Document:

Exhibit

Exhibit 4(c)
Execution Version
	
	
	 

Hawaiian Electric Company, Inc.
Hawaii Electric Light Company, Inc.

$25,000,000 5.23% Senior Notes, Series 2015A, due October 1, 2045

______________
Note Purchase and Guaranty Agreement
_____________

Dated as of October 15, 2015

	
	
	 

    

	
				
	 
	TABLE OF CONTENTS
	 

	SECTION
	 
	PAGE
	

	SECTION 1.
	AUTHORIZATION OF NOTES
	1
	

	SECTION 2.
	SALE AND PURCHASE OF NOTES; GUARANTY
	1
	

	Section 2.1
	Sale and Purchase of Notes
	1
	

	Section 2.2
	Guaranty
	1
	

	SECTION 3.
	CLOSING
	1
	

	SECTION 4.
	CONDITIONS TO CLOSING
	2
	

	Section 4.1
	Representations and Warranties
	2
	

	Section 4.2
	Performance; No Default
	2
	

	Section 4.3
	Compliance Certificates
	2
	

	Section 4.4
	Opinions of Counsel
	3
	

	Section 4.5
	Purchase Permitted by Applicable Law, Etc
	3
	

	Section 4.6
	Sale of Other Notes
	3
	

	Section 4.7
	Payment of Special Counsel Fees
	3
	

	Section 4.8
	Private Placement Number
	3
	

	Section 4.9
	Changes in Corporate Structure; Change in Control
	4
	

	Section 4.10
	Funding Instructions
	4
	

	Section 4.11
	Proceedings and Documents
	4
	

	SECTION 5.
	REPRESENTATIONS AND WARRANTIES OF THE CONSTITUENT COMPANIES
	4
	

	Section 5.1
	Organization; Power and Authority
	4
	

	Section 5.2
	Authorization, Etc
	4
	

	Section 5.3
	Disclosure
	5
	

	Section 5.4
	Organization and Ownership of Shares of Subsidiaries; Affiliates
	5
	

	Section 5.5
	Financial Statements; Material Liabilities
	6
	

	Section 5.6
	Compliance with Laws, Other Instruments, Etc
	6
	

	Section 5.7
	Governmental Authorizations, Etc
	7
	

	Section 5.8
	Litigation; Observance of Agreements, Statutes and Orders
	7
	

	Section 5.9
	Taxes
	7
	

	Section 5.10
	Title to Property; Leases
	8
	

	Section 5.11
	Licenses, Permits, Etc
	8
	

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	TABLE OF CONTENTS
 (continued)
	 

	SECTION
	 
	PAGE
	

	Section 5.12
	Compliance with ERISA
	8
	

	Section 5.13
	Private Offering
	9
	

	Section 5.14
	Use of Proceeds; Margin Regulations
	9
	

	Section 5.15
	Existing Indebtedness; Future Liens
	10
	

	Section 5.16
	Foreign Assets Control Regulations, Etc
	10
	

	Section 5.17
	Status under Certain Statutes
	12
	

	Section 5.18
	Environmental Matters
	12
	

	Section 5.19
	Pari Passu Ranking
	13
	

	SECTION 6.
	REPRESENTATIONS OF THE PURCHASERS
	13
	

	Section 6.1
	Purchase for Investment
	13
	

	Section 6.2
	Accredited Investor Status
	13
	

	Section 6.3
	Source of Funds
	14
	

	SECTION 7.
	INFORMATION AS TO THE CONSTITUENT COMPANIES
	15
	

	Section 7.1
	Financial and Business Information
	15
	

	Section 7.2
	Officer’s Certificate
	19
	

	Section 7.3
	Visitation
	19
	

	SECTION 8.
	PAYMENT AND PREPAYMENT OF THE NOTES
	20
	

	Section 8.1
	Maturity
	20
	

	Section 8.2
	Optional Prepayments with Make-Whole Amount
	20
	

	Section 8.3
	Allocation of Partial Prepayments
	21
	

	Section 8.4
	Maturity; Surrender, Etc
	21
	

	Section 8.5
	Purchase of Notes
	21
	

	Section 8.6
	Make-Whole Amount
	21
	

	Section 8.7
	Offer to Prepay Notes in the Event of a Change in Control
	23
	

	Section 8.8
	Offer to Prepay Upon Sale of Assets
	24
	

	SECTION 9.
	AFFIRMATIVE COVENANTS
	25
	

	Section 9.1
	Compliance with Laws
	25
	

	Section 9.2
	Insurance
	25
	

	Section 9.3
	Maintenance of Properties
	26
	

	Section 9.4
	Payment of Taxes and Claims
	26
	

	Section 9.5
	Corporate Existence, Etc
	26
	

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	TABLE OF CONTENTS
 (continued)
	 

	SECTION
	 
	PAGE
	

	Section 9.6
	Books and Records
	26
	

	Section 9.7
	Pari Passu Ranking
	27
	

	SECTION 10.
	NEGATIVE COVENANTS
	27
	

	Section 10.1
	Capitalization Ratio
	27
	

	Section 10.2
	Consolidated Subsidiary Funded Debt to Capitalization Ratio
	27
	

	Section 10.3
	Limitation on Liens
	27
	

	Section 10.4
	Sale of Assets; Consolidation; Merger
	30
	

	Section 10.5
	Limitation on Restrictive Agreements
	32
	

	Section 10.6
	Transactions with Affiliates
	33
	

	Section 10.7
	Line of Business
	33
	

	Section 10.8
	Terrorism Sanctions Regulations
	33
	

	SECTION 11.
	EVENTS OF DEFAULT
	34
	

	SECTION 12.
	REMEDIES ON DEFAULT, ETC
	36
	

	Section 12.1
	Acceleration
	36
	

	Section 12.2
	Other Remedies
	37
	

	Section 12.3
	Rescission
	37
	

	Section 12.4
	No Waivers or Election of Remedies, Expenses, Etc 
	37
35
	

	SECTION 13.
	GUARANTY
	37
	

	Section 13.1
	The Guaranty
	37
	

	Section 13.2
	Waiver of Defenses
	38
	

	Section 13.3
	Guaranty of Payment
	38
	

	Section 13.4
	Guaranty Unconditional
	38
	

	Section 13.5
	Reinstatement
	38
	

	Section 13.6
	Payment on Demand
	39
	

	Section 13.7
	Stay of Acceleration
	39
	

	Section 13.8
	No Subrogation
	39
	

	Section 13.9
	Marshalling
	39
	

	Section 13.10
	Consideration
	39
38
	

	SECTION 14.
	REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES; COMPANY’S AGENT
	40
	

	   Section 14.1
	   Registration of Notes
	40
	

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	TABLE OF CONTENTS
 (continued)
	 

	SECTION
	 
	PAGE
	

	Section 14.2
	Transfer and Exchange of Notes
	40
	

	Section 14.3
	Replacement of Notes
	40
	

	Section 14.4
	The Company’s Agent
	41
	

	SECTION 15.
	PAYMENTS ON NOTES
	41
	

	 Section 15.1
	 Place of Payment
	41
	

	 Section 15.2
	 Home Office Payment
	42
	

	SECTION 16.
	EXPENSES, ETC
	42
	

	 Section 16.1
	 Transaction Expenses
	42
	

	 Section 16.2
	 Survival
	42
	

	SECTION 17.
	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
	42
	

	SECTION 18.
	AMENDMENT AND WAIVER
	43
	

	Section 18.1
	Requirements
	43
	

	Section 18.2
	Solicitation of Holders of Notes
	43
	

	Section 18.3
	Binding Effect, Etc
	44
	

	Section 18.4
	Notes Held by a Constituent Company, Etc
	44
	

	SECTION 19.
	NOTICES
	44
	

	SECTION 20.
	REPRODUCTION OF DOCUMENTS
	46
	

	SECTION 21.
	CONFIDENTIAL INFORMATION
	46
	

	SECTION 22.
	SUBSTITUTION OF PURCHASER
	47
	

	SECTION 23.
	MISCELLANEOUS
	48
	

	Section 23.1
	Successors and Assigns
	48
	

	Section 23.2
	Payments Due on Non-Business Days
	48
	

	Section 23.3
	Accounting Terms; Change in GAAP
	48
	

	Section 23.4
	Severability
	49
	

	Section 23.5
	Construction, Etc
	49
	

	Section 23.6
	Counterparts
	49
	

	Section 23.7
	Governing Law
	49
	

	Section 23.8
	Jurisdiction and Process; Waiver of Jury Trial
	49
	

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	Attachments to Note Purchase and Guaranty Agreement:
	 

