Amended and Restated Credit Agreement (UNS)


    Exhibit
      4.4

    


    [EXECUTION
      VERSION]

     

    
      

    

     

     

    $60,000,000

     

    AMENDED
      AND RESTATED CREDIT AGREEMENT

     

     

    Dated
      as
      of August 11, 2006,

     

    Among

     

    UNS
      ELECTRIC, INC.

    and

    UNS
      GAS, INC.,

    each
      as a Borrower

     

    and

     

    UNISOURCE
      ENERGY SERVICES, INC.,

    as
      Guarantor

     

    and

     

    THE
      BANKS NAMED HEREIN AND THE OTHER LENDERS

    FROM
      TIME TO TIME PARTY HERETO,

    as
      Lenders

     

    and

    


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

    as
      Co-Syndication Agents,

     

    and

    


    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

       

      
        	
                 Section

                 

              	
                Page 

              
	 PRELIMINARY
                STATEMENTS	
                 1

              
	
                 

                  ARTICLE
                  I

                 

              	
                 

                DEFINITIONS
                  AND ACCOUNTING TERMS

                 

              	
                 

                1

                 

              
	
                    SECTION
                  1.01.

              	
                Certain
                  Defined Terms

              	
                1

              
	
                    SECTION
                  1.02.

              	
                Computation
                  of Time Periods; Construction

              	
                21

              
	
                    SECTION
                  1.03.

              	
                Accounting
                  Terms

              	
                21

              
	
                  

                  ARTICLE
                  II

              	
                 

                COMMITMENTS

                 

              	
                 

                22

                 

              
	
                    SECTION
                  2.01.

              	
                The
                  Commitments

              	
                22

              
	
                    SECTION
                  2.02.

              	
                Fees

              	
                22

              
	
                    SECTION
                  2.03.

              	
                Reduction
                  of the Commitments

              	
                23

              
	
                    SECTION
                  2.04.

              	
                Computations
                  of Outstandings

              	
                24

              
	
                 

                  ARTICLE
                  III

              	
                 

                LOANS

                 

              	
                 

                24

                 

              
	
                    SECTION
                  3.01.

              	
                Loans

              	
                24

              
	
                    SECTION
                  3.02.

              	
                Conversion
                  of Loans

              	
                25

              
	
                    SECTION
                  3.03.

              	
                Interest
                  Periods

              	
                26

              
	
                    SECTION
                  3.04.

              	
                Other
                  Terms Relating to the Making and Conversion of Loans

              	
                26

              
	
                    SECTION
                  3.05.

              	
                Repayment
                  of Loans; Interest

              	
                29

              
	
                    SECTION
                  3.06.

              	
                Additional
                  Interest on Eurodollar Rate Loans

              	
                29

              
	
                    SECTION
                  3.07.

              	
                New
                  Lenders

              	
                29

              
	
                 

                  ARTICLE
                  IV

                 

              	
                 

                LETTERS
                  OF CREDIT

                 

              	
                 

                30

                 

              
	
                    SECTION
                  4.01.

              	
                Issuing
                  Banks

              	
                30

              
	
                    SECTION
                  4.02.

              	
                Letters
                  of Credit

              	
                30

              
	
                    SECTION
                  4.03.

              	
                Issuing
                  Bank Fees

              	
                31

              
	
                    SECTION
                  4.04.

              	
                Reimbursement
                  to Issuing Banks

              	
                31

              
	
                    SECTION
                  4.05.

              	
                Obligations
                  Absolute

              	
                32

              
	
                    SECTION
                  4.06.

              	
                Liability
                  of Issuing Banks and the Lenders

              	
                32

              
	
                 

                  ARTICLE
                  V

                 

              	
                 

                PAYMENTS,
                  COMPUTATIONS AND YIELD PROTECTION

                 

              	
                 

                33

                 

              


      

       

      
        
          
          

        

        
          -i-

          
            

          

        

        
          
          

        

      

       

      
        	
                    SECTION
                  5.01.

              	
                Payments
                  and Computations

              	
                33

              
	
                    SECTION
                  5.02.

              	
                Interest
                  Rate Determination

              	
                35

              
	
                    SECTION
                  5.03.

              	
                Prepayments

              	
                35

              
	
                    SECTION
                  5.04.

              	
                Yield
                  Protection

              	
                36

              
	
                    SECTION
                  5.05.

              	
                Sharing
                  of Payments, Etc

              	
                37

              
	
                    SECTION
                  5.06.

              	
                Taxes

              	
                38

              
	
                 

                  ARTICLE
                  VI

                 

              	
                 

                CONDITIONS
                  PRECEDENT

                 

              	
                 

                40

                 

              
	
                    SECTION
                  6.01.

              	
                Conditions
                  Precedent to Effectiveness

              	
                40

              
	
                    SECTION
                  6.02.

              	
                Conditions
                  Precedent to Each Extension of Credit

              	
                41

              
	
                    SECTION
                  6.03.

              	
                Determinations
                  Under Section 6.01

              	
                42

              
	
                    SECTION
                  6.04.

              	
                Reliance
                  on Certificates

              	
                42

              
	
                 

                  ARTICLE
                  VII

                 

              	
                 

                REPRESENTATIONS
                  AND WARRANTIES

                 

              	
                 

                42

                 

              
	
                    SECTION
                  7.01.

              	
                Representations
                  and Warranties of the Obligors

              	
                42

              
	
                 

                  ARTICLE
                  VIII

                 

              	
                 

                COVENANTS
                  OF THE OBLIGORS

                 

              	
                 

                49

                 

              
	
                    SECTION
                  8.01.

              	
                Affirmative
                  Covenants

              	
                49

              
	
                    SECTION
                  8.02.

              	
                Negative
                  Covenants

              	
                55

              
	
                    SECTION
                  8.03.

              	
                Financial
                  Covenants

              	
                59

              
	
                 

                  ARTICLE
                  IX

                 

              	
                 

                DEFAULTS

                 

              	
                 

                60

                 

              
	
                    SECTION
                  9.01.

              	
                Events
                  of Default

              	
                60

              
	
                    SECTION
                  9.02.

              	
                Remedies

              	
                  
                  63

              
	
                 

                  ARTICLE
                  X

                 

              	
                 

                THE
                  ADMINISTRATIVE AGENT

                 

              	
                 

                64

                 

              
	
                    SECTION
                  10.01.

              	
                Authorization
                  and Action

              	
                64

              
	
                    SECTION
                  10.02.

              	
                Indemnification

              	
                66

              
	
                 

                  ARTICLE
                  XI

                 

              	
                 

                GUARANTY

                 

              	
                 

                66

                 

              
	
                    SECTION
                  11.01.

              	
                The
                  Guaranty

              	
                66

              
	
                    SECTION
                  11.02.

              	
                Obligations
                  Unconditional

              	
                67

              
	
                    SECTION
                  11.03.

              	
                Subrogation

              	
                69

              
	
                    SECTION
                  11.04.

              	
                Reinstatement

              	
                69

              
	
                    SECTION
                  11.05.

              	
                Remedies
                  Unaffected

              	
                70

              


      

       

      
        
          
          

        

        
          -ii-

          
            

          

        

        
          
          

        

      

       

      
        	
                    SECTION
                  11.06.

              	
                Continuing
                  Guarantee; Liability in Respect of Successor

              	
                70

              
	
                 

                  ARTICLE
                  XII

              	
                 

                MISCELLANEOUS

                 

              	
                 

                70

              
	
                    SECTION
                  12.01.

              	
                Amendments,
                  Etc.

              	
                70

              
	
                    SECTION
                  12.02.

              	
                Notices,
                  Etc

              	
                71

              
	
                    SECTION
                  12.03.

              	
                No
                  Waiver of Remedies

              	
                71

              
	
                    SECTION
                  12.04.

              	
                Costs,
                  Expenses and Indemnification

              	
                72

              
	
                    SECTION
                  12.05.

              	
                Right
                  of Set-off

              	
                73

              
	
                    SECTION
                  12.06.

              	
                Binding
                  Effect

              	
                73

              
	
                    SECTION
                  12.07.

              	
                Assignments
                  and Participation

              	
                73

              
	
                    SECTION
                  12.08.

              	
                Confidentiality

              	
                78

              
	
                    SECTION
                  12.09.

              	
                WAIVER
                  OF JURY TRIAL

              	
                78

              
	
                    SECTION
                  12.10.

              	
                Governing
                  Law; Submission to Jurisdiction

              	
                79

              
	
                    SECTION
                  12.11.

              	
                Relation
                  of the Parties; No Beneficiary

              	
                79

              
	
                    SECTION
                  12.12.

              	
                Execution
                  in Counterparts

              	
                79

              
	
                    SECTION
                  12.13.

              	
                Survival
                  of Agreement

              	
                79

              
	
                    SECTION
                  12.14.

              	
                Patriot
                  Act Notice

              	
                  
                  79

              


      

    

    

       

      Exhibits

       

      
        	
                EXHIBIT
                  A

              	
                -

              	
                Form
                  of Notice of Borrowing

              


      

      
        	
                EXHIBIT
                  B 

              	
                -

              	
                Form
                  of Notice of Conversion

              


      

      
        	
                EXHIBIT
                  C 

              	
                -

              	
                Form
                  of Opinion of Thelen Reid & Priest LLP, New York counsel to the
                  Obligors

              


      

      
        	
                EXHIBIT
                  D 

              	
                -

              	
                Form
                  of Opinion of the General Counsel of the Guarantor and counsel
                  to the
                  Borrowers

              


      

      
        	
                EXHIBIT
                  E 

              	
                -
                  

              	
                Form
                  of Lender Assignment 

              


      

      


       

      Schedules

       

      SCHEDULE
        1.01                  
Applicable
        Lending Offices

      SCHEDULE
        7.01(e)  Subsidiaries
        

      SCHEDULE
        7.01(h)  Material
        Litigation

      SCHEDULE
        7.01(n)  Existing
        Indebtedness

      SCHEDULE
        7.01(s)  Environmental
        Matters

       

      
        
          
          

        

        
          -iii-

          
            

          

        

        
          
          

        

      

    

     

    

       

      AMENDED
        AND RESTATED CREDIT AGREEMENT

       

      Dated
        as
        of August 11, 2006

       

      THIS
        AMENDED AND RESTATED CREDIT AGREEMENT
        is made
        by and among:

       

      
        	 	
                (i)

              	
                UNS
                  Electric, Inc., an Arizona corporation (“UNS
                  Electric”)
                  and UNS Gas, Inc., an Arizona corporation (“UNS
                  Gas”,
                  and together with UNS Electric being referred to herein, individually,
                  as
                  a “Borrower”
                  and, collectively, as the “Borrowers”),

              


      

       

      
        	 	
                (ii)

              	
                UniSource
                  Energy Services, Inc., an Arizona corporation (the “Guarantor”),
                  

              


      

       

      
        	 	
                (iii)

              	
                the
                  banks listed on the signature pages hereof as “Existing Lenders” (the
                  “Existing
                  Lenders”),
                  the banks listed on the signature pages hereof as “New Lenders” (the
                  “New
                  Lenders”,
                  and together with the Existing Lenders being referred to herein,
                  collectively, as the “Banks”),
                  and the other Lenders (as hereinafter defined) from time to time
                  party
                  hereto, and

              


      

       

      
        	 	
                (iv)

              	
                Union
                  Bank of California, N.A. (“Union
                  Bank”),
                  as administrative agent (in such capacity, together with its successors
                  and assigns in such capacity, the “Administrative
                  Agent”)
                  for the Lenders hereunder.

              


      

       

      PRELIMINARY
        STATEMENTS

       

      The
        Borrowers, the Existing Lenders, the Guarantor, The Bank of New York, as
        syndication agent, Wells Fargo Bank, National Association, as documentation
        agent, and Union Bank of California, N.A., as administrative agent, previously
        entered into that certain Credit Agreement, dated as of April 15, 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
        AND ACCOUNTING TERMS

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “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.

       

      “ABR
        Loan”
means
        a
        Loan that bears interest as provided in Section 3.05(b)(i).

       

      “ACC” means
        the
        Arizona Corporation Commission.

       

      “ACC
        Order”
means
        Opinion and Order No. 66028 issued by the ACC on July 3, 2003.

       

      “ACC
        Settlement Agreement”
means
        the settlement agreement dated as of April 1, 2003 between the Staff of the
        ACC Utilities Division, UniSource Energy, Tucson Electric Power Company and
        Citizens Communications Company.

       

      “Administrative
        Agent”
has
        the
        meaning assigned to such term in the preamble hereto.

       

      “Affiliate”
means,
        at any time, and with respect to any Person, (a) any other Person that at
        such
        time directly or indirectly through one or more intermediaries Controls,
        or is
        Controlled by, or is under common Control with, such first Person, and (b)
        any
        Person beneficially owning or holding, directly or indirectly, 10% or more
        of
        any class of voting or equity interests of any Obligor or any Subsidiary
        or any
        Person of which any Obligor and its Subsidiaries beneficially own or hold,
        in
        the aggregate, directly or indirectly, 10% or more of any class of voting
        or
        equity interests. As used in this definition, “Control”
means
        the possession, directly or indirectly, of the power to direct or cause the
        direction of the management and policies of a Person, whether through the
        ownership of voting securities, by contract or otherwise. Unless the context
        otherwise clearly requires, any reference to an “Affiliate” is a reference to an
        Affiliate of an Obligor.

       

      “Agreement”
means
        this Amended and Restated Credit Agreement, as amended, supplemented or
        otherwise modified from time to time.

       

      “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.

       

      “Applicable
        Lending Office”
means,
        with respect to each Lender, (i) such Lender’s Domestic Lending Office, in
        the case of an ABR Loan, and (ii) such Lender’s Eurodollar Lending Office,
        in the case of a Eurodollar Rate Loan.

       

      “Applicable
        Margin”
means,
        for any day, (a) with respect to any Eurodollar Rate Loan, 1.0% per
        annum,
        and (b)
        with respect to any ABR Loan, 0.0% per
        annum. 
        Notwithstanding the foregoing, each of the foregoing Applicable Margins shall
        be



      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


       

      increased
        by 2.0% per
        annum
        upon the
        occurrence and during the continuance of an Event of Default.

       

      “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 Rate Loan comprising part of the same Borrowing,
        a rate
per
        annum
        during
        each Interest Period equal at all times to the sum of the Eurodollar Rate
        for
        such Interest Period plus
        the
        Applicable Margin in effect from time to time during such Interest
        Period.

       

      “Availability
        Sublimit”
means,
        with respect to any Borrower at any time, the lesser of (a) 75% of the aggregate
        amount of the Commitments at such time and (b) the maximum amount of
        Indebtedness that such Borrower may incur at such time pursuant to Section
        10.5
        of the Note Purchase Agreement to which it is a party and Sections 8.02(e)
        and
        8.03(a) hereof. The Availability Sublimit for any Borrower shall in no event
        exceed (i) from the Closing Date until the date on which the conditions set
        forth in Section 6.02(b) have been satisfied, $30,000,000, and (ii) from
        and
        after the date on which the conditions set forth in Section 6.02(b) have
        been
        satisfied, $45,000,000.

       

      “Available
        Commitment”
means,
        for each Lender on any day, the unused portion of such Lender’s Commitment,
        computed after giving effect to all Extensions of Credit or prepayments to
        be
        made on such day and the application of proceeds therefrom. “Available
        Commitments”
means
        the aggregate of the Lenders’ Available Commitments.

       

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

       

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

       

      “Borrower
        Successor”
has
        the
        meaning assigned to such term in Section 8.02(b).

       

      “Borrowing”
means
        a
        borrowing consisting of Loans of the same Type, having the same Interest
        Period
        and made or Converted on the same day by the Lenders, ratably in accordance
        with
        their respective Percentages. Any Borrowing consisting of Loans of a particular
        Type may be referred to as being a Borrowing of such “Type”.
        All
        Loans of the same Type, having the same Interest Period and made or Converted
        on
        the same day shall be deemed a single Borrowing hereunder until repaid or
        next
        Converted.

       

      “Business
        Day”
means
        (a) for all purposes other than as covered by clause (b) below, a day other
        than
        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 close and (b)
        with
        respect to all notices and determinations in connection with, and payments
        of
        principal and interest on, Eurodollar Rate Loans, any day which is a Business
        Day


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      described
        in clause (a) and which is also a day for trading by and between banks in
        Dollar
        deposits in the London interbank market.

       

      “Capital
        Lease”
means,
        at any time, a lease with respect to which the lessee is required concurrently
        to recognize the acquisition of an asset and the incurrence of a liability
        in
        accordance with GAAP.

       

      “Capital
        Lease Obligation”
means,
        with respect to any Person and a Capital Lease, the amount of the obligation
        of
        such Person as the lessee under such Capital Lease which would, in accordance
        with GAAP, appear as a liability on a balance sheet of such Person.

       

      “Change
        of Control”
means
        the failure of UniSource Energy directly or indirectly to beneficially own
        100%
        of the shares of each Obligor’s voting stock outstanding. 

       

      “Closing
        Date”
means
        the date upon which each of the conditions precedent enumerated in Section
        6.01
        and, only with respect to the initial Extension of Credit, Section 6.02 has
        been
        fulfilled to the satisfaction of the Lenders, the Administrative Agent and
        the
        Borrowers. The Closing Date shall take place on or before August 11, 2006
        at the
        offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New
        York 10004, at 10:00 A.M. (New York, New York time), or such other time and/or
        location as the parties hereto may mutually agree.

       

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

       

      “Commitment”
        means,
        for
        each Lender, the obligation of such Lender to make Loans to any Borrower
        and to
        participate in Extensions of Credit resulting from the issuance (or extension,
        modification or amendment) of any Letter of Credit in an aggregate amount
        no
        greater than (i) the amount set forth opposite such Lender’s name on the
        signature pages hereof or (ii) if such Lender has entered into one or more
        Lender Assignments, the amount set forth for such Lender in the Register
        maintained by the Administrative Agent pursuant to Section 12.07(c), in each
        such case as such amount may be reduced from time to time pursuant to Section
        2.03. “Commitments”
means
        the total of the Lenders’ Commitments hereunder. The Commitments shall in no
        event exceed $60,000,000.

       

      “Confidential
        Information”
has
        the
        meaning assigned to such term in Section 12.08. 

       

      “Consolidated
        Debt”
means,
        with respect to any Borrower as of any date of determination, the total of
        all
        Indebtedness of such Borrower and its Subsidiaries outstanding on such date,
        after eliminating all offsetting debits and credits between such Borrower
        and
        its Subsidiaries and all other items required to be eliminated in the course
        of
        the preparation of consolidated financial statements of such Borrower and
        its
        Subsidiaries in accordance with GAAP.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      “Consolidated
        Income Available for Interest Charges”
means,
        with respect to any Borrower for any period, Consolidated Net Income of such
        Borrower for such period plus all amounts deducted in the computation thereof
        on
        account of (a) Interest Charges, (b) taxes imposed on or measured by income
        or
        excess profits, and (c) the amount of all depreciation and amortization
        allowances and other non-cash expenses of such Borrower and its Subsidiaries
        for
        such period.

       

      “Consolidated
        Long Term Debt” means,
        with respect to any Borrower as of any date of determination, the total of
        all
        Long Term Debt of such Borrower and its Subsidiaries outstanding on such
        date,
        after eliminating all offsetting debits and credits between such Borrower
        and
        its Subsidiaries and all other items required to be eliminated in the course
        of
        the preparation of consolidated financial statements of such Borrower and
        its
        Subsidiaries in accordance with GAAP.

       

      “Consolidated
        Net Income”
means,
        with respect to any Borrower and with reference to any fiscal period, the
        net
        income (or loss) of such Borrower and its Subsidiaries for such period (taken
        as
        a cumulative whole), as determined in accordance with GAAP, after eliminating
        all offsetting debits and credits between such Borrower and its Subsidiaries
        and
        all other items required to be eliminated in the course of the preparation
        of
        consolidated financial statements of such Borrower and its Subsidiaries in
        accordance with GAAP, adjusted to exclude (a) any extraordinary gain or loss
        reflected in the net income (or loss) for such Borrower and its Subsidiaries
        for
        such period and (b) any cumulative effect of a change in accounting principles
        reflected in the net income (or loss) for such Borrower and its Subsidiaries
        for
        such period.

       

      “Consolidated
        Net Worth”
means,
        with respect to any Person at any time:

       

      (a)     the
        total
        assets of such Person and its Subsidiaries which would be shown as assets
        on a
        consolidated balance sheet of such Person and its Subsidiaries as of such
        time
        prepared in accordance with GAAP, after eliminating all amounts properly
        attributable to minority interests, if any, in the stock and surplus of
        Subsidiaries; minus 

       

      (b)     the
        total
        liabilities of such Person and its Subsidiaries which would be shown as
        liabilities on a consolidated balance sheet of such Person and its Subsidiaries
        as of such time prepared in accordance with GAAP; minus

       

      (c)     the
        net
        book value of all assets (other than intangible assets eligible for cost
        recovery through regulatory rates) of such Person and its Subsidiaries, after
        deducting any reserves applicable thereto, which would be treated as intangible
        under GAAP, including, without limitation, goodwill, trademarks, trade names,
        service marks, brand names, copyrights, patents, unamortized debt discount
        and
        expense and organizational expenses.

       

      “Consolidated
        Total Capitalization”
means,
        with respect to any Borrower at any time, the sum of ConsolidatedNet Worth
        and
        Consolidated Debt of such Borrower at such time.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

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

       

      “Conversion”,
        “Convert”
or
        “Converted”
refers
        to a conversion of Loans of one Type into Loans of another Type, or to the
        selection of a new, or the renewal of the same, Interest Period for Loans,
        as
        the case may be, pursuant to Section 3.02.

       

      “Current
        Maturities of Long Term Debt”
means,
        at any time and with respect to any item of Long Term Debt, the portion of
        such
        Long Term Debt outstanding at such time which by the terms of such Long Term
        Debt or the terms of any instrument or agreement relating thereto is due
        on
        demand or within one year from such time (whether by sinking fund, other
        required prepayment or final payment at maturity) and is not directly or
        indirectly renewable, extendible or refundable at the option of the obligor
        under an agreement or firm commitment in effect at such time to a date one
        year
        or more from such time.

       

      “Default”
means
        any of the events specified in Section 9.01, whether or not any requirement
        for
        the giving of notice, the lapse of time, or both, has been
        satisfied.

       

      “Default
        Rate”
means
        a
        rate per
        annum
        equal at
        all times to the Applicable Rate for an ABR Loan in effect from time to
        time.

       

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

       

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

       

      “Distribution”
means,
        in respect of any corporation, association or other business
        entity:

       

      (a)     dividends
        or other distributions or payments on capital stock or other equity interests
        of
        such corporation, association or other business entity (except distributions
        in
        such stock or other equity interests); and 

       

      (b)     the
        redemption or acquisition of such stock or other equity interests or of
        warrants, rights or other options to purchase such stock or other equity
interests
        (except when solely in exchange for such stock or other equity interests)
        unless
        made, contemporaneously, from the net proceeds of a sale of such stock or
        other
        equity interests.
         

        “Dollars”
and
          the
          sign “$”
each
          means lawful money of the United States.

        
           

          
            
              
              

            

            
              6

              
                

              

            

            
              
              

            

          

           

        

         

      

      “Domestic
        Lending Office”
means,
        with respect to any Lender, the office or Affiliate of such Lender specified
        as
        its “Domestic
        Lending Office”
        opposite its name on Schedule 1.01 hereto or in the Lender Assignment pursuant
        to which it became a Lender, or such other office or Affiliate of such Lender
        as
        such Lender may from time to time specify in writing to the Borrower and
        the
        Administrative Agent.

       

      “Eligible
        Assignee”
means
        (a) a commercial bank or trust company organized under the laws of the United
        States, or any State thereof; (b) a commercial bank organized under the
        laws of any other country that is a member of the OECD, or a political
        subdivision of any such country, provided
        that
        such bank is acting through a branch or agency located in the United States;
        (c)
        the central bank of any country that is a member of the OECD; (d) any other
        commercial bank or other financial institution engaged generally in the business
        of extending credit or purchasing debt instruments; and (e) a Lender or an
        Affiliate of a Lender; provided,
        however,
        that
        (A) any such Person described in clauses (a) through (e) above shall also
        (i) have outstanding unsecured indebtedness that is rated A- or better by
        S&P or A3 or better by Moody’s (or an equivalent rating by another
        nationally-recognized credit rating agency of similar standing if neither
        of
        such corporations is then in the business of rating unsecured indebtedness
        of
        entities engaged in such businesses) or (ii) have combined capital and
        surplus (as established in its most recent report of condition to its primary
        regulator) of not less than $250,000,000 (or its equivalent in foreign
        currency), (B) any Person described in clause (b), (c), or (d) above, shall,
        on
        the date on which it is to become a Lender hereunder, (1) be entitled to
        receive payments hereunder without deduction or withholding of any United
        States
        Federal income taxes (as contemplated by Section 5.06) and (2) not be
        incurring any losses, costs or expenses of the type for which such Person
        could
        demand payment under Section 5.04(a) or (c) (except to the extent that, in
        the absence of the making of an assignment to such Person, the assigning
        Lender
        would have incurred an equal or greater amount of such losses, costs or expenses
        and such losses, costs or expenses would have been payable by the Borrowers
        to
        such assigning Lender hereunder), and (C) any Person described in clause
        (a),
        (b), (c), (d) or (e) above that is not a Lender shall, in addition, be
        acceptable to each Issuing Bank based upon its then-existing credit criteria.
        

       

      “Environmental
        Laws”
means
        any and all Federal, state, local, and foreign statutes, laws, regulations,
        ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
        franchises, licenses, agreements or governmental restrictions relating to
        pollution and the protection of the environment or the release of any materials
        into the environment, including but not limited to those related to hazardous
        substances or wastes, air emissions and discharges to waste or public
        systems.

       

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

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

                    
         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, and the rules and regulations promulgated thereunder from time to time
        in
        effect.

       

      “ERISA
        Affiliate”
means,
        with respect to any Obligor, any trade or business (whether or not incorporated)
        that is treated as a single employer together with such Obligor under section
        414 of the Code.

       

      “ERISA
        Event”
means,
        with respect to any Obligor, (a) any “reportable event”, as defined in Section
        4043 of ERISA or the regulations issued thereunder with respect to any Plan
        of
        such Obligor (other than an event for which the 30-day notice period is waived);
        (b) the existence with respect to any Plan of such Obligor 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 of such Obligor; (d) the incurrence
        by
        such Obligor or any of its ERISA Affiliates of any liability under Title
        IV of
        ERISA with respect to the termination of any Plan of such Obligor; (e) the
        receipt by such Obligor or any of its ERISA Affiliates from the PBGC of any
        notice of its intent to institute proceedings to terminate any Plan of such
        Obligor or to appoint a trustee to administer any Plan of such Obligor under
        Section 4042 of ERISA or the providing of notice by a plan administrator
        of the
        intent to terminate any Plan of such Obligor under Section 4041 of ERISA;
        (f)
        the incurrence by such Obligor or any of its ERISA Affiliates of any liability
        with respect to the withdrawal or partial withdrawal from any Plan or
        Multiemployer Plan of such Obligor; or (g) the receipt by such Obligor or
        any of
        its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan
        from such Obligor or any of its ERISA Affiliates 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.

       

      “Eurocurrency
        Liabilities”
has
        the
        meaning assigned to such term in Regulation D of the Board, as in effect
        from time to time. 

       

      “Eurodollar
        Lending Office”
means,
        with respect to any Lender, the office or Affiliate of such Lender specified
        as
        its “Eurodollar
        Lending Office”
        opposite its name on Schedule 1.01 hereto or in the Lender Assignment pursuant
        to which it became a

                     
        Lender (or, if no such office or Affiliate is specified, its Domestic Lending
        Office), or such other office or Affiliate of such Lender as such Lender
        may
        from time to time specify in writing to the Borrower and the Administrative
        Agent. 

       

      “Eurodollar
        Rate”
means,
        for
        each
        Interest Period for each Eurodollar Rate Loan made as part of the same
        Borrowing, an interest rate per
        annum
        (rounded
        upwards, if necessary, to the nearest whole multiple of 1/16 of 1%) equal
        to the
        rate at which Dollar deposits are offered for such Interest Period as displayed
        on the Reuters Screen LIBO

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

       Page
        (or, if such rate is not displayed on the Reuters Screen LIBO Page, then
        on the
        Telerate Screen LIBO Page) at or about 9:00 A.M. (Los Angeles, California
        time)
        two Business Days prior to the beginning of such Interest Period for delivery
        on
        the first day of such Interest Period, and in an amount approximately equal
        to
        the amount of such Eurodollar Rate Loan and for a period approximately equal
        to
        such Interest Period. If for any Interest Period for a Eurodollar Rate Loan
        no
        such displayed rate is available, the Administrative Agent shall determine
        such
        rate based on the average rate at which the Administrative Agent is offered
        deposits in Dollars of such duration and in the amount of $5,000,000 by prime
        banks in the London interbank market as of approximately 11:00 A.M. (London,
        England time) two Business Days before the commencement of such Interest
        Period.

       

      “Eurodollar
        Rate Loan”
means
        a
        Loan that bears interest as provided in Section 3.05(b)(ii).

       

      “Eurodollar
        Reserve Percentage”
of
        any
        Lender for each Interest Period for each Eurodollar Rate Loan means the reserve
        percentage applicable to such Lender during such Interest Period (or if more
        than one such percentage shall be so applicable, the daily average of such
        percentages for those days in such Interest Period during which any such
        percentage shall be so applicable) under Regulation D or other regulations
        issued from time to time by the Board for determining the maximum reserve
        requirement (including any emergency, supplemental or other marginal reserve
        requirement) then applicable to such Lender with respect to liabilities or
        assets consisting of or including Eurocurrency Liabilities having a term
        equal
        to such Interest Period. 

       

      “Event
        of Default”
means
        any of the events specified in Section 9.01, provided
        that any
        requirement for the giving of notice, the lapse of time, or both, has been
        satisfied.

