Document:

Pacific Gas and Electric Credit Agreement

Exhibit 10.3

$1,000,000,000

CREDIT AGREEMENT

Among

PACIFIC GAS AND ELECTRIC COMPANY,

as Borrower,

The Several Lenders from Time to Time Parties
Hereto,

CITICORP NORTH AMERICA, INC.,

as Administrative Agent,

JPMORGAN CHASE BANK, N.A.,

as Syndication Agent,

And

BARCLAYS BANK PLC, BNP PARIBAS

And

DEUTSCHE BANK SECURITIES INC.,

as Documentation Agents

Dated as of April 8, 2005

CITIGROUP GLOBAL MARKETS, INC.

and J.P. MORGAN SECURITIES INC.,

as Joint Lead Arrangers and

Joint Bookrunners

TABLE OF CONTENTS

			
Page

	
Section 1.     

	

DEFINITIONS..............................................................................................

	
1

		
1.1

	
Defined
Terms.................................................................................................

	
1

		
1.2

	
Other Definitional
Provisions............................................................................

	
17

	
          

		
	
Section 2.

	
AMOUNT AND TERMS OF
COMMITMENTS..........................................

	
18

		
2.1

	

Commitments..................................................................................................

	
18

		
2.2

	
Proceudre for Revolving Loan
Borrowing........................................................

	
19

		
2.3

	
Commitment
Increases....................................................................................

	
19

		
2.4

	
Swingline
Commitment....................................................................................

	
21

		
2.5

	
Procedure for Swingline Borrowing; Refunding of Swingline
Loans...................

	
21

		
2.6

	
Facility Fees, Utilization Fees,
etc....................................................................

	
23

		
2.7

	
Termination or Reduction of commitments; Extension of
Termination Date........

	
23

		
2.8

	
Optional
Prepayments.....................................................................................

	
25

		
2.9

	
Conversion and Continuation
Options..............................................................

	
26

		
2.10

	
Limitations on Eurodollar
Tranches..................................................................

	
26

		
2.11

	
Interest Rates and Payment
Dates....................................................................

	
26

		
2.12

	
Computation of Interest and
Fees....................................................................

	
27

		
2.13

	
Inability to Determine Interest
Rate..................................................................

	
27

		
2.14

	
Pro Rata Treatment and Payments;
Notes........................................................

	
28

		
2.15

	
Requirements of
Law.......................................................................................

	
29

		
2.16

	

Taxes..............................................................................................................

	
31

		
2.17

	

Indemnity........................................................................................................

	
33

		
2,18

	
Change of Lending
Office................................................................................

	
33

		
2.19

	
Replacement of
Lenders..................................................................................

	
33

	
     

		
	
Section 3.

	
LETTERS OF
CREDIT..................................................................................
........................................................................................................................

	
34

		
3.1

	
L/C
Commitment.............................................................................................

	
34

		
3.2

	
Procedure for Issuance of Letters of
Credit......................................................

	
35

		
3.3

	
Fees and Other
Charges..................................................................................

	
35

		
3.4

	
L/C
Participations............................................................................................

	
35

		
3.5

	
Reimbursement Obligation of the
Borrower......................................................

	
37

		
3.6

	
Obligations
Absolute.......................................................................................

	
37

		
3.7

	
Letter of Credit
Payments................................................................................

	
38

		
3.8

	

Applications....................................................................................................

	
38

		
3.9

	
Actions of Issuing
Lenders...............................................................................

	
38

		
3.10

	
Borrower’s
Indemnification..............................................................................

	
38

		
3.11

	
Lenders’
Indemnification..................................................................................

	
39

	
     

		
	
Section 4.

	
REPRESENTATION AND
WARRANTIES.................................................

	
39

	
 

		
4.1

	
Financial
Condition..........................................................................................

	
39

		
4.2

	
No
Change.....................................................................................................

	
40

		
4.3

	
Existence; Compliance with
Law......................................................................

	
40

		
4.4

	
Power; Authorization; Enforceable
Obligations.................................................

	
40

		
4.5

	
No Legal
Bar..................................................................................................

	
40

		
4.6

	

Litigation.........................................................................................................

	
41

		
4.7

	
No
Default......................................................................................................

	
41

		
4.8

	

Taxes..............................................................................................................

	
41

		
4.9

	
Federal
Regulations.........................................................................................

	
41

		
4.10

	

ERISA............................................................................................................

	
41

		
4.11

	
Investment Company Act; Other
Regulations...................................................

	
42

		
4.12

	
Use of
Proceeds..............................................................................................

	
42

		
4.13

	
Environmental
Matters.....................................................................................

	
42

		
4.14

	
Accuracy of Information,
etc............................................................................

	
43

		
4.15

	
Regulatory
Matters..........................................................................................

	
44

	
     

		
	
Section 5.

	
CONDITIONS
PRECEDENT.......................................................................

	
44

		
5.1

	
Conditions to the Effective
Date.......................................................................

	
44

		
5.2

	
Conditions to Each Credit
Event......................................................................

	
46

	
     

		
	
Section 6.

	
AFFIRMATIVE
COVENANTS....................................................................

	
47

		
6.1

	
Financial
Statements........................................................................................

	
47

		
6.2

	
Certificates; Other
Information.........................................................................

	
47

		
6.3

	
Payment of
Taxes............................................................................................

	
48

		
6.4

	
Maintenance of Existence;
Compliance............................................................

	
48

		
6.5

	
Maintenance of Property;
Insurance.................................................................

	
48

		
6.6

	
Inspection of Property; Books and Records;
Discussions.................................

	
48

		
6.7

	

Notices...........................................................................................................

	
49

		
6.8

	
Maintenance of Licenses,
etc...........................................................................

	
50

	
     

		
	
Section 7.

	
NEGATIVE
COVENANTS...........................................................................

	
50

		
7.1

	
Consolidated Capitalization
Ratio.....................................................................

	
50

		
7.2

	

Liens...............................................................................................................

	
50

		
7.3

	
Fundamental
Changes......................................................................................

	
50

		
7.4

	
Release
Date...................................................................................................

	
50

			
	
Section 8.

	
EVENTS OF
DEFAULT................................................................................

	
51

	
     

		
	
Section 9.

	
THE
AGENTS...............................................................................................

	
54

		
9.1

	

Appointment...................................................................................................

	
54

		
9.2

	
Delegation of
Duties........................................................................................

	
54

		
9.3

	
Exculpatory
Provisions....................................................................................

	
54

		
9.4

	
Reliance by Administrative
Agent.....................................................................

	
54

		
9.5

	
Notice of
Default.............................................................................................

	
55

		
9.6

	
Non-Reliance on Agents and Other
Lenders....................................................

	
55

		
9.7

	

Indemnification................................................................................................

	
56

		
9.8

	
Agent in Its Individual
Capacity........................................................................

	
56

		
9.9

	
Successor Administrative
Agent.......................................................................

	
56

		
9.10

	
Documentation Agents and Syndication
Agent..................................................

	
57

	
     

		
	
Section 10.

	

MISCELLANEOUS......................................................................................

	
57

		
10.1

	
Amendments and
Waivers...............................................................................

	
57

		
10.2

	

Notices...........................................................................................................

	
59

		
10.3

	
No Waiver; Cumulative
Remedies...................................................................

	
60

		
10.4

	
Survival of Representations and
Warranties......................................................

	
60

		
10.5

	
Payment of Expenses and
Taxes......................................................................

	
60

		
10.6

	
Successors and Assigns; Participations and
Assignments..................................

	
61

		
10.7

	
Adjustments;
Set‐off........................................................................................

	
64

		
10.8

	

Counterparts...................................................................................................

	
65

		
10.9

	

Severability.....................................................................................................

	
65

		
10.10

	

Integration.......................................................................................................

	
65

		
10.11

	
Governing
Law....................................................................................

	
65

		
10.12

	
Submission To Jurisdiction;
Waivers................................................................

	
65

		
10.13

	

Acknowledgments...........................................................................................

	
66

		
10.14

	

Confidentiality.................................................................................................

	
66

		
10.15

	
WAIVERS OF JURY
TRIAL......................................................................

	
67

		
10.16

	
Releases of Senior
Bond..................................................................................

	
67

		
10.17

	
USA Patriot
Act..............................................................................................

	
67

	
SCHEDULES:

	
	
     

	
	
1.1A

	
Commitments

	
     

	
	
EXHIBITS:

	
	
    

	
	
A

	
Form of Bond Delivery Agreement

	
B

	
Form of New Lender Supplement

	
C

	
Form of Commitment Increase Supplement

	
D

	
Form of Compliance Certificate

	
E

	
Form of Closing Certificate

	
F

	
Form of Assignment and Assumption

	
G-1

	
Form of Legal Opinion of Orrick, Herrington & Sutcliffe LLP,
as to corporate matters

	
G-2

	
Form of Legal Opinion of Orrick, Herrington & Sutcliffe LLP,
as to regulatory matters

	
G-3

	
Form of Legal Opinion of Bruce R. Worthington, Esq.

	
H

	
Form of Exemption Certificate

	
I

	
Form of Senior Bond

	
J

	
Form of Note

	
K

	
Form of Escrow Deposit and Disbursement Agreement

                      CREDIT
AGREEMENT (this “Agreement”), dated as of April
8, 2005, among PACIFIC GAS AND ELECTRIC COMPANY, a California
corporation (the “Borrower”), the several banks
and other financial institutions or entities from time to time
parties to this Agreement (the “Lenders”),
CITIGROUP GLOBAL MARKETS, INC. and J.P. MORGAN SECURITIES INC., as
joint lead arrangers and joint bookrunners (together and in such
capacities, the “Arrangers”), JPMORGAN CHASE
BANK, N.A. (“JPMorgan Chase Bank”), as
syndication agent (in such capacity, the “Syndication
Agent”), BARCLAYS BANK PLC, BNP PARIBAS and DEUTSCHE BANK
SECURITIES INC., as documentation agents (together and in such
capacities, the “Documentation Agents”), and
CITICORP NORTH AMERICA, INC. (“Citicorp”), as
administrative agent (in such capacity, together with any successor
thereto, the “Administrative Agent”).

W I T N E 
S S E T H:

                      WHEREAS,
the Borrower has requested the Lenders to make available to it the
credit facilities described herein;

                      WHEREAS,
the credit facilities made available hereunder consist of
(i) a facility permitting the issuance, for the
Borrower’s account, of letters of credit, in an aggregate
face amount at any time outstanding not exceeding $546,000,000, to
provide for payment under energy procurement contracts and
(ii) a facility permitting the issuance, for the
Borrower’s account, of letters of credit for purposes other
than energy procurement and revolving credit loans and swingline
loans, in an aggregate face and principal amount at any time
outstanding not exceeding $454,000,000, including loans to repay
the outstanding principal amount of the term loans made to the
Borrower pursuant to the Bond Refunding Loan Agreements (as defined
in Section 1.1); and

                      WHEREAS,
the Lenders are willing to make available the credit facilities
described herein upon and subject to the terms and conditions set
forth herein;

NOW THEREFORE, the parties hereto hereby agree as follows:

SECTION 1. 
DEFINITIONS

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

                      
“ABR”:  for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to
the greater of (a) the Base Rate in effect on such day and
(b) the Federal Funds Effective Rate in effect on such day
plus 1⁄2 of 1%.  For purposes hereof,
“Base Rate” shall mean the rate of interest per
annum publicly announced from time to time by the Administrative
Agent as its base rate in effect at its principal office in New
York City (the Base Rate not being intended to be the lowest rate
of interest charged by the Administrative Agent in connection with
extensions of credit to debtors).  Any change in the ABR due
to a change in the Base Rate or the Federal Funds Effective Rate
shall be effective as of the opening of business on the effective
day of such change in the Base Rate or the Federal Funds Effective
Rate, respectively.

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

                      
“Act”:  as defined in Section 10.17.

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

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

                      
“Agreement”:  as defined in the preamble
hereto.

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

	
Level

	
Rating

 S&P/Moody’s

	
Applicable Margin

 for

 ABR Loans

	
Applicable Margin

 for

 Eurodollar Loans

	
1

	
A/A2 or higher

	
0%

	
0.220%

	
2

	
A-/A3

	
0%

	
0.300%

	
3

	
BBB+/Baa1

	
0%

	
0.350%

	
4

	
BBB/Baa2

	
0%

	
0.425%

	
5

	
BBB-/Baa3

	
0%

	
0.575%

	
6

	
BB+/Ba1 or lower

	
0%

	
0.675%

                      Subject
to the provisions of this paragraph regarding split ratings,
changes in the Applicable Margins shall become effective on the
date on which S&P and/or Moody’s changes its relevant
Rating.  In the event the Ratings of S&P and Moody’s
are in different levels set forth in the grid above, the higher of
the two Ratings (i.e., the Rating set forth in the
grid above opposite the lower numerical level number) shall
govern.  In the event that, at any time, a Rating is not
available from one of such rating agencies, the Applicable Margins
shall be determined on the basis of the Rating from the other
rating agency. In the event that, at any time, Ratings from each
such rating agency are not available for companies generally, the
Applicable Margins shall be determined on the basis of the last
Rating(s) made available.  In the event that, at any time,
such Ratings are not available for the Borrower but are generally
available for other companies, then the Applicable Margins shall be
those set forth above opposite level 6.

                      
“Application”:  an application, in such
form as the relevant Issuing Lender may reasonably specify from
time to time, requesting such Issuing Lender to issue a Letter of
Credit.

                      
“Arrangers”:  as defined in the preamble
hereto.

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

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

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

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

                      
“Benefitted Lender”:  as defined in
Section 10.7(a).

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

                      
“Bond Delivery Agreement”:  the Bond
Delivery Agreement to be executed by the Borrower and the
Administrative Agent, substantially in the form of
Exhibit A.

                      
“Bond Fund Loan Agreements”: means (a) the Bond
Refunding Loan Agreement (1996 Series B), dated as of April 12,
2004, by and among the Borrower, the lenders named therein,
JPMorgan Chase Bank, as Administrative Agent, and Citicorp, as
Syndication Agent, (b) the Bond Refunding Loan Agreement (1996
Series D), dated as of April 12, 2004, by and among the Borrower,
the lenders named therein, JPMorgan Chase Bank, as Administrative
Agent, and Citicorp, as Syndication Agent, (c) the Bond Refunding
Loan Agreement (1997 Series A), dated as of April 12, 2004, by and
among the Borrower, the lenders named therein, JPMorgan Chase Bank,
as Administrative Agent, and Citicorp, as Syndication Agent, and
(d) the Bond Refunding Loan Agreement (1997 Series C), dated as of
April 12, 2004, by and among the Borrower, the lenders named
therein, JPMorgan Chase Bank, as Administrative Agent, and
Citicorp, as Syndication Agent.