	 
	 

	Schedule A
	Information Relating to Purchasers

	Schedule B
	Defined Terms

	Schedule C
	Consolidated Capitalization Illustration

	Schedule D
	Consolidated Funded Debt Illustration

	Schedule E
	Consolidated Subsidiary Funded Debt Illustration

	Schedule 5.3
	Disclosure Materials

	Schedule 5.4
	Subsidiaries of the Parent Guarantor and Ownership of Subsidiary Stock

	Schedule 5.5
	Financial Statements

	Schedule 5.7
	Governmental Authorizations

	Schedule 5.15
	Existing Indebtedness

	Schedule 5.17
	Status Under Certain Statutes

	Schedule 10.3
	Existing Liens

	Schedule 10.5
	Restrictive Agreements

	Schedule 10.6
	Affiliate Transactions

	Exhibit 1
	Form of 5.23% Senior Note, Series 2015A, due October 1, 2045

	Exhibit 4.4 (a)
	Form of Opinion of the Vice President-General Counsel of the Parent Guarantor

	Exhibit 4.4 (b)
	Form of Opinion of Special Counsel for the Constituent Companies

	Exhibit 4.4 (c) 
	Form of Opinion of Special Counsel to the Purchasers

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Hawaiian Electric Company, Inc.
Hawaii Electric Light Company, Inc.
900 Richards Street
Honolulu, Hawaii 96813-2956

$25,000,000 5.23% Senior Notes, Series 2015A, due October 1, 2045

Dated as of October 15, 2015
To each of the Purchasers 
  listed in the attached Schedule A:
Ladies and Gentlemen:
Hawaii Electric Light Company, Inc., a Hawaii corporation (together with any successor thereto that becomes a party hereto pursuant to Section 10.4, the “Company”), and Hawaiian Electric Company, Inc., a Hawaii corporation (together with any successor thereto that becomes a party hereto pursuant to Section 10.4, the “Parent Guarantor,” and together with the Company, the “Constituent Companies” and, individually a “Constituent Company”), jointly and severally agree with each of the Purchasers as follows:
		
	SECTION 1.
	Authorization of Notes.

The Company has authorized the issue and sale of $25,000,000 aggregate principal amount of its 5.23% Senior Notes, Series 2015A, due October 1, 2045 (the “Notes”).  As used herein, the term “Notes” shall mean all notes originally delivered pursuant to this Agreement and any such notes issued in substitution therefor pursuant to Section 14.  The Notes shall be substantially in the form set out in Exhibit 1.  Certain capitalized and other terms used in this Agreement are defined in Schedule B; and references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.
		
	SECTION 2.
	Sale and Purchase of Notes; Guaranty.

Section 2.1    Sale and Purchase of Notes.  Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser, and each Purchaser will purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount specified opposite such Purchaser’s name in Schedule A at the purchase price of 100% of the principal amount thereof.  The Purchasers’ obligations hereunder are several, and not joint obligations, and no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.
Section 2.2    Guaranty.  Pursuant to Section 13, the Parent Guarantor absolutely, unconditionally and irrevocably guarantees the Obligations of the Company.
		
	SECTION 3.
	Closing.

 

The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of Schiff Hardin LLP, 666 Fifth Avenue, 17th Floor, New York, New York 10103, commencing at 11:00 a.m. New York, New York time, at a closing (the “Closing”) on October 15, 2015 or on such other Business Day thereafter as may be agreed upon by the Constituent Companies and the Purchasers.  At the Closing, the Company will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at least $100,000 as such Purchaser may request) dated the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company in accordance with the funding instructions described in Section 4.10.  If at the Closing the Company shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment. 
		
	SECTION 4.
	Conditions to Closing.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:
Section 4.1    Representations and Warranties.  The representations and warranties of each Constituent Company in this Agreement shall be correct when made and at the time of the Closing (except to the extent that any of the representations and warranties expressly refer to an earlier time, in which case such representations and warranties shall be correct as of such earlier time).
Section 4.2    Performance; No Default.  Each Constituent Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and before and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Section 5.14), no Default or Event of Default shall have occurred and be continuing.  Neither Constituent Company nor any Subsidiary shall have entered into any transaction since the date of the Memorandum that would have been prohibited by Section 10 had such Section applied since such date.
Section 4.3    Compliance Certificates.
(a)    Officer’s Certificate.  Each Constituent Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b)    Secretary’s Certificate.  Each Constituent Company shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of the Closing, certifying as to (1) the resolutions attached thereto and any other corporate 

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proceedings relating to the authorization, execution and delivery of this Agreement and, in the case of the Company, the Notes and (2) such Constituent Company’s organizational documents as then in effect.
Section 4.4    Opinions of Counsel.  Such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the date of the Closing (a) from Susan A. Li, Esq., Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary of the Parent Guarantor covering the matters set forth in Exhibit 4.4(a) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or special counsel to the Purchasers may reasonably request (and the Constituent Companies hereby instruct such counsel to deliver such opinion to such Purchaser), (b) from Pillsbury Winthrop Shaw Pittman LLP, special counsel for the Constituent Companies, covering the matters set forth in Exhibit 4.4(b) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or special counsel to the Purchasers may reasonably request (and the Constituent Companies hereby instruct such counsel to deliver such opinion to such Purchaser) and (c) from Schiff Hardin LLP, special counsel to the Purchasers in connection with such transactions, substantially in the form set forth in Exhibit 4.4(c) and covering such other matters incident to such transactions as such Purchaser may reasonably request.
Section 4.5    Purchase Permitted by Applicable Law, Etc.  On the date of the Closing, such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date of this Agreement.  If requested by any Purchaser, such Purchaser shall have received an Officer’s Certificate from the Parent Guarantor certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.
Section 4.6    Sale of Other Notes.  Contemporaneously with the Closing, the Company shall sell to each other Purchaser, and each other Purchaser shall purchase, the Notes to be purchased by such Purchaser at the Closing as specified in Schedule A.
Section 4.7    Payment of Special Counsel Fees.  Without limiting the provisions of Section 16.1, the Company shall have paid on or before the Closing the reasonable fees, charges and disbursements of special counsel to the Purchasers referred to in Section 4.4(c) to the extent reflected in a statement of such counsel rendered to the Company at least two Business Days prior to the Closing.
Section 4.8    Private Placement Number.  A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for the Notes.

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Section 4.9    Changes in Corporate Structure; Change in Control.  Neither Constituent Company shall have changed its jurisdiction of incorporation or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity and no Change in Control shall have occurred, at any time following the date of the most recent financial statements referred to in Schedule 5.5.  
Section 4.10    Funding Instructions.  At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer of the Company on letterhead of the Company directing the manner of payment of funds and setting forth (a) the name and address of the transferee bank, (b) such transferee bank’s ABA number, (c) the account name and number into which the purchase price for the Notes is to be deposited and (d) the name and telephone number of the Company representative responsible for verifying receipt of such funds by the transferee bank.
Section 4.11    Proceedings and Documents.  All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and special counsel to the Purchasers, and such Purchaser and special counsel to the Purchasers shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or special counsel to the Purchasers may reasonably request.
		
	SECTION 5.
	Representations and Warranties of the Constituent Companies.