       

      “Exchange
        Act”
means
        the Securities Exchange Act of 1934, as amended from time to time, and the
        rules
        and regulations promulgated thereunder from time to time.

       

      “Existing
        Credit Agreement”
has
        the
        meaning assigned to such term in the preliminary statements hereto.


       

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


      “Extension
        of Credit”
means
        (i) the making of a Borrowing (including any Conversion), (ii) the issuance
        of a
        Letter of Credit, or (iii) the amendment of any Letter of Credit having the
        effect of extending the stated termination date thereof, increasing the LC
        Outstandings thereunder, or otherwise altering any of the material terms
        or
        conditions thereof.

       

      “Fair
        Market Value”
means,
        at any time and with respect to any Property, the sale value of such Property
        that would be realized in an arm’s-length sale at such time between an informed
        and willing buyer and an informed and willing seller (neither being under
        a
        compulsion to buy or sell).

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      “Federal
        Funds Effective Rate”
means,
        for any period, a fluctuating interest rate per
        annum
        equal
        for each day during such period to the weighted average (rounded upwards,
        if
        necessary, to the next 1/100 of 1%) 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 (rounded upwards, if necessary, to the next
        1/100
        of 1%) of the quotations for such day for such transactions received by the
        Administrative Agent from three Federal funds brokers of recognized standing
        selected by the Administrative Agent.

       

      “Fee
        Letter”
has
        the
        meaning assigned to such term in Section 2.02(c).

       

      “Final
        Maturity Date”
means
        the later to occur of (i) April 15, 2008 and (ii) if (and only if) the
        conditions set forth in Section 6.02(b) have been satisfied, August 11,
        2011.

       

      “Foreign
        Lender”
means
        any Lender that is organized under the laws of a jurisdiction other than
        that in
        which the Borrowers are located. For purposes of this definition, the United
        States of America, each State thereof and the District of Columbia shall
        be
        deemed to constitute a single jurisdiction.

       

      “GAAP”
means
        generally accepted accounting principles in the United States of America
        as in
        effect from time to time.

       

      “Governmental
        Approval”
means
        all authorizations, approvals, certificates, permits, waivers, exemptions,
        consents, variances, franchises, registrations, filings, authorizations,
        licenses or similar orders of, or from, any Governmental Authority.

       

      “Governmental
        Authority”
means
        (a) the government of (i) the United States of America or any State or
        other political subdivision thereof, or (ii) any jurisdiction in which any
        Obligor or any Subsidiary thereof conducts all or any part of its business,
        or
        which asserts jurisdiction over any Properties of any Obligor or any Subsidiary
        thereof, or (b) any entity exercising executive, legislative, judicial,
        regulatory or administrative functions of, or pertaining to, any such
        government.

       

      “Governmental
        Rule”
means
        any statute, law, regulation, ordinance, rule, judgment, order, decree, permit,
        license, concession, directive, guideline, policy or rule of common law,
        requirement of, or other governmental restriction or any similar form of
        decision of or determination by, or any interpretation or administration
        of any
        of the foregoing by, any Governmental Authority, whether now or hereafter
        in
        effect.

       

      “Granting
        Lender”
has
        the
        meaning assigned to such term in Section 12.07(j).

       

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

       

      “Guarantor
        Successor”
has
        the
        meaning assigned to such term in Section 8.02(b).

       

      
        “Guaranty”
means
          the guaranty set forth in Article XI of this Agreement.

      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

       

      “Guaranty Obligation”
means,
        with respect to any Person, any obligation (except the endorsement in the
        ordinary course of business of negotiable instruments for deposit or collection)
        of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend
        or other obligation of any other Person in any manner, whether directly or
        indirectly, including, without limitation, obligations incurred through an
        agreement, contingent or otherwise, by such Person:

       

      (a)     to
        purchase such Indebtedness or obligation or any Property constituting security
        therefor;

       

      (b)     to
        advance or supply funds (i) for the purchase or payment of such Indebtedness
        or
        obligation, or (ii) to maintain any working capital or other balance sheet
        condition or any income statement condition of any other Person or otherwise
        to
        advance or make available funds for the purchase or payment of such Indebtedness
        or obligation;

       

      (c)     to
        lease
        Properties or to purchase Properties or services primarily for the purpose
        of
        assuring the owner of such Indebtedness or obligation of the ability of any
        other Person to make payment of the Indebtedness or obligation; or

       

      (d)     otherwise
        to assure the owner of such Indebtedness or obligation against loss in respect
        thereof.

       

      In
        any
        computation of the Indebtedness or other liabilities of the obligor under
        any
        Guaranty Obligation, the Indebtedness or other obligations that are the subject
        of such Guaranty Obligation shall be assumed to be direct obligations of
        such
        obligor.

       

      “Guaranty
        Termination Date”
means,
        with respect to any Borrower, the first date after the Closing Date on which
        no
        Indebtedness of such Borrower (including, without limitation, Indebtedness
        under
        the Note Purchase Agreement to which such Borrower is a party, but excluding
        Indebtedness under this Agreement) is guaranteed by, or otherwise has the
        benefit of any Guaranty Obligation of, the Guarantor.

       

      “Hazardous
        Material”
means
        any and all pollutants, toxic or hazardous wastes or any other substances
        that
        might pose a hazard to health or safety, the removal of which may be required
        or
        the generation, manufacture, refining, production, processing, treatment,
        storage, handling, transportation, transfer, use, disposal, release, discharge,
        spillage, seepage, or filtration of which is or shall be restricted, prohibited
        or penalized by any applicable law (including, without limitation, asbestos,
        urea formaldehyde foam insulation and polycholorinated biphenyls).

       

      “Indebtedness”
with
        respect to any Person means, at any time, without duplication:

       

      (a)     its
        liabilities for borrowed money and its redemption obligations in respect
        of
        mandatorily redeemable Preferred Stock;

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (b)     its
        liabilities for the deferred purchase price of Property acquired by such
        Person
        (excluding accounts payable arising in the ordinary course of business but
        including all liabilities created or arising under any conditional sale or
        other
        title retention agreement with respect to any such Property);

       

      (c)     all
        liabilities appearing on its balance sheet in accordance with GAAP in respect
        of
        Capital Leases;

       

      (d)     all
        liabilities for borrowed money secured by any Lien with respect to any Property
        owned by such Person (whether or not it has assumed or otherwise become liable
        for such liabilities);

       

      (e)     its
        liabilities in respect of letters of credit or instruments serving a similar
        function issued or accepted for its account by banks and other financial
        institutions (whether or not representing obligations for borrowed
        money);

       

      (f)     Swaps
        of
        such Person; and

       

      (g)     any
        Guaranty Obligation of such Person with respect to liabilities of a type
        described in any of clauses (a) through (f) above.

       

      Indebtedness
        of any Person shall include all obligations of such Person of the character
        described in clauses (a) through (g) above to the extent such Person remains
        legally liable in respect thereof notwithstanding that any such obligation
        is
        deemed to be extinguished under GAAP.

       

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

       

      “Interest
        Charges”
means,
        with respect to any Borrower for any period, the sum (without duplication)
        of
        the following (in each case, eliminating all offsetting debits and credits
        between such Borrower and its Subsidiaries and all other items required to
        be
        eliminated in the course of the preparation of consolidated financial statements
        of such Borrower
        and its Subsidiaries in accordance with GAAP): (a) all interest in respect
        of
        Indebtedness of such Borrower and its Subsidiaries (including imputed interest
        on Capital Lease Obligations) deducted in determining Consolidated Net Income
        for such period, together with all interest capitalized or deferred during
        such
        period and not deducted in determining Consolidated Net Income for such period,
        and (b) to the extent actually paid, all debt discount and expense amortized
        or
        required to be amortized in the determination of Consolidated Net Income
        for
        such period.

       

      “Interest
        Coverage Ratio”
means,
        with respect to any Borrower for any period, the ratio of (a) Consolidated
        Income Available for Interest Charges of such Borrower for such period to
        (b)
        Interest Charges of such Borrower for such period.

       

      “Interest
        Period”
has
        the
        meaning assigned to such term in Section 3.03.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      “Issuing
        Bank”
means
        any Lender designated by a Borrower, and acceptable to the Administrative
        Agent,
        in accordance with Section 4.01, as the issuer of a Letter of Credit pursuant
        to
        an Issuing Bank Agreement. As of the Closing Date, the Borrowers have designated
        Union Bank as an Issuing Bank, such designee has agreed to act as an Issuing
        Bank hereunder, and the Administrative Agent has accepted such designee pursuant
        to Section 4.01.

       

      “Issuing
        Bank Agreement”
means
        an agreement between an Issuing Bank and a Borrower, in form and substance
        satisfactory to the Administrative Agent, providing for the issuance of one
        or
        more Letters of Credit, in form and substance satisfactory to the Administrative
        Agent, in support of general corporate activities of such Borrower.

       

      “LC
        Payment Notice”
has
        the
        meaning assigned to such term in Section 4.04(b).

       

      “LC
        Outstandings”
means,
        for any Letter of Credit on any date of determination, the maximum amount
        available to be drawn under such Letter of Credit at any time on or after
        such
        date (assuming the satisfaction of all conditions for drawing enumerated
        therein).

       

      “Lender
        Assignment”
means
        an assignment and assumption agreement entered into by a Lender and an Eligible
        Assignee, and accepted by the Administrative Agent, in substantially the
        form of
        Exhibit E. 

       

      “Lenders”
means
        the Banks listed on the signature pages hereof, each Eligible Assignee that
        shall become a party hereto pursuant to Section 12.07, and, to the extent
        provided in Section 4.04(c), each Issuing Bank.

       

      “Letter
        of Credit”
means
        a
        letter of credit issued by an Issuing Bank pursuant to Section 4.02, as such
        letter of credit may from time to time be amended, modified or extended in
        accordance with the terms of this Agreement and the Issuing Bank Agreement
        to
        which it relates.

       

      “Letter
        of Credit Expiration Date”
means
        the date that occurs five Business Days prior to the Final Maturity
        Date.

       

      “Letter
        of Credit Sublimit”
means
        $30,000,000. In no event shall the aggregate LC Outstandings of all Letters
        of
        Credit outstanding on any date of determination (after giving effect to all
        Extensions of Credit on such date) exceed the Letter of Credit
        Sublimit.

       

      “Lien”
means,
        with respect to any Person, any mortgage, lien, pledge, charge, security
        interest or other encumbrance, or any interest or title of any vendor, lessor,
        lender or other secured party to or of such Person under any conditional
        sale or
        other title retention agreement or Capital Lease, upon or with respect to
        any
        Property or asset of such Person (including in the case of stock, stockholder
        agreements, voting trust agreements and all similar arrangements).

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      “Loan”
means
        a
        loan by a Lender to a Borrower pursuant to Section 3.01 (or deemed made pursuant
        to Section 4.04(c) or (d)), and refers to an ABR Loan or a Eurodollar Rate
        Loan
        (each of which shall be a “Type”
of
        Loan). All Loans by a Lender of the same Type, having the same Interest Period
        and made or Converted on the same day shall be deemed to be a single Loan
        by
        such Lender until repaid or next Converted. 

       

      “Loan
        Documents”
means
        this Agreement, any Promissory Notes, the Fee Letter, and the Issuing Bank
        Agreement(s), and any amendment, waiver, supplement or other modification
        to any
        of the foregoing.

       

      “Long
        Term Debt”
means,
        with respect to any Borrower, all Indebtedness of such Borrower which by
        its
        terms or by the terms of any instrument or agreement relating thereto matures,
        or which is otherwise payable or unpaid, one year or more from, or is directly
        or indirectly renewable or extendible at the option of the obligor in respect
        thereof to a date one year or more (including, without limitation, an option
        of
        such obligor under a revolving credit or similar agreement obligating the
        lender
        or lenders to extend credit over a period of one year or more) from, the
        date of
        the creation thereof, provided
        that
        Long Term Debt shall include, as at any date of determination, Current
        Maturities of Long Term Debt.

       

      “Material”
means,
        with respect to any Obligor, material in relation to the business, operations,
        affairs, financial condition, assets, Properties or prospects of such Obligor
        and its Subsidiaries taken as a whole.

       

      “Material
        Adverse Effect”
means,
        with respect to any Obligor, a material adverse effect on (a) the business,
        operations, affairs, financial condition, assets or Properties of such Obligor
        and its Subsidiaries taken as a whole, or (b) the ability of such Obligor
        to
        perform its obligations under this Agreement and the other Loan Documents
        to
        which it is a party, or (c) the validity or enforceability of this Agreement
        or
        any other Loan Document to which it is a party.

       

      “Moody’s”
means
        Moody’s Investors Service, Inc. or any successor thereto.


      “Multiemployer
        Plan”
means,
        with respect to any Obligor, a “multiemployer plan” (as such term is defined in
        Section 4001(a)(3) of ERISA) that is subject to Title IV of ERISA and to
        which
        such Obligor or any ERISA Affiliate of such Obligor is making or accruing
        an
        obligation to make contributions, or has within any of the preceding five
        plan
        years made or accrued an obligation to make contributions.

       

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

       

      “Note
        Purchase Agreements”
means,
        collectively, (i) the Note Purchase and Guaranty Agreement, dated as of August
        11, 2003, among UNS Electric, the Guarantor and the Purchasers named therein,
        and (ii) the Note Purchase and Guaranty Agreement, dated as of August 11,
        2003,
        among UNS Gas, the Guarantor and the Purchasers named therein.

       

      “Notice
        of Borrowing”
has
        the
        meaning assigned to such term in Section 3.01(a).

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      “OECD”
means
        the Organization for Economic Cooperation and Development.

       

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

       

      “Obligors”
means
        the Borrowers and, prior to the occurrence of the Guaranty Termination Date
        with
        respect to both Borrowers, the Guarantor.

       

      “Officer’s
        Certificate”
means,
        with respect to an Obligor, a certificate of a Senior Financial Officer of
        such
        Obligor or of any other officer of such Obligor whose responsibilities extend
        to
        the subject matter of such certificate.

       

      “Participant”
has
        the
        meaning assigned to such term in Section 12.07(e).

       

      “PBGC”
means
        the Pension Benefit Guaranty Corporation referred to in ERISA or any successor
        thereto.

       

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

       

      “Person”
means
        an individual, partnership, corporation, limited liability company, association,
        trust, unincorporated organization, or a government or agency or political
        subdivision thereof.

       

      “Permitted
        Lien”
means,
        with respect to any Person, each of the following:

       

      (a)     Liens
        for
        taxes, assessments or other governmental charges which are not yet due and
        payable or the payment of which is not at the time required by Section
        8.01(g);

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (b)     statutory
        Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen
        and other similar Liens, in each case, incurred in the ordinary course of
        business for sums not yet due and payable or the payment of which is not
        at the
        time required by Section 8.01(g);

       

      (c)     Liens
        (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary
        course of business (i) in connection with workers’ compensation, unemployment
        insurance and other types of social security or retirement benefits, or (ii)
        to
        secure (or to obtain letters of credit that secure) the performance of tenders,
        statutory obligations, surety bonds, appeal bonds, bids, leases (other than
        Capital Leases), performance bonds, purchase, construction or sales contracts
        and other similar obligations, in each case not incurred or made in connection
        with the borrowing of money, the obtaining of advances or credit or the payment
        of the deferred purchase price of Property;

       

      (d)     any
        attachment or judgment Lien, unless the judgment it secures shall not, within
        sixty days after the entry thereof, have been discharged or execution thereof
        stayed pending appeal, or shall not have been discharged within sixty days
        after
        the expiration of any such stay; 

       

      (e)     leases
        or
        subleases granted to others, easements, rights-of-way, restrictions and other
        similar charges or encumbrances, in each case incidental to, and not interfering
        with, the ordinary conduct of the business of such Person, provided
        that
        such Liens do not, in the aggregate, materially detract from the value of
        such
        Person’s Property subject to any such leases, subleases, easements,
        rights-of-way, restrictions or other similar charges or
        encumbrances;

       

      (f)     any
        Lien
        created to secure all or any part of the purchase price, or to secure
        Indebtedness incurred or assumed to pay all or any part of the purchase price
        or
        cost of construction, of property (or any improvement thereon) acquired
or
        constructed by such Person or a Subsidiary of such Person after the Closing
        Date, provided
        that:

       

      (i)     any
        such
        Lien shall extend solely to the item or items of such property (or improvement
        thereon) so acquired or constructed and, if required by the terms of the
        instrument originally creating such Lien, other property (or improvement
        thereon) which is an improvement to or is acquired for specific use in
        connection with such acquired or constructed property (or improvement thereon)
        or which is real property being improved by such acquired or constructed
        property (or improvement thereon);

       

      (ii)     the
        principal amount of the Indebtedness secured by any such Lien shall not,
        at the
        time such Lien is created, exceed an amount equal to the lesser of (A) the
        cost
        to such Person or such Subsidiary of the property (or improvement thereon)
        so
        acquired or constructed and (B) the Fair Market Value (as determined in good
        faith by the board of directors

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

       of
        such Person) of such property (or improvement thereon) at the time of such
        acquisition or construction; and 

       

      (iii)     any
        such
        Lien shall be created contemporaneously with, or within 90 days after, the
        acquisition or construction of such property; 

       

      (g)     Liens
        in
        existence on the Closing Date securing the payment or performance of any
        liabilities assumed by (i) UNS Gas pursuant to that certain asset purchase
        agreement, dated as of October 29, 2002, between UniSource Energy and Citizens
        Communications Company, pursuant to which Citizens Communications Company
        transferred certain assets (the “Gas
        Assets”)
        and
        liabilities to UNS Gas, and the agreements and instruments referred to therein,
        and (ii) UNS Electric pursuant to that certain asset purchase agreement,
        dated
        as of October 29, 2002, between UniSource Energy and Citizens Communications
        Company, pursuant to which Citizens Communications Company transferred certain
        assets (the “Electric
        Assets”,
        and
        together with the Gas Assets being referred to herein, collectively, as the
        “Assets”)
        and
        liabilities to UNS Electric, and the agreements and instruments referred
        to
        therein; and

       

      (h)     with
        respect to any Asset which consists of a leasehold or other possessory interest
        in real property, Liens to which the underlying fee estate in such real property
        is subject that do not and could not reasonably be expected to result in
        a
        Material Adverse Effect.

       

      “Plan”
means,
        with respect to any Obligor, 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 such Obligor
        or
        any of its ERISA Affiliates 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. 

       

      “Preferred
        Stock”
means
        any class of capital stock of a corporation that is preferred over any other
        class of capital stock of such corporation as to the payment of dividends
        or the
        payment of any amount upon liquidation or dissolution of such
        corporation.

       

      “Promissory
        Note”
means
        any promissory note of any Borrower payable to the order of a Lender (and,
        if
        requested, its registered assigns), issued pursuant to Section 3.01(d); and
“Promissory
        Notes”
means
        any or all of the foregoing.

       

      “Property”
or
        “Properties”
means,
        unless otherwise specifically limited, real or personal property of any kind,
        tangible or intangible, choate or inchoate, including cash, securities, accounts
        and contract rights; and the words “asset” and “property” as used herein shall
        be construed to have the same meaning and effect as the foregoing.

       

      “Recipient”
has
        the
        meaning assigned to such term in Section 12.08.

       

      “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

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

       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 assigned to such term in Section 12.07(c).

       

      “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 and agents of such Person and of
        such
        Person’s Affiliates.

       

      “Request
        for Issuance”
has
        the
        meaning assigned to such term in Section 4.02(a).

       

      “Required
        Lenders”
means,
        on any date of determination, Lenders that, collectively, on such date (i)
        hold
        at least 51% of the then aggregate outstanding principal amount of the Loans
        owing to Lenders or (ii) if no Loans are then outstanding, have Percentages
        in
        the aggregate of at least 51%. Any determination of those Lenders constituting
        the Required Lenders shall be made by the Administrative Agent and shall
        be
        conclusive and binding on all parties absent manifest error.

       

      “Requirement
        of Law”
means,
        as to any Person, the articles of incorporation and by-laws or other
        organizational or governing documents of such Person, and any Governmental
        Rules
        or determination of an arbitrator or a court or other Governmental

      Authority,
        in each case applicable to or binding upon such Person or any of its Property
        or
        to which such Person or any of its Property is subject.

       

      “Responsible
        Officer”
means,
        with respect to any Obligor, any Senior Financial Officer of such Obligor
        and
        any other officer of such Obligor with responsibility for the administration
        of
        the relevant portion of this Agreement.

       

      “Restricted
        Payment”
means
        (i) any Distribution in respect of any Person or any Subsidiary of such Person
        (other than on account of capital stock or other equity interests of a
        Subsidiary owned legally and beneficially by such Person or another Subsidiary
        of such Person), including, without limitation, any Distribution resulting
        in
        the acquisition by such Person of Securities which would constitute treasury
        stock, (ii) the purchase or acquisition (including pursuant to any merger
        with
        any Person that was not a wholly-owned Subsidiary of such Person prior to
        such
        merger) of any capital stock, evidences of indebtedness or other securities
        (including any option, warrant or other right to acquire any of the foregoing)
        of any other Person, (iii) the making of any loans or advances to, or any
        other
        investment in, any other Person, and (iv) the purchase or acquisition (in
        one
        transaction or a series of transactions) of any assets of any other Person
        constituting a business unit. For purposes of this Agreement, the amount
        of any
        Restricted Payment

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

       made
        in Property shall be the greater of (x) the Fair Market Value of such Property
        (as determined in good faith by the board of directors (or equivalent governing
        body) of the Person making such Restricted Payment) and (y) the net book
        value
        thereof on the books of such Person, in each case determined as of the date
        on
        which such Restricted Payment is made.

       

      “Revolving
        Credit Termination Date”
means
        the earlier to occur of (i) the Final Maturity Date and (ii) the date of
        termination or reduction in whole of the Commitments pursuant to Section
        2.03 or
        9.02.

       

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

       

      “Sanctioned
        Person”
means
        (i) any Person designated in the list of Specially Designated Nationals and
        Blocked Persons published by the Office of Foreign Assets Control of the
        U.S.
        Department of the Treasury, as amended from time to time; and (ii) any other
        Person with which transactions are prohibited under U.S. Economic Sanctions
        Law.

       

      “SEC”
means
        the Securities and Exchange Commission (or any successors thereto or an
        analogous Governmental Authority).

       

      “Securities
        Act”
means
        the Securities Act of 1933, as amended from time to time, and the rules and
        regulations promulgated thereunder from time to time in effect.

       

      “Security”
has
        the
        meaning set forth in section 2(a)(1) of the Securities Act.

       

      “Senior
        Financial Officer”
means,
        with respect to any Person, the chief financial officer, principal accounting
        officer, treasurer or comptroller of such Person.

       

      “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.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      “SPC”
has
        the
        meaning assigned to such term in Section 12.07(j).

       

      “Subsidiary”
means,
        as to any Person, any corporation, association or other business entity in
        which
        such Person or one or more of its Subsidiaries or such Person and one or
        more of
        its Subsidiaries owns sufficient equity or voting interests to enable it
        or them
        (as a group) ordinarily, in the absence of contingencies, to elect a majority
        of
        the directors (or Persons performing similar functions) of such entity, and
        any
        partnership or joint venture if more than a 50% interest in the profits or
        capital thereof is owned by such Person or one or more of its Subsidiaries
        or
        such Person and one or more of its Subsidiaries (unless such partnership
        can and
        does ordinarily take major business actions without the prior approval of
        such
        Person or one or more of its Subsidiaries). Unless the context otherwise
        clearly
        requires, any reference to a Subsidiary is a reference to a Subsidiary of
        an
        Obligor.

       

      “Swaps”
means,
        with respect to any Person, payment obligations with respect to interest
        rate
        swaps, currency swaps and similar obligations obligating such Person to make
        payments, whether periodically or upon the happening of a contingency. For
        the
        purposes of this Agreement, the amount of the obligation under any Swap shall
        be
        the amount determined in respect thereof as of the end of the then most recently
        ended fiscal quarter of such Person, based on the assumption that such Swap
        had
        terminated at the end of such fiscal quarter, and in making such determination,
        if any agreement relating to such Swap provides for the netting of amounts
        payable by and to such Person thereunder or if any such agreement provides
        for
        the simultaneous payment of amounts by and to such Person, then in each such
        case, the amount of such obligation shall be the net amount so
        determined.

       

      “Transactions”
means
        the execution, delivery and performance by the Obligors of this Agreement
        and
        the other Loan Documents, the issuance of Letters of Credit, the borrowing
        of
        Loans and the use of the proceeds thereof.

       

      “Type”
has
        the
        meaning assigned to such term (i) in the definition of “Loan”
when
        used in such context and (ii) in the definition of “Borrowing”
when
        used in such context.

       

      “Union
        Bank”
has
        the
        meaning assigned to such term in the preamble hereto.

       

      “UniSource
        Energy”
means
        UniSource Energy Corporation, a corporation incorporated under the law of
        the
        State of Arizona.

       

      “UNS
        Electric”
has
        the
        meaning assigned to such term in the preamble hereto.

       

      “UNS
        Gas”
has
        the
        meaning assigned to such term in the preamble hereto.

       

      “U.S.
        Economic Sanctions Law”
means
        (a) the International Emergency Economic Powers Act of 1977, as amended,
        the
        Trading with the Enemy Act of 1917, as amended, and any executive order issued
        thereunder and in effect from time to time and (b) the foreign assets control
        regulations of the U.S. Department of the Treasury, codified

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       at
        Title 31, Subtitle B, Chapter V of the Code of Federal Regulations, as amended,
        and any enabling legislation thereof.

       

      “Utility
        Business”
means
        the business of producing, developing, generating, transmitting, distributing,
        selling or supplying electrical energy or natural gas 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 Guarantor or any Subsidiary
        to
        enter.

       

      “Wholly-Owned
        Subsidiary”
means,
        at any time, any Subsidiary one hundred percent (100%) of all of the equity
        interests (except directors’ qualifying shares) and voting interests of which
        are owned by any one or more of any Obligor and such Obligor’s other
        Wholly-Owned Subsidiaries at such time.

       

      “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. Computation of Time Periods; Construction.
        (a)
        Unless otherwise indicated, each reference in this Agreement to a specific
        time
        of day is a reference to Los Angeles, California time. In the computation
        of
        periods of time under this Agreement, any period of a specified number of
        days
        or months shall be computed by including the first day or month occurring
        during
        such period and excluding the last such day or month. Unless the context
        requires otherwise, in the case of a period of time “from” a specified date “to”
or “until” a later specified date, the word “from”
means
        “from and including” and the words “to”
and
        “until”
each
        means “to but excluding”.

       

      (b)     Unless
        the context requires otherwise, the definitions of terms herein shall apply
        equally to the singular and plural forms of the terms defined. Whenever the
        context may require, any pronoun shall include the corresponding masculine,
        feminine and neuter forms. The words “include”,
        “includes”,
        and
“including”
shall
        be deemed to be followed by the phrase “without
        limitation”.
        The
        word “will”
shall
        be construed to have the same meaning and effect as the word “shall”.
        Unless
        the context requires otherwise (i) any definition of or reference to any
        agreement, instrument or other document herein shall be construed as referring
        to such agreement, instrument or other document as from time to time amended,
        restated, supplemented or otherwise modified (subject to any restrictions
        on
        such amendments, restatements, supplements or modifications set forth herein),
        (ii) any reference herein to any Person shall be construed to include such
        Person’s successors and assigns, (iii) the words “herein”,
        “hereof”
and
        “hereunder”,
        and
        words of similar import, shall be construed to refer to this Agreement in
        its
        entirety and not to any particular provision hereof and (iv) 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.

       

      SECTION
        1.03. Accounting Terms.
        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
        a Borrower notifies the Administrative Agent that such Borrower requests
        an
        amendment to any provision hereof to eliminate the effect of any
        change

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      occurring
        after the date hereof in GAAP or in the application thereof on the operation
        of
        such provision (including the effects of the application or discontinuance
        of
        the application of accounting for the effects of regulation to all or any
        portion of such Borrower’s operations), or if the Administrative Agent notifies
        a 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
        before such change shall have become effective until such notice shall have
        been
        withdrawn or such provision amended in accordance herewith.

       

      ARTICLE
        II

      COMMITMENTS

       

      SECTION
        2.01. The Commitments.
        (a)
        Each Lender severally agrees, on the terms and conditions hereinafter set
        forth,
        to make Loans to each Borrower and to participate in the issuance of Letters
        of
        Credit (and the LC Outstandings thereunder) during the period from the Closing
        Date until the Revolving Credit Termination Date, in an aggregate outstanding
        amount not to exceed on any day such Lender’s Available Commitment (after giving
        effect to all Extensions of Credit to be made on such day and the application
        of
        the proceeds thereof). Within the limits hereinafter set forth, each Borrower
        may, from the Closing Date until the Revolving Credit Termination Date, request
        Extensions of Credit hereunder, prepay Loans, or reduce or cancel Letters
        of
        Credit, and use the resulting increase in the Available Commitments for further
        Extensions of Credit in accordance with the terms hereof. 


      (b)     In
        no
        event shall any Borrower be entitled to request or receive any Extensions
        of
        Credit that would cause (i) the principal amount outstanding hereunder to
        exceed
        the Commitments, (ii) until the conditions set forth in Section 6.02(b) have
        been satisfied, the principal amount outstanding hereunder to exceed
        $40,000,000, or (iii) the sum of (A) the aggregate outstanding principal
        amount
        of Loans made to such Borrower and (B) the aggregate LC Outstandings of all
        Letters of Credit issued at the request of such Borrower and then outstanding,
        in each case after giving effect to such Extensions of Credit and the
        application of the proceeds thereof, to exceed such Borrower’s Availability
        Sublimit.

       

      SECTION
        2.02. Fees.
        (a)
        Each Borrower agrees to pay to the Administrative Agent for the account of
        each
        Lender a commitment fee at a rate equal to 0.15% per
        annum
        on 50%
        of the daily amount of such Lender’s Available Commitment, from the date hereof,
        in the case of each Bank, and from the effective date specified in the Lender
        Assignment pursuant to which it became a Lender, in the case of each other
        Lender, until the Revolving Credit Termination Date, payable quarterly in
        arrears on the last day of each March, June, September and December, commencing
        on the first such date to occur following the date hereof, and on the Revolving
        Credit Termination Date.