                      
“Bond Maturity Date” means April 8, 2010; and if
such date is extended from time to time pursuant to
Section 2.7(g), “Bond Maturity Date” shall mean
such extended date.

                      
“Borrower”:  as defined in the preamble
hereto.

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

                      
“Business”:  as defined in Section
4.13(b) .

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

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

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

                      
“Citicorp”: as defined in the preamble
hereto.

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

                      
“Commitment”:  as to any Lender, the
obligation of such Lender, if any, to make Revolving Loans and
participate in Swingline Loans and Letters of Credit in an
aggregate principal and/or face amount not to exceed the amount set
forth under the heading “Commitment” opposite such
Lender’s name on Schedule 1.1A or in the
Assignment and Assumption or New Lender Supplement pursuant to
which such Lender became a party hereto, as the same may be changed
from time to time pursuant to the terms hereof.  The original
amount of the Total Commitments is $1,000,000,000.

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

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

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

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

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

                      
“Conduit Lender”:  any special purpose
corporation organized and administered by any Lender for the
purpose of making Loans otherwise required to be made by such
Lender and designated by such Lender in a written instrument;
provided, that the designation by any Lender of a Conduit
Lender shall not relieve the designating Lender of any of its
obligations to fund a Loan under this Agreement if, for any reason,
its Conduit Lender fails to fund any such Loan, and the designating
Lender (and not the Conduit Lender) shall have the sole right and
responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender,
and provided, further, that no Conduit Lender shall
(a) be entitled to receive any greater amount pursuant to
Section 2.15, 2.16, 2.17 or 10.5 than the designating Lender
would have been entitled to receive in respect of the extensions of
credit made by such Conduit Lender or (b) be deemed to have
any Commitment.

                      
“Consolidated Capitalization”: on any date of
determination, the sum of (a) Consolidated Total Debt on such
date plus (b) without duplication, the amount set forth
opposite the caption “shareholders’ equity” (or
any similar caption) on the consolidated balance sheet, prepared in
accordance with GAAP, of the Borrower and its Subsidiaries as of
such date.

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

                      
“Consolidated Total Debt”:  at any date,
the aggregate principal amount of all obligations of the Borrower
and its Significant Subsidiaries at such date that in accordance
with GAAP would be classified as debt on a consolidated balance
sheet of the Borrower, and without duplication all Guarantee
Obligations of the Borrower and its Significant Subsidiaries at
such date in respect of obligations of any other Person that in
accordance with GAAP would be classified as debt on a consolidated
balance sheet of such Person; provided that, the
determination of “Consolidated Total Debt” shall
exclude (a) the Securitized Bonds and (b) Indebtedness of the
Borrower and its Significant Subsidiaries in an amount equal to the
amount of cash held as cash collateral for any fully cash
collateralized letter of credit issued for the account of the
Borrower or any Significant Subsidiary.

                      
“Continuing Lender”:  as defined in Section
2.7.

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

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

                      
“Credit Event”:  as defined in Section
5.2.

                      
“Default”:  any of the events specified in
Section 8, whether or not any requirement for the giving of notice,
the lapse of time, or both, has been satisfied.

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

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

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

                      
“Effective Date”: the date on which the
conditions precedent set forth in Section 5.1 shall have been
satisfied or waived.

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

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

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

                      
“Escrow Deposit and Disbursement Agreement”: an
Escrow Deposit Agreement and Disbursement Agreement, substantially
in the form of Exhibit K.

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

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

                      
“Eurodollar Base Rate”:  with respect to
each day during each Interest Period pertaining to a Eurodollar
Loan, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period
commencing on the first day of such Interest Period appearing on
Page 3750 of the Telerate screen as of 11:00 A.M., London
time, two Business Days prior to the beginning of such Interest
Period.  In the event that such rate does not appear on
Page 3750 of the Telerate screen (or otherwise on such
screen), the “Eurodollar Base Rate” shall be
determined by reference to such other comparable publicly available
service for displaying eurodollar rates as may be selected by the
Administrative Agent or, in the absence of such availability, by
reference to the rate at which the Administrative Agent is offered
Dollar deposits at or about 11:00 A.M., New York City time,
two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where its eurodollar and foreign
currency and exchange operations are then being conducted for
delivery on the first day of such Interest Period for the number of
days comprised therein.

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

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

	
                Eurodollar Base Rate              

	
1.00 - Eurocurrency Reserve Requirements

  

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

                      
“Event of Default”:  any of the events
specified in Section 8, provided that any requirement for
the giving of notice, the lapse of time, or both, has been
satisfied.

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

                      
“Existing Credit Agreement”:  the Credit
Agreement, dated as of March 5, 2004, among the Borrower, the
lenders parties thereto, the syndication agent and co-documentation
agents named therein and Citicorp, as administrative agent.

                      
“Existing Issuing Lender”:  JPMorgan Chase
Bank, N.A. (successor by merger to Bank One, NA).

                      
“Existing Letters of Credit”:  each of the
letters of credit issued by the Existing Issuing Lender under the
Existing Credit Agreement and outstanding on the Effective
Date.

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

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

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

	
Level

	
Rating

 S&P/Moody’s

	
Facility Fee Rate

	
 

	
1

	
A/A2 or higher

	
0.080%

	
2

	
A-/A3

	
0.100%

	
3

	
BBB+/Baa1

	
0.125%

	
4

	
BBB/Baa2

	
0.150%

	
5

	
BBB-/Baa3

	
0.175%

	
6

	
BB+/Ba1 or lower

	
0.200%

                      Subject
to the provisions of this paragraph regarding split ratings,
changes in the Facility Fee Rate shall become effective on the date
on which S&P and/or Moody’s changes its relevant
Rating.  In the event the Ratings of S&P and Moody’s
are in different levels set forth in the grid above, the higher of
the two Ratings (i.e., the Rating set forth in the grid
above opposite the lower numerical level number) shall
govern.  In the event that, at any time, a Rating is not
available from one of such rating agencies, the Facility Fee Rate
shall be determined on the basis of the Rating from the other
rating agency. In the event that, at any time, Ratings from each
such rating agency are not available for companies generally, the
Facility Fee Rate shall be determined on the basis of the last
Rating(s) made available.  In the event that, at any time,
such Ratings are not available for the Borrower but are generally
available for other companies, then the Facility Fee Rate shall be
that set forth above opposite level 6.

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

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

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

                      
“Funding Office”:  the office of the
Administrative Agent specified in Section  10.2 or such other
office as may be specified from time to time by the Administrative
Agent as its funding office by written notice to the Borrower and
the Lenders.

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

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

                      
“Guarantee Obligation”:  as to any Person
(the “guaranteeing person”), any obligation,
including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing person that guarantees any Indebtedness,
leases, dividends or other obligations (the “primary
obligations”) of any other third Person (the
“primary obligor”) in any manner, whether
directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation,
(iv) otherwise to assure or hold harmless the owner of any
such primary obligation against loss in respect thereof or
(v) to reimburse or indemnify an issuer of a letter of credit,
surety bond or guarantee issued by such issuer in respect of
primary obligations of a primary obligor other than the Borrower or
any Significant Subsidiary; provided, however, that
the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of
business.  The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made
and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying
such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are
not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s
reasonably anticipated liability in respect thereof as determined
by the Borrower in good faith.

                      
“Indebtedness”:  of any Person at any date,
without duplication, (a) all indebtedness of such Person for
borrowed money, (b) all obligations of such Person for the
deferred purchase price of property or services (other than trade
payables, including under energy procurement and transportation
contracts, incurred in the ordinary course of such Person’s
business), (c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all
indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations of
such Person as lessee which are capitalized in accordance with
GAAP, (f) all obligations of such Person, contingent or
otherwise, as an account party or applicant under or in respect of
acceptances, letters of credit, surety bonds or similar
arrangements (other than reimbursement obligations, which are not
due and payable on such date, in respect of documentary letters of
credit issued to provide for the payment of goods and services in
the ordinary course of business), (g) the liquidation value of
all mandatorily redeemable preferred Capital Stock of such Person,
(h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g)
above, (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the
holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such
obligation (provided, that if such Person is not liable for
such obligation, the amount of such Person’s Indebtedness
with respect thereto shall be deemed to be the lesser of the stated
amount of such obligation and the value of the property subject to
such Lien), and (j) for the purposes of Section 8(e) only, all
obligations of such Person in respect of Swap Agreements,
provided that Indebtedness as used in this Agreement shall
exclude any Non-Recourse Debt.  The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness
expressly provide that such Person is not liable therefor.

                      
“Indenture”:  the Indenture of Mortgage,
dated as of March 11, 2004, between the Borrower and the Indenture
Trustee, as supplemented by the First Supplemental Indenture, dated
as of March 23, 2004 and the Second Supplemental Indenture, dated
as of April 12, 2004.

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

                      
“Information Memorandum”:  the Information
Memorandum dated March 2005, and furnished to certain Lenders in
connection with the syndication of the Commitments, as supplemented
by each and all Specified Exchange Act Filings filed by the
Borrower during the period from March 15, 2005 through the date of
this Agreement.

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

                      
“Insolvent”:  pertaining to a condition of
Insolvency.

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

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

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

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

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

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

                      
“Issuing Lender”:  (a) in respect of the
Existing Letters of Credit, the Existing Issuing Lender and (b) in
respect of any Letters of Credit issued hereunder on or after the
Effective Date, (i) JPMorgan Chase Bank or any affiliate thereof
selected by JPMorgan Chase Bank with the consent of the Borrower
(such consent not to be unreasonably withheld) and (ii) any
other Lender selected by the Borrower as an Issuing Lender with the
consent of such Lender and the Administrative Agent.

                      
“L/C Commitment”:  $600,000,000.

                      
“L/C Obligations”:  at any time, an amount
equal to the sum of (a) the aggregate then undrawn and
unexpired amount of the then outstanding Letters of Credit and
(b) the aggregate amount of drawings under issued Letters of
Credit that have not then been reimbursed pursuant to
Section 3.5.

                      
“L/C Participants”:  in respect of any
Letter of Credit, the collective reference to all the Lenders other
than the Issuing Lender that issued such Letter of Credit.

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

                      
“Letters of Credit”:  as defined in
Section 3.1.

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

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

                      
“Loan Documents”:  (i) this Agreement,
the Notes and the Applications and (ii) prior to the Release
Date, the Bond Delivery Agreement, the Senior Bond and the
Indenture and, in each case, any amendment, waiver, supplement or
other modification to any of the foregoing, provided that,
the term “Loan Documents” shall not include the
Indenture for the purposes of Section 8 and 10.1.

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

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

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

                      
“Mortgaged Property”:  as defined in the
Indenture.

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

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

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

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

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

                      
“Non-Procurement Facility Limit”: 
$454,000,000.

                      
“Non-Procurement Letter of Credit”: a Letter of
Credit issued for any purpose other than energy procurement.

                      
“Non-Recourse Debt”:  Indebtedness of the
Borrower or any of its Significant Subsidiaries that is incurred in
connection with the acquisition, construction, sale, transfer or
other disposition of specific assets, to the extent recourse,
whether contractual or as a matter of law, for non-payment of such
Indebtedness is limited (a) to such assets, or (b) if
such assets are (or are to be) held by a Subsidiary formed solely
for such purpose, to such Subsidiary or the Capital Stock of such
Subsidiary.

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

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

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

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

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

                      
“Participant”:  as defined in
Section 10.6(c).

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

                      
“PCG”:  PG&E Corporation, a California
corporation and the holder of approximately 89% of the issued and
outstanding voting Capital Stock of the Borrower.

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

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

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

                      
“Procurement L/C Facility Limit”: 
$546,000,000.

                      
“Properties”:  as defined in
Section 4.13(a).

                      
“PUHCA”: the Public Utility Holding Company Act
of 1935, as amended, and rules and regulations promulgated
thereunder.

                      
“Rating”: each rating announced by S&P and
Moody’s in respect of (a) prior to the Release Date, the
Borrower’s senior secured debt and (b) from and after
the Release Date, the Borrower’s senior unsecured, non
credit-enhanced debt.

                      
“Receivables Facility”:  the Receivables
Purchase Agreement, dated as of March 5, 2004, among the Borrower,
PG&E Accounts Receivable Company LLC, a Delaware limited
liability company, the Conduit Purchasers party thereto, the
Committed Purchasers party thereto, the Managing Agents party
thereto, and JPMorgan Chase Bank.

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

                      
“Register”:  as defined in
Section 10.6(b).

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

                      
“Reimbursement Obligation”:  the obligation
of the Borrower to reimburse each Issuing Lender pursuant to
Section 3.5 for amounts drawn under Letters of Credit issued
by such Issuing Lender.

                      
“Release Date”:  as defined in the
Indenture; provided, that the Release Date may not in any
event be earlier than the date that the Borrower delivers written
evidence pursuant to the Indenture that the ratings of the
Borrower’s senior unsecured long-term debt (after giving
pro forma effect to the release of all collateral
securing the Senior Bond Indenture Securities and the other bonds
outstanding under the Indenture) are at least Baa2 from
Moody’s and BBB from S&P.

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

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

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

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

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

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

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

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

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

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

                      
“Securitized Bonds”:  any securitized bonds
or similar asset-backed securities that are non-recourse to the
Borrower, are issued by a special purpose subsidiary of the
Borrower and are payable from a specific or dedicated rate
component, including the approximately $2,900,000,000 in rate
reduction certificates backed by transition property that were
issued in 1997, the approximately $1,900,000,000 in energy recovery
bonds backed by energy recovery property that the Borrower issued
in February 2005 and the approximately $1,100,000,000 in energy
recovery bonds backed by energy recovery property that the Borrower
expects to be issued by no later than February 2006.

                      
“Senior Bond”:  the bond to be issued by
the Borrower to the Administrative Agent pursuant to the Indenture
on the Effective Date substantially in the form of Exhibit I.

                      
“Senior Bond Indenture Securities”: the
approximately $5,300,000,000 aggregate principal amount of
outstanding publicly issued securities issued by the Borrower under
the Indenture.

                      
“Significant Subsidiary”:  as defined in
Article 1, Rule 1-02(w) of Regulation S-X of the Exchange
Act as of the Effective Date, provided that notwithstanding
the foregoing, none of PG&E Funding LLC, PG&E Accounts
Receivable LLC, PG&E Energy Recovery Funding LLC or any other
special purpose finance subsidiary shall constitute a Significant
Subsidiary.  Unless otherwise qualified, all references to a
“Significant Subsidiary” or to “Significant
Subsidiaries” in this Agreement shall refer to a Significant
Subsidiary or Significant Subsidiaries of the Borrower.

