Document:

Financing Agreement between the Company and Clark County, NV

 EXHIBIT 10.01 

 FINANCING AGREEMENT 
  
 Dated as of October 1, 2004 
  
 By and Between 
  
 CLARK COUNTY,
NEVADA 
  
 and 
  
 SOUTHWEST GAS CORPORATION 
  
 relating to 
  
 CLARK COUNTY, NEVADA 
 INDUSTRIAL DEVELOPMENT REFUNDING REVENUE BONDS 
 (SOUTHWEST GAS CORPORATION PROJECT) 
 SERIES 2004B 
  

 FINANCING AGREEMENT 
  

  
 TABLE OF CONTENTS 
  
 (This Table of Contents is
not a part of this Agreement and is only for convenience of reference) 
  

							
	 	 	 	  	Page

	 ARTICLE I
	 	 DEFINITIONS
	  	1
				
	 SECTION 1.1
	 	 	 	 Definitions of Terms
	  	1
				
	 SECTION 1.2
	 	 	 	 Number and Gender
	  	1
				
	 SECTION 1.3
	 	 	 	 Articles, Sections
	  	1
				
	 ARTICLE II
	 	 	 	REPRESENTATIONS	  	2
				
	 SECTION 2.1
	 	 	 	 Representations by the Issuer
	  	2
				
	 SECTION 2.2
	 	 	 	 Representations by the Borrower
	  	2
				
	 ARTICLE III
	 	 	 	THE PROJECT; ISSUANCE OF THE BONDS	  	4
				
	 SECTION 3.1
	 	 	 	 The Project
	  	4
				
	 SECTION 3.2
	 	 	 	 Agreement to Issue Bonds; Application of Bond Proceeds
	  	4
				
	 SECTION 3.3
	 	 	 	 Investment of Moneys
	  	4
				
	 SECTION 3.4
	 	 	 	 Costs of Issuance
	  	5
				
	 ARTICLE IV
	 	 	 	LOAN AND PROVISIONS FOR REPAYMENT	  	5
				
	 SECTION 4.1
	 	 	 	 Loan of Bond Proceeds
	  	5
				
	 SECTION 4.2
	 	 	 	 Loan Repayments and Other Amounts Payable
	  	5
				
	 SECTION 4.3
	 	 	 	 Unconditional Obligation
	  	7
				
	 SECTION 4.4
	 	 	 	 Payments Pledged and Assigned
	  	8
				
	 SECTION 4.5
	 	 	 	 Payment of the Bonds and Other Amounts
	  	8
				
	 ARTICLE V
	 	 	 	SPECIAL COVENANTS AND AGREEMENTS	  	8
				
	 SECTION 5.1
	 	 	 	 Right of Access to the Project and Records
	  	8
				
	 SECTION 5.2
	 	 	 	 Borrower’s Maintenance of Its Existence; Assignments
	  	9
				
	 SECTION 5.3
	 	 	 	 Maintenance and Repair; Taxes; Utility and Other Charges
	  	11
				
	 SECTION 5.4
	 	 	 	 Qualification in Nevada
	  	11
				
	 SECTION 5.5
	 	 	 	 No Warranty by the Issuer
	  	11
				
	 SECTION 5.6
	 	 	 	 Agreement as to Use of the Project
	  	12

  

 -i- 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	 	 	  	Page

	 SECTION 5.7
	 	 Notices and Certificates Required to be Delivered to the Trustee
	  	12
			
	 SECTION 5.8
	 	 Borrower to Furnish Notice of Adjustments of Interest Rate Periods
	  	12
			
	 SECTION 5.9
	 	 Information Reporting
	  	12
			
	 SECTION 5.10
	 	 Tax Covenants; Rebate
	  	12
			
	 SECTION 5.11
	 	 Continuing Disclosure
	  	13
			
	 SECTION 5.12
	 	 Liquidity Facility
	  	14
			
	 SECTION 5.13
	 	 Letter of Credit
	  	14
			
	 SECTION 5.14
	 	 Requirement to Deliver Letter of Credit or Liquidity Facility Under Certain Circumstances
	  	15
			
	 SECTION 5.15
	 	 Bond Insurance
	  	15
			
	 ARTICLE VI
	 	EVENTS OF DEFAULT AND REMEDIES	  	16
			
	 SECTION 6.1
	 	 Events of Default Defined
	  	16
			
	 SECTION 6.2
	 	 Remedies on Default
	  	17
			
	 SECTION 6.3
	 	 No Remedy Exclusive
	  	20
			
	 SECTION 6.4
	 	 Agreement to Pay Fees and Expenses of Counsel
	  	20
			
	 SECTION 6.5
	 	 No Additional Waiver Implied by One Waiver; Consents to Waivers
	  	20
			
	 ARTICLE VII
	 	OPTION AND OBLIGATION OF BORROWER TO PREPAY	  	21
			
	 SECTION 7.1
	 	 Option to Prepay
	  	21
			
	 SECTION 7.2
	 	 Obligation to Prepay
	  	21
			
	 SECTION 7.3
	 	 Notice of Prepayment; Amount to be Prepaid
	  	21
			
	 SECTION 7.4
	 	 Cancellation at Expiration of Term
	  	22
			
	 ARTICLE VIII
	 	NON-LIABILITY OF ISSUER	  	22
			
	 SECTION 8.1
	 	 Non-Liability of the Issuer
	  	22
			
	ARTICLE IX	 	MISCELLANEOUS	  	22
			
	 SECTION 9.1
	 	 Notices
	  	22
			
	 SECTION 9.2
	 	 Assignments
	  	23
			
	 SECTION 9.3
	 	 Severability
	  	23

  

 -ii- 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	 	 	  	Page

	 SECTION 9.4
	 	 Execution of Counterparts
	  	23
			
	 SECTION 9.5
	 	 Amounts Remaining in Bond Fund
	  	23
			
	 SECTION 9.6
	 	 Amendments, Changes and Modifications
	  	23
			
	 SECTION 9.7
	 	 Governing Law
	  	23
			
	 SECTION 9.8
	 	 Authorized Issuer and Borrower Representatives
	  	23
			
	 SECTION 9.9
	 	 Term of the Agreement
	  	24
			
	 SECTION 9.10
	 	 Binding Effect
	  	24
			
	 SECTION 9.11
	 	 Trustee and Bond Insurer as Parties in Interest and Third Party Beneficiaries
	  	24
			
	 EXHIBIT A
	 	Description of the Project	  	A-1

  

 -iii- 

 THIS FINANCING AGREEMENT made and entered into as of October 1, 2004 (this “Agreement”), by and
between CLARK COUNTY, NEVADA, a political subdivision of the State of Nevada, party of the first part (hereinafter sometimes referred to as the “Issuer”), and SOUTHWEST GAS CORPORATION, a California corporation, party of the second part
(hereinafter sometimes referred to as the “Borrower”), 
  
 W I T N E S S E T H: 
  
 WHEREAS, concurrently with the
execution and delivery of this Agreement, the Issuer is entering into an Indenture of Trust, dated as of October 1, 2004 (the “Indenture”), with BNY Midwest Trust Company, as trustee (the “Trustee”) thereunder, pursuant to which
$75,000,000 principal amount of Clark County, Nevada Industrial Development Refunding Revenue Bonds (Southwest Gas Corporation Project) Series 2004B (the “Bonds”) will be issued and secured; and 
  
 WHEREAS, the Issuer hereby confirms and the Borrower hereby acknowledges and
adopts the recitals to the Indenture as though fully set forth here; 
  
 NOW, THEREFORE, in consideration of the respective representations and agreements hereinafter contained, the parties hereto agree as follows: 
  
 ARTICLE I 
  
 DEFINITIONS 
  
 SECTION 1.1 Definitions of Terms. Except as defined below, for all purposes of this Agreement, unless the context clearly requires otherwise, all terms defined in Article I of the Indenture have the same meanings in this
Agreement. 
  
 “Event of Default” under this Agreement
is defined in Section 6.1. 
  
 SECTION 1.2 Number and
Gender. The singular form of any word used herein, including the terms defined in Section 1.02 of the Indenture, shall include the plural, and vice versa. The use herein of a word of any gender shall include all genders. 
  
 SECTION 1.3 Articles, Sections. Unless otherwise specified,
references to Articles, Sections and other subdivisions of this Agreement are to the designated Articles, Sections and other subdivisions of this Agreement as originally executed. The words “hereof,” “herein,”
“hereunder” and words of similar import refer to this Agreement as a whole. The headings or titles of the several articles and sections, and the table of contents appended to copies hereof, shall be solely for convenience of reference and
shall not affect the meaning, construction or effect of the provisions hereof. 
  

 1 

 ARTICLE II 
  

REPRESENTATIONS 
  
 SECTION 2.1 Representations by the Issuer. The Issuer makes the following representations as the basis for the undertakings on its part
herein contained: 
  
 (a) The Issuer is a political subdivision
of the State. Under the provisions of the Act, the Issuer has the power to enter into the transactions contemplated by this Agreement and to carry out its obligations hereunder. By proper action, the Issuer has been duly authorized to execute,
deliver and duly perform this Agreement and the Indenture. To the extent the foregoing representation involves a legal conclusion, such representation is made in reliance on the opinion of Bond Counsel. 
  
 (b) To refinance a portion of the Cost of the Project by refunding the
Refunded Bonds, the Issuer will issue the Bonds, which will mature, bear interest and be subject to redemption as provided in the Indenture. 
  
 (c) The Issuer’s interest in this Agreement (except certain rights of the Issuer to payment of fees and expenses and indemnification, to rights of
inspection and to consents and rights to receive any notices, certificates, requests, requisitions and other communications) will be pledged to the Trustee as security for payment of the principal of, and premium, if any, and interest on the Bonds.

  
 (d) The Issuer has not pledged and will not pledge its
interest in this Agreement for any purpose other than to secure the Bonds under the Indenture. 
  
 (e) The Issuer is not in default under any of the provisions of the laws of the State which default would affect its existence or its powers referred to in subsection (a) of this Section 2.1. 
  
 (f) The Issuer has found and determined and hereby finds and determines that
all requirements of the Act with respect to the issuance of the Bonds and the execution of this Agreement and the Indenture have been complied with and that financing or refinancing the Project, including the refunding of the Refunded Bonds, by
issuing the Bonds and entering into this Agreement and the Indenture is in the public interest, serves the public purposes and meets the requirements of the Act. 
  
 (g) On October 5, 2004, the Issuer adopted a resolution authorizing the issuance of refunding bonds in an amount not to
exceed $75,000,000 to refinance the Project. 
  
 (h) No member,
officer or other official of the Issuer has any interest whatsoever in the Borrower or in the transactions contemplated by this Agreement. 
  
 SECTION 2.2 Representations by the Borrower. The Borrower makes the following representations as the basis for the undertakings on its part
herein contained: 
  

 2 

 (a) The Borrower is a corporation duly incorporated and in good standing in the State of California, is
duly qualified to transact business and in good standing in the State, has power to enter into and by proper corporate action has been duly authorized to execute and deliver this Agreement and all other documents contemplated hereby to be executed
by the Borrower in connection with the issuance and sale of the Bonds. 
  
 (b) Neither the execution and delivery of this Agreement or any other documents contemplated hereby to be executed by the Borrower in connection with the issuance and sale of the Bonds, the consummation of the transactions contemplated
hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, conflicts with or results in a breach of any of the terms, conditions or provisions of the Borrower’s articles of incorporation or by-laws or of any
corporate actions or of any agreement or instrument to which the Borrower is now a party or by which it is bound, or constitutes a default (with due notice or the passage of time or both) under any of the foregoing, or result in the creation or
imposition of any prohibited lien, charge or encumbrance whatsoever upon any of the property or assets of the Borrower under the terms of any instrument or agreement to which the Borrower is now a party or by which it is bound. 
  
 (c) The Cost of the Project is as set forth in the Tax Certificate and has
been determined in accordance with sound engineering/construction and accounting principles. All the information provided by, and all the representations made by, the Borrower in the Tax Certificate are true and correct as of the date thereof.

  
 (d) The Project consists of those facilities described in
Exhibit A to this Agreement and in the Southwest Gas Corporation Engineering Certificate dated the date of issuance of the Bonds (the “Engineering Certificate”), which is incorporated by reference herein, and the Borrower shall not make
any changes to the Project except as otherwise permitted hereunder or to the operation thereof which would affect the qualification of the Project under the Act or impair the Tax-Exempt status of the Bonds. In particular, the Borrower shall comply
with all requirements set forth in the Tax Certificate. The Borrower intends to cause the Project to be used for the local furnishing of natural gas until the principal of, the premium, if any, and the interest on the Bonds shall have been paid.

  
 (e) The Borrower has and will have title to and all necessary
easements to install the Project, sufficient to carry out the purposes of this Agreement. 
  
 (f) At the time of submission of an application to the Issuer for financial assistance in connection with the Project and on the dates on which the Issuer took action on such application, permanent financing for the
Project had not otherwise been obtained or arranged. 
  
 (g) All
certificates, approvals, permits and authorizations with respect to the construction of the Project of agencies of applicable local governments, the State and the federal government have been obtained or will be obtained in the normal course of
business. 
  

 3 

 (h) No event has occurred and no condition exists which would constitute an Event of Default or which
with the passing of time or with the giving of notice or both would become such an Event of Default. 
  
 (i) To the best of the knowledge of the Borrower, no member, officer, or other official of the Issuer has any interest whatsoever in the Borrower or in
the transactions contemplated by this Agreement. 
  
 (j) The
Borrower has reviewed the Indenture and hereby accepts the terms thereof. 
  
 ARTICLE III 
  
 THE
PROJECT; ISSUANCE OF THE BONDS 
  
 SECTION 3.1 The
Project. The Borrower has acquired, constructed, equipped, and installed the Project and all other facilities and real and personal property necessary for the operation of the Project substantially in accordance with the Plans and
Specifications for the Project. The Borrower further agrees that it at all times shall operate the Project as a “project” within the meaning of the Act and so that the Project constitutes Exempt Facilities. 
  
 SECTION 3.2 Agreement to Issue Bonds; Application of Bond
Proceeds. In order to provide funds to loan to the Borrower to refinance part of the Cost of the Project as provided in Section 4.1 hereof, the Issuer agrees that it will issue under the Indenture and sell and cause to be delivered to the
Initial Purchaser thereof the Bonds in an aggregate principal amount not to exceed $75,000,000, each bearing interest and maturing as set forth in the Indenture. The Issuer will thereupon deposit the proceeds received from the sale of the Bonds as
provided in Section 2.02(e) of the Indenture. 
  