       

      (b)     Each
        Borrower agrees to pay to the Administrative Agent for the account of each
        Lender a commission on the daily aggregate amount of the LC Outstandings
        of all
        Letters of Credit issued at the request of such Borrower, from the date hereof
        until the Letter of Credit Expiration Date, at a rate per
        annum
        equal to
        the Applicable Margin with respect to Eurodollar 

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      Rate
        Loans from time to time, payable quarterly in arrears on the last day of
        each
        March, June, September and December, commencing on the first such date to
        occur
        following the date hereof, and on the Letter of Credit Expiration
        Date.

       

      (c)     In
        addition to the fees provided for in subsections (a) and (b) above, the
        Borrowers shall pay to the Administrative Agent, for its own account, such
        other
        fees as are provided for in that certain letter agreement, dated the Closing
        Date, among the Borrowers and the Administrative Agent (the “Fee
        Letter”),
        in
        the amounts and at the times specified therein.

       

      SECTION
        2.03. Reduction of the Commitments.
        (a) The
        Commitments shall be automatically and permanently terminated on the Revolving
        Credit Termination Date. 

       

      (b)     The
        Borrowers may, upon at least three Business Days’ prior written notice (duly
        executed by a Responsible Officer of each Borrower) to the Administrative
        Agent
        (which shall promptly distribute copies thereof to the Lenders), terminate
        in
        whole or reduce ratably in part the unused portions of the Commitments;
provided
        that any
        such partial reduction shall be in the aggregate amount of $5,000,000 or
        an
        integral multiple of $1,000,000 in excess thereof; and provided,
        further,
        that
        the Commitments shall in no event be reduced to an amount which is less than
        the
        aggregate LC Outstandings on the date of such reduction.

       

      (c)     In
        the
        event that, at any time, (i) all or a majority of the voting capital stock
        of
        any Borrower or Borrower Successor is sold, transferred or otherwise conveyed
        to
        any Person (other than a Wholly-Owned Subsidiary), (ii) all or substantially
        all
        of the assets of any Borrower or Borrower Successor are sold, transferred,
        leased or otherwise conveyed to any Person (other than a
        Wholly-Owned Subsidiary), or (iii) any Borrower or Borrower Successor no
        longer
        constitutes a Subsidiary, in each case as a result of or pursuant to a
        transaction (or series of transactions) permitted hereunder (including Section
        8.02(b)) or otherwise, then (A) all Obligations of such Borrower or Borrower
        Successor (as the case may be) shall be immediately due and payable, (B)
        all
        outstanding Letters of Credit issued at the request and for the account of
        such
        Borrower or Borrower Successor (as the case may be) shall be cancelled, or
        such
        Borrower or Borrower Successor (as the case may be) shall pay immediately
        to
        the
        Administrative Agent an amount equal to the aggregate LC Outstandings of
        all
        such Letters of Credit, to be held by the Administrative Agent (for its benefit
        and the benefit of the Issuing Banks and the Lenders) as cash collateral
        securing such LC Outstandings and such Borrower’s or Borrower Successor’s (as
        the case may be) reimbursement obligations with respect thereto,
        (C) the
        Commitments shall be automatically and permanently reduced by an amount equal
        to
        the excess (if any) of (1) the aggregate amount of the Commitments at such
        time
        over (2) $45,000,000, (D) such Borrower or Borrower Successor (as the case
        may
        be) shall no longer be permitted to request or receive any Extension of Credit
        and (E) upon the payment in full of all outstanding Obligations of such Borrower
        or Borrower Successor (as the case may be) and the satisfaction of the
        requirements set forth in clause (B) above, such Borrower or Borrower Successor
        (as the case may be) shall automatically and immediately cease to be a party
        to
        this Agreement; provided,
        however,
        that
        this paragraph (c) shall not apply to any transaction described in clause
        (i),
        (ii) or (iii) above with respect to any Borrower if (x) the Commitments have
        previously been reduced pursuant to clause (C) above, (y) such Borrower is
        the
        only borrower under this Agreement and (z) in connection with such transaction,
        both a Guarantor Successor and a Borrower Successor have assumed all obligations
        of the Guarantor (if any) and such Borrower, respectively, under this Agreement
        and

       

      
        
          
          

        

        
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       the
        other Loan Documents in accordance with Section 8.02(b)(i)(D), and the other
        conditions set forth in Section 8.02(b)(i)(A) through (E) have been
        satisfied.

       

      SECTION
        2.04. Computations of Outstandings.
        Whenever reference is made in this Agreement to the principal amount outstanding
        on any date under this Agreement, such reference shall refer to the sum of
        (a)
        the aggregate principal amount of all Loans outstanding on such date
plus
        (b) the
        aggregate LC Outstandings of all Letters of Credit outstanding on such date,
        in
        each case after giving effect to all Extensions of Credit to be made on such
        date and the application of the proceeds thereof. At no time shall the principal
        amount outstanding under this Agreement exceed (i) until the date on which
        the
        conditions set forth in Section 6.02(b) shall have been satisfied, $40,000,000
        or (ii) the aggregate amount of the Commitments, and at no time shall the
        portion of the principal amount outstanding under this Agreement attributed
        to
        any Borrower exceed such Borrower’s Availability Sublimit. References to the
        unused portion of the Commitments shall refer to the excess, if any, of the
        Commitments over the principal amount outstanding hereunder; and references
        to
        the unused portion of any Lender’s Commitment shall refer to such Lender’s
        Percentage of the unused Commitments.

       

      ARTICLE
        III

      LOANS

       

      SECTION
        3.01. Loans.
        (a)
        Each Borrower may request a Borrowing (other than a Conversion) by delivering
        a
        notice (a “Notice
        of Borrowing”)
        to the
        Administrative Agent no later
        than 11:00 A.M. on the third Business Day or, in the case of ABR Loans, on
        the
        first Business Day, prior to the date of the proposed Borrowing. The
        Administrative Agent shall give each Lender prompt notice of each Notice
        of
        Borrowing. Each Notice of Borrowing shall be in substantially the form of
        Exhibit A and shall specify the requested (i) date of such Borrowing (which
        shall be a Business Day, but in no event later than the Business Day immediately
        preceding the Revolving Credit Termination Date), (ii) Type of Loans to be
        made
        in connection with such Borrowing, (iii) Interest Period, if any, for such
        Loans and (iv) amount of such Borrowing. Each proposed Borrowing shall conform
        to the requirements of Sections 3.03 and 3.04.

       

      (b)     Each
        Lender shall, before 10:00 A.M. on the date of such Borrowing, make available
        for the account of its Applicable Lending Office to the Administrative Agent
        at
        the Administrative Agent’s address referred to in Section 12.02, in same day
        funds, such Lender’s Percentage of such Borrowing. After the Administrative
        Agent’s receipt of such funds and upon fulfillment of the applicable conditions
        set forth in Article VI, the Administrative Agent will make such funds available
        to the applicable Borrower at the Administrative Agent’s aforesaid address.
        Notwithstanding the foregoing, unless the Administrative Agent shall have
        received notice from a Lender prior to the date of any Borrowing that such
        Lender will not make available to the Administrative Agent such Lender’s
        Percentage of such Borrowing, the Administrative Agent may assume that such
        Lender has made such Percentage available to the Administrative Agent on
        the
        date of such Borrowing in accordance with the first sentence of this subsection
        (b), and the Administrative Agent may, in reliance upon such assumption,
        make
        available to the applicable Borrower on such date a corresponding
        amount.

       

      
        
          
          

        

        
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      (c) If
        and to
        the extent that any Lender (a “non-performing
        Lender”)
        shall
        not have made available to the Administrative Agent, in accordance with
        subsection (b) above, such Lender’s Percentage of any Borrowing, the
        non-performing Lender and the applicable Borrower severally agree to repay
        to
        the Administrative Agent forthwith on demand corresponding amounts (not to
        exceed the aggregate amount that such non-performing Lender failed to make
        available to the Administrative Agent), together with interest thereon for
        each
        day from the date such amount is made available to such Borrower until the
        date
        such amount is repaid to the Administrative Agent, at (i) in the case of
        such Borrower, the interest rate applicable at the time to Loans made in
        connection with such Borrowing and (ii) in the case of such Lender, the Federal
        Funds Effective Rate. Within the limits of each Lender’s Available Commitment
        and subject to the other terms and conditions set forth in this Agreement
        for
        the making of Loans, each Borrower may request (and the Lenders shall honor)
        one
        or more additional Borrowings from the performing Lenders to fund such repayment
        to the Administrative Agent. If a non-performing Lender shall repay to the
        Administrative Agent such corresponding amount in full (with interest as
        above
        provided), (x) the Administrative Agent shall apply such corresponding
        amount and interest to the repayment to the Administrative Agent (or repayment
        of Loans made to fund such repayment to the Administrative Agent), and shall
        make any remainder available to the applicable Borrower and (y) such amount
        so
        repaid shall be deemed to constitute such Lender’s Loan, made as part of such
        Borrowing for purposes of this Agreement as if funded concurrently with the
        other Loans made as part of such Borrowing, and such Lender shall forthwith
        cease to be deemed a non-performing Lender; if and so long as such
        non-performing Lender shall not repay such amount, and unless and until an
        Eligible Assignee shall have assumed
        and performed the obligations of such non-performing Lender, all computations
        by
        the Administrative Agent of Percentages, Commitments and payments hereunder
        shall be made without regard to the Commitments, or outstanding Loans, of
        such
        non-performing Lender, and any amounts paid to the Administrative Agent for
        the
        account of such non-performing Lender shall be held by the Administrative
        Agent
        in trust for such non-performing Lender in a non-interest-bearing special
        purpose account. Nothing herein shall in any way limit, waive or otherwise
        reduce any claims that any party hereto may have against any non-performing
        Lender. The failure of any Lender to make the Loan to be made by it as part
        of
        any Borrowing shall not relieve any other Lender of its obligation, if any,
        hereunder to make its Loan on the date of such Borrowing, but no Lender shall
        be
        responsible for the failure of any other Lender to make the Loan to be made
        by
        such other Lender on the date of any Borrowing.

       

      (d) Any
        Lender may request that Loans made by it hereunder be evidenced by a Promissory
        Note. In such event, the Borrowers 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 12.07) 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
        3.02. Conversion of Loans.
        Each
        Borrower may from time to time Convert any Loan (or portion thereof) of any
        Type
        made to such Borrower to one or more Loans of the same or any other Type
        by
        delivering a notice of such Conversion (a “Notice
        of Conversion”)
        to the
        Administrative Agent no later than 11:00 A.M. on (x) the third Business Day
        prior to the date

       

      
        
          
          

        

        
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       of
        any proposed Conversion into a Eurodollar Rate Loan and (y) the first Business
        Day prior to the date of any proposed Conversion into an ABR Loan. The
        Administrative Agent shall give each Lender prompt notice of each Notice
        of
        Conversion. Each Notice of Conversion shall be in substantially the form
        of
        Exhibit B and shall specify (i) the requested date of such Conversion (which
        shall be a Business Day), (ii) the Type of, and Interest Period, if any,
        applicable to, the Loans (or portions thereof) proposed to be Converted,
        (iii)
        the requested Type of Loans to which such Loans (or portions thereof) are
        proposed to be Converted, (iv) the requested initial Interest Period, if
        any, to
        be applicable to the Loans resulting from such Conversion and (v) the aggregate
        amount of Loans (or portions thereof) proposed to be Converted. Each proposed
        Conversion shall be subject to the provisions of Sections 3.03 and
        3.04.

       

      SECTION
        3.03. Interest Periods.
        The
        period between the date of each Eurodollar Rate Loan and the date of payment
        in
        full of such Loan shall be divided into successive periods (“Interest
        Periods”)
        for
        purposes of computing interest applicable thereto. The initial Interest Period
        for each such Loan shall begin on the day such Loan is made, and each subsequent
        Interest Period shall begin on the last day of the immediately preceding
        Interest Period for such Loan. The duration of each Interest Period shall
        be
        one, two, three or six months, as the applicable Borrower may, in accordance
        with Section 3.01 or 3.02, select; provided,
        however,
        that:

       

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

       

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

       

      (iii)     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.

       

      SECTION
        3.04. Other Terms Relating to the Making and Conversion of
        Loans.
        (a)  Notwithstanding anything in Section 3.01 or 3.02 to the
        contrary:

       

      (i)     each
        Borrowing (other than a Borrowing deemed made under Section 4.04(c) or (d))
        shall be in an aggregate amount not less than $1,000,000 or an integral multiple
        of $1,000,000 in excess thereof (or, in each case, such lesser amount as
        shall
        be equal to the total amount of the Available Commitments on such date, after
        giving effect to all other Extensions of Credit to be made on such date),
        and
        shall consist of Loans of the same Type, having the same Interest Period
        and
        made or Converted on the same day by the Lenders ratably according to their
        respective Percentages;

       

      
        
          
          

        

        
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      (ii)     a
        Borrower may request that more than one Borrowing be made on the same day;
        

       

      (iii)     at
        no
        time shall more than eight (8) different Borrowings comprising Eurodollar
        Rate
        Loans be outstanding hereunder;

       

      (iv)     no
        Eurodollar Rate Loan may be Converted on a date other than the last day of
        the
        Interest Period applicable to such Loan unless the corresponding amounts,
        if
        any, payable to the Lenders pursuant to Section 5.04(b) are paid
        contemporaneously with such Conversion;

       

      (v)     if
        a
        Borrower shall either fail to give a timely Notice of Conversion pursuant
        to
        Section 3.02 in respect of any Loans made to such Borrower or fail, in any
        Notice of Conversion that has been timely given by such Borrower, to select
        the
        duration of any Interest Period for Loans to be Converted into Eurodollar
        Rate
        Loans in accordance with Section 3.03, such Loans shall, on the last day
        of the
        then existing Interest Period therefor, automatically Convert into, or remain
        as, as the case may be, ABR Loans; and

       

      (vi)     if
        an
        Event of Default has occurred and is continuing with respect to any Borrower
        or,
        prior to the occurrence of the Guaranty Termination Date with respect to
        such
        Borrower, the Guarantor, (A) no outstanding Loans made to such Borrower may
        be
        Converted to or continued as Eurodollar Rate Loans and (B) unless repaid,
        each
        Eurodollar Rate Loan made to such Borrower shall be Converted to an ABR Loan
        at
        the end of the Interest Period applicable thereto.

       

      (b)     If
        any
        Lender shall notify the Administrative Agent that the introduction of or
        any
        change in, or in the interpretation of, any law or regulation makes it unlawful,
        or that any central bank or other Governmental Authority asserts that it
        is
        unlawful, for such Lender or its Applicable Lending Office to perform its
        obligations hereunder to make, or to fund or maintain, Eurodollar Rate Loans
        hereunder, (i) the obligation of such Lender to make, or to Convert Loans
        into, Eurodollar Rate Loans for any Borrowing from such Lender shall be
        forthwith suspended until the earlier to occur of the date upon which
        (A) such Lender shall cease to be a party hereto and (B) it is no
        longer unlawful for such Lender to make, fund or maintain Eurodollar Rate
        Loans,
        and (ii) if the maintenance of Eurodollar Rate Loans then outstanding
        through the last day of the Interest Period therefor would cause such Lender
        to
        be in violation of such law, regulation or assertion, such Lender may require
        each Borrower to either prepay or Convert all Eurodollar Rate Loans made
        by such
        Lender to such Borrower within five days after such Borrower’s receipt of such
        notice, and if such Borrower shall not have so prepaid or Converted such
        Eurodollar Rate Loans by such fifth day, then such Eurodollar Rate Loans
        shall
        be deemed automatically Converted to ABR Loans on such fifth day. Promptly
        upon
        becoming aware that the circumstances that caused such Lender to deliver
        such
        notice no longer exist, such Lender shall deliver notice thereof to the
        Administrative Agent (but the failure to do so shall impose no liability
        upon
        such Lender). Promptly upon receipt of such notice from such Lender (or upon
        such Lender’s assigning all of its Commitments, Loans, participation and other
        rights and obligations hereunder to an Eligible Assignee), the Administrative
        Agent shall deliver notice thereof to the Borrowers and the Lenders and such
        suspension shall terminate. 

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

       

      (c)     If the
        Required Lenders shall, at least one Business Day before the date of any
        requested Borrowing, notify the Administrative Agent that the Eurodollar
        Rate
        for Eurodollar Rate Loans to be made in connection with such Borrowing will
        not
        adequately reflect the cost to such Required Lenders of making, funding or
        maintaining their respective Eurodollar Rate Loans for such Borrowing, the
        right
        of the Borrowers to select Eurodollar Rate Loans for such Borrowing and any
        subsequent Borrowing shall be suspended until the Administrative Agent shall
        notify the Borrowers and the Lenders that the circumstances causing such
        suspension no longer exist, and each Loan to be made or Converted in connection
        with such Borrowing shall be an ABR Loan.

       

      (d)     If
        any
        Lender shall have delivered a notice to any Borrower or the Administrative
        Agent
        described in Section 3.04(b) or Section 3.06, or shall become a non-performing
        Lender under Section 3.01(c) or Section 4.04(c), and if and so long as such
        Lender shall not have withdrawn such notice or corrected such non-performance
        in
        accordance with said Section 3.04(b), Section 3.06, Section 3.01(c) or
        Section 4.04(c), the Borrowers or the Administrative Agent may demand that
        such
        Lender assign in accordance with Section 12.07, to one or more Eligible
        Assignees designated by the Borrowers or the Administrative Agent, all
(but
        not
        less than all) of such Lender’s Commitments, Loans, participation and other
        rights and obligations hereunder; provided
        that any
        such demand by the Borrowers during the continuance of a Default or an Event
        of
        Default shall be ineffective without the consent of the Required Lenders.
        If,
        within 30 days following any such demand by the Administrative Agent or the
        Borrowers, any such Eligible Assignee so designated shall fail to consummate
        such assignment on terms reasonably satisfactory to such Lender, or the
        Borrowers and the Administrative Agent shall have failed to designate any
        such
        Eligible Assignee, then such demand by the Borrowers or the Administrative
        Agent
        shall become ineffective, it being understood for purposes of this provision
        that such assignment shall be conclusively deemed to be on terms reasonably
        satisfactory to such Lender, and such Lender shall be compelled to consummate
        such assignment forthwith, if such Eligible Assignee (i) shall agree to such
        assignment in substantially the form of the Lender Assignment attached hereto
        as
        Exhibit E and (ii) shall tender payment to such Lender in an amount equal
        to the full outstanding Dollar amount accrued in favor of such Lender hereunder
        (as computed in accordance with the records of the Administrative Agent),
        including, without limitation, all accrued interest and fees and, to the
        extent
        not paid by the Borrowers, any payments required pursuant to Section
        5.04(b).

       

      (e)     Each
        Notice of Borrowing and Notice of Conversion shall be irrevocable and binding
        on
        the applicable Borrower. In the case of any Borrowing which the related Notice
        of Borrowing or Notice of Conversion specifies is to be comprised of Eurodollar
        Rate Loans, the applicable Borrower shall severally indemnify each Lender
        against any loss, cost or expense incurred by such Lender as a result of
        any
        failure by such Borrower to fulfill, on or before the date specified in such
        Notice of Borrowing or Notice of Conversion for such Borrowing, the applicable
        conditions (if any) set forth in this Article III (other than failure pursuant
        to the provisions of Section 3.04(c) hereof) or in Article VI, including
        any
        such loss (including loss of anticipated profits), cost or expense incurred
        by
        reason of the liquidation or reemployment of deposits or other funds acquired
        by
        such Lender to fund the Loan to be made by such Lender when such Loan, as
        a
        result of such failure, is not made on such date.

       

      
        
          
          

        

        
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      SECTION
        3.05. Repayment of Loans; Interest.

       

      (a)     Principal.
        Each
        Borrower shall repay in full, on the Revolving Credit Termination Date, the
        outstanding principal amount of the Loans made to such Borrower. 

       

      (b)     Interest.
        Each
        Borrower shall pay interest on the unpaid principal amount of each Loan made
        to
        such Borrower from the date of such Loan until such principal amount shall
        be
        paid in full, at the Applicable Rate for such Loan, payable as
        follows:

       

      (i)     ABR
        Loans.
        If such
        Loan is an ABR Loan, interest thereon shall be payable quarterly in arrears
        on
        the last day of each March, June, September and December, on the date of
        any
        Conversion of such ABR Loan and on the date such ABR Loan shall become due
        and
        payable or shall otherwise be paid in full; provided,
        however,
        that
        interest accruing on the principal amount of any ABR Loan that is not paid
        when
        due (whether at stated maturity, by acceleration or otherwise) shall be payable
        on demand.

       

      (ii)     Eurodollar
        Rate Loans.
        If such
        Loan is a Eurodollar Rate Loan, interest thereon shall be payable on the
        last
        day of each Interest Period for such Loan and, if the Interest Period for
        such
        Loan has a duration of more than three months, on that day of each third
        month
        during such Interest Period that corresponds to the first day of such Interest
        Period (or, if any such month does not have a corresponding day, then on
        the
        last day of such month); provided,
        however,
        that
        interest accruing on the principal amount of any Eurodollar Rate Loan that
        is
        not paid when due (whether at stated maturity, by acceleration or otherwise)
        shall be payable on demand.

       

      SECTION
        3.06. Additional Interest on Eurodollar Rate Loans.
        Each
        Borrower shall pay to the Administrative Agent for the account of each Lender
        any costs actually incurred by such Lender with respect to Eurodollar Rate
        Loans
        made to such Borrower that are attributable to such Lender’s compliance with
        regulations of the Board requiring the maintenance of reserves with respect
        to
        liabilities or assets consisting of or including Eurocurrency Liabilities.
        Such
        costs shall be paid to the Administrative Agent for the account of such Lender
        in the form of additional interest on the unpaid principal amount of each
        Eurodollar Rate Loan of such Lender made to such Borrower, from the date
        of such
        Eurodollar Rate Loan until such principal amount is paid in full, at an interest
        rate per
        annum
        equal at
        all times to the remainder obtained by subtracting (i) the Eurodollar Rate
        for
        the Interest Period for such Eurodollar Rate Loan from (ii) the rate obtained
        by
        dividing such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar
        Reserve Percentage of such Lender for such Interest Period, payable on each
        date
        on which interest is payable on such Eurodollar Rate Loan (but in no event
        earlier than five Business Days after the Borrower’s receipt of the certificate
        referred to in the last sentence of this Section 3.06). Such additional interest
        shall be determined by such Lender and notified to the applicable Borrower
        through the Administrative Agent. A certificate as to the amount of such
        additional interest and giving a reasonable explanation and calculation thereof
        shall be submitted to the applicable Borrower and the Administrative Agent
        by
        such Lender and shall be conclusive and binding for all purposes, absent
        manifest error.

       

      SECTION
        3.07. New Lenders.
        On
        the
        Closing Date, each New Lender and Increasing Lender (as hereinafter defined)
        shall purchase by assignment from the Existing

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      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, the outstanding Loans owing to each Lender shall equal such
        Lender’s Percentage of the aggregate amount of Loans owing to all Lenders. As
        used herein, the term “Increasing Lender” means each Existing Lender whose
        Commitment (as set forth on the signature pages hereof) exceeds its Commitment
        (as defined in the Existing Credit Agreement) under the Existing Credit
        Agreement.

       

      ARTICLE
        IV

      LETTERS
        OF CREDIT

       

      SECTION
        4.01. Issuing Banks. 
        Subject
        to the terms and conditions hereof, each Borrower may from time to time identify
        and arrange for one or more Lenders to act as Issuing Banks hereunder. Notice
        of
        any such designation by a Borrower shall be given to the Administrative
        Agent at least four Business Days prior to the first date upon which such
        Borrower proposes that such Issuing Bank issue its first Letter of Credit,
        so as
        to provide adequate time for such proposed Issuing Bank to be approved by
        the
        Administrative Agent hereunder (such approval not to be unreasonably withheld).
        Within two Business Days following the receipt of any such designation of
        a
        proposed Issuing Bank, the Administrative Agent shall notify the applicable
        Borrower as to whether such designee is acceptable to the Administrative
        Agent.
        Nothing contained herein shall be deemed to require any Lender to agree to
        act
        as an Issuing Bank, if it does not so desire.

       

      SECTION
        4.02. Letters of Credit.
        (a)
        Each Letter of Credit shall be issued (or the stated maturity thereof extended
        or terms thereof modified or amended) on not less than three Business Days’
prior written notice thereof to the Administrative Agent (which shall promptly
        distribute copies thereof to the Lenders) and the relevant Issuing Bank.
        Each
        such notice (a “Request
        for Issuance”)
        shall
        specify (i) the date (which shall be a Business Day, but in no event later
        than the date that occurs ten (10) Business Days prior to the Revolving Credit
        Termination Date) of issuance of such Letter of Credit (or the date of
        effectiveness of such extension, modification or amendment) and the stated
        expiry date thereof (which shall be no later than the date that occurs one
        year
        from the date of issuance of such Letter of Credit (or, in the case of any
        extension of a Letter of Credit, one year from the date of effectiveness
        of such
        extension), and in any event no later than the Letter of Credit Expiration
        Date,
        (ii) the proposed stated amount of such Letter of Credit (which shall not
        be less than $250,000) and (iii) such other information as shall
        demonstrate compliance of such Letter of Credit with the requirements specified
        therefor in this Agreement and the relevant Issuing Bank Agreement. Each
        Request
        for Issuance shall be irrevocable unless modified or rescinded by the applicable
        Borrower not less than one Business Day prior to the proposed date of issuance
        (or effectiveness) specified therein. Not later than 10:00 A.M. on the proposed
        date of issuance (or effectiveness) specified in such Request for Issuance,
        and
        upon fulfillment of the applicable conditions precedent and the other
        requirements set forth herein and in the relevant Issuing Bank Agreement,
        such
        Issuing Bank shall issue (or extend, amend or modify) such Letter of Credit
        and
        provide notice and a copy thereof to the Administrative Agent, which shall
        promptly furnish copies thereof to the Lenders.

       

      
        
          
          

        

        
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      (b)     Each
        Lender severally agrees with such Issuing Bank to participate in the Extension
        of Credit resulting from the issuance (or extension, modification or amendment)
        of such Letter of Credit, in the manner and the amount provided in Section
        4.04(b), and the issuance of such Letter of Credit shall be deemed to be
        a
        confirmation by such Issuing Bank and each Lender of such participation in
        such
        amount.

       

      (c)     Notwithstanding
        anything herein to the contrary, the aggregate LC Outstandings of all Letters
        of
        Credit outstanding at any one time shall not exceed the Letter of Credit
        Sublimit.

       

      SECTION
        4.03. Issuing Bank Fees
        Each
        Borrower shall pay directly to each Issuing Bank such fees and expenses,
        if any,
        specified to be paid by it to such Issuing Bank pursuant to the Issuing Bank
        Agreement to which such Borrower and such Issuing Bank are parties, at the
        times, and in the manner, specified in such Issuing Bank Agreement.

       

      SECTION
        4.04. Reimbursement to Issuing Banks.
        (a)
        Each Borrower hereby agrees to pay to the Administrative Agent for the account
        of each Issuing Bank, on demand made by such Issuing Bank to such Borrower
        and
        the Administrative Agent, on and after each date on which such Issuing Bank
        shall pay any amount under any Letter of Credit issued by such Issuing Bank
        at
        the request of such Borrower, a sum equal to the amount so paid plus interest
        on
        such amount from the date so paid by such Issuing Bank until repayment to
        such
        Issuing Bank in full at a fluctuating interest rate per
        annum
        equal at
        all times to the Applicable Rate for ABR Loans.

       

      (b)     If
        any
        Issuing Bank shall not have been reimbursed in full for any payment made
        by such
        Issuing Bank under any Letter of Credit issued by such Issuing Bank on the
        date
        of such payment, such Issuing Bank shall give the Administrative Agent and
        each
        Lender prompt notice thereof (an “LC
        Payment Notice”)
        no
        later than 10:00 A.M. on the Business Day immediately succeeding the date
        of
        such payment by such Issuing Bank. Each Lender severally agrees to purchase
        a
        participation in the reimbursement obligation of the applicable Borrower
        to such
        Issuing Bank under subsection (a) above, by paying to the Administrative
        Agent
        for the account of such Issuing Bank an amount equal to such Lender’s Percentage
        of such unreimbursed amount paid by such Issuing Bank, plus interest on such
        amount at a rate per
        annum
        equal to
        the Federal Funds Effective Rate from the date of such payment by such Issuing
        Bank to the date of payment to such Issuing Bank by such Lender. Each such
        payment by a Lender shall be made not later than 1:00 P.M. on the later to
        occur of (i) the Business Day immediately following the date of such
        payment by such Issuing Bank and (ii) the Business Day on which such Lender
        shall have received an LC Payment Notice from such Issuing Bank. Each Lender’s
        obligation to make each such payment to the Administrative Agent for the
        account
        of such Issuing Bank shall be several and shall not be affected by (A) the
        occurrence or continuance of any Default or Event of Default, (B) the failure
        of
        any other Lender to make any payment under this Section 4.04, or (C) the
        date of
        the drawing under the applicable Letter of Credit issued by such Issuing
        Bank.
        Each Lender further agrees that each such payment shall be made without any
        offset, abatement, withholding or reduction whatsoever. 

       

      (c)     The
        failure of any Lender to make any payment to the Administrative Agent for
        the
        account of an Issuing Bank in accordance with subsection (b) above shall
        not
        relieve any other Lender of its obligation to make payment, but no Lender
        shall
        be responsible for the failure of any other Lender. If any Lender (a
“non-performing
        Lender”)
        shall
        fail to make any payment

       

      
        
          
          

        

        
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      to
        the
        Administrative Agent for the account of an Issuing Bank in accordance with
        subsection (b) above within five Business Days after such Lender’s receipt of
        the LC Payment Notice relating thereto, then, for so long as such failure
        shall
        continue, such Issuing Bank shall be deemed, for purposes of Section 5.05
        and Article IX hereof, to be a Lender hereunder owed a Loan in an amount
        equal
        to the outstanding principal amount due and payable by such Lender to the
        Administrative Agent for the account of such Issuing Bank pursuant to subsection
        (b) above.