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

                      
“Specified Exchange Act Filings”:  the
Borrower’s Form 10-K annual report for the year ended
December 31, 2004 and each and all of the Form 8-Ks (and to the
extent applicable proxy statements) filed by the Borrower or PCG
with the SEC after December 31, 2004 and prior to the date that is
one Business Day before the date of this Agreement.

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

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

                      
“Swingline Commitment”:  the obligation of
the Swingline Lender to make Swingline Loans pursuant to
Section 2.4 in an aggregate principal amount at any one time
outstanding not to exceed $100,000,000.

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

                      
“Swingline Loans”:  as defined in
Section 2.4.

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

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

                      
“Termination Date”:  the date that is the
fifth anniversary of the Effective Date or such later date as may
be determined pursuant to Section 2.7(b) or such earlier date
as otherwise determined pursuant to Section 2.7.

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

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

                      
“Transferee”:  any Assignee or
Participant.

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

                      
“United States”:  the United States of
America.

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

	
Level

	
Rating

 S&P/Moody’s

	
Utilization Fee

Rate

	
1

	
A/A2 or higher

	
0.100%

	
2

	
A-/A3

	
0.100%

	
3

	
BBB+/Baa1

	
0.125%

	
4

	
BBB/Baa2

	
0.125%

	
5

	
BBB-/Baa3

	
0.125%

	
6

	
BB+/Ba1 or lower

	
0.250%

                      Subject
to the provisions of this paragraph regarding split ratings,
changes in the Utilization Fee Rate shall become effective on the
date on which S&P and/or Moody’s changes its relevant
Rating.  In the event the Ratings of S&P and Moody’s
are in different levels set forth in the grid above, the higher of
the two Ratings (i.e., the Rating set forth in the grid
above opposite the lower numerical level number) shall
govern.  In the event that, at any time, a Rating is not
available from one of such rating agencies, the Utilization Fee
Rate shall be determined on the basis of the Rating from the other
rating agency. In the event that, at any time, Ratings from each
such rating agency are not available for companies generally, the
Utilization Fee Rate shall be determined on the basis of the last
Rating(s) made available.  In the event that, at any time,
such Ratings are not available for the Borrower but are generally
available for other companies, then the Utilization Fee Rate shall
be that set forth above opposite level 6.

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

                      
(b)  As used herein and, except as otherwise provided therein,
in the other Loan Documents, and any certificate or other document
made or delivered pursuant hereto or thereto, (i) accounting
terms relating to the Borrower and its Significant Subsidiaries
defined in Section 1.1 and accounting terms partly defined in
Section 1,1, to the extent not defined, shall have the
respective meanings given to them under GAAP, (ii) the words
“include”, “includes” and
“including” shall be deemed to be followed by the
phrase “without limitation”, (iii) the word
“incur” shall be construed to mean incur, create,
issue, assume or become liable in respect of (and the words
“incurred” and “incurrence” shall have
correlative meanings), (iv) the words “asset” and
“property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities,
revenues, accounts, leasehold interests and contract rights, and
(v) references to agreements or other Contractual Obligations
shall, unless otherwise specified, be deemed to refer to such
agreements or Contractual Obligations as amended, supplemented,
restated or otherwise modified from time to time.

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

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

                      
(e)  The Borrower shall not be required to perform, nor
shall it be required to guarantee the performance of, any of the
affirmative covenants set forth in Section 6 that apply to any of
its Significant Subsidiaries nor shall any of the Borrower’s
Significant Subsidiaries be required to perform, nor shall any of
such Significant Subsidiaries be required to guarantee the
performance of, any of the Borrower’s affirmative covenants
set forth in Section 6 or any of the affirmative covenants set
forth in Section 6 that apply to any other Significant Subsidiary;
provided, that nothing in this Section 1.2(e) shall prevent
the occurrence of a Default or an Event of Default arising out of
the Borrower’s failure to cause any Significant Subsidiary to
comply with the provisions of this Agreement applicable to such
Significant Subsidiary.

SECTION
2.  AMOUNT AND TERMS OF COMMITMENTS

                      2.1  
Commitments.  (a)  Subject to the terms
and conditions hereof, each Lender severally agrees to make
revolving credit loans (“Revolving Loans”) to
the Borrower from time to time on or after the Effective Date and
during the Commitment Period in an aggregate principal amount at
any one time outstanding which, when added to such Lender’s
Percentage of the sum of (i) the L/C Obligations then
outstanding and (ii) the aggregate principal amount of the
Swingline Loans then outstanding, does not exceed the amount of
such Lender’s Commitment; provided that,
(x) subject to Section 10.1, the aggregate outstanding
principal amount of all Loans plus the aggregate outstanding amount
of L/C Obligations in respect of Non-Procurement Letters of Credit
may not at any time exceed the Non-Procurement Facility Limit, (y)
the Total Extensions of Credit may not at any time prior to the
Release Date exceed the outstanding principal amount of the Senior
Bond and (z) after giving effect to the Revolving Loans
requested to be made, the aggregate amount of the Available
Commitments shall not be less than zero.  During the
Commitment Period, the Borrower may use the Commitments by
borrowing, prepaying the Revolving Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions
hereof.  The Revolving Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with
Sections 2.2 and 2.9.

                      
(b)  The Borrower shall repay all outstanding Revolving
Loans on the Termination Date; provided that, prior to the
release of the Senior Bond pursuant to Section 10.16, any
principal payment under the Senior Bond shall automatically be
deemed to be an equal principal payment in respect of the Loans
(but any such principal payment under the Senior Bond shall not
reduce the face amount thereof unless such payment is accompanied
by an equal permanent reduction in the Total Commitments).

                      2.2  
Procedure for Revolving Loan Borrowing.  The
Borrower may borrow under the Commitments during the Commitment
Period on any Business Day, provided that the Borrower shall
give the Administrative Agent irrevocable notice (which notice must
be received by the Administrative Agent prior to 12:00 Noon,
New York City time, (a) three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or
(b) one Business Day prior to the requested Borrowing Date, in
the case of ABR Loans) specifying (i) the amount and Type of
Revolving Loans to be borrowed, (ii) the requested Borrowing
Date and (iii) in the case of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor.  Each borrowing under the
Commitments shall be in an amount equal to $1,000,000 or a whole
multiple of $500,000 in excess thereof (or, if the then aggregate
Available Commitments are less than $1,000,000, such lesser
amount); provided, that the Swingline Lender may request, on
behalf of the Borrower, borrowings under the Commitments that are
ABR Loans in other amounts pursuant to Section 2.5.  Upon
receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each Lender thereof.  Each Lender
will make the amount of its pro rata share of each borrowing
available to the Administrative Agent for the account of the
Borrower at the Funding Office prior to 12:00 Noon, New York
City time, on the Borrowing Date requested by the Borrower in funds
immediately available to the Administrative Agent.  Such
borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the
books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent.

                      2.3  
Commitment Increases.

                      
(a)  In the event that the Borrower wishes to increase
the Total Commitments at any time when no Default or Event of
Default has occurred and is continuing (or shall result of such
increase) and subject to obtaining all necessary regulatory
approvals, it shall notify the Administrative Agent in writing of
the amount (the “Revolving Credit Offered Increase
Amount”) of such proposed increase (such notice, a 
“Commitment Increase Notice”) in a minimum
amount equal to $10,000,000.  The Borrower shall offer each of
the Lenders the opportunity to provide such Lender’s
Percentage of the Revolving Credit Offered Increase Amount, and if
any Lender declines such offer, in whole or in part, the Borrower
may offer such declined amount to (i) other Lenders and/or (ii)
other banks, financial institutions or other entities with the
consent of the Administrative Agent and, unless any such other
bank, financial institution or other entity would qualify as an
Eligible Assignee, the Issuing Lender (which consents of the
Administrative Agent and the Issuing Lender shall not be
unreasonably withheld or delayed).  The Commitment Increase
Notice shall specify the Lenders and/or banks, financial
institutions or other entities that will be requested to provide
such Revolving Credit Offered Increase Amount.  The Borrower
or, if requested by the Borrower, the Administrative Agent will
notify such Lenders, and/or banks, financial institutions or other
entities of such offer.

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

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

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

                      
(e)  Notwithstanding anything to the contrary in this
Section 2.3, (i) in no event may the Borrower deliver
more than one Commitment Increase Notice each year, (ii) no
Lender shall have any obligation to increase its Commitment unless
it agrees to do so in its sole discretion and (iii) in no event
shall any transaction effected pursuant to this Section 2.3
cause the Total Commitments to exceed $1,500,000,000;
provided that if the Borrower’s Receivables Facility
is terminated or expires, no transaction effected pursuant to this
Section 2.3 shall cause the Total Commitments to exceed
$1,850,000,000.

                      
(f)  The Administrative Agent shall have received on or
prior to the Revolving Credit Re-Allocation Date, for the benefit
of the Lenders, (i) a legal opinion of counsel to the Borrower
covering such matters as are customary for transactions of this
type as may be reasonably requested by the Administrative Agent,
which opinions shall be substantially the same, to the extent
appropriate, as the opinions rendered by counsel to the Borrower on
the Effective Date, (ii) certified copies of resolutions of
the board of directors of the Borrower authorizing the Borrower to
borrow the Revolving Credit Offered Increase Amount and (iii) prior
to the Release Date and upon the Administrative Agent’s
delivery to the Borrower of the existing Senior Bond, a new Senior
Bond, with a face amount equal to the Total Commitments, as
increased pursuant to this Section 2.3.

                      2.4  
Swingline Commitment.  (a)  Subject to
the terms and conditions hereof, the Swingline Lender agrees to
make a portion of the credit otherwise available to the Borrower
under the Commitments from time to time on or after the Effective
Date during the Commitment Period by making swingline loans
(“Swingline Loans”) to the Borrower; provided that
(i) the aggregate principal amount of Swingline Loans
outstanding at any time shall not exceed the Swingline Commitment
then in effect (notwithstanding that the Swingline Loans
outstanding at any time, when aggregated with the Swingline
Lender’s other outstanding Revolving Loans, may exceed the
Swingline Commitment or the Swingline Lender’s Commitment
then in effect) and (ii) the Borrower shall not request, and
the Swingline Lender shall not make, any Swingline Loan if, after
giving effect to the making of such Swingline Loan, (x) the
aggregate amount of the Available Commitments would be less than
zero, (y) subject to Section 10.1, the aggregate outstanding
principal amount of all Loans plus the aggregate outstanding amount
of L/C Obligations in respect of Non-Procurement Letters of Credit
would exceed the Non-Procurement Facility Limit or (z) the
Total Extensions of Credit would exceed the outstanding principal
amount of the Senior Bond at any time prior to the Release
Date.  During the Commitment Period, the Borrower may use the
Swingline Commitment by borrowing, repaying and reborrowing, all in
accordance with the terms and conditions hereof.  Swingline
Loans shall be ABR Loans only.

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

                      2.5  
Procedure for Swingline Borrowing; Refunding of Swingline
Loans.

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

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

                      
(c)  If prior to the time a Revolving Loan would have
otherwise been made pursuant to Section 2.5(b), one of the
events described in Section 8(f) shall have occurred and be
continuing with respect to the Borrower or if for any other reason,
as determined by the Swingline Lender in its sole discretion,
Revolving Loans may not be made as contemplated by
Section 2.5(b), each Lender shall, on the date such Revolving
Loan was to have been made pursuant to the notice referred to in
Section 2.5(b), purchase for cash an undivided participating
interest in the then outstanding Swingline Loans by paying to the
Swingline Lender an amount (the “Swingline Participation
Amount”) equal to (i) such Lender’s Percentage
times (ii) the sum of the aggregate principal amount of
Swingline Loans then outstanding that were to have been repaid with
such Revolving Loans.

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

                      
(e)  Each Lender’s obligation to make the Loans
referred to in Section 2.5(b) and to purchase participating
interests pursuant to Section 2.5(c) shall be absolute and
unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or
other right that such Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of a Default or
an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5, (iii) any adverse
change in the condition (financial or otherwise) of the Borrower,
(iv) any breach of this Agreement or any other Loan Document
by the Borrower or any other Lender or (v) any other
circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing.

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

                      
(b)  If the average daily aggregate principal amount of
the Loans and L/C Obligations outstanding for the calendar quarter
preceding a Fee Payment Date (or such shorter period beginning with
the date hereof or ending with the Termination Date) is greater
than 50% of the daily average Total Commitments for such calendar
quarter or period, the Borrower agrees to pay to the Administrative
Agent for the account of each Lender a utilization fee at the
applicable Utilization Fee Rate on such average daily aggregate
principal amount of the Loans and the L/C Obligations outstanding
during such calendar quarter (or shorter period), payable in
arrears on each Fee Payment Date.

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

2 .7  Termination or Reduction of
Commitments; Extension of Termination
Date..  (a)  The Borrower shall have the
right, upon not less than three Business Days’ notice to the
Administrative Agent, to terminate the Commitments or, from time to
time, to reduce the amount of the Commitments; provided that
no such termination or reduction of Commitments shall be permitted
if, after giving effect thereto and to any prepayments of the
Revolving Loans and Swingline Loans made on the effective date
thereof, the Total Extensions of Credit would exceed the Total
Commitments.  Any such reduction shall be in an amount equal
to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Commitments then in effect.

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

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

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

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

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

                      
(g)  Prior to the Release Date, in the event that the
Termination Date is extended pursuant to this Section 2.7 beyond
the Bond Maturity Date of the Senior Bond, the Borrower and the
Administrative Agent shall make appropriate arrangements (and the
Lenders hereby direct and authorize the Administrative Agent to
make such arrangements) such that (i) the Bond Maturity Date
of the Senior Bond shall be amended to be coincident with or later
than such extended Termination Date or (ii) a new Senior Bond
having a maturity date coincident with or later than such extended
Termination Date shall be substituted for the Senior Bond then held
by the Administrative Agent; and such amendment or exchange shall
be effected pursuant to documentation and arrangements reasonably
satisfactory to the Administrative Agent.

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

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

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

                      2.10  
Limitations on Eurodollar
Tranches.  Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions and
continuations of Eurodollar Loans and all selections of Interest
Periods shall be in such amounts and be made pursuant to such
elections so that (a) after giving effect thereto, the
aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple
of $500,000 in excess thereof and (b) no more than
15 Eurodollar Tranches shall be outstanding at any one
time.

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

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

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

                      
(d)  Interest shall be payable in arrears on each
Interest Payment Date, provided that interest accruing
pursuant to paragraph (c) of this Section shall be payable
from time to time on demand.

                      
(e)  The amount of any interest payments received by the
Administrative Agent under the Senior Bond shall be deemed to be
payments of interest and fees payable by the Borrower hereunder and
shall reduce, dollar-for-dollar, the amount of interest and fees
then owing by the Borrower hereunder.