Each Constituent Company represents and warrants to each Purchaser that:
Section 5.1    Organization; Power and Authority.  Each Constituent Company is a corporation duly organized under the laws of the Republic of Hawaii (in the case of the Company) or the Kingdom of Hawaii (in the case of the Parent Guarantor) and is validly existing and in good standing under the laws of the State of Hawaii, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each Constituent Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and, in the case of the Company, the Notes and to perform its obligations under the provisions hereof and thereof.
Section 5.2    Authorization, Etc.  
(a)    This Agreement and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof against payment of the purchase price therefor, each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of 

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equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(b)    This Agreement has been duly authorized by all necessary corporate action on the part of the Parent Guarantor, and this Agreement constitutes the legal, valid and binding obligation of the Parent Guarantor enforceable against the Parent Guarantor in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3    Disclosure.  The Constituent Companies, through their agent, U.S. Bancorp Investments, Inc., have delivered to each Purchaser a copy of a Confidential Private Placement Memorandum, dated September 10, 2015 (the “Memorandum”), relating to the transactions contemplated hereby.  The Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Parent Guarantor and its Subsidiaries.  This Agreement, the Memorandum (excluding information and market and industry data specifically identified as being from a third party source) and the documents, certificates or other writings delivered to the Purchasers by or on behalf of the Constituent Companies in connection with the transactions contemplated hereby and identified on Schedule 5.3 and the financial statements listed in Schedule 5.5 (this Agreement, the Memorandum and such documents, certificates or other writings and such financial statements delivered to each Purchaser prior to September 22, 2015 being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made; provided that, with respect to market and industry data, projected financial information and other forward-looking information, each Constituent Company represents and warrants only that such information was prepared in good faith based upon information and assumptions believed by it to be reasonable at the time.  Except as disclosed in the Disclosure Documents (including the documents incorporated by reference therein), since December 31, 2014, there has been no change in the financial condition, operations, business or properties of the Parent Guarantor or any of its Subsidiaries except changes that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.  There is no fact known to either Constituent Company that would reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.
Section 5.4    Organization and Ownership of Shares of Subsidiaries; Affiliates.  
(a)    Schedule 5.4 contains complete and correct lists (1) of the Parent Guarantor’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the jurisdiction of its organization and the percentage of shares of each class of its capital stock or similar Equity Interests outstanding owned by the Parent Guarantor and each of its other Subsidiaries, (2) of the Parent Guarantor’s Affiliates, other than its Subsidiaries, and (3) of each Constituent Company’s directors and senior officers.  On the date of the Closing, the only Significant Subsidiaries are the Company and Maui Electric.

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(b)    All of the outstanding shares of capital stock or similar Equity Interests of each Subsidiary shown in Schedule 5.4 as being owned by the Parent Guarantor and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Parent Guarantor or another of its Subsidiaries free and clear of any Lien.
(c)    Each Subsidiary is a corporation or other legal entity duly organized, validly existing and, where applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and, where applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.
(d)    No Significant Subsidiary is a party to, or otherwise subject to any legal, regulatory, contractual or other restriction (other than the agreements listed on Schedule 10.5, the regulatory authority of the Hawaii Public Utilities Commission and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Significant Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Parent Guarantor or any of its Significant Subsidiaries that owns outstanding shares of capital stock or similar Equity Interests of such Significant Subsidiary.
Section 5.5    Financial Statements; Material Liabilities.  The Constituent Companies have delivered to each Purchaser copies of the consolidated financial statements of the Parent Guarantor and its Subsidiaries listed on Schedule 5.5.  All of said financial statements (including, in each case, any related schedules and notes) fairly present in all material respects the consolidated financial position of the Parent Guarantor and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to the absence of complete notes and to normal year-end adjustments).  The Parent Guarantor and its Subsidiaries do not have any Material liabilities that are not disclosed on or expressly reserved for in such financial statements or otherwise disclosed in the Disclosure Documents.
Section 5.6    Compliance with Laws, Other Instruments, Etc.  The execution, delivery and performance (a) by the Company of this Agreement and the Notes and (b) by the Parent Guarantor of this Agreement will not (1) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Parent Guarantor or any of its Significant Subsidiaries under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, shareholders agreement or any other material agreement or instrument to which the Parent Guarantor or any of its Significant Subsidiaries is bound or by which the Parent Guarantor or any of its Significant Subsidiaries or any of their respective properties may be bound or affected, (2) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or 

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ruling of any court, arbitrator or Governmental Authority applicable to the Parent Guarantor or any of its Significant Subsidiaries or (3) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Parent Guarantor or any of its Significant Subsidiaries.
Section 5.7    Governmental Authorizations, Etc.  Subject to the accuracy of the representations and warranties of the Purchasers in Section 6, no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required to be obtained or made by (a) the Company in connection with the execution, delivery or performance by the Company of this Agreement or the Notes or (b) the Parent Guarantor in connection with the execution, delivery or performance by the Parent Guarantor of this Agreement except as set forth in Schedule 5.7 and except for the filing of a Current Report on Form 8-K with the SEC and any necessary Blue Sky filings.  On the date of the Closing, each item listed on Schedule 5.7 shall have been duly obtained, will be final and in full force and effect and will not be subject to appeal or any condition which has not been satisfied.
Section 5.8    Litigation; Observance of Agreements, Statutes and Orders.  
(a)    There are no actions, suits, investigations or proceedings pending or, to the Knowledge of either Constituent Company, threatened against the Parent Guarantor or any of its Significant Subsidiaries or any property of the Parent Guarantor or any of its Significant Subsidiaries in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
(b)    Neither the Parent Guarantor nor any of its Significant Subsidiaries is (1) in default under any term of any agreement or instrument to which it is a party or by which it is bound, (2) in violation of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or (3) in violation of any applicable law, ordinance, rule or regulation of any Governmental Authority (including, without limitation, Environmental Laws, ERISA, the USA PATRIOT Act or any of the other laws and regulations that are referred to in Section 5.16), which default or violation, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
Section 5.9    Taxes.  The Parent Guarantor and its Significant Subsidiaries have filed all income and other material tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (a) the amount of which is not, individually or in the aggregate, Material or (b) the amount, applicability or validity of which is currently being contested in good faith by appropriate actions or proceedings and with respect to which the Parent Guarantor or one of its Significant Subsidiaries, as the case may be, has established adequate reserves in accordance with GAAP.  Neither Constituent Company knows of no basis for any other tax or assessment that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The charges, accruals and reserves on the books of the Parent Guarantor and its Significant Subsidiaries in respect of U.S. federal, state or other 

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taxes for all fiscal periods are adequate.  The U.S. federal income tax liabilities of the Parent Guarantor and its Significant Subsidiaries have been finally determined (whether by reason of completed audits or the statute of limitations having run) for all fiscal years up to and including the fiscal year ended December 31, 2011.
Section 5.10    Title to Property; Leases.  The Parent Guarantor and its Significant Subsidiaries have good and sufficient title or valid leasehold interests to their respective properties owned or leased by them that, individually or in the aggregate, are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Parent Guarantor or any of its Significant Subsidiaries after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens other than Permitted Liens.  All leases to which the Parent Guarantor or any of its Significant Subsidiaries is a party that, individually or in the aggregate, are Material are valid and are in full force and effect in all material respects.
Section 5.11    Licenses, Permits, Etc.  
(a)    The Parent Guarantor and its Significant Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks, trade names and domain names or rights thereto, without known conflict with the rights of others, except where the failure to own or possess the same would not reasonably be expected to result in a Material Adverse Effect.
(b)    To the Knowledge of each Constituent Company, no product or service of the Parent Guarantor or any of its Significant Subsidiaries infringes in any material respect any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name, domain name or other right owned by any other Person.
(c)    To the Knowledge of each Constituent Company, there is no violation by any Person of any right of the Parent Guarantor or any of its Significant Subsidiaries with respect to any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name, domain name or other right owned or used by the Parent Guarantor or any of its Significant Subsidiaries, except for such violations that would not reasonably be expected to result in a Material Adverse Effect.
Section 5.12    Compliance with ERISA.  
(a)    The Parent Guarantor and each ERISA Affiliate have operated and administered each Plan and Benefit Plan in compliance with ERISA and all other applicable laws, regulations and guidance except for such instances of noncompliance as have not resulted in and would not reasonably be expected, either individually or in the aggregate, to result in a Material Adverse Effect.  No ERISA Event has occurred that when taken together with all other such ERISA Events for which liability is reasonably expected to occur would reasonably be expected to result in a Material Adverse Effect.
(b)    The adjusted funding target attainment percentage under each of the Plans as of the end of such Plan’s most recently ended plan year, as determined by the Plans’ 

