shall continue
      undismissed for 60 days or an order or decree approving or ordering any of
      the
      foregoing shall be entered;

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

     

    (i)    
the
      Borrower or any Significant Subsidiary shall (i) voluntarily commence any
      proceeding or file any petition seeking liquidation, reorganization or other
      relief under any Federal, state or foreign bankruptcy, insolvency, receivership
      or similar law now or hereafter in effect, (ii) consent to the institution
      of,
      or fail to contest in a timely and appropriate manner, any proceeding or
      petition described in clause (h) of this Article, (iii) apply for or consent
      to
      the appointment of a receiver, trustee, custodian, sequestrator, conservator
      or
      similar official for the Borrower or any Significant Subsidiary or for a
      substantial part of its assets, (iv) file an answer admitting the material
      allegations of a petition filed against it in any such proceeding, (v) make
      a
      general assignment for the benefit of creditors or (vi) take any action for
      the
      purpose of effecting any of the foregoing;

     

    (j)    
the
      Borrower or any Significant Subsidiary shall become unable, admit in writing
      its
      inability or fail generally to pay its debts as they become due;

     

    (k)    one
      or
      more judgments for the payment of money in an aggregate amount in excess of
      $20,000,000 shall be rendered against the Borrower, any Significant Subsidiary
      or any combination thereof and the same shall remain undischarged for a period
      of 30 consecutive days during which execution shall not be effectively stayed,
      or any action shall be legally taken by a judgment creditor to attach or levy
      upon any assets of the Borrower or any Significant Subsidiary to enforce any
      such judgment;

     

    (l)    
an
      ERISA
      Event shall have occurred that, when taken together with all other ERISA Events
      that have occurred, has resulted or could reasonably be expected to result
      in a
      Material Adverse Effect;

     

    (m)   (i)
      any
      Lien purported to be created under any Security Document or the Mortgage
      Indenture shall cease to be, or shall be asserted by the Borrower or any
      Consolidated Subsidiary not to be, a valid and perfected Lien on any collateral
      subject thereto, with the priority required by the applicable Security Document
      or the Mortgage Indenture, as applicable, except (A) as a result of the sale
      or
      other disposition of the applicable Collateral in a transaction permitted under
      the Loan Documents or (B) as a result of the Administrative Agent’s failure to
      maintain possession of any stock certificates, promissory notes or other
      instruments delivered to it under any Security Document, or (ii) any Collateral
      Mortgage Bond shall for any reason (x) cease to be entitled to the benefits
      of
      the Mortgage Indenture or to be secured by the Lien of the Mortgage Indenture
      equally and ratably with all other bonds, if any, outstanding under the Mortgage
      Indenture or (y) cease to be a legal, valid and binding obligation of the
      Borrower; or

     

    (n)    any
      Change in Control shall occur; or

     

    (o)    any
      material provision of this Agreement or any other Loan Document to which the
      Borrower is a party shall for any reason, except to the extent permitted by
      the
      express terms hereof or thereof, cease to be valid and binding on or enforceable
      against the Borrower, or the Borrower shall so assert in writing;

     

    then,
      and
      in every such event (other than an event with respect to the Borrower described
      in clause (h) or (i) of this Article), and at any time thereafter during the
      continuance of such event, (A) the Revenue Bond Issuing Banks (in the case
      of
      clauses (iii) and (vi) below) shall, at the

     

    
      
        
        

      

      
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    request
      of the Administrative Agent or the Required Lenders, and (B) the Administrative
      Agent may, and at the request of the Required Lenders shall, in each case by
      notice to the Borrower, take any or all of the following actions, at the same
      or
      different times: (i) terminate the Aggregate Commitments, and thereupon the
      Aggregate Commitments shall terminate immediately, (ii) declare the Loans and
      LC
      Disbursements then outstanding to be due and payable in whole (or in part,
      in
      which case any principal not so declared to be due and payable may thereafter
      be
      declared to be due and payable), and thereupon the principal of the Loans and
      LC
      Disbursements so declared to be due and payable, together with accrued interest
      thereon and all fees and other obligations of the Borrower accrued hereunder,
      shall become due and payable immediately, without presentment, demand, protest
      or other notice of any kind, all of which are hereby waived by the Borrower,
      (iii) take any action under Section 2.04(k), (iv) deliver a notice of redemption
      under the Sixth Supplemental Indenture or the Seventh Supplemental Indenture
      (as
      applicable) stating that such notice is being delivered pursuant to this Article
      VII, (v) require
      the Borrower to (in which case the Borrower shall) deposit immediately with
      the
      Administrative Agent cash collateral in
      an
      amount
      equal to the aggregate
      undrawn
      amount of all outstanding Letters of Credit at such time, to
      be
      held by the Administrative Agent (for the benefit of the Issuing Banks and
      the
      Lenders) as security
      for the Borrower’s reimbursement obligations in respect of such Letters of
      Credit, and (vi) direct the Revenue Bond Issuing Banks to (in which case the
      Revenue Bond Issuing Banks shall) exercise the rights and remedies available
      under the Revenue Bond Pledge Agreements and, in addition thereto, all the
      rights and remedies of a secured party on default under the Uniform Commercial
      Code as in effect in the State of New York at that time in respect of the
      Collateral (as defined in the Revenue Bond Pledge Agreements); and in case
      of
      any event with respect to the Borrower described in clause (h) or (i) of this
      Article, the Aggregate Commitments shall automatically terminate and the
      principal of the Loans and LC Disbursements then outstanding, together with
      accrued interest thereon and all fees and other obligations of the Borrower
      accrued hereunder and the cash collateral referred to in clause (v) above,
      shall
      automatically become due and payable, without presentment, demand, protest
      or
      other notice of any kind, all of which are hereby waived by the Borrower.
Notwithstanding
      anything to the contrary contained herein, no notice given or declaration made
      by the Administrative Agent pursuant to this Article VII shall affect (1) the
      obligation of any Issuing Bank to make any payment under any Letter of Credit
      issued by such Issuing Bank in accordance with the terms of such Letter of
      Credit or (2) the participatory interest of each Lender in each such
      payment.

     

    ARTICLE
      VIII

    The
      Administrative Agent

     

    Each
      of
      the Lenders and the Issuing Banks hereby irrevocably appoints the Administrative
      Agent as its agent and authorizes the Administrative Agent to take such actions
      on its behalf and to exercise such powers as are delegated to the Administrative
      Agent by the terms of the Loan Documents, together with such actions and powers
      as are reasonably incidental thereto. The Required Lenders or the Borrower
      may
      at any time, with the consent of the Borrower (provided
      that
      such consent shall not be required if an Event of Default under clause (a),
      (b),
      (h), (i) or (j) of Article VII shall have occurred and is continuing) or the
      Required Lenders, as the case may be, replace the Administrative Agent (it
      being
      understood that any such replacement Administrative Agent shall be a Person
      that
      serves as Administrative Agent for other credit facilities of a comparable
      size), provided
      that the
      Required Lenders or the Borrower

     

    
      
        
        

      

      
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    may
      not
      replace the Administrative Agent unless, after giving effect to such replacement
      and each contemporaneous assignment, the Required Lenders or the Borrower shall
      have arranged in connection with such replacement, to the extent requested
      by
      the Administrative Agent, that (a) neither the Administrative Agent nor any
      of
      its Affiliates shall have outstanding any Letter of Credit, Loan, LC
      Disbursement, Revolving Commitment, Revenue Bond Commitment or other obligation
      of any kind under this Agreement or any other Loan Document and (b) each of
      the
      Administrative Agent and its Affiliates shall have received payment in full
      of
      all amounts owing to it under or in respect of this Agreement and each other
      Loan Document.