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

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

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

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

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

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

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

                      
(b)  Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Revolving
Loans shall be made pro rata according to the respective
outstanding principal amounts of the Revolving Loans then held by
the Lenders.  Each payment in respect of Reimbursement
Obligations in respect of any Letter of Credit shall be made to the
Issuing Lender that issued such Letters of Credit.

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

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

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

                      
(f)  Notwithstanding the anything to the contrary
contained in this Agreement, the Borrower shall make all payments
of amounts due and payable under this Agreement directly to the
parties to whom such payments are payable in accordance with the
terms hereof, and shall not make any payments of any amount due and
payable hereunder to the Indenture Trustee as a payment under the
Senior Bond.

                      
(g)  The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will promptly
execute and deliver to such Lender a promissory note (a
“Note”) of the Borrower evidencing any Revolving
Loans of such Lender, substantially in the form of Exhibit J, with
appropriate insertions as to date and principal amount;
provided, that delivery of Notes shall not be a condition
precedent to the Effective Date or the occurrence or making of
Loans on the Effective Date.

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

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

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

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

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

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

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

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

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

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

                      
(d)  Each Lender (or Transferee) that is not a
“U.S. Person” as defined in Section 7701(a)(30) of
the Code (a “Non-U.S. Lender”) shall deliver to
the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation
shall have been purchased) two copies of either U.S. Internal
Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a
Non‐U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of “portfolio interest”, a
statement substantially in the form of Exhibit H and a Form
W-8BEN, or any subsequent versions thereof or successors thereto,
properly completed and duly executed by such Non‐U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S.
federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents.  Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes
a party to this Agreement (or, in the case of any Participant, on
or before the date such Participant purchases the related
participation).  In addition, each Non‐U.S. Lender shall
deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non‐U.S. Lender. 
Each Non-U.S. Lender shall promptly notify the Borrower at any time
it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such
purpose).  Notwithstanding any other provision of this
paragraph, a Non‐U.S. Lender shall not be required to deliver
any form pursuant to this paragraph that such Non‐U.S. Lender
is not legally able to deliver; provided, however, if
any Non-U.S. Lender fails to file forms with the Borrower and the
Administrative Agent (or, in the case of a Participant, with the
Lender from which the related participation was purchased) on or
before the date the Non-U.S. Lender becomes a party to this
Agreement (or, in the case of a Participant, on or before the date
such Participant purchased the related participation) entitling the
Non-U.S. Lender to a complete exemption from United States
withholding taxes at such time, such Non-U.S. Lender shall not be
entitled to receive any increased payments from the Borrower with
respect to United States withholding taxes under paragraph (a)
of this Section, except to the extent that the Non-U.S.
Lender’s assignor (if any) was entitled, at the time of the
assignment to the Non-U.S. Lender, to receive additional amounts
from the Borrower with respect to United States withholding
taxes.

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

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

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

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

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

                      2.19  
Replacement of Lenders.  The Borrower shall be
permitted to replace any Lender that (a) requests (on its
behalf or any of its Participants) reimbursement for amounts owing
pursuant to Section 2.15 or 2.16(a) or (b) defaults in
its obligation to make Loans hereunder, with a replacement
financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law,
(ii) no Event of Default shall have occurred and be continuing
at the time of such replacement, (iii) prior to any such
replacement, such Lender shall have taken no action under
Section 2.18 which eliminates the continued need for payment
of amounts owing pursuant to Section 2.15 or 2.16(a),
(iv) the replacement financial institution shall purchase, at
par, all Loans and other amounts owing to such replaced Lender on
or prior to the date of replacement, (v) the Borrower shall be
liable to such replaced Lender under Section 2.17 if any
Eurodollar Loan owing to such replaced Lender shall be purchased
other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative
Agent, (vii) the replaced Lender shall be obligated to make
such replacement in accordance with the provisions of
Section 10.6 (provided that the Borrower shall be
obligated to pay the registration and processing fee referred to
therein), (viii) until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts (if any)
required pursuant to Section 2.15 or 2.16(a), as the case may
be, and (ix) any such replacement shall not be deemed to be a
waiver of any rights that the Borrower, the Administrative Agent or
any other Lender shall have against the replaced Lender.

SECTION
3.   LETTERS OF CREDIT

                      3.1  
L/C Commitment.  From and after the Effective Date,
each Existing Letter of Credit shall, subject to the terms and
conditions hereof, constitute a Letter of Credit hereunder. 
Subject to the terms and conditions hereof, each Issuing Lender, in
reliance on the agreements of the other Lenders set forth in
Section 3.4(a), agrees to issue standby and commercial letters of
credit (the letters of credit issued on and after the Effective
Date pursuant to this Section 3, together with the Existing Letters
of Credit, collectively, the “Letters of
Credit”) for the account of the Borrower on any Business
Day on or after the Effective Date and during the Commitment Period
in such form as may be approved from time to time by such Issuing
Lender; provided, that no Issuing Lender shall issue any
Letter of Credit (and no Existing Letter of Credit may become a
Letter of Credit hereunder) if, after giving effect to such
issuance (or to the transfer of such Existing Letter of Credit
hereunder, as the case may be), (i) the L/C Obligations would
exceed the L/C Commitment, (ii) the aggregate amount of the
Available Commitments would be less than zero, (iii) if the purpose
of such Letter of Credit is energy procurement, the aggregate
outstanding amount of L/C Obligations in respect of Letters of
Credit issued for energy procurement purposes would exceed the
Procurement L/C Facility Limit, (iv) subject to Section 10.1,
if such Letter of Credit is a Non-Procurement Letter of Credit, the
aggregate outstanding amount of L/C Obligations in respect of
Non-Procurement Letters of Credit plus the aggregate outstanding
principal amount of all Loans would exceed the Non-Procurement
Facility Limit or (v) the Total Extensions of Credit would
exceed the outstanding principal amount of the Senior Bond at any
time prior to the Release Date.  The Administrative Agent, the
Issuing Lenders and the Lenders shall be entitled to rely
conclusively on the Borrower’s statements in determining
whether the limitation set forth in clauses (iii) and (iv) of the
preceding sentence are satisfied; and the Administrative Agent, the
Issuing Lenders and the Lenders shall not be required to maintain
any records with respect to whether or not the Procurement L/C
Facility Limit or the Other L/C Facility Limit is exceeded at any
time.  Each Letter of Credit shall (i) be denominated in
Dollars and (ii) expire no later than the earlier of
(x) the first anniversary of its date of issuance and
(y) the date which is five Business Days prior to the
Termination Date; provided that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional
one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).

(b)  No Issuing Lender shall at any time be obligated
to issue, amend, extend or renew any Letter of Credit hereunder if
such issuance, amendment, extension or renewal would conflict with,
or cause such Issuing Lender or any L/C Participant to exceed any
limits imposed by, any applicable Requirement of Law.

                      3.2  
Procedure for Issuance of Letters of Credit.  The
Borrower may from time to time request that an Issuing Lender issue
a Letter of Credit by delivering to such Issuing Lender at its
address for notices specified herein an Application therefor,
completed to the satisfaction of such Issuing Lender, and such
other certificates, documents and other papers and information as
such Issuing Lender may request.  Concurrently with the
delivery of an Application to an Issuing Lender, the Borrower shall
deliver a copy thereof to the Administrative Agent and the
Administrative Agent shall provide notice of such request to the
Lenders.  Upon receipt of any Application, an Issuing Lender
will process such Application and the certificates, documents and
other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby by issuing
the original of such Letter of Credit to the beneficiary thereof or
as otherwise may be agreed to by such Issuing Lender and the
Borrower (but in no event shall any Issuing Lender be required to
issue any Letter of Credit earlier than three Business Days after
its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating
thereto).  Promptly after issuance by an Issuing Lender of a
Letter of Credit, such Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower.  Each Issuing Lender shall
promptly give notice to the Administrative Agent of the issuance of
each Letter of Credit issued by such Issuing Lender (including the
amount thereof), and shall provide a copy of such Letter of Credit
to the Administrative Agent as soon as possible after the date of
issuance.

                      3.3  
Fees and Other Charges.

                      
(a)  The Borrower will pay a fee on the aggregate
drawable amount of all outstanding Letters of Credit at a per annum
rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans, shared ratably among the Lenders in accordance
with their respective Percentages and payable quarterly in arrears
on each Fee Payment Date after the issuance date.  In
addition, the Borrower shall pay to the relevant Issuing Lender for
its own account a fronting fee on the aggregate drawable amount of
all outstanding Letters of Credit issued in an amount to be agreed
between the Borrower and such Issuing Lender, payable quarterly in
arrears on each Fee Payment Date after the issuance date.

                      
(b)  In addition to the foregoing fees, the Borrower
shall pay or reimburse each Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by such
Issuing Lender in issuing, negotiating, effecting payment under,
amending, renewing or otherwise administering any Letter of
Credit.

                      3.4  
L/C Participations

                      
(a)  Each Issuing Lender irrevocably agrees to grant and
hereby grants to each L/C Participant, and, to induce each Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and
purchases from each Issuing Lender, on the terms and conditions
hereinafter stated, for such L/C Participant’s own account
and risk, an undivided interest equal to such L/C
Participant’s Percentage in each Issuing Lender’s
obligations and rights under each Letter of Credit issued by such
Issuing Lender hereunder and the amount of each draft paid by such
Issuing Lender thereunder.  Each L/C Participant
unconditionally and irrevocably agrees with each Issuing Lender
that, if a draft is paid under any Letter of Credit issued by such
Issuing Lender for which such Issuing Lender is not reimbursed in
full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Administrative
Agent for the account of such Issuing Lender upon demand at such
Issuing Lender’s address for notices specified herein (and
thereafter the Administrative Agent shall promptly pay to such
Issuing Lender) an amount equal to such L/C Participant’s
Percentage of the amount of such draft, or any part thereof, that
is not so reimbursed.  Each L/C Participant’s obligation
to pay such amount shall be absolute and unconditional and shall
not be affected by any circumstance, including (i) any setoff,
counterclaim, recoupment, defense or other right that such L/C
Participant may have against the Issuing Lender, the Borrower or
any other Person for any reason whatsoever, (ii) the
occurrence or continuance of a Default or an Event of Default or
the failure to satisfy any of the other conditions specified in
Section 5, (iii) any adverse change in the condition
(financial or otherwise) of the Borrower, (iv) any breach of
this Agreement or any other Loan Document by the Borrower, any
other Borrower or any other L/C Participant or (v) any other
circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing.

                      
(b)  If any amount (a “Participation
Amount”) required to be paid by any L/C Participant to an
Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by such Issuing Lender
under any Letter of Credit is paid to such Issuing Lender within
three Business Days after the date such payment is due, such
Issuing Lender shall so notify the Administrative Agent, which
shall promptly notify the L/C Participants, and each L/C
Participant shall pay to the Administrative Agent, for the account
of such Issuing Lender, on demand (and thereafter the
Administrative Agent shall promptly pay to such Issuing Lender) an
amount equal to the product of (i) such Participation Amount,
times (ii) the daily average Federal Funds Effective
Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available
to such Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such
period and the denominator of which is 360.  If any
Participation Amount required to be paid by any L/C Participant
pursuant to Section 3.4(a) is not made available to the
Administrative Agent for the account of the relevant Issuing Lender
by such L/C Participant within three Business Days after the date
such payment is due, the Administrative Agent on behalf of such
Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such Participation Amount with interest
thereon calculated from such due date at the rate per annum
applicable to ABR Loans.  A certificate of the Administrative
Agent submitted on behalf of an Issuing Lender to any L/C
Participant with respect to any amounts owing under this Section
shall be conclusive in the absence of manifest error.

                      
(c)  Whenever, at any time after an Issuing Lender has
made payment under any Letter of Credit and has received from the
Administrative Agent any L/C Participant’s pro rata share of
such payment in accordance with Section 3.4(a), such Issuing
Lender receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, including
proceeds of collateral applied thereto by such Issuing Lender), or
any payment of interest on account thereof, such Issuing Lender
will distribute to the Administrative Agent for the account of such
L/C Participant (and thereafter the Administrative Agent will
promptly distribute to such  L/C Participant) its pro rata
share thereof; provided, however, that in the event
that any such payment received by such Issuing Lender shall be
required to be returned by such Issuing Lender, such L/C
Participant shall return to the Administrative Agent for the
account of such Issuing Lender (and thereafter the Administrative
Agent shall promptly return to such Issuing Lender) the portion
thereof previously distributed by such Issuing Lender.

                      3.5  
Reimbursement Obligation of the Borrower.  The
Borrower agrees to reimburse each Issuing Lender on (i) the
Business Day on which the Borrower receives notice from an Issuing
Lender of a draft drawn on a Letter of Credit issued by such
Issuing Lender and paid by such Issuing Lender, if such notice is
received on such Business Day prior to 11:00 A.M., New York
City time, or (ii) if clause (i) above does not apply,
the Business Day immediately following the day on which the
Borrower receives such notice, for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs
or expenses incurred by such Issuing Lender in connection with such
payment which are obligations of the Borrower hereunder (the
amounts described in the foregoing clauses (a) and (b) in
respect of any drawing, collectively, the “Payment
Amount”).  Each such payment shall be made to such
Issuing Lender at its address for notices specified herein in
lawful money of the United States of America and in immediately
available funds.  Interest shall be payable on each Payment
Amount from the date of the applicable drawing until payment in
full at the rate set forth in (i) until the second Business
Day following the date of the applicable drawing,
Section 2.11(b) and (ii) thereafter,
Section 2.11(c).  Each drawing under any Letter of Credit
shall (unless an event of the type described in clause (i) or
(ii) of Section 8(f) shall have occurred and be continuing
with respect to the Borrower, in which case the procedures
specified in Section 3.4 for funding by L/C Participants shall
apply) constitute a request by the Borrower to the Administrative
Agent for a borrowing pursuant to Section 2.1 of ABR Loans
(or, at the option of the Administrative Agent and the Swingline
Lender in their sole discretion, a borrowing pursuant to
Section 2.4 of Swingline Loans) in the amount of such
drawing.  The Borrowing Date with respect to such borrowing
shall be the first date on which a borrowing of Revolving Loans
(or, if applicable, Swingline Loans) could be made, pursuant to
Section 2.1 (or, if applicable, Section 2.4), if the
Administrative Agent had received a notice of such borrowing at the
time the Administrative Agent receives notice from the relevant
Issuing Lender of such drawing under such Letter of Credit.