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enrolled actuary pursuant to Section 436 of the Code and applicable regulations, is not less than 70% and the accumulated benefit obligations of the Plans, determined on the basis of the actuarial assumptions utilized for purposes of the Parent Guarantor’s most recent audited financial statements, did not exceed the aggregate current value of the assets of such Plans by more than 45%.
(c)    The Parent Guarantor, its Subsidiaries and their ERISA Affiliates have never participated in, contributed to, or had any liability or obligation with respect to a Multiemployer Plan.
(d)    The accumulated postretirement benefit obligation (determined as of the last day of the Parent Guarantor’s most recently ended fiscal year in accordance with Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of the Parent Guarantor and its Subsidiaries did not exceed the aggregate current value of the assets that fund such obligation, as reported on the Parent Guarantor’s most recent audited consolidated financial statements, by more than 40%.
(e)    The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of Section 406 of ERISA or in connection with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code.  The representations by each Constituent Company to each Purchaser in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.3 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by such Purchaser.
Section 5.13    Private Offering.  Neither Constituent Company nor anyone acting on their behalf has offered, during a period of at least six months prior to the date of such offer, the Notes, the Guaranty provided in Section 13 or any similar Securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than 17 other Institutional Investors of the type described in clause (c) of the definition thereof, each of which has been offered the Notes and the Guaranty provided in Section 13 at a private sale for investment.  Neither Constituent Company nor anyone acting on their behalf has taken, or will take, any action that would subject the issuance or sale of the Notes and the delivery of the Guaranty provided in Section 13 to the registration requirements of Section 5 of the Securities Act or to the registration requirements of any securities or blue sky laws of any applicable jurisdiction.
Section 5.14    Use of Proceeds; Margin Regulations.  The Company will apply the proceeds of the sale of the Notes to finance and refinance capital expenditures including the repayment of short-term or long-term borrowings and/or to reimburse funds used for these purposes.  No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker 

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or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 25% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 25% of the value of such assets.  As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.
Section 5.15    Existing Indebtedness; Future Liens.  
(a)    Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Parent Guarantor and its Subsidiaries as of June 30, 2015 (including descriptions of the obligors and obligees, principal amount outstanding, any collateral therefor and any Guarantees thereof), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Parent Guarantor or its Subsidiaries.  Neither the Parent Guarantor nor any of its Significant Subsidiaries is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Parent Guarantor or such Significant Subsidiary and no event or condition exists with respect to any Indebtedness of the Parent Guarantor or any Significant Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.
(b)    Neither the Parent Guarantor nor any of its Significant Subsidiaries has agreed or consented to cause or permit any of its property, whether now owned or hereafter acquired, to be subject to a Lien that secures Indebtedness or to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien other than a Permitted Lien.
(c)    Neither the Parent Guarantor nor any of its Subsidiaries is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Parent Guarantor or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company or the Parent Guarantor, except as disclosed in Schedule 5.15.
Section 5.16    Foreign Assets Control Regulations, Etc.  
(a)    None of the Parent Guarantor, any of its Controlled Entities or, to the Parent Guarantor’s Knowledge, HEI is (1) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”) (an “OFAC ListedPerson”), (2) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (i) any OFAC Listed Person or (ii) any Person, entity, organization, foreign country or regime that is  

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subject to any OFAC Sanctions Program, or (3) otherwise blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions, including but not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, CISADA or any similar law or regulation with respect to Iran or any other country, the Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any economic sanctions regulations administered and enforced by the United States or any enabling legislation or executive order relating to any of the foregoing (collectively, “U.S. Economic Sanctions”) (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (1), clause (2) or clause (3), a “Blocked Person”).  None of the Parent Guarantor, any Controlled Entity or, to the Parent Guarantor’s Knowledge, HEI has been notified that its name appears or may in the future appear on a state list of Persons that engage in investment or other commercial activities in Iran or any other country that is subject to U.S. Economic Sanctions.
(b)    No part of the proceeds from the sale of the Notes hereunder constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Company, any Controlled Entity of the Parent Guarantor or HEI, directly or indirectly, (1) in connection with any investment in, or any transactions or dealings with, any Blocked Person, or (2) otherwise in violation of U.S. Economic Sanctions.
(c)    None of the Parent Guarantor, any Controlled Entity or, to the Parent Guarantor’s Knowledge, HEI (1) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti-Money Laundering Laws”) or any U.S. Economic Sanctions violations, (2) to the Parent Guarantor’s Knowledge, is under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any U.S. Economic Sanctions violations, (3) has been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. Economic Sanctions, or (4) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws.  The Parent Guarantor has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Parent Guarantor and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti-Money Laundering Laws and U.S. Economic Sanctions.
(d)    (1)    None of the Parent Guarantor, any Controlled Entity or, to the Parent Guarantor’s Knowledge, HEI (i) has been charged with, or convicted of bribery or any other anti-corruption related activity under any applicable law or regulation in a U.S. or any non-U.S. country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 (collectively, “Anti-Corruption Laws”), (ii) to the Parent Guarantor’s Knowledge, is under investigation by any U.S. or non-U.S. Governmental Authority for possible violation of Anti-Corruption Laws, (3) has been assessed civil or criminal penalties under any Anti-Corruption Laws or (4) has been or is the target of sanctions imposed by the United Nations or the European Union;
 

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(2)    To the Parent Guarantor’s Knowledge, none of the Parent Guarantor, any Controlled Entity or HEI has, within the last five years, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a Governmental Official or a commercial counterparty for the purposes of: (i) influencing any act, decision or failure to act by such Governmental Official in his or her official capacity or such commercial counterparty, (ii) inducing a Governmental Official to do or omit to do any act in violation of the Governmental Official’s lawful duty, or (iii) inducing a Governmental Official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure an improper advantage in violation of any applicable law or regulation or which would cause any holder to be in violation of any law or regulation applicable to such holder; and
(3)    No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage.  The Parent Guarantor has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Parent Guarantor and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti-Corruption Laws.
Section 5.17    Status under Certain Statutes.  Neither the Parent Guarantor nor any of its Subsidiaries is subject to regulation under the Investment Company Act of 1940, as amended, or the ICC Termination Act of 1995, as amended, or, except as set forth in Schedule 5.17, either the Public Utility Holding Company Act of 2005, as amended, or the Federal Power Act, as amended.
Section 5.18    Environmental Matters.  
(a)    Neither Constituent Company nor any Significant Subsidiary has Knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted asserting any claim against the Parent Guarantor or any of its Significant Subsidiaries or any of their respective real properties or other assets now or formerly owned, leased or operated by any of them, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.  
(b)    Neither Constituent Company nor any Significant Subsidiary has Knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or

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operated by any of them or to other assets or their use, except, in each case, such as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(c)    Neither the Parent Guarantor nor any of its Significant Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them in a manner which is contrary to any Environmental Law that would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(d)    Neither the Parent Guarantor nor any of its Significant Subsidiaries has disposed of any Hazardous Materials in a manner which is contrary to any Environmental Law that would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(e)    All buildings on all real properties now owned, leased or operated by the Parent Guarantor or any of its Significant Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 5.19    Pari Passu Ranking.  
(a)    The obligations of the Company under this Agreement and the Notes rank at least pari passu in right of payment with all other unsecured senior Indebtedness (actual or contingent) of the Company, including, without limitation, all unsecured senior Indebtedness of the Company described in Schedule 5.15.
(b)    The obligations of the Parent Guarantor under this Agreement rank at least pari passu in right of payment with all other unsecured senior Indebtedness (actual or contingent) of the Parent Guarantor, including, without limitation, all unsecured senior Indebtedness of the Parent Guarantor described in Schedule 5.15.
		
	SECTION 6.
	Representations of the Purchasers.

Section 6.1    Purchase for Investment.  Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not as an agent or nominee for any other Person and not with a view to the distribution or public offering thereof, provided that the disposition of such Purchaser’s or such pension or trust fund’s property shall at all times be within such Purchaser’s or such pension or trust fund’s control.  Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.
Section 6.2    Accredited Investor Status.  Each Purchaser severally represents that it is an Accredited Investor and has had an opportunity to ask questions of the Constituent Companies 

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and receive answers concerning the Parent Guarantor and its Subsidiaries and the terms and conditions of the sale of the Notes.
Section 6.3    Source of Funds.  Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:
(a)    the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or
(b)    the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or
(c)    the Source is either (1) an insurance company pooled separate account, within the meaning of PTE 90-1 or (2) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or
(d)    the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a Person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (1) the identity of such QPAM and (2) the names of any employee benefit plans  

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whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d); or
(e)    the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a Person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (1) the identity of such INHAM and (2) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or
(f)    the Source is a governmental plan; or
(g)    the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or
(h)    the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.3, the terms “employee benefit plan,” “governmental plan” and “separate account” shall have the respective meanings assigned to such terms in Section 3 of ERISA.
		