 SECTION 3.3 Investment of Moneys. Any moneys held as a part of the Bond Fund or the Refunding Account shall be invested or reinvested by the Trustee at the written direction of an Authorized Borrower Representative as to
specific investments, to the extent permitted by law, in accordance with Section 7.01 of the Indenture. The Borrower shall not direct the Trustee to make any investments or reinvestments other than those permitted by the Indenture and as permitted
by law. In making any such investments, the Trustee may rely on directions delivered to it pursuant to this Section, and the Trustee and the Issuer shall be relieved of all liability with respect to making such investments in accordance with such
directions. The Borrower agrees that to the extent any moneys in the Bond Fund represent moneys held for the payment of the principal of Bonds which have become due at maturity or on a redemption date and the premium, if any, on such Bonds or
interest due on Bonds in all cases where Bonds have not been presented for payment and paid or such interest is unclaimed, or to the extent any moneys are held by the Trustee for the payment of the purchase price of Bonds which have not been
presented for payment, such moneys shall not be invested. 
  

 4 

 SECTION 3.4 Costs of Issuance. The Borrower covenants and agrees to pay all costs incurred
in connection with the issuance of the Bonds and the Issuer shall have no obligation with respect to such costs. 
  
 ARTICLE IV 
  
 LOAN AND PROVISIONS FOR REPAYMENT 
  
 SECTION 4.1 Loan of Bond Proceeds. (a) The Issuer agrees, upon the terms and conditions in this Agreement, to lend to the Borrower the proceeds received by the Issuer from the sale of the Bonds in order
to refinance a portion of the Cost of the Project by refunding the Refunded Bonds. The Issuer’s obligation herein shall be solely to deposit the proceeds of the Bonds with the Trustee as provided in Section 3.2 hereof. Upon such deposit, the
Issuer will be deemed to have made a loan to the Borrower in an amount equal to the principal amount of the Bonds. 
  
 (b) The Issuer and the Borrower expressly reserve the right to enter into, to the extent permitted by law, an agreement or agreements other than this
Agreement, with respect to the issuance by the Issuer, under an indenture or indentures other than the Indenture, of obligations to provide additional funds to pay the Cost of the Project or to refund all or any principal amount of the Bonds (or any
portions thereof), or any combination thereof. 
  
 SECTION 4.2
Loan Repayments and Other Amounts Payable. (a) On each date provided in or pursuant to the Indenture for the payment of principal (whether at maturity or upon redemption or acceleration) of and/or premium, if any, and/or interest on any
Bonds, until the principal of and premium, if any, and interest on the Bonds shall have been fully paid or provision for the payment thereof shall have been made in accordance with the Indenture, the Borrower shall pay to the Trustee in immediately
available funds, for deposit in the account within the Bond Fund, as a repayment installment of the loan of the proceeds of the Bonds pursuant to Section 4.1 hereof, a sum equal to the amount payable on such interest payment or redemption or
acceleration or maturity date as principal (whether at maturity or upon redemption or acceleration) of and premium, if any, and interest on the Bonds as provided in the Indenture. In the event the Borrower shall fail to make any of the payments
required in this subsection, the payment so in default shall continue as an obligation of the Borrower until the amount in default shall have been fully paid. 
  

(b) The Borrower shall pay or cause to be paid to the Trustee amounts equal to the amounts to be paid by the Trustee for the purchase of Bonds which
have not been remarketed pursuant to Article IV of the Indenture and the premium, if any, on the Bonds which have been remarketed pursuant to Article IV of the Indenture, in each case as and to the extent provided in the Indenture. Such amounts
shall be paid or caused to be paid by the Borrower to the Trustee, acting as Tender Agent (or, for so long as the Bonds are Book-Entry Bonds, to the Securities Depository), in immediately available funds on the dates and no later than the times such
payments pursuant to Section 4.05 of the Indenture are to be made. In the event the Borrower shall fail to make (or cause to be made) any of the payments required in this subsection, the payment so in default shall continue as an obligation of the
Borrower until the amount in default shall have been fully paid. The obligation of the Borrower to make any payment under this 

  

 5 

 
subsection shall be deemed to have been satisfied to the extent of any corresponding payment made by a Bank or a Liquidity Provider to the Trustee under any
Letter of Credit or Liquidity Facility. 
  
 (c) The Borrower
agrees to pay to the Trustee, (i) the reasonable fees, charges and expenses of the Trustee, as Registrar, and as Paying Agent and Tender Agent, as and when the same become due, and (ii) the reasonable fees, charges and expenses of the Trustee, as
and when the same become due under the Indenture, including payments under Section 6.4 hereof, and including the annual fee of the Trustee for the services rendered by it and the expenses incurred by it under the Indenture. In the event the Borrower
should fail to make any of the payments required in this subsection, the item or installment so in default shall continue as an obligation of the Borrower until the amount in default shall have been fully paid; provided, however, that
such failure of payment shall not be deemed an event of default during the period in which the Borrower is in good faith contesting, by appropriate proceedings promptly initiated and diligently conducted, such payment required by this subsection.
The provision of this subsection shall survive the retirement of the Bonds, the termination of this Agreement and the resignation or approval of the Trustee. 
  
 (d) The Borrower shall pay to the Issuer upon demand all Administrative Expenses, including payments under Section 6.4 hereof. In the event the Borrower
should fail to make any of the payments required in this subsection, the item or installment so in default shall continue as an obligation of the Borrower until the amount in default shall have been fully paid. 
  
 (e) The Borrower releases the Issuer and the Trustee from, and covenants and
agrees that neither the Issuer nor the Trustee shall be liable for, and covenants and agrees, to the extent permitted by law, to indemnify and hold harmless the Issuer and the Trustee and their directors, officers, employees and agents from and
against, any and all losses, claims, damages, liabilities or expenses, of every conceivable kind, character and nature whatsoever arising out of, resulting from or in any way connected with (1) the Project, or the conditions, occupancy, use,
possession, conduct or management of, or work done in or about, or from the planning, design, acquisition, installation or construction of the Project or any part thereof (including without limitation any of the foregoing relating to any federal,
state or local environmental law, rule or regulation); (2) the issuance of any Bonds or any certifications, covenants or representations made in connection therewith and the carrying out of any of the transactions contemplated by the Bonds and this
Agreement; (3) the Trustee’s acceptance or administration of the trusts under the Indenture, or the exercise or performance of any of its powers or duties under the Indenture; or (4) any untrue statement or alleged untrue statement of any
material fact necessary to make the statements made, in the light of the circumstances under which they were made, not misleading, in any official statement or other offering circular utilized by the Issuer or any underwriter or placement agent in
connection with the sale or remarketing of any Bonds; provided that such indemnity shall not be required for damages that result from willful misconduct (or, as to the Trustee, negligence), including willful misconduct (or, as to the Trustee,
negligence) in the provision of any statements or information, on the part of the party seeking such indemnity. The Borrower further covenants and agrees, to the extent permitted by law, to pay or to reimburse the Issuer and the Trustee and their
respective officers, employees and agents for any and all costs, reasonable attorneys’ fees, liabilities or expenses incurred in connection with investigating, defending against or otherwise in connection with any such losses, claims, damages,
liabilities, 

  

 6 

 
expenses or actions, except to the extent that the same arise out of the willful misconduct (or, as to the Trustee, negligence) of the party claiming such
payment or reimbursement. The provisions of this Section shall survive the retirement of the Bonds, the expiration of this Agreement and the resignation or removal of the Trustee. 
  
 The indemnified party shall promptly notify the Borrower in writing of any claim or action covered by this indemnity and
brought against the indemnified party, or in respect of which indemnity may be sought against the Borrower, setting forth the particulars of such claim or action, and the Borrower will assume the defense thereof, including the employment of counsel
satisfactory to the indemnified party and the payment of all expenses. The indemnified party may employ separate counsel in any such action and participate in the defense thereof, and the fees and expenses of such counsel shall be payable by the
Borrower. 
  
 (f) The Borrower agrees to pay to the Remarketing
Agent and the Auction Agent the reasonable fees, charges and expenses of such Remarketing Agent and Auction Agent, and the Issuer shall have no obligation or liability with respect to the payment of any such fees, charges or expenses. 
  
 (g) The Borrower agrees to pay any Rebate Requirement (as defined in the Tax
Certificate) to the Trustee for deposit in the Rebate Fund. 
  
 (h) The Borrower also agrees to pay, (i) as soon as practicable after receipt of request for payment thereof, all expenses required to be paid by the Borrower under the terms of any bond purchase agreement relating to the sale of the Bonds;
(ii) at the time of issuance of any Bonds, the Issuer’s administrative fee in the amount of $50,000; and (iii) at the time of issuance of any Bonds, all reasonable expenses of the Issuer related to such Bonds which are not otherwise required to
be paid by the Borrower under the terms of this Agreement. 
  
 SECTION 4.3 Unconditional Obligation. The obligation of the Borrower to make the payments pursuant to this Agreement and to perform and observe the other agreements on its part contained herein shall be absolute and
unconditional, irrespective of any defense or any rights of set-off, recoupment or counterclaim it might otherwise have against the Issuer, and during the term of this Agreement, the Borrower shall pay (or cause to be paid) absolutely the payments
to be made on account of the loan as prescribed in Section 4.2 and all other payments as prescribed herein, free of any deductions and without abatement, diminution or set-off. Until such time as the principal of and premium, if any, and interest on
the Bonds shall have been fully paid, or provisions for the payment thereof shall have been made as required by the Indenture, the Borrower (i) will not suspend or discontinue any payments required hereunder, including payments provided for in
Section 4.2 hereof; (ii) will perform and observe all of its other covenants contained in this Agreement and all obligations required to be performed by it by the Indenture; and (iii) except as provided in Article VII hereof, will not terminate this
Agreement for any cause, including, without limitation, the occurrence of any act or circumstance that may constitute failure of consideration, destruction of or damage to the Project, commercial frustration of purpose, any change in the tax or
other laws of the United States of America or of the State or any political subdivision of either of them, or any failure of the Issuer or the Trustee to perform and observe any covenant, whether express or implied, or any duty, liability or
obligation arising out of or connected with this Agreement or the Indenture, except to the extent permitted by this Agreement. 
  

 7 

 SECTION 4.4 Payments Pledged and Assigned. It is understood and agreed that all rights to
the payment of moneys hereunder (except payments made to the Trustee pursuant to Sections 4.2(c), 4.2(e) 4.2(g), 4.2(h) and 6.4 hereof and payments to be made to the Remarketing Agent and the Auction Agent pursuant to Section 4.2(f) hereof and
payments to be made to the Issuer pursuant to Sections 4.2(d), 4.2(e), 4.2(h) and 6.4 hereof and its rights of indemnification and inspection and rights to receive notices, certificates, requests, requisitions or other communications and to give
consents hereunder) are pledged and assigned to the Trustee by the Indenture. The Borrower consents to such pledge and assignment. The Issuer hereby directs the Borrower and the Borrower hereby agrees to pay or cause to be paid to the Trustee all
said amounts required to be paid by or for the account of the Borrower pursuant to Section 4.2 hereof (except payments to be made directly to the Remarketing Agent and the Auction Agent pursuant to Section 4.2(f) hereof and payments to be made
directly to the Issuer pursuant to Sections 4.2(d), 4.2(e), 4.2(h) and 6.4 hereof). The Project will not constitute any part of the security for the Bonds. 
  
 SECTION 4.5 Payment of the Bonds and Other Amounts. The Bonds shall be payable from payments made by the Borrower to the Trustee under
Section 4.2(a) hereof and/or from amounts received by the Trustee from a draw on a Letter of Credit. Payments of principal of or premium, if any, or interest on the Bonds with moneys in the Bond Fund or earnings on investments made under the
provisions of the Indenture shall be credited against the obligation to pay required by Section 4.2(a) hereof. To the extent provided in the Indenture, whenever any Bonds are redeemable in whole or in part at the option of the Borrower, the Trustee,
on behalf of the Issuer, shall redeem the same upon the request of the Borrower and such redemption shall constitute payment of amounts required by Section 4.2(a) hereof equal to the redemption price of such Bonds. 
  
 Whenever payment or provision therefor has been made in respect of the
principal of or premium, if any, or interest on all or any portion of the Bonds in accordance with the Indenture (whether at maturity or upon redemption or acceleration or upon provision for payment in accordance with Article VIII of the Indenture),
payments shall be deemed paid to the extent such payment or provision therefor has been made and is considered to be a payment of principal of or premium, if any, or interest on such Bonds. If, pursuant to the terms of the Indenture, such Bonds are
thereby deemed paid in full, the Trustee shall notify the Borrower and the Issuer that such payment requirement has been satisfied. Subject to the foregoing, or unless the Borrower is entitled to a credit under this Agreement or the Indenture, all
payments shall be in the full amount required by Sections 4.2(a) and (b) hereof. 
  
 ARTICLE V 
  
 SPECIAL
COVENANTS AND AGREEMENTS 
  
 SECTION 5.1 Right of Access
to the Project and Records. The Borrower agrees that during the term of this Agreement the Issuer, the Trustee and the duly authorized agents of either of them shall have the right at all reasonable times during normal business hours 

  

 8 

 
to examine the books and records of the Borrower with respect to the Project and to enter upon the site of the Project to examine and inspect the Project;
provided, however, that this right is subject to federal and State laws and regulations applicable to the site of the Project. The rights of access hereby reserved to the Issuer and the Trustee may be exercised only after such agent shall have
executed release of liability and secrecy agreements if requested by the Borrower in the form then currently used by the Borrower, and nothing contained in this Section or in any other provision of this Agreement shall be construed to entitle the
Issuer or the Trustee to any information or inspection involving the confidential know-how of the Borrower. 
  
 SECTION 5.2 Borrower’s Maintenance of Its Existence; Assignments. 
  
 (a) To the extent permitted by law and its articles of incorporation, the Borrower agrees that during the term of this
Agreement it will maintain its corporate existence in good standing and its authorization to do business in the State and will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge into
another Person or permit one or more other Persons to consolidate with or merge into it; provided, however, that the Borrower may, without violating the covenants in this Section, merge into or consolidate with or transfer all or substantially all
of its assets to a wholly-owned subsidiary of the Borrower; and provided further that the Borrower may, without violating the covenants in this Section, combine, consolidate with or merge into another Person qualified to do business in one of the
states of the United States, or permit one or more other Persons to combine, consolidate with or merge into it, or sell to another Person all or substantially all of its assets, if: 
  
 (i) the surviving, resulting or transferee Person, as the case may be (A) assumes and agrees in writing to
pay and perform all of the obligations of the Borrower hereunder, unless such obligations are assumed by operation of law, and (B) is qualified to do business in the State; 
  
 (ii) any existing Bond Insurance, Liquidity Facility or Letter of Credit will remain in full force and
effect or will be replaced as provided in Sections 5.12 or 5.13, or 5.15, or the Bonds covered by such existing Bond Insurance, Liquidity Facility or Letter of Credit shall have been redeemed; 
  
 (iii) the long-term ratings on the outstanding Bonds, as
applicable, shall be no lower than the lower of (1) “Baa3” from Moody’s and “BBB-” from S&P, as applicable, or (2) the long-term ratings on the outstanding Bonds immediately prior to the transaction; and 
  
 (iv) the short-term ratings on the outstanding Bonds, as
applicable, shall be no lower than the lower of (1) “A-1” from Moody’s, “P-1” from S&P and “F-1” from Fitch, as applicable, or (2) the short-term ratings on the outstanding Bonds immediately prior to the
transaction. 
  