     

    The
      bank
      serving as the Administrative Agent hereunder shall have the same rights and
      powers in its capacity as a Lender as any other Lender and may exercise the
      same
      as though it were not the Administrative Agent, and such bank and its Affiliates
      may accept deposits from, lend money to and generally engage in any kind of
      business with the Borrower or any Subsidiary or other Affiliate thereof as
      if it
      were not the Administrative Agent hereunder.

     

    The
      Administrative Agent shall not have any duties or obligations except those
      expressly set forth in the Loan Documents. Without limiting the generality
      of
      the foregoing, (a) the Administrative Agent shall not be subject to any
      fiduciary or other implied duties, regardless of whether a Default has occurred
      and is continuing, (b) the Administrative Agent shall not have any duty to
      take
      any discretionary action or exercise any discretionary powers, except
      discretionary rights and powers expressly contemplated by the Loan Documents
      that the Administrative Agent is required to exercise in writing by the Required
      Lenders (or such other number or percentage of the Lenders as shall be necessary
      under the circumstances as provided in Section 9.02), and (c) except as
      expressly set forth in the Loan Documents, the Administrative Agent shall not
      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 Subsidiaries that is
      communicated to or obtained by the bank serving as Administrative Agent or
      any
      of its Affiliates in any capacity. The Administrative Agent shall not be liable
      for any action taken or not taken by it with the consent or at the request
      of
      the Required Lenders (or such other number or percentage of the Lenders as
      shall
      be necessary under the circumstances as provided in Section 9.02) or in the
      absence of its own gross negligence or willful misconduct. The Administrative
      Agent shall be deemed not to have knowledge of any Default unless and until
      written notice thereof is given to the Administrative Agent by the Borrower
      or a
      Lender, and the Administrative Agent shall not be responsible for or have any
      duty to ascertain or inquire into (i) any statement, warranty or representation
      made in or in connection with any Loan Document, (ii) the contents of any
      certificate, report or other document delivered hereunder or in connection
      herewith, (iii) the performance or observance of any of the covenants,
      agreements or other terms or conditions set forth in any Loan Document, (iv)
      the
      validity, enforceability, effectiveness or genuineness of any Loan Document
      or
      any other agreement, instrument or document, or (v) the satisfaction of any
      condition set forth in Article IV or elsewhere in any Loan Document, other
      than
      to confirm receipt of items expressly required to be delivered to the
      Administrative Agent. Notwithstanding anything herein to the contrary, no Lender
      identified as a Co-Syndication Agent or a Co-Documentation Agent shall have
      any
      separate duties, responsibilities, obligations or authority as Co-Syndication
      Agent or Co-Documentation Agent.

     

    The
      Administrative Agent shall be entitled to rely upon, and shall not incur any
      liability for relying upon, any notice, request, certificate, consent,
      statement, instrument,

     

    
      
        
        

      

      
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    document
      or other writing believed by it to be genuine and to have been signed or sent
      by
      the proper Person. The Administrative Agent also may rely upon any statement
      made to it orally or by telephone and believed by it to be made by the proper
      Person, and shall not incur any liability for relying thereon. The
      Administrative Agent may consult with legal counsel (who may be counsel for
      the
      Borrower), independent accountants and other experts selected by it, and shall
      not be liable for any action taken or not taken by it in accordance with the
      advice of any such counsel, accountants or experts.

     

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

     

    Subject
      to the appointment and acceptance of a successor Administrative Agent as
      provided in this paragraph, the Administrative Agent may resign at any time
      by
      notifying the Lenders, the Issuing Banks and the Borrower. Upon any such
      resignation, the Required Lenders shall have the right, in consultation with
      the
      Borrower, to appoint a successor. If no successor shall have been so appointed
      by the Required Lenders and shall have accepted such appointment within 30
      days
      after the retiring Administrative Agent gives notice of its resignation, then
      the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
      Banks, appoint a successor Administrative Agent, which shall be any commercial
      bank organized under the laws of the United States of America or any State
      thereof having a combined capital and surplus and undivided profits of not
      less
      than $500,000,000, or an Affiliate of any such bank.

     

    Upon
      the
      acceptance of its appointment as Administrative Agent hereunder by a successor
      or replacement, such successor or replacement shall succeed to and become vested
      with all the rights, powers, privileges and duties of the retiring or replaced
      Administrative Agent, and the retiring or replaced Administrative Agent shall
      be
      discharged from its duties and obligations hereunder. The fees payable by the
      Borrower to a successor Administrative Agent shall be the same as those payable
      to its predecessor unless otherwise agreed between the Borrower and such
      successor. After the Administrative Agent’s resignation or replacement
      hereunder, the provisions of this Article and Section 9.03 shall continue in
      effect for the benefit of such retiring Administrative Agent, its sub-agents
      and
      their respective Related Parties in respect of any actions taken or omitted
      to
      be taken by any of them while it was acting as Administrative
      Agent.

     

    Each
      Lender acknowledges that it has, independently and without reliance upon the
      Administrative 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 Agreement. Each Lender also acknowledges that it
      will, independently and without reliance upon the Administrative Agent or any
      other Lender and based on such documents and information as it shall from time
      to time deem appropriate, continue to make its own decisions in

     

    
      
        
        

      

      
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    taking
      or
      not taking action under or based upon this Agreement, any other Loan Document
      or
      related agreement or any document furnished hereunder or
      thereunder.

     

    ARTICLE
      IX

    Miscellaneous

     

    SECTION
      9.01. Notices.
      

     

    (a)    Except
      in
      the case of notices and other communications expressly permitted to be given
      by
      telephone (and subject to paragraph (b) below), all notices and other
      communications provided for herein shall be in writing and shall be delivered
      by
      hand or overnight courier service, mailed by certified or registered mail or
      sent by telecopy, as follows:

     

    (i)    
if
      to the
      Borrower, to it at One South Church Avenue, Tucson, Arizona 85701, Attention
      of
      Chief Financial Officer (Telecopy No. (520) 884-3612); 

     

    (ii)    if
      to the
      Administrative Agent, to Union Bank of California, N.A., 445 South Figueroa
      Street, 15th
      Floor,
      Los Angeles, California 90071, Attention of Kevin Zitar (Telecopy No. (213)
      236-4096); and 

     

    (iii)   if
      to any
      other Agent, any Issuing Bank or any Lender, to it at its address (or telecopy
      number) set forth in its Administrative Questionnaire.

     

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

     

    (c)    Any
      party
      hereto may change its address or telecopy number for notices and other
      communications hereunder by notice to the other parties hereto. All notices
      and
      other communications given to any party hereto in accordance with the provisions
      of this Agreement shall be deemed to have been given on the date of
      receipt.

