Document:

exv10w2

Exhibit 10.2

FIRST AMENDMENT TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT 

     THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (hereinafter referred to
as the “Amendment”) is made and entered into effective as of August 4, 2008 between and among, on
the one hand, the lenders identified on the signature pages hereof (such lenders, together with
their respective successors and assigns, are referred to hereinafter each individually as a
“Lender” and collectively as the “Lenders”), WELLS FARGO FOOTHILL, INC., a California corporation,
as the arranger and administrative agent for the Lenders (“Agent”), and, on the other hand, ENERGY
CORPORATION OF AMERICA, a West Virginia corporation (“Borrower”).

RECITALS

     A. Agent, the Lenders and the Borrower entered into that certain Second Amended and Restated
Credit Agreement, dated as of September 7, 2007 (the “Credit Agreement”).

     B. Borrower has requested an increase in the Maximum Loan Amount from $200,000,000.00 to
$250,000,000.00, consisting of a Maximum Revolver Amount of up to $150,000,000.00 and a Term Loan
Amount of up to $100,000,000.00.

     C. As of August 1, 2008, the outstanding principal amount under the Term Loan is
$99,000,000.00 and the outstanding principal amount under the revolving facility is $75,274,335.76.
Such amounts are unconditionally owed by Borrower to Lenders without offset, defense or
counterclaim of any kind, nature or description whatsoever.

     D. Agent and the Lenders are willing to consent to such an increase and to amend the Credit
Agreement subject to the terms and conditions hereinafter set forth.

AGREEMENT

     NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:

ARTICLE I

Definitions

     Section 1.01. Recitals. The foregoing recitals are hereby incorporated into and made
a part of this Amendment for all purposes.

     Section 1.02. Definitions. Capitalized terms used in this Amendment, to the extent
not otherwise defined herein, shall have the same meaning as in the Credit Agreement, as amended
hereby.

ARTICLE II

Amendments and Other Agreements

     Section 2.01. Amendment to Section 1.1 of the Credit Agreement. The following
definitions in Section 1.1 of the Credit Agreement are hereby amended by amending and
restating each such definition in its entirety to read as follows:

     “’Applicable Margin’ means, on any day, and with respect to any Obligation, the
applicable per annum percentage set forth in the table shown below, based on the
average monthly Revolver Usage for the immediately preceding month:

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amendment to second Amended and Restated Credit Agreement — Page 1

 

	 	 	 	 	 	 	 	 	 
	Average Monthly	 	 	 	 	 	LIBOR	 
	Total Usage	 	Base Rate Loans	 	 	Rate Loans	 
	 
	 	 	 	 	 	 	 	 
	$0 to $60,000,000.00
	 	 	Less 0.25%	 	 	 	Plus 1.50%	 
	$60,000,000.01 to $115,000,000.00
	 	 	Plus 0.0%	 	 	 	Plus 1.75%	 
	Greater than $115,000,000.00
	 	 	Plus 0.25%	 	 	 	Plus 2.00%	 

     “’Hydrocarbon Interests Hedging Agreement Reserves’ means as of any date
of determination, reserves in an amount, if positive, equal to (a) the aggregate
Hedging Obligations of Borrower, its Subsidiaries and Affiliates to Bank Product
Providers relating to commodities or commodity prices, minus (b)(i) the
Total Value (calculated in a manner consistent with the determination of the
Borrowing Base) multiplied by 65%, minus (ii) the Maximum Loan
Amount. By way of example, if (A) the aggregate Hedging Obligations are
$60,000,000.00, (B) the Total Value is $386,000,000.00 and (C) the Maximum Loan
Amount is $250,000,000.00, then $60,000,000.00 — [($386,000,000.00 x 0.65) -
$250,000,000.00] = $59,100,000.00.”

     “’Maximum Loan Amount’ means $250,000,000.00.”

     “’Maximum Revolver Amount’ means $150,000,000.00, as such amount may be reduced
from time to time in accordance with Section 6.23.”

     “’PV-10 Value’ means, as of the date of determination, the sum of the present
values of the Net Operating Income expected to be received in each of the months
following the date of determination, determined as follows:

     (a) the Net Operating Income shall be determined on the lesser amount
of (i) a ceiling value of MmBTU — $6.50 and Bbl — $65.00 of Proved
Developed Producing Reserves as of such date of determination, adjusting
such price to reflect the effect of the then-outstanding Hedging Agreements,
but without adjustment to reflect the Basis Differential with respect to
Hydrocarbons produced from the Eligible Proved Developed Producing Reserves
of the Pledging Subsidiaries and the Eligible Proved Developed Producing
Reserves of the Partnerships and the LLC, as determined by the Approved
Engineer and approved by Agent, or (ii) (x) on the basis of the contract
price to the extent contracts exist or (y) in the event that contracts do
not exist, on the basis of the applicable NYMEX Price for the category of
Proved Developed Producing Reserves as of such date of determination,
adjusting such price to reflect the appropriate Basis Differential with
respect to Hydrocarbons produced from the Eligible Proved Developed
Producing Reserves of the Pledging Subsidiaries and the Eligible Proved
Developed Producing Reserves of the Partnerships and the LLC and the effect
of the then-outstanding Hedging Agreements, as determined by the Approved
Engineer and approved by Agent; and

     (b) the present value of each such Net Operating Income amount shall be
determined by discounting such Monthly Net Operating Income from the month
in which it is expected to be received, on a monthly basis, to such date of
determination at a rate of 10% per annum.”