                      3.6  
Obligations Absolute.  The Borrower’s
obligations under this Section 3 shall be absolute and
unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment that the Borrower
may have or have had against any Issuing Lender, any beneficiary of
a Letter of Credit or any other Person; other than with respect to
any action taken or omitted by an Issuing Lender under or in
connection with any Letter of Credit issued by it or the related
drafts or documents found to constitute gross negligence or willful
misconduct or not in accordance with the standards of care
specified in the Uniform Commercial Code of the State of New
York.  The Borrower also agrees with each Issuing Lender that
such Issuing Lender shall not be responsible for, and the
Borrower’s Reimbursement Obligations under Section 3.5
shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent
or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which
such Letter of Credit may be transferred or any claims whatsoever
of the Borrower against any beneficiary of such Letter of Credit or
any such transferee.  No Issuing Lender shall be liable for
any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted,
in connection with any Letter of Credit, except for errors or
omissions which resulted from the gross negligence or willful
misconduct of such Issuing Lender.  The Borrower agrees that
any action taken or omitted by an Issuing Lender under or in
connection with any Letter of Credit issued by it or the related
drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards or care
specified in the Uniform Commercial Code of the State of New York,
shall be binding on the Borrower and shall not result in any
liability of such Issuing Lender to the Borrower.

                      3.7  
Letter of Credit Payments.  If any draft shall be
presented for payment under any Letter of Credit, the relevant
Issuing Lender shall promptly notify the Borrower and the
Administrative Agent of the date and amount thereof.  The
responsibility of the relevant Issuing Lender to the Borrower in
connection with any draft presented for payment under any Letter of
Credit, in addition to any payment obligation expressly provided
for in such Letter of Credit issued by such Issuing Lender, shall
be limited, in the absence of gross negligence or willful
misconduct or failure to act in accordance with the standards of
care specified in the Uniform Commercial Code of the State of New
York, to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such
presentment appear on their face to be in conformity with such
Letter of Credit.

                      3.8  
Applications.  To the extent that any provision
of any Application related to any Letter of Credit is inconsistent
with the provisions of this Section 3, the provisions of this
Section 3 shall apply.

                      3.9  
Actions of Issuing Lenders.  Each Issuing Lender
shall be entitled to rely, and shall be fully protected in relying,
upon any draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it in good
faith to be genuine and correct and to have been signed, sent or
made by the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other
experts selected by such Issuing Lender.  Each Issuing Lender
shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such
advice or concurrence of the Required Lenders as it reasonably
deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Notwithstanding any
other provision of this Section, as between the Issuing Lenders and
the Lenders, each Issuing Lender shall in all cases be fully
protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of the Required Lenders, and
such request and any action taken or failure to act pursuant
thereto shall be binding upon the Lenders and any future holders of
a participation in any Letter of Credit.

                      3.10  
Borrower’s Indemnification.  The Borrower
hereby agrees to indemnify and hold harmless each Lender, each
Issuing Lender and the Administrative Agent, and their respective
directors, officers, agents and employees from and against any and
all claims and damages, losses, liabilities, costs or expenses
which such Lender, such Issuing Lender or the Administrative Agent
may incur (or which may be claimed against such Lender, such
Issuing Lender or the Administrative Agent by any Person
whatsoever) by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to pay
under any Letter of Credit or any actual or proposed use of any
Letter of Credit, including, without limitation, any claims,
damages, losses, liabilities, costs or expenses which such Issuing
Lender may incur by reason of or in connection with (i) the
failure of any other Lender to fulfill or comply with its
obligations to an Issuing Lender hereunder (but nothing herein
contained shall affect any rights the Borrower may have against any
defaulting Lender) or (ii) by reason of or on account of an Issuing
Lender issuing any Letter of Credit which specifies that the term
“Beneficiary” included therein includes any successor
by operation of law of the named Beneficiary, but which Letter of
Credit does not require that any drawing by any such successor
Beneficiary be accompanied by a copy of a legal document,
satisfactory to such Issuing Lender, evidencing the appointment of
such successor Beneficiary; provided that the Borrower shall
not be required to indemnify any Lender, any Issuing Lender or the
Administrative Agent for any claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused by
(x) the willful misconduct or gross negligence of such Issuing
Lender in determining whether a request presented under any Letter
of Credit complied with the terms of such Letter of Credit and in
accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York or (y) such Issuing
Lender’s failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms
and conditions of such Letter of Credit.  Nothing in this
Section is intended to limit the obligations of the Borrower under
any other provision of this Agreement.

                      3.11  
Lenders’ Indemnification.  Each Lender
shall, ratably in accordance with its Percentage, indemnify each
Issuing Lender, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including reasonable counsel
fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees’ gross
negligence or willful misconduct or failure to comply with the
standard of care specified in the Uniform Commercial Code of the
State of New York or such Issuing Lender’s failure to pay
under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of the
Letter of Credit) that such indemnitees may suffer or incur in
connection with this Section or any action taken or omitted by such
indemnitees hereunder.

SECTION 4.   REPRESENTATIONS AND
WARRANTIES

                      To
induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to
the Administrative Agent and each Lender, on the Effective Date
and, except as provided in Section 5.2(b), on the date of each
Credit Event hereunder after the Effective Date, that:

                      4.1  
Financial Condition.  The
audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as of December 31, 2004, and the
related consolidated statement of operations and cash flows for the
fiscal year ended on such date, reported on by Deloitte &
Touche LLP, present fairly in all material respects the
consolidated financial condition of the Borrower and its
consolidated Subsidiaries as of such date, and the consolidated
results of its operations and its consolidated cash flows for the
respective fiscal year then ended.  All such financial
statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently
throughout the periods involved. 

                      4.2  
No Change.  Since December 31, 2004, there
has been no development or event that has had or could reasonably
be expected to have a Material Adverse Effect, except as disclosed
in the Specified Exchange Act Filings.

                      4.3  
Existence; Compliance with Law.  Each of the
Borrower and its Significant Subsidiaries (a) is duly
organized, validly existing and in good standing under the laws of
its jurisdiction of organization, (b) has the corporate power
and corporate authority to own and operate its property, to lease
the property it operates as lessee and to conduct the business in
which it is currently engaged, (c) is duly qualified as a
foreign corporation or other organization and in good standing
under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification except to the extent that the failure to so qualify
could not reasonably be expected to have a Material Adverse Effect
and (d) is in compliance with all Requirements of Law except
to the extent that the failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse
Effect.

                      4.4  
Power; Authorization; Enforceable
Obligations.  The Borrower has the corporate
power and corporate authority to make, deliver and perform the Loan
Documents and to obtain extensions of credit hereunder.  The
Borrower has taken all necessary corporate action to authorize the
execution, delivery and performance of the Loan Documents and to
authorize the extensions of credit on the terms and conditions of
this Agreement.  No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the
extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of
the Loan Documents (other than the Indenture), except
(i) consents, authorizations, filings and notices which have
been obtained or made and are in full force and effect, (ii) any
filing that may be required in the future the failure of which to
obtain could not reasonably be expected to have a Material Adverse
Effect and (iii) applicable regulatory requirements (including the
approval of the CPUC) prior to foreclosure under the
Indenture.  This Agreement has been, and each other Loan
Document upon execution and delivery will be, duly executed and
delivered.  This Agreement constitutes, and each other Loan
Document upon execution will constitute, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited
by (x) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors’ rights generally, laws of general application
related to the enforceability of securities secured by real estate
and by general equitable principles (whether enforcement is sought
by proceedings in equity or at law) and (y) applicable
regulatory requirements (including the approval of the CPUC) prior
to foreclosure under the Indenture.

                      4.5  
No Legal Bar.  The execution, delivery and
performance of this Agreement and the other Loan Documents, the
issuance of Letters of Credit, the borrowings hereunder and the use
of the proceeds thereof will not violate in any material respect
any Requirement of Law or any Contractual Obligation of the
Borrower or any of its Significant Subsidiaries and will not result
in, or require, the creation or imposition of any Lien on any of
their respective properties or revenues pursuant to any Requirement
of Law or any such Contractual Obligation (other than the Liens
created by the Indenture and the Bond Delivery Agreement).  No
Requirement of Law or Contractual Obligation applicable to the
Borrower or any of its Significant Subsidiaries is reasonably
likely to have a Material Adverse Effect.

                      4.6  
Litigation.  (a)  No litigation,
investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the
Borrower, threatened in writing by or against the Borrower or any
of its Significant Subsidiaries or against any of their material
respective properties or revenues with respect to any of the Loan
Documents.

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

                      4.7  
No Default.  Neither the Borrower nor any of its
Significant Subsidiaries is in default under or with respect to any
of its Contractual Obligations in any respect that could reasonably
be expected to have a Material Adverse Effect.  No Default or
Event of Default has occurred and is continuing.

                      4.8  
Taxes.  The Borrower and each of its Significant
Subsidiaries has filed or caused to be filed all Federal and state
returns of income and franchise taxes imposed in lieu of net income
taxes and all other material tax returns that are required to be
filed and has paid all taxes shown to be due and payable on said
returns or with respect to any claims or assessments for taxes made
against it or any of its property by any Governmental Authority
(other than (i) any amounts the validity of which are
currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have
been provided on the books of the Borrower or any of its
Significant Subsidiaries, as applicable, and (ii) claims which
could not reasonably be expected to have a Material Adverse
Effect).  No tax Liens have been filed against the Borrower or
any of its Significant Subsidiaries other than (A) Liens for
taxes which are not delinquent or (B) Liens for taxes which
are being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been
provided on the books of the Borrower or any of its Significant
Subsidiaries, as applicable.

                      4.9  
Federal Regulations.  No part of the proceeds of
any Loans, and no other extensions of credit hereunder, will be
used for “buying” or “carrying” any
“margin stock” within the respective meanings of each
of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board.

                      4.10  
ERISA.  Neither a Reportable Event (other than
the Post-event Notices of Reportable Events filed with the PBGC on
May 2, 2001, in respect of the April 6, 2001, bankruptcy
filing of the Borrower, on July 16, 2003, in respect of the
July 8, 2003, bankruptcy filing of National Energy & Gas
Transmission (“NEGT”), and on November 4, 2004,
in respect of the departure of NEGT from the Borrower controlled
group of companies on October 29, 2004) nor an “accumulated
funding deficiency” (within the meaning of Section 412
of the Code or Section 302 of ERISA) has occurred during the
five‐year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and
each Plan has complied with the applicable provisions of ERISA and
the Code, except, in each case, to the extent that any such
Reportable Event, “accumulated funding deficiency” or
failure to comply with the applicable provisions of ERISA or the
Code could not reasonably be expected to result in a Material
Adverse Effect.  No termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC or a Plan has arisen,
during such five-year period.  The present value of all
accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan
allocable to such accrued benefits by a material amount. 
Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan that has
resulted or could reasonably be expected to result in a material
liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability
under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which this
representation is made or deemed made.  No such Multiemployer
Plan is in Reorganization or Insolvent.

                      4.11  
Investment Company Act; Other Regulations.  The
Borrower is not an “investment company”, or a company
“controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as
amended.  On the date hereof, the Borrower is not subject to
regulation under any Requirement of Law (other than
(a) Regulation X of the Board and
(b) Sections 817-830, and Sections 701 and 851 of the
California Public Utilities Code) that limits its ability to incur
Indebtedness under this Agreement.

                      4.12  
Use of Proceeds.  The proceeds of the Revolving
Loans, the Swingline Loans and the Letters of Credit shall be used
(i) to refinance any debt outstanding under the Existing
Credit Agreement, (ii) for working capital purposes and
(iii) for general corporate purposes, including commercial
paper back-up. 

                      4.13  
Environmental Matters.  Except as
(i) disclosed in the Specified Exchange Act Filings or
(ii) in the aggregate, could not reasonably be expected to
have a Material Adverse Effect:

                      
(a)  the facilities and properties owned, leased or
operated by the Borrower and its Significant Subsidiaries (the
“Properties”) do not contain, and, to the
Borrower’s knowledge, have not previously contained, any
Materials of Environmental Concern in amounts or concentrations or
under circumstances that constitute or constituted a violation of,
or, to the Borrower’s knowledge, would give rise to liability
under, any Environmental Law;

                      
(b)  neither the Borrower nor any of its Significant
Subsidiaries has received or is aware of any notice of violation,
alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental
Laws with regard to any of the Properties or the business operated
by the Borrower and its Significant Subsidiaries (the
“Business”), nor does the Borrower have
knowledge or reason to believe that any such notice will be
received or is being threatened;

                      
(c)  Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or
in a manner or to a location that, to the Borrower’s
knowledge, would give rise to liability under, any Environmental
Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of
the Properties in violation of, or in a manner that, to the
Borrower’s knowledge, would give rise to liability under, any
applicable Environmental Law;

                      
(d)  no judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the
Borrower, threatened, under any Environmental Law to which the
Borrower or any of its Significant Subsidiaries is or will be named
as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business;

                      
(e)  there has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Borrower or any of
its Significant Subsidiaries in connection with the Properties or
otherwise in connection with the Business, in violation of or in
amounts or in a manner that, to the Borrower’s knowledge,
would give rise to liability under Environmental Laws;

                      
(f)  the Properties and all operations at the Properties
are in compliance, and have in the last five years been in
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the Business;
and

                      
(g)  neither the Borrower nor any of its Significant
Subsidiaries has assumed any liability of any other Person under
Environmental Laws.

                      4.14  
Accuracy of Information, etc.  No statement or
information (other than projections, if any, and pro
forma information) contained in this Agreement, any other
Loan Document, the Information Memorandum or any other document,
certificate or statement furnished by or on behalf of the Borrower
to the Administrative Agent or the Lenders, or any of them, for use
in connection with the transactions contemplated by this Agreement
or the other Loan Documents, contained as of the date such
statement, information, document or certificate was so furnished
(or, in the case of the Information Memorandum, as of the date of
this Agreement), any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements contained
herein or therein not misleading when taken as a whole.  The
projections, if any, and pro forma financial
information contained in the materials referenced above are based
upon good faith estimates and assumptions believed by management of
the Borrower to be reasonable at the time made, it being recognized
by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information
may differ from the projected results set forth therein by a
material amount.  There is no fact known to the Borrower that
could reasonably be expected to have a Material Adverse Effect that
has not been expressly disclosed herein, in the other Loan
Documents, in the Information Memorandum (including any attachments
thereto), the Specified Exchange Act Filings or in any other
documents, certificates and statements furnished to the
Administrative Agent and the Lenders for use in connection with the
transactions contemplated hereby and by the other Loan
Documents.

                      4.15  
Regulatory Matters.  (a)  Neither the
Borrower nor any Significant Subsidiary of the Borrower is  a
“holding company” or a “subsidiary company”
or an “affiliate” of a “holding company” or
a company which is required to be registered as a “holding
company” as such terms are defined under PUHCA, except that
each of the Borrower and its Significant Subsidiaries is a
“subsidiary company” of PCG, which is a “holding
company” exempt from all provisions of PUHCA (except for
Section 9(a)(2) thereof) pursuant to Section 3(a)(i)
thereof and Rule 2 thereunder.