       

      (d)     Each
        participation purchased by a Lender under subsection (b) above shall
        constitute an ABR Loan deemed made by such Lender to the applicable Borrower
        on
        the date of such payment by the relevant Issuing Bank under the applicable
        Letter of Credit issued by such Issuing Bank at the request of such Borrower
        (irrespective of such Borrower’s noncompliance, if any, with the conditions
        precedent for Loans hereunder); and all such payments by the Lenders
in
        respect of any one such payment by such Issuing Bank shall constitute a single
        Borrowing hereunder.

       

      SECTION
        4.05. Obligations Absolute.
        The
        payment obligations of each Lender under Section 4.04(b) and of each Borrower
        under this Agreement in respect of any payment under any Letter of Credit
        and
        any Loan deemed made under Section 4.04(c) or (d) shall be unconditional
        and
        irrevocable, and shall be paid strictly in accordance with the terms of this
        Agreement under all circumstances, including the following
        circumstances:

       

      (i)     any
        lack
        of validity or enforceability of any Loan Document or any other agreement
        or
        instrument relating thereto or to such Letter of Credit;

       

      (ii)     any
        amendment or waiver of, or any consent to departure from, all or any of the
        Loan
        Documents;

       

      (iii)     the
        existence of any claim, set-off, defense or other right which any Borrower
        may
        have at any time against any beneficiary, or any transferee, of such Letter
        of
        Credit (or any Persons for whom any such beneficiary or any such transferee
        may
        be acting), any Issuing Bank, or any other Person, whether in connection
        with
        this Agreement, the transactions contemplated herein or by such Letter of
        Credit, or any unrelated transaction;

       

      (iv)     any
        statement or any other document presented under such Letter of Credit proving
        to
        be forged, fraudulent, invalid or insufficient in any respect or any statement
        therein being untrue or inaccurate in any respect;

       

      (v)     payment
        in good faith by any Issuing Bank under any Letter of Credit issued by such
        Issuing Bank against presentation of a draft or certificate which does not
        comply with the terms of such Letter of Credit; or

       

      (vi)     any
        other
        circumstance or happening whatsoever, whether or not similar to any of the
        foregoing.

       

      SECTION
        4.06. Liability of Issuing Banks and the Lenders.
        Each
        Borrower assumes all risks of the acts and omissions of any beneficiary or
        transferee of any Letter of Credit issued at the request of such Borrower
        in
        connection with such Letter of Credit, and neither the Issuing 

       

      
        
          
          

        

        
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      Bank
        that
        has issued such Letter of Credit, the Lenders nor any of their respective
        officers, directors, employees, agents or Affiliates shall be liable or
        responsible for (a) the use that may be made of such Letter of Credit or
        any acts or omissions of any beneficiary or transferee thereof in connection
        therewith; (b) the validity, sufficiency or genuineness of documents, or of
        any endorsement thereon, even if such documents should prove to be in any
        or all
        respects invalid, insufficient, fraudulent or forged; (c) payment by such
        Issuing Bank against presentation of documents that do not comply with the
        terms
        of such Letter of Credit, including failure of any documents to bear any
        reference or adequate reference to such Letter of Credit; or (d) any other
        circumstances whatsoever in making or failing to make payment under such
        Letter
        of Credit, except
        that the
        applicable Borrower shall have the right to bring suit against such Issuing
        Bank, and such Issuing Bank shall be liable to such Borrower and any Lender,
        to
        the extent of any direct,
        as opposed to consequential, damages suffered by such Borrower or such Lender
        which such Borrower or such Lender proves were caused by such Issuing Bank’s
        willful misconduct or gross negligence, including such Issuing Bank’s willful
        failure to make timely payment under such Letter of Credit following the
        presentation to it by the beneficiary thereof of a draft and accompanying
        certificate(s) which strictly comply with the terms and conditions of such
        Letter of Credit. In furtherance and not in limitation of the foregoing,
        any
        Issuing Bank may accept sight drafts and accompanying certificates presented
        under any Letter of Credit issued by such Issuing Bank that appear on their
        face
        to be in order, without responsibility for further investigation.
        Notwithstanding the foregoing, no Lender shall be obligated to indemnify
        any
        Borrower for damages caused by any Issuing Bank’s willful misconduct or gross
        negligence, and the obligation of each Borrower to reimburse the Lenders
        hereunder in accordance with the terms hereof shall be absolute and
        unconditional, notwithstanding the gross negligence or willful misconduct
        of any
        Issuing Bank.

       

      ARTICLE
        V

      PAYMENTS,
        COMPUTATIONS AND

      YIELD
        PROTECTION

       

      SECTION
        5.01. Payments and Computations.
        (a) The
        Borrowers shall make each payment hereunder and under the other Loan Documents
        not later than 10:00 A.M. on the day when due in Dollars to the Administrative
        Agent at its address referred to in Section 12.02 in same day funds, except
        payments to be made directly to any Issuing Bank as expressly provided herein;
        any payment received after 10:00 A.M. shall be deemed to have been received
        at
        the start of business on the next succeeding Business Day. The Administrative
        Agent will promptly thereafter cause to be distributed like funds relating
        to
        the payment of principal, interest, fees or other amounts payable to the
        Lenders, to the respective Lenders to which the same are payable, for the
        account of their respective Applicable Lending Offices, in each case to be
        applied in accordance with the terms of this Agreement. If and to the extent
        that any distribution of any payment from a Borrower required to be made
        to any
        Lender pursuant to the preceding sentence shall not be made in full by the
        Administrative Agent on the date such payment was received by the Administrative
        Agent, the Administrative Agent shall pay to such Lender, upon demand, interest
        on the unpaid amount of such distribution, at a rate per
        annum
        equal to
        the Federal Funds Effective Rate, from the date of such payment by such Borrower
        to the Administrative Agent to the date of payment in full by the Administrative
        Agent to such Lender of such unpaid amount. Upon the Administrative Agent’s
        acceptance of a Lender Assignment and recording of the

       

      
        
          
          

        

        
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       information
        contained therein in the Register pursuant to Section 12.07, from and after
        the
        effective date specified in such Lender Assignment, the Administrative Agent
        shall make all payments hereunder and under any Promissory Notes in respect
        of
        the interest assigned thereby to the Lender assignee thereunder, and the
        parties
        to such Lender Assignment shall make all appropriate adjustments in such
        payments for periods prior to such effective date directly between
        themselves.

       

      (b)     Each
        Borrower hereby authorizes the Administrative Agent, each Lender and each
        Issuing Bank, if and to the extent payment owed by such Borrower to the
        Administrative Agent, such Lender or such Issuing Bank, as the case may be,
        is
        not made when due hereunder (or,
        in
        the case of a Lender, under any Promissory Note held by such Lender), to
        charge
        from time to time against any or all of such Borrower’s accounts with the
        Administrative Agent, such Lender or such Issuing Bank, as the case may be,
        any
        amount so due.

       

      (c)     All
        computations of interest based on the Alternate Base Rate (when the Alternate
        Base Rate is based on the Reference Rate) shall be made by the Administrative
        Agent on the basis of a year of 365 or 366 days, as the case may be. All
        other
        computations of interest and fees hereunder (including computations of interest
        based on the Eurodollar Rate and the Federal Funds Effective Rate) shall
        be made
        by the Administrative Agent on the basis of a year of 360 days. In each such
        case, such computation shall be made for the actual number of days (including
        the first day but excluding the last day) occurring in the period for which
        such
        interest or fees are payable. Each such determination by the Administrative
        Agent or a Lender shall be conclusive and binding for all purposes, absent
        manifest error.

       

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

       

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

       

      (f)     Any
        fees,
        interest, costs, expenses or other amount (other than the principal amount
        of
        any Loan, which shall accrue interest at the Applicable Rate for such Loan)
        payable by the Borrower hereunder or under any of the Promissory Notes that
        is
        not paid when due (whether at stated maturity, by acceleration or otherwise)
        shall (to the fullest extent permitted by

       

      
        
          
          

        

        
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      law)
        bear
        interest, from the date when due until paid in full, at a rate per
        annum
        equal at
        all times to the Default Rate, payable on demand. 

       

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

       

      SECTION
        5.02. Interest Rate Determination.
        The
        Administrative Agent shall give prompt notice to the applicable Borrower
        and the
        Lenders of the interest rate determined by the Administrative Agent for purposes
        of Section 3.05(b)(i) or (ii) applicable to Loans made to such
        Borrower.

       

      SECTION
        5.03. Prepayments
        No
        Borrower shall have any right to prepay any principal amount of any Loans
        made
        to such Borrower other than as provided in subsections (a) and (b)
        below.

       

      (a)     Each
        Borrower may, upon at least three Business Days’ written notice, with respect to
        Eurodollar Rate Loans, and one Business Day’s written notice, with respect to
        ABR Loans, to the Administrative Agent stating the proposed date and the
        aggregate principal amount of the prepayment, and if such notice is given
        such
        Borrower shall, prepay the outstanding principal amounts of Loans made to
        such
        Borrower as part of the same Borrowing, in whole or ratably in part, together
        with (i) accrued interest to the date of such prepayment on the principal
        amount
        prepaid and (ii) in the case of Eurodollar Rate Loans, any amount payable
        to the Lenders pursuant to Section 5.04(b); provided,
        however,
        that
        each partial prepayment shall be in an aggregate principal amount of not
        less
        than $1,000,000 or an integral multiple of $1,000,000 in excess
        thereof.

       

      (b)     On
        the
        date of any termination or reduction of the Commitments pursuant to Section
        2.03, the Borrowers shall pay or prepay so much of the principal amount
        outstanding hereunder as shall be necessary in order that the aggregate
        principal amount outstanding hereunder (after giving effect to all Extensions
        of
        Credit to be made on such date and the application of the proceeds thereof)
        will
        not exceed the Commitments (and, with respect to each Borrower, such Borrower’s
        Availability Sublimit) following such termination or reduction, together
        with
        (i) accrued interest to the date of such prepayment on the principal amount
        prepaid and (ii) in the case of prepayments of Eurodollar Rate Loans, any
        amount payable to the Lenders pursuant to Section 5.04(b). In connection
        with
        any partial reduction of the Commitments pursuant to Section 2.03(b), the
        Borrowers shall designate, in the written notice delivered to the Administrative
        Agent pursuant to Section 2.03(b), which outstanding Borrowings will be prepaid
        pursuant to this subsection (b) on the date of such reduction; provided,
        that if
        the Borrowers fail to provide such designation, the prepayments required
        by this
        subsection (b) shall be applied (A) on a pro
        rata
        basis to
        the outstanding Borrowings of each Borrower, and (B) to outstanding ABR Loans
        up
        to the full amount thereof before they are applied to outstanding Eurodollar
        Rate Loans

       

      
        
          
          

        

        
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      (in
        the
        order of the remaining duration of their respective Interest Periods (the
        Eurodollar Rate Loans with the shortest remaining Interest Period to be prepaid
        first)).

       

      SECTION
        5.04. Yield Protection.

       

      (a)     Increased
        Costs.
        If, due
        to either (i) the introduction of or any change in or in the interpretation
        of any law or regulation after the date hereof, or (ii) the compliance with
        any guideline or request from any central bank or other governmental authority
        (whether or not having
        the force of law) issued or made after the date hereof, there shall be
        reasonably incurred any increase in (A) the cost to any Lender of agreeing
        to
        make or making, funding or maintaining Eurodollar Rate Loans, or of
        participating in the issuance, maintenance or funding of any Letter of Credit,
        or (B) the cost to any Issuing Bank of issuing or maintaining any Letter of
        Credit, then the Borrowers shall from time to time, promptly after receipt
        of
        written demand by such Lender or Issuing Bank, as the case may be (with a
        copy
        of such demand to the Administrative Agent), pay to the Administrative Agent
        for
        the account of such Lender or Issuing Bank, as the case may be, additional
        amounts sufficient to compensate such Lender or Issuing Bank, as the case
        may
        be, for such increased cost. A certificate as to the amount of such increased
        cost and giving a reasonable explanation and calculation thereof shall be
        submitted to the Borrowers and the Administrative Agent by such Lender or
        such
        Issuing Bank, as the case may be, shall constitute such demand and shall
        be
        conclusive and binding for all purposes, absent manifest error.

       

      (b)     Breakage.
        If, due
        to any prepayment pursuant to Section 5.03, an acceleration of maturity of
        the
        Loans pursuant to Section 9.02, or any other reason, any Lender receives
        payments of principal of any Eurodollar Rate Loan made to any Borrower other
        than on the last day of the Interest Period relating to such Loan, or if
        any
        Borrower shall Convert any Eurodollar Rate Loans on any day other than the
        last
        day of the Interest Period therefor, such Borrower shall, promptly after
        demand
        by such Lender (with a copy of such demand to the Administrative Agent),
        pay to
        the Administrative Agent for the account of such Lender any amounts required
        to
        compensate such Lender for additional losses, costs, or expenses (including
        anticipated lost profits) that such Lender may reasonably incur as a result
        of
        such payment or Conversion, including any loss, cost or expense incurred
        by
        reason of the liquidation or reemployment of deposits or other funds acquired
        by
        such Lender to fund or maintain such Loan. For purposes of this subsection
        (b)
        and Section 3.04(e), a certificate setting forth the amount of such additional
        losses, costs, or expenses and giving a reasonable explanation and calculation
        thereof shall be submitted to the applicable Borrower and the Administrative
        Agent by such Lender, shall constitute such demand and shall be conclusive
        and
        binding for all purposes, absent manifest error.

       

      (c)     Capital.
        If any
        Lender or Issuing Bank determines that (i) the introduction of or any
        change in or in the interpretation of any law or regulation after the date
        hereof or (ii) compliance with any law or regulation or any guideline or
        request from any central bank or other governmental authority (whether or
        not
        having the force of law) issued or made after the date hereof, affects or
        would
        affect the amount of capital required or expected to be maintained by such
        Lender or Issuing Bank, whether directly, or indirectly as a result of
        commitments of any corporation controlling such Lender or Issuing Bank (but
        without duplication), and the amount of such capital is increased by or based
        upon (A) the existence of such Lender’s or Issuing Bank’s

       

      
        
          
          

        

        
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      commitment
        to lend or issue or participate in any Letter of Credit hereunder, (B) the
        participation in or issuance or maintenance of any Letter of Credit or Loan
        or
        (C) other similar such commitments, then, promptly after demand by such
        Lender or Issuing Bank, the Borrowers shall pay to the Administrative Agent
        for
        the account of such Lender or Issuing Bank from time to time as specified
        by
        such Lender or Issuing Bank additional amounts sufficient to compensate such
        Lender or Issuing Bank in the light of such circumstances, to the extent
        that
        such Lender or Issuing Bank reasonably determines such increase in capital
        to be
        allocable to the transactions contemplated
        hereby. A certificate as to such amounts and giving a reasonable explanation
        and
        calculation thereof (to the extent permitted by law) shall be submitted to
        the
        Borrowers and the Administrative Agent by such Lender or Issuing Bank and
        shall
        be conclusive and binding for all purposes, absent manifest error.

       

      (d)     Notices,
        Etc.
        Each
        Lender hereby agrees to use its best efforts to notify the Borrowers of the
        occurrence of any event referred to in subsection (a), (b) or (c) of this
        Section 5.04 promptly after becoming aware of the occurrence thereof. Each
        Borrower shall pay the Administrative Agent, for the account of such Lender,
        the
        amount shown as due by such Borrower on any certificate delivered pursuant
        to
        this Section 5.04 within ten (10) Business Days after its receipt of the
        same.
        The failure of any Lender to provide such notice or to make demand for payment
        under said subsection shall not constitute a waiver of such Lender’s rights
        hereunder; provided
        that,
        notwithstanding any provision to the contrary contained in this Section 5.04,
        a
        Borrower shall not be required to reimburse any Lender for any amounts or
        costs
        incurred under subsection (a), (b) or (c) above, more than 270 days prior
        to the
        date that such Lender notifies such Borrower in writing thereof, in each
        case
        unless, and to the extent that, any such amounts or costs so incurred shall
        relate to the retroactive application of any event notified to such Borrower
        which entitles such Lender to such compensation. If any Lender shall
        subsequently determine that any amount demanded and collected under this
        Section
        5.04 was done so in error, such Lender will promptly return such amount to
        the
        applicable Borrower.

       

      (e)     Survival
        of Obligations.
        Subject
        to subsection (d) above, the Borrowers’ obligations under this Section 5.04
        shall survive the repayment of all other amounts owing to the Lenders, the
        Administrative Agent and the Issuing Banks under the Loan Documents and the
        termination of the Commitments.

       

      SECTION
        5.05. Sharing of Payments, Etc.
        If any
        Lender shall obtain any payment (whether voluntary, involuntary, through
        the
        exercise of any right of set-off, or otherwise) on account of the Loans owing
        to
        it (other than pursuant to Section 5.04 or 12.07) in excess of its ratable
        share
        of payments obtained by all the Lenders on account of the Loans of such Lenders,
        such Lender shall forthwith purchase from the other Lenders such participation
        in the Loans owing to them as shall be necessary to cause such purchasing
        Lender
        to share the excess payment ratably with each of them; provided,
        however,
        that if
        all or any portion of such excess payment is thereafter recovered from such
        purchasing Lender, such purchase from each Lender shall be rescinded and
        such
        Lender shall repay to the purchasing Lender the purchase price to the extent
        of
        such recovery together with an amount equal to such Lender’s ratable share
        (according to the proportion of (i) the amount of such Lender’s required
        repayment to (ii) the total amount so recovered from the purchasing Lender)
        of any interest or other amount paid or payable by the purchasing Lender
        in
        respect of the total amount so recovered. Each Borrower agrees that any Lender
        so purchasing a participation from another Lender pursuant to this Section
        5.05
        may, to

       

      
        
          
          

        

        
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       the
        fullest extent permitted by law, exercise all its rights of payment (including
        the right of set-off) with respect to such participation as fully as if such
        Lender were the direct creditor of such Borrower in the amount of such
        participation. Notwithstanding the foregoing, if any Lender shall obtain
        any
        such excess payment involuntarily, such Lender may, in lieu of purchasing
        participations from the other Lenders in accordance with this Section 5.05,
        on
        the date of receipt of
        such
        excess payment, return such excess payment to the Administrative Agent for
        distribution in accordance with Section 5.01(a).

       

      SECTION
        5.06. Taxes.
        (a) All
        payments by a Borrower hereunder and under the other Loan Documents shall
        be
        made in accordance with Section 5.01, free and clear of and without deduction
        for all present or future taxes, levies, imposts, deductions, charges or
        withholdings, and all liabilities with respect thereto, excluding,
        in the
        case of each Lender, each Issuing Bank and the Administrative Agent, taxes
        imposed on its overall net or gross income, receipts, capital, net worth,
        privilege of transacting business or corporate franchise taxes imposed on
        it by
        the jurisdiction under the laws of which such Lender, such Issuing Bank or
        the
        Administrative Agent (as the case may be) is organized or any political
        subdivision thereof and, in the case of each Lender, taxes imposed on its
        overall net or gross income, receipts, capital, net worth, privilege of
        transacting business or corporate franchise taxes imposed on it by the
        jurisdiction of such Lender’s Applicable Lending Office or any political
        subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
        charges, withholdings and liabilities being hereinafter referred to as
“Taxes”).
        If
        any Borrower shall be required by law to deduct any Taxes from or in respect
        of
        any sum payable by such Borrower hereunder or under any other Loan Document
        to
        any Lender, any Issuing Bank or the Administrative Agent, (i) the sum
        payable shall be increased as may be necessary so that after making all required
        deductions (including deductions applicable to additional sums payable under
        this Section 5.06) such Lender, such Issuing Bank or the Administrative Agent
        (as the case may be) receives an amount equal to the sum it would have received
        had no such deductions been made, (ii) such Borrower shall make such
        deductions, and (iii) such Borrower shall pay the full amount deducted to
        the relevant taxation authority or other authority in accordance with applicable
        law.

       

      (b)    In
        addition, each Borrower agrees to pay any present or future stamp or documentary
        taxes or any other similar taxes or charges that arise from any payment made
        by
        such Borrower hereunder or under any other Loan Document to which it is a
        party
        or from the execution, delivery or registration of, or otherwise with respect
        to, this Agreement or any other Loan Document (hereinafter referred to as
        “Other
        Taxes”).

       

      (c)     The
        Borrowers will indemnify each Lender, each Issuing Bank and the Administrative
        Agent for the full amount of Taxes and Other Taxes (including any Taxes and
        any
        Other Taxes imposed by any jurisdiction on amounts payable under this Section
        5.06) paid by such Lender, such Issuing Bank or the Administrative Agent
        (as the
        case may be) and any liability (including penalties, interest and expenses)
        arising therefrom or with respect thereto, whether or not such Taxes or Other
        Taxes were correctly or legally asserted. This indemnification shall be made
        within 30 days from the date such Lender, such Issuing Bank or the
        Administrative Agent (as the case may be) makes written demand therefor.
        Nothing
        herein shall preclude the right of any Borrower to contest any such Taxes
        or
        Other Taxes so paid, and each Lender, each Issuing Bank and the Administrative
        Agent (as the case may be) will, 

       

      
        
          
          

        

        
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      following
        notice from, and at the expense of, such Borrower, reasonably cooperate with
        such Borrower to preserve such Borrower’s rights to contest such Taxes or Other
        Taxes.

       

      (d)     Within
        30
        days after the date of any payment of Taxes, the applicable Borrower will
        furnish to the Administrative Agent, at its address referred to in Section
        12.02, the original or a certified copy of a receipt evidencing payment
        thereof.

       

      (e)     Each
        Bank
        represents and warrants that either (i) it is organized under the laws of a
        jurisdiction within the United States or (ii) it has delivered to the
        Borrowers or the Administrative Agent duly completed copies of such form
        or
        forms prescribed by the United States Internal Revenue Service indicating
        that
        such Bank is entitled to receive payments without deduction or withholding
        of
        any United States federal income taxes, as permitted by the Code or any tax
        treaty to which the United States is a party. Each other Lender agrees that,
        on
        or prior to the date upon which it shall become a party hereto, and upon
        the
        reasonable request from time to time of the Borrowers or the Administrative
        Agent, such Lender will deliver to the Borrowers and the Administrative Agent
        (to the extent that it is not prohibited by law from doing so) either (A) a
        statement that it is organized under the laws of a jurisdiction within the
        United States or (B) duly completed copies of such form or forms as may
        from time to time be prescribed by the United States Internal Revenue Service,
        indicating that such Lender is entitled to receive payments without deduction
        or
        withholding of any United States federal income taxes, as permitted by the
        Internal Revenue Code. Each Bank that has delivered, and each other Lender
        that
        hereafter delivers, to the Borrowers and the Administrative Agent the form
        or
        forms referred to in the two preceding sentences further undertakes to deliver
        to the Borrowers and the Administrative Agent, to the extent that it is not
        prohibited by law from doing so, further copies of such form or forms, or
        successor applicable form or forms, as the case may be, as and when any previous
        form filed by it hereunder shall expire or shall become incomplete or inaccurate
        in any respect. Each Lender represents and warrants that each such form supplied
        by it to the Administrative Agent and the Borrowers pursuant to this subsection
        (e), and not superseded by another form supplied by it, is or will be, as
        the
        case may be, complete and accurate, and such Lender acknowledges and agrees
        that
        nothing contained herein shall in any way limit, waive, or otherwise reduce
        any
        claim that the Administrative Agent or the Borrowers may have against such
        Lender in the event that any such form shall not be complete and
        accurate.

       

      (f)     Any
        Lender claiming any additional amounts payable pursuant to this Section 5.06
        shall use its best efforts (consistent with its internal policy and legal
        and
        regulatory restrictions) to change the jurisdiction of its Applicable Lending
        Office if the making of such a change would avoid the need for, or reduce
        the
        amount of, any such additional amounts that may thereafter accrue and would
        not,
        in the reasonable judgment of such Lender, be otherwise disadvantageous to
        such
        Lender.

       

      (g)     Without
        prejudice to the survival of any other agreement of the Borrowers hereunder,
        the
        agreements and obligations of the Borrowers contained in this Section 5.06
        shall
        survive the repayment of all other amounts owing to the Lenders, the
        Administrative Agent and the Issuing Banks under the Loan Documents and the
        termination of the Commitments. If and to the extent that the obligations
        of the
        Borrowers under this Section 5.06 are unenforceable for any reason, the
        Borrowers agree to make the maximum contribution to the payment and satisfaction
        thereof which is permissible under applicable law.

       

      
        
          
          

        

        
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      ARTICLE
        VI

      CONDITIONS
        PRECEDENT

       

      SECTION
        6.01. Conditions Precedent to Effectiveness.
        This
        Agreement, and the obligation of each Lender or Issuing Bank, as the case
        may
        be, to make Extensions 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 12.01):

       

      (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) written 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 (i) Issuing Bank Agreements, duly
        executed by each of the Borrowers and Union Bank, in form and substance
        satisfactory to the Administrative Agent, (ii) the Fee Letter, duly executed
        by
        the Borrowers, in form and substance satisfactory to the Administrative Agent,
        and (iii) the Promissory Notes (if requested by any Lender pursuant to Section
        3.01(d)), duly executed by the applicable Borrower. 

       

      (c)     The
        Administrative Agent shall have received a favorable written opinion (addressed
        to the Administrative Agent, the Issuing Banks and the Lenders and dated
        the
        Closing Date) of (i) Thelen Reid & Priest LLP, New York counsel for the
        Obligors, substantially in the form of Exhibit C, and (ii) Raymond S. Heyman,
        Esq., General Counsel for the Guarantor and counsel for the Borrowers,
        substantially in the form of Exhibit D. The Obligors hereby request such
        counsel
        to deliver such opinions. 

       

      (d)     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 Obligors, the authorization
        of
        the Transactions and any other legal matters relating to the Obligors, the
        Loan
        Documents or the Transactions, all in form and substance satisfactory to
        the
        Administrative Agent and its counsel. 

       

      (e)     The
        representations and warranties of the Obligors set forth in this Agreement
        and
        the other Loan Documents shall be true and correct, no Default or Event of
        Default shall have occurred and be continuing, and the Administrative Agent
        shall have received a certificate, dated the Closing Date and signed by the
        President, a Vice President or a Senior Financial Officer of each Obligor,
        confirming the same as of the Closing Date. 

       

      (f)     The
        Administrative Agent shall have received a certificate, dated the Closing
        Date
        and signed by the President, a Vice President or a Senior Financial Officer
        of
        each Obligor, confirming compliance with the conditions set forth in this
        Section 6.01. 

       

      (g)     The
        Administrative Agent and the Lenders shall have received all documentation
        and
        other information required by bank regulatory authorities under 

       

      
        
          
          

        

        
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      applicable
        “know your customer” and anti-money laundering rules and regulations, including
        without limitation the Patriot Act, with respect to the Obligors. 

       

      (h)     The
        Administrative Agent shall have received all fees and other amounts due and
        payable on or prior to the Closing Date, including all up-front fees and,
        to the
        extent invoiced, reimbursement or payment of all out-of-pocket expenses required
        to be reimbursed or paid by the Borrowers hereunder or under any other Loan
        Document. 

       

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

       

      (j)     Except
        as
        contemplated in Section 6.02(b)(i), all requisite Governmental Authorities
        and
        third parties, if any, shall have approved or consented to this Agreement,
        the
        other Loan Documents and the Transactions to the extent required and material
        (and the Administrative Agent shall have received certified copies of all
        such
        approvals and consents, which shall be in form and substance satisfactory
        to the
        Administrative Agent and the Lenders), no stay of any applicable regulatory
        approval shall have been issued and there shall be no litigation, governmental,
        administrative or judicial action, actual or, to the knowledge of the Obligors,
        threatened, that could reasonably be expected to restrain, prevent or impose
        burdensome conditions on this Agreement, the other Loan Documents or the
        Transactions.

       

      (k)     The
        Administrative Agent shall have received true, correct and complete copies,
        certified as to authenticity by the applicable Borrower, of any amendments
        or
        supplements, entered into at any time after April 15, 2005, to the Note Purchase
        Agreement to which such Borrower is a party.

       

      (l)     The
        Administrative Agent shall have received such other approvals, opinions and
        documents as any Lender, through the Administrative Agent, may reasonably
        request.

       

      SECTION
        6.02. Conditions Precedent to Each Extension of Credit.
        The
        obligation of each Lender or Issuing Bank, as the case may be, to make an
        Extension of Credit (including the initial Extension of Credit, but excluding
        Conversions) to or for the account of any Borrower shall be subject to the
        further conditions precedent that (a) on the date of such Extension of Credit
        and after giving effect thereto, the following statements shall be true (and
        each of the giving of the applicable notice or request with respect thereto
        and
        the making of such Extension of Credit shall constitute a representation
        and
        warranty by such Borrower that, on the date of such Extension of Credit,
        such
        statements are true):

       

      (i)     the
        representations and warranties of such Borrower and, prior to the occurrence
        of
        the Guaranty Termination Date with respect to such Borrower, the Guarantor
        contained in this Agreement and the other Loan Documents are true and correct
        on
        and as of the date of such Extension of Credit, before and after giving effect
        to such Extension of Credit and to the application of the proceeds thereof,
        as
        though made on
        and as
        of such date (except for any such representations and warranties that expressly
        

       

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

       

      relate
        to
        an earlier date, in which case such representations and warranties were true
        and
        correct as of such earlier date); and

       

      (ii)     no
        Default or Event of Default with respect to such Borrower or, prior to the
        occurrence of the Guaranty Termination Date with respect to such Borrower,
        the
        Guarantor has occurred and is continuing, or would result from such Extension
        of
        Credit or the application of the proceeds thereof; and

       

      (b)     in
        the
        case of any Extension of Credit that would result in the utilization of greater
        than $40,000,000 of the Commitments, the Administrative Agent shall have
        received on or before the date thereof: (i) a certified 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 Commitments provided by this
        Agreement and (B) the extension of the maturity date of the credit facilities
        established by this Agreement; and (ii) a favorable written opinion of counsel
        to the Obligors with respect to such ACC order, in form and substance
        satisfactory to the Administrative Agent.