     

    SECTION
      9.02. Waivers;
      Amendments.

     

    (a)    No
      failure or delay by the Administrative Agent, any Issuing Bank or any Lender
      in
      exercising any right or power hereunder or under any other Loan Document or
      the
      Mortgage Indenture shall operate as a waiver thereof, nor shall any single
      or
      partial exercise of any such right or power, or any abandonment or
      discontinuance of steps to enforce such a right or power, preclude any other
      or
      further exercise thereof or the exercise of any other right or power. The rights
      and remedies of the Administrative Agent, the Issuing Banks and the Lenders
      hereunder and under the other Loan Documents and the Mortgage Indenture are
      cumulative and are not exclusive of any rights or remedies that they would
      otherwise have. No waiver of any provision of any Loan Document or consent
      to
      any departure by the Borrower therefrom shall in

     

    
      
        
        

      

      
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    any
      event
      be effective unless the same shall be permitted by paragraph (b) of this
      Section, and then such waiver or consent shall be effective only in the specific
      instance and for the purpose for which given. Without limiting the generality
      of
      the foregoing, the making of a Loan or issuance of a Letter of Credit shall
      not
      be construed as a waiver of any Default, regardless of whether the
      Administrative Agent, any Lender or any Issuing Bank may have had notice or
      knowledge of such Default at the time.

     

    (b)    Neither
      this Agreement nor any other Loan Document nor any provision hereof or thereof
      may be waived, amended or modified except, in the case of this Agreement,
      pursuant to an agreement or agreements in writing entered into by the Borrower
      and the Required Lenders or by the Borrower and the Administrative Agent with
      the consent of the Required Lenders or, in the case of any other Loan Document,
      pursuant to an agreement or agreements in writing entered into by the
      Administrative Agent and the Borrower, in each case with the consent of the
      Required Lenders or, in the case of the Sixth Supplemental Indenture, the
      Seventh Supplemental Indenture or the Collateral Mortgage Bonds, in each case
      with the consent of the Required Lenders and as provided by the Mortgage
      Indenture with the Administrative Agent exercising the rights of the holder
      of
      the Collateral Mortgage Bonds and acting at the direction of the Required
      Lenders; provided
      that no
      such agreement shall (i) increase any Revolving Commitment or Revenue Bond
      Commitment of any Lender without the written consent of such Lender, (ii) reduce
      the principal amount of any Loan or LC Disbursement or reduce the rate of
      interest thereon, or reduce any fees payable hereunder, or change the definition
      of “Applicable Margin” or “Commitment Fee Rate”, in each case without the
      written consent of each Lender affected thereby, (iii) postpone the scheduled
      date of payment of the principal amount of any Loan or LC Disbursement, or
      any
      interest thereon, or any fees payable hereunder, or reduce the amount of, waive
      or excuse any such payment, or postpone the scheduled date of expiration of
      any
      Revolving Commitment or Revenue Bond Commitment, without the written consent
      of
      each Lender affected thereby, (iv) change Section 2.16(b) or (c) in a manner
      that would alter the pro
      rata
      sharing
      of payments required thereby, without the written consent of each Lender, (v)
      change any of the provisions of this Section or the definition of “Required
      Lenders” or any other provision of any Loan Document specifying the number or
      percentage of Lenders required to waive, amend or modify any rights hereunder
      or
      make any determination or grant any consent hereunder, without the written
      consent of each Lender, (vi) amend or waive any of the conditions set forth
      in
      Section 4.02(c), without the written consent of each Lender, or (vii) release
      all or any portion of the Collateral Mortgage Bonds or release all or
      substantially all of any other Collateral from the Liens of the Security
      Documents without the consent of each Lender, in each case except for any such
      release expressly permitted hereunder or under any Security Document;
provided further
      that no
      such agreement shall amend, modify or otherwise affect the rights or duties
      of
      any Agent or any Issuing Bank hereunder without the prior written consent of
      such Agent or Issuing Bank, as the case may be. Notwithstanding the foregoing,
      any provision of this Agreement requiring the consent of a Lender unwilling
      to
      provide such consent may be amended by an agreement in writing entered into
      by
      the Borrower, the Required Lenders, the Issuing Banks and the Administrative
      Agent if (1) by the terms of such agreement the Aggregate Commitment of each
      such opposing Lender shall terminate upon the effectiveness of such amendment
      and (2) at the time such amendment becomes effective, each such opposing Lender
      receives payment in full of the principal of and interest accrued on each Loan
      made by it and all other amounts owing to it or accrued for its account under
      the Loan Documents.

     

    
      
        
        

      

      
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    SECTION
      9.03. Expenses;
      Indemnity; Damage Waiver.

     

    (a)    The
      Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
      Administrative Agent, the Arranger and their respective Affiliates (including
      due diligence expenses and the reasonable fees, charges and disbursements of
      counsel for the Administrative Agent and the Arranger) in connection with the
      arrangement and syndication of the credit facilities provided for herein, the
      preparation, execution, delivery and administration of the Loan Documents or
      any
      amendments, modifications or waivers of the provisions thereof (whether or
      not
      the transactions contemplated hereby or thereby shall be consummated); (ii)
      all
      out-of-pocket expenses and charges of the Arranger in connection with any
      evaluations of Collateral conducted by it; (iii) all reasonable out-of-pocket
      expenses incurred by any Issuing Bank in connection with the issuance, amendment
      or extension of any Letter of Credit or any demand for payment thereunder;
      and
      (iv) all out-of-pocket expenses incurred by the Administrative Agent, any
      Issuing Bank or any Lender, including the fees, charges and disbursements of
      any
      counsel for the Administrative Agent, any Issuing Bank or any Lender, in
      connection with the enforcement or protection of its rights in connection with
      the Loan Documents, including its rights under this Section, or in connection
      with the Loans made or Letters of Credit issued hereunder, including all such
      out-of-pocket expenses incurred during any workout, restructuring or
      negotiations in respect of such Loans or Letters of Credit. 

     

    (b)    The
      Borrower shall indemnify the Administrative Agent, the Arranger, each Issuing
      Bank and each Lender, and each Related Party of any of the foregoing Persons
      (each such Person being called an “Indemnitee”)
      against, and hold each Indemnitee harmless from, any and all losses, claims,
      damages, liabilities and related expenses, including the fees, charges and
      disbursements of any counsel for any Indemnitee, incurred by or asserted against
      any Indemnitee arising out of, in connection with, or as a result of (i) the
      execution or delivery of any Loan Document or any agreement or instrument
      contemplated hereby, the performance by the parties to the Loan Documents of
      their respective obligations thereunder or the consummation of the Transactions
      or any other transactions contemplated thereby, (ii) any Loan or Letter of
      Credit or the use of the proceeds therefrom (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), (iii) any actual or alleged presence or
      release of Hazardous Materials on or from any property owned or operated by
      the
      Borrower or any of its Subsidiaries, or any Environmental Liability related
      in
      any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
      prospective claim, litigation, investigation or proceeding relating to any
      of
      the foregoing, whether based on contract, tort or any other theory and
      regardless of whether any Indemnitee is a party thereto; provided
      that
      such indemnity shall not, as to any Indemnitee, be available to the extent
      that
      such losses, claims, damages, liabilities or related expenses are determined
      by
      a court of competent jurisdiction by final and nonappealable judgment to have
      resulted primarily from the gross negligence or willful misconduct of such
      Indemnitee.