                      
(b)  Solely by virtue of the execution, delivery and
performance of, or the consummation of the transactions
contemplated by this Agreement, no Lender shall be or become
subject to regulation (i) as a “holding company,”
or an “affiliate” of a “holding company” or
a “subsidiary company” of a “holding
company,” within the meaning of PUHCA, (ii) under the
FPA or (iii) as a “public utility” or
“public service corporation” or the equivalent under
any Requirement of Law.

SECTION 5.  CONDITIONS PRECEDENT

                      5.1  
Conditions to the Effective Date.  The
occurrence of the Effective Date is subject to the satisfaction of
the following conditions precedent:

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

                      
(b)  Bond Delivery Agreement; Senior Bond. 
Unless the Release Date occurs on or prior to the Effective Date,
the Administrative Agent shall have received:

                      
(i)  the Bond Delivery Agreement, duly executed and
delivered by the Borrower;

                      
(ii)  the Senior Bond in a face amount equal to the Total
Commitments as of the Effective Date, duly issued and authenticated
under the Indenture;

                      
(iii)  a certificate of a duly authorized officer of the
Indenture Trustee certifying that the Senior Bond has been
authenticated and is outstanding under the Indenture;

                      
(iv)  satisfactory evidence that all filings necessary to
perfect the Liens in favor of the Indenture Trustee, for the
benefit of the Lenders and the holders of the Senior Bond Indenture
Securities, on the Mortgaged Property (other than any Mortgaged
Property acquired after the recording of the Indenture) shall have
been made or taken to the extent such perfection can be
accomplished by filing;

                      
(v)  a certificate of a Responsible Officer certifying
that attached thereto is a true copy of the Indenture and of any
supplement thereto that is applicable to the Senior Bond;

                      
(vi)  copies of all legal opinions and other documents
delivered to the Indenture Trustee by or on behalf of the Borrower
in connection with the issuance of the Senior Bond; and

                      
(vii)the Escrow Deposit and Disbursement Agreement, duly executed
and delivered by the Borrower and the Indenture Trustee.

                      
(c)  Financial Statements.  The Lenders shall
have received the financial statements described in
Section 4.1.

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

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

                      
(f)  Closing Certificate; Certified Articles of
Incorporation; Good Standing Certificates.  The
Administrative Agent shall have received (i) a certificate of
the Borrower, dated the Effective Date, substantially in the form
of Exhibit E, with appropriate insertions and attachments,
including the articles of incorporation of the Borrower certified
by the Secretary of State of the State of California, and
(ii) a good standing certificate for the Borrower from the
Secretary of State of the State of California; such closing
certificate shall contain a confirmation by the Borrower that the
conditions precedent set forth in this Section 5.1 have been
satisfied.

                      
(g)  Legal Opinions.  The Administrative
Agent shall have received the following executed legal
opinions:

                      
(i)  the legal opinion of Orrick, Herrington &
Sutcliffe LLP, special counsel on behalf of the Borrower, opining
as to corporate matters, substantially in the form of
Exhibit G-1;

                      
(ii)  the legal opinion of Orrick, Herrington &
Sutcliffe LLP, special counsel on behalf of the Borrower, opining
as to regulatory matters, substantially in the form of
Exhibit G-2; and

                      
(iii)  legal opinion of Bruce R. Worthington, Esq.,
counsel to the Borrower, substantially in the form of
Exhibit G-3.

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

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

                      5.2  
Conditions to Each Credit Event.  The agreement
of each Lender to make any Loan or to issue or extend the expiry
date under, or participate in, a Letter of Credit (other than the
extension of a Letter of Credit pursuant to the evergreen
provisions therein) (each, a “Credit Event”),
including each Issuing Lender to issue a Letter of Credit, on any
date (including any Credit Event to occur on the Effective Date) is
subject to the satisfaction of the following conditions
precedent:

                      
(a)  Satisfaction of Conditions Precedent in Section
5.1.  The conditions set precedent set forth in
Section 5.1 shall have been satisfied or waived in accordance
with this Agreement as of the Effective Date.

                      
(b)  Representations and Warranties.  Each of
the representations and warranties made by the Borrower in this
Agreement that does not contain a materiality qualification (other
than, with respect to any Credit Event after the Effective Date,
the representations and warranties set forth in Section 4.2 and
4.6(b)) shall be true and correct in all material respects on and
as of the date of such Credit Event as if made on and as of such
date, and each of the representations and warranties made by the
Borrower in this Agreement that contains a materiality
qualification (other than the representations and
warranties set forth in Sections 4.2 and 4.6(b))shall be true
and correct on and as of such date (or, to the extent such
representations and warranties specifically relate to an earlier
date, that such representations and warranties were true and
correct in all material respects, or true and correct, as the case
may be, as of such earlier date).

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

                      Each
borrowing of Loans hereunder, and each request by the Borrower for
the issuance of or extension of an expiry date under a Letter of
Credit hereunder (other than the extension of a Letter of Credit
pursuant to the evergreen provisions therein), shall constitute a
representation and warranty by the Borrower as of the date of such
Credit Event that the conditions contained in this Section 5.2
have been satisfied.

SECTION 6.  AFFIRMATIVE COVENANTS

                      The
Borrower hereby agrees that, so long as the Commitments remain in
effect, or any Letter of Credit, any Loan, any interest on any Loan
or any fee payable to any Lender or the Administrative Agent
hereunder remains outstanding, or any other amount then due and
payable is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall and with respect to Sections 6.3 and
6.6(b), shall cause its Significant Subsidiaries to:

                      6.1  
Financial Statements.  Furnish to the
Administrative Agent with a copy for each Lender, and the
Administrative Agent shall deliver to each Lender:

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

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

                      All
such financial statements shall be complete and correct in all
material respects and shall be prepared in reasonable detail and in
accordance with GAAP applied (except as approved by such
accountants or officer, as the case may be, and disclosed in
reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods.  The Borrower shall
be deemed to have delivered the financial statements required to be
delivered pursuant to this Section 6.1 upon the filing of such
financial statements by the Borrower through the SEC’s EDGAR
system or the publication by the Borrower of such financial
statements on its website.

                      6.2  
Certificates; Other Information.  Furnish to the
Administrative Agent with a copy for each Lender (or, in the case
of clause (c), the relevant Lender), and the Administrative
Agent shall deliver to each Lender:

                      
(a)  within two days after the delivery of any financial
statements pursuant to Section 6.1, (i) a certificate of
a Responsible Officer stating that such Responsible Officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate and (ii) in the case of
quarterly or annual financial statements, a Compliance Certificate,
substantially in the form of Exhibit D, containing all information
and calculations reasonably necessary for determining compliance by
the Borrower with the provisions of this Agreement referred to
therein as of the last day of the fiscal quarter or fiscal year of
the Borrower, as the case may be;

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

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

                      6.3  
Payment of Taxes.  Pay all taxes due and payable
or any other tax assessments made against the Borrower or any of
its Significant Subsidiaries or any of their respective property by
any Governmental Authority (other than (i) any amounts the
validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the
Borrower or any of its Significant Subsidiaries, as applicable or
(ii) where the failure to effect such payment could not
reasonably be expected to have a Material Adverse Effect).

                      6.4  
Maintenance of Existence;
Compliance.  (a)(i)  Preserve, renew
and keep in full force and effect its organizational existence and
(ii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal
conduct of its business, except, in each case, as otherwise
permitted by Section 7.3 and except, in the case of
clause (ii) above, to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and
(b) comply with all Contractual Obligations and Requirements
of Law except for any such Contractual Obligations or Requirements
of Law being contested in good faith by appropriate proceedings and
except to the extent that failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse
Effect.

                      6.5  
Maintenance of Property;
Insurance.  (a)  Keep all property
useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted, except to the extent
that failure to do so could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, and (b) maintain
with financially sound and reputable insurance companies insurance
on all its material property in at least such amounts and against
at least such risks as are usually insured against in the same
general area by companies engaged in the same or a similar business
of comparable size and financial strength and owning similar
properties in the same general areas in which the Borrower
operates, which may include self-insurance, if determined by the
Borrower to be reasonably prudent.

                      6.6  
Inspection of Property; Books and Records;
Discussions.  (a)  Keep proper books of
records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and
activities and (b) unless a Default or Event of Default has
occurred and is continuing, not more than once a year and after at
least five Business Days’ notice, (i) permit representatives
of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any
reasonable time to discuss the business, operations, properties and
financial and other condition of the Borrower and its Significant
Subsidiaries with officers and employees of the Borrower and its
Significant Subsidiaries and (ii) use commercially reasonable
efforts to provide for the Lenders (in the presence of
representatives of the Borrower) to meet with the independent
certified public accountants of the Borrower and its Subsidiaries;
provided, that any such visits or inspections shall be
subject to such conditions as the Borrower and each of its
Significant Subsidiaries shall deem necessary based on reasonable
considerations of safety and security; and provided,
further, that neither the Borrower nor any Significant
Subsidiary shall be required to disclose to any Lender or its
agents or representatives any information which is subject to the
attorney-client privilege or attorney work-product privilege
properly asserted by the applicable Person to prevent the loss of
such privilege in connection with such information or which is
prevented from disclosure pursuant to a confidentiality agreement
with third parties.

                      6.7  
Notices.  Promptly give notice to the
Administrative Agent with a copy for each Lender of, and the
Administrative Agent shall deliver such notice to each Lender:

                      
(a)  the occurrence of any Default or Event of
Default;

                      
(b)  any litigation or proceeding or, to the knowledge of
the Borrower, any investigation that, in each case, may exist at
any time between the Borrower or any of its Significant
Subsidiaries and any Governmental Authority, including
environmental proceedings, that could reasonably be expected to
have a Material Adverse Effect;

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

                      
(d)  any litigation or proceeding to which the Borrower
or any of its Significant Subsidiaries is a party (i) the
primary purpose of which is to challenge the legality, validity or
enforceability of the Loan Documents, (ii) seeks to prohibit
the ownership or operation by the Borrower or any of its
Significant Subsidiaries of all or a material portion of their
respective businesses or assets, or (iii) the primary purpose
of which is to challenge the issuance or validity of the Senior
Bond;

                      
(e)  the following events, as soon as possible and in any
event within 30 days after the Borrower knows thereof: 
(i) the occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency
of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer
Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and

                      
(f)  any development or event (other than any litigation
or proceeding) that has had or could reasonably be expected to have
a Material Adverse Effect.

                      6.8  
Maintenance of Licenses, etc.  Maintain in full
force and effect any authorization, consent, license or approval of
any Governmental Authority necessary for the conduct of the
Borrower’s business as now conducted by it or necessary in
connection with this Agreement, except to the extent the failure to
do so could not reasonably be expected to have a Material Adverse
Effect.

SECTION
7.  NEGATIVE COVENANTS

                      The
Borrower hereby agrees that, so long as the Commitments remain in
effect, or any Letter of Credit, any Loan, or any interest on any
Loan or any fee payable to any Lender or the Administrative Agent
hereunder remains outstanding, or any other amount then due and
payable is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall not and, with respect to Section 7.2,
shall not permit its Significant Subsidiaries to:

                      7.1  
Consolidated Capitalization Ratio.  Permit the
Consolidated Capitalization Ratio on the last day of any fiscal
quarter, from and after the last day of the first fiscal quarter
ending after the Effective Date, to exceed 0.65 to 1.0.

                      7.2  
Liens.  Create, incur, assume or suffer to exist
any Lien upon any assets of the Borrower or any Significant
Subsidiary, whether now owned or hereafter acquired, except for
(i) Liens securing the Borrower’s obligations to the
Administrative Agent and the Lenders under this Agreement and the
other Loan Documents and (ii) Liens permitted by the
Indenture.

                      7.3  
Fundamental Changes.     Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or
Dispose of all or substantially all of its property or business
(including, without limitation, rental equipment or leasehold
interests and excluding the sale or transfer of any accounts
receivable or of any amounts that are accrued and recorded in a
regulatory account for collections by the Borrower, in each case,
in connection with a securitization transaction), except that the
Borrower may be merged, consolidated or amalgamated with another
Person or Dispose of all or substantially all of its property or
business so long as, after giving effect to such transaction, (a)
no Default or Event of Default shall have occurred and be
continuing, (b) either (i) the Borrower is the continuing or
surviving corporation of such merger, consolidation or amalgamation
or (ii) the continuing or surviving corporation of such merger,
consolidation or amalgamation, if not the Borrower or the
purchaser, shall have assumed all obligations of the Borrower under
the Loan Documents pursuant to arrangements reasonably satisfactory
to the Administrative Agent and (c) the ratings by
Moody’s and S&P of the continuing or surviving
corporation’s or purchaser’s senior, unsecured, non
credit-enhanced debt shall be at least the higher of (1) Baa3 from
Moody’s and BBB- from S&P and (2) the ratings
by such rating agencies of the Borrower’s senior, unsecured,
non credit-enhanced debt in effect before the earlier of the
occurrence or the public announcement of such event.

                      7.4  
Release Date.  At any time prior to the Release Date,
deliver or cause to be delivered a Company Order (as defined in the
Indenture) to the Indenture Trustee requesting a release of the
Lien of the Indenture on the Mortgaged Property pursuant to Section
8.12(c) of the Indenture.