     Section 2.02. Amendment to Section 2.2 of the Credit Agreement. Section 2.2
of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

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amendment to second Amended and Restated Credit Agreement — Page 2

 

     “2.2 Term Loan. Borrower hereby represents and warrants that Lenders
have made the Term Loan in the principal amount equal to the Term Loan Amount to
Borrower for the purposes set forth in Section 6.20 hereof. The Term Loan
shall be repaid on the following dates and in the following amounts:

	 	 	 
	Date	 	Installment Amount
	July 10, 2009

	 	$1,000,000
	July 10, 2010
	 	$1,000,000
	July 10, 2011
	 	$1,000,000

The outstanding unpaid principal balance and all accrued and unpaid interest under
the Term Loan shall be due and payable on the earliest of (a) the Maturity Date, (b)
the date of the acceleration of the Term Loan in accordance with the terms hereof,
and (c) the date of termination of this Agreement, whether by its terms, by
prepayment, or by acceleration. All amounts outstanding under the Term Loan shall
constitute Obligations.

The Lenders acknowledge a payment, on or prior to July 10, 2008, by Borrower on the
outstanding indebtedness under the Term Loan in the amount of $1,000,000.00 (the
“July 2008 Term Installment Payment”). Borrower made such payment by applying funds
advanced under the revolving facility to the Term Loan. Borrower has requested
that, as of August 4, 2008, the principal amount outstanding under the Term Loan be
$100,000,000.00. Accordingly, the Lenders agree to reverse the July 2008 Term
Installment Payment, which shall result in the advances under the revolving facility
being reduced by $1,000,000 and the principal amount outstanding under the Term Loan
being increased by $1,000,000, such that, as of August 4, 2008, the principal amount
outstanding under the Term Loan is $100,000,000.00, and the principal amount
outstanding under the revolving facility is $74,274,335.76.”

     Section 2.03. Amendment to Section 6.23 of the Credit Agreement. Section
6.23 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

     “6.23. Collateral Value. Unless otherwise consented to by Agent in
writing, after a Reserve Report or other report or information is delivered pursuant
to Section 6.2 or otherwise that shows the Total Value is less than the
amount determined by multiplying the Maximum Loan Amount by 1.5 (“Collateral Value
Amount”), Agent may adjust the Borrowing Base accordingly and Borrower shall, within
five (5) Business Days, notify Agent that Borrower shall:

     (a) execute, and/or cause to be executed and delivered to the Agent
within sixty (60) days supplemental or additional Mortgages, in form and
substance satisfactory to the Agent and its counsel, securing payment of the
Obligations and covering other Oil and Gas Properties directly owned by
Borrower, one or more of the Pledging Subsidiaries or any other Subsidiary
of Borrower which are not then covered by any Mortgage and having a value
(as determined by Agent in its sole discretion), in addition to the other
Oil and Gas Properties already subject to a Mortgage, sufficient to cause
the Total Value to exceed the Collateral Value Amount, or

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amendment to second Amended and Restated Credit Agreement — Page 3

 

     (b) if such Oil and Gas Properties are insufficient to provide such
supplemental or additional Mortgages, then, within five (5) days, (i)
demonstrate to Agent that it cannot provide such supplemental or additional
Mortgages and (ii) make a payment with respect to the Advances in an
aggregate principal amount sufficient to reduce the Total Usage to an amount
equal to or less than 65% of the newly established Total Value.”

     Section 2.04. Amendment to Section 7.20(a)(i) of the Credit Agreement. Section
7.20(a)(i) of the Credit Agreement is hereby amended and restated in its entirety to read as
follows:

     “(i) Minimum EBITDAX. (A) after the date hereof to and including September 30,
2008, EBITDAX in an amount equal to or greater than $40,000,000.00 at the close of
each fiscal quarter of Borrower and (B) after September 30, 2008, EBITDAX in an
amount equal to or greater than $55,000,000.00 at the close of each fiscal quarter
of Borrower. Compliance of the foregoing covenant will be tested quarterly on a
rolling four quarter basis.”

     Section 2.05. Amendment to Schedule C-1 to the Credit Agreement. Schedule
C-1 to the Credit Agreement is hereby amended and restated in its entirety to read as set forth
on Exhibit A attached hereto.

ARTICLE III

Conditions 

     Section 3.01. Conditions Precedent. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent, unless specifically waived by Agent:

     (a) Agent shall have received this Amendment, duly executed by Borrower, together with
the Consent and Ratification (the “Ratification”) attached hereto, duly executed by each
Pledging Subsidiary;

     (b) Borrower shall deliver evidence to Agent that all necessary corporate
authorizations and proceedings were taken by Borrower and the Pledging Subsidiaries in
connection with the transactions contemplated by this Amendment;

     (c) The representations and warranties contained herein, in the Credit Agreement, as
amended hereby, the Ratification and in each other Loan Document shall be true and correct
as of the date hereof, as if made on the date hereof, except to the extent such
representations and warranties relate to an earlier date;

     (d) Borrower shall have delivered a certificate to Agent demonstrating, in form and
substance satisfactory to Agent, a Total Value equal to or in excess of $350,000,000.00;

     (e) No Event of Default shall have occurred and be continuing and no Default shall
exist; and

     (f) Borrower shall have delivered or caused to be delivered such other documents,
agreements and instruments as Agent may require to effect the terms and provisions of this
Amendment.