 (v) if immediately prior to such
merger, consolidation, reorganization or conversion, or such sale or other disposition, the Borrower is a public utility regulated by the Public Utility Commission of their respective jurisdictions (or a similar body in another jurisdiction) or the
Federal Energy Regulatory Commission, such successor 

  

 9 

 
entity shall be a public utility regulated by the Public Utility Commission of their respective jurisdiction (or another similar body in another
jurisdiction) or the Federal Energy Regulatory Commission. 
  
 The
Borrower agrees to provide the Issuer such information as the Issuer may reasonably request in order to assure compliance with this Section 5.2(a). 
  
 Within ten (10) Business Days after the consummation of the merger or other transaction described above, the Borrower shall (except as provided in the
next sentence) provide the Issuer, any Bond Insurer, any Bank, any Liquidity Provider and the Trustee with counterpart copies of the merger instruments or other documents constituting the transaction but only to the extent that such documents or
instruments are available to the public and not subject to any confidentiality agreement or restriction, and an officer’s certificate satisfactory to the Issuer executed by an Authorized Borrower Representative that all of the provisions of
this Section 5.2(a) have been complied with. In the case of a (i) merger or consolidation of the Borrower and any wholly-owned subsidiary of the Borrower or (ii) the transfer to any wholly-owned subsidiary of the Borrower of all or substantially all
of the assets of the Borrower, the Borrower shall send the Issuer, any Bond Insurer, any Bank, any Liquidity Provider and the Trustee a notice of such merger within ten (10) Business Days after its completion, together with the officer’s
certificate described in the preceding sentence. 
  
 Notwithstanding any other provision of this Section 5.2, the Borrower need not comply with any of the provisions of Section 5.2(a) if, at the time of such merger, combination, sale of assets, dissolution or reorganization, the Bonds will be
defeased as provided in Article VIII of the Indenture or redeemed in full as provided in Article III of the Indenture. 
  
 (b) The rights and obligations of the Borrower under this Agreement may be assigned and delegated, respectively, by the Borrower to any person in whole or
in part, subject, however, to each of the following conditions: 
  
 (i) No assignment other than pursuant to subsection (a) of this Section shall relieve the Borrower from primary liability for any of its obligations hereunder, and in the event of any assignment not pursuant to said
subsection (a) the Borrower shall continue to remain primarily liable for the payments specified in Section 4.2 hereof and for performance and observance of the other agreements on its part herein provided to be performed and observed by it.

  
 (ii) Any assignment from the Borrower shall
retain for the Borrower such rights and interests as will permit it to perform its obligations under this Agreement, and any assignee from the Borrower shall assume in writing the obligations of the Borrower hereunder to the extent of the interest
assigned, unless such obligations are assumed by operation of law. 
  
 (iii) The Borrower shall, within thirty (30) days of each such assignment, furnish or cause to be furnished to the Issuer and the Trustee a true and complete copy of each such assignment together with an instrument of
assumption, if required, and an opinion of Counsel satisfactory to the Issuer that the Borrower has complied with the provision of this Section 5.2(b). 
  

 10 

 (c) In the case of any consolidation, merger or transfer pursuant to subsection (a) hereof or any
assignment pursuant to subsection (b) hereof, the Borrower shall cause to be delivered to the Issuer and the Trustee, not later than the effective date of such consolidation, merger, transfer or assignment, an opinion of Bond Counsel to the effect
that such consolidation, merger, transfer or assignment will not, in and of itself, adversely affect the Tax-Exempt status of any Bonds. 
  
 SECTION 5.3 Maintenance and Repair; Taxes; Utility and Other Charges. The Borrower agrees to maintain, to the extent permitted by applicable
law and regulation, the Project, or cause the Project to be so maintained, during the term of this Agreement (i) in as reasonably safe condition as its operations shall permit and (ii) in good repair and in good operating condition, ordinary wear
and tear excepted, making from time to time all necessary repairs thereto and renewals and replacements thereof. 
  
 The Borrower agrees to pay or cause to be paid during the term of this Agreement all taxes, governmental charges of any kind lawfully assessed or levied
upon the Project or any part thereof, all utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Project and all assessments and charges lawfully made by any governmental body for public improvements that
may be secured by a lien on the Project, provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the Borrower shall be obligated to pay only such installments
as are required to be paid during the term of this Agreement. The Borrower may, at the Borrower’s expense and in the Borrower’s name, in good faith, contest any such taxes, assessments and other charges and, in the event of any such
contest, may permit the taxes, assessments or other charges so contested to remain unpaid during that period of such contest and any appeal therefrom unless by such nonpayment the Project or any part thereof will be subject to loss or forfeiture.

  
 The Borrower agrees that it will keep, or cause to be kept,
(i) the Project insured against such risks and in such amounts as are consistent with its insurance practices for similar types of facilities (which may include self-insurance), and (ii) insurance against all direct or contingent loss or liability
for personal injury, death or property damage occasioned by the operation of the Project, which insurance may include self-insurance and may be a part of the policy or policies of insurance customarily maintained by the Borrower in connection with
its general property and liability insurance upon all of the plants and properties operated by it (including such deductibles as may be provided in said policies). 
  
 SECTION 5.4 Qualification in Nevada. The Borrower agrees that throughout the term of this Agreement it, or any
successor or assignee as permitted by Section 5.2 hereof, will be qualified to do business in the State. 
  
 SECTION 5.5 No Warranty by the Issuer. The Issuer makes no warranty, either express or implied, as to the Project or that it will be
suitable for the purposes of the Borrower or needs of the Borrower. 
  

 11 

 SECTION 5.6 Agreement as to Use of the Project. The Issuer and the Borrower agree that the
Issuer shall have no interest in the Project. 
  
 SECTION 5.7
Notices and Certificates Required to be Delivered to the Trustee. The Borrower hereby agrees to provide the Trustee with the following: 
  
 (a) Within one hundred twenty (120) days of the end of the fiscal year of the Borrower, a certificate of an Authorized Borrower Representative to the
effect that (i) all payments have been made under this Agreement and that, to the best of such Authorized Borrower Representative’s knowledge, no Event of Default or event or condition which with the passage of time or giving of notice or both
would constitute an Event of Default has occurred and is continuing and (ii) audited financial statements of the Borrower for such fiscal year; 
  
 (b) Upon knowledge of an Event of Default under this Agreement or the Indenture, notice of such Event of Default, such notice to include a description of
the nature of such event and what steps are being taken to remedy such Event of Default; and 
  
 (c) Prompt written disclosure of any significant change known to the Borrower that occurs which would adversely impact the Trustee’s ability to perform its duties under the Indenture, or of any conflicts which
may result because of other business dealings between the Trustee and the Borrower (including, without limitation, removal or replacement of the Remarketing Agent, if any). 
  
 SECTION 5.8 Borrower to Furnish Notice of Adjustments of Interest Rate Periods. The Borrower is hereby granted
the option to designate from time to time changes in Rate Periods (and to rescind such changes) in the manner and to the extent set forth in Section 2.03 of the Indenture. In the event the Borrower elects to exercise any such option, the Borrower
agrees that it shall cause notices of adjustments of Rate Periods (or rescissions thereof) to be given to the Issuer, the Trustee, the Liquidity Provider, the Bank, the Bond Insurer, the Remarketing Agent and the Auction Agent in accordance with
Section 2.03 of the Indenture. The exercise of any such option, and all actions in connection therewith, may be taken by the Borrower through agents acting on its behalf, as provided in the Indenture, including without limitation, the Remarketing
Agent. In connection with any change in Rate Periods, if the Indenture requires an opinion of Bond Counsel as a condition thereto, the Borrower shall, at its sole expense, cause such opinion to be delivered to the Issuer and the Trustee in
accordance with the Indenture. 
  
 SECTION 5.9 Information
Reporting. The Issuer covenants and agrees that, upon the direction of the Borrower or Bond Counsel, it will mail or cause to be mailed to the Secretary of the Treasury (or his designee as prescribed by regulation, currently the Internal
Revenue Service Center, Ogden, UT 84201) a statement setting forth the information required by Section 149(e) of the Code, which statement shall be in the form of the Information Reporting Statement (Form 8038) of the Internal Revenue Service (or
any successor form as may be necessary from time to time with respect to any Bonds). 
  

 12 

 SECTION 5.10 Tax Covenants; Rebate. 
  
 (a) The Borrower covenants that it will not take any action which would
adversely affect the Tax-Exempt status of any of the Bonds, and will take, or require to be taken, such acts as may be reasonably within its ability and as may from time to time be required under applicable law or regulation to continue such
Tax-Exempt status of such Bonds; and, in furtherance of such covenants, the Borrower agrees to comply with the Tax Certificate and the Engineering Certificate. 
  

(b) The Borrower covenants that it will not take any action or fail to take any action with respect to the Bonds which would cause any of the Bonds to
be “arbitrage bonds” within the meaning of Section 148 of the Code. 
  
 (c) The Borrower covenants that it will not use or permit the use of any property financed with the proceeds of any of the Bonds by any person (other than a state or local governmental unit) in such manner or to such
extent as would result in loss of the Tax-Exempt status of any of the Bonds. 
  
 (d) The Borrower shall calculate, or cause to be calculated, its rebate liability at such times as are required by Section 148(f) of the Code and any temporary, proposed or final Regulations as may be applicable to
such Bonds from time to time. The Borrower shall provide to the Trustee a copy of each calculation of rebate liability prepared by or on behalf of the Borrower, which documentation shall be made available to the Issuer upon request. The Borrower
shall make any and all payments to the Trustee for deposit in the Rebate Fund, or as otherwise required to be made to the United States Department of the Treasury in connection with any of the Bonds pursuant to Section 148(f) of the Code.

  
 (e) Notwithstanding any other provisions of this Agreement to
the contrary, so long as necessary in order to maintain the Tax-Exempt status of any of the Bonds, the covenants in this Section 5.10 shall survive the payment for such Bonds and the interest thereon, including any payment or defeasance thereof
pursuant to Section 8.01 of the Indenture. 
  
 SECTION 5.11
Continuing Disclosure. The Borrower shall undertake the continuing disclosure requirements promulgated under S.E.C. Rule 15c2-12, as it may from time to time hereafter be amended or supplemented, if applicable, and the Issuer shall have
no liability to the holders of the Bonds or any other person with respect to such disclosure matters. Notwithstanding any other provision of the Indenture, failure of the Borrower to comply with the requirements of S.E.C. Rule 15c2-12, as it may
from time to time hereafter be amended or supplemented, shall not be considered an Event of Default; however, the Trustee, subject to Article X of the Indenture, may (and, at the request of the Remarketing Agent or the holders of at least 25% in
aggregate principal amount of Outstanding Bonds, shall) or any Bondholder or beneficial owner of any Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the
Borrower to comply with its obligations under this Section 5.11. 
  
 To the extent
that the Borrower enters into a continuing disclosure agreement with respect to the Bonds, the Bond Insurer shall be included as a party to be notified under such agreement. 
  

 13 

 SECTION 5.12 Liquidity Facility. At the time of initial issuance and delivery of the Bonds,
there is no Liquidity Facility in effect. The Borrower may at any time, upon notice to the Issuer, deliver to the Trustee a Liquidity Facility effective at the start of a Rate Period, or at another time consistent with the Indenture, subject to the
conditions set forth in this Section 5.12 and in Section 5.14 and to the requirements of the Indenture and of Section 5.14 hereof. 
  
 Not less than thirty (30) days prior to the delivery of a Liquidity Facility, the Borrower shall (i) deliver to the Trustee and the Remarketing Agent a
written commitment for the delivery of such Liquidity Facility, (ii) inform the Trustee and the Remarketing Agent of the date on which the Liquidity Facility will become effective and (iii) inform the Trustee of the rating expected to apply to the
Bonds after the related Liquidity Facility is delivered. On or prior to the date of the delivery of a Liquidity Facility to the Trustee, the Borrower shall cause to be furnished to the Trustee and the Issuer (i) an opinion of Bond Counsel to the
effect that the delivery of such Liquidity Facility to the Trustee is authorized under the Indenture and complies with the terms hereof and thereof and will not adversely affect the Tax-Exempt status of the Bonds and (ii) an opinion to the effect
that the Liquidity Facility is exempt from registration under the Securities Act of 1933, as amended, and is enforceable in accordance with its terms, except to the extent that enforceability thereof may be limited by bankruptcy, reorganization or
similar laws limiting the enforceability of creditors’ rights generally and except that no opinion need be expressed as to the availability of any discretionary equitable rights. 
  
 SECTION 5.13 Letter of Credit. At the time of initial issuance
and delivery of the Bonds, there is no Letter of Credit in effect. The Borrower may at any time, upon notice to the Issuer, deliver a Letter of Credit effective at the start of a Rate Period, or at another time consistent with the Indenture, subject
to the conditions set forth in this Section 5.13 and in Section 5.14 and to the requirements of the Indenture. 
  
 Not less than thirty (30) days prior to the delivery of a Letter of Credit, the Borrower shall (i) deliver to the Trustee and the Remarketing Agent a
written commitment for the delivery of such Letter of Credit, (ii) inform the Trustee and the Remarketing Agent of the date on which the Letter of Credit will become effective and (iii) inform the Trustee of the rating expected to the Bonds after
the related Letter of Credit is delivered. On or prior to the date of the delivery of a Letter of Credit to the Trustee, the Borrower shall cause to be furnished to the Trustee and the Issuer (i) an opinion of Bond Counsel to the effect that the
delivery of such Letter of Credit to the Trustee is authorized under the Indenture and complies with the terms hereof and thereof and will not adversely affect the Tax-Exempt status the Bonds and (ii) an opinion to the effect that the Letter of
Credit is exempt from registration under the Securities Act of 1933, as amended, and is enforceable in accordance with its terms, except to the extent that enforceability thereof may be limited by bankruptcy, reorganization or similar laws limiting
the enforceability of creditors’ rights generally and except that no opinion need be expressed as to the availability of any discretionary equitable rights. 
  