	SECTION 7.
	Information as to the Constituent Companies.

Section 7.1    Financial and Business Information.  The Constituent Companies shall deliver to each holder of a Note that is an Institutional Investor:
(a)    Quarterly Statements - within 60 days (or such shorter period as is the date by which such financial statements are required to be delivered under any Principal Credit Agreement or the date on which such corresponding financial statements are delivered under any Principal Credit Agreement if such delivery occurs earlier than such required delivery date) after the end of each quarterly fiscal period in each fiscal year of the Parent Guarantor (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of,
(1)    a consolidated and consolidating balance sheet of the Parent Guarantor and its Subsidiaries as at the end of such quarter, and
(2)    consolidated and consolidating statements of income, cash flows and retained earnings of the Parent Guarantor and its Subsidiaries 

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for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,
setting forth (in the case of the consolidated financial statements, in comparative form) the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of), the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer of the Parent Guarantor as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end audit adjustments and the absence of notes; provided, that delivery within the time periods specified above of copies of the Parent Guarantor’s Quarterly Report on Form 10-Q or applicable successor form (“Form 10-Q”) for such fiscal quarter, prepared in accordance with the SEC’s requirements therefor, containing the consolidated and consolidating financial statements described above and filed with the SEC, shall be deemed to satisfy the requirements of this Section 7.1(a); provided, further, that the Constituent Companies shall be deemed to have made such delivery of such Form 10-Q if such Form 10-Q shall have been made available for free within the time period specified above on the SEC’s EDGAR system (or any successor system adopted by the SEC) and shall have provided notification of the availability thereof to such holder;
(b)    Annual Statements - within 120 days (or such shorter period as is the date by which such financial statements are required to be delivered under any Principal Credit Agreement or the date on which such corresponding financial statements are delivered under any Principal Credit Agreement if such delivery occurs earlier than such required delivery date) after the end of each fiscal year of the Parent Guarantor, duplicate copies of,
(1)    a consolidated and consolidating balance sheet of the Parent Guarantor and its Subsidiaries, as at the end of such year, and
(2)    consolidated and consolidating statements of income, cash flows and retained earnings of the Parent Guarantor and its Subsidiaries, for such year,
setting forth (in the case of the consolidated financial statements, in comparative form) the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon (without a “going concern” or similar qualification or exception and without any qualification or exception as to the scope of the audit on which such opinion is based) of independent public accountants of recognized regional or national standing or any other independent public accountants reasonably acceptable to the Required Holders, which opinion shall state that such consolidated financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a 

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reasonable basis for such opinion in the circumstances; provided, that delivery within the time period specified above of copies of the Parent Guarantor’s Annual Report on Form 10-K or applicable successor form (“Form 10-K”) for such fiscal year (together with the Parent Guarantor’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act), prepared in accordance with the SEC’s requirements therefor, containing the consolidated and consolidating financial statements described above and filed with the SEC, shall be deemed to satisfy the requirements of this Section 7.1(b); provided, further, that the Constituent Companies shall be deemed to have made such delivery of such Form 10-K if such Form 10-K shall have been made available for free within the time period specified above on the SEC’s EDGAR system (or any successor system adopted by the SEC) and shall have provided notification of the availability thereof to such holder;
(c)    SEC and Other Reports - promptly, and in any event within seven Business Days after they become available, one copy of (1) each financial statement, report, notice or proxy statement sent by the Parent Guarantor or any of its Significant Subsidiaries to its principal lending banks as a whole (excluding information sent to such banks in the ordinary course of administration of a bank facility, such as information relating to pricing and borrowing availability) or to its public Securities holders generally and (2) each current or periodic report, each registration statement (without exhibits except as expressly requested by such Purchaser or holder), and each prospectus and all amendments thereto filed by the Parent Guarantor or any of its Significant Subsidiaries with the SEC; provided, that the Constituent Companies shall be deemed to have made delivery of the foregoing items under both clauses (1) and (2) if such item shall have been made available for free on the SEC’s EDGAR system (or any successor system adopted by the SEC) and shall have provided notification of the availability thereof to such holder;
(d)    Notice of Default or Event of Default - promptly, and in any event within seven days after a Responsible Officer of a Constituent Company becomes aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Constituent Companies are taking or propose to take with respect thereto;
(e)    ERISA Matters - promptly, and in any event within seven days after a Responsible Officer of a Constituent Company becomes aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Parent Guarantor or an ERISA Affiliate proposes to take with respect thereto:
(1)    with respect to any Plan, any reportable event, as defined in Section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date thereof; or

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(2)    the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Parent Guarantor or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or
(3)    any event, transaction or condition that could result in the incurrence of any liability by the Parent Guarantor or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien other than a Permitted Lien on any of the rights, properties or assets of the Parent Guarantor or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, would reasonably be expected to have a Material Adverse Effect;
(f)    Notices from Governmental Authority - promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Parent Guarantor or any of its Subsidiaries from any federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that would reasonably be expected to have a Material Adverse Effect provided, that the Constituent Companies shall be deemed to have made delivery of any notice of any such item if such item shall have been reported in a current or periodic report filed with the SEC and made available for free on the SEC’s EDGAR system (or any successor system adopted by the SEC) and the Company or the Parent Guarantor shall have provided notification of the availability thereof to such holder;
(g)    Resignation or Replacement of Independent Auditors - within 10 days following the date on which the Parent Guarantor’s independent auditors resign or the Parent Guarantor elects to change independent auditors, as the case may be, notification thereof, together with such supporting information as the Required Holders may request; provided, that delivery of a copy of a Current Report of the Parent Guarantor on Form 8-K or applicable successor form (“Form 8-K”) reporting such resignation or change of independent auditors, prepared in accordance with the SEC’s requirements therefor and filed with the SEC, shall be deemed to satisfy the requirements of this Section 7.1(g); provided, further, that the Constituent Companies shall be deemed to have made such delivery of such Form 8-K if the Parent Guarantor shall have made such Form 8-K available for free within the time period specified above on the SEC’s EDGAR system (or any successor system adopted by the SEC) and shall have provided notification of the availability thereof to such holder; and
(h)    Requested Information - with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Parent Guarantor or any of its Subsidiaries or relating to the ability of a Constituent Company to perform its obligations hereunder and, in the case of the 

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Company, under the Notes as from time to time may be reasonably requested by any such holder of a Note.
Section 7.2    Officer’s Certificate.  Each set of financial statements delivered to a holder of a Note that is an Institutional Investor pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer of each Constituent Company (which, in the case of a deemed delivery through a filing with the SEC, as permitted by Section 7.1(a) or Section 7.1(b), shall be by separate concurrent delivery of such certificate to such holder of a Note that is an Institutional Investor):
(a)    Covenant Compliance - setting forth the information that is required in order to establish whether the Constituent Companies were in compliance with the requirements of Section 10.1, Section 10.2 and Section 10.4 during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section that involves mathematical calculations, the information from such financial statements and other records of the Constituent Companies that is required to perform such calculations) and detailed calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence; provided that, if neither the Parent Guarantor nor any of its Significant Subsidiaries has been party to a Disposition pursuant to Section 10.4(c) during the relevant period covered by such certificate, then such certificate shall state such fact and information and calculations with respect to Section 10.4 shall not be included in such certificate.  In the event that a Constituent Company or any Subsidiary has made an election to measure any financial liability using fair value (which election is being disregarded for purposes of determining compliance with this Agreement pursuant to Section 23.3) as to the period covered by any such financial statement, such Senior Financial Officer’s certificate as to such period shall include a reconciliation from GAAP with respect to such election; and
(b)    Event of Default - certifying that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Constituent Companies and their Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default (other than a Default or Event of Default for which notice has been given to the holders of the Notes during such period pursuant to Section 7.1(d) and which has been subsequently waived or cured) or, if any such condition or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Parent Guarantor or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Constituent Companies shall have taken or propose to take with respect thereto.
Section 7.3    Visitation.  Each Constituent Company shall permit the representatives of each holder of a Note that is an Institutional Investor:

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(a)    No Default - if no Default or Event of Default then exists, at the expense of such holder and upon reasonable prior notice to a Constituent Company, to visit the principal executive office of such Constituent Company, to discuss the affairs, finances and accounts of such Constituent Company and its Subsidiaries with such Constituent Company’s officers, and (with the consent of such Constituent Company, which consent will not be unreasonably withheld, and in the presence of representatives of such Company) its independent public accountants, and (with the consent of such Constituent Company, which consent will not be unreasonably withheld) to visit the other offices and properties of such Constituent Company and each of its Subsidiaries, all at such reasonable times (within normal business hours) as may be reasonably requested in writing, but no more than twice in any fiscal year; and
(b)    Default - if a Default or Event of Default then exists, at the expense of the Constituent Companies and upon reasonable prior notice, to visit and inspect any of the offices or properties of a Constituent Company or any of its Subsidiaries, to examine all of their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision such Constituent Company authorizes said accountants to discuss the affairs, finances and accounts of such Constituent Company and its Subsidiaries), all at such times and as often as may be reasonably requested.
		