     

    (c)    To
      the
      extent that the Borrower fails to pay any amount required to be paid by it
      to
      the Administrative Agent, the Arranger or any Issuing Bank under paragraph
      (a)
      or (b) of this Section, each Lender severally agrees to pay to the
      Administrative Agent, the Arranger or such Issuing Bank, as the case may be,
      such Lender’s Percentage (determined as of the time that the applicable
      unreimbursed expense or indemnity payment is sought) of such unpaid
      amount;

     

    
      
        
        

      

      
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    provided
      that the
      unreimbursed expense or indemnified loss, claim, damage, liability or related
      expense, as the case may be, was incurred by or asserted against the
      Administrative Agent, the Arranger or such Issuing Bank in its capacity as
      such.

     

    (d)    To
      the
      extent permitted by applicable law, the Borrower shall not assert, and hereby
      waives, any claim against any Indemnitee, on any theory of liability, for
      special, indirect, consequential or punitive damages (as opposed to direct
      or
      actual damages) arising out of, in connection with, or as a result of, this
      Agreement, any other Loan Document or any agreement or instrument contemplated
      hereby or thereby, the Transactions, any Loan or Letter of Credit or the use
      of
      the proceeds thereof.

     

    (e)    All
      amounts due under this Section shall be payable promptly after delivery to
      the
      Borrower of a reasonably detailed statement therefor.

     

    SECTION
      9.04. 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
      (including any Affiliate of any Issuing Bank that issues any Letter of Credit),
      except that the Borrower may not assign or otherwise transfer any of its rights
      or obligations hereunder without the prior written consent of each Lender (and
      any attempted assignment or transfer by the Borrower without such consent shall
      be null and void). 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 (including any Affiliate
      of
      any Issuing Bank that issues any Letter of Credit) and, to the extent expressly
      contemplated hereby, the Related Parties of each of the Agents, the Arranger,
      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 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
      Commitment and the Revolving Loans owing to it or all or a portion of its
      Revenue Bond Commitment and the Revenue Bond Loans owing to it); provided
      that
      (i) except in the case of an assignment to a Lender, an Affiliate of a
      Lender or an Approved Fund of any Lender, each of the Administrative Agent
      and
      the Issuing Banks must give its prior written consent to such assignment (which
      consent shall not be unreasonably withheld), (ii) except in the case of an
      assignment to a Lender, an Affiliate of a Lender or an Approved Fund of any
      Lender, the Borrower must give its prior written consent to such assignment
      (which consent shall not be unreasonably withheld), (iii) except in the case
      of
      an assignment to a Lender, an Affiliate of a Lender or an Approved Fund of
      any
      Lender, or an assignment of the entire remaining amount of the assigning
      Lender’s Aggregate Commitment, the amount of the Revolving Loan Commitment
      and/or Revenue Bond Commitment of the assigning Lender subject to each such
      assignment (determined as of the date the Assignment and Assumption with respect
      to such assignment is delivered to the Administrative Agent) shall be in an
      aggregate amount of not less than $5,000,000 unless each of the Borrower and
      the
      Administrative Agent otherwise consent, (iv) the parties to each assignment
      shall execute and deliver to the Administrative Agent an Assignment and
      Assumption, together with a processing and recordation fee of $3,500, and (v)
      the assignee, if it shall not be a Lender, shall deliver to the Administrative
      Agent an Administrative

     

    
      
        
        

      

      
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    Questionnaire;
      and provided further
      that any
      consent of the Borrower otherwise required under this paragraph shall not be
      required (A) if an Event of Default shall have occurred and be continuing or
      (B)
      in connection with the initial syndication of the Aggregate Commitments and
      Loans. Subject to acceptance and recording thereof pursuant to paragraph (d)
      of
      this Section, from and after the effective date specified in each Assignment
      and
      Assumption the assignee thereunder shall be a party hereto and, to the extent
      of
      the interest assigned by such Assignment and Assumption, have the rights and
      obligations of a Lender under this Agreement, and the assigning Lender
      thereunder shall, to the extent of the interest assigned by such Assignment
      and
      Assumption, be released from its obligations under this Agreement (and, in
      the
      case of an Assignment and Assumption covering all of the assigning Lender’s
      rights and obligations under this Agreement, such Lender shall cease to be
      a
      party hereto but shall continue to be entitled to the benefits of Sections
      2.13,
      2.14, 2.15 and 9.03). Any assignment or transfer by a Lender of rights or
      obligations under this Agreement that does not comply with this paragraph shall
      be treated for purposes of this Agreement as a sale by such Lender of a
      participation in such rights and obligations in accordance with paragraph (e)
      of
      this Section.

     

    (c)    The
      Administrative Agent, acting for this purpose as an agent of the Borrower,
      shall
      maintain at one of its offices in California 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 Aggregate Commitments of, and principal amount
      of the Loans and LC Disbursements owing to, each Lender pursuant to the terms
      hereof from time to time (the “Register”).
      The
      entries in the Register shall be conclusive, and the Borrower, the
      Administrative Agent, the Issuing Banks 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, any
      Issuing Bank and any Lender at any reasonable time and from time to time upon
      reasonable prior notice.

     

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

     

    (e)    Any
      Lender may, without the consent of the Borrower, the Administrative Agent or
      any
      Issuing Bank, sell participations to one or more banks or other entities (a
      “Participant”)
      in all
      or a portion of such Lender’s rights and obligations under this Agreement
      (including all or a portion of its Revolving Commitment and the Revolving Loans
      owing to it or all or a portion of its Revenue Bond Commitment and the Revenue
      Bond Loans owing to it); provided
      that (i)
      such Lender’s obligations under this Agreement shall remain unchanged, (ii) such
      Lender shall remain solely responsible to the other parties hereto for the
      performance of such obligations and (iii) the Borrower, the Administrative
      Agent, the Issuing Banks and the other Lenders shall continue to deal solely
      and
      directly with such Lender in connection with such Lender’s rights and
      obligations under this Agreement. Any agreement or instrument pursuant
      to

     

    
      
        
        

      

      
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    which
      a
      Lender sells such a participation shall provide that such Lender shall retain
      the sole right to enforce the Loan Documents and to approve any amendment,
      modification or waiver of any provision of the Loan Documents; provided
      that
      such agreement or instrument may provide that such Lender will not, without
      the
      consent of the Participant, agree to any amendment, modification or waiver
      described in the first proviso to Section 9.02(b) that affects such Participant.
      Subject to paragraph (f) of this Section, the Borrower agrees that each
      Participant shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15
      to
      the same extent as if it were a Lender and had acquired its interest by
      assignment pursuant to paragraph (b) of this Section. To the extent permitted
      by
      law, each Participant also shall be entitled to the benefits of Section 9.08
      as
      though it were a Lender, provided such Participant agrees to be subject to
      Section 2.16(c) as though it were a Lender.