       

      SECTION
        6.03. Determinations Under Section 6.01.
        For
        purposes of determining compliance with the conditions specified in Section
        6.01, each Lender shall be deemed to have consented to, approved or accepted
        or
        to be satisfied with each document or other matter required thereunder to
        be
        consented to or approved by or acceptable or satisfactory to the Lenders
        unless
        an officer of the Administrative Agent responsible for the transactions
        contemplated by this Agreement shall have received written notice from such
        Lender prior to the Closing Date specifying its objection thereto.

       

      SECTION
        6.04. Reliance on Certificates.
        The
        Lenders, the Issuing Banks and the Administrative Agent shall be entitled
        to
        rely conclusively upon the certificates delivered from time to time by officers
        of an Obligor as to the names, incumbency, authority and signatures of the
        respective individuals named therein until such time as the Administrative
        Agent
        may receive a replacement certificate, in form acceptable to the Administrative
        Agent, from an officer of such Obligor identified to the Administrative Agent
        as
        having authority to deliver such certificate, setting forth the names and
        true
        signatures of the officers and other representatives of such Obligor thereafter
        authorized to act on behalf of such Obligor.

       

      ARTICLE
        VII

      REPRESENTATIONS
        AND WARRANTIES

       

      SECTION
        7.01. Representations and Warranties of the Obligors.
        To
        induce the Administrative Agent, the Issuing Banks and the Lenders to enter
        into
        this Agreement and to make Extensions of Credit, each Obligor hereby represents
        and warrants to the Administrative Agent, each Issuing Bank and each Lender
        that:

       

      (a)     Organization;
        Power and Authority. Such
        Obligor is a corporation duly organized, validly existing and in good standing
        under the laws of its jurisdiction of incorporation, and is duly qualified
        as a
        foreign corporation and is in good standing in each jurisdiction
        in which such qualification is required by law, other than those jurisdictions
        as to which the failure to be so qualified or in good standing could not,
        individually or in the 

       

      
        
          
          

        

        
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      aggregate,
        reasonably be expected to have a Material Adverse Effect. Such Obligor has
        the
        corporate power and authority to own or hold under lease the Properties it
        purports to own or hold under lease, or proposes to own or hold under lease,
        to
        transact the business it transacts and proposes to transact, to execute and
        deliver the Loan Documents to which it is a party and to perform the provisions
        thereof.

       

      (b)     Authorization,
        Execution and Delivery. Each
        Loan
        Document to which such Obligor is a party has been duly authorized by all
        necessary corporate action on the part of such Obligor, and upon execution
        and
        delivery thereof each such Loan Document will constitute a legal, valid and
        binding obligation of such Obligor enforceable against such Obligor in
        accordance with its terms, except as such enforceability may be limited by
        (i)
        applicable bankruptcy, insolvency, reorganization, moratorium or other similar
        laws affecting the enforcement of creditors’ rights generally and (ii) general
        principles of equity (regardless of whether such enforceability is considered
        in
        a proceeding in equity or at law). Each Loan Document to which such Obligor
        is a
        party has been duly executed and delivered by such Obligor.

       

      (c)     Disclosure;
        No Material Adverse Change; Etc.
        Such
        Obligor has disclosed to the Administrative Agent and the Lenders all
        agreements, instruments and corporate or other restrictions to which it or
        any
        of its Subsidiaries is subject, and all other matters known to it, that,
        individually or in the aggregate, could reasonably be expected to result
        in a
        Material Adverse Effect. Neither the Information Memorandum, the Disclosure
        Documents nor any of the other reports, financial statements, certificates
        or
        other information furnished by or on behalf of such Obligor 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 material misstatement of a 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, such Obligor 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. Except as disclosed in the Information
        Memorandum, the Disclosure Documents or in one of the documents, certificates
        or
        other writings identified therein, since December 31, 2005, there has been
        no
        change in the financial condition, operations, business, Properties or prospects
        of any Obligor or any Subsidiary of any Obligor except changes that individually
        or in the aggregate could not reasonably be expected to have a Material Adverse
        Effect. There is no fact known to such Obligor that could reasonably be expected
        to have a Material Adverse Effect that has not been set forth herein or in
        the
        Information Memorandum, the Disclosure Documents or the other documents,
        certificates and other writings delivered to the Administrative Agent and
        the
        Lenders prior to the Closing Date by or on behalf of the Obligors specifically
        for use in connection with the transactions contemplated hereby.

       

      (d)     Financial
        Condition.
        The
        most recent financial statements delivered by such Obligor pursuant to Section
        8.01(a)(i) or (ii) (including, without limitations, the financial statements
        of
        the Obligors for the fiscal year ended December 31, 2005) present fairly,
        in all
        material respects, the financial position and results of operations and cash
        flows of such Obligor

       

      
        
          
          

        

        
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       and
        its 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 8.01(a)(i). Neither such
        Obligor
        nor any of its Subsidiaries had, at the date of the most recent balance sheet
        referred to above, any Guaranty Obligation, 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, was material to such Obligor and its Subsidiaries, taken
        as
        a whole, and which was not reflected in the foregoing statements or in the
        notes
        thereto. During the period from December 31, 2005 to and including the date
        hereof there has been no Disposition by such Obligor or any of its Subsidiaries
        of any material part of its business or Property.

       

      (e)     Organization
        and Ownership of Shares of Subsidiaries. 

       

      (i)     As
        of the
        Closing Date, Schedule 7.01(e) contains (except as noted therein) complete
        and
        correct lists of (i) such Obligor’s Subsidiaries, showing, as to each
        Subsidiary, the correct name thereof, the jurisdiction of its organization,
        and
        the percentage of shares of each class of its capital stock or similar equity
        interests outstanding owned by such Obligor and each other Subsidiary, (ii)
        each
        Obligor’s directors and senior officers, and (iii) the Obligors’ Affiliates,
        other than Subsidiaries.

       

      (ii)     All
        of
        the outstanding shares of capital stock or similar equity interests of each
        Subsidiary shown in Schedule 7.01(e) as being owned by an Obligor and its
        Subsidiaries have been validly issued, are fully paid and nonassessable and
        are
        owned by such Obligor or another Subsidiary free and clear of any Lien (except
        as otherwise disclosed in Schedule 7.01(e)).

       

      (iii)     Each
        Subsidiary identified in Schedule 7.01(e) is a corporation or other legal
        entity
        duly organized, validly existing and in good standing under the laws of its
        jurisdiction of organization, and is duly qualified as a foreign corporation
        or
        other legal entity and is in good standing in each jurisdiction in which
        such
        qualification is required by law, other than those jurisdictions as to which
        the
        failure to be so qualified or in good standing could not, individually or
        in the
        aggregate, reasonably be expected to have a Material Adverse Effect. Each
        such
        Subsidiary has the corporate or other power and authority to own or hold
        under
        lease the Properties it purports to own or hold under lease and to transact
        the
        business it transacts and proposes to transact.

       

      (iv)     No
        Subsidiary of any Borrower is a party to any agreement, or otherwise subject
        to
        any legal restriction, restricting the ability of such Subsidiary to pay
        dividends out of profits or make any other similar distributions of profits
        to
        such Borrower or any of its Subsidiaries that owns outstanding shares of
        capital
        stock or similar equity interests of such Subsidiary, other than (A) this
        Agreement and the other Loan Documents, (B) the agreements listed on Schedule
        7.01(e), (C) customary limitations imposed by corporate law
        statutes and (D) any covenant contained in an agreement evidencing Indebtedness
        permitted to be incurred by such Subsidiary pursuant to Section 8.02(e) that
        restricts the payment of a dividend or distribution upon the occurrence and
        during the continuance of a default thereunder. 

       

      
        
          
          

        

        
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      (f)     Compliance
        with Laws, Other Instruments, etc.
        The
        execution, delivery and performance by such Obligor of each Loan Document
        to
        which it is a party will not (i) contravene, result in any breach of, or
        constitute a default under, or result in the creation of any Lien in respect
        of
        any Property of such Obligor or any of its Subsidiaries under, any indenture,
        mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate
        charter or by-laws, or any other agreement or instrument to which such Obligor
        or any such Subsidiary is bound or by which such Obligor or any such Subsidiary
        or any of their respective Properties may be bound or affected, (ii) conflict
        with or result in a breach of any of the terms, conditions or provisions
        of any
        order, judgment, decree, or ruling of any court, arbitrator or Governmental
        Authority applicable to such Obligor or any of its Subsidiaries or (iii)
        violate
        any provision of any Governmental Rule applicable to such Obligor or any
        of its
        Subsidiaries.

       

      (g)     Governmental
        Authorizations, etc.
        No
        consent, approval or authorization of, or registration, filing or declaration
        with, any Governmental Authority is required in connection with the execution,
        delivery or performance by such Obligor of any Loan Document to which it
        is a
        party, except for (i) until the satisfaction of the conditions set forth
        in
        Section 6.02(b)(i), the approval of the ACC that is required for the extension
        of the Final Maturity Date from April 15, 2008 and the increase in the
        Commitments above $40,000,000 and (ii) the ACC Order, which ACC Order has
        been
        obtained and is in full force and effect.

       

      (h)     Litigation;
        Observance of Agreements, Statutes and Orders. 

       

      (i)     Except
        as
        disclosed in Schedule 7.01(h), there are no actions, suits or proceedings
        pending or, to the knowledge of such Obligor, threatened against or affecting
        such Obligor or any of its Subsidiaries or any Property of such Obligor or
        any
        of its Subsidiaries in any court or before any arbitrator of any kind or
        before
        or by any Governmental Authority (A) that involve any of the Loan Documents
        or
        the Transactions or (B) that, individually or in the aggregate, could reasonably
        be expected to have a Material Adverse Effect.

       

      (ii)     Neither
        such Obligor nor any of its Subsidiaries is in default under any term of
        any
        agreement or instrument to which it is a party or by which it is bound, or
        any
        order, judgment, decree or ruling of any court, arbitrator or Governmental
        Authority or is in violation of any applicable law, ordinance, rule or
        regulation (including, without limitation, Environmental Laws) of any
        Governmental Authority, which default or violation, individually or in the
        aggregate, could reasonably be expected to have a Material Adverse
        Effect.

       

      (i)     Taxes.
        Such
        Obligor and each of its Subsidiaries have filed all tax returns that are
        required to have been filed in any jurisdiction, and have paid all taxes
        shown
        to be due and payable on such returns and all other taxes and assessments
        levied
        upon them or their Properties, income
        or
        franchises, to the extent such taxes and assessments have become due and
        payable
        and before they have become delinquent, except for any taxes and assessments
        (i)
        the amount of which is not individually or in the aggregate Material or (ii)
        the
        amount, applicability or validity of which is currently being contested in
        good
        faith by appropriate proceedings and with respect to which such Obligor or
        such
        Subsidiary, as the case may be, has established adequate reserves in accordance
        with GAAP. Such Obligor knows of no basis for any other tax or assessment
        that

       

      
        
          
          

        

        
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      could
        reasonably be expected to have a Material Adverse Effect. The charges, accruals
        and reserves on the books of such Obligor and its Subsidiaries in respect
        of
        Federal, state or other taxes for all fiscal periods are adequate.

       

      (j)     Title
        to Property; Leases.
        Such
        Obligor and its Subsidiaries have good and sufficient title to their respective
        properties that individually or in the aggregate are Material, in each case
        free
        and clear of Liens prohibited by this Agreement. All leases that individually
        or
        in the aggregate are Material are valid and subsisting and are in full force
        and
        effect in all Material respects.

       

      (k)     Licenses,
        Permits, etc. 

       

      (i)     Such
        Obligor and its Subsidiaries own or possess all licenses, permits, franchises,
        authorizations, patents, copyrights, service marks, trademarks and trade
        names,
        or rights thereto, that individually or in the aggregate are Material, without
        known conflict with the rights of others;

       

      (ii)     to
        the
        best knowledge of such Obligor, no product of such Obligor infringes in any
        material respect any license, permit, franchise, authorization, patent,
        copyright, service mark, trademark, trade name or other right owned by any
        other
        Person; and

       

      (iii)     to
        the
        best knowledge of such Obligor, there is no Material violation by any Person
        of
        any right of such Obligor or any of its Subsidiaries with respect to any
        patent,
        copyright, service mark, trademark, trade name or other right owned or used
        by
        such Obligor or such Subsidiary.

       

      (l)     Compliance
        with ERISA.

       

      (i)     Such
        Obligor and each of its ERISA Affiliates have operated and administered each
        Plan in compliance with all applicable laws except for such instances of
        noncompliance as have not resulted in and could not reasonably be expected
        to
        result in a Material Adverse Effect. Neither such Obligor nor any of its
        ERISA
        Affiliates has incurred any liability pursuant to Title I or IV of ERISA
        (other
        than claims for benefits in the ordinary course or PBGC premiums required
        by
        Title IV of ERISA) or the penalty or excise tax provisions of the Code relating
        to employee benefit plans (as defined in Section 3 of ERISA), and no event,
        transaction or condition has occurred or exists that could reasonably be
        expected to result in the incurrence of any such liability by such Obligor
        or
        any of its ERISA Affiliates, or in the imposition of any Lien on any of the
        rights or Properties of such Obligor or any of its ERISA Affiliates, in either
        case pursuant to Title I or IV of ERISA or to such penalty or excise tax
        provisions or to Section 401(a)(29)
        or 412 of the Code, other than such liabilities or Liens as would not be
        individually or in the aggregate Material.

       

      (ii)     The
        present value of the aggregate benefit liabilities under each of such Obligor’s
        Plans (other than Multiemployer Plans), determined as of the end of such
        Plan’s
        most recently ended plan year on the basis of the actuarial assumptions
        specified for funding purposes in such Plan’s most recent actuarial valuation
        report, did not exceed

       

      
        
          
          

        

        
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      the
        aggregate current value of the assets of such Plan allocable to such benefit
        liabilities by an amount, in the case of any single Plan or in the aggregate
        for
        all Plans, that has resulted or could reasonably be expected to result in
        a
        Material Adverse Effect. The term “benefit liabilities” has the meaning
        specified in section 4001 of ERISA and the terms “current value” and “present
        value” have the meaning specified in section 3 of ERISA.

       

      (iii)     Such
        Obligor and its ERISA Affiliates have not incurred withdrawal liabilities
        (and
        are not subject to contingent withdrawal liabilities) under section 4201
        or 4204
        of ERISA in respect of Multiemployer Plans that individually or in the aggregate
        have resulted or could reasonably be expected to result in a Material Adverse
        Effect.

       

      (iv)     The
        expected postretirement benefit obligations (determined as of the last day
        of
        such Obligor’s most recently ended fiscal year in accordance with Financial
        Accounting Standards Board Statement No. 106, without regard to liabilities
        attributable to continuation coverage mandated by section 4980B of the Code)
        of
        such Obligor and its Subsidiaries could not reasonably be expected to result
        in
        a Material Adverse Effect.

       

      (m)     Use
        of Proceeds; Margin Regulations.
        Each
        Borrower will apply the proceeds of all Loans made to such Borrower and utilize
        Letters of Credit issued hereunder for general corporate purposes. No part
        of
        the proceeds of any Loan made to such Borrower and no Letter of Credit issued
        at
        the request of such Borrower will be used, directly or indirectly, for the
        purpose of buying or carrying any margin stock within the meaning of Regulation
        U, or for the purpose of buying or carrying or trading in any securities
        under
        such circumstances as to involve such Borrower in a violation of Regulation
        X of
        the Board or to involve any broker or dealer in a violation of Regulation
        T of
        the Board. As used in this Section 7.01(m), the terms “margin stock” and
“purpose of buying or carrying” shall have the meanings assigned to them in
        Regulation U.

       

      (n)     Existing
        Indebtedness.

       

      (i)     Except
        as
        described therein, Schedule 7.01(n) sets forth a complete and correct list
        of
        all outstanding Indebtedness of such Obligor and each of its Subsidiaries
        as of
        the Closing Date. Neither such Obligor nor any such Subsidiary is in default
        and
        no waiver of default is currently in effect, in the payment of any principal
        or
        interest on any Indebtedness of such Obligor or such Subsidiary and no event
        or
        condition exists with respect to any Indebtedness of such Obligor or any
        such
        Subsidiary that would permit (or that with the giving of notice or the lapse
        of
        time, or both, would permit) one or more Persons to cause such Indebtedness
        to
        become due and payable before its stated maturity or before its regularly
        scheduled dates of payment. 


      (ii)     Neither
        such Obligor nor any of its Subsidiaries has agreed or consented to cause
        or
        permit in the future (upon the happening of a contingency or otherwise) any
        of
        its Property, whether now owned or hereafter acquired, to be subject to a
        Lien
        not permitted by Section 8.02(c).

       

      (o)     Foreign
        Assets Control Regulations, etc.
        None of
        the Transactions will violate the Trading with the Enemy Act, as amended,
        or any
        of the foreign assets control regulations of

       

      
        
          
          

        

        
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      the
        United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
        or
        any enabling legislation or executive order relating thereto.

       

      (p)     Status
        under Certain Statutes.
        Neither
        such Obligor nor any of its Subsidiaries is subject to regulation under the
        Investment Company Act of 1940, as amended, or the Interstate Commerce Act,
        as
        amended. 

       

      (q)     Anti-Terrorism
        Order.
        Neither
        such Obligor nor any of its Subsidiaries is a Sanctioned Person. To the best
        knowledge of such Obligor, neither such Obligor nor any of its Subsidiaries
        has
        any legally binding contracts or agreements with any Sanctioned
        Person.

       

      (r)     Labor
        Matters.
        There
        are no strikes or other labor disputes against such Obligor or any of its
        Subsidiaries pending or, to the knowledge of such Obligor, threatened that
        (individually or in the aggregate) could reasonably be expected to have a
        Material Adverse Effect. Hours worked by and payments made to employees of
        such
        Obligor or any of 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 such Obligor 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 such Obligor or the relevant Subsidiary.

       

      (s)     Environmental
        Matters.
        Neither
        such Obligor nor any of its Subsidiaries has knowledge of any claim or has
        received any notice of any claim, and no proceeding has been instituted raising
        any claim against such Obligor or any of its Subsidiaries or any of their
        respective real Properties now or formerly owned, leased or operated by any
        of
        them or other Properties, alleging any damage to the environment or violation
        of
        any Environmental Laws, except, in each case, such as could not reasonably
        be
        expected to result in a Material Adverse Effect. Except as disclosed in Schedule
        7.01(s):

       

      (i)     neither
        such Obligor nor any of its Subsidiaries has knowledge of any facts which
        would
        give rise to any claim, public or private, of violation of Environmental
        Laws or
        damage to the environment emanating from, occurring on or in any way related
        to
        real Properties now or formerly owned, leased or operated by any of them,
        or in
        any way related to its Properties or their use, except, in each case, such
        as
        could not reasonably be expected to result in a Material Adverse
        Effect;

       

      (ii)     neither
        such Obligor nor any of its Subsidiaries has stored any Hazardous Materials
        on
        real Properties now or formerly owned, leased or operated by any of them
        and has
        not disposed of any Hazardous Materials in a manner contrary to any Environmental
        Laws in each case in any manner that could reasonably be expected to result
        in a
        Material Adverse Effect; and

       

      (iii)     all
        buildings on all real Properties now owned, leased or operated by such Obligor
        or any of its Subsidiaries are in compliance with applicable Environmental
        Laws,
        except where failure to comply could not reasonably be expected to result
        in a
        Material Adverse Effect.

       

      
        
          
          

        

        
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      (t)     Solvency.
        Each
        Obligor is, and after giving effect to the incurrence of all Indebtedness
        and
        obligations being incurred in connection herewith and the Transactions will
        be,
        Solvent.

       

      ARTICLE
        VIII

      COVENANTS
        OF THE OBLIGORS

       

      SECTION
        8.01. Affirmative Covenants.
        Each
        Obligor covenants and agrees that so long as any Loan or any other amount
        payable hereunder or under any Promissory Note shall remain unpaid, any Letter
        of Credit shall remain outstanding or any Lender shall have any
        Commitment:

       

      (a)     Financial
        and Business Information. Such
        Obligor shall deliver to the Administrative Agent, with a copy for each Lender
        (and the Administrative Agent will forward such copies to the
        Lenders):

       

      (i)     Quarterly
        Statements
        - within
        60 days after the end of each quarterly fiscal period in each fiscal year
        of
        such Obligor (other than the last quarterly fiscal period of each such fiscal
        year), copies of,

       

      (A)     a
        consolidated balance sheet of such Obligor and its Subsidiaries as at the
        end of
        such quarter, 

       

      (B)     consolidated
        statements of income of such Obligor and its Subsidiaries, for such quarter
        and
        (in the case of the second and third quarters) for the portion of the fiscal
        year ending with such quarter, and

       

      (C)     consolidated
        statements of cash flow for the period from the beginning of such fiscal
        year to
        the end of such quarter,

       

      setting
        forth in each case in comparative form the figures for the corresponding
        periods
        in the previous fiscal year, all in reasonable detail, prepared in accordance
        with GAAP applicable to quarterly financial statements generally, and certified
        by a Senior Financial Officer of such Obligor as fairly presenting, in all
        material respects, the financial position of the companies being reported
        on and
        their results of operations and cash flows, subject to changes resulting
        from
        year-end adjustments, provided
        that
        delivery within the time period specified above of copies of such Obligor’s
        Quarterly Report on Form 10-Q, if any,
        prepared in compliance with the requirements therefor and filed with the
        SEC
        shall be deemed to satisfy the requirements of this Section
        8.01(a)(i);

       

      (ii)     Annual
        Statements
        - within
        105 days after the end of each fiscal year of such Obligor, copies
        of,

       

      (A)     a
        consolidated balance sheet of such Obligor and its Subsidiaries, as at the
        end
        of such year, and

       

      
        
          
          

        

        
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      (B)     consolidated
        statements of income, changes in shareholders’ equity and cash flows of such
        Obligor and its Subsidiaries, for such year, setting forth in each case in
        comparative form the figures for the previous fiscal year, all in reasonable
        detail, prepared in accordance with GAAP, and accompanied

       

      (1)     by
        an
        opinion thereon of independent certified public accountants of recognized
        national standing, which opinion shall not contain any qualification or
        exception as to the scope of such audit and shall state that such financial
        statements present fairly, in all material respects, the financial position
        of
        the companies being reported upon and their results of operations and cash
        flows
        and have been prepared in conformity with GAAP, and that the examination
        of such
        accountants in connection with such financial statements has been made in
        accordance with generally accepted auditing standards, and that such audit
        provides a reasonable basis for such opinion in the circumstances,
        and

       

      (2)     a
        certificate of such accountants stating that they have reviewed this Agreement
        and stating further whether, in making their audit, they have become aware
        of
        any condition or event that then constitutes a Default or an Event of Default
        resulting from a breach of the provisions of any of Sections 8.02(d), 8.02(e),
        8.03(a) and 8.03(b) hereof, and, if they are aware that any such condition
        or
        event then exists, specifying the nature and period of the existence thereof
        (it
        being understood that such accountants shall not be liable, directly or
        indirectly, for any failure to obtain knowledge of any Default or Event of
        Default),

       

      provided,
        that
        the delivery within the time period specified above of such Obligor’s Annual
        Report on Form 10-K (if any) for such fiscal year (together with such Obligor’s
        annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under
        the
        Exchange Act) prepared in accordance with the requirements therefor and filed
        with the SEC, together with the accountant’s certificate described in clause (2)
        above, shall be deemed to satisfy the requirements of this Section
        8.01(a)(ii);

       

      (iii)     SEC
        and Other Reports
        -
        promptly upon their becoming available, one copy of (A) each financial
        statement, report, notice or proxy statement sent by such Obligor or any
        of its
        Subsidiaries to public securities holders generally, and (B) each regular
        or
        periodic report, each registration statement (without exhibits except as
        expressly requested by the Administrative Agent or a Lender), and each
        prospectus and all
        amendments thereto filed by such Obligor or any of its Subsidiaries with
        the SEC
        and of all press releases and other statements made available generally by
        such
        Obligor or any of its Subsidiaries to the public concerning developments
        that
        are Material;

       

      (iv)     Notice
        of Default or Event of Default
        -
        promptly, and in any event within five days after a Responsible Officer of
        such
        Obligor becoming aware of the existence of any Default or Event of Default
        or
        that any Person has given any notice or taken any action with respect to
        a
        claimed default hereunder or that any Person has given any notice or taken
        any
        action with respect to a claimed default of the type referred to in
        Section

       

      
        
          
          

        

        
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         9.01(e),
          a written notice specifying the nature and period of existence thereof
          and what
          action the applicable Obligor is taking or proposes to take with respect
          thereto;

      

       

      (v)     ERISA
        Matters
        -
        promptly, and in any event within five days after a Responsible Officer of
        such
        Obligor becoming aware of any of the following, a written notice setting
        forth
        the nature thereof and the action, if any, that the applicable Obligor or
        an
        ERISA Affiliate of such Obligor proposes to take with respect
        thereto:

       

      (A)     with
        respect to any Plan, any reportable event, as defined in section 4043(b)
        of
        ERISA and the regulations thereunder, for which notice thereof has not been
        waived pursuant to such regulations as in effect on the date hereof;
        or

       

      (B)     (1)
        the
        taking by the PBGC of steps to institute, or the threatening by the PBGC
        of the
        institution of, proceedings under section 4042 of ERISA for the termination
        of,
        or the appointment of a trustee to administer, any Plan, (2) the providing
        of
        notice by a plan administrator of the intent to terminate any Plan under
        section
        4041 of ERISA, or (3) the receipt by such Obligor or any of its ERISA Affiliates
        of a notice, or the receipt by any Multiemployer Plan from such Obligor or
        any
        of its ERISA Affiliates of any notice, concerning the imposition of withdrawal
        liability under section 4201 or 4204 of ERISA 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; or

       

      (C)     any
        event
        (including, without limitation, any ERISA Event), transaction or condition
        that
        could result in the incurrence of any liability by such Obligor or any of
        its
        ERISA Affiliates pursuant to Title I or IV of ERISA (other than claims in
        the
        ordinary course or PBGC premiums required by Title IV of ERISA) or the penalty
        or excise tax provisions of the Code relating to employee benefit plans,
        or in
        the imposition of any Lien on any of the rights or Properties of such Obligor
        or
        any of its ERISA Affiliates pursuant to Title I or IV of ERISA or such penalty
        or excise tax provisions, if such liability or Lien, taken together with
        any
        other such liabilities or Liens then existing, could reasonably be expected
        to
        have a Material Adverse Effect;

       

      (vi)     Notices
        from Governmental Authority
        -
        promptly, and in any event within 30 days of receipt thereof, copies of any
        notice to such Obligor or any of its Subsidiaries from
        any
        Federal or state Governmental Authority relating to any order, ruling, statute
        or other law or regulation that could reasonably be expected to have a Material
        Adverse Effect;

       

      (vii)     ACC
        Communications
        -
        promptly, and in any event within 30 days of receipt thereof, copies of any
        Material communication to such Obligor or any of its Subsidiaries from the
        ACC
        or any Material filing by such Obligor or any of its Subsidiaries with the
        ACC
        relating to any breach of the ACC Settlement Agreement or any matter that
        could
        reasonably be expected to cause or constitute a Material Adverse Effect;
        

       

      
        
          
          

        

        
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      (viii) Default
        and Litigation
        -
        promptly, and in any event within five days after a Responsible Officer of
        such
        Obligor becoming aware of any of the following, a written notice setting
        forth
        the nature thereof and the action, if any, that the applicable Obligor proposes
        to take with respect thereto:

       

      (A)     any
        default or event of default under any Contractual Obligation (other than
        under
        the Loan Documents) of such Obligor or any of its Subsidiaries that, if not
        cured or waived, could reasonably be expected to have a Material Adverse
        Effect;

       

      (B)     any
        litigation, investigation or proceeding which may exist at any time between
        such
        Obligor or any of its Subsidiaries and any Governmental Authority that, if
        adversely determined, could reasonably be expected to have a Material Adverse
        Effect; or

       

      (C)     any
        litigation or proceeding affecting such Obligor or any of its Subsidiaries
        in
        which the amount involved is greater than $4,000,000 and not covered by
        insurance or in which injunctive or similar relief is sought; and

       

      (ix)     Requested
        Information
        - with
        reasonable promptness, such other data and information relating to the business,
        operations, affairs, financial condition or Properties of such Obligor or
        any of
        its Subsidiaries or relating to the ability of such Obligor to perform its
        obligations under the Loan Documents to which it is a party as from time
        to time
        may be reasonably requested by the Administrative Agent or any
        Lender.

       

      (b)     Officer’s
        Certificate.
        Each
        set of financial statements delivered to the Administrative Agent pursuant
        to
        Section 8.01(a)(i) or Section 8.01(a)(ii) shall be accompanied by a certificate
        of a Senior Financial Officer of the Obligor delivering such financial
        statements setting forth:

       

      (i)     Covenant
        Compliance
        - if
        such Obligor is a Borrower, the information (including detailed calculations)
        required in order to establish whether such Borrower was in compliance with
        the
        requirements of Sections 8.03(a) and 8.03(b) during the quarterly or annual
        period covered by the statements then being furnished; and


      (ii)     Event
        of Default
        - a
        statement that such officer has reviewed the relevant terms hereof and has
        made,
        or caused to be made, under his or her supervision, a review of the transactions
        and conditions of such Obligor and its Subsidiaries from the beginning of
        the
        quarterly or annual period covered by the statements then being furnished
        to the
        date of the certificate and that such review shall not have disclosed the
        existence during such period of any condition or event that constitutes a
        Default or an Event of Default or, if any such condition or event existed
        or
        exists (including, without limitation, any such event or condition resulting
        from the failure of such Obligor or any of its Subsidiaries to comply with
        any
        Environmental Law), specifying the nature and period of existence thereof
        and
        what action such Obligor shall have taken or proposes to take with respect
        thereto.