 If a Letter of Credit is already in effect, upon delivery of a new Letter of Credit pursuant to this Section 5.13, the
provider of the new Letter of Credit shall refund to the provider of the existing Letter of Credit the purchase price of all Outstanding Bank Bonds, including any accrued and unpaid interest on such Bank Bonds, calculated as set forth in the
Reimbursement Agreement relating to the existing Letter of Credit, unless the Borrower pays such purchase price and interest directly to the Bank. 
  

 14 

 SECTION 5.14 Requirement to Deliver Letter of Credit or Liquidity Facility Under Certain
Circumstances. Unless otherwise authorized by the Bond Insurer, or unless the provisions of the last sentence of this Section apply, the Borrower agrees that, should all or any of the Bonds bear interest at a Daily Rate, a Weekly Rate, a
Flexible Rate or a Term Rate for a Term Rate Period ending before the Maturity Date, then the Borrower’s obligations to purchase such Bonds pursuant to Section 4.2(b) hereof shall at all times be supported by a Liquidity Facility having the
following characteristics: (i) such Liquidity Facility must conform with the requirements of Section 5.12; (ii) such Liquidity Facility must be accompanied by written evidence from each Rating Agency then rating the Bonds that, following the
delivery of such Liquidity Facility, the rating on the Bonds shall not be lower than A-1, P-1 or F-1, as applicable; (iii) should any of such ratings fall below such level after the issuance or renewal of such Liquidity Facility, the Borrower will
have 90 days to replace such Liquidity Facility with a Liquidity Facility that meets the requirements of this Section 5.14; and (iv) the terms of such Liquidity Facility, and of any supplement to or modification of the Indenture or Agreement to
accommodate such Liquidity Facility, shall be acceptable to the Bond Insurer. The terms of any Letter of Credit, and of any supplement to or modification of the Indenture or Agreement to accommodate such Letter of Credit, shall be acceptable to the
Bond Insurer. If such Letter of Credit is being delivered to secure the purchase price of the Bonds purchased by the Tender Agent as provided in Article IV, then such Letter of Credit must meet the requirements of the foregoing paragraph as if it
were a Liquidity Facility. Notwithstanding the foregoing, but subject to terms and conditions on which any Bond Insurance may be issued, no Liquidity Facility shall be required for any Bonds if not otherwise required by the Indenture. 
  
 SECTION 5.15 Bond Insurance. 
  
 (a) At the time of their initial issuance and delivery, the Bonds will be
secured by an Initial Financial Guaranty Insurance Policy issued by the Bond Insurer. Thereafter, the Borrower may at any time, upon notice to the Issuer, deliver to the Trustee Bond Insurance effective at the start of a Rate Period, or at another
time consistent with the Indenture, subject to the conditions set forth in this Section 5.15 and to the requirements of the Indenture. 
  
 (b) Not less than thirty (30) days prior to the delivery of any Bond Insurance, the Borrower shall (i) deliver to the Trustee, the Remarketing Agent and
the Auction Agent a written commitment for the delivery of such Bond Insurance, (ii) inform the Trustee, the Remarketing Agent and the Auction Agent of the date on which the Bond Insurance will become effective and (iii) inform the Trustee of the
rating expected to apply to the Bonds after the related Bond Insurance is delivered. On or prior to the date of the delivery of any Bond Insurance to the Trustee, the Borrower shall cause to be furnished to the Trustee and the Issuer (i) an opinion
of Bond Counsel to the effect that the delivery of such Bond Insurance to the Trustee is authorized under the Indenture and complies with the terms hereof and thereof and will not adversely affect the Tax-Exempt status of the Bonds and (ii) an
opinion to the effect that the Bond Insurance is exempt from registration under the Securities Act of 1933, as amended, and is enforceable in accordance with its terms, except to the extent that enforceability thereof may be limited by bankruptcy,
reorganization or similar laws limiting the enforceability of creditors’ rights generally and except that no opinion need be expressed as to the availability of any discretionary equitable rights. 
  

 15 

 (c) Concurrently with delivery to the Trustee, the Borrower shall deliver to any Bond Insurer copies of
any notices delivered to the Trustee pursuant to Sections 5.8, 5.12, 5.13 and this Section 5.15. 
  
 (d) The representations and covenants in this Agreement are in addition to, and not in replacement of, any representations and covenants contained in any
agreement between the Borrower and any Bond Insurer. Without limiting the generality of the foregoing, any Liquidity Facility delivered pursuant to Section 5.12 above shall, in addition to conforming to the requirements of this Agreement, conform to
such other requirements as shall be contained in any such agreement between the Borrower and any Bond Insurer. 
  
 ARTICLE VI 
  
 EVENTS OF DEFAULT AND REMEDIES 
  
 SECTION 6.1
Events of Default Defined. The following events shall be Events of Default under this Agreement, and the terms “Event of Default” or “Events of Default” shall mean, whenever they are used in this Agreement, any one or
more of the following events: 
  
 (a) Failure by the Borrower to
pay when due any amounts required to be paid under Section 4.2(a) or 4.2(b) hereof; or 
  
 (b) Failure by the Borrower to observe and perform any covenant, condition or agreement on its part to be observed or performed in this Agreement, other than as referred to in (a) above, for a period of ninety (90)
days after written notice, specifying such failure and requesting that it be remedied and stating that such notice is a “Notice of Default” hereunder, given to the Borrower by the Trustee or to the Borrower and the Trustee by the Issuer,
unless the Issuer and the Trustee shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the Issuer and the Trustee will
not unreasonably withhold their consent to an extension of such time if corrective action is instituted within the applicable period and diligently pursued until the failure is corrected and the fact of such non-correction, corrective action or
diligent pursuit is evidenced to the Trustee by a certificate of an Authorized Borrower Representative; or 
  
 (c) A proceeding or case shall be commenced, without the application or consent of the Borrower, in any court of competent jurisdiction seeking (i)
liquidation, reorganization, dissolution, winding-up or composition or adjustment of debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of the Borrower or of all or any substantial part of its assets, or (iii)
similar relief under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, and such proceeding or cause shall continue undismissed, or an order, judgment, or decree approving or ordering any of
the foregoing shall be entered and shall continue in effect for a period of ninety (90) days; or an order for relief against the Borrower shall be entered against the Borrower in an involuntary case under the United States Bankruptcy Code (as now or
hereafter in effect) or other applicable law; or 
  

 16 

 (d) The Borrower shall admit in writing its inability to pay its debts generally as they become due or
shall file a petition in voluntary bankruptcy or shall make any general assignment for the benefit of its creditors, or shall consent to the appointment of a receiver or trustee of all or substantially all of its property, or shall commence a
voluntary case under the United States Bankruptcy Code (as now or hereafter in effect), or shall file in any court of competent jurisdiction a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, or shall fail to controvert in a timely or appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under such United States Bankruptcy Code or other
applicable law; or 
  
 (e) Dissolution or liquidation of the
Borrower; provided that the term “dissolution or liquidation of the Borrower” shall not be construed to include the cessation of the corporate existence of the Borrower resulting either from a merger or consolidation of the Borrower into
or with another corporation or a dissolution or liquidation of the Borrower following a transfer of all or substantially all of its assets as an entirety, under the conditions permitting such actions contained in Section 5.2 hereof; or 

 
 (f) The occurrence of an “Event of Default” under the Indenture
(other than an Event of Default described in Section 9.01(e) thereof); or 
  
 (g) Receipt by the Trustee from any Bond Insurer, Bank or Liquidity Provider of notice of the occurrence of an “event of default” under the insurance agreement entered into between the Borrower and the Bond
Insurer relating to the Bond Insurance or under the Reimbursement Agreement or Liquidity Facility. 
  
 The foregoing provisions of Section 6.1(b) are subject to the following limitations: If by reason of Force Majeure the Borrower is unable in whole or in
part to carry out its agreements on its part herein contained other than the obligations on the part of the Borrower contained in Article IV and Section 6.4 hereof the Borrower shall not be deemed in default during the continuance of such inability.
The Borrower agrees, however, to remedy with all reasonable dispatch the cause or causes preventing the Borrower from carrying out its agreements; provided that the settlement of strikes, lockouts and other industrial disturbances shall be entirely
within the discretion of the Borrower and the Borrower shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the sole
judgment of the Borrower unfavorable to the Borrower. 
  
 SECTION 6.2 Remedies on Default. Subject to the rights of any Bond Insurer or Bank (except in the event of an Insurer Default or Bank Default, respectively), whenever any Event of Default referred to in Section 6.1 hereof
shall have occurred and be continuing, 
  
 (a) The Trustee may, to
the extent and in the manner set forth in Section 9.02 of the Indenture, by notice in writing to the Borrower declare the unpaid indebtedness under Section 4.2(a) hereof to be due and payable immediately, if concurrently with or prior to such notice
the unpaid principal amount of the Bonds shall have been declared to be due and payable, 

  

 17 

 
and upon any such declaration the same (being an amount sufficient, together with other moneys available therefor in the Bond Fund, to pay the unpaid
principal of and premium, if any, and interest accrued on the Bonds) shall become and shall be immediately due and payable as liquidated damages. 
  
 (b) The Issuer or the Trustee may take whatever action at law or in equity may appear necessary or desirable to collect the payments and other amounts
then due and thereafter to become due hereunder or to enforce performance and observance of any obligation, agreement or covenant of the Borrower hereunder; provided, however, that nothing in Section 4.4 hereof shall be deemed to limit the rights of
the Issuer under this Section 6.2(b); provided, nevertheless, that the Issuer will not exercise any remedies, with respect to any of the Issuer’s rights assigned to the Trustee pursuant to Section 4.4 hereof unless, in the Issuer’s
reasonable judgment and after written request to a Responsible Officer of the Trustee, the Trustee has failed to enforce such rights. The Issuer has no obligation to take any action under this Section. 
  
 (c) Upon the occurrence of an Event of Default described in Section 6.1(a)
hereof, the Trustee shall immediately draw upon any Bond Insurance, Liquidity Facility or Letter of Credit, if permitted by the terms thereof and required by the terms of the Indenture, and apply the amount so drawn in accordance with the Indenture
and may exercise any remedy available to it thereunder. 
  
 The
provisions of clause (a) of the preceding paragraph are subject to the condition that if, at any time after the unpaid indebtedness under Section 4.2(a) hereof shall have been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter provided, there shall have been deposited with the Trustee a sum sufficient to pay all the principal of the Bonds matured prior to such declaration and all matured
installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal as provided herein, and the reasonable expenses of the Trustee and the Issuer, and any and all other defaults known to the Trustee (other
than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have
been made therefor, then, and in every such case, the Trustee shall, on behalf of the Owners of all the Bonds, with the consent of any Bank and any Bond Insurer, as required pursuant to Section 9.03 of the Indenture, rescind and annul such
declaration and its consequences and waive such default; provided that no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. 
  
 In case the Trustee or the Issuer, as the case may be, shall have proceeded
to enforce its rights under this Agreement, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Issuer, then, and in every such case, the Borrower, the Trustee
and the Issuer shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Borrower, the Trustee and the Issuer shall continue as though no such action had been taken. 
  

 18 

 Any amounts collected pursuant to action taken under this Section 6.2 shall be paid into the Bond Fund
(unless otherwise provided in this Agreement) and applied in accordance with the provisions of the Indenture. No action taken pursuant to this Section 6.2 shall relieve the Borrower from the Borrower’s obligations pursuant to Section 4.2
hereof. 
  
 No recourse shall be had for any claim based on this
Agreement against any officer, director or shareholder, past, present or future, of the Borrower as such, either directly or through the Borrower, under any constitutional provision, statute or rule of law, or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise. 
  
 Nothing
herein contained, including, without limitation, the last two paragraphs of this Section 6.2, shall be construed to prevent the Issuer from enforcing directly any of its rights under Section 5.1 hereof and under Sections 4.2(d), 4.2(e), 4.2(h) and
6.4 hereof. 
  
 In case proceedings shall be pending for the
bankruptcy or for the reorganization of the Borrower under the federal bankruptcy laws or any other applicable law, or in case a receiver or trustee shall have been appointed for the property of the Borrower or in the case of any other similar
judicial proceedings relative to the Borrower, or the creditors or property of the Borrower, then the Trustee shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount
owing and unpaid pursuant to this Agreement and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee allowed in such judicial
proceedings relative to the Borrower, its creditors or its property, and to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute such amounts as provided in the Indenture after the deduction
of its reasonable charges and expenses. Any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized to make such payments to the Trustee, and to pay to the Trustee any amount due if for reasonable compensation and
expenses, including reasonable expenses and fees of counsel incurred by it up to the date of such distribution. 
  
 Anything in this Agreement to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default with respect to Bonds supported by
Bond Insurance, except in the event of an Insurer Default applicable to a particular Bond Insurer, the Bond Insurer providing Bond Insurance shall be entitled to control and direct the enforcement of all rights and remedies granted to the Issuer,
the Bondholders or the Trustee for the benefit of the Bondholders hereunder covered by such Bond Insurance, including, without limitation: (i) the right to accelerate the payment, in the manner described in subsection (a) of this Section 6.2, of
that portion of the Borrower’s indebtedness hereunder attributable to the Bonds, (ii) the right to annul any declaration of acceleration relating to the Borrower’s indebtedness hereunder attributable to the Bonds, and (iii) the right to
consent to all waivers of Events of Default hereunder in respect of the Bonds. 
  
 Subject to the rights of the Bond Insurer as provided in the preceding paragraph, but anything else in this Agreement to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default with
respect to Bonds supported by a Letter of Credit, except in the event of a Bank Default applicable to a particular Bank, the Bank providing the Letter of Credit shall be entitled to control and direct the enforcement of all rights and remedies
granted to 

  

 19 

 
the Issuer, the Bondholders or the Trustee for the benefit of the Bondholders hereunder covered by such Letter of Credit, including, without limitation: (i)
the right to accelerate the payment, in the manner described in subsection (a) of this Section 6.2, of that portion of the Borrower’s indebtedness hereunder attributable to the Bonds and (ii) the right to annul any declaration of acceleration
relating to the Borrower’s indebtedness hereunder attributable to the Bonds, and the Bank shall also be entitled to approve all waivers of Events of Default hereunder in respect of the Bonds. 
  
 SECTION 6.3 No Remedy Exclusive. No remedy herein conferred
upon or reserved to the Issuer or the Trustee is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now
or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power
may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Issuer or the Trustee to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice as
may be herein expressly required. Such rights and remedies as are given the Issuer hereunder shall also extend to the Trustee and the Owners of the Bonds, subject to the provisions of the Indenture, and the Trustee and Owners of the Bonds shall be
entitled to the benefit of all covenants and agreements herein contained. 
  