	SECTION 8.
	Payment and Prepayment of the Notes.

Section 8.1    Maturity.  As provided therein, the entire unpaid principal balance of each Note shall be due and payable on the Maturity Date thereof.
Section 8.2    Optional Prepayments with Make-Whole Amount.  The Company may, at its option, upon notice as provided below, prepay at any time all of the Notes, or from time to time any part of the Notes in an amount not less than $5,000,000 of the aggregate principal amount of the Notes then outstanding, at 100% of the principal amount so prepaid, together with interest accrued thereon to the date of prepayment plus the applicable Make‐Whole Amount, if any, determined for the prepayment date with respect to such principal amount.  The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 20 days, and not more than 60 days, prior to the date fixed for such prepayment.  Each such notice shall specify such prepayment date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer of the Company as to the estimated Make‐Whole Amount, if any, due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer of the Company specifying the calculation of such Make-Whole Amount as of the specified prepayment date.

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Section 8.3    Allocation of Partial Prepayments.  In the case of each partial prepayment of the Notes pursuant to Section 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.
Section 8.4    Maturity; Surrender, Etc.  In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any.  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.5    Purchase of Notes.  The Constituent Companies will not, and will not permit any of their Affiliates to, purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to an offer to purchase, made by a Constituent Company or an Affiliate, pro rata to the holders of all Notes at the time outstanding, upon the same terms and conditions.  Any such offer shall provide each holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least 10 Business Days.  If the holders of more than 25% of the principal amount of the Notes then outstanding accept such offer, the relevant Constituent Company shall, or shall cause its Affiliate to, promptly notify the remaining holders of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least five Business Days from its receipt of such notice to accept such offer.  The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.
Section 8.6    Make-Whole Amount.  “Make-Whole Amount” shall mean, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note, over the amount of such Called Principal, provided, however, that the Make‐Whole Amount may in no event be less than zero.  For the purposes of determining the Make‐Whole Amount, the following terms have the following meanings:
“Called Principal” shall mean, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.
“Discounted Value” shall mean, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and 

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at a discount factor (applied on the same periodic basis as that on which interest on the applicable Note is payable) equal to the Reinvestment Yield with respect to such Called Principal.
“Reinvestment Yield” shall mean, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the ask-side yield(s) reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury Securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there are no such U.S. Treasury Securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the ask-side yields Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury Securities with the maturities (1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.
If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” shall mean, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to, and greater than, such Remaining Average Life, and (2) the U.S. Treasury constant maturity so reported with the term closest to, and less than, such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.
“Remaining Average Life” shall mean, with respect to any Called Principal, the number of years obtained by dividing (a) such Called Principal into (b) the sum of the products obtained by multiplying (1) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (2) the number of years, computed on the basis of a 360‐day year composed of twelve 30‐day months calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.
“Remaining Scheduled Payments” shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that 

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would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of such Note, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or Section 12.1.
“Settlement Date” shall mean, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.
Section 8.7    Offer to Prepay Notes in the Event of a Change in Control.  
(a)    Notice of Change in Control.  The Company will, within five Business Days after a Constituent Company has Knowledge of the occurrence of a Change in Control, give written notice of such Change in Control to each holder of record of the Notes (determined as of the date of such notice).  Such notice shall contain and constitute an offer to prepay Notes as described in Section 8.7(b) and shall be accompanied by the certificate described in Section 8.7(e).
(b)    Offer to Prepay Notes.  The offer to prepay Notes contemplated by Sections 8.7(a) shall be an offer to each holder to prepay, on a date specified in such offer (the “Change in Control Proposed Prepayment Date”), in accordance with and subject to this Section 8.7, all, but not less than all, of the Notes held by such holder.  Such Change in Control Proposed Prepayment Date shall be a Business Day not less than 30 days and not more than 60 days after the date of such offer (or if the Change in Control Proposed Prepayment Date shall not be specified in such offer, the Change in Control Proposed Prepayment Date shall be the Business Day nearest to the 30th day after the date of such offer).
(c)    Acceptance; Rejection.  A holder of Notes may accept or reject the offer to prepay all, but not less than all, of the Notes held by such holder made pursuant to this Section 8.7 by causing a notice of such acceptance or rejection to be delivered to the Company at least five Business Days prior to the Change in Control Proposed Prepayment Date.  A failure by a holder of Notes to so respond to an offer to prepay made pursuant to this Section 8.7 or an attempt by such holder to accept the offer other than with respect to all Notes held by such holder shall be deemed to constitute a rejection of such offer by such holder.
(d)    Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 8.7 shall be at 100% of the principal amount of such Notes, together with accrued and unpaid interest on such Notes accrued to the date of prepayment but without any Make-Whole Amount.  The prepayment shall be made on the Change in Control Proposed Prepayment Date.

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(e)    Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.7 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying (1) the Change in Control Proposed Prepayment Date, (2) that such offer is made pursuant to this Section 8.7 and that failure by a holder to respond to such offer by the deadline established in Section 8.7(c) or to accept such offer with respect to all, but not less than all, of the Notes held by it shall result in such offer to such holder being deemed rejected, (3) the principal amount of each Note held by such holder offered to be prepaid, (4) the interest that would be due on each Note held by such holder offered to be prepaid, accrued to the Change in Control Proposed Prepayment Date, (5) that no Make-Whole Amount is payable in connection with such prepayment, (6) that the conditions of this Section 8.7 have been fulfilled and (7) in reasonable detail, the nature and date of the Change in Control.
(f)    “Change in Control” shall mean that HEI shall cease to own ,directly or indirectly, 100% of the voting capital stock or other equity or voting interests of the Parent Guarantor that is ordinarily entitled, in the absence of contingencies, to vote in the election of the Parent Guarantor’s directors (excluding, for the avoidance of doubt, preferred stock or other Securities of the Parent Guarantor the holders of which may be entitled to vote to elect directors only upon a default or under other limited circumstances specified in such Securities); provided, that the event specified above shall not constitute a “Change in Control” if, on the day of the occurrence of such event and at all times during the period of 90 consecutive days thereafter (the “Ratings Period”), the long-term unsecured, unenhanced Indebtedness of the Parent Guarantor shall maintain an Investment Grade Rating by at least one Ratings Agency or, if more than one Ratings Agency shall rate such Indebtedness during such Ratings Period, each such Ratings Agency.  Notwithstanding anything to the contrary in this Agreement, the completion of the transactions as contemplated by the Agreement and Plan of Merger by and among HEI, NextEra Energy Inc., NEE Acquisition Sub I, LLC and NEE Acquisition Sub II, Inc., dated December 3, 2014 (as it may be amended from time to time), shall not be deemed a “Change in Control” and to the extent such transactions are completed, the reference to HEI in the preceding definition of “Change in Control” shall be replaced with NextEra Energy Inc.
Section 8.8    Offer to Prepay Upon Sale of Assets.
(a)    Notice and Offer.  In the event of a Disposition of assets by a Constituent Company or any Significant Subsidiary where the Constituent Companies have elected to apply the Net Cash Proceeds of such Disposition pursuant to clause (B) of the second paragraph of Section 10.4(c), the Company shall, no later than the 335th day following the date of such Disposition, give written notice of such event (a “Sale of Assets Prepayment Event”) to each holder of Notes.  Such notice shall contain, and shall constitute, an irrevocable offer to each holder to prepay, at 100% of the aggregate Ratable Portion of the Notes held by such holder, together with interest on that portion of the Notes then being prepaid accrued to the Sale of Assets Prepayment Date but, in any case, without any Make-Whole Amount, the Ratable Portion of the Notes held by such holder on the date specified in such notice (the “Sale of Assets Prepayment Date”), which date shall be a Business Day not less than 30 days and not more than 60 days after the date of 