SECTION 8
  EVENTS OF DEFAULT

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

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

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

                      
(c)  the Borrower shall default in the observance or
performance of any agreement contained in Section 7.1 or Section
7.3 of this Agreement; or

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

                      
(e)  the Borrower or any of its Significant Subsidiaries
shall (i) default in making any payment of any principal of
any Indebtedness (including any Guarantee Obligation, but excluding
the Loans) on the due date with respect thereto (after giving
effect to any period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created); or
(ii) default in making any payment of any interest on any such
Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created;
or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is
to cause, or (in the case of all Indebtedness other than
Indebtedness under any Swap Agreement) to permit the holder or
beneficiary of such Indebtedness (or a trustee or agent on behalf
of such holder or beneficiary) to cause, with the giving of notice
if required, such Indebtedness to become due prior to its stated
maturity or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; provided, that a
default, event or condition described in clause (i), (ii) or
(iii) of this paragraph (e) shall not at any time constitute
an Event of Default unless, at such time, one or more defaults,
events or conditions of the type described in clauses (i),
(ii) and (iii) of this paragraph (e) shall have occurred and
be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $100,000,000;
provided further, that unless payment of the Loans
hereunder has already been accelerated, if such default shall be
cured by the Borrower or such Significant Subsidiary or waived by
the holders of such Indebtedness and any acceleration of maturity
having resulted from such default shall be rescinded or annulled,
in each case, in accordance with the terms of such agreement or
instrument, without any modification of the terms of such
Indebtedness requiring the Borrower or such Significant Subsidiary
to furnish security or additional security therefor, reducing the
average life to maturity thereof or increasing the principal amount
thereof, or any agreement by the Borrower or such Significant
Subsidiary to furnish security or additional security therefor or
to issue in lieu thereof Indebtedness secured by additional or
other collateral or with a shorter average life to maturity or in a
greater principal amount, then any Default hereunder by reason
thereof shall be deemed likewise to have been thereupon cured or
waived; or

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

                      
(g)  a trustee shall be appointed to administer any Plan
under Section 4042 of ERISA, or the PBGC shall institute
proceedings to terminate, or to have a trustee appointed to
administer any Plan and such proceedings shall continue undismissed
or unstayed and in effect for a period of 30 days, and any such
event could reasonably be expected to result in a Material Adverse
Effect; or

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

                      
(i)  at any time after the Effective Date and prior to
the Release Date, (i) the Senior Bond shall cease to be
outstanding for any reason other than (A) the termination of
the Total Commitments, the payment in full of the Loans,
Reimbursement Obligations and other obligations then due and owing
under the Loan Documents and the termination or expiration of the
Letters of Credit or (B) the payment in full of the Senior
Bond, (ii) the Administrative Agent, on behalf of the Lenders,
shall cease (except as described in the foregoing clause (i))
at any time to be the holder of the Senior Bond for all purposes of
the Indenture (unless the Senior Bond is transferred by the
Administrative Agent) or (iii) the Lien of the Indenture shall
cease to constitute a valid and enforceable Lien on the Mortgaged
Property; or

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

                      then,
and in any such event, (A) if such event is an Event of
Default specified in clause (i) or (ii) of paragraph (f)
above with respect to the Borrower, automatically the Commitments
shall immediately terminate and the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the
other Loan Documents (including all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder)
shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the
following actions may be taken: (i) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request
of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and
(ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents
(including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and
payable.  With respect to all Letters of Credit with respect
to which presentment for honor shall not have occurred at the time
of an acceleration pursuant to this paragraph, the Borrower shall
at such time deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit.  Amounts held
in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrower
hereunder and under the other Loan Documents.  After all such
Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other
obligations of the Borrower hereunder and under the other Loan
Documents shall have been paid in full, the balance, if any, in
such cash collateral account shall be returned to the Borrower (or
such other Person as may be lawfully entitled thereto). 
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby
expressly waived by the Borrower.

SECTION 9  THE
AGENTS

                      9.1  
Appointment.  Each Lender hereby irrevocably
designates and appoints the Administrative Agent as the agent of
such Lender under this Agreement and the other Loan Documents, and
each such Lender irrevocably authorizes the Administrative Agent,
in such capacity, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto.  Notwithstanding
any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent.

                      9.2  
Delegation of Duties.  The Administrative Agent
may execute any of its duties under this Agreement and the other
Loan Documents by or through agents or
attorneys‐in‐fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.  The
Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in‐fact selected by it
with reasonable care.

                      9.3  
Exculpatory Provisions.  Neither any Agent nor
any of their respective officers, directors, employees, agents,
attorneys‐in‐fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this
Agreement or any other Loan Document (except to the extent that any
of the foregoing are found by a final and nonappealable decision of
a court of competent jurisdiction to have resulted from its or such
Person’s own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the
Borrower or any officer thereof contained in this Agreement or any
other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the
Agents under or in connection with, this Agreement or any other
Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any
other Loan Document or for any failure of the Borrower to perform
its obligations hereunder or thereunder.  The Agents shall not
be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or
to inspect the properties, books or records of the Borrower.

                      9.4  
Reliance by Administrative Agent.  The
Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including counsel to the
Borrower), independent accountants and other experts selected by
the Administrative Agent.  The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative
Agent.  The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders (or, if so specified by this
Agreement, all Lenders) as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and
all liability and expense that may be incurred by it by reason of
taking or continuing to take any such action.  The
Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders), and
such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future
holders of the Loans.

                      9.5  
Notice of Default.  The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default unless the Administrative Agent
has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating
that such notice is a “notice of default”.  In the
event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the
Lenders.  The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the
Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.

                      9.6  
Non-Reliance on Agents and Other Lenders.  Each
Lender expressly acknowledges that neither the Agents nor any of
their respective officers, directors, employees, agents,
attorneys‐in‐fact or affiliates have made any
representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of the
Borrower or any of its affiliates, shall be deemed to constitute
any representation or warranty by any Agent to any Lender. 
Each Lender represents to the Agents that it has, independently and
without reliance upon any Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business,
operations, property, financial and other condition and
creditworthiness of the Borrower and its affiliates and made its
own decision to make its Loans hereunder and enter into this
Agreement.  Each Lender also represents that it will,
independently and without reliance upon any Agent or any other
Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and its affiliates.  Except
for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning
the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or any of
its affiliates that may come into the possession of the
Administrative Agent or any of its officers, directors, employees,
agents, attorneys‐in‐fact or affiliates.

                      9.7  
Indemnification.  The Lenders agree to indemnify
each Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to
do so), ratably according to their respective Percentages in effect
on the date on which indemnification is sought under this Section
(or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with such Percentages
immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the
payment of the Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or
omitted by such Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from such
Agent’s gross negligence or willful misconduct.  The
agreements in this Section shall survive for two years after
repayment of the Loans and all other amounts payable hereunder.

                      9.8  
Agent in Its Individual Capacity.  Each Agent and
its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as
though such Agent were not an Agent.  With respect to its
Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the
same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were
not an Agent, and the terms “Lender” and
“Lenders” shall include each Agent in its individual
capacity.

                      9.9  
Successor Administrative Agent.  The
Administrative Agent may resign as Administrative Agent upon
10 days’ notice to the Lenders and the Borrower. 
If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the
Required Lenders shall appoint from among the Lenders a successor
agent for the Lenders, which successor agent shall (unless an Event
of Default under Section 8(f) with respect to the Borrower
shall have occurred and be continuing) be subject to approval by
the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
“Administrative Agent” shall mean such successor
agent effective upon such appointment and approval, and the former
Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent
or any of the parties to this Agreement or any holders of the
Loans.  If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a
retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective, and the Lenders shall
assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint
a successor agent as provided for above.  After any retiring
Administrative Agent’s resignation as Administrative Agent,
the provisions of this Section 9 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan
Documents.

                      9.10  
Documentation Agents and Syndication Agent.  None
of the Documentation Agents or the Syndication Agent shall have any
duties or responsibilities hereunder in its capacity as such.

SECTION 10.  MISCELLANEOUS

                      10.1  
Amendments and Waivers.  Neither this Agreement,
any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the
provisions of this Section 10.1.  The Required Lenders
and the Borrower may, or, with the written consent of the Required
Lenders, the Administrative Agent and the Borrower may, from time
to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or the other
Loan Documents or changing in any manner the rights of the Lenders
or of the Borrower hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other
Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall:

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

                      
(ii)  eliminate or reduce the voting rights of any Lender
under this Section 10.1 or Section 10.6(a)(i) without the
written consent of such Lender;

                      
(iii)  reduce any percentage specified in the definition
of Required Lenders, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement
and the other Loan Documents, in each case without the written
consent of all Lenders;

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

                      
(v)  amend, modify or waive any provision of
Section 9 without the written consent of the Administrative
Agent;

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

                      
(vii)  (A) release the Senior Bond prior to the
Release Date, (B) amend the definition of “Release
Date” to cause an earlier release of the Mortgaged Property
than such definition in effect on the Effective Date or
(C) amend, modify or waive any provision of Section 5.1
or 7.4, in each case, without the consent of all the Lenders;
or

                      
(viii)  amend, modify or waive any provision of
Section 3 or any other provision affecting the Issuing Lenders
without the written consent of each Issuing Lender affected
thereby.

                      Any
such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the Lenders, the Administrative Agent and all
future holders of the Loans.  In the case of any waiver, the
Borrower, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under
the other Loan Documents, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.

                      If
the Required Lenders shall have approved any amendment which
requires the consent of all of the Lenders, the Borrower shall be
permitted to replace any non-consenting Lender with another
financial institution, provided that, (i) the
replacement financial institution shall purchase at par, all Loans
and other amounts owing to such replaced Lender on or prior to the
date of replacement, (ii) the Borrower shall be liable to such
replaced Lender under Section 2.17 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the
last day of the Interest Period relating thereto (as if such
purchase constituted a prepayment of such Loans), (iii) such
replacement financial institution, if not already a Lender, shall
be reasonably satisfactory to the Administrative Agent and, with
respect to any replacement financial institution that is not an
Eligible Assignee, each Issuing Lender, (iv) the replaced
Lender shall be obligated to make such replacement in accordance
with the provisions of Section 10.6 (provided that the
Borrower shall be obligated to pay the registration and processing
fee referred to therein) and (v) any such replacement shall
not be deemed to be a waiver of any rights the Borrower, the
Administrative Agent or any other Lender shall have against the
replaced Lender.

                      Notwithstanding
anything to the contrary herein but subject to obtaining all
necessary regulatory approvals, in addition to the amendments
described above, each of the Procurement Facility Limit and the
Non-Procurement Facility Limit may be changed by the Borrower by
written notice to the Administrative Agent and the Issuing Lenders
and no consent of any other party shall be required;
provided that, (a) the aggregate amount of L/C
Obligations may not exceed the L/C Commitment, (b) the sum of
the Procurement Facility Limit and the Non-Procurement Facility
Limit may not exceed the Total Commitments and (c) neither the
Procurement Facility Limit nor the Non-Procurement Facility Limit
may exceed the Total Commitments; provided that any notice
delivered pursuant to Section 2.1 or Section 2.4 which would,
after giving effect to the Loans requested to be made, cause the
aggregate outstanding principal amount of the Loans plus the
aggregate outstanding amount of L/C Obligations in respect of
Non-Procurement Letters of Credit to exceed the Non-Procurement
Facility Limit shall be deemed to be a notice by the Borrower
hereunder.

                      10.2  
Notices.  All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made
when delivered, or three Business Days after being deposited in the
mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative
questionnaire delivered to the Administrative Agent in the case of
the Lenders, or to such other address as may be hereafter notified
by the respective parties hereto:

	
Borrower:

	
Pacific Gas and Electric Company

 c/o PG&E Corporation

 One Market Street

 Spear Tower, Suite 2400

 San Francisco, California 94105

		
Attention:  Assistant Treasurer

		
Telecopy:    (415) 267-7265/7268

		
Telephone:  (415) 817-8199/(415) 267-7000

	
      

	
	
with a copy to:

	
Pacific Gas and Electric Company

 c/o PG&E Corporation

 One Market

 Spear Tower, Suite 2400

 San Francisco, California  94105

		
Attention:   Chief Counsel, Corporate

		
Telecopy:   (415) 817-8225

		
Telephone: (415) 817-8200

	
     

	
	
Administrative Agent:

	
Citicorp North America, Inc.

 Two Penns Way

 Suite 200

 New Castle, Delaware 19720

		
Attention:  Heather Puchalski

Telecopy:       (212) 994-0961

Telephone:    (302) 894-6021

	
     

	
	
Issuing Lenders:

	
As notified by each Issuing Lender to the Administrative Agent
and the Borrower.

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

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

                      10.3  
No Waiver; Cumulative Remedies.  No failure to
exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate
as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right,
remedy, power or privilege.  The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

                      10.4  
Survival of Representations and Warranties.  All
representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

                      10.5  
Payment of Expenses and Taxes.  The Borrower
agrees (a) to pay or reimburse the Administrative Agent, each
Issuing Lender and the Lenders for all their respective reasonable
out‐of‐pocket costs and expenses incurred in connection
with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including the reasonable fees and
disbursements of only one counsel and special California regulatory
counsel to the Administrative Agent and filing and recording fees
and expenses, with statements with respect to the foregoing to be
submitted to the Borrower prior to the Effective Date (in the case
of amounts to be paid on the Effective Date) and from time to time
thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent shall deem appropriate, (b) to pay or
reimburse each Lender, each Issuing Lender and the Administrative
Agent for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement,
the other Loan Documents and any such other documents, including
the fees and disbursements of only one counsel to the
Administrative Agent, the Lenders and the Issuing Lenders,
(c) to pay, indemnify, and hold each Lender, each Issuing
Lender and the Administrative Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect
to, or resulting from any delay in paying, stamp, excise and Other
Taxes, if any, that may be payable or determined to be payable in
connection with the execution and delivery of, or consummation of
any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in
respect of, this Agreement, the other Loan Documents and any such
other documents, and (d) to pay, indemnify, and hold each
Lender, each Issuing Lender and the Administrative Agent and their
respective officers, directors, employees, affiliates, agents and
controlling persons (each, an “Indemnitee”)
harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever
with respect to the execution, delivery, enforcement and
performance of this Agreement, the other Loan Documents and any
such other documents, including any of the foregoing relating to
the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any Environmental Law applicable to the
operations of the Borrower and its Significant Subsidiaries or any
of the Properties and the reasonable fees and expenses of one legal
counsel in connection with claims, actions or proceedings by any
Indemnitee against the Borrower under any Loan Document (all the
foregoing in this clause (d), collectively, the
“Indemnified Liabilities”), provided,
that the Borrower shall have no obligation hereunder to any
Indemnitee with respect to Indemnified Liabilities to the extent
such Indemnified Liabilities resulted from the gross negligence or
willful misconduct of such Indemnitee.  Without limiting the
foregoing, and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Significant
Subsidiaries not to assert, and hereby waives and agrees to cause
its Significant Subsidiaries to waive, all rights for contribution
or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature, under or related to
Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee.  All amounts due under this
Section 10.5 shall be payable not later than 30 days
after written demand therefor, subject to the Borrower’s
receipt of reasonably detailed invoices.  Statements payable
by the Borrower pursuant to this Section 10.5 shall be
submitted to Assistant Treasurer (Telephone No. (415)
817-8199/(415) 267-7000) (Telecopy No. (415) 267-7265/7268),
at the address of the Borrower set forth in Section 10.2 with
a copy to Chief Counsel, Corporate (Telephone No. (415) 817-8200)
(Telecopy No. (415) 817-8225), at the address of the Borrower set
forth in Section 10.2, or to such other Person or address as
may be hereafter designated by the Borrower in a written notice to
the Administrative Agent.  The agreements in this
Section 10.5 shall survive for two years after repayment of
the Loans and all other amounts payable hereunder.

                      10.6  
Successors and Assigns; Participations and
Assignments.  (a)  The provisions of
this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns
permitted hereby (including any affiliate of the Issuing Lender
that issues any Letter of Credit), except that (i) the
Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no
Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section 10.6.

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

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

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

                         (C)                         each
Issuing Lender, provided that no consent of any Issuing
Lender shall be required for any assignment to an Eligible
Assignee.