 SECTION 6.4 Agreement to Pay Fees and Expenses of Counsel. In the event the Borrower should default under any of the provisions of this Agreement and the Issuer or the Trustee should employ Counsel or
incur other expenses for the collection of the indebtedness hereunder or the enforcement of performance or observance of any obligation or agreement on the part of the Borrower herein contained, the Borrower agrees that it will on demand therefor
pay to the Trustee, the Issuer or, if so directed by the Issuer, to the Counsel for the Issuer, the reasonable fees of such Counsel and such other reasonable expenses so incurred by or on behalf of the Issuer or the Trustee. If the circumstances set
forth in this Section 6.4 shall occur with the result that the Borrower is obligated to make payments to the Trustee under this Section 6.4, and so long as such obligation shall be continuing, in order to secure such obligation of the Borrower to
the Trustee, the Trustee shall have a lien prior to the Bonds on all moneys held by the Trustee under the Indenture except those moneys held in trust to pay the principal of and premium, if any, and interest on, or the purchase price of, particular
Bonds and except for moneys, if any, in the Rebate Fund. If the Trustee incurs fees and expenses in connection with a default specified in Section 6.1(c), 6.1(d) or 6.1(e) of this Agreement, such fees and expenses are understood to include expenses
of administration under any bankruptcy law. 
  
 SECTION 6.5
No Additional Waiver Implied by One Waiver; Consents to Waivers. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach hereunder. No waiver shall be effective unless in writing and signed by the party making the waiver. The Issuer shall have no power to waive any default hereunder by the
Borrower without the consent of the Trustee. Subject to the provisions of Section 6.2, the Trustee shall have the power to waive any default by the Borrower hereunder, except a default under Sections 4.2(d), 4.2(e), 4.2(h) or 6.4, without the prior
written concurrence of the Issuer. 
  

 20 

 ARTICLE VII 
  
 OPTION AND OBLIGATION OF BORROWER TO PREPAY 
  
 SECTION 7.1 Option to Prepay. The Borrower shall have, and is hereby granted, the option to prepay the
payments due hereunder in whole or in part at any time or from time to time (a) to provide for the redemption of the Bonds pursuant to the provisions of Section 3.01(A) of the Indenture or (b) to provide for the defeasance of the Bonds pursuant to
Article VIII of the Indenture. In the event the Borrower elects to provide for the redemption of Bonds as permitted by this Section, the Borrower shall notify and instruct the Trustee in accordance with Section 7.3 hereof to redeem all or any
portion of the Bonds in advance of maturity. 
  
 SECTION 7.2
Obligation to Prepay. The Borrower shall be obligated to prepay amounts due hereunder, in whole or in part, to provide for the redemption of Bonds in whole or in part pursuant to the provisions of Section 3.01(B) of the Indenture. In the
case of any of the events stated in Section 3.01(B) of the Indenture, the Borrower must satisfy its obligation by prepaying within 180 days after such event. 
  
 SECTION 7.3 Notice of Prepayment; Amount to be Prepaid. (a) In order to exercise the option granted to the Borrower in Section 7.1 hereof,
or fulfill an obligation described in Section 7.2 hereof, the Borrower shall give at least 30 days written notice of such prepayment to the Issuer, the Trustee, the Bond Insurer, the Auction Agent and the Remarketing Agent. On the date fixed for
redemption of the Bonds or portions thereof, there shall be deposited with the Trustee from payments by the Borrower as required by Section 7.l or 7.2, as appropriate, for payment into the Bond Fund the amount required in subsection (b) of this
Section. The notice shall provide for the date of the application of the prepayment made by the Borrower hereunder to the redemption of the Bonds or portions thereof in whole or in part pursuant to call for redemption, shall specify the redemption
date and shall be given to the Trustee, the Issuer, the Auction Agent and the Remarketing Agent in accordance with the provisions of the Indenture for the redemption of Bonds or portions thereof. 
  
 (b) The prepayment payable by the Borrower hereunder upon either (i) the
exercise of the option granted to the Borrower in Section 7.1 hereof, or (ii) the fulfillment of an obligation specified in Section 7.2 shall be, to the extent applicable and except as otherwise provided in Article VIII of the Indenture, the sum of
the following: 
  
 (1) the amount of money which,
when added to the amount on deposit in the Bond Fund prior to the prepayment being made and available for such purpose, will be sufficient to provide all funds necessary to redeem the Bonds or portions thereof designated in the notice specified in
subsection (a) of this Section to be redeemed on the date set forth in the notice, including, without limitation, principal, premium, if any, and all interest to accrue to said redemption date and redemption expenses; plus 
  

 21 

 (2) in the event all of the Bonds are to be redeemed, an amount of money equal to all
Administrative Expenses and the Trustee’s, Auction Agent’s and Remarketing Agent’s fees and expenses under the Indenture accrued and to accrue until the final payment and redemption of the Bonds. 
  
 (c) Any prepayment made pursuant to Section 7.1 or 7.2 hereof shall be
deposited into the Bond Fund. No prepayment or investment of the proceeds thereof shall be made which shall cause any Bonds to be “arbitrage bonds” within the meaning of Section 148(a) of the Code. 
  
 SECTION 7.4 Cancellation at Expiration of Term. At the
acceleration, termination or expiration of the term of this Agreement and following full payment of the Bonds or provision for payment thereof and of all other fees and charges having been made in accordance with the provisions of this Agreement and
the Indenture, the Issuer shall deliver to the Borrower any documents and take or cause the Trustee to take such actions as may be necessary to effectuate the cancellation and evidence the termination of this Agreement. 
  
 ARTICLE VIII 
  
 NON-LIABILITY OF ISSUER 
  
 SECTION 8.1 Non-Liability of the Issuer. The Issuer shall not
be obligated to pay the principal of, or premium, if any, or interest on the Bonds, except from Revenues, and shall not be obligated to pay the purchase price of any Bonds, except from the proceeds of the remarketing of the Bonds or from moneys paid
or caused to be paid by the Borrower pursuant to Section 4.2(b) hereof. The Borrower hereby acknowledges that the Issuer’s sole source of moneys to repay the Bonds will be provided by the payments made or caused to be made by the Borrower
pursuant to this Agreement, together with other Revenues, and the proceeds of Bond Insurance, including investment income on certain funds and accounts held by the Trustee under the Indenture, and hereby agrees that if the payments to be made
hereunder shall ever prove insufficient to pay all principal of, and premium, if any, and interest on the Bonds as the same shall become due (whether by maturity, redemption, acceleration or otherwise), then upon notice from the Trustee, the
Borrower shall pay such amounts as are required from time to time to prevent any deficiency or default in the payment of such principal, premium or interest. 
  
 ARTICLE IX 
  
 MISCELLANEOUS 
  
 SECTION 9.1 Notices. All notices, certificates or other communications shall be sufficiently given in writing and shall be deemed given on the day on which the same have been mailed by certified mail,
postage prepaid, or by qualified overnight courier service, courier charges prepaid, addressed as set forth in Section 13.06 of the Indenture. A duplicate copy of each notice, certificate or other communication given hereunder by either the Issuer
or the Borrower to the other shall also be given to the Trustee. The Issuer, the Borrower, the Trustee, the Bond Insurer, the Liquidity Provider, the Bank, the Remarketing Agent and the Auction Agent may, by notice given hereunder, designate any
further or different addresses to which subsequent notices, certificates or other communications shall be sent. 
  

 22 

 SECTION 9.2 Assignments. This Agreement may not be assigned by either party without consent
of the other, except that (i) the Issuer shall assign to the Trustee its rights under this Agreement (except under Sections 4.2(d), 4.2(e), 4.2(h) and 6.4 hereof and rights of the Issuer to make inspections or to receive any notices, certificates,
requests, requisitions or communications hereunder and to give consent hereunder) as provided by Section 4.4 hereof, (ii) the Borrower may assign its rights under this Agreement as provided by Section 5.2 hereof; and (iii) the Issuer may not assign
this Agreement except upon receipt by the Trustee of an Opinion of Bond Counsel to the affect that such assignment will not adversely affect the Tax-Exempt status of the Bonds. 
  
 SECTION 9.3 Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact,
be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative, or unenforceable to any extent whatever. 
  
 SECTION 9.4 Execution of Counterparts. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument; provided, however, that for purposes of perfecting a security interest in this Agreement by the
Trustee, only the counterpart delivered, pledged and assigned to the Trustee shall be deemed the original. 
  
 SECTION 9.5 Amounts Remaining in Bond Fund. It is agreed by the parties hereto that after payment in full of (i) the Bonds (or provision for
payment thereof having been made in accordance with the provisions of the Indenture), (ii) the fees, charges and expenses of the Trustee in accordance with the Indenture, (iii) the Administrative Expenses of the Issuer, (iv) the fees and expenses of
the Auction Agent and the Remarketing Agent, and (v) all other amounts required to be paid under this Agreement and the Indenture, any amounts remaining in the Bond Fund shall belong to and be paid to the Borrower by the Trustee. Notwithstanding any
other provision of this Agreement or the Indenture, under no circumstances shall proceeds of Bond Insurance, a Liquidity Facility or a Letter of Credit be paid to the Issuer or the Borrower. 
  
 SECTION 9.6 Amendments, Changes and Modifications. This
Agreement may be amended, changed, modified, altered or terminated only by written instrument executed by the Issuer and the Borrower and in accordance with Article XII of the Indenture. 
  
 SECTION 9.7 Governing Law. This Agreement shall be governed exclusively by and construed in accordance with
the applicable laws of the State; provided, however, that the rights, duties and benefits of the Trustee shall be governed by the laws of the State of New York. 
  
 SECTION 9.8 Authorized Issuer and Borrower Representatives. Whenever under the provisions of this Agreement
the approval of the Issuer or the Borrower is required to take some action at the request of the other, such approval or such request shall be 

  

 23 

 
given for the Issuer by the Authorized Issuer Representative and for the Borrower by the Authorized Borrower Representative, and the other party hereto and
the Trustee shall be authorized to act on any such approval or request and neither party hereto shall have any complaint against the other or against the Trustee as a result of any such action taken. 
  
 SECTION 9.9 Term of the Agreement. This Agreement shall be in
full force and effect from its date to and including such date as all of the Bonds issued under the Indenture shall have been fully paid or retired (or provision for such payment shall have been made as provided in the Indenture) and all other fees
and expenses shall have been paid pursuant to this Agreement or the Indenture, provided that all representations and certifications by the Borrower as to all matters affecting the Tax-Exempt status of interest on any Bonds and the covenants of the
Borrower in Sections 4.2(c), 4.2(d), 4.2(e), 4.2(h), 5.10 and 6.4 hereof shall survive the termination of this Agreement. 
  
 SECTION 9.10 Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the Issuer, the Borrower and their
respective successors and assigns, subject, however, to the limitations contained in Section 5.2 hereof. 
  
 SECTION 9.11 Trustee and Bond Insurer as Parties in Interest and Third Party Beneficiaries. The parties hereto acknowledge and agree that as
to any right to indemnity or payment of fees and expenses provided in Section 4.2 hereof the Trustee is a party in interest and third party beneficiary under this Agreement entitled to enforce its rights as so stated herein as if it were a party
hereto. To the extent that this Agreement confers upon or gives or grants to the Bond Insurer any right, remedy or claim under or by reason of this Agreement, the Bond Insurer is hereby explicitly recognized as being a third-party beneficiary
hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder. 
  
 [REMAINDER OF THIS PAGE INTENTIONALLY BLANK] 
  

 24 

 [Signature Page 1 to Financing Agreement] 
  
 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

  

			
	 CLARK COUNTY, NEVADA

		
	 By
	 	 /s/ Chip Maxfield

	 	 	Chairman,
	 	 	Board of County Commissioners

  
 (SEAL) 
  
 Attest: 
  

	
	 /s/ Shirley B. Parraguire

	County Clerk

  

 25 

 [Signature Page 2 to Financing Agreement] 
  

			
	 SOUTHWEST GAS CORPORATION

		
	 By:
	 	 /s/ Kenneth J. Kenny

	 	 	Authorized Borrower Representative

  

 26 

 EXHIBIT A 
  

DESCRIPTION OF THE PROJECT 
  
 The Project consists of those certain additions and improvements to, and replacements of, the Borrower’s natural gas distribution and transmission
system through which the Borrower furnishes natural gas to its customers in Clark County, Nevada, and certain other plant, property and equipment used or to be used for the same purpose, including, without limitation, meters, customer service
connections, mains, pressure regulators and other additions and improvements to, and replacements of, the facilities which comprise the Borrower’s natural gas distribution and transmission system, including associated land and land rights.

  

 A-1Acknowledgement and Consent by Merrill Lynch Bank USA, Gardner Property Holdings

 Exhibit 4.12 
  
 ACKNOWLEDGMENT AND CONSENT 
  
 THIS ACKNOWLEDGMENT AND CONSENT (this “Agreement”) dated as of March 1, 2005 is by and among Merrill Lynch Bank USA (“Lender”),
Gardner Property Holdings, L.C., a Utah limited liability company (“Borrower”), HCPI/Utah, LLC, a Delaware limited liability company (the “Down REIT Sub”), each of the entities that is affiliated with Borrower and that is a
signatory hereto under the designation “Pledgor” (individually and collectively, as the context requires, “Pledgor”), and Health Care Property Investors, Inc., a Maryland corporation (“HCPI”). 
  
 RECITALS: 
  
 1. Each Pledgor is a Non-Managing Member of the Down REIT Sub pursuant to that certain Amended and Restated Limited
Liability Company Agreement of HCPI/Utah, LLC, dated as of January 20, 1999, as amended by Amendment Nos. 1, 2, 3, 4, 5, 6, 7, 8 and 9 dated as of June 30, 1999, November 12, 1999, January 12, 2000, March 1, 2000, December 1, 2000, March 16, 2001,
March 30, 2001, October 1, 2001 and October 30, 2001, respectively (the “LLC Agreement”). Further, each Pledgor is the record owner of the number of Non-Managing Member Units, as set forth opposite such Pledgor’s name on Exhibit A
attached hereto (collectively, the “Pledged Units”). As of the date of this Agreement, the Pledged Units are evidenced by the LLC Unit Certificates referred to on Exhibit A (collectively, the “Certificates”). All references
herein to the Pledged Units shall include all additional or substituted Non-Managing Member Units, from time to time pledged to Lender pursuant to the Loan Agreement, as defined below, and all references herein to the Certificates shall include the
Certificates related to such additional or substituted Non-Managing Member Units. 
  