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such notice.  Such notice shall be sent to each holder of record of the Notes (determined as of the date of such notice) and such notice shall also state (1) that such offer is being made pursuant to this Section 8.8 and that the failure by such holder to respond to such offer by the deadline established in Section 8.8(b) or to accept such offer with respect to all, but not less than all, of the Notes held by it shall result in such offer to such holder being deemed rejected; (2) the Ratable Portion of each such Note held by such holder offered to be prepaid; (3) the prepayment price of each Note as described in Section 8.8(b); (4) the interest that would be due on the Ratable Portion of each such Note offered to be prepaid, accrued to, but not including, the Sale of Assets Prepayment Date and (5) in reasonable detail, a description of the nature and the date of the Sale of Assets Prepayment Event giving rise to such offer of prepayment.  
(b)    Acceptance and Payment.  A holder of Notes may accept or reject the offer to prepay the Ratable Portion of the Notes held by such holder pursuant to this Section 8.8 by causing a notice of such acceptance or rejection to be delivered to the Company at least five Business Days prior to the Sale of Assets Prepayment Date.  A failure by a holder of the Notes to respond to an offer to prepay made pursuant to this Section 8.8 or to accept such offer with respect to all, but not less than all, of the Notes held by it shall be deemed to constitute a rejection of such offer by such holder.  If so accepted, such offered prepayment of the Ratable Portion of the Notes of each holder that has accepted such offer shall be due and payable on the Sale of Assets Prepayment Date.  Such offered prepayment shall be made at 100% of the aggregate Ratable Portion of the Notes held by each holder that has accepted such offer, together with interest on that portion of the Notes then being prepaid accrued to the Sale of Assets Prepayment Date but, in any case, without any Make-Whole Amount.
		
	SECTION 9.
	Affirmative Covenants.

Each Constituent Company covenants that so long as any of the Notes are outstanding:
Section 9.1    Compliance with Laws.  Without limiting Section 10.8, each Constituent Company will, and will cause each of its Significant Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, Environmental Laws, ERISA, the USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.16, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.2    Insurance.  Each Constituent Company will, and will cause each of its Significant Subsidiaries to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is 

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customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.
Section 9.3    Maintenance of Properties.  Each Constituent Company will, and will cause each of its Significant Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear and other than damage from casualties provided such damage is repaired within a commercially reasonable period of time), so that the business carried on in connection therewith may be properly conducted at all times; provided, that this Section shall not prevent a Constituent Company or any Significant Subsidiary from discontinuing the operation and the maintenance of any of their properties if such discontinuance is desirable in the conduct of its business and such Constituent Company has concluded that such discontinuance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.4    Payment of Taxes and Claims.  Each Constituent Company will, and will cause each of its Significant Subsidiaries to, file all income and other material tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges or levies imposed on them or any of their properties, assets, income or franchises, to the extent the same have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of a Constituent Company or any Significant Subsidiary other than a Permitted Lien; provided that neither Constituent Company nor any Significant Subsidiary need pay any such tax, assessment, charge, levy or claim if (1) the amount, applicability or validity thereof is contested by such Constituent Company or such Significant Subsidiary on a timely basis in good faith and in appropriate proceedings, and such Constituent Company or a Significant Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of such Constituent Company or such Significant Subsidiary or (2) the nonpayment of all such taxes, assessments, charges, levies and claims in the aggregate would not reasonably be expected to have a Material Adverse Effect.
Section 9.5    Corporate Existence, Etc.  Subject to Section 10.4, each Constituent Company will at all times preserve and keep its corporate existence in full force and effect.  Subject to Section 10.4, each Constituent Company will at all times preserve and keep, or cause to be preserved and kept, in full force and effect (a) the corporate existence of each of its Significant Subsidiaries (unless merged into a Constituent Company or into another Subsidiary (which is or by reason of such merger becomes a Significant Subsidiary) in which a Constituent Company owns all of the voting capital stock or other equity or voting interests that are ordinarily entitled, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such Subsidiary) and (b) all rights and franchises of each Constituent Company and each Significant Subsidiary, unless, in the good faith judgment of such Constituent Company, the termination of, or failure to preserve and keep in full force and effect, such corporate existence, right or franchise would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.6    Books and Records.  Each Constituent Company will, and will cause each of its Significant Subsidiaries to, maintain proper books of record and account in conformity 

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with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over such Constituent Company or such Significant Subsidiary, as the case may be.  Each Constituent Company will, and will cause each of its Significant Subsidiaries to, keep books, records and accounts which, in reasonable detail, accurately reflect all transactions and dispositions of assets.  Each Constituent Company and its Significant Subsidiaries have devised a system of internal accounting controls sufficient to provide reasonable assurances that their respective books, records, and accounts accurately reflect all transactions and dispositions of assets and each Constituent Company will, and will cause each of its Significant Subsidiaries to, continue to maintain such system.
Section 9.7    Pari Passu Ranking.  
(a)    The Notes and all other obligations of the Company under this Agreement are and at all times shall remain direct obligations of the Company ranking pari passu as against the assets of the Company with all other present and future unsecured senior Indebtedness (actual or contingent) of the Company.
(b)    The obligations of the Parent Guarantor under this Agreement are and at all times shall remain direct obligations of the Parent Guarantor ranking pari passu as against the assets of the Parent Guarantor with all other present and future unsecured senior Indebtedness (actual or contingent) of the Parent Guarantor.
		
	SECTION 10.
	Negative Covenants.

Each Constituent Company covenants that so long as any of the Notes are outstanding:
Section 10.1    Capitalization Ratio.  The Constituent Companies will not permit the Consolidated Capitalization Ratio to be less than 0.35 to 1.00 as of the end of any fiscal quarter or fiscal year end of the Parent Guarantor.
Section 10.2    Consolidated Subsidiary Funded Debt to Capitalization Ratio.  
(a)    The Company will not permit its Consolidated Subsidiary Funded Debt to Capitalization Ratio to exceed 0.65 to 1.00 as of the end of any fiscal quarter or fiscal year end of the Company. 
(b)    The Constituent Companies will not permit the Consolidated Subsidiary Funded Debt to Capitalization Ratio of any of their Significant Subsidiaries to exceed 0.65 to 1.00 as of the end of any fiscal quarter or fiscal year end of such Constituent Company.  
Section 10.3    Limitation on Liens.  The Constituent Companies will not, and will not permit any of their Significant Subsidiaries to, incur, create, assume or permit to exist any Lien on the capital stock or similar Equity Interests of or other ownership interests in any Significant Subsidiary or any Lien on any of its other assets, now or hereafter owned, without effectively providing concurrently therewith to equally and ratably secure the obligations of the Constituent Companies under this Agreement and, in the case of the Company, the Notes pursuant to 