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

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

                        (B)                         the
parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; and

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

                      
(iii)  Subject to acceptance and recording thereof
pursuant to paragraph (b)(iv) below, from and after the
effective date specified in each Assignment and Assumption the
Assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment
and Assumption covering all of the assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be
a party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 10.5 but shall be subject to the
limitations set forth therein).  Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does
not comply with this Section 10.6 shall be treated for
purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with
paragraph (c) of this Section.

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

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

                      
(c)  (i)  Any Lender may, without the consent
of the Borrower or the Administrative Agent, sell participations to
one or more banks or other entities (a
“Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans owing
to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged,
(B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and
(C) the Borrower, the Administrative Agent, the Issuing Lender
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 pursuant to
which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of
this Agreement; provided that such agreement may provide
that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver that
(1) requires the consent of each Lender directly affected
thereby pursuant to the proviso to the second sentence of
Section 10.1 and (2) directly affects such
Participant.  Subject to paragraph (c)(ii) of this
Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.15, 2.16 and 2.17 to
the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this
Section.

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

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

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

                      
(f)  Notwithstanding the foregoing, any Conduit Lender
may assign any or all of the Loans it may have funded hereunder to
its designating Lender without the consent of the Borrower or the
Administrative Agent and without regard to the limitations set
forth in Section 10.6(b).  Each of the Borrower, each
Lender and the Administrative Agent hereby confirms that it will
not institute against a Conduit Lender or join any other Person in
instituting against a Conduit Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding
under any state bankruptcy or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper
note issued by such Conduit Lender; provided, however, that
each Lender designating any Conduit Lender hereby agrees to
indemnify, save and hold harmless each other party hereto for any
loss, cost, damage, expense, obligations, penalties, actions,
judgments, suits or any kind whatsoever arising out of its
inability to institute such a proceeding against such Conduit
Lender during such period of forbearance.

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

                      10.7  
Adjustments; Set‐off.  (a)  Except to
the extent that this Agreement expressly provides for payments to
be allocated to a particular Lender, if any Lender (a
“Benefitted Lender”) shall receive any payment
of all or part of the Obligations owing to it hereunder, or receive
any collateral in respect thereof (whether voluntarily or
involuntarily, by set‐off, pursuant to events or proceedings
of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to or collateral received
by any other Lender, if any, in respect of the Obligations owing to
such other Lender hereunder, such Benefitted Lender shall purchase
for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender
hereunder, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral
ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.

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

                      10.8  
Counterparts.  This Agreement may be executed by
one or more of the parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. 
Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof.  A set of the copies of this
Agreement signed by all the parties shall be lodged with the
Borrower and the Administrative Agent.

                      10.9  
Severability.  Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

                      10.10  
Integration.  This Agreement and the other Loan
Documents represent the entire agreement of the Borrower, the
Administrative Agent and the Lenders with respect to the subject
matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any
Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.

                      10.11  
Governing Law.  THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.

                      10.12  
Submission To Jurisdiction; Waivers.  The
Borrower hereby irrevocably and unconditionally:

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

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

                      
(c)  agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail),
postage prepaid, to the Borrower at its address set forth in
Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

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

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

                      10.13  
Acknowledgments.  The Borrower hereby
acknowledges that:

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

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

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

                      10.14  
Confidentiality.  Each of the Administrative
Agent and each Lender agrees to keep confidential in accordance
with such party’s customary practices (and in any event in
compliance with applicable law regarding material non-public
information) all non-public information provided to it by the
Borrower, the Administrative Agent or any Lender pursuant to or in
connection with this Agreement that is designated by the provider
thereof as confidential; provided that nothing herein shall
prevent the Administrative Agent or any Lender from disclosing any
such information (a) to the Administrative Agent, any other
Lender or any affiliate thereof, (b) subject to an agreement
to comply with the provisions of this Section or substantially
equivalent provisions, to any actual or prospective Transferee or
any direct or indirect counterparty to any Swap Agreement (or any
professional advisor to such counterparty), (c) to its
employees, directors, agents, attorneys, accountants and other
professional advisors or those of any of its affiliates (as long as
such attorneys, accountants and other professional advisors are
subject to confidentiality requirements substantially equivalent to
this Section), (d) upon the request or demand of any
Governmental Authority, (e) in response to any order of any
court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) if requested
or required to do so in connection with any litigation or similar
proceeding, (g) that has been publicly disclosed, (h) to
the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that
requires access to information about a Lender’s investment
portfolio in connection with ratings issued with respect to such
Lender, or (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document, provided that,
in the case of clauses (d), (e) and (f) of this
Section 10.14, with the exception of disclosure to bank
regulatory authorities, the Borrower (to the extent legally
permissible) shall be given prompt prior notice so that it may seek
a protective order or other appropriate remedy.

                      10.15  
WAIVERS OF JURY TRIAL.  THE BORROWER,
THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.

                      10.16  
Releases of Senior Bond.  (a) 
Notwithstanding anything to the contrary herein or in any other
Loan Document, upon the occurrence of the Release Date, the
Administrative Agent is hereby irrevocably authorized by each
Lender (without requirement of notice to or consent of any Lender)
to promptly surrender to or upon the order of the Borrower the
Senior Bond then held by the Administrative Agent, in accordance
with the terms of the Bond Delivery Agreement.

                      
(b)  The Administrative Agent shall promptly surrender to
or upon the order of the Borrower the Senior Bond then held by the
Administrative Agent at such time as (i) the Loans, the
Reimbursement Obligations and any interest or fees payable to the
Lenders or the Administrative Agent hereunder shall have been paid
in full, (ii) all other amounts then due and payable by the
Borrower to the parties hereto under the Loan Documents shall have
been paid in full, and (iii) the Commitments have been
terminated and the Letters of Credit have terminated or
expired.

                      10.17  
USA Patriot Act.  Each Lender hereby
notifies the Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October
26, 2001)) (the “Act”), it is required to
obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and
other information that will a

llow such Lender to identify the Borrower in accordance with the
Act.

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

	

                                                            

	
PACIFIC GAS AND ELECTRIC COMPANY

		

                       

		
         

		
By:  /s/  Kent M. Harvey________________

		
       Name:  Kent
M. Harvey

		

       Title:    Senior
Vice President – Chief 

                  Financial
Officer and Treasurer

		

                        

		
       

		
CITICORP NORTH AMERICA, INC., as

Administrative Agent and as a
Lender

		
       

	
         

	
		
By:  /s/  Carolyn A. Kee__________________

		

       Name:   Carolyn
A. Kee

		

       Title:     Vice
President

		
       

		
      

		
JPMORGAN CHASE BANK, N.A., as Issuing

Lender and as a Lender

	
         

	     
		
            

		
By:  /s/  Thomas Casey__________________

		

        Name:  Thomas
Casey

		

        Title:     Vice
President

	

                                                           

	
BARCLAYS BANK PLC

		

                            

		
     

		
By:  /s/  Sydney G.
Dennis                    

		

       Name:   Sydney
G. Dennis

		

       Title:     Director

	

                                                                 

	
BNP PARIBAS

	
	
     

	
	
     

		
By:  /s/  Mark A.
Renaud         

		
       Name:  Mark
A. Renaud

		

       Title:    Managing
Director

		
           

		
By:  /s/  Francis J.
DeLaney      

		

       Name:  Francis
J. DeLaney

		

       Title:    Managing
Director

 
 

	

                                                                 

	
DEUTSCHE BANK AG NEW YORK BRANCH

	
	
     

	
	
     

		
By:  /s/  Richard Henshall
        

		
     Name:   Richard Henshall

		
     Title:    
Director

		
           

		
           

		
By:  /s/  David J. Bell   

		
       Name:   David J.
Bell

		
      
Title:     Managing Director

	

                                                                 

	
ABN AMRO BANK N.V.

	
	
     

	
	
     

		
By:  /s/  John D. Reed  

		
       Name:   John D.
Reed

		
      
Title:    
Director                                       

		
      

		
By:  /s/  Todd D.
Vaubel          

		
        Name:  
Todd D. Vaubel

		
      
Title:      Assistant Vice President

	

                                                                 

	
LEHMAN BROTHERS BANK, FSB

	
	
     

	
	
     

		
By:  /s/  Gary T. Taylor 

		
       Name:   Gary T.
Taylor

		
      
Title:     Senior Vice President

		

	

                                                                 

	
MELLON BANK, N.A.

	
	
     

	
	
     

		
By:  /s/  Richard A. Matthews  

		
       Name:   Richard
A. Matthews

		
      
Title:     First Vice President

		

	

                                                                 

	
ROYAL BANK OF CANADA

	
	
     

	
	
     

		
By:    /s/  John D. Reed

		
  By:  /s/  Linda M.
Stephens    

		
        
Name:   Linda M. Stephens

		
        
Title:     Authorized Signatory

	

                                                                 

	
THE BANK OF NEW YORK

	
	
     

	
	
     

		
By:  /s/  Jesus Williams 

		
       Name:   Jesus
Williams

		
      
Title:      Vice President

	

                                                                 

	
THE BANK OF NOVA SCOTIA

	
	
     

	
	
     

		
By:  /s/  Thane Rattew  

		
       Name:   Thane
Rattew

		
      
Title:     Managing Director

	

                                                                 

	
UBS LOAN FINANCE LLC

	
	
     

	
	
     

		
By:  /s/  Edward
Gripps           

		
       Name:   Edward
Gripps

		
    
  Title:     Director

		
       

		
By:  /s/  Joselin
Fernandes        

		
       Name:   Joselin
Fernandes

		
      
Title:     Associate Director

	

                                                                 

	
UNION BANK OF CALIFORNIA, N.A.

	
	
     

	
	
     

		
By:  /s/  Dennis G.
Blank          

		
       Name:   Dennis G.
Blank

		
       Title:   
  Vice President

	

                                                                 

	
KBC BANK N.V.

	
	
     

	
	
     

		
By:  /s/  Jean-Pierre
Diels         

		
       Name:   
Jean-Pierre Diels

		
      
Title:      First Vice President

		
          

		
By:  /s/  Eric
Raskin     

		
       Name:   Eric
Raskin

		
      
Title:     Vice President

	

                                                                 

	
MORGAN STANLEY BANK

	
	
     

	
	
     

		
By:  /s/  Daniel Twenge 

		
       Name:   Daniel
Twenge

		
      
Title:     Vice President

	

                                                                 

	
WILLIAM STREET COMMITMENT CORPORATION (Recourse only to assets
of William Street Commitment Corporation)

	
	
     

	
	
     

		
By:  /s/  Manda
D’Agata          

		
       Name:   Manda
D’Agata

		
      
Title:     Assistant Vice President

COMMITMENTS

	
Lender

	
Commitment

	
Citicorp North America, Inc.

	
$93,000,000.00

	
JPMorgan Chase Bank, N.A.

	
$93,000,000.00

	
Barclays Bank PLC

	
$80,000,000.00

	
BNP Paribas

	
$80,000,000.00

	
Deutsche Bank AG New York Branch

	
$80,000,000.00

	
ABN Amro Bank N.V.

	
$62,000,000.00

	
Lehman Brothers Bank, FSB

	
$62,000,000.00

	
Mellon Bank, N.A.

	
$62,000,000.00

	
Royal Bank of Canada

	
$62,000,000.00

	
The Bank of New York

	
$62,000,000.00

	
The Bank of Nova Scotia

	
$62,000,000.00

	
UBS Loan Finance LLC

	
$62,000,000.00

	
Union Bank of California, N.A.

	
$62,000,000.00

	
KBC Bank, NV

	
$26,000,000.00

	
Morgan Stanley Bank

	
$26,000,000.00

	
William Street Commitment Corporation

	
$26,000,000.00

		
	
Total

	
$1,000,000,000.00ANNEX B

Exhibit 10.1

Merrill Lynch International

Merrill Lynch Financial Centre

2 King Edward Street

London, England EC1A 1HQ

Dominion Resources, Inc.

120 Tredegar Street

Richmond, VA 23219                                                                                                 April 5, 2005

Re: Forward Stock Sale Transaction dated September 7, 2004 on the Common Stock, no par value, of Dominion Resources, Inc. ("Dominion").

Dear Sir/Madam,

This letter memorialises the agreement of Dominion and Merrill Lynch International ("MLI") to replace, in its entirety, Annex B of the Confirmation dated September 7, 2004, among Dominion, MLI and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Agent, bearing ML Ref No. 0483204 (the "Confirmation"), to among other things, change the Maturity Date with respect to Tranche B to August 26, 2005. Dominion and MLI hereby agree that Revised Annex B, annexed hereto, shall replace and supersede in its entirety, Annex B of the Confirmation for all settlements subsequent to the date hereof. In all other respects, the Confirmation shall remain in force and full force and effect. All capitalized terms not defined herein shall have the respective meaning ascribed to such term in the Confirmation. 

Please acknowledge your agreement with the foregoing by countersigning a copy of this letter where indicated and returning to Brian Carroll by mail and by fax to 4 World Financial Center (17), New York, NY 10080, fax number (917) 778-0835.

	
Very truly yours,

	
Merrill Lynch International

	
By:_/s/ Kristen Chung ___

Kristen Chung

Authorized Signatory

 

	
Acknowledged and Agreed:

Dominion Resources, Inc.

	
By: /s/ G. Scott Hetzer

        Senior Vice President 

        and Treasurer

	
 

 

REVISED ANNEX B

	
Base Amount:
	
5,000,000 Shares

	
Maturity Date:
	
August 26, 2005, which date shall be the last date upon which shares must be delivered in the event of Physical Settlement and purchases by Party A will have settled pursuant to Cash Settlement.

	
Maturity Forward Price:
	
$64.11

	
Early Settlement

Forward Price:
	
Party B may choose to exercise the contract early and, if Physical Settlement applies, by delivering some or all of the underlying Shares in exchange for a Forward Price under the schedule below.

	
 
	
For the avoidance of doubt, the relevant Settlement Date for the purposes of the schedule below shall be 

(i) if Physical Settlement applies, the Settlement Date shall be the date upon which Party A is reflected as the record holder of the relevant Settlement Shares on the books of the transfer agent of Party B, and (ii) if Cash or Net Stock Settlement applies, the related Forward Price shall be determined on a weighted average basis by the date(s) Party A is reflected as the record holder of the relevant Close-out Shares on the books of the transfer agent of Party B.

	
 
	
 

	
During Period (Settlement Dates are inclusive):
	
Forward Price:

	
From April 4, 2005 until April 30, 2005

From May 1, 2005 until May 25, 2005

From May 26, 2005 until June 30, 2005

From July 1, 2005 until July 31, 2005

From August 1, 2005 to August 25, 2005
	
$63.88

$64.06

$63.51

$63.75

$63.94

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