     Section 3.02. Conditions Subsequent. Unless specifically waived in writing by Agent,
Borrower shall complete or cause to be completed the requirements set forth below (the “Conditions
Subsequent”), in form and substance satisfactory to Agent, on or before the applicable completion
date, and Borrower

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amendment to second Amended and Restated Credit Agreement — Page 4

 

acknowledges and agrees that Borrower’s failure or refusal to complete any of the Conditions
Subsequent on or before the applicable completion date shall, at Agent’s election, constitute a
breach of Borrower’s agreement hereunder and an Event of Default under the Credit Agreement without
the necessity of any written notice to Borrower and shall allow the Agent (at its option) to
exercise any and all of its remedies:

     (a) On or before October 31, 2008, Borrower shall have executed and delivered to Agent
such Mortgages and/or Deeds of Trust (as applicable) and any amendment, supplement or
modification to same as may be required by Agent for recording as appropriate sufficient for
the Mortgaged Properties to have an aggregate value equal to or in excess of
$375,000,000.00, and all such documents and instruments shall be duly recorded in form and
substance satisfactory to Agent, and Borrower shall have caused to be delivered to Agent, in
form and substance similar to what has been previously provided by Borrower to Agent, such
financing statements and/or amendments or modifications thereto, title searches and/or title
updates as may be required by Agent in connection therewith; and

     (b) On or before October 31, 2008, Borrower shall have delivered or caused to be
delivered to Agent an internally prepared engineering report certifying to Agent that
Borrower has Mortgaged Properties having a value equal to or in excess of $375,000,000.00.

ARTICLE IV

Ratifications, Representations and Warranties

     Section 4.01. Ratifications. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement
and, except as expressly modified and superseded by this Amendment, the terms and provisions of the
Credit Agreement and the other Loan Documents are ratified and confirmed and shall continue in full
force and effect. Borrower and the Agent agree that the Credit Agreement, as amended hereby, and
the other Loan Documents shall continue to be legal, valid, binding and enforceable in accordance
with their respective terms.

     Section 4.02. Representations and Warranties. Borrower hereby represents and
warrants to Agent as follows:

     (a) the execution, delivery and performance of this Amendment and any and all other
Loan Documents executed and/or delivered in connection herewith have been authorized by all
requisite corporate action on the part of Borrower and do not and will not conflict with or
violate any provision of any applicable law, the Articles of Incorporation or Bylaws of
Borrower or any agreement, document, judgment, license, order or permit applicable to or
binding upon the Borrower or its Property; no consent, approval, authorization or order of
and no notice to or filing with, any court or governmental authority or third person is
required in connection with the execution, delivery or performance of this Amendment or to
consummate the transactions contemplated hereby;

     (b) the representations and warranties contained in the Credit Agreement, as amended
hereby, the Ratification and in each of the other Loan Documents are true and correct on and
as of the date hereof as though made on and as of the date hereof, except to the extent such
representations and warranties relate to an earlier date;

     (c) Borrower is in full compliance with all covenants and agreements contained in the
Credit Agreement, as amended hereby, and in each of the other Loan Documents; and

first
amendment to second Amended and Restated Credit Agreement — Page 5

 

     (d) Except as has otherwise been disclosed to Agent, Borrower has not amended its
Articles of Incorporation or Bylaws or other organizational documents since the date of the
execution of the Credit Agreement.

ARTICLE V

Miscellaneous

     Section 5.01. Survival of Representations and Warranties. All representations and
warranties made in the Credit Agreement and the other Loan Documents, including, without
limitation, this Amendment, shall survive the execution and delivery of this Amendment, and no
investigation by Agent or any closing shall affect the representations and warranties or the right
of Agent to rely upon them.

     Section 5.02. Reference to Credit Agreement. Each of the Loan Documents, including
the Credit Agreement and any and all other agreements, documents or instruments now or hereafter
executed and delivered pursuant to the terms of the Credit Agreement, as amended hereby, are hereby
amended so that any reference in such Loan Documents to the Credit Agreement shall mean a reference
to the Credit Agreement, as amended hereby.

     Section 5.03. Expenses of Agent. As provided in the Credit Agreement, Borrower
agrees to pay on demand all reasonable costs and expenses incurred by Agent in connection with the
preparation, negotiation and execution of this Amendment and any and all amendments, modifications,
and supplements hereto, including, without limitation, the reasonable costs and fees of Agent’s
legal counsel, and all reasonable costs and expenses incurred by Agent in connection with the
enforcement or preservation of any rights under the Credit Agreement, as amended hereby, or any
other Loan Document, including, without limitation, the reasonable costs and fees of Agent’s legal
counsel.

     Section 5.04. RELEASE. BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE
ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE OBLIGATIONS OR TO
SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE AGENT OR THE LENDERS. BORROWER
HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES THE AGENT AND THE LENDERS, THEIR
PREDECESSORS, AGENTS, ATTORNEYS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS,
DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR
UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL,
AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED, WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE AGAINST THE AGENT AND THE LENDERS, THEIR
PREDECESSORS, AGENTS, ATTORNEYS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF
WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE,
AND ARISING FROM ANY OF THE OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR,
CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE
APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT OR OTHER LOAN
DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.

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amendment to second Amended and Restated Credit Agreement — Page 6

 

     Section 5.05. Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder
of this Amendment and the effect thereof shall be confined to the provision so held to be invalid
or unenforceable.

     Section 5.06. APPLICABLE LAW. THIS AMENDMENT SHALL BE DEEMED TO HAVE BEEN MADE AND
TO BE PERFORMABLE IN ATLANTA, GEORGIA, AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF GEORGIA.

     Section 5.07. Successors and Assigns. This Amendment is binding upon and shall inure
to the benefit of Agent, the Lenders and the Borrower and their respective successors and assigns,
except the Borrower may not assign or transfer any of its rights or obligations hereunder without
the prior written consent of Agent.