 2. Lender is a party to that certain Loan Management Account Agreement, dated as of the date hereof, by and among Borrower, Pledgor, Lender and Merrill Lynch, Pierce, Fenner & Smith Incorporated (as such agreement
has been or may hereafter be amended, supplemented or otherwise modified from time to time, the “Loan Agreement”), whereby Lender has agreed to lend to Borrower from time to time, on a revolving basis, an amount not to exceed $11,250,000
as presently established. 
  
 3. Pursuant to the Loan Agreement,
the loan contemplated therein is secured by, inter alia, (i) all of Pledgor’s right, title and interest in the Pledged Units, and (ii) all of Pledgor’s right, title and interest in those certain Registration Rights Agreements between each
Pledgor and HCPI, as amended with respect to certain0of the Pledged Units (individually and collectively, referred to herein as the “Registration Rights Agreement”). The loan contemplated in the Loan Agreement is also secured, pursuant to
the Loan Agreement, by similar collateral security pertaining to HCPI/Utah II, LLC, a Delaware limited liability company (“HCPI/Utah II, LLC”) as confirmed in the Acknowledgment and Consent, dated as of the date hereof (the “Utah II
Acknowledgment and Consent”), among Lender, Borrower, HCPI, HCPI/Utah II, LLC and certain other pledgors specified therein. 
  
  

 4. The parties hereto desire to enter into this Agreement for the purpose of setting forth certain
agreements among Lender, Borrower, Pledgor, HCPI and the Down REIT Sub with respect to the Collateral. 
  
 5. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the LLC Agreement. 
  
 NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 
  

	1.	Definitions. As used in this Agreement, the following terms shall have the meanings hereinafter set forth unless the context shall otherwise require.

  

	 	a.	“Collateral” shall mean, collectively, the Pledged Units, the Pledged Shares and any and all securities issued or issuable on the conversion or redemption of the Pledged
Units or Pledged Shares, or cash or other distributions of every kind in respect of any of the foregoing. 

  

	 	b.	“Commission” shall mean the Securities and Exchange Commission. 

  

	 	c.	“Default” shall mean a Remedy Event as defined in the Loan Agreement or a demand under Section 8.3 of the Loan Agreement. 

  

	 	d.	“Material Adverse Effect” shall mean (i) an adverse condition or event material to, (ii) a material adverse effect on, or (iii) a material adverse change in, as the case
may be, any one or more of the following: (A) the business, assets, results of operations, financial condition or prospects of HCPI or the Down REIT Sub, as the case may be, or (B) the ability of HCPI or the Down REIT Sub, as the case may be, to
perform its obligations under any material contract to which it is a party. 

  

	 	e.	“Pledged Shares” shall mean REIT Shares which are exchanged by HCPI for any Pledged Units which are tendered to HCPI, as the Managing Member of the Down REIT Sub, pursuant
to the exchange provisions set forth in Section 8.6 of the LLC Agreement, as the same are amended as provided in Section 7.b.i below. 

  

	 	f.	“Registration Rights” shall mean a Pledgor’s rights under the Registration Rights Agreement, as supplemented and modified in Section 7.b below.

  

	 	g.	“S-3 Expiration Date” means the date on which Form S-3 (or a similar successor form of registration statement) is not available to HCPI for the registration of REIT Shares
pursuant to the Securities Act. 

  

	 	h.	“Securities Act” shall mean the Securities Act of 1933, as amended. 

  

 2 

	2.	Acknowledgment of Pledge, etc. 

  

	 	a.	HCPI and the Down REIT Sub hereby agree, acknowledge and approve, as being subject to, but complying with Section 11.3 of the LLC Agreement, (i) the grant by Pledgor to Lender of a
security interest in the Collateral pursuant to the Loan Agreement, and (ii) subject to Section 7.a below, the Transfer, to Lender or other purchaser at foreclosure, of the Pledged Units upon foreclosure (or transfer in lieu of foreclosure, with
each reference herein to foreclosure to include such a transfer) thereon by Lender under or pursuant to the Loan Agreement; provided, however, that such acknowledgement and approval of the Down REIT Sub is not, and shall not be construed to be, the
consent to or approval of any other Transfer in the event Lender or other purchaser at foreclosure becomes the owner of any of the Pledged Units. HCPI agrees to note in its and the Down REIT Sub’s books and records that the undersigned Pledgors
have granted to Lender security interests in the Collateral and agrees that upon delivery to HCPI by Lender of the Certificates evidencing ownership of the Pledged Units, together with original unit powers duly executed by Pledgor in blank in the
form attached hereto as Exhibit B, if requested by Lender, HCPI will register in its books and records, or the books and records of the Down REIT Sub, ownership of such Pledged Units in the name of Lender or its nominee. HCPI agrees that it will not
register the Pledged Units (or any entitlement to any dividend, distribution or other proceeds thereof) into the name of any person other than the Pledgor listed as the owner thereof on Exhibit A attached hereto, or recognize any person other than
such Pledgor as the owner of such Pledged Units, without the prior written consent of Lender. 

  

	 	b.	HCPI and the Down REIT Sub agree that notwithstanding Section 11.3.D of the LLC Agreement, they will not require an opinion of counsel in order for the Down REIT Sub and HCPI to
recognize the Pledgor’s pledge of the Pledged Units and the grant of a security interest to Lender in the Collateral. 

  

	 	c.	HCPI and the Down REIT Sub hereby acknowledge receipt of copies of the Instructions to Register Security Interest attached hereto as Exhibit C (the “Instructions”) and the
notice of Lender’s security interest contained therein and agree to comply with the terms of the Instructions. 

  

	 	d.	HCPI and the Down REIT Sub hereby agree that by virtue of Lender holding a security interest in the Pledged Units (i) Lender does not and shall not become a Substituted Member under
Section 11.4 of the LLC Agreement unless and until Lender forecloses on the Pledged Units and (ii) Lender does not and shall not undertake any obligations or liabilities of Pledgor of any nature whatsoever pertaining to the Pledged Units or under
the LLC Agreement, both before or after any foreclosure by Lender on the Pledged Units. 

  

	 	e.	HCPI and the Down REIT Sub acknowledge and agree that upon the execution and delivery to Lender by the Pledgors of this Agreement, the Loan Agreement and all schedules hereto and
thereto to which the Pledgors are parties, and the Certificates, the Pledgors will not be required to sign any other documents or take any other action with respect to the Transfer of the Pledged Units to Lender in connection with the exercise of
Lender’s rights under this Agreement. 

  

 3 

	 	f.	The parties acknowledge and agree that Lender and Borrower may from time to time further modify the Loan Agreement, including by way of adding additional entities as Pledgors
thereunder and/or by adding additional Non-Managing Member Units as Pledged Units. Any such additional entities added as Pledgors and/or any existing Pledgors who pledge additional Pledged Units shall concurrently acknowledge their status as parties
to this Agreement on such terms and with the same force and effect as if each such entity had originally executed and delivered same. Lender shall give written notice thereof to the Down REIT Sub, HCPI and each Pledgor contemporaneously with any
such modification of the Loan Agreement; no written consent or other acknowledgement shall be required from any entity to which such notice is sent as a condition to the effectiveness of the foregoing. Such notice shall include such further
amendment and restatement of Exhibit A and Exhibit C to this Agreement as necessary in order to reflect the additional Pledged Units of each such entity added as an additional Pledgor and/or the additional Pledged Units of each such existing
Pledgor. Following such notification from Lender, each reference to “Pledgor” in this Agreement shall be understood to include for all purposes any such entity so added to the Loan Agreement. 

  

	3.	Notices. Unless and until HCPI has received written notice from Lender to the effect that Lender no longer claims any interest in the Collateral, (a) HCPI shall send to
Lender a copy of each notice sent to holders of LLC Units by HCPI under the LLC Agreement as and when it delivers such notice to Pledgor, including any notice of Reduction pursuant to Section 8.6.D of the LLC Agreement, and (b) at the written
request of Lender, HCPI shall send to Lender a copy of each other communication, report or other information from time to time sent to Pledgor as holder of the Pledged Units or Pledged Shares. 

  

	4.	Amendments to Registration Rights Agreement and the LLC Agreement. Unless and until HCPI has received written notice from Lender to the effect that Lender no longer claims
any interest in the Collateral, (a) no amendment of, termination of, or supplement to, the Registration Rights Agreement shall be effective without the prior written consent of Lender, and (b) no amendment of, termination of or supplement to the LLC
Agreement for which the consent of any Pledgor is required shall be effective without the prior written consent of Lender, which consent shall not be unreasonably withheld; provided that if written disapproval is not received from Lender within 10
Business Days following receipt by Lender of a written request to approve such amendment (which request shall specifically reference the time limitation imposed by this Section 4), then Lender’s approval of such amendment shall be deemed to
have been given. 

  

	5.	Distributions, etc. 

  
 a. Following receipt by the Down REIT Sub of written notice (which notice shall specifically reference this Section 5 of this Agreement) from Lender that
a 
  

 4 

 Default has occurred and is continuing (a “Default Notice”): (i) upon the written instruction
of Lender and until instructions to the contrary are received from Lender, the Down REIT Sub shall remit to Lender all cash distributions otherwise payable to Pledgor in respect of the Pledged Units, and HCPI shall remit to Lender all cash dividends
otherwise payable to Pledgor in respect of the Pledged Shares, of any nature, and (ii) upon the written instruction of Lender and until instructions to the contrary are received from Lender, all rights of Pledgor to exercise the voting or other
consensual rights that Pledgor would otherwise be entitled to exercise in respect of the Collateral shall cease, and all such rights (and any other rights Pledgor may have in respect of the Collateral) shall thereupon become vested in Lender, which
shall have the sole right to exercise such rights, until further notice from Lender. With respect to cash distributions payable during such time as no event of Default is occurring, each Pledgor hereby directs the Down REIT Sub and/or HCPI, as the
case may be, and the Down REIT Sub and/or HCPI, as the case may be, agrees to deposit any and all such dividends and distributions in the following account as set forth in Section 3.1. of the Loan Agreement: 43JO7293. Any amounts paid to the Lender
or its designee as contemplated by the terms of the foregoing shall be treated as amounts paid or distributed to Pledgor for all purposes of the LLC Agreement, or other agreement pursuant to which the payment or distribution is made or is required
to be made and shall be deemed to satisfy the obligations of the Down REIT Sub or HCPI to make such payment thereunder. Each Pledgor hereby agrees that neither the Down REIT Sub nor HCPI shall be deemed to be in breach of its obligations under, or
in violation of the provisions of, any such agreement by virtue of having made such payments in the foregoing manner. 
  

	b.	From and after the date of this Agreement, and whether or not a Default has occurred and is continuing, if Pledgor shall become entitled to receive, in connection with any of the
Collateral, any: 

  

	 	i.	LLC Units or stock certificates (including, without limitation, stock certificates relating to the Pledged Shares), including, without limitation, any certificates (1) issued in
respect of additional properties contributed by such Pledgor to the Down REIT Sub, or (2) representing a dividend or distribution or issued in connection with any increase or reduction of capital, reclassification, merger, consolidation, sale of
assets, combination of shares or partnership units, stock or partnership units split, spin-off, or split-off; 

  

	 	ii.	Options, warrants, rights or other securities or instruments, whether as an addition to, or in substitution or in exchange for, any of the Collateral, or otherwise;

  

	 	iii.	Dividends or distributions payable in property other than cash, including securities issued by other than the issuer of any of the Collateral; or 

  

	 	iv.	Any sums paid in redemption of any of the Collateral, 

  

 5 

 then HCPI shall deliver the same to Lender, to be held by Lender as part of the Collateral. Any amounts
paid to the Lender or its designee as contemplated by the terms of the foregoing shall be treated as amounts paid or distributed to Pledgor for all purposes of the LLC Agreement, or other agreement pursuant to which the payment or distribution is
made or is required to be made and shall be deemed to satisfy the obligations of the Down REIT Sub or HCPI to make such payment thereunder. Each Pledgor hereby agrees that neither the Down REIT Sub nor HCPI shall be deemed to be in breach of its
obligations under, or in violation of the provisions of, any such agreement by virtue of having made such payments in the foregoing manner. 
  

	6.	Registration Rights and Registration Statements. 

  

	 	a.	Shelf Registration Statement. HCPI hereby represents and warrants to Lender that it has filed pursuant to the Securities Act, and has kept continuously effective, a
registration statement on Form S-3, dated January 27, 2000 and a registration statement on Form S-3, dated August 30, 2002 (such registration statements, including all amendments (including post-effective amendments) and all exhibits thereto and
materials incorporated by reference therein, collectively, the “Shelf Registration Statement”) that relate to the offer and sale of certain REIT Shares issued or to be issued by the Down REIT Sub upon exchange of those Pledged Units
described on Exhibit D attached hereto (the “Registered Pledged Units”). HCPI hereby agrees, if not so amended prior to the date of this Agreement, to amend and supplement the Shelf Registration Statement within 10 Business Days after the
date of this Agreement and to file one or more such amendments and supplements with the Commission as required by Rule 424 or similar rule that may be adopted under the Securities Act to include Lender as a “Selling Shareholder”
thereunder. 

  

	 	b.	Registration Rights. In addition to the specific registration rights set forth in this Agreement, in the name of and on behalf of Pledgor, Lender shall have the right to
exercise Pledgor’s Registration Rights with respect to any Pledged Units then owned by Pledgor and held by Lender, including without limitation (i) subject to the terms and conditions of the Registration Rights Agreement, the right to enforce
the applicable provisions of the Registration Rights Agreement pertaining to HCPI’s obligation to file with the commission a registration statement on Form S-3 (the “Issuance Registration Statement”) covering, among other things, the
issuance to Lender of REIT Shares issued or to be issued by the Down REIT Sub upon exchange of those Pledged Units described on Exhibit E attached hereto and naming Lender as a “Selling Shareholder” thereunder and (ii) the right to
request, at the times and in the manner set forth in the Registration Rights Agreement, HCPI to register for sale under the Securities Act any Pledged Shares issuable or issued upon exchange of Pledged Units; provided, however, that, in the case of
a Demand Registration pursuant to Section 3.1(a) of the Registration Rights Agreement, the Down REIT Sub agrees that Lender shall not be subject to the once-every-twelve-months limitation set forth in clause (i) thereof (provided that if at any time
Lender has exercised a Demand Registration right in the previous 

  

 6 

 twelve month period, for which the Down REIT Sub or HCPI has paid the expenses thereof, as provided in
Section 3.4 of the Registration Rights Agreement, Lender shall pay the expenses described in Section 3.4 of the Registration Rights Agreement in connection with the filing of such Demand Registration), nor shall Lender be subject to the $1,000,000
minimum requirement referred to in clause (ii) thereof if Lender is exercising Demand Registration Rights with respect to all of the Pledged Shares it owns or has the right to acquire upon an Exchange. Pledgor hereby irrevocably appoints Lender as
his attorney-in-fact to exercise any such Registration Rights, and irrevocably instructs HCPI to honor any such exercise by Lender of Pledgor’s Registration Rights. 
  