     

    (f)    A
      Participant shall not be entitled to receive any greater payment under Section
      2.13 or 2.15 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 2.15 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 2.15(d) as though it were
      a
      Lender.

     

    (g)    Any
      Lender may at any time pledge or assign a security interest in all or any
      portion of its rights under this Agreement to secure obligations of such Lender,
      including any pledge or assignment to secure obligations to a Federal Reserve
      Bank, and this Section shall not apply to any such pledge or assignment of
      a
      security interest; provided
      that no
      such pledge or assignment of a security interest shall release a Lender from
      any
      of its obligations hereunder or substitute any such pledgee or assignee for
      such
      Lender as a party hereto. In the case of any Lender that is a fund that invests
      in bank loans, such Lender may, without the consent of the Borrower, the Issuing
      Banks or the Administrative Agent, assign or pledge all or any portion of its
      rights under this Agreement, including the Loans and notes or any other
      instrument evidencing its rights as a Lender under this Agreement, to any holder
      of, trustee for, or any other representative of holders of, obligations owed
      or
      securities issued by, such fund, as security for such obligations or securities;
      provided
      that any
      foreclosure or similar action by such trustee or representative shall be subject
      to the provisions of this Section 9.04(b) concerning assignments.

     

    (h)    Notwithstanding
      anything to the contrary contained herein, any Lender (a “Granting
      Lender”)
      may
      grant to a special purpose funding vehicle (an “SPC”),
      identified as such in writing from time to time by the Granting Lender to the
      Administrative Agent and the Borrower, the option to provide to the Borrower
      all
      or any part of any Loan that such Granting Lender would otherwise be obligated
      to make to the Borrower pursuant to this Agreement or the option to pay to
      the
      Administrative Agent for the account of the applicable Issuing Bank all or
      any
      part of such Granting Lender’s Applicable Percentage of any LC Disbursement made
      by such Issuing Bank and not reimbursed by the Borrower that such Granting
      Lender would otherwise be obligated to pay to the Administrative Agent for
      the
      account of the applicable Issuing Bank pursuant to this Agreement, as the case
      may be; provided
      that (i)
      nothing herein shall constitute a commitment by any SPC to make any Loan or
      to
      pay such Granting Lender’s Applicable Percentage of any LC Disbursement
      reimbursement obligation and (ii) if an SPC elects not to exercise such option
      or otherwise fails to provide all or any part of such Loan or to

     

    
      
        
        

      

      
        69

        
          

        

      

      
        
        

      

    

     

    pay
      all
      or any part of such Granting Lender’s Applicable Percentage of any LC
      Disbursement reimbursement obligation, the Granting Lender shall be obligated
      to
      make such Loan or to pay its Applicable Percentage of any LC Disbursement
      reimbursement obligation, as the case may be, pursuant to the terms hereof.
      The
      making of a Loan by an SPC or the payment by such SPC of such Granting Lender’s
      Applicable Percentage of any LC Disbursement reimbursement obligation hereunder
      shall utilize the Revolving Commitment or Revenue Bond Commitment, as
      applicable, of the Granting Lender to the same extent, and as if, such Loan
      were
      made by such Granting Lender or such LC Disbursement reimbursement obligation
      were paid by such Granting Lender. Each party hereto hereby agrees that no
      SPC
      shall be liable for any indemnity or similar payment obligation under this
      Agreement (all liability for which shall remain with the Granting Lender).
      In
      furtherance of the foregoing, each party hereto hereby agrees (which agreement
      shall survive the termination of this Agreement) that, prior to the date that
      is
      one year and one day after the payment in full of all outstanding commercial
      paper or other senior indebtedness of any SPC, it will not institute against,
      or
      join any other person in instituting against, such SPC in connection with its
      activities as an SPC hereunder any bankruptcy, reorganization, arrangement,
      insolvency or liquidation proceedings under the laws of the United States or
      any
      State thereof. In addition, notwithstanding anything to the contrary in this
      Section 9.04, any SPC may (A) with notice to, but without the prior written
      consent of, the Borrower, the Issuing Banks and the Administrative Agent and
      without paying any processing fee therefor, assign all or a portion of its
      interests in any Loans or LC Disbursement reimbursement obligations to the
      Granting Lender or to any financial institutions (consented to by the Borrower
      and the Administrative Agent) providing liquidity and/or credit support to
      or
      for the account of such SPC to support the funding or maintenance of Loans
      or
      payment of LC Disbursement reimbursement obligations and (ii) disclose on a
      confidential basis consistent with the provisions of Section 9.12 any non-public
      information relating to its Loans or LC Disbursement reimbursement obligations
      to any rating agency, commercial paper dealer or provider of any surety,
      guarantee or credit or liquidity enhancement to such SPC. The provisions of
      this
      Section relating any SPC may not be amended without the written consent of
      such
      SPC.

     

    SECTION
      9.05. Survival.
      All
      covenants, agreements, representations and warranties made by the Borrower
      in
      the Loan Documents and in the certificates or other instruments delivered in
      connection with or pursuant to this Agreement or any other Loan Document shall
      be considered to have been relied upon by the other parties hereto and shall
      survive the execution and delivery of the Loan Documents and the making of
      any
      Loans and issuance of any Letters of Credit, regardless of any investigation
      made by any such other party or on its behalf and notwithstanding that any
      Agent, any Issuing Bank or any Lender may have had notice or knowledge of any
      Default or incorrect representation or warranty at the time any credit is
      extended hereunder, and shall continue in full force and effect as long as
      the
      principal of or any accrued interest on any Loan or any fee or any other amount
      payable under this Agreement is outstanding and unpaid or any Letter of Credit
      is outstanding and so long as any Revolving Commitment or Revenue Bond
      Commitment has not expired or terminated. The provisions of Sections 2.13,
      2.14,
      2.15 and 9.03 and Article VIII shall survive and remain in full force and effect
      regardless of the consummation of the transactions contemplated hereby, the
      repayment of the Loans, the expiration or termination of the Letters of Credit
      and the Aggregate Commitments or the termination of this Agreement or any
      provision hereof.

     

    
      
        
        

      

      
        70

        
          

        

      

      
        
        

      

    

     

    SECTION
      9.06. Counterparts;
      Integration; Effectiveness.
      This
      Agreement may be executed in counterparts (and by different parties hereto
      on
      different counterparts), each of which shall constitute an original, but all
      of
      which when taken together shall constitute a single contract. This Agreement,
      the other Loan Documents and any separate letter agreements with respect to
      fees
      payable to the Administrative Agent, the Arranger and the Issuing Banks
      constitute the entire contract among the parties relating to the subject matter
      hereof and supersede any and all previous agreements and understandings, oral
      or
      written, relating to the subject matter hereof. Except as provided in Section
      4.01, this Agreement shall become effective when it shall have been executed
      by
      the Administrative Agent and when the Administrative Agent shall have received
      counterparts hereof which, when taken together, bear the signatures of each
      of
      the other parties hereto, and thereafter shall be binding upon and inure to
      the
      benefit of the parties hereto and their respective successors and assigns.
      Delivery of an executed counterpart of a signature page of this Agreement by
      telecopy shall be effective as delivery of a manually executed counterpart
      of
      this Agreement.