     Section 5.08. Counterparts/Facsimile. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original, but all of which
when taken together shall constitute one and the same instrument. Delivery of an executed
counterpart of this Amendment by facsimile shall be equally as effective as delivery of an original
executed counterpart of this Amendment. Any party delivering an executed counterpart of this
Amendment by facsimile shall also deliver an original executed counterpart of this Amendment but
the failure to do so shall not affect the validity, enforceability and binding effect of this
Amendment.

     Section 5.09. Effect of Waiver. No consent or waiver, express or implied, by Agent
to or for any breach of or deviation from any covenant or condition of the Credit Agreement shall
be deemed a consent or waiver to or of any other breach of the same or any other covenant,
condition or duty.

     Section 5.10. Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of this Amendment.

     Section 5.11. FINAL AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED HEREBY, REPRESENTS
THE FINAL AGREEMENT AMONG THE PARTIES RELATED TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[Remainder of page intentionally left blank.]

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amendment to second Amended and Restated Credit Agreement — Page 7

 

     IN WITNESS WHEREOF, the Borrower, Agent and the Lenders have caused this Amendment to be
executed as of the date first written above by their duly authorized officers.

	 	 	 	 	 
	 	 	BORROWER
	 
	 	 	 	 
	 	 	ENERGY CORPORATION OF AMERICA
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Michael S. Fletcher
	 
	 	 	 	 
	 
	 	Name:	 	Michael S. Fletcher 
	 

	 	 	 	 
	 

	 	Title:	 	CEO 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	AGENT AND LENDERS
	 
	 	 	 	 
	 	 	WELLS FARGO FOOTHILL, INC.,
	 	 	as Agent and Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Gary Forlenza
	 

	 	 	 	 
	 

	 	Name:	 	Gary Forlenza 
	 
	 	 	 	 
	 

	 	Title:	 	VP 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,
	 	 	as Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Charles W. Patterson
	 

	 	 	 	 
	 

	 	Name:	 	Charles W. Patterson 
	 

	 	 	 	 
	 

	 	Title:	 	Managing Director 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,
	 	 	as Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Tyler Faverbach
	 

	 	 	 	 
	 

	 	Name:	 	Tyler Faverbach 
	 

	 	 	 	 
	 

	 	Title:	 	Vice President 
	 

	 	 	 	 

[Consent and Ratification follows.]

first amendment to second
Amended and Restated Credit Agreement — Signature Page

 

CONSENT AND RATIFICATION

     The undersigned, EASTERN AMERICAN ENERGY CORPORATION, a West Virginia corporation and
ALLEGHENY & WESTERN ENERGY CORPORATION, a West Virginia corporation (each a “Pledging Subsidiary”
and collectively the “Pledging Subsidiaries”) have executed certain Loan Documents in favor of
WELLS FARGO FOOTHILL, INC., a California corporation, as the arranger and administrative agent
(“Agent”) for the Lenders in connection with that certain Second Amended and Restated Credit
Agreement, dated as of September 7, 2007 (the “Credit Agreement”) between and among, on the one
hand, the lenders identified on the signature pages thereof (such lenders, together with their
respective successors and assigns, are referred to thereafter each individually as a “Lender” and
collectively as the “Lenders”), Agent, and, on the other hand, ENERGY CORPORATION OF AMERICA, a
West Virginia corporation (“Borrower”). The Pledging Subsidiaries hereby consent and agree to the
terms of the First Amendment to Second Amended and Restated Credit Agreement (the “Amendment”)
executed by Borrower, the Lenders and Agent, a copy of which is attached hereto, and the
undersigned agree that the Loan Documents to which they are a party shall remain in full force and
effect and shall continue to be the legal, valid and binding obligation of the Pledging
Subsidiaries and enforceable against the Pledging Subsidiaries in accordance with their terms.
Furthermore, each Pledging Subsidiary hereby agrees and acknowledges that (a) none of the Loan
Documents to which it is a party is subject to any claims, defenses or offsets, (b) nothing
contained in the Amendment or any other Loan Document shall adversely affect any right or remedy of
Agent under any of the Loan Documents to which it is a party, (c) the execution and delivery of the
Amendment shall in no way reduce, impair or discharge any indebtedness, liability or obligation of
the undersigned under any of the Loan Documents to which it is a party and shall not constitute a
waiver by Agent of any of Agent’s rights against the undersigned, (d) by virtue hereof and by
virtue of each of the Loan Documents to which it is a party, each Pledging Subsidiary ratifies in
full all of its indebtedness, liabilities and obligations arising under each of the Loan Documents
to which it is a party, (e) the Pledging Subsidiaries’ consent is not required for the
effectiveness of the Amendment, and (f) no consent by the Pledging Subsidiaries is required for the
effectiveness of any future amendment, modification, forbearance or other action with respect to
the Credit Agreement or any present or future Loan Document.

	 	 	 	 	 	 	 	 	 
	EASTERN AMERICAN	 	 	 	ALLEGHENY & WESTERN ENERGY
	ENERGY CORPORATION,	 	 	 	CORPORATION,
	a West Virginia Corporation	 	 	 	a West Virginia Corporation
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	 
	 	 
	 	By:
	 	 
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 	 	 

first amendment to
second Amended and Restated Credit Agreement — Consent and Ratification

 

EXHIBIT A

SCHEDULE C-1

Commitments

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Revolver	 	 	Term Loan	 	 	Total	 
	Lender	 	Commitment	 	 	Commitment	 	 	Commitment	 
	Wells Fargo Foothill, Inc.
	 	$	75,000,000	 	 	$	50,000,000	 	 	$	125,000,000	 
	Bank of America, N.A.
	 	$	37,500,000	 	 	$	37,500,000	 	 	$	75,000,000	 
	U.S. Bank National Association
	 	$	37,500,000	 	 	$	12,500,000	 	 	$	50,000,000	 
	All Lenders
	 	$	150,000,000	 	 	$	100,000,000	 	 	$	250,000,000	 