       

      
        
          
          

        

        
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      (c)   
Books
        and Records; Inspection.
        Such
        Obligor will, and will cause each of its 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. Such Obligor shall permit the representatives
        of the
        Administrative Agent and each Lender:

       

      (i)     No
        Default
        - if no
        Default or Event of Default with respect to such Obligor then exists, at
        the
        expense of the Administrative Agent or such Lender (as the case may be) and
        upon
        reasonable prior notice to such Obligor, to visit the principal executive
        office
        of such Obligor, to discuss the affairs, finances and accounts of such Obligor
        and its Subsidiaries with such Obligor’s officers, and (with the consent of such
        Obligor, which consent will not be unreasonably withheld) its independent
        public
        accountants, and (with the consent of such Obligor, which consent will not
        be
        unreasonably withheld) to visit the other offices and Properties of such
        Obligor
        and its Subsidiaries, all at such reasonable times and as often as may be
        reasonably requested in writing; and

       

      (ii)     Default
        - if a
        Default or Event of Default with respect to such Obligor then exists, at
        the
        expense of such Obligor, to visit and inspect any of the offices or Properties
        of such Obligor or any of its Subsidiaries, to examine all their respective
        books of account, records, reports and other papers, to make copies and extracts
        therefrom, and to discuss their respective affairs, finances and accounts
        with
        their respective officers and independent public accountants (and by this
        provision such Obligor authorizes said accountants to discuss the affairs,
        finances and accounts of such Obligor and its Subsidiaries), all at such
        times
        and as often as may be requested.

       

      (d)     Compliance
        with Law. Such
        Obligor shall, and shall cause each of its Subsidiaries to, comply with all
        Governmental Rules to which each of them is subject, including, without
        limitation, ERISA and Environmental Laws, and will obtain and maintain in
        effect
        all Governmental Approvals necessary to the ownership of their respective
        Properties or to the conduct of their respective businesses, in each case
        to the
        extent necessary to ensure that non-compliance with such Governmental Rules
        or
        failures to obtain or maintain in effect such Governmental Approvals could
        not,
        individually or in the aggregate, reasonably be expected to have a Material
        Adverse Effect.


      (e)     Insurance.
        Such
        Obligor shall, and shall cause each of its Subsidiaries to, maintain, with
        financially sound and reputable insurers, or through its own program of
        self-insurance, insurance with respect to their respective Properties and
        businesses against such casualties and contingencies, of such types, on such
        terms and in such amounts (including deductibles, co-insurance and
        self-insurance, if adequate reserves are maintained with respect thereto)
        as is
        customary in the case of entities of established reputations engaged in the
        same
        or a similar business and similarly situated.

       

      (f)     Maintenance
        of Properties. Such
        Obligor shall, and shall cause each of its Subsidiaries to, maintain and
        keep,
        or cause to be maintained and kept, their respective Properties in good repair,
        working order and condition (other than ordinary wear and tear), so that
        the
        business carried on in connection therewith may be properly conducted at
        all
        times,

       

      
        
          
          

        

        
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      provided
        that
        this Section 8.01(f) shall not prevent such Obligor or any such Subsidiary
        from
        discontinuing the operation and the maintenance of any of its Properties
        if such
        discontinuance is desirable in the conduct of its business and such Obligor
        has
        concluded that such discontinuance could not, individually or in the aggregate,
        reasonably be expected to have a Material Adverse Effect.

       

      (g)     Payment
        of Taxes, Obligations and Claims. Such
        Obligor shall, and shall cause each of its Subsidiaries to, file all tax
        returns
        required to be filed in any jurisdiction and pay and discharge (i) all taxes
        shown to be due and payable on such returns and all other taxes, assessments,
        governmental charges, or levies imposed on them or any of their Properties,
        income or franchises, to the extent such taxes and assessments have become
        due
        and payable and before they have become delinquent, and (ii) all claims and
        other obligations of whatever nature for which sums have become due and payable
        that have or might become a Lien on Properties of such Obligor or any such
        Subsidiary, provided
        that
        neither such Obligor nor any such Subsidiary need pay any such tax, assessment.
        claims or obligations if (A) the amount, applicability or validity thereof
        is
        contested by such Obligor or such Subsidiary on a timely basis in good faith
        and
        in appropriate proceedings, and such Obligor or such Subsidiary has established
        adequate reserves therefor in accordance with GAAP on the books of such Obligor
        or such Subsidiary or (B) the nonpayment of all such taxes, assessments,
        claims
        and obligations in the aggregate could not reasonably be expected to have
        a
        Material Adverse Effect.

       

      (h)     Legal
        Existence, etc. Such
        Obligor shall at all times preserve and keep in full force and effect its
        legal
        existence. Subject to Section 8.02(b), such Obligor shall at all times preserve
        and keep in full force and effect the legal existence of each of its
        Subsidiaries (unless merged into such Obligor or a Subsidiary) and all rights
        and franchises of such Obligor and its Subsidiaries unless, in the good faith
        judgment of such Obligor, the termination of or failure to preserve and keep
        in
        full force and effect such legal existence, right or franchise could not,
        individually or in the aggregate, have a Material Adverse Effect.

       

      (i)     Corporate
        Separateness. The
        Guarantor, for so long as it is an Obligor, shall at all times maintain its
        separate existence and, specifically, shall conduct its affairs in accordance
        with the following:

       

      (i)     the
        Guarantor shall: (A) maintain and prepare separate financial reports and
        financial statements in accordance with GAAP, showing its assets and liabilities
        separate and apart from those of any other Person other than its Subsidiaries,
        and will not have its assets listed on the financial statement of any other
        Person (provided,
        that
        the Guarantor’s assets may be included in a consolidated financial statement of
        a Person of which the Guarantor is a Subsidiary, if inclusion on such
        consolidated financial statement is required to comply with the requirements
        of
        GAAP); (B) maintain its books, records and bank accounts separate from those
        of
        its Affiliates and any other Person other than its Subsidiaries; and (C)
        not
        permit any of its Affiliates independent access to its bank
        accounts;

       

      (ii)     the
        Guarantor shall not commingle or pool any of its funds or other assets with
        those of any of its Affiliates or any other Person other than its Subsidiaries,
        and it shall hold all of its assets in its own name;

       

      
        
          
          

        

        
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      (iii)    
the
        Guarantor shall conduct its own business in its own name and shall not operate,
        or purport to operate, collectively as a single or consolidated business
        entity
        with respect to any Person other than its Subsidiaries;

       

      (iv)    
the
        Guarantor shall, insofar as is consistent with commercial and business
        circumstances affecting its business and financial condition, remain Solvent
        and
        pay its own debts, liabilities and expenses (including overhead expenses,
        if
        any) only out of its own assets as the same shall become due;

       

      (v)     the
        Guarantor has done, or caused to be done, and shall do, all things necessary
        to
        observe all corporate formalities and other organizational formalities of
        the
        jurisdiction in which it is organized, and preserve its existence;

       

      (vi)           
        the
        Guarantor shall, to the extent it utilizes stationary, invoices and checks,
        maintain and utilize separate stationery, invoices and checks bearing its
        own
        name;

       

      (vii)           
        the
        Guarantor shall, at all times, hold itself out to the public as a legal entity
        separate and distinct from any other Person other than its Subsidiaries and
        shall correct any known misunderstanding regarding its separate
        identity;

       

      (viii)           the
        Guarantor shall not identify itself as a division of any other
        Person;

       

      (ix)             the
        Guarantor shall maintain its assets in such a manner that it will not be
        costly
        or difficult to segregate, ascertain or identify its individual assets from
        those of any of its Affiliates or any other Person other than its
        Subsidiaries;

       

      (x)              
        the
        Guarantor shall not use its separate existence to abuse creditors or to
        perpetrate a fraud, injury, or injustice on creditors in violation of applicable
        law;

       

      (xi)             
        the
        Guarantor shall not, in connection with the Loan Documents, act with an intent
        to hinder, delay, or defraud any of its creditors in violation of applicable
        law; and  (xii) the
        Guarantor shall not pledge its assets for the benefit of any Person, except
        as
        permitted by the Loan Documents.

       

      (j)     Maintain
        Ownership of Subsidiaries.
        At all
        times prior to the occurrence of the Guaranty Termination Date with respect
        to
        each Borrower, the Guarantor shall maintain, directly or indirectly, legal
        and
        beneficial ownership of all of the outstanding capital stock of such Borrower,
        free and clear of any Liens; provided
        that the
        foregoing shall not prohibit any merger, consolidation, sale or transfer
        permitted under Section 8.02(b).

       

      SECTION
        8.02. Negative Covenants.
        Each
        Obligor covenants and agrees that so long as any Loan or any other amount
        payable hereunder or under any Promissory Note shall remain unpaid, any Letter
        of Credit shall remain outstanding or any Lender shall have any
        Commitment:

       

      (a)     Transactions
        with Affiliates.
        Such
        Obligor shall not, and shall not permit any of its Subsidiaries to, enter
        into
        directly or indirectly any transaction or Material group of related

       

      
        
          
          

        

        
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       transactions
        (including, without limitation, the purchase, lease, sale or exchange of
        Properties of any kind or the rendering of any service) with any of its
        Affiliates (other than a Borrower or another Subsidiary), except in the ordinary
        course and pursuant to the reasonable requirements of such Obligor’s or such
        Subsidiary’s business and upon fair and reasonable terms no less favorable to
        such Obligor or such Subsidiary than would be obtainable in a comparable
        arm’s-length transaction with a Person not an Affiliate; provided
        that the
        foregoing shall not prohibit (i) shared corporate or administrative
        services and staffing with Affiliates, including, without limitation,
        accounting, legal, human resources and treasury operations, provided on
        customary terms for similarly situated companies and otherwise as set forth
        above or on a fully allocated cost basis and (ii) transactions conducted in
        a manner required by applicable law, rule or regulation.

       

      (b)     Merger,
        Consolidation, etc. 

       

      (i)     Such
        Obligor shall not consolidate with or merge with any other Person or convey,
        transfer or lease all or substantially all of its assets in a single transaction
        or series of transactions to any Person, and, prior to the occurrence of
        the
        Guaranty Termination Date with respect to each Borrower, the Guarantor shall
        not
        sell or otherwise transfer any shares of the stock (or any options or warrants
        to purchase stock or other Securities exchangeable for or convertible into
        stock) of such Borrower to any Person unless:

       

      (A)     the
        successor formed by such consolidation or the survivor of such merger or
        the
        Person that acquires by conveyance, transfer or lease substantially all of
        the
        assets of such Obligor as an entirety or the transferee of such shares of
        stock,
        as the case may be (any such Person, in relation to any such transaction
        involving a Borrower, being referred to herein as a “Borrower
        Successor”,
        and
        any such Person, in relation to any such transaction involving the Guarantor,
        being referred to herein as a “Guarantor
        Successor”),
        shall
        have a credit rating in respect of its long-term debt from S&P of “BBB” or
        higher or from Moody’s of “Baa2” or higher;


      (B)     any
        Borrower Successor shall be primarily engaged in the Utility
        Business;

       

      (C)     any
        Borrower Successor or, for so long as the Guarantor (or any Guarantor Successor)
        is an Obligor, Guarantor Successor shall be a Solvent corporation organized
        and
        existing under the laws of the United States or any State thereof (including
        the
        District of Columbia);

       

      (D)     if
        any
        Borrower Successor or Guarantor Successor is not such Obligor, such Borrower
        Successor or, for so long as the Guarantor (or any Guarantor Successor) is
        an
        Obligor, Guarantor Successor, as the case may be, (1) shall have executed
        and
        delivered to the Administrative Agent its assumption of the due and punctual
        performance and observance of each covenant and condition of this Agreement
        and
        the other Loan Documents to which it is a party and (2) shall have caused
        to be
        delivered to the Administrative Agent an opinion of

       

      
        
          
          

        

        
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       nationally
        recognized independent counsel, or other independent counsel reasonably
        satisfactory to the Required Lenders, to the effect that all agreements or
        instruments effecting such assumption are enforceable in accordance with
        their
        terms and comply with the terms hereof; and

       

      (E)     immediately
        after giving effect to such transaction and, if any Borrower Successor or
        Guarantor Successor is not such Obligor, the effectiveness of all agreements
        and
        instruments effecting the assumption (if any) required pursuant to clause
        (D)
        above, no Default or Event of Default shall have occurred and be
        continuing;

       

      provided,
        however,
        that
        (1) this Section 8.02(b)(i) shall not apply to the consolidation or merger
        of a
        Wholly-Owned Subsidiary of a Borrower into such Borrower; and (2)
        notwithstanding the foregoing, any Borrower may at any time convey, transfer
        or
        lease all or substantially all of its assets in a single transaction or series
        of transactions to any other Person, and the Guarantor may at any time sell
        or
        otherwise transfer all or a majority of the voting capital stock of any Borrower
        to any other Person, in each case so long as (x) such Borrower or the Guarantor
        (for so long as it is an Obligor), as the case may be, shall have received
        consideration in respect thereof in an amount not less than the Fair Market
        Value of such assets or capital stock, as the case may (as determined in
        good
        faith by the board of directors of such Obligor), and (y) if such other Person
        is not a Wholly-Owned Subsidiary, the requirements set forth in Section 2.03(c)
        in connection with such transaction are satisfied (provided,
        however,
        that
        this clause (2) shall not apply to any such transaction if such Borrower
        is the
        only borrower under this Agreement at such time, it being understood and
        agreed
        that in such circumstance both a Guarantor Successor and a Borrower Successor
        shall have assumed all obligations of the Guarantor (for so long as the
        Guarantor is an Obligor) and such Borrower, respectively, under this Agreement
        and the other Loan Documents in accordance with clause (D) above and the
        other
        conditions set forth in clauses (A) through (E) above shall be
        satisfied).

       

      (ii)     No
        such
        conveyance, transfer or lease of substantially all of the assets of any Borrower
        shall have the effect of releasing such Borrower or any successor Person
        that
        shall theretofore have become such in the manner prescribed in this Section
        8.02(b) from its liability under this Agreement or the other Loan Documents,
        or
        the Guarantor from its obligations hereunder or under the Guaranty, except
        that,
        if the Guaranty Termination Date has not occurred with respect to both
        Borrowers, the Guarantor shall be released from its obligations hereunder
        and
        under the Guaranty if, in the case of any such transaction that is permitted
        by
        Section 8.02(b)(i), the Guarantor Successor shall have (A) executed and
        delivered to the Administrative Agent its assumption of the due and punctual
        performance and observance of the obligations of the Guarantor under this
        Agreement and under the Guaranty, and (B) caused to be delivered to the
        Administrative Agent an opinion of nationally recognized independent counsel,
        or
        other independent counsel reasonably satisfactory to the Administrative Agent,
        to the effect that all agreements or instruments effecting such assumption
        are
        enforceable in accordance with their terms and comply with the terms
        hereof.

       

      
        
          
          

        

        
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      (c)     Liens.
        

       

      (i)     The
        Guarantor (for so long as it is an Obligor) shall not directly or indirectly
        create, incur, assume or permit to exist (upon the happening of a contingency
        or
        otherwise) any Lien (other than Permitted Liens) securing Indebtedness for
        borrowed money on or with respect to any Property (including, without
        limitation, any document or instrument in respect of goods or accounts
        receivable) of the Guarantor, whether now owned or held or hereafter acquired,
        or any income or profits therefrom or assign or otherwise convey any right
        to
        receive income or profits (unless it makes, or causes to be made, effective
        provision whereby its obligations with respect to the Guaranty will be equally
        and ratably secured with any and all other Indebtedness thereby secured so
        long
        as such other Indebtedness shall be so secured, such security to be pursuant
        to
        an agreement reasonably satisfactory to the Administrative Agent and, in
        any
        such case, the Guarantor’s obligations with respect to the Guaranty shall have
        the benefit, to the fullest extent that, and with such priority as, the Lenders,
        the Administrative Agent and the Issuing Banks may be entitled under applicable
        law, of an equitable Lien on such Property).

       

      (ii)     Such
        Borrower shall not, and shall not permit any of its Subsidiaries to, directly
        or
        indirectly create, incur, assume or permit to exist (upon the happening of
        a
        contingency or otherwise) any Lien (other than Permitted Liens) securing
        Indebtedness for borrowed money on or with respect to any Property (including,
        without limitation, any document or instrument in respect of goods or accounts
        receivable) of such Borrower or any such Subsidiary, whether now owned or
        held
        or hereafter acquired, or any income or profits therefrom or assign or otherwise
        convey any right to receive income or profits (unless it makes, or causes
        to be
        made, effective provision whereby the Obligations of such Borrower will be
        equally and ratably secured with any and all other Indebtedness thereby secured
        so long as such other Indebtedness shall be so secured, such security to
        be
        pursuant to an agreement reasonably satisfactory to the Administrative Agent
        and, in any such case, the Obligations of such Borrower shall have the benefit,
        to the fullest extent that, and with such priority as, the Lenders, the
        Administrative Agent and the Issuing Banks may be entitled under applicable
        law,
        of an equitable Lien on such Property).

       

      (d)     Restricted
        Payments.
        Such
        Borrower shall not at any time declare or make, or incur any liability to
        declare or make, any Restricted Payment unless:

       

      (i)     such
        Restricted Payment would not violate any Requirement of Law applicable to
        such
        Borrower; and

       

      (ii)     immediately
        after giving effect to such action no Default or Event of Default with respect
        to such Borrower or the Guarantor would exist.

       

      
        
          
          

        

        
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      (e)     Incurrence
        of Indebtedness.

       

      (i)     Such
        Borrower shall not, and shall not permit any of its Subsidiaries to, directly
        or
        indirectly, create, incur, assume, guarantee, or otherwise become directly
        or
        indirectly liable with respect to, any Indebtedness, unless on the date such
        Borrower or such Subsidiary becomes liable with respect to any such Indebtedness
        and immediately after giving effect thereto and the concurrent retirement
        of any
        other Indebtedness, no Default or Event of Default with respect to such Borrower
        or, prior to the occurrence of the Guaranty Termination Date with respect
        to
        such Borrower, the Guarantor shall have occurred and be continuing.

       

      (ii)     For
        the
        purposes of this Section 8.02(e):

       

      (A)     any
        Person becoming a Subsidiary after the date hereof shall be deemed, at the
        time
        it becomes a Subsidiary, to have incurred all of its then outstanding
        Indebtedness and pro
        forma
        effect
        shall be given to the earnings of such Person; and 

       

      (B)     upon
        the
        creation, incurrence or assumption of any Indebtedness, any other Indebtedness
        shall be deemed to be retired concurrently with such action if (1) such other
        Indebtedness is retired with the proceeds of such Indebtedness and (2) such
        other Indebtedness is retired within 60 days of such action.

       

      (f)     Anti-Terrorism
        Order.
        Such
        Obligor shall not, and shall not permit any of its Subsidiaries to, enter
        into
        any legally binding contracts or agreements with any Sanctioned
        Person.

       

      (g)     Change
        in Nature of Business.
        Such
        Obligor will not, and will not permit any of its Subsidiaries to, engage
        to any
        material extent in any business other than businesses of the type conducted
        by
        such Obligor and its Subsidiaries on the date of execution of this Agreement
        and
        businesses reasonably related thereto. 

       

      SECTION
        8.03. Financial Covenants.
        Each
        Borrower covenants and agrees that so long as any Loan or any other amount
        payable hereunder or under any Promissory Note shall remain unpaid, any Letter
        of Credit shall remain outstanding or any Lender shall have any
        Commitment:

       

      (a)     Consolidated
        Leverage Ratio.
        Such
        Borrower shall maintain at all times a ratio of such Borrower’s Consolidated
        Long Term Debt to its Consolidated Total Capitalization of not greater than
        (i)
        in the case of UNS Gas, 0.67 to 1.00, and (ii) in the case of UNS Electric,
        0.65
        to 1.00.

       

      (b)     Interest
        Coverage Ratio.
        Such
        Borrower shall not permit its Interest Coverage Ratio for the
        four-fiscal-quarter period ended on the last day of each fiscal quarter,
        commencing with the fiscal quarter ending June 30, 2006, to be less than
        2.25 to
        1.00.

       

      
        
          
          

        

        
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      ARTICLE
        IX

      DEFAULTS

       

      SECTION
        9.01. Events of Default.
        As to
        each Borrower, if any of the following events shall occur and be continuing,
        the
        Administrative Agent and the Lenders shall be entitled to exercise the remedies
        with respect to such Borrower set forth in Section 9.02:

       

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

       

      (b)     Any
        representation or warranty made or deemed made by such Borrower or, prior
        to the
        occurrence of the Guaranty Termination Date with respect to such Borrower,
        the
        Guarantor herein or in any other Loan Document or that is contained in any
        certificate, document or financial or other statement furnished by such Borrower
        or the Guarantor at any time under or in connection with this Agreement or
        any
        other Loan Document shall prove to have been inaccurate in any material respect
        on or as of the date made or deemed made or furnished; or

       

      (c)     Such
        Borrower or, prior to the occurrence of the Guaranty Termination Date with
        respect to such Borrower, the Guarantor shall default in the observance or
        performance of any agreement contained in Section 8.01(a)(iv), 8.01(h), 8.01(j),
        8.02 or 8.03; or

       

      (d)     Such
        Borrower or, prior to the occurrence of the Guaranty Termination Date with
        respect to such Borrower, the Guarantor shall default in the observance or
        performance of any other agreement contained in this Agreement or any other
        Loan
        Document to which it is a party (other than those referred to in paragraphs
        (a),
        (b) and (c) of this Section) and such default is not remedied within 30 days
        after such Borrower or the Guarantor, as applicable, receives written notice
        of
        such default from the Administrative Agent (any such written notice to be
        identified as a “notice of default” and to refer specifically to this Section
        9.01(d)) (which notice will be given at the request of any Lender);
        or

       

      (e)     (i)
        such
        Borrower, any Subsidiary of such Borrower or, prior to the occurrence of
        the
        Guaranty Termination Date with respect to such Borrower, any other Subsidiary
        of
        the Guarantor (including, without limitation, the other Borrower) is in default
        (as principal or as guarantor or other surety) in the payment of any principal
        of or premium or make-whole amount or interest on any Indebtedness that is
        outstanding in an aggregate principal amount of at least $4,000,000 beyond
        any
        period of grace provided with respect thereto, or (ii) such Borrower, any
        Subsidiary of such Borrower or, prior to the occurrence of the Guaranty
        Termination Date with respect to such Borrower, any other Subsidiary of the
        Guarantor (including, without limitation, the other Borrower) is in default
        in
        the performance of or compliance with any term of any evidence of any
        Indebtedness in an aggregate outstanding principal amount of at least $4,000,000
        or of any mortgage, indenture or other agreement relating thereto or any
        other
        condition exists, and as a consequence of such default or condition such
        Indebtedness has become, or has been declared, due and payable before its
        stated
        maturity or before its regularly scheduled
        dates of payment, or (iii) as a consequence of the occurrence or continuation
        of
        any 

       

      
        
          
          

        

        
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      event
        or
        condition (other than the passage of time or the right of the holder of
        Indebtedness to convert such Indebtedness into equity interests), such Borrower,
        any Subsidiary of such Borrower or, prior to the occurrence of the Guaranty
        Termination Date with respect to such Borrower, any other Subsidiary of the
        Guarantor (including, without limitation, the other Borrower) has become
        obligated to purchase or repay Indebtedness before its regular maturity or
        before its regularly scheduled dates of payment in an aggregate outstanding
        principal amount of at least $4,000,000 (it being understood and agreed that
        any
        Default or Event of Default pursuant to this subsection (e) with respect
        to any
        Borrower, any Subsidiary of such Borrower or, prior to the occurrence of
        the
        Guaranty Termination Date with respect to such Borrower, any other Subsidiary
        of
        the Guarantor (including, without limitation, the other Borrower) shall be
        deemed, for all purposes of this Agreement, to be a Default or an Event of
        Default (as the case may be) with respect to such Borrower); or

       

      (f)     (i)
        such
        Borrower or, prior to the occurrence of the Guaranty Termination Date with
        respect to such Borrower, the Guarantor is in default (as principal or as
        guarantor or other surety) in the payment of any principal of or premium
        or
        make-whole amount or interest on any Indebtedness that is outstanding in
        an
        aggregate principal amount of at least $4,000,000 beyond any period of grace
        provided with respect thereto, or (ii) such Borrower or, prior to the occurrence
        of the Guaranty Termination Date with respect to such Borrower, the Guarantor
        is
        in default in the performance of or compliance with any term of any evidence
        of
        any Indebtedness in an aggregate outstanding principal amount of at least
        $4,000,000 or of any mortgage, indenture or other agreement relating thereto
        or
        any other condition exists, and as a consequence of such default or condition
        such Indebtedness has become, or has been declared (or one or more Persons
        are
        entitled to declare such Indebtedness to be), due and payable before its
        stated
        maturity or before its regularly scheduled dates of payment, or (iii) as
        a
        consequence of the occurrence or continuation of any event or condition (other
        than the passage of time or the right of the holder of Indebtedness to convert
        such Indebtedness into equity interests), (x) such Borrower or, prior to
        the
        occurrence of the Guaranty Termination Date with respect to such Borrower,
        the
        Guarantor has become obligated to purchase or repay Indebtedness before its
        regular maturity or before its regularly scheduled dates of payment in an
        aggregate outstanding principal amount of at least $4,000,000, or (y) one
        or
        more Persons have the right to require such Borrower or, prior to the occurrence
        of the Guaranty Termination Date with respect to such Borrower, the Guarantor
        to
        purchase or repay such Indebtedness; or

       

      (g)     such
        Borrower, any Subsidiary of such Borrower or, prior to the occurrence of
        the
        Guaranty Termination Date with respect to such Borrower, the Guarantor or
        any
        other Subsidiary of the Guarantor (including, without limitation, the other
        Borrower) (i) is generally not paying, or admits in writing its inability
        to
        pay, its debts as they become due, (ii) files, or consents by answer or
        otherwise to the filing against it of, a petition for relief or reorganization
        or arrangement or any other petition in bankruptcy, for liquidation or to
        take
        advantage of any bankruptcy, insolvency, reorganization, moratorium or other
        similar law of any jurisdiction, (iii) makes an assignment for the benefit
        of
        its creditors, (iv) consents to the appointment of a custodian, receiver,
        trustee or other officer with similar powers with respect to it or with respect
        to any substantial part of its Property, (v) is adjudicated as insolvent
        or to
        be liquidated, or (vi) takes corporate action for the purpose of any of the
        foregoing (it being understood and agreed that
        any
        Default or Event of Default pursuant to this subsection (g) with respect
        to any
        Borrower, any Subsidiary of such Borrower or, prior to the occurrence of
        the
        Guaranty Termination Date

       

      
        
          
          

        

        
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       with
        respect to such Borrower, the Guarantor or any other Subsidiary of the Guarantor
        (including, without limitation, the other Borrower) shall be deemed, for
        all
        purposes of this Agreement, to be a Default or an Event of Default (as the
        case
        may be) with respect to such Borrower); or 

       

      (h)     a
        court
        or governmental authority of competent jurisdiction enters an order (i)
        appointing, without consent by such Borrower, any Subsidiary of such Borrower
        or, prior to the occurrence of the Guaranty Termination Date with respect
        to
        such Borrower, the Guarantor or any other Subsidiary of the Guarantor
        (including, without limitation, the other Borrower), a custodian, receiver,
        trustee or other officer with similar powers (A) with respect to such Borrower,
        any Subsidiary of such Borrower or, prior to the occurrence of the Guaranty
        Termination Date with respect to such Borrower, the Guarantor or any other
        Subsidiary of the Guarantor (including, without limitation, the other Borrower)
        or (B) with respect to any substantial part of the Property of such Borrower,
        any Subsidiary of such Borrower or, prior to the occurrence of the Guaranty
        Termination Date with respect to such Borrower, the Guarantor or any other
        Subsidiary of the Guarantor (including, without limitation, the other Borrower),
        or (ii) constituting an order for relief or approving a petition for relief
        or
        reorganization or any other petition in bankruptcy or for liquidation or
        to take
        advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
        the dissolution, winding-up or liquidation of such Borrower, any Subsidiary
        of
        such Borrower or, prior to the occurrence of the Guaranty Termination Date
        with
        respect to such Borrower, the Guarantor or any other Subsidiary of the Guarantor
        (including, without limitation, the other Borrower), or any such petition
        shall
        be filed against such Borrower, any Subsidiary of such Borrower or, prior
        to the
        occurrence of the Guaranty Termination Date with respect to such Borrower,
        the
        Guarantor or any other Subsidiary of the Guarantor (including, without
        limitation, the other Borrower) and such petition shall not be dismissed
        within
        60 days (it being understood and agreed that any Default or Event of Default
        pursuant to this subsection (h) with respect to any Borrower, any Subsidiary
        of
        such Borrower or, prior to the occurrence of the Guaranty Termination Date
        with
        respect to such Borrower, the Guarantor or any other Subsidiary of the Guarantor
        (including, without limitation, the other Borrower) shall be deemed, for
        all
        purposes of this Agreement, to be a Default or an Event of Default (as the
        case
        may be) with respect to such Borrower); or

       

      (i)     a
        final
        judgment or judgments for the payment of money aggregating in excess of
        $4,000,000 are rendered against such Borrower, any of its Subsidiaries or,
        prior
        to occurrence of the Guaranty Termination Date with respect to such Borrower,
        the Guarantor and such judgment or judgments are not, within 60 days after
        entry
        thereof, bonded, discharged or stayed pending appeal, or are not discharged
        within 60 days after the expiration of such stay (it being understood and
        agreed
        that any Default or Event of Default pursuant to this subsection (i) with
        respect to any Subsidiary of a Borrower or, prior to the occurrence of the
        Guaranty Termination Date with respect to such Borrower, the Guarantor shall
        be
        deemed, for all purposes of this Agreement, to be a Default or an Event of
        Default (as the case may be) with respect to such Borrower); or

       

      (j)     an
        ERISA
        Event with respect to such Borrower or, prior to the occurrence of the Guaranty
        Termination Date with respect to such Borrower, the Guarantor shall have
        occurred that,
        when taken together with all other such ERISA Events that have occurred,
        has
        resulted or could reasonably be expected to result in a Material Adverse
        Effect;
        or

       

      
        
          
          

        

        
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      (k)     prior
        to
        the occurrence of the Guaranty Termination Date with respect to such Borrower,
        the Guarantor shall fail to observe or perform any of its obligations contained
        in Article XI or shall renounce in writing its obligations with respect thereto
        (it being understood and agreed that any Default or Event of Default pursuant
        to
        this subsection (k) with respect to the Guarantor that occurs prior to the
        occurrence of the Guaranty Termination Date with respect to a Borrower shall
        be
        deemed, for all purposes of this Agreement, to be a Default or an Event of
        Default (as the case may be) with respect to such Borrower); or

       

      (l)     Any
        material provision of this Agreement or any other Loan Document to which
        such
        Borrower or the Guarantor 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 such Borrower or, prior to the occurrence of the
        Guaranty Termination Date with respect to such Borrower, the Guarantor, or
        such
        Borrower or the Guarantor shall so assert in writing; or

       

      (m)     Any
        Change of Control shall occur; or

       

      (n)     Any
        Governmental Approval required to be made or obtained by such Borrower or,
        prior
        to the occurrence of the Guaranty Termination Date with respect to such
        Borrower, the Guarantor in connection with the Transactions shall be rescinded,
        revoked, otherwise terminated, or amended or modified in any manner which
        is
        materially adverse to the interests of the Lenders, the Issuing Banks and
        the
        Administrative Agent.