	7.	Rights upon Remedy Events. 

  

	 	a.	Restrictions on Transfer Upon foreclosure of any Pledged Units, the Lender shall be entitled to Transfer such Pledged Units, in whole or in part, subject to applicable
restrictions set forth in Section 11.3 through 11.6 of the LLC Agreement; provided, however, that HCPI and the Down REIT Sub acknowledge and agree that (i) the provisions of Section 11.6.C shall not apply to any foreclosure by Lender on any Pledged
Units, (ii) to the extent any such restrictions require the consent of HCPI or the Down REIT Sub, HCPI and the Down REIT Sub hereby provide their consent to such foreclosure, (iii) if Lender or a purchaser of Pledged Units at foreclosure is
prohibited from becoming a Substituted Member of HCPI, Lender or such purchaser may become an Assignee in accordance with such restrictions, (iv) the Down REIT Sub shall conduct its business in the ordinary course in accordance with past practices,
and (v) neither Lender nor any purchaser of Pledged Units or Pledged Shares at foreclosure shall be obligated to assume, or otherwise be responsible for, any obligation a Pledgor may have under the LLC Agreement or any other obligation of Pledgor
accrued prior to foreclosure under the LLC Agreement; provided that nothing in this subclause 7.a.(v) shall release or reduce any prior obligations of a Pledgor to HCPI or the Down REIT Sub, it being acknowledged and agreed by the Down REIT Sub or
HCPI that the Down REIT Sub and HCPI have recourse against any such Pledgor only and not against Lender. HCPI further acknowledges and agrees that the aforesaid restrictions do not apply to Pledged Shares. Lender acknowledges and agrees that the
Pledged Shares are subject to certain restrictions on ownership and transfer as set forth in the Charter of the HCPI, as amended from time to time. 

  
  

 7 

	 	b.	Exchange of Pledged Shares; Foreclosure. In addition to (i) Lender’s rights under Section 5 of this Agreement, (ii) Lender’s rights as a pledgee, transferee or
Assignee at foreclosure of LLC Units or a Membership Interest as provided in the LLC Agreement, and (iii) any and all other rights Lender may have in respect of a Default under any other agreement, document or instrument, or under applicable law,
upon the occurrence of any one or more Defaults (including, without limitation, the right of Lender to exercise its rights under the Loan Agreement to foreclose on or acquire the entire interest of Pledgor in all or any portion of any Collateral),
Lender shall thereupon and thereafter during the continuance thereof have the right, in its sole and absolute discretion, to do or cause to be done any one or more of the following: 

  

	 	i.	Exchange of Registered Pledged Units. 

  
 Lender shall have the right, upon written notice to the Down REIT Sub and in the name of and on behalf of Pledgor, to exercise Pledgor’s exchange
rights and require HCPI to exchange all or any portion (as selected and in such order as Lender may elect in its sole discretion) of the Registered Pledged Units in accordance with Section 8.6.A of the LLC Agreement (the “Exchange
Rights”). Any request for such exchange shall be made on the form of Notice of Exchange attached hereto as Exhibit F. Pledgor hereby irrevocably appoints Lender as its attorney-in-fact to exercise such Exchange Rights, and irrevocably instructs
the Down REIT Sub and HCPI to honor any such exercise by Lender of the Exchange Rights. HCPI hereby agrees that upon any such exercise of the Exchange Rights, HCPI shall deliver the entire Cash Amount or REIT Shares to Lender, in each case without
deduction in respect of any claim which HCPI or the Down REIT Sub may from time to time have of any nature or kind against Pledgor (other than with respect to any withholding tax obligation imposed by law on the Down REIT Sub with respect to any
amount distributable or allocable to a Pledgor in respect of Registered Pledged Units, as contemplated in Section 5.3 of the LLC Agreement). 
  
 In addition to the foregoing, the second sentence of Section 8.6.A of the LLC Agreement is hereby amended with respect to Lender to provide that
notwithstanding the first sentence of Section 8.6.A of the LLC Agreement, after, or concurrently with, receipt by HCPI of any Default Notice, the Lender shall have the right to (i) tender Registered Pledged Units for Exchange (subject to the
following terms and conditions of Section 8.6.A of the LLC Agreement) and require the Down REIT Sub to acquire up to the number of Registered Pledged Units specified in the Notice of Exchange as referred to in the definition of “Specified
Exchange Date” set forth in subparagraph (c) immediately following; provided, however that Lender may tender Registered Pledged Units for Exchange hereunder once, irrespective of the aggregate market value of such Registered Pledged Units, and
an unlimited number of times, provided the aggregate market value of such Registered Pledged Units is at least $1,000,000 on the date of any such Notice of Exchange. 
  
 In connection with the foregoing, the definition of the term “Specified Exchange Date” in the LLC Agreement
shall, with respect to Lender and only with respect to Lender, be amended to read as follows: 
  
 “Specified Exchange Date” means in the case of an Exchange pursuant to Section 8.6.A hereof, that date 
  
  

 8 

 specified by Lender in a Notice of Exchange to the Company; provided, however, that such date
shall in no event be less than fourteen (14) days (or if such day is not a Business Day, the next following Business Day) after HCPI’s receipt of such Notice of Exchange and provided further that the Specified Exchange Date, as well as the
closing of an Exchange on the Specified Exchange Date, may be deferred in the Managing Member’s sole and absolute discretion, for such time as may be reasonably required to effect, as applicable, (i) necessary funding arrangements, (ii)
compliance with the Securities Act or other applicable laws (including, but not limited to, (a) state “blue sky” or other securities laws and (b) the expiration or termination of the applicable waiting period, if any, under the Hart Scott
Rodino Antitrust Improvements Act of 1976, as amended, and (iii) satisfaction or waiver of other commercially reasonable and customary closing conditions and requirements for a transaction of such nature (provided that in no event shall such
Exchange be delayed more than 30 days in the aggregate with respect to (i) and (iii) above, or more than 150 days in the aggregate with respect to (ii) above. 
  

	 	ii.	Put for Unregistered Pledged Units. 

  
 Until such time as HCPI has filed, pursuant to Section 6 of this Agreement, (i) an amendment to the Shelf Registration Statement, and (ii) the Issuance
Registration Statement, as the case may be, Lender shall have the right upon written notice to HCPI in the form of Deficiency Notice attached hereto as Exhibit G (a “Deficiency Notice”), to exchange all or any portion of the Unregistered
Pledged Units for one or more cash payments from HCPI on any foreclosure of the Unregistered Pledged Units, where the cash or fair market value of Pledged Shares (determined based on the closing price of the REIT Shares on the date of the Deficiency
Notice, as reported on the New York Stock Exchange or such other exchange on which the REIT Shares are then listed) issued on exchange of Registered Pledged Units will be insufficient to satisfy Borrower’s Obligations (as defined in the Loan
Agreement) under the Loan Agreement, in an amount (the “Unregistered Units Cash Payment”) equal to (i) the fair market value of such Unregistered Pledged Units (determined based on the closing price of the REIT Shares on the date of the
Deficiency Notice on the New York Stock Exchange or such other exchange on which the REIT Shares are then listed), multiplied by (ii) the number of such Unregistered Pledged Units exchanged, less (iii) 1% of the product of (i) and (ii). Each
Unregistered Units Cash Payment shall be payable by HCPI within 14 days following its receipt of the Deficiency Notice with respect thereto; provided, however, that at such time as 
  
  

 9 

 Lender receives written notice from HCPI of the filing and effectiveness of the Issuance Registration
Statement, Lender’s rights pursuant to this Section 7.b.ii shall terminate with respect to any such Unregistered Pledged Units covered by such registration, so long as such registration remains effective. In the event and to the extent that any
registration statement with respect to any Pledged Units ceases to be effective, the provisions of this Section 7.b.ii shall again apply with respect to all affected Pledged Units and/or Pledged Shares. 
  
 Notwithstanding the provisions of Section 7.b.ii above, but subject to
Section 7.b.iii below and Section 7.b.iii of the Utah II Acknowledgement and Consent, Lender agrees that to the extent Lender has the right to exchange Registered Pledged Units under either this Agreement or under the Utah II Acknowledgment and
Consent on or before the specified date in the applicable Notice of Exchange, Lender shall exercise any and all such exchange rights hereunder and thereunder, prior to delivering a Deficiency Notice under Section 7.b.ii above. 
  

	 	iii.	Put for Exchange Delays in Pledged Units. Notwithstanding anything to the contrary in this Agreement, in the event that the Specified Exchange Date under Section 7.b.i is
deferred to a date that is later than the date specified in the applicable Notice of Exchange and where the cash or fair market value of the Pledged Units (determined based on the closing price of the REIT Shares on the date of the Deficiency Notice
on the New York Stock Exchange or such other exchange on which the REIT Shares are then listed), if any, which may be exchanged on or before the specified date in the applicable Notice of Exchange will be insufficient to satisfy Borrower’s
Obligations (as defined in the Loan Agreement) under the Loan Agreement, Lender shall have the right, upon providing a Deficiency Notice to HCPI, to exchange all or any portion of the affected Pledged Units for one or more cash payments from HCPI in
an amount (the “Exchange Delay Cash Payment”) equal to (i) the fair market value (determined based on the closing price of the REIT Shares on the date of the Deficiency Notice on the New York Stock Exchange or such other exchange on which
the REIT Shares are then listed) of such affected Pledged Units, multiplied by (ii) the number of such affected Pledged Units to be exchanged, less (iii) 1% of the product of (i) and (ii). Each Exchange Delay Cash Payment shall be payable by HCPI
within 14 days following its receipt of the Deficiency Notice with respect thereto. 

  
 In addition, the parties hereto agree and acknowledge that the obligation of HCPI, HCPI/Utah II, LLC and/or the Down REIT Sub, as the case may be, to
make Unregistered Units Cash Payments and/or Exchange Delay Cash Payments under this Section 7 and under Section 7 of the Utah II Acknowledgment and Consent shall not exceed, in the aggregate, $10,000,000. 
  

 10 

	 	iv.	Concurrent Exercise. The rights exercisable by Lender under this Section 7.b may be invoked before or after foreclosure under the Loan Agreement in Lender’s sole
discretion, and all without further notice to or any requirement of consent by Pledgor, which hereby irrevocably and unconditionally waives any right to give any contrary instructions to HCPI. All parties acknowledge that Lender desires to
consummate any necessary foreclosure under the Loan Agreement on a basis that such foreclosure occurs concurrent with the closing of an Exchange; all parties agree to cooperate reasonably with Lender to that end. HCPI agrees that it will not act on
any separate instructions or communications from Pledgor pertaining to the Pledged Units or Pledged Shares or Registration Rights Agreement without the express written consent of Lender. Nothing in this subparagraph (v) shall in any way obligate
Lender to consummate any necessary foreclosure under the Loan Agreement in the manner referred to above; Lender may, in its sole discretion, determine that another method of realization upon the Collateral is preferable or required, and such
determination by Lender shall in no manner limit or restrict the obligations of Borrower, Pledgor or any other person or entity with respect to the loans contemplated herein. 

  

	 	v.	Foreclosure. Subject to the terms and conditions of the Loan Agreement, Lender shall have the right to foreclose on or acquire the entire interest of Pledgor in all or any
portion of any Pledged Shares (including all of Pledgor’s right, title and interest in the Registration Rights Agreement to the extent applicable to such Pledged Shares) owned by Pledgor, by foreclosure or in any other manner. In the event that
Lender elects to exercise its rights under this Section 7.b.v, Lender shall deliver to HCPI a notice of its intent to do so no later than 10 Business Days prior to the date of any sale, public or private, or of any transfer in lieu of foreclosure,
and HCPI (without limitation on its own right, under applicable law, to participate in any sale or other disposition of any of the Collateral) shall reasonably cooperate, at no expense to itself, with Lender in completing its foreclosure on the
affected Pledged Shares in compliance with applicable laws, including, if applicable, all actions reasonably necessary to comply with the filing requirements described in Rule 144(c)(1) of the Securities Act, so as to enable the Lender to sell such
Pledged Shares without registration under the Securities Act. 

  

	8.	Representations and Warranties by the Down REIT Sub and HCPI. The Down REIT Sub and HCPI hereby represent and warrant to Lender as follows as of the date hereof:

  

	 	a.	LLC Agreement. A true and correct copy of the LLC Agreement as in effect as of the date hereof is attached as Exhibit H hereto. 

  

	 	b.	Organization And Authority of the Down REIT Sub. The Down REIT Sub has been duly formed, is validly existing as a limited liability company in good standing under the laws of
the State of Delaware, and is duly qualified to transact 

  

 11 

 business and is in good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification except where the absence of such qualification would not have a Material Adverse Effect. The Down REIT Sub has all requisite power and authority to own or hold under lease the property it
purports to own or hold under lease, to carry on its business as now conducted and as proposed to be conducted except as would not have a Material Adverse Effect, and to execute and deliver this Agreement and to perform its obligations hereunder.

  

	 	c.	Authorization by the Down REIT Sub; Binding Effect. The Down REIT Sub has by all necessary action duly authorized (i) the execution and delivery of this Agreement and (ii)
the performance of its obligations hereunder. This Agreement constitutes the legal, valid and binding obligation of the Down REIT Sub, enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles
and by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to creditors’ rights generally. 

  

	 	d.	Pledged Units; Managing Member of the Down REIT Sub. All of the Pledged Units are validly issued and non-assessable. The identity of the registered owners, the total number
of Pledged Units and the corresponding Certificates evidencing ownership thereof are accurately set forth on Exhibit A attached hereto. No security interest in the Pledged Units has been registered on the records of the Down REIT Sub (or its
transfer agent). HCPI is the sole Managing Member of the Down REIT Sub and owns the only Managing Member Units thereof. 

  

	 	e.	Organization and Authority of HCPI. HCPI is a corporation duly organized, validly existing and in good standing under the laws of Maryland, and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification except where the absence of such qualification would not have a Material Adverse Effect.
HCPI has all requisite power and authority to own or hold under lease the property it purports to own or hold under lease, to carry on its business as now conducted and as proposed to be conducted except as would not have a Material Adverse Effect,
and to execute and deliver this Agreement and to perform its obligations hereunder. 