First
Amendment to Second Amended and Restated Credit Agreementexv4w1

Exhibit 4.1

EXECUTION COPY

 

Ninth Supplemental Indenture

Dated as of April 1, 2010

Supplement to the Amended and Restated Indenture

Dated as of April 22, 2005

 

PACIFIC GAS AND ELECTRIC COMPANY

Issuer

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

Trustee

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I
	 	DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II
	 	REOPENING OF THE 5.80% SENIOR NOTES	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE III
	 	MISCELLANEOUS	 	 	2	 
	 
	 	 	 	 	 	 
	SECTION 301
	 	Application of Ninth Supplemental Indenture	 	 	2	 
	SECTION 302
	 	Effective Date of Ninth Supplemental Indenture	 	 	3	 
	SECTION 303
	 	Counterparts	 	 	3	 
	 
	 	 	 	 	 	 
	EXHIBIT A
	 	 	 	 	 	 

i

 

     NINTH SUPPLEMENTAL INDENTURE, dated as of April 1, 2010 (this “Ninth Supplemental Indenture”),
by and between PACIFIC GAS AND ELECTRIC COMPANY, a corporation duly organized and existing under
the laws of the State of California (the “Company” or the “Issuer”), and THE BANK OF NEW YORK
MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of
the United States of America (formerly known as The Bank of New York Trust Company, N.A.), as
Trustee under the Base Indenture (as hereinafter defined) (the “Trustee”).

RECITALS OF THE COMPANY

     A. The Company and the Trustee are parties to that certain Amended and Restated Indenture,
dated as of April 22, 2005 (the “Base Indenture”), as supplemented by the First Supplemental
Indenture, dated as of March 13, 2007 (the “First Supplemental Indenture”), the Second Supplemental
Indenture, dated as of December 4, 2007 (the “Second Supplemental Indenture”), the Third
Supplemental Indenture, dated as of March 3, 2008 (the “Third Supplemental Indenture”), the Fourth
Supplemental Indenture, dated as of October 21, 2008 (the “Fourth Supplemental Indenture”), the
Fifth Supplemental Indenture, dated as of November 18, 2008 (the “Fifth Supplemental Indenture”),
the Sixth Supplemental Indenture, dated as of March 6, 2009 (the “Sixth Supplemental Indenture”),
the Seventh Supplemental Indenture, dated as of June 11, 2009 (the “Seventh Supplemental
Indenture”), the Eighth Supplemental Indenture, dated as of November 18, 2009 (the “Eighth
Supplemental Indenture”) and this Ninth Supplemental Indenture (this “Ninth Supplemental
Indenture,” and together with the Base Indenture, the First Supplemental Indenture, the Second
Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the
Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture
and the Eighth Supplemental Indenture, the “Indenture”), which supplements, amends and restates
that certain Indenture of Mortgage, dated as of March 11, 2004, as supplemented by the First
Supplemental Indenture thereto, dated as of March 23, 2004 and the Second Supplemental Indenture
thereto, dated as of April 12, 2004, providing for the issuance by the Company of an unlimited
number of series of Bonds (as defined in the Base Indenture) from time to time.

     B. Under the Base Indenture, the Company is authorized to establish one or more series of
Bonds at any time in accordance with and subject to the provisions of the Base Indenture, and the
terms of such series of Bonds may be described by a supplemental indenture executed by the Company
and the Trustee.

     C. Pursuant to the First Supplemental Indenture, the Company authorized the issuance of the
5.80% Senior Notes (as defined below).

     D. Section 201 of the First Supplemental Indenture provides that the 5.80% Senior Notes may be
reopened, from time to time, for issuances of additional Bonds of such series, and any additional
Bonds issued and comprising 5.80% Senior Notes shall have identical terms as the 5.80% Senior
Notes, except that the issue price, issue date and, in some cases, the first Interest Payment Date
may differ.

     E. The execution and delivery of this Ninth Supplemental Indenture has been authorized by a
Board Resolution (as defined in the Base Indenture).

 

 

     F. Concurrent with the execution hereof, the Company has caused its counsel to deliver to the
Trustee an Opinion of Counsel (as defined in the Base Indenture) pursuant to Section 13.03 of the
Base Indenture together with the documents required under Article V of the Base Indenture.

     F. The Company has done all things necessary to make this Ninth Supplemental Indenture a valid
agreement of the Company, in accordance with its terms.

     NOW, THEREFORE, the Company and the Trustee agree, for the benefit of each other and for the
equal and proportionate benefit of Holders of the 5.80% Senior Notes (as defined below) with
respect to all provisions herein applicable to such series of notes, as follows:

ARTICLE I

DEFINITIONS

     Unless the context otherwise requires, capitalized terms used but not defined herein have the
meaning set forth in the Indenture. The following additional terms are hereby established for
purposes of this Ninth Supplemental Indenture and shall have the meanings set forth in this Ninth
Supplemental Indenture only for purposes of this Ninth Supplemental Indenture:

     “5.80% Senior Notes” has the meaning set forth in Article II hereof.

      

     The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this
Ninth Supplemental Indenture as a whole and not to any particular Article, Section or other
subdivision.