       

      SECTION
        9.02. Remedies.
        If any
        Event of Default has occurred and is continuing with respect to a Borrower
        or,
prior
        to
        the occurrence of the Guaranty Termination Date with respect to such
        Borrower,
        the
        Guarantor, then the Administrative Agent shall at the request, or may with
        the
        consent, of the Required Lenders, upon notice to such Borrower (i) declare
        the
        Commitments and the obligation of each Lender to make Loans to such Borrower
        (other than Loans under Section 4.04(b)) or Convert Loans of such Borrower
        and
        of any Issuing Bank to issue a Letter of Credit at the request of such Borrower
        to be terminated, whereupon the same shall forthwith terminate,
        (ii) declare the principal amount of Loans made to such Borrower
        outstanding hereunder, all interest thereon and all other amounts payable
        by
        such Borrower under this Agreement and the other Loan Documents to be forthwith
        due and payable, whereupon the principal amount of such Loans, all such interest
        and all such other amounts shall become and be forthwith due and payable,
        without presentment, demand, protest or further notice of any kind, all of
        which
        are hereby expressly waived by such Borrower,
        and/or
        (iii) require such Borrower to pay immediately to the Administrative Agent
        an
        amount equal to the aggregate LC Outstandings of all outstanding Letters
        of
        Credit issued at the request of such Borrower, to be held by the Administrative
        Agent (for its benefit and the benefit of the Issuing Banks and the Lenders)
        as
        cash collateral securing such LC Outstandings and such Borrower’s reimbursement
        obligations with respect thereto;
        provided,
        however,
        upon
        the occurrence of any Event of Default specified in Section 9.01(g) or Section
        9.01(h) with respect to any Borrower (other than an Event of Default described
        in clause (i) of Section 9.01(g) or described in clause (vi) of Section 9.01(g)
        by virtue of the fact that such clause encompasses clause (i) of Section
        9.01(g)), (A) the Commitments
        and the obligation of each Lender to make Loans to such Borrower and of any
        Issuing Bank to issue any Letter of Credit at the request of such Borrower
        shall
        automatically be terminated, (B) the principal amount of Loans made to such
        Borrower outstanding hereunder, all interest thereon and all other amounts
        payable by such Borrower under this Agreement and the 

       

      
        
          
          

        

        
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      other
        Loan Documents shall automatically become and be immediately due and payable,
        without presentment, demand, protest or any notice of any kind, all of which
        are
        hereby expressly waived by such Borrower(s), and (C) such
        Borrower shall pay immediately to the Administrative Agent an amount equal
        to
        the aggregate LC Outstandings of all outstanding Letters of Credit issued
        at the
        request of such Borrower, to be held by the Administrative Agent (for its
        benefit and the benefit of the Issuing Banks and the Lenders) as cash collateral
        securing such LC Outstandings and such Borrower’s reimbursement obligations with
        respect thereto.
        Notwithstanding anything to the contrary contained herein, no notice given
        or
        declaration made by the Administrative Agent pursuant to this Section 9.02
        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
        X

      THE
        ADMINISTRATIVE AGENT

       

      SECTION
        10.01. Authorization
        and Action.

       

      (a)     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.

       

      (b)     Any
        Lender serving as 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 Lender and its
        Affiliates may accept deposits from, lend money to and generally engage in
        any
        kind of business with the Obligors or any of their Subsidiaries or other
        Affiliates thereof as if it were not the Administrative Agent
        hereunder.

       

      (c)     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, (i) the Administrative Agent (in such capacity) shall not
        be
        subject to any fiduciary or other implied duties, regardless of whether a
        Default or an Event of Default has occurred and is continuing, (ii) 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 12.01), and (iii) 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
        Obligors or any of their Subsidiaries or Affiliates
        that is communicated to or obtained by the Lender 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
        12.01) or in the absence of its own gross negligence or willful
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      Administrative
        Agent shall be deemed not to have knowledge of any Default or Event of Default
        unless and until written notice thereof is given to the Administrative Agent
        by
        an Obligor or a Lender (in which case the Administrative Agent shall promptly
        give a copy of such written notice to the Lenders and the Issuing Banks).
        The
        Administrative Agent shall not be responsible to any of the Lenders or Issuing
        Banks for or have any duty to ascertain or inquire into (A) any statement,
        warranty or representation made in or in connection with any Loan Document,
        (B)
        the contents of any certificate, report or other document delivered thereunder
        or in connection therewith, (C) the performance or observance of any of the
        covenants, agreements or other terms or conditions set forth in any Loan
        Document, (D) the validity, enforceability, effectiveness or genuineness
        of any
        Loan Document or any other agreement, instrument or document, or (E) the
        satisfaction of any condition set forth in Article VI or elsewhere in any
        Loan
        Document, other than to confirm receipt of items expressly required to be
        delivered to the Administrative Agent. 

       

      (d)     The
        Administrative Agent shall be entitled to rely upon, and shall not incur
        any
        liability for relying upon, any notice, request, certificate, consent,
        statement, instrument, document or other writing 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 any Obligor), independent accountants and other experts
        selected by it, and shall not be liable for any action taken or not taken
        by it
        in good faith in accordance with the advice of any such counsel, accountants
        or
        experts.

       

      (e)     The
        Administrative Agent may perform any and all its duties and exercise its
        rights
        and powers by or through 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 subsections of this
        Section
        10.01 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.

       

      (f)     Subject
        to the appointment and acceptance of a successor Administrative Agent as
        provided in this subsection (f), the Administrative Agent may resign at any
        time
        by notifying the Lenders, the Issuing Banks and the Obligors. Upon any such
        resignation, the Required Lenders shall have the right, in consultation with
        the
        Borrowers, 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 a Lender or
        an
        Affiliate of a Lender. Upon the acceptance
        of its appointment as Administrative Agent hereunder by a successor, such
        successor shall succeed to and become vested with all the rights, powers,
        privileges and duties of the retiring Administrative Agent, and the retiring
        Administrative Agent shall be discharged from its duties and obligations
        hereunder. The fees payable by the Borrowers to a successor Administrative
        Agent
        shall be the same as those payable to its predecessor unless otherwise agreed
        between the Borrowers and such successor. After the Administrative Agent’s
        resignation hereunder, the provisions of this Article and Section 12.04 shall
        continue in effect for the benefit 

       

      
        
          
          

        

        
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      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.

       

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

       

      SECTION
        10.02. Indemnification.
        The
        Lenders agree to indemnify the Administrative Agent (to the extent not
        reimbursed by the Obligors), ratably according to the respective Percentages
        of
        the Lenders, from and against any and all liabilities, obligations, losses,
        damages, penalties, actions, judgments, suits, costs, expenses or disbursements
        of any kind or nature whatsoever which may be imposed on, incurred by, or
        asserted against the Administrative Agent in any way relating to or arising
        out
        of this Agreement or any other Loan Document (other than the Fee Letter)
        or any
        action taken or omitted by the Administrative Agent under this Agreement
        or any
        other Loan Document (other than the Fee Letter), provided
        that no
        Lender shall be liable for any portion of such liabilities, obligations,
        losses,
        damages, penalties, actions, judgments, suits, costs, expenses or disbursements
        resulting from the Administrative Agent’s gross negligence or willful
        misconduct, as determined by the final and nonappealable judgment of a court
        of
        competent jurisdiction. Without limitation of the foregoing, each Lender
        agrees
        to reimburse the Administrative Agent promptly upon demand for its ratable
        share
        of any out-of-pocket expenses (including counsel fees) incurred by the
        Administrative Agent in connection with the preparation, execution, syndication,
        delivery, administration, modification, amendment or enforcement (whether
        through negotiations, legal proceedings or otherwise) of, or legal advice
        in
        respect of rights or responsibilities under, this Agreement or any other
        Loan
        Document (other than the Fee Letter) to the extent that the Administrative
        Agent
        is entitled to reimbursement for such expenses pursuant to Section 12.04
        but is
        not reimbursed for such expenses by the Obligors.

       

      ARTICLE
        XI

      GUARANTY

       

      SECTION
        11.01. The Guaranty. The
        Guarantor hereby guarantees to each Lender, each Issuing Bank, the
        Administrative Agent and their respective successors and assigns the
prompt
        payment in full of all unpaid principal of and interest on (including, without
        limitation, interest accruing after the maturity of the Loans and interest
        accruing after the filing of any petition in bankruptcy, or the commencement
        of
        any insolvency, reorganization or like proceeding, relating to any Borrower,
        whether or not a claim for post-filing or post-petition interest is allowed
        in
        such proceeding) the Loans and all other Obligations of each Borrower to
        the
        Administrative Agent, any Issuing Bank or any Lender, whether direct or
        indirect, absolute or contingent, due or to become due, or now existing or
        hereafter incurred, which may arise under, out of, or in connection with,
        this
        Agreement, any Letter of Credit, any other Loan

       

      
        
          
          

        

        
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       Document
        or any other document made, delivered or given in connection herewith or
        therewith, whether on account of principal, interest, fees, indemnities,
        costs,
        expenses (including, without limitation, all reasonable fees, charges and
        disbursements of counsel to the Administrative Agent, any Issuing Bank or
        any
        Lender that are required to be paid by the Borrowers pursuant hereto) or
        otherwise, in each case strictly in accordance with the express terms hereof
        (such obligations of each Borrower being herein collectively called, in respect
        of such Borrower, the “Guaranteed
        Obligations”),
        and
        agrees to pay any and all expenses (including, without limitation, reasonable
        fees and expenses of counsel) incurred by the Administrative Agent, the Issuing
        Banks or the Lenders in enforcing any rights under this Article XI. Without
        limiting the generality of the foregoing, the Guarantor’s liability shall extend
        to all amounts that constitute part of the Guaranteed Obligations and would
        be
        owed by a Borrower to the Administrative Agent, the Issuing Banks or the
        Lenders
        under this Agreement and the other Loan Documents but for the fact that they
        are
        unenforceable or not allowable due to the existence of a bankruptcy,
        reorganization or similar proceeding involving any Borrower.

       

      In
        addition, the Guarantor hereby further agrees, as an independent obligation,
        that, if a Borrower fails to pay in full when expressed to be due (whether
        at
        stated maturity, upon acceleration or optional prepayment or otherwise) any
        of
        the Guaranteed Obligations strictly in accordance with the express terms
        hereof,
        the Guarantor will promptly pay the same, without any demand or notice
        whatsoever, and that in the case of any extension of time of payment or renewal
        of any of the Guaranteed Obligations, the same will be paid in full when
        expressed to be due (whether at stated maturity, upon acceleration or optional
        prepayment or otherwise) in accordance with the terms of such extension or
        renewal.

       

      SECTION
        11.02. Obligations Unconditional.
        The
        obligations of the Guarantor under Section 11.01 are irrevocable, absolute
        and
        unconditional, irrespective of the value, genuineness, validity, regularity
        or
        enforceability of the obligations of a Borrower hereunder or under any other
        agreement or instrument referred to herein and, to the fullest extent permitted
        by applicable law, irrespective of any other circumstance whatsoever that
        might
        otherwise constitute a legal or equitable discharge or defense of a surety
        or
        guarantor, it being the intent of this Section 11.02 that the obligations
        of the
        Guarantor hereunder shall be irrevocable, absolute and unconditional under
        any
        and all circumstances. Without limiting the generality of the foregoing,
        the
        occurrence of one or more of the following shall not preclude the exercise
        by
        the Lenders, the Issuing Banks or the Administrative Agent of any right,
        remedy
        or power hereunder or alter or impair the liability of the Guarantor hereunder,
        which shall remain irrevocable, absolute and unconditional as described
        above:

       

      (a)     at
        any
        time or from time to time, without notice to the Guarantor, the time for
        any
        performance of or compliance with any of the Guaranteed Obligations shall
        be
        extended, waived or renewed, or a Borrower shall be released from any of
        the
        Guaranteed Obligations, or any of the Guaranteed Obligations shall be
        subordinated in right of payment to any other liability of a
        Borrower;

       

      (b)     any
        of
        the acts mentioned herein or any agreement or instrument referred to herein
        or
        otherwise in connection with the Guaranteed Obligations shall be done or
        omitted;

       

      
        
          
          

        

        
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      (c)     any
        of
        the Guaranteed Obligations shall be accelerated or otherwise become due prior
        to
        their stated maturity, or any of the Guaranteed Obligations shall be amended,
        supplemented, restated or otherwise modified in any respect, or any right
        hereunder or under any agreement or instrument referred to herein or otherwise
        in connection with the Guaranteed Obligations shall be waived, or any other
        guarantee of any of the Guaranteed Obligations or any security therefor shall
        be
        released, substituted or exchanged in whole or in part or otherwise dealt
        with;

       

      (d)     a
        Borrower or any other guarantor or obligor in respect of any of the Guaranteed
        Obligations (i) becomes insolvent or is unable to pay its debts or fails
        or
        admits in writing its inability generally to pay its debts as they become
        due,
        (ii) makes a general assignment, arrangement or composition with or for the
        benefit of its creditors, (iii) institutes or has instituted against it a
        proceeding seeking a judgment of insolvency or bankruptcy or any other relief
        under any bankruptcy or insolvency law or other similar law affecting creditors’
rights, or a petition is presented for its winding-up or liquidation, (iv)
        seeks
        or becomes subject to the appointment of an administrator, provisional
        liquidator, conservator, receiver, trustee, custodian or other similar official
        for it or for all or substantially all its assets, (v) has a secured party
        take
        possession of all or substantially all its assets or has a distress, execution,
        attachment, sequestration or other legal process levied, enforced or sued
        on or
        against all or substantially all its assets or (vi) causes or is subject
        to any
        event with respect to it which, under the applicable laws of any jurisdiction,
        has an analogous effect to any of the events specified in clauses (i), (ii),
        (iii), (iv) or (v) above (any proceeding referred to in this paragraph is
        herein
        referred to as an “Insolvency
        Proceeding”);

       

      (e)     this
        Agreement or any agreement or instrument referred to herein shall be rejected
        (including pursuant to Section 365 of the United States Bankruptcy Code,
        as
        amended) by an administrator, provisional liquidator, conservator, receiver,
        trustee, custodian or other similar official for a Borrower or for all or
        substantially all of a Borrower’s assets in any Insolvency
        Proceeding;

       

      (f)     the
        occurrence of any Default or Event of Default hereunder or the occurrence
        of any
        similar event (howsoever described) under any agreement or instrument referred
        to herein;

       

      (g)    except
        as
        otherwise provided in Section 8.02(b)(ii), any consolidation or amalgamation
        of
        a Borrower with, any merger of a Borrower with or into, or any transfer by
        a
        Borrower of all or substantially all of such Borrower’s assets to, another
        Person, any change in the legal or beneficial ownership of ownership interests
        issued by a Borrower, or any other change whatsoever in the objects, capital
        structure, constitution or business of a Borrower;

       

      (h)     any
        delay, failure or inability of a Borrower or any other guarantor or obligor
        in
        respect of any of the Guaranteed Obligations to perform, willful or otherwise,
        any provision hereunder or any agreement or instrument referred to herein
        or
        otherwise in connection with the Guaranteed Obligations;

       

      (i)     the
        failure or breach of any representation or warranty (whether written or oral)
        made by a Borrower or any other Person herein or in any agreement or instrument
        referred to herein or otherwise in connection with the Guaranteed Obligations;
        or any event or circumstance constituting fraud in the inducement or any
        other
        similar event or circumstance;

       

      
        
          
          

        

        
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      (j)     any
        action or failure to act by any Lender, any Issuing Bank or the Administrative
        Bank that adversely affects the Guarantor’s right of subrogation arising by
        reason of any performance by the Guarantor of its obligations under this
        Article
        XI;

       

      (k)     any
        suit
        or other action brought by, or any judgment in favor of, any beneficiaries
        or
        creditors of, a Borrower or any other Person for any reason whatsoever,
        including any suit or action in any way disaffirming, repudiating, rejecting
        or
        otherwise calling into question any issue, matter or thing in respect of
        this
        Agreement, the other Loan Documents or any agreement or instrument referred
        to
        herein or therein or otherwise in connection with the Guaranteed
        Obligations;

       

      (l)     the
        existence of any claim, set-off, defense or other right which the Guarantor
        may
        have at any time against the Administrative Agent, any Issuing Bank, any
        Lender
        or any other Person, whether in connection with this Guaranty, the Transactions
        or any unrelated transaction;

       

      (m)     any
        lack
        or limitation of status or of power, incapacity or disability of a Borrower
        or
        any other guarantor or obligor in respect of any of the Guaranteed Obligations;
        or

       

      (n)     any
        change in the laws, rules or regulations of any jurisdiction, or any present
        or
        future action or order of any Governmental Authority, amending, varying or
        otherwise affecting the validity or enforceability of any of the Guaranteed
        Obligations or the obligations of any other guarantor or obligor in respect
        of
        any of the Guaranteed Obligations.

       

      The
        Guarantor hereby expressly waives diligence, presentment, demand of payment,
        protest and all notices whatsoever, and any requirement that the Lenders,
        the
        Issuing Banks or the Administrative Agent exhaust any right, power or remedy
        (including filing any proof of claim relating to the Guaranteed Obligations
        in
        any Insolvency Proceeding) or proceed against any Borrower under this Agreement,
        any other Loan Document or any agreement or instrument referred to herein
        or
        therein, or against any other Person under any other guarantee of, or security
        for, any of the Guaranteed Obligations, it being understood that this Article
        XI
        is a guarantee of payment and not just collection.

       

      SECTION
        11.03. Subrogation.
        The
        Guarantor hereby agrees that until the payment and satisfaction in full of
        all
        Guaranteed Obligations it shall not exercise any right or remedy (including
        the
        filing of any proof of claim in any Insolvency Proceeding) against a Borrower
        or
        any other guarantor or obligor in respect of any of the Guaranteed Obligations
        or any security therefor
        arising by reason of any performance by the Guarantor of its obligations
        under
        this Article XI, whether by subrogation or otherwise. In the event that,
        prior
        to the payment and satisfaction in full of all Guaranteed Obligations, any
        amount is received by the Guarantor from a Borrower in respect of the
        performance by the Guarantor of its obligations under this Article XI, whether
        by subrogation or otherwise, the Guarantor will promptly following receipt
        thereof pay such amount to the Administrative Agent for application to any
        Guaranteed Obligations then owing, whether matured or unmatured. 

       

      SECTION
        11.04. Reinstatement.
        The
        obligations of the Guarantor under this Article XI shall be automatically
        reinstated if and to the fullest extent that for any reason any payment by
        or

       

      
        
          
          

        

        
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      on
        behalf
        of a Borrower in respect of the Guaranteed Obligations is rescinded or must
        be
        otherwise restored by any holder of any of the Guaranteed Obligations, whether
        as a result of any Insolvency Proceeding or otherwise, all as though such
        payment had not been made, and the Guarantor agrees that it will indemnify
        each
        Lender, each Issuing Bank and the Administrative Agent on demand for all
        reasonable costs and expenses (including the reasonable fees and disbursements
        of counsel) incurred by such Lender, such Issuing Bank and the Administrative
        Agent in connection with such rescission or restoration, including any such
        costs and expenses incurred in defending against any claim alleging that
        such
        payment constituted a preference, fraudulent transfer or similar payment
        under
        any bankruptcy, insolvency or similar law.

       

      SECTION
        11.05. Remedies Unaffected.
        The
        Guarantor agrees that, as between the Guarantor and the Lenders, the Issuing
        Banks and the Administrative Agent, the Guaranteed Obligations may be declared
        to be forthwith due and payable as provided herein (and shall be deemed to
        have
        become automatically due and payable in the circumstances provided in the
        proviso
        contained in Section 9.02) for purposes of Section 11.01, notwithstanding
        any
        stay (including under the United States Bankruptcy Code, as amended), injunction
        or other prohibition preventing the same as against a Borrower, and that,
        in
        such event, the Guaranteed Obligations (whether or not due and payable by
        the
        Borrowers) shall forthwith become due and payable by the Guarantor for purposes
        of Section 11.01.

       

      SECTION
        11.06. Continuing Guarantee; Liability in Respect of
        Successor.

       

      (a)     The
        guarantee in this Article XI is a continuing guarantee, and shall apply to
        all
        Guaranteed Obligations whenever arising.

       

      (b)     In
        the
        event that a Borrower shall consolidate or amalgamate with, or merge with
        or
        into, or transfer all or substantially all its assets to, another Person,
        except
        as otherwise provided in Section 8.02(b)(ii), the Guarantor will continue
        to be
        obligated hereunder in respect of the Guaranteed Obligations, whether or
        not the
        Guaranteed Obligations are assumed by such Person, and each reference herein
        to
        such Borrower shall thereafter instead be a reference to such
        Person.

       

      (c)     Notwithstanding
        any other provision contained in this Article XI to the contrary, this Guaranty
        shall automatically terminate as to any Borrower upon the occurrence of the
        Guaranty Termination Date with respect to such Borrower.

       

      ARTICLE
        XII

      MISCELLANEOUS

       

      SECTION
        12.01. Amendments, Etc.
        No
        amendment or waiver of any provision of this Agreement or any other Loan
        Document, nor consent to any departure by any Obligor therefrom, shall in
        any
        event be effective unless the same shall be in writing and signed by the
        Required Lenders, and then such waiver or consent shall be effective only
        in the
        specific instance and for the specific purpose for which given; provided,
        however,
        that no
        amendment, waiver or consent shall, unless in writing and signed by all the
        Lenders, do any of the following: (i) waive, modify or eliminate any of the
        conditions specified in Article VI, (ii) increase the Commitments of the
        Lenders
        or subject the Lenders to any additional obligations, (iii) reduce the principal
        of, or

       

      
        
          
          

        

        
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       interest
        on, any Loan, any Applicable Margin or any fees or other amounts payable
        hereunder (other than fees payable to the Administrative Agent pursuant to
        Section 2.02(c)), (iv) extend the Revolving Credit Termination Date or the
        Letter of Credit Expiration Date or postpone any date fixed for any payment
        of
        principal of, or interest on, any Loan or any fees or other amounts payable
        hereunder (other than fees payable to the Administrative Agent pursuant to
        Section 2.02(c)), (v) change the definition of “Required
        Lenders”
        contained in Section 1.01 or change any other provision that specifies the
        percentage of the Commitments or of the aggregate unpaid principal amount
        of the
        Loans or the number of Lenders which shall be required for the Lenders or
        any of
        them to take any action hereunder, (vi) amend any Loan Document in a manner
        intended to prefer one or more Lenders over any other Lenders, (vii) release
        the
        Guaranty, in whole or in part, except for any such release expressly permitted
        hereunder, or change the definition of “Guaranty
        Termination Date”
        contained in Section 1.01, (viii) amend or waive any of the conditions set
        forth
        in Section 6.02(b), or (ix) amend, waive or modify this Section 12.01; and
        provided,
        further,
        that no
        amendment, waiver or consent shall, unless in writing and signed by the
        Administrative Agent in addition to the Lenders required above to take such
        action, affect the rights or duties of the Administrative Agent under this
        Agreement or any other Loan Document; and provided,
        further,
        that no
        amendment, waiver or consent shall, unless in writing and signed by each
        Issuing
        Bank in addition to the Lenders required above to take such action, affect
        the
        rights or duties of any Issuing Bank under this Agreement or any other Loan
        Document. Any request from a Borrower for any amendment, waiver or consent
        under
        this Section 12.01 shall be addressed to the Administrative Agent. 

       

      SECTION
        12.02. Notices, Etc.
        All
        notices and other communications provided for hereunder and under the other
        Loan
        Documents shall be in writing (including telegraphic, facsimile, telex or
        cable
        communication) and mailed, telegraphed, telecopied, telexed, cabled or
        delivered, (i) if to any Borrower, at its address at One South Church Avenue,
        Suite 1820, Tucson, Arizona 85701, Attention: Chief Financial Officer (Telecopy
        No. (520) 884-3612); (ii) if to the Guarantor, at its address at One South
        Church Avenue, Suite 200, Tucson, Arizona 85701, Attention: Chief Financial
        Officer (Telecopy No. (520) 884-3612); (iii) if to any Bank, at its Domestic
        Lending Office specified opposite its name on Schedule 1.01; (iv) if to any
        Issuing Bank, at its address specified in the Issuing Bank Agreement to which
        it
        is a party; (v) if to any Lender other than a Bank, at its Domestic Lending
        Office specified in the Lender Assignment pursuant to which it became a Lender;
        and (vi) if to the Administrative Agent, at its address at 445 South Figueroa
        Street, Los Angeles, California 90071, Attention: Kevin Zitar (Telecopy No.
        (213) 236-4096); or, as to each party, at such other address as shall be
        designated by such party in
        a
        written notice to the other parties. All such notices and communications
        shall,
        when mailed, telegraphed, telecopied, telexed or cabled, be effective five
        days
        after being deposited in the mails, or when delivered to the telegraph company,
        telecopied, confirmed by telex answerback or delivered to the cable company,
        respectively, except that notices and communications to the Administrative
        Agent
        pursuant to Article II, III, or X shall not be effective until received by
        the
        Administrative Agent.

       

      SECTION
        12.03. No Waiver of Remedies.
        No
        failure on the part of any Lender, any Issuing Bank or the Administrative
        Agent
        to exercise, and no delay in exercising, any right hereunder or under any
        other
        Loan Document shall operate as a waiver thereof; nor shall any single or
        partial
        exercise of any such right preclude any other or further exercise thereof
        or
        the

       

      
        
          
          

        

        
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      exercise
        of any other right. The remedies herein provided are cumulative and not
        exclusive of any remedies provided by law.

       

      SECTION
        12.04. Costs, Expenses and Indemnification.
        (a) The
        Borrowers agree to pay, promptly after delivery to the Borrowers of a reasonably
        detailed statement therefor, all reasonable costs and expenses of the
        Administrative Agent in connection with the preparation, negotiation,
        syndication, execution and delivery of the Loan Documents and any proposed
        modification, amendment, waiver or consent relating to any Loan Document,
        including the reasonable fees and disbursements of counsel to the Administrative
        Agent with respect thereto and with respect to the administration of, and
        advising the Administrative Agent as to its rights and responsibilities under,
        this Agreement and the other Loan Documents. The Borrowers further agree
        to pay,
        promptly after delivery to the Borrowers of a reasonably detailed statement
        therefor, all costs and expenses of the Administrative Agent and each Lender
        (including the fees and disbursements of counsel to the Administrative Agent
        and
        counsel for each Lender) in connection with the enforcement (whether through
        negotiations, legal proceedings or otherwise) of this Agreement, the other
        Loan
        Documents and the other documents to be delivered hereunder.

       

      (b)     Each
        Borrower shall indemnify the Administrative Agent, each Issuing Bank, each
        Lender, and each Related Party of any of the foregoing Persons (each such
        Person
        being called an “Indemnified
        Person”)
        against, and hold each Indemnified Person harmless from, any and all losses,
        claims, damages, liabilities and related expenses, including the reasonable
        fees, charges and disbursements of any counsel for any Indemnified Person
        (whether or not such Indemnified Person is named as a party to any proceeding
        or
        is otherwise subjected to judicial or legal process arising from any such
        proceeding), incurred by or asserted against any Indemnified Person arising
        out
        of, in connection with, or as a result of (i) the execution or delivery of
        any
        Loan Document or any other agreement or instrument contemplated hereby or
        thereby, the performance by the parties to the Loan Documents of their
        respective obligations thereunder or the consummation of the transactions
        contemplated hereby or thereby, (ii) any Loan, Letter of Credit or other
        Extension of Credit to such Borrower or the use or proposed 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 comply with the terms of such Letter of Credit), (iii)
        any
        actual or alleged presence or release of any Hazardous Materials on or from
        any
        property owned or operated by such Borrower or any of its Affiliates, or
        any
        Environmental Liability related in any way to such Borrower or any of its
        Affiliates,
        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; provided
        that
        such indemnity shall not, as to any Indemnified Person, be available to the
        extent that such losses, claims, damages, liabilities or related expenses
        are
        determined by a court of competent jurisdiction by final and nonappealable
        judgment to have resulted from the gross negligence or willful misconduct
        of
        such Indemnified Person.