  

	 	f.	No Claims. To their knowledge, neither HCPI nor the Down REIT Sub has any existing claim, defense, setoff or right of recoupment under the LLC Agreement, any other agreement,
or any law, rule or regulation, against or with respect to (i) any of the Pledged Units, (ii) any of REIT Shares that may be issuable or any amount that may be payable in connection with the exchange of any Pledged Units or (iii) any obligation of
Pledgor under the LLC Agreement or any other agreement with respect to any of the Pledged Units, any of the REIT Shares that may be issued or any amount that may be payable in connection with the redemption of any Pledged Units.

  

 12 

	 	g.	Authorization by HCPI; Binding Effect. HCPI has by all necessary action duly authorized the execution and delivery of this Agreement and the performance of its obligations
hereunder. This Agreement constitutes the legal, valid and binding obligation of HCPI, enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles and by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to creditors’ rights generally. 

  

	 	h.	HCPI Status. HCPI is organized in conformity with the requirements for qualification as a real estate investment trust under the Code and its ownership and method of
operation enables it to meet the requirements for taxation as a real estate investment trust under the Code. 

  

	 	i.	No Conflict. The execution, delivery and performance by HCPI of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not violate any
provision of the charter or bylaws of HCPI, or the LLC Agreement, or any contractual or other undertaking by which HCPI or any of its assets are bound. As of the date of this Agreement, the Pledged Units are not evidenced by writing or certificate
except by the Certificates expressly referred to on Exhibit A hereto. 

  

	 	j.	Registration Rights Agreement. A true and complete copy of the Registration Rights Agreement, including any amendments and supplements thereto, is attached to this Agreement
as Exhibit I. The Registration Rights Agreement remains in full force and effect as of the date of this Agreement, and is the legal, valid and binding obligation of HCPI enforceable against it in accordance with its terms, except as enforcement may
be limited by equitable principles and by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to creditors’ rights generally. 

  

	 	k.	Governmental or Other Approvals. No governmental or other approval is or will be required in connection with the execution, delivery and performance by the Down REIT Sub or
HCPI of this Agreement or the transactions contemplated hereby or to ensure the legality, validity or enforceability hereof. 

  

	9.	Representations and Warranties by Pledgor. To its knowledge, Pledgor does not have any existing claims, defenses, setoff rights or rights of recoupment under the LLC
Agreement, under any other agreement, or any law, rule or regulation, against or with respect to any obligation of either HCPI or the Down REIT Sub under the LLC Agreement or any other agreement. 

  

	10.	Compliance with Securities Laws. Lender, Borrower and Pledgor hereby acknowledge that a portion of the Collateral has not been registered for sale under the Securities Act,
that Lender may be unable to effect a public sale (under applicable provisions of the Uniform Commercial Code) of all or any part of the Collateral, and subject to the restrictions on transfer described above, may be compelled to resort to one or
more private sales to a restricted group of purchasers who will be obligated to agree, among 

  

 13 

 other things, to acquire the Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Lender and Pledgors hereby further acknowledge that any such private sales may be at prices and on terms less favorable than those of public sales. 
  

	11.	Liability to Pledgor. Pledgor and Borrower assume all risks of the acts or omissions of Lender with respect to its exercise of its rights hereunder. Neither the Down REIT
Sub, HCPI, nor any of their officers, directors, partners, employees or agents shall be liable or responsible for any acts or omissions of the Lender, including without limitation the validity of any determination by Lender that a Default has
occurred or is continuing, nor shall any of such persons have any responsibility for investigation into the facts and circumstances giving rise to any such determination by Lender, nor shall any such person be liable or responsible for following the
instructions of Lender in accordance with this Agreement regardless of any notice, information or instructions to the contrary received by HCPI from Pledgor or any other person, including without limitation following instruction of Lender (a) to
remit distributions by the Down REIT Sub made in respect of the Pledged Units, and distributions of HCPI made in respect of Pledged Shares, to Lender, pursuant to Section 5 above, (b) to terminate the voting and/or other consensual rights of Pledgor
(and consider such right to have vested in Lender) pursuant to Section 5 above, (c) to exercise Pledgor’s Exchange Rights in the name of and on behalf of Pledgor pursuant to Section 7 above, or (d) to exercise Pledgor’s Registration Rights
in the name of and on behalf of Pledgor, pursuant to Section 6 above. 

  

	12.	Separate Actions; Waiver of Statute of Limitations. The obligations of HCPI and Pledgor hereunder shall be in addition to any obligations of Pledgor under the Loan Agreement.
Without limiting the provisions of the Loan Agreement, a separate action or actions may be brought and prosecuted against any one or more of the parties hereto whether or not action is brought against any other person or whether any other person is
joined in any such action or actions. HCPI and Pledgor acknowledge that there are no conditions precedent to the effectiveness of this Agreement and that this Agreement is in full force and effect and is binding on such person as of the date hereof.
To the extent permitted under applicable law, Pledgor waives the benefit of any statute of limitations affecting such person’s liability hereunder or the enforcement thereof. Lender hereby agrees that neither the Down REIT Sub nor HCPI shall
have any obligation or liability under the Loan Agreement or any other agreement related to the loan contemplated by the Loan Agreement except as expressly set forth herein and in the Instructions. Pledgor agrees that nothing set forth herein shall
alter, diminish or otherwise affect its obligations under the LLC Agreement or any other agreement between Pledgor and HCPI or the Down REIT Sub relating to the Pledged Units or Pledged Shares. 

  

	13.	Continuing Obligations. Borrower and Pledgor shall indemnify and hold harmless Lender from and against any and all obligations, claims, losses, liabilities, damages, expenses
or costs (including reasonable attorneys’ fees and expenses and fees and expenses of expert witnesses) arising from or in any way connected with the obligations or liabilities of either such person with respect to agreements, documents or other
instruments, whether now existing or hereafter incurred, or the conditions and obligations to be observed and performed by Borrower or Pledgor under any agreement, document or 

  

 14 

 other instrument relating to the Collateral, except for those arising from Lender’s gross negligence
or willful misconduct. In addition, Borrower shall indemnify and hold harmless Lender from and against any and all obligations, claims, losses, liabilities, damages, expenses or costs (including reasonable attorneys’ fees and expenses and fees
and expenses of expert witnesses) arising from or in any way connected with the exercise by Lender of any rights or remedies under the Loan Agreement or this Agreement with respect to the Collateral, including, without limitation, all costs and
expenses associated with the exercise of any foreclosure rights and/or exchange rights pursuant to Section 6.b above or otherwise. 
  

	14.	Appointment as Attorney-in-Fact. Pledgor hereby appoints Lender as its true and lawful attorney-in-fact, with full power of substitution, for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instruments either in the name of Pledgor or in the name of Lender, which such attorney-in-fact may deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest; provided, that nothing in this section shall require the Lender to take any action or execute any instruments. 

  

	15.	Notices. Any notice, demand, request or report required or permitted to be given or made to a party to this Agreement shall be in writing and shall be deemed given or made
when delivered in person or when sent by first class United States mail or by other means of written communication (including by telecopy, facsimile, or commercial courier service) (a) in the case of a Pledgor, to that Pledgor at the address set
forth below and (ii) in the case of each other party, at its address for notices set forth below or at such other address as such party may give notice of in accordance with the provisions of this Section: 

  

			
	Borrower and each Pledgor:	  	c/o The Boyer Company, L.C.
	 	  	127 South 500 East, Suite 100
	 	  	Salt Lake City, Utah 84102
	 	  	Attention: Brian Gochnour
	 	  	Telephone No.: 801-521-4781
	 	  	Telecopier: 801-521-4793
		
	Lender:	  	Merrill Lynch Bank USA
	 	  	15 W. South Temple, Suite 300
	 	  	Salt Lake City, Utah 84101
	 	  	Attention: Director
	 	  	Telephone No.:
	 	  	Telecopier:
		
	HCPI and/or Down REIT Sub:	  	Health Care Property Investors, Inc.
	 	  	3760 Kilroy Airport Way, Suite 300
	 	  	Long Beach, California 90806
	 	  	Attention: Legal Department
	 	  	Telephone No.: (562) 733-5100
	 	  	Telecopier: (562) 733-5200

  

 15 

	16.	Assignments. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
Nothing contained herein, express or implied, is intended to confer on any person other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

  

	17.	Governing Law. This Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the internal laws of the State of New
York applicable to contracts made and to be performed in that State, without regard to conflict of laws principles. 

  

	18.	Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original but all of which together shall constitute but one
agreement. This Agreement may be executed and delivered by facsimile. 

  

	19.	Entire Agreement; Amendments. This Agreement (including the instruments between the parties referred to herein) constitutes the entire agreement among the parties and
supersedes all other prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. All references to sections, subsections, clauses, exhibits and schedules shall be deemed
references to such part of this Agreement, unless the context shall otherwise require. No provisions of this Agreement may be effectively waived, changed or amended, or the termination or discharge thereof agreed to or acknowledged, orally, but only
by an agreement in writing signed by the party against whom the enforcement of any waiver, change, amendment, termination or discharge is sought. 

  

	20.	Headings. The headings contained in this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 

  

	21.	Invalidity. If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect.

  

	22.	Attorneys’ Fees. In the event of any controversy, claim or dispute between the parties hereto arising out of or relating to this Agreement or any of the documents
provided for herein, or the breach thereof, the prevailing party shall be entitled to recover from the losing party reasonable attorneys’ fees, expenses and costs. 

  
 [Remainder of page intentionally left blank.] 
  

 16 

 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written
above. 
  

			
	 LENDER:

	
	MERRILL LYNCH BANK USA
		
	By:	 	  

	Date:	 	  

	 Title:
	 	  

  

			
	 BORROWER:

	
	 GARDNER PROPERTY HOLDINGS, L.C.,

	 a Utah limited liability company

		
	 By:
	 	  

	 Date:
	 	  

	 Title:
	 	  

  

			
	 THE DOWN REIT SUB:

	
	 HCPI/UTAH, LLC,

	 a Delaware limited liability company

		
	 By:
	 	HEALTH CARE PROPERTY
	 	 	INVESTORS, INC., its Managing Member
		
	By:	 	  

	Date:	 	  

	Title:	 	  

  

			
	HCPI:
	
	HEALTH CARE PROPERTY INVESTORS, INC.,
	a Maryland corporation
		
	By:	 	  

	Date:	 	  

	Title:	 	  

  
  

 17 

			
	PLEDGORS:
	
	AMARILLO BELL ASSOCIATES,
	a Utah general partnership
		
	By:	 	THE BOYER COMPANY, L.C.,
	 	 	its Partner
		
	By:	 	  

	Date:	 	  

	Title:	 	  

  

			
	 BOYER CENTERVILLE CLINIC COMPANY,
 L.C., a
Utah limited liability company

		
	By:	 	THE BOYER COMPANY, L.C.,
	 	 	its Manager
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

			
	BOYER GRANTSVILLE MEDICAL, L.C.,
	a Utah limited liability company
		
	By:	 	THE BOYER COMPANY, L.C.,
	 	 	its Manager
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

			
	BOYER IOMEGA, L.C.,
	a Utah limited liability company
		
	By:	 	THE BOYER COMPANY, L.C.,
	 	 	its Manager
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  
  

 18 

			
	PLEDGORS:
	
	 BOYER-OGDEN MEDICAL ASSOCIATES NO.
 2, LTD.,
a Utah limited partnership

		
	By:	 	THE BOYER COMPANY, L.C.,
	 	 	its General Partner
	By:	 	  

	Name:	 	  

	Title:	 	  

  

			
	BOYER SPRINGVILLE, L.C.,
	a Utah limited liability company
		
	By:	 	THE BOYER COMPANY, L.C.,
	 	 	its Manager
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

			
	BOYER-ST. MARKS MEDICAL ASSOCIATES,
	LTD., a Utah limited partnership
		
	By:	 	THE BOYER COMPANY, L.C.,
	 	 	its General Partner
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

			
	 BOYER ST. MARK’S MEDICAL ASSOCIATES
 #2, LTD., a Utah limited partnership

		
	By:	 	THE BOYER COMPANY, L.C.,
	 	 	its General Partner
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  
  

 19 

 EXHIBIT A 
  
 PLEDGED UNITS 
  

					
	 Member Name

	 	 Certificate Nos.

	 	 Number of Non-Managing
 Member Units Pledged

	 Amarillo Bell Associates
	 	105, 106, 128, 129	 	29,189
	 Boyer Centerville Clinic
 Company, L.C.
	 	48, 49	 	11,740
	 Boyer Grantsville Medical,
 L.C.
	 	55, 56	 	3,737
	 Boyer Iomega, L.C.
	 	67, 68	 	55,723
	 Boyer-Ogden Medical
 Associates No. 2, Ltd.
	 	32	 	29,277
	 Boyer Springville, L.C.
	 	76	 	33,344
	 Boyer-St. Marks Medical
 Associates, Ltd.
	 	123, 126	 	86,680
	 Boyer St. Mark’s Medical
 Associates #2, Ltd.
	 	20, 21	 	36,836
	 	 	TOTAL:	 	286,526

  
  

 20 

 EXHIBIT B 
  
 IRREVOCABLE UNIT POWER 
  
  

 21 

 EXHIBIT C 
  
 THE INSTRUCTIONS 
  
  

 22 

 EXHIBIT D 
  
 REGISTERED PLEDGED UNITS 
  

					
	 Member Name

	 	 Certificate Nos.

	 	 Number of Non-Managing
 Member Units Pledged

	 Amarillo Bell Associates
	 	105, 106	 	11,181
	 Boyer Centerville Clinic
 Company, L.C.
	 	48, 49	 	11,740
	 Boyer Grantsville Medical, L.C.
	 	55, 56	 	3,737
	 Boyer Iomega, L.C.
	 	67, 68	 	55,723
	 Boyer-Ogden Medical
 Associates No. 2, Ltd.
	 	32	 	29,277
	 Boyer Springville, L.C.
	 	76	 	33,344
	 Boyer-St. Marks Medical
 Associates, Ltd.
	 	123, 126	 	86,680
	 Boyer St. Mark’s Medical
 Associates #2, Ltd.
	 	20, 21	 	36,836
	 	 	TOTAL:	 	268,518

  
  

 23 

 EXHIBIT E 
  
 UNREGISTERED PLEDGED UNITS 
  

					
	 Member Name

	 	 Certificate Nos.

	 	 Number of Non-Managing
 Member Units Pledged

	 Amarillo Bell Associates
	 	128, 129	 	18,008
	 	 	TOTAL:	 	18,008

  
  

 24 

 EXHIBIT F 
  
 NOTICE OF EXCHANGE 
  
  

 25 

 EXHIBIT G 
  
 DEFICIENCY NOTICE 
  
  

 26 

 EXHIBIT H 
  
 LLC AGREEMENT 
  
  

 27 

 EXHIBIT I 
  
 REGISTRATION RIGHTS AGREEMENT 
  
  

 28

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}]]