ARTICLE II

REOPENING OF 5.80% SENIOR NOTES

     Pursuant to Section 201 of the First Supplemental Indenture, the twenty-second series of Bonds
established by said Section and designated as the “5.80% Senior Notes due March 1, 2037” (the
“5.80% Senior Notes”) is reopened and additional Bonds comprising part of such series shall be
issued in the aggregate principal amount of $250,000,000 and shall be issued in the form of one or
more Global Bonds in substantially the form set forth in Exhibit A hereto. As a result of
the further issuance of $250,000,000 aggregate principal amount of Bonds of the twenty-second
series on April 1, 2010, the issued amount of Bonds of such series now totals $950,000,000.

2

 

ARTICLE III

MISCELLANEOUS

     SECTION 301 Application of Ninth Supplemental Indenture.

     Except as provided herein, each and every term and condition contained in this Ninth
Supplemental Indenture that modifies, amends or supplements the terms and conditions of the
Indenture shall apply only to the 5.80% Senior Notes established hereby and not to any other series of
Bonds established under the Indenture. Except as specifically amended and supplemented by, or to
the extent inconsistent with, this Ninth Supplemental Indenture, the Indenture shall remain in full
force and effect and is hereby ratified and confirmed.

     SECTION 302 Effective Date of Ninth Supplemental Indenture.

     This Ninth Supplemental Indenture shall be effective upon the execution and delivery hereof by
each of the parties hereto.

     SECTION 303 Counterparts.

     This Ninth Supplemental Indenture may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.

3

 

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

	 	 	 	 	 
	 	PACIFIC GAS AND ELECTRIC COMPANY,

        as Issuer

 	 
	 	By:  	/s/ Nicholas M. Bijur
 	 
	 	 	Name:  	Nicholas M. Bijur 	 
	 	 	Title:  	Treasurer 	 
	 
	 	THE BANK OF NEW YORK MELLON TRUST 

        COMPANY, N.A.,

        as Trustee

 	 
	 	By:  	/s/ Teresa Petta
 	 
	 	 	Name:  	Teresa Petta 	 
	 	 	Title:  	Vice President 	 
	 

Signature page to Ninth Supplemental Indenture

4

 

EXHIBIT A

FORM OF ADDITIONAL BONDS ISSUED AS PART OF THE

5.80% SENIOR NOTES DUE MARCH 1, 2037

     THIS SENIOR NOTE IS A BOND AND A GLOBAL BOND WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR NOTES IN DEFINITIVE FORM, THIS SENIOR NOTE
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

     UNLESS THIS SENIOR NOTE CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SENIOR NOTE CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     THE FOLLOWING SUMMARY OF TERMS IS SUBJECT TO THE INFORMATION SET FORTH ON THE REVERSE HEREOF:

	 	 	 	 	 
	PRINCIPAL AMOUNT :

$250,000,000

	 	ORIGINAL ISSUE DATE:
March 13, 2007
	 	INTEREST RATE: 5.80% per annum
	 
	 	 	 	 
	MATURITY DATE:

	 	INTEREST PAYMENT DATES:
	 	THIS SENIOR NOTE IS A:
	March 1, 2037

	 	March 1 and September
1, commencing
September 1, 2010
	 	þ     Global Book-Entry Bond

o     Certificated Bond

REGISTERED OWNER: Cede & Co., as

nominee of The Depository Trust Company

A-1

 

PACIFIC GAS AND ELECTRIC COMPANY

5.80% SENIOR NOTES DUE MARCH 1, 2037

(Fixed Rate)

No. R-3         
        
        
        
                
        
        
        
        
        
        
        
        
        
        
        
        

Principal Amount: $250,000,000

CUSIP No: 694308 GJ0

     PACIFIC GAS AND ELECTRIC COMPANY, a corporation duly organized and existing under the laws of
the State of California (herein called the “Company,” which term includes any successor Person
pursuant to the applicable provisions of the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., as nominee for The Depository Trust Company, or
registered assigns, the Principal Amount stated above on the Maturity Date stated above, and to pay
interest thereon from and including the Original Issue Date stated above or, in the case of a 5.80%
Senior Note Due March 1, 2037 issued upon the registration of transfer or exchange, from and
including the most recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on the Interest Payment Dates set forth above and on the Maturity
Date stated above, commencing September 1, 2010 at the rate of 5.80% per annum until the principal
hereof is paid or made available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this 5.80% Senior Note Due March 1, 2037 (this “Senior Note,” and together
with all other 5.80% Senior Notes Due March 1, 2037, the “Senior Notes”) (or one or more
Predecessor Bonds) is registered at the close of business on the Regular Record Date for such
interest, which shall be the 15th day of the month next preceding such Interest Payment Date;
provided, however, that interest payable at the Maturity Date or on a Redemption Date will be paid
to the Person to whom principal is payable. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Senior Note (or one or more Predecessor Bonds) is
registered at the close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Senior Notes not
less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of the Indenture and any securities exchange, if any,
on which the Senior Notes may be listed, and upon such notice as may be required by any such
exchange, all as more fully provided in said Indenture.

     Payments of interest on this Senior Note will include interest accrued to but excluding the
respective Interest Payment Dates. Interest payments for this Senior Note shall be computed and
paid on the basis of the 360-day year of twelve 30-day months and will accrue from March 13, 2007
or from the most recent Interest Payment Date to which interest has been paid or duly provided for.
In the event that any date on which interest is payable on this Senior Note (other than the
Maturity Date) is not a Business Day then payment of the interest payable on such date will be made
on the next succeeding day that is a Business Day (and without any interest or payment in respect
of any such delay) with the same force and effect as if made on the date the

A-2

 

payment was originally payable. If the Maturity Date falls on a day that is not a Business
Day, the payment of principal, premium, if any, and interest may be made on the next succeeding
Business Day, and no interest on such payment shall accrue for the period from and after maturity.