       

      (c)     Each
        Borrower’s obligations under this Section 12.04 shall survive the repayment of
        all amounts owing to the Lenders, the Issuing Banks and the Administrative
        Agent
        under the Loan Documents and the termination of the Commitments. If and to
        the
        extent that the obligations of a Borrower under this Section 12.04 are
        unenforceable for any reason, such Borrower agrees to make the maximum
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      which
        is
        permissible under applicable law, which contribution shall in any event not
        exceed the amount that such Borrower would otherwise have been obligated
        to pay
        under this Section 12.04.

       

      SECTION
        12.05. Right of Set-off.
        (a)
        Upon (i) the occurrence and during the continuance of any Event of Default
        with
        respect to a Borrower or the Guarantor and (ii) the making of the request
        or the
        granting of the consent specified by Section 9.02 to authorize the
        Administrative Agent to declare the principal amount outstanding hereunder
        as to
        a Borrower to be due and payable pursuant to the provisions of Section 9.02,
        each Lender and Issuing Bank is hereby authorized at any time and from time
        to
        time, to the fullest extent permitted by law, to set off and apply any and
        all
        deposits (general or special, time or demand, provisional or final) at any
        time
        held and other indebtedness at any time owing by such Lender or Issuing Bank
        to
        or for the credit or the account of the applicable Borrower(s) or,
        prior
        to the occurrence of the Guaranty Termination Date with respect to such
        Borrower(s),
        the
        Guarantor, against any and all of the obligations of such Borrower(s) or
        the
        Guarantor, respectively, to such Lender or Issuing Bank (as the case may
        be)
        existing under any Loan Document and any Promissory Notes of such Borrower
        held
        by such Lender or the applicable Issuing Bank Agreement to which such Issuing
        Bank is a party, as the case may be, irrespective of whether or not such
        Lender
        or Issuing Bank shall have made any demand under such Loan Document, such
        Promissory Notes or such Issuing Bank Agreement, as the case may be, and
        although such obligations may be unmatured. Each Lender and Issuing Bank
        agrees
        to notify promptly the applicable Borrower(s) or the Guarantor (as applicable)
        after any such set-off and application made by such Lender or Issuing Bank,
        provided
        that the
        failure to give such notice shall not affect the validity of such set-off
        and
        application. The rights of each Lender and Issuing Bank under this Section
        12.05
        are in addition to other rights and remedies (including other rights of set-off)
        which such Lender and Issuing Bank may have. 

       

      (b)     Each
        Borrower agrees that it shall have no right of off-set, deduction or
        counterclaim in respect of its obligations hereunder, and that the obligations
        of the Lenders hereunder are several and not joint. Nothing contained herein
        shall constitute a relinquishment or waiver of such Borrower’s rights to any
        independent claim that such Borrower may have against the Administrative
        Agent
        or any Lender for the Administrative Agent’s or such Lender’s, as the case may
        be, gross negligence or willful misconduct, but no Lender shall be liable
        for
        any such conduct on the part of the Administrative Agent or any other Lender,
        and the Administrative Agent shall be liable for any such conduct on the
        part of
        any Lender.

       

      SECTION
        12.06. Binding Effect.
        This
        Agreement shall become effective when it shall have been executed by the
        Obligors and the Administrative Agent and when the Administrative Agent shall
        have been notified by each Bank that such Bank has executed it and thereafter
        shall be binding upon and inure to the benefit of the Obligors, the
        Administrative Agent and each Lender and their respective successors and
        assigns, except that no Obligor shall have the right to assign its rights
        hereunder or any interest herein without the prior written consent of the
        Lenders. 

       

      SECTION
        12.07. Assignments and Participation.
        (a)
        Each Lender may, with the consent of the Borrowers, the Administrative Agent
        and
        the Issuing Banks (such consent not to be unreasonably withheld or delayed
        and,
        in the case of the Borrowers, shall not be required if an Event of Default
        has
        occurred and is continuing), assign to one or more banks or other financial
        institutions all or a portion of its rights and obligations under this Agreement
        and the other Loan

       

      
        
          
          

        

        
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       Documents
        (including all or a portion of its Commitment, the Loans owing to it and
        any
        Promissory Notes held by it); provided,
        however,
        that
        (i) each such assignment shall be of a constant, and not a varying, percentage
        of all of the assigning Lender’s rights and obligations under this Agreement,
        (ii) the amount of the Commitment of the assigning Lender being assigned
        pursuant to each such assignment (determined as of the date of the Lender
        Assignment with respect to such assignment) shall in no event be less than
        the
        lesser of the aggregate amount of such Lender’s Commitment and $5,000,000, (iii)
        each such assignment shall be to an Eligible Assignee, and (iv) the parties
        to
        each such assignment shall execute and deliver to the Administrative Agent,
        for
        its acceptance and recording in the Register, a Lender Assignment, together
        with
        any Promissory Notes subject to such assignment and a processing and recordation
        fee (payable by the assigning Lender or such assignee) of $3,500;
        and
provided
        further,
        however,
        that
        the consent of the Borrowers and the Administrative Agent shall not be required
        for any assignments by a Lender to any of its Affiliates or to any other
        Lender
        or any of its Affiliates.
        Upon
        such execution, delivery, acceptance and recording, from and after the effective
        date specified in each Lender Assignment, which effective date shall be at
        least
        five Business Days after the execution thereof (or such earlier date acceptable
        to the Administrative Agent), (A) the assignee thereunder shall be a party
        hereto and, to the extent that rights and obligations hereunder have been
        assigned to it pursuant to such Lender Assignment, have the rights and
        obligations of a Lender hereunder and (B) the Lender assignor thereunder
        shall,
        to the extent that rights and obligations hereunder have been assigned by
        it to
        an Eligible Assignee pursuant to such Lender Assignment, relinquish its rights
        and be released from its obligations under this Agreement (and, in the case
        of a
        Lender Assignment covering all or the remaining portion of an assigning Lender’s
        rights and obligations under this Agreement, such Lender shall cease to be
        a
        party hereto); provided,
        however,
        that
        the limitation set forth in clause (iii) above shall not apply if an Event
        of
        Default shall have occurred and be continuing and the Administrative Agent
        shall
        have declared any Loans to be, or any Loans shall have automatically become,
        immediately due and payable hereunder. Notwithstanding anything to the contrary
        contained in this Agreement, any Lender may at any time assign all or any
        portion of the Loans owing to it to any Affiliate of such Lender. No such
        assignment, other than to an Eligible Assignee in accordance with this
        Section 12.07, shall release the assigning Lender from its obligations
        hereunder.

       

      (b)     By
        executing and delivering a Lender Assignment, the Lender assignor thereunder
        and
        the assignee thereunder confirm to and agree with each other and the other
        parties hereto as follows: (i) other than as provided in such Lender Assignment,
        such assigning Lender makes
        no
        representation or warranty and assumes no responsibility with respect to
        any
        statements, warranties or representations made in or in connection with any
        Loan
        Document or the execution, legality, validity, enforceability, genuineness,
        sufficiency or value of any Loan Document or any other instrument or document
        furnished pursuant thereto; (ii) such assigning Lender makes no representation
        or warranty and assumes no responsibility with respect to the financial
        condition of any Obligor or the performance or observance by any Obligor
        of any
        of its obligations under any Loan Document or any other instrument or document
        furnished pursuant thereto; (iii) such assignee confirms that it has received
        a
        copy of each Loan Document, together with copies of the financial statements
        referred to in Section 7.01(d) of this Agreement and such other documents
        and
        information as it has deemed appropriate to make its own credit analysis
        and
        decision to enter into such Lender Assignment; (iv) such assignee will,
        independently and without reliance upon the Administrative Agent, such assigning
        Lender or any other Lender and based on such documents and information as
        it
        shall deem appropriate at the time, continue to 

       

      
        
          
          

        

        
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      make
        its
        own credit decisions in taking or not taking action under the Loan Documents;
        (v) such assignee confirms that it is an Eligible Assignee (unless an Event
        of
        Default shall have occurred and be continuing and the Administrative Agent
        shall
        have declared any Loans to be immediately due and payable hereunder, in which
        case no such confirmation is necessary); (vi) such assignee appoints and
        authorizes the Administrative Agent to take such action as agent on its behalf
        and to exercise such powers under the Loan Documents as are delegated to
        the
        Administrative Agent by the terms thereof, together with such powers as are
        reasonably incidental thereto; and (vii) such assignee agrees that it will
        perform in accordance with their terms all of the obligations which by the
        terms
        of the Loan Documents are required to be performed by it as a
        Lender.

       

      (c)     The
        Administrative Agent shall maintain at its address referred to in Section
        12.02
        a copy of each Lender Assignment delivered to and accepted by it and a register
        for the recordation of the names and addresses of the Lenders and the Commitment
        of, and principal amount of the Loans owing to, each Lender from time to
        time
        (the “Register”).
        The
        entries in the Register shall be conclusive and binding for all purposes,
        absent
        manifest error, and the Obligors, the Administrative Agent, the Issuing Banks
        and the Lenders may treat each Person whose name is recorded in the Register
        as
        a Lender hereunder for all purposes of this Agreement. The Register shall
        be
        available for inspection by the Borrowers, any Issuing Bank or any Lender
        at any
        reasonable time and from time to time upon reasonable prior notice.

       

      (d)     Upon
        its
        receipt of a Lender Assignment executed by an assigning Lender and an assignee
        representing that it is an Eligible Assignee (unless an Event of Default
        shall
        have occurred and be continuing and the Administrative Agent shall have declared
        any Loans to be immediately due and payable hereunder, in which case no such
        representation is necessary), together with any Promissory Notes subject
        to such
        assignment, the processing and recordation fee referred to in subsection
        (a)
        above and any written consent to such assignment required by subsection (a)
        above, the Administrative Agent shall, if such Lender Assignment has been
        completed and is in substantially the form of Exhibit E, (i) accept such
        Lender
        Assignment, (ii) record the information contained therein in the Register
        and
        (iii) give prompt notice thereof to the Borrowers. New and/or replacement
        Promissory Notes payable to the assignee and the assigning Lender (if the
        assigning Lender assigned less than all of its rights and obligations
hereunder)
        shall be issued upon request pursuant to Section 3.01(d), and shall be dated
        the
        effective date of such Lender Assignment.

       

      (e)     Each
        Lender may sell participations to one or more banks or other financial
        institutions (a “Participant”)
        in or
        to all or a portion of its rights and obligations under the Loan Documents
        (including all or a portion of its Commitment, the Loans owing to it and
        any
        Promissory Notes held by it); provided,
        however,
        that
        (i) such Lender’s obligations under this Agreement (including its Commitment to
        the Borrowers hereunder) shall remain unchanged, (ii) such Lender shall remain
        solely responsible to the other parties hereto for the performance of such
        obligations, (iii) such Lender shall remain the holder of any such Promissory
        Notes for all purposes of this Agreement, and (iv) the Obligors, 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 which a Lender sells such a participation shall provide that
        such
        Lender shall retain the sole right to enforce this Agreement and the other
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        Documents and to approve any 

       

      
        
          
          

        

        
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      amendment,
        modification or waiver of any provision of this Agreement or any other Loan
        Document; 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 12.01 that affects such Participant. Subject to subsection (f) below,
        the Obligors agree that each Participant shall be entitled to the benefits
        of
        Sections 5.04 and 5.06 (and subject to the related obligations under such
        Sections) to the same extent as if it were a Lender and had acquired its
        interest by assignment pursuant to subsection (a) above. To the extent permitted
        by law, each Participant shall also be entitled to the benefits of Section
        12.05(a) as though it were a Lender, provided
        such
        Participant agrees to be subject to Section 5.05 as though it were a
        Lender.

       

      (f)     A
        Participant shall not be entitled to receive any greater payment under
        Section 5.04 or 5.06 than the applicable Lender would have been entitled to
        receive with respect to the participation sold to such Participant. A
        Participant that would be a Foreign Lender if it were a Lender shall not
        be
        entitled to the benefits of Section 5.06 unless the Borrowers are notified
        of
        the participation sold to such Participant and such Participant agrees, for
        the
        benefit of the Borrowers, to comply with Section 5.06 as though it were a
        Lender.

       

      (g)     Any
        Lender may, in connection with any assignment or participation or proposed
        assignment or participation pursuant to this Section 12.07, disclose to the
        assignee or Participant or proposed assignee or Participant, any information
        relating to the Obligors furnished to such Lender by or on behalf of any
        Obligor; provided
        that
        prior to any such disclosure, the assignee or Participant or proposed assignee
        or Participant shall agree, in accordance with the terms of Section 12.08,
        to
        preserve the confidentiality of any Confidential Information received by
        it from
        such Lender.

       

      (h)     If
        any
        Lender (or any Participant to which such Lender has sold a participation)
        shall
        make any demand for payment under Section 5.04(a) or (c), then within 30
        days
        after any such demand (if, but only if, such demanded payment has been made
        by
        the Borrowers), the Borrowers may, with the approval of the Administrative
        Agent
        (which approval shall not be unreasonably withheld) and provided that no
        Default
        or Event of Default shall then have occurred
        and be continuing, demand that such Lender assign, at the sole cost and expense
        of the Borrowers, in accordance with this Section 12.07 to one or more Eligible
        Assignees designated by the Borrowers, all (but not less than all) of such
        Lender’s Commitment and the Loans owing to it within the period ending on the
        later to occur of (x) the last day of the 30-day period described above and
        (y)
        the last day of the longest of the then current Interest Periods for such
        Loans.
        If any such Eligible Assignee designated by the Borrowers shall fail to
        consummate such assignment on terms acceptable to such Lender, or if the
        Borrowers shall fail to designate any such Eligible Assignees for all or
        part of
        such Lender’s Commitment or Loans, then such demand by the Borrowers shall
        become ineffective; it being understood for purposes of this subsection (h)
        that
        such assignment shall be conclusively deemed to be on terms acceptable to
        such
        Lender, and such Lender shall be compelled to consummate such assignment
        to an
        Eligible Assignee designated by the Borrowers, if such Eligible Assignee
        (1)
        shall agree to such assignment by entering into a Lender Assignment with
        such
        Lender and (2) shall offer compensation to such Lender in an amount equal
        to all
        amounts then owing by the Borrowers to such Lender hereunder and under any
        Promissory Notes made by the Borrowers to such Lender, whether for principal,
        interest, fees, costs or expenses (other than the demanded payment
        referred

       

      
        
          
          

        

        
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       to
        above, and payable by the Borrowers as a condition to the Borrowers’ right to
        demand such assignment) or otherwise (including, without limitation, to the
        extent not paid by the Borrowers, any payments required pursuant to Section
        5.04(b)). Notwithstanding anything set forth above in this subsection (h)
        to the
        contrary, the Borrowers shall not be entitled to compel the assignment by any
        Lender demanding payment under Section 5.04(a) of its Commitment and Loans
        if,
        prior to or promptly following any such demand by the Borrowers, such Lender
        shall have changed or shall change, as the case may be, its Applicable Lending
        Office for its Eurodollar Rate Loans so as to eliminate the further incurrence
        of such increased cost. In furtherance of the foregoing, any such Lender
        demanding payment or giving notice as provided above agrees to use reasonable
        efforts to so change its Applicable Lending Office if, to do so, would not
        result in the incurrence by such Lender of additional costs or expenses which
        it
        deems material or, in the sole judgment of such Lender, be inadvisable for
        regulatory, competitive or internal management reasons.

       

      (i)     Anything
        in this Section 12.07 to the contrary notwithstanding, any Lender may assign
        and
        pledge all or any portion of its Commitment and the Loans owing to it to
        any
        Federal Reserve Bank (and its transferees) as collateral security pursuant
        to
        Regulation A of the Board and any Operating Circular issued by such Federal
        Reserve Bank. No such assignment shall release the assigning Lender from
        its
        obligations hereunder.

       

      (j)     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 Borrowers, the option to fund all or any part
        of
        any Loan that such Granting Lender would otherwise be obligated to fund pursuant
        to this Agreement; provided
        that (i)
        nothing herein shall constitute a commitment by any SPC to make any Loan,
        and
        (ii) nothing herein shall excuse any Granting Lender from its obligations
        hereunder. The funding of a Loan by an SPC hereunder shall utilize the
        Commitment of the Granting Lender to the same extent, and as if, such Loan
        were
        funded 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 for which a Lender would otherwise be liable for so long as, and
        to
        the extent, the Granting Lender provides such indemnity
        or makes such payment. In furtherance of the foregoing, each Lender 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
        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 contained in this subsection
        (j), any SPC may, with prior notice to, but without the prior written consent
        of, the Borrowers and the Administrative Agent and without paying any processing
        fee therefor, assign all or a portion of its interests in any Loans to the
        Granting Lender or to any financial institutions (consented to by the Borrowers
        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.
        This
        subsection (j) may not be amended without the prior written consent of each
        Granting Lender, all or any part of whose Loans are being funded by an SPC
        at
        the time of such amendment. Notwithstanding the foregoing provisions of this
        subsection, (1) an SPC shall not be deemed to be a Lender or a Participant
        and
        shall have no rights under this Agreement except as provided in this subsection
        (j), and in particular, but not by way of limitation, shall have no rights
        to
        compensation for

       

      
        
          
          

        

        
          77

          
            

          

        

        
          
          

        

      

       

      increased
        costs pursuant to Article III or Section 5.04 or 5.06, (2) the Granting Lender’s
        obligations under this Agreement (including its Commitment to the Borrowers
        hereunder) shall remain unchanged, (3) the Granting Lender shall remain solely
        responsible to the other parties hereto for the performance of such obligations,
        (4) the Granting Lender shall remain the holder of any Promissory Notes for
        all
        purposes of this Agreement, (5) the Obligors, the Administrative Agent, the
        Issuing Banks and the other Lenders shall continue to deal solely and directly
        with the Granting Lender in connection with such Granting Lender’s rights and
        obligations under this Agreement, and (6) the Granting Lender shall indemnify
        and hold the Borrowers harmless from and against any and all liabilities,
        obligations, losses, damages, penalties, actions, judgments, suits, costs,
        expenses or disbursements of any kind or nature whatsoever which may be incurred
        or shall arise as a result of any grant to an SPC contemplated
        hereunder.

       

      SECTION
        12.08. Confidentiality.
        In
        connection with the negotiation and administration of this Agreement and
        the
        other Loan Documents, each Obligor has furnished and will from time to time
        furnish to the Administrative Agent, the Issuing Banks and the Lenders (each,
        a
“Recipient”)
        written information which is identified to the Recipient when delivered as
        confidential (such information, other than any such information which (a)
        was
        publicly available, or otherwise known to the Recipient, at the time of
        disclosure, (b) subsequently becomes publicly available other than through
        any
        act or omission by the Recipient or (c) otherwise subsequently becomes known
        to
        the Recipient other than through a Person whom the Recipient knows to be
        acting
        in violation of his or its obligations to any Obligor, being hereinafter
        referred to as “Confidential
        Information”).
        The
        Recipient will not knowingly disclose any such Confidential Information to
        any
        third party (other than to those persons who have a confidential relationship
        with the Recipient), and will take all reasonable steps to restrict access
        to
        such information in a manner designed to maintain the confidential nature
        of
        such information, in each case until such time as the same ceases to be
        Confidential Information or as any Obligor may otherwise instruct. It is
        understood, however, that the foregoing will not restrict the Recipient’s
        ability to freely exchange such Confidential Information with its Affiliates
        or
        with prospective participants in or assignees of the Recipient’s position
        herein, but the Recipient’s ability
        to so exchange Confidential Information shall be conditioned upon any such
        Affiliate’s or prospective participant’s or assignee’s (as the case may be)
        entering into an agreement as to confidentiality similar to this Section
        12.08.
        It is further understood that the foregoing will not prohibit the disclosure
        of
        any or all Confidential Information if and to the extent that such disclosure
        may be required (i) by a regulatory agency or otherwise in connection with
        an
        examination of the Recipient’s records by appropriate authorities, (ii) pursuant
        to court order, subpoena or other legal process, (iii) otherwise as required
        by
        law, or (iv) in order to protect such Recipient’s interests or its rights or
        remedies hereunder or under the other Loan Documents; in the event of any
        required disclosure under clause (ii), (iii) or (iv), above, the Recipient
        agrees to use reasonable efforts to inform the Obligors as promptly as
        practicable to the extent not prohibited by law.

       

      SECTION
        12.09. WAIVER OF JURY TRIAL.
        THE BORROWERS, THE GUARANTOR, THE ADMINISTRATIVE AGENT, THE ISSUING BANKS
        AND
        THE LENDERS EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
        ANY
        ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
        OR ANY

       

      
        
          
          

        

        
          78

          
            

          

        

        
          
          

        

      

       

      OTHER
        LOAN DOCUMENT, OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR
        THEREUNDER.

       

      SECTION
        12.10. Governing Law; Submission to Jurisdiction.
        This
        Agreement and the Promissory Notes shall be governed by, and construed in
        accordance with, the laws of the State of New York. The Borrowers, the
        Guarantor, the Lenders, the Issuing Banks and the Administrative Agent each
        (i)
        irrevocably submits to the non-exclusive jurisdiction of any New York State
        court or Federal court sitting in New York City in any action arising out
        of any
        Loan Document, (ii) agrees that all claims in such action may be decided
        in such
        court, (iii) waives, to the fullest extent it may effectively do so, the
        defense
        of an inconvenient forum and (iv) consents to the service of process by mail.
        A
        final judgment in any such action shall be conclusive and may be enforced
        in
        other jurisdictions. Nothing herein shall affect the right of any party to
        serve
        legal process in any manner permitted by law or affect its right to bring
        any
        action in any other court.

       

      SECTION
        12.11. Relation of the Parties; No Beneficiary.
        No
        term, provision or requirement, whether express or implied, of any Loan
        Document, or actions taken or to be taken by any party thereunder, shall
        be
        construed to create a partnership, association, or joint venture between
        such
        parties or any of them. No term or provision of the Loan Documents shall
        be
        construed to confer a benefit upon, or grant a right or privilege to, any
        Person
        other than the parties hereto. The Obligors hereby acknowledge that none
        of the
        Administrative Agent, the Issuing Banks nor the Lenders has any fiduciary
        relationship with or fiduciary duty to any Obligor arising out of or in
        connection with this Agreement or any of the other Loan Documents, and the
        relationship between the Administrative Agent, the Issuing Banks and the
        Lenders, on the one hand, and the Obligors, on the other hand, in connection
        herewith or therewith is solely, with respect to the Borrowers, that of creditor
        and debtor and, with respect to the Guarantor, that of beneficiary and
        guarantor.

       

      SECTION
        12.12. Execution in Counterparts.
        This
        Agreement may be executed in any number of counterparts and by different
        parties
        hereto in separate counterparts, each of which when so executed shall be
        deemed
        to be an original and all of which taken together shall constitute one and
        the
        same Agreement. 

       

      SECTION
        12.13. Survival of Agreement.
        All
        covenants, agreements, representations and warranties made herein and in
        the
        certificates pursuant hereto shall be considered to have been relied upon
        by the
        Administrative Agent, the Issuing Banks and the Lenders and shall survive
        the
        making by the Lenders of the Extensions of Credit and the execution and delivery
        to the Lenders of any Promissory Notes evidencing the Extensions of Credit
        and
        shall continue in full force and effect so long as any Promissory Note or
        any
        amount due hereunder or under any other Loan Document is outstanding and
        unpaid,
        any Letter of Credit is outstanding, or any Commitment of any Lender has
        not
        been terminated. 

       

      SECTION
        12.14. Patriot Act Notice.
        Each
        Lender and the Administrative Agent (for itself and not on behalf of any
        other
        party) hereby notifies the Obligors 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 each Obligor,
        which information includes the name and address of each Obligor and
        other

       

      
        
          
          

        

        
          79

          
            

          

        

        
          
          

        

      

       

      information
        that will allow such Lender or the Administrative Agent, as applicable, to
        identify each Obligor in accordance with the Patriot Act.

      


      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

       

      
        
          
          

        

        
          80

          
            

          

        

        
          
          

        

      

    

     

    
      
         

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

         

      

      
        
          
            	 	
                    UNS
                      ELECTRIC, INC., as a Borrower

                     

                     

                  
	 	
                    By:

                  	 /s/
                    Kevin P. Larson
	 	 	
                    Name:  
                      

                  	
                     Kevin P. Larson

                  
	 	 	Title:	 Vice
                    President and Treasurer
	 	 	
                     

                  


          

           

          
             

            
              
                
                  	 	
                          UNS
                            GAS, INC., as a Borrower

                           

                           

                        
	 	
                          By:

                        	 /s/
                          Kevin P. Larson
	 	 	
                          Name:  
                            

                        	
                            Kevin P. Larson

                        
	 	 	Title:	 
Vice
                          President and
                          Treasurer
	 	 	
                           

                        


                

                 

                
                  
                     

                    
                      
                        
                          	 	
                                  UNISOURCE
                                    ENERGY SERVICES, INC., as Guarantor

                                   

                                   

                                
	 	
                                  By:

                                	  /s/
                                  Kevin P.
                                  Larson
	 	 	
                                  Name:  
                                    

                                	
                                    Kevin P. Larson

                                
	 	 	Title:	 
Sr.
                                  Vice President and
                                  Treasurer
	 	 	
                                   

                                


                        

                         

                        
                          
                             

                            
                              
                                
                                  	 	
                                          UNION
                                            BANK OF CALIFORNIA, N.A., as Administrative
                                            Agent

                                           

                                           

                                        
	 	
                                          By:

                                        	 /s/
                                          Kevin M. Zitar
	 	 	
                                          Name:  
                                            

                                        	
                                           Kevin M. Zitar

                                        
	 	 	Title:	 Vice
                                          President
	 	 	
                                           

                                        


                                

                                 

                                
                                  
                                    
                                    

                                  

                                  
                                    
                                      S-1

                                      Signature
                                        Page to UNS Electric, Inc. and UNS Gas, Inc.
                                        Amended and Restated Credit
                                        Agreement

                                    

                                    
                                      

                                    

                                  

                                  
                                    
                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
                                       

        
          
            
              	
                       Commitment

                    	
                       Existing
                        Bank

                       

                    
	
                           
$8,000,000

                    	
                      THE
                        BANK OF NEW YORK

                       

                       

                    
	 	
                      By:

                    	 /s/
                      John-Paul Marotta
	 	 	
                      Name:  
                        

                    	
                       John-Paul Marotta

                    
	 	 	Title:	 Managing
                      Director
	 	 	
                       

                    


            

             

            
              
                
                

              

              
                
                  S-2

                  
                    Signature
                      Page to UNS Electric, Inc. and UNS Gas, Inc. Amended and Restated
                      Credit
                      Agreement

                  

                

                
                  

                

              

              
                
                

              

            

          

        

      

    

     

    
                                     

      
        
          
            	
                     Commitment

                  	
                     Existing
                      Bank

                     

                  
	
                         
$15,000,000

                  	
                    UNION
                      BANK OF CALIFORNIA, N.A.

                     

                     

                  
	 	
                    By:

                  	 /s/
                    Kevin M. Zitar
	 	 	
                    Name:  
                      

                  	
                     Kevin M. Zitar

                  
	 	 	Title:	 Vice
                    President
	 	 	
                     

                  


          

           

          
            
              
              

            

            
              
                S-3

                
                  Signature
                    Page to UNS Electric, Inc. and UNS Gas, Inc. Amended and Restated
                    Credit
                    Agreement

                

              

              
                

              

            

            
              
              

            

          

        

      

    

     

    
                                     

      
        
          
            	
                     Commitment

                  	
                     Existing
                      Bank

                     

                  
	
                         
$15,000,000

                  	
                    WELLS
                      FARGO BANK, NATIONAL

                    ASSOCIATION

                     

                     

                  
	 	
                    By:

                  	 /s/
                    Clyde Gossert
	 	 	
                    Name:  
                      

                  	
                     Clyde Gossert

                  
	 	 	Title:	 Vice
                    President
	 	 	
                     

                  


          

           

          
             

            
              
                
                

              

              
                
                  S-4

                  
                    Signature
                      Page to UNS Electric, Inc. and UNS Gas, Inc. Amended and Restated
                      Credit
                      Agreement

                  

                

                
                  

                

              

              
                
                

              

            

             

            
                                             

              
                
                  
                    	
                             Commitment

                          	
                             Existing
                              Bank

                             

                          
	
                                 
$8,000,000

                          	
                            JPMORGAN
                              CHASE BANK, N.A.

                             

                             

                          
	 	
                            By:

                          	 /s/
                            Nancy R. Barwig
	 	 	
                            Name:  
                              

                          	
                             Nancy R. Barwig

                          
	 	 	Title:	 Vice
                            President
	 	 	
                             

                          


                  

                   

                  
                     

                    
                      
                        
                        

                      

                      
                        
                          S-5

                          
                            Signature
                              Page to UNS Electric, Inc. and UNS Gas, Inc. Amended
                              and Restated Credit
                              Agreement

                          

                        

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                                                     

                      
                        
                          
                            	
                                     Commitment

                                  	
                                     Existing
                                      Bank

                                     

                                  
	
                                         
$6,000,000

                                  	
                                    WACHOVIA
                                      BANK, NATIONAL

                                    ASSOCIATION

                                     

                                     

                                  
	 	
                                    By:

                                  	 /s/
                                    Paul Pritchett
	 	 	
                                    Name:  
                                      

                                  	
                                     Paul Pritchett

                                  
	 	 	Title:	 Vice
                                    President
	 	 	
                                     

                                  


                          

                           

                          
                             

                            
                              
                                
                                

                              

                              
                                
                                  S-6

                                  
                                    Signature
                                      Page to UNS Electric, Inc. and UNS Gas, Inc.
                                      Amended and Restated Credit
                                      Agreement

                                  

                                

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                             

                            
                                                             

                              
                                
                                  
                                    	
                                             Commitment

                                          	
                                             New
                                              Bank

                                             

                                          
	
                                                 
$8,000,000

                                          	
                                            ABN
                                              AMRO BANK N.V.

                                             

                                             

                                          
	 	
                                            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-7

          
            Signature
              Page to UNS Electric, Inc. and UNS Gas, Inc. Amended and Restated Credit
              Agreement