     

    SECTION
      9.07. Severability.
      Any
      provision of this Agreement held to be invalid, illegal or unenforceable in
      any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such invalidity, illegality or unenforceability without affecting the validity,
      legality and enforceability of the remaining provisions hereof; and the
      invalidity of a particular provision in a particular jurisdiction shall not
      invalidate such provision in any other jurisdiction.

     

    SECTION
      9.08. Right
      of Setoff.
      If an
      Event of Default shall have occurred and be continuing, each Lender and each
      of
      its 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 obligations at any time owing by such Lender or Affiliate to or for the
      credit or the account of the Borrower against any of and all the obligations
      of
      the Borrower now or hereafter existing under this Agreement held by such Lender,
      irrespective of whether or not such Lender shall have made any demand under
      this
      Agreement and although such obligations may be unmatured. The rights of each
      Lender under this Section are in addition to other rights and remedies
      (including other rights of setoff) which such Lender may have.

     

    SECTION
      9.09. Governing
      Law; Jurisdiction; Consent to Service of Process.

     

    (a)    This
      Agreement shall be construed in accordance with and governed by the law of
      the
      State of New York.

     

    (b)    The
      Borrower hereby irrevocably and unconditionally submits, for itself and its
      property, to the nonexclusive jurisdiction of the Supreme Court of the State
      of
      New York sitting in New York County and of the United States District Court
      of
      the Southern District of New York, and any appellate court from any thereof,
      in
      any action or proceeding arising out of or relating to any Loan Document, or
      for
      recognition or enforcement of any judgment, and each of the parties hereto
      hereby irrevocably and unconditionally agrees that all claims in respect of
      any
      such action or proceeding may be heard and determined in such New York State
      or,
      to the extent permitted by law, in such Federal court. Each of the parties
      hereto agrees that a final judgment in any such action or proceeding shall
      be
      conclusive and may be enforced in other jurisdictions by suit on the judgment
      or
      in any other manner provided by law. Nothing
      in this

     

    
      
        
        

      

      
        71

        
          

        

      

      
        
        

      

    

     

    Agreement
      or any other Loan Document shall affect any right that the Administrative Agent,
      any Issuing Bank or any Lender may otherwise have to bring any action or
      proceeding relating to this Agreement or any other Loan Document against the
      Borrower or its properties in the courts of any jurisdiction.

     

    (c)    The
      Borrower hereby irrevocably and unconditionally waives, to the fullest extent
      it
      may legally and effectively do so, any objection which it may now or hereafter
      have to the laying of venue of any suit, action or proceeding arising out of
      or
      relating to this Agreement or any other Loan Document in any court referred
      to
      in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
      waives, to the fullest extent permitted by law, the defense of an inconvenient
      forum to the maintenance of such action or proceeding in any such
      court.

     

    (d)    Each
      party to this Agreement irrevocably consents to service of process in the manner
      provided for notices in Section 9.01. Nothing in this Agreement or any other
      Loan Document will affect the right of any party to this Agreement to serve
      process in any other manner permitted by law.

     

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

     

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

     

    SECTION
      9.12. Confidentiality.
      Each of
      the Administrative Agent, the Issuing Banks and the Lenders agrees to maintain
      the confidentiality of the Information (as defined below), except that
      Information may be disclosed (a) to its and its Affiliates’ directors, officers,
      employees and agents, including accountants, auditors, legal counsel and other
      advisors (it being understood that the Persons to whom such disclosure is made
      will be informed of the confidential nature of such Information and instructed
      to keep such Information confidential), (b) to the extent requested by any
      regulatory authority, (c) to the extent required by applicable laws or
      regulations or by any subpoena or similar legal process, (d) to any other party
      to this Agreement, (e) in connection with the exercise of any remedies hereunder
      or any suit, action or proceeding relating to this Agreement or any other Loan
      Document or the enforcement of rights hereunder, (f) subject to an agreement
      containing provisions substantially the same as those of this Section, to (i)
      any assignee of or Participant in, or any prospective assignee of or
      Participant

     

    
      
        
        

      

      
        72

        
          

        

      

      
        
        

      

    

     

    in,
      any
      of its rights or obligations under this Agreement or (ii) any actual or
      prospective counterparty (or its advisors) to any swap or derivative transaction
      relating to the Borrower and its obligations, (g) with the consent of the
      Borrower or (h) to the extent such Information (i) becomes publicly available
      other than as a result of a breach of this Section or (ii) becomes available
      to
      any Agent, any Issuing Bank or any Lender on a nonconfidential basis from a
      source other than the Borrower. For the purposes of this Section, “Information”
means
      all information received from the Borrower relating to the Borrower or its
      business, other than any such information that is available to any Agent, any
      Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by
      the
      Borrower; provided
      that, in
      the case of information received from the Borrower after the date hereof, such
      information is clearly identified at the time of delivery as confidential.
      Any
      Person required to maintain the confidentiality of Information as provided
      in
      this Section shall be considered to have complied with its obligation to do
      so
      if such Person has exercised the same degree of care to maintain the
      confidentiality of such Information as such Person would accord to its own
      confidential information.

     

    SECTION
      9.13. Interest
      Rate Limitation.
      Notwithstanding anything herein to the contrary, if at any time the interest
      rate applicable to any Loan or LC Disbursement, together with all fees, charges
      and other amounts which are treated as interest on such Loan or LC Disbursement
      under applicable law (collectively the “Charges”),
      shall
      exceed the maximum lawful rate (the “Maximum
      Rate”)
      which
      may be contracted for, charged, taken, received or reserved by the Lender
      holding such Loan or LC Disbursement in accordance with applicable law, the
      rate
      of interest payable in respect of such Loan hereunder, together with all Charges
      payable in respect thereof, shall be limited to the Maximum Rate and, to the
      extent lawful, the interest and Charges that would have been payable in respect
      of such Loan but were not payable as a result of the operation of this Section
      shall be cumulated and the interest and Charges payable to such Lender in
      respect of other Loans or periods shall be increased (but not above the Maximum
      Rate therefor) until such cumulated amount, together with interest thereon
      at
      the Federal Funds Effective Rate to the date of repayment, shall have been
      received by such Lender.

     

    SECTION
      9.14. Patriot
      Act Notice.
      Each
      Lender and each Agent (for itself and not on behalf of any other party) 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 “Patriot
      Act”),
      it is
      required to obtain, verify and record information that identifies the Borrower,
      which information includes the name and address of the Borrower and other
      information that will allow such Lender or such Agent, as applicable, to
      identify the Borrower in accordance with the Patriot Act.