     Payment of principal of, premium, if any, and interest on Senior Notes shall be made in such
coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts. Payments of principal of, premium, if any, and interest on
the Senior Notes represented by a Global Bond shall be made by wire transfer of immediately
available funds to the Holder of such Global Bond, provided that, in the case of payments of
principal and premium, if any, such Global Bond is first surrendered to the Paying Agent. If any
of the Senior Notes are no longer represented by a Global Bond, (i) payments of principal, premium,
if any, and interest due on the Maturity Date or earlier redemption of such Senior Notes shall be
made at the office of the Paying Agent upon surrender of such Senior Notes to the Paying Agent, and
(ii) payments of interest shall be made, at the option of the Company, subject to such surrender
where applicable, (A) by check mailed to the address of the Person entitled thereto as such address
shall appear in the Bond Register or (B) by wire transfer to registered Holders of at least
$10,000,000 in principal amount of Senior Notes at such place and to such account at a banking
institution in the United States as such Holders may designate in writing to the Trustee at least
sixteen (16) days prior to the date for payment.

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SENIOR NOTE SET FORTH ON THE
REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET
FORTH AT THIS PLACE.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Senior Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

A-3

 

     In Witness Whereof, the Company has caused this instrument to be duly executed.

     Dated: April 1, 2010

	 	 	 	 	 
	 	PACIFIC GAS AND ELECTRIC COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

A-4

 

	 	 	 	 	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     This Senior Note is one of the Bonds of the series designated as Bonds of the Twenty-Second
Series referred to in the within-mentioned Indenture.

     Dated: April 1, 2010

	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., As
Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 

A-5

 

	 	 	 	 	 

Reverse of Senior Note

     This 5.80% Senior Note Due March 1, 2037 is one of a duly authorized issue of Bonds of the
Company, issued and issuable in one or more series under an Amended and Restated Indenture, dated
as of April 22, 2005 (the “Base Indenture”), as heretofore supplemented and as further supplemented
by a Ninth Supplemental Indenture, dated as of April 1, 2010 (as so supplemented, and together with
all additional indentures supplemental thereto, and any constituent instruments establishing the
terms of particular Bonds, being herein called the “Indenture”), between the Company and The Bank
of New York Mellon Trust Company, N.A. (formerly The Bank of New York Trust Company, N.A.), as
Trustee (herein called the “Trustee,” which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a description of the respective
rights, limitations of rights, duties and immunities of the Company, the Trustee and the Holders of
Bonds thereunder and of the terms and conditions upon which Bonds are, and are to be, authenticated
and delivered. This Senior Note is a Bond within the meaning of the Indenture and is one of the
Bonds of the twenty-second series designated as the 5.80% Senior Note Due March 1, 2037 established
by the Company under the Indenture and initially issued in an aggregate principal amount of
$700,000,000 on March 13, 2007. As a result of the further issuance of $250,000,000 aggregate
principal amount of Bonds of the twenty-second series on April 1, 2010, the issued amount of Bonds
of such series now totals $950,000,000. The acceptance of this Senior Note shall be deemed to
constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the
Indenture.

     Subject to the terms and conditions of the Indenture, the Senior Notes are redeemable at the
option of the Company (“Optional Redemption”), in whole or in part, prior to Maturity, at a
Redemption Price equal to the greater of:

     (a) 100% of the principal amount of the Senior Notes to be redeemed; or

     (b) as determined by the Quotation Agent, the sum of the present values of the
Remaining Scheduled Payments of principal and interest on the Senior Notes to be redeemed
(not including any portion of payments of interest accrued as of the Redemption Date)
discounted to the Redemption Date on a semi-annual basis at the Adjusted Treasury Rate, plus
25 basis points,

plus, in either of the above cases, accrued and unpaid interest thereon to but not including the
Redemption Date.

     Interest installments whose Stated Maturity is on or prior to such Redemption Date will be
payable to Holders of such Senior Notes, or one or more Predecessor Bonds, of record at the close
of business on the relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.

     In the case of an Optional Redemption, notice of redemption will be in writing and mailed
first-class postage-prepaid not less than 30 days nor more than 60 days prior to the Redemption
Date to each Holder of Senior Notes to be redeemed at the Holder’s registered address; provided,
however, that such notice need not state the dollar amount of the Redemption Price if such dollar
amount has not been determined as of the date such notice is being given to

A-6

 

the Holders of the Senior Notes being redeemed. If money sufficient to pay the Redemption
Price of all Senior Notes (or portions thereof) to be redeemed on the Redemption Date is deposited
with the Paying Agent or the Trustee on or prior to the Redemption Date, from and after such
Redemption Date such Senior Notes or portions thereof shall cease to bear interest. Senior Notes
in denominations larger than $1,000 in principal amount may be redeemed in part but only in
integral multiples of $1,000.

     In the event of redemption of this Senior Note in part only, a new Senior Note or Senior Notes
of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof
upon the surrender hereof.

     As provided in the Indenture and subject to certain limitations therein set forth, this Senior
Note or any portion of the principal amount hereof will be deemed to have been paid for all
purposes of the Indenture and to be no longer Outstanding thereunder, and the Company’s entire
indebtedness in respect thereof will be satisfied and discharged, if there has been irrevocably
deposited with the Trustee or any Paying Agent (other than the Company), in trust, money in an
amount which will be sufficient and/or Eligible Obligations, the principal of and interest on which
when due, without regard to any reinvestment thereof, will provide moneys which, together with
money, if any, deposited with or held by the Trustee or such Paying Agent, will be sufficient to
pay when due the principal of and premium, if any, and interest on this Senior Note when due.