    


    
      
        
        

      

      
        73

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        
          	 	
                  TUCSON
                    ELECTRIC POWER COMPANY

                   

                
	 	
                  By:

                	/s/
                  Kevin P. Larson
	 	 	
                  Name:

                	 Kevin
                  P. Larson
	 	 	
                  Title:

                	 Sr.
                  Vice President, CFO and
                  Treasurer


        

      

    

     

     

    
      	
            	
              UNION
                BANK OF CALIFORNIA, N.A., as
Administrative Agent and as an
                Existing Lender

               

            
	 	
              By:

            	 /s/
              Kevin M. Zitar
	 	 	
              Name:

            	 Kevin
              M. Zitar
	 	 	
              Title:

            	 Vice
              President


    

     

    
      
        
        

      

      
        
          S-1

           

          Signature
            Page to Credit Agreement

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                THE
                  BANK OF NEW YORK, as Co-Syndication
Agent, as an Issuing Bank and as an
                  Existing Lender

              

               

            
	 	
              By:

            	 /s/
              John-Paul Marotta
	 	 	
              Name:

            	 John-Paul
              Marotta
	 	 	
              Title:

            	 Managing
              Director


    

     

    
      
        
        

      

      
        
          S-2

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                JPMORGAN
                  CHASE BANK, N.A., as
Co-Syndication Agent and as an Existing
                  Lender

                 

              

            
	 	
              By:

            	 /s/
              Nancy R. Barwig
	 	 	
              Name:

            	 Nancy
              R. Barwig
	 	 	
              Title:

            	 Vice
              President


    

     

    
      
        
        

      

      
        
          S-3

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  WELLS
                    FARGO BANK, NATIONAL ASSOCIATION, as
Co-Documentation Agent and as an
                    Existing Lender

                   

                

              

            
	 	
              By:

            	 /s/
              Clyde Gossert
	 	 	
              Name:

            	 Clyde
              Gossert
	 	 	
              Title:

            	 Vice
              President


    

     

    
      
        
        

      

      
        
          S-4

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  ABN
                    AMRO BANK N.V. (as successor to
LASALLE BANK NATIONAL
                    ASSOCIATION),
as Co-Documentation Agent and as an Existing
                    Lender

                   

                

              

            
	 	
              By:

            	 /s/
              James L. Moyes
	 	 	
              Name:

            	 James
              L. Moyes
	 	 	
              Title:

            	 Managing
              Director


    

     

    
      	
            	
              By:

            	 /s/
              Todd D. Vaubel
	 	 	
              Name:

            	 Todd
              D. Vaubel
	 	 	
              Title:

            	 Assistant
              Vice President


    

    


    
      
        
        

      

      
        
          S-5

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  
                    CREDIT
                      SUISSE (as
                      successor to CREDIT SUISSE FIRST BOSTON, acting through its
                      New York
                      Branch), as an Issuing Bank

                  

                   

                

              

            
	 	
              By:

            	 /s/
              David Dodd
	 	 	
              Name:

            	 David
              Dodd
	 	 	
              Title:

            	 Vice
              President


    


    
      	
            	
              By:

            	 /s/
Shaheen
              Malik
	 	 	
              Name:

            	 Shaheen
              Malik
	 	 	
              Title:

            	 Associate


    

     

    
      
        
        

      

      
        
          S-6

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  
                    BANK
                      HAPOALIM B.M.,
                      as a New Lender

                     

                  

                

              

            
	 	
              By:

            	 /s/
              Shaun Breidbart
	 	 	
              Name:

            	 Shaun
              Breidbart
	 	 	
              Title:

            	 Vice
              President



      
        	
              	
                By:

              	 /s/
                Frederic S. Becker
	 	 	
                Name:

              	 Frederic
                S. Becker
	 	 	
                Title:

              	 Senior
                Vice President


      



    
      
        
        

      

      
        
          S-7

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  BAYERISCHE
                    LANDESBANK,
                    CAYMAN
ISLANDS BRANCH, as an Existing Lender

                   

                

              

            
	 	
              By:

            	 /s/
              John Gregory
	 	 	
              Name:

            	 John
              Gregory
	 	 	
              Title:

            	 Vice
              President


    

     

    
      	
            	
              By:

            	 /s/
              Norman McClave
	 	 	
              Name:

            	 Norman
              McClave
	 	 	
              Title:

            	 First
              Vice President


    

     

    
      
        
        

      

      
        
          S-8

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  
                    BNP
                      PARIBAS,
                      as an Existing Lender

                  

                

              

            
	 	
              By:

            	 /s/
              Francis J. Delaney
	 	 	
              Name:

            	 Francis
              J. Delaney
	 	 	
              Title:

            	 Managing
              Director


       

      
        	
              	
                By:

              	 /s/
                Leonardo Osorio
	 	 	
                Name:

              	 Leonardo
                Osorio
	 	 	
                Title:

              	 Director


      

    

     

    
      
        
        

      

      
        
          S-9

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  
                    
                      COBANK,
                        ACB,
                        as a New Lender

                    

                  

                

              

            
	 	
              By:

            	 /s/
              John Guilds
	 	 	
              Name:

            	 John
              Guilds
	 	 	
              Title:

            	 Vice
              President


       

      
        
          
          

        

        
          
            S-10

             

            
              Signature
                Page to Credit Agreement

            

          

          
            

          

        

        
          
          

        

      

    

    


    
      	
            	
              
                
                  
                    
                      COMERICA
                        WEST INCORPORATED,
                        as an Existing New Lender

                    

                  

                

              

            
	 	
              By:

            	 /s/
              Fatima Arshad
	 	 	
              Name:

            	 Fatima
              Arshad
	 	 	
              Title:

            	 Corporate
              Banking Representative


    

     

    
      
        
        

      

      
        
          S-11

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  
                    
                      
                        COMMERZBANK
                          AG, NEW YORK AND
CAYMAN BRANCHES,
                          as an Existing Lender

                      

                    

                  

                

              

            
	 	
              By:

            	 /s/
              Andrew Campbell
	 	 	
              Name:

            	 Andrew
              Campbell
	 	 	
              Title:

            	 Senior
              Vice President


       

      
        	
              	
                By:

              	 /s/
                Andrew Kjoller
	 	 	
                Name:

              	 Andrew
                Kjoller
	 	 	
                Title:

              	 Vice
                President


      

       

    

    
      
        
        

      

      
        
          S-12

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  
                    
                      
                        DRESDNER
                          BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES,
                          as a New Lender

                      

                    

                  

                

              

            
	 	
              By:

            	 /s/
              Thomas R. Brady
	 	 	
              Name:

            	 Thomas
              R. Brady
	 	 	
              Title:

            	 Director


       

      
        	
              	
                By:

              	 /s/
                Mark McGuiban
	 	 	
                Name:

              	 Mark
                McGuiban
	 	 	
                Title:

              	 Vice
                President


      

    

     

    
      
        
        

      

      
        
          S-13

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  
                    
                      
                        
                          
                            KBC
                              BANK, N.V.,
                              as a New Lender

                          

                           

                        

                      

                    

                  

                

              

            
	 	
              By:

            	 /s/
              Eric Raskin
	 	 	
              Name:

            	 Eric
              Raskin
	 	 	
              Title:

            	 Vice
              President


    

     

    
      	
            	
              By:

            	 /s/
              Robert Snauffer
	 	 	
              Name:

            	 Robert
              Snauffer
	 	 	
              Title:

            	 First
              Vice President


    

     

    
      
        
        

      

      
        
          S-14

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  
                    
                      
                        LLOYDS
                          TSB BANK PLC, as an Existing Lender

                         

                      

                    

                  

                

              

            
	 	
              By:

            	 /s/
              Russell Protti
	 	 	
              Name:

            	 Russell
              Protti
	 	 	
              Title:

            	 AVP,
              Project Finance 


       

      
        	
              	
                By:

              	 /s/
                Paul D. Briamonte
	 	 	
                Name:

              	 Paul
                D. Briamonte
	 	 	
                Title:

              	 Director
                Project Finance


      

    

     

    
      
        
        

      

      
        
          S-15

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

    
       

    

    
      	
            	
              
                
                  
                    
                      
                        
                          
                            
                              
                                SOVEREIGN
                                  BANK,
                                  as an Existing Lender

                              

                            

                          

                           

                        

                      

                    

                  

                

              

            
	 	
              By:

            	 /s/
              Elisabet C. Hayes
	 	 	
              Name:

            	 Elisabet
              C. Hayes
	 	 	
              Title:

            	 Vice
              President


    

     

    
      
        
        

      

      
        
          S-16

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  
                    
                      
                        
                          
                            
                              
                                THE
                                  BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH
                                  (as successor by
                                  merger to UFJ Bank Limited), as an Existing
                                  Lender

                              

                            

                          

                           

                        

                      

                    

                  

                

              

            
	 	
              By:

            	 /s/
              Chi-Cheng Chen
	 	 	
              Name:

            	 Chi-Cheng
              Chen
	 	 	
              Title:

            	 Authorized
              Signatory


    

     

    
      
        
        

      

      
        
          S-17

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    


    
      	
            	
              
                
                  
                    
                      
                        
                          
                            
                              
                                U.S.
                                  BANK NATIONAL ASSOCIATION,
                                  as an Existing Lender

                              

                            

                          

                           

                        

                      

                    

                  

                

              

            
	 	
              By:

            	 /s/
              Dale Parshall
	 	 	
              Name:

            	 Dale
              Parshall
	 	 	
              Title:

            	 Vice
              President


    

     

    
      
        
        

      

      
        
          S-18

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  WACHOVIA
                                    BANK, NATIONAL
ASSOCIATION,
                                    as a New Lender

                                

                              

                            

                          

                           

                        

                      

                    

                  

                

              

            
	 	
              By:

            	 /s/
              Paul Pritchett
	 	 	
              Name:

            	 Paul
              Pritchett
	 	 	
              Title:

            	 Vice
              President


    

     

    
      
        
        

      

      
        
          S-19

           

          
            Signature
              Page to Credit Agreement

          

        

        
          

        

      

      
        
        

      

       

    

    SCHEDULE
      1.01

    


    PRICING
      SCHEDULE

    


    The
      “Applicable Margin” and the “Commitment Fee Rate” for any day are the respective
      annual percentage rates set forth below in the applicable row under the column
      corresponding to the Status that exists on such day:

    


    
      	 	
               

              ≥BBB+/Baa1

            	
               

              BBB/Baa2

            	
               

              BBB-/Baa3

            	
               

              BB+/Ba1

            	
               

              ≤BB/Ba2

            
	
               

              Status

            	
               

              Level
                1

            	
               

              Level
                2

            	
               

              Level
                3

            	
               

              Level
                4

            	
               

              Level
                5

            
	
               

              Applicable
                Margin --
Eurodollar Loans

               

            	
               

              0.45%

            	
               

              0.55%

            	
               

              0.65%

            	
               

              0.875%

            	
               

              1.00%

            
	
               

              Applicable
                Margin --
ABR Loans

               

            	
               

              0.00%

            	
               

              0.00%

            	
               

              0.00%

            	
               

              0.00%

            	
               

              0.00%

            
	
               

              Commitment
                Fee Rate 

            	
               

              0.09%

               

            	
               

              0.11%

            	
               

              0.15%

            	
               

              0.175%

            	
               

              0.225%

            


    

     

    For
      purposes of this Pricing Schedule, the following terms have the following
      meanings:

     

    “Level
      1 Status”
exists
      at any date if, at such date, the Index Debt is rated either BBB+ or higher
      by
      S&P or
      Baa1 or
      higher by Moody’s.

     

    “Level
      2 Status”
exists
      at any date if, at such date (i) the Index Debt is rated either BBB or higher
      by
      S&P or
      Baa2 or
      higher by Moody’s and (ii) Level 1 Status does not exist.

     

    “Level
      3 Status”
exists
      at any date if, at such date (i) the Index Debt is rated either BBB- or higher
      by S&P or
      Baa3 or
      higher by Moody’s and (ii) neither Level 1 Status nor Level 2 Status
      exists.

     

    “Level
      4 Status”
exists
      at any date if, at such date (i) the Index Debt is rated either BB+ or higher
      by
      S&P or
      Ba1 or
      higher by Moody’s and (ii) none of Level 1 Status, Level 2 Status or Level 3
      Status exists.

     

    “Level
      5 Status”
exists
      at any date if, at such date, no other Status exists.

     

    “Status”
refers
      to the determination of which of Level 1 Status, Level 2 Status, Level 3 Status,
      Level 4 Status, or Level 5 Status exists at any date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
      the foregoing, if the Index Debt is split-rated and the ratings differential
      is
      two or more ratings levels, the Status shall be determined assuming that (a)
      the
      higher rating is equal to the midpoint of the two ratings (e.g., for a split
      rating of BBB+/Baa3, BBB is the midpoint and will be deemed to be the higher
      rating, and for a split rating of BB/Baa1, Baa3 is the midpoint and will be
      deemed to be the higher rating) or (b) if there is no exact midpoint, the higher
      rating is equal to the higher of the two middle intermediate ratings (e.g.,
      for
      a split rating of BBB+/Ba1, BBB is the higher of the two middle intermediate
      ratings and will be deemed to be the higher rating, and for a split rating
      of
      BB/Baa2, Baa3 is the higher of the two middle intermediate ratings and will
      be
      deemed to be the higher rating). 

     

    If
      at any
      time the Index Debt is unrated by Moody’s or S&P, Level 5 Status shall
      exist; provided
      that if
      the reason that there is no such Moody’s rating or S&P rating results from
      Moody’s or S&P, as the case may be, ceasing to issue debt ratings generally,
      then the Borrower and the Administrative Agent may select another
      nationally-recognized rating agency to substitute for Moody’s or S&P, as
      applicable, for purposes of the foregoing Schedule (and all references herein
      to
      Moody’s or S&P, as applicable, shall refer to such substitute rating
      agency), and until a substitute nationally-recognized rating agency is so
      selected the Status shall be determined by reference to the rating most recently
      in effect prior to such cessation. 

     

    The
      Applicable Margin and Commitment Fee Rate shall be increased or decreased in
      accordance with the foregoing Schedule upon any change in the applicable ratings
      of the Index Debt. The ratings of the Index Debt in effect at any date are
      those
      in effect at the close of business on such date.

     

    
      
        
        

      

      
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