     If an Event of Default shall occur and be continuing, the Trustee or the Holders of not less
than 33% in aggregate principal amount of the Outstanding Bonds, considered as one class, may
declare the principal amount of all Bonds then Outstanding to be due and payable immediately by
notice in writing to the Company (and to the Trustee if given by Holders); provided, however, that
with respect to certain Events of Default relating to bankruptcy, insolvency and similar events,
the principal amount of all Bonds then Outstanding shall be due and payable immediately without
further action by the Trustee or the Holders.

     The Indenture permits, with certain exceptions as therein provided, the Company and the
Trustee to enter into one or more supplemental indentures for the purpose of adding any provisions
to, or changing in any manner or eliminating any of the provisions of, the Indenture with the
consent of the Holders of not less than a majority in aggregate principal amount of the Bonds at
the time Outstanding, considered as one class; provided, however, that if there shall be Bonds of
more than one series Outstanding under the Indenture and if a proposed supplemental indenture shall
directly affect the rights of the Holders of Bonds of one or more, but less than all, of such
series, then the consent only of the Holders of a majority in aggregate principal amount of the
Outstanding Bonds of all series so directly affected, considered as one class, shall be required;
and provided, further, that if the Bonds of any series shall have been issued in more than one
Tranche and if a proposed supplemental indenture shall directly affect the rights of the Holders of
Bonds of one or more, but less than all, of such Tranches, then the consent only of the Holders of
a majority in aggregate principal amount of the Outstanding Bonds of all Tranches so directly
affected, considered as one class, shall be required; and provided, further, that the Indenture
permits the Company and the Trustee to enter into one or more supplemental indentures for certain
purposes without the consent of any Holders of Bonds. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of Bonds,

A-7

 

on behalf of the Holders of all such Bonds, to waive certain past defaults under the Indenture
and their consequences. Any such consent or waiver by the Holder of this Senior Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Senior Note and of any
Senior Note issued upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this Senior Note.

     As provided in and subject to the provisions of the Indenture, the Holder of this Senior Note
shall not have the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall
have previously given the Trustee written notice of a continuing Event of Default, the Holders of
at least 33% in aggregate principal amount of the Bonds at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from
the Holders of at least a majority in aggregate principal amount of Bonds at the time Outstanding a
direction inconsistent with such written request, and shall have failed to institute any such
proceeding for 60 days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Senior Note for the enforcement of any
payment of principal hereof or any premium or interest hereon on or after the respective due dates
expressed herein.

     No reference herein to the Indenture and no provision of this Senior Note or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of and any premium and interest on this Senior Note at the times, place and rate, and
in the coin or currency, herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Senior Note is registrable in the Bond Register, upon surrender of this Senior
Note for registration of transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Senior Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee or
the Bond Registrar, as the case may be, duly executed by the Holder hereof or such Holder’s
attorney duly authorized in writing, and thereupon one or more new Senior Notes of like tenor, of
authorized denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

     The Senior Notes are issuable only in registered form without coupons in denominations of
$1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Senior Notes are exchangeable for a like aggregate principal amount
of Senior Notes and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

     The Company shall not be required to execute or to provide for the registration of the
transfer of or the exchange of (A) any Senior Note of this series during a period of 15 days

A-8

 

immediately preceding the date notice is to be given identifying the serial numbers of the
Senior Notes called for redemption, or (B) any Senior Note selected for redemption in whole or in
part, except the unredeemed portion of any Senior Note being redeemed in part.

     Prior to due presentment of this Senior Note for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Senior
Note is registered as the owner hereof for all purposes, whether or not this Senior Note is
overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

     This Senior Note shall be governed by, and construed and enforced in accordance with, the laws
of the State of California without regard to the principles of conflicts of laws thereunder, except
to the extent that the Trust Indenture Act shall be applicable.

     As provided in the Indenture, no recourse shall be had for the payment of the principal of,
premium, if any, or interest with respect to this Senior Note, or any part thereof, or for any
claim based hereon or otherwise in respect hereof, or of the indebtedness represented hereby, or
upon any obligation, covenant or agreement under the Indenture, against any incorporator,
shareholder, officer or director, as such, past, present or future, of the Company or of any
predecessor or successor corporation (either directly or through the Company or a predecessor or
successor corporation), whether by virtue of any constitutional provision, statute or rule of law
or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and
understood that the Indenture and all the Bonds are solely corporate obligations and that any such
personal liability is hereby expressly waived and released as a condition of, and as part of the
consideration for, the execution of the Indenture and the issuance of this Senior Note.

     All terms used in this Senior Note which are not defined herein shall have the meanings
assigned to them in the Indenture.

A-9

 

ASSIGNMENT FORM

To assign this Senior Note, fill in the form below: (I) or (we) assign and transfer this
Senior Note to

 
 

(Insert assignee’s soc. sec. or tax I.D. no.)

 
 

 
 

 
 

 
 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint  

to transfer this Senior Note on the books of the Company. The agent may substitute another to act
for him.

 

Date:                                         

	 	 	 
	 
	 	Your signature:  

	 	 	(Sign exactly as your name appears on the face of this Senior
Note)

	 	 	 

	 	 	Tax Identification No.:  

	 	 	 

	 	 	SIGNATURE GUARANTEE:

	 	 	 

	 	 	 

	 	 	 

	 	 	Signatures must be guaranteed by an “eligible guarantor
institution” meeting the requirements of the Bond Registrar,
which requirements include membership or participation in the
Securities Transfer Agent Medallion Program (“STAMP”) or such
other “signature guarantee program” as may be determined by
the Bond Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

A-10

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