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documentation in form and substance reasonably satisfactory to the Required Holders (including, without limitation, an intercreditor agreement), except the following Liens (“Permitted Liens”):
(a)    deposits under workmen’s compensation, unemployment insurance and social security laws, or to secure the performance of bids, tenders, contracts (other than for the repayment of borrowed money), leases, statutory obligations, surety or appeal bonds, or indemnity, performance or other similar bonds, in the ordinary course of business for sums not yet due and payable beyond any applicable grace or cure period or the payment of which is not at the time required by Section 9.4; 
(b)    Liens (other than any Lien imposed by ERISA) imposed by law, such as carriers’, warehousemen’s or mechanics’ liens, incurred in good faith in the ordinary course of business and securing obligations that are not yet due and payable beyond any applicable grace or cure period or the payment of which is not at the time required by Section 9.4, and Liens arising out of judgments or awards not exceeding $50,000,000 in the aggregate with respect to which appeals are being prosecuted, execution pending such appeals having been effectively stayed;
(c)    the right reserved to, or vested in, any municipality or public authority by the terms of any right, power, franchise, grant, license, or permit, or by any provision of law, to purchase or recapture or designate a purchaser of any property; 
(d)    any Lien securing a tax, assessment or other governmental charge or levy or the claim of a materialman, mechanic, carrier, warehouseman or landlord for labor, materials, supplies or rentals incurred in the ordinary course of business, in each case, for sums not yet due and payable beyond any applicable grace or cure period or the payment of which is not at the time required by Section 9.4; 
(e)    any Lien existing on any property or asset at the time such property or asset is acquired by a Constituent Company or any Significant Subsidiary (including acquisition by merger or consolidation), but only if and so long as (1) such Lien was not created in contemplation of such property or asset being acquired, (2) such Lien is and will remain confined to the property or asset subject to it at the time such property or asset is acquired and to improvements thereafter erected on or attached to such property or asset or any property or asset acquired in substitution or replacement thereof and (3) such Lien secures only the obligation secured thereby at the time such property or asset is acquired; 
(f)    any Lien in existence on the date of this Agreement to the extent set forth on Schedule 10.3, but only, in the case of each such Lien, to the extent it secures an obligation outstanding on the date of this Agreement to the extent set forth on such Schedule; 
(g)    any Lien securing Purchase Money Indebtedness, or to secure payment of all or any part of the cost of construction of improvements as they are incurred or within 270 days thereafter, but only if, in the case of each such Lien, (1) such Lien shall at all times be confined solely to the property or asset the purchase price of which was financed 

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through the incurrence of the Purchase Money Indebtedness secured by such Lien and to improvements thereafter erected on or attached to such property or asset or any property or asset acquired in substitution or replacement thereof and (2) such Lien attached to such property or asset within 270 days of the acquisition or improvement of such property or asset; 
(h)    easements, reservations, rights-of-way, restrictions, survey exceptions and other similar encumbrances as to real property which customarily exist on properties of corporations engaged in similar activities and similarly situated and which do not interfere in any material respect with the conduct of the business of a Constituent Company or any Significant Subsidiary conducted at the property subject thereto; 
(i)    licenses, leases and subleases of property owned or leased by a Constituent Company or any Significant Subsidiary not interfering with the ordinary conduct of the business of the Constituent Company and the Significant Subsidiaries; 
(j)    Liens securing obligations, neither assumed by a Constituent Company or any Significant Subsidiary nor on account of which a Constituent Company or any Significant Subsidiary customarily pays interest, upon real estate or under which a Constituent Company or any Significant Subsidiary has a right-of-way, easement, franchise or other servitude or of which a Constituent Company or any Significant Subsidiary is the lessee of the whole thereof or any interest therein for the purpose of locating transmission and distribution lines and related support structures, pipe lines, substations, measuring stations, tanks, pumping or delivery equipment or similar equipment; 
(k)    Liens arising by virtue of any statutory or common law or contractual provision relating to banker’s liens, rights of setoff or similar rights as to deposit accounts or other funds maintained with a depository institution in the ordinary course of business; 
(l)    any Lien constituting a renewal, extension or replacement of a Lien permitted under clause (e), (f) or (g) of this Section 10.3, but only if (1) at the time such Lien is granted and immediately after giving effect thereto, no Default or Event of Default would exist and be continuing, (2) such Lien is limited to all or a part of the property or asset that was subject to the Lien so renewed, extended or replaced and to improvements thereafter erected on or attached to such property or asset or any property or asset acquired in substitution or replacement thereof, (3) the principal amount of the obligations secured by such Lien does not exceed the principal amount of the obligations secured by the Lien so renewed, extended or replaced, together with reasonable out-of-pocket expenses and accrued interest with respect to the obligations so renewed, extended or replaced, and (4) the obligations secured by such Lien bear interest at a rate per annum not exceeding the rate borne by the obligations secured by the Lien so renewed, extended or replaced except for any increase that, in the reasonable opinion of the relevant Constituent Company, is commercially reasonable at the time of such increase; and
(m)    other Liens securing Indebtedness or other monetary obligations of a Constituent Company or any Significant Subsidiary; provided, that at the time any such 

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Indebtedness or other monetary obligation is incurred (and after giving effect thereto and to the concurrent repayment of any Indebtedness or other monetary obligations with the proceeds thereof), (1) in the case of the Parent Guarantor, the aggregate principal amount of all Indebtedness and other monetary obligations then secured pursuant to this clause (m) shall not exceed an amount equal to 15% of Consolidated Capitalization and (2) in the case of the Company, the aggregate principal amount of all Indebtedness and other monetary obligations of the Company and its Significant Subsidiaries then secured pursuant to this clause (m) shall not exceed an amount equal to 15% of the Company’s Consolidated Subsidiary Capitalization; and provided further that, notwithstanding the foregoing, neither Constituent Company will grant any Liens securing Indebtedness outstanding under a Principal Credit Agreement pursuant to this Section 10.3(m) unless and until all obligations of the Constituent Companies under this Agreement and, in the case of the Company, the Notes shall concurrently be secured equally and ratably with such Indebtedness pursuant to documentation in form and substance reasonably satisfactory to the Required Holders (including, without limitation, an intercreditor agreement).
Section 10.4    Sale of Assets; Consolidation; Merger.
(a)    The Constituent Companies will not, and will not permit any of their Significant Subsidiaries to, Dispose of all or substantially all of its properties and assets to any Person; provided that this provision shall not apply to any such Disposition by (1) any Significant Subsidiary (other than the Company) to a Constituent Company or to any other Subsidiary (which is or by reason of such transfer becomes a Significant Subsidiary) in which a Constituent Company owns all of the voting capital stock or other equity or voting interests that are ordinarily entitled, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such Subsidiary or (2) the Company to the Parent Guarantor.
(b)    The Constituent Companies will not, and will not permit any of their Significant Subsidiaries to, consolidate with or merge into any other Person (other than a merger of a Significant Subsidiary (other than the Company) into, or a consolidation of a Significant Subsidiary (other than the Company) with, a Constituent Company or any other Subsidiary (which is or by reason of such transfer becomes a Significant Subsidiary) in which a Constituent Company owns all of the voting capital stock or other equity or voting interests that are ordinarily entitled, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such Subsidiary) or acquire all or substantially all the properties and assets of any Person unless:
(1)    in the case of a merger or consolidation involving the Parent Guarantor, the Parent Guarantor is the surviving corporation;
(2)    in the case of a merger or consolidation involving the Company and a Person other than the Parent Guarantor, the surviving corporation is either (i) the Company, (ii) Maui Electric or (iii) another Subsidiary (which is or by reason of such transfer becomes a Significant 

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Subsidiary) in which the Parent Guarantor owns all of the voting capital stock or other equity or voting interests that are ordinarily entitled, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such Subsidiary and, in the case of clauses (ii) and (iii) above, the Parent Guarantor shall have reaffirmed in writing its obligations under Section 13 and the conditions of Section 10.4(d) shall be satisfied;
(3)    after giving effect to any merger or consolidation or acquisition, the Constituent Companies are in pro forma compliance with Section 10.1;
(4)    no Default or Event of Default exists or results therefrom and is continuing; and
(5)    the holders of Notes shall have received prior to the consummation of any such merger, consolidation or acquisition, a certificate executed by a Senior Financial Officer of each Constituent Company as to each of the matters described in clauses (1) through (4) above.
(c)    Except as permitted by the provisions of clauses (a) and (b) of this Section 10.4, the Constituent Companies will not, and will not permit any of their Significant Subsidiaries to Dispose of any property, including the capital stock or similar Equity Interests of or other ownership interests in Subsidiaries owned by it, in one or more transactions, to any Person, other than (1) Dispositions in the ordinary course of business, (2) Dispositions by a Constituent Company or a Significant Subsidiary to a Constituent Company or to a Subsidiary (which is or by reason of such transfer becomes a Significant Subsidiary) in which a Constituent Company owns all of the voting capital stock or other equity or voting interests that are ordinarily entitled, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such Subsidiary, (3) Dispositions within 365 days after the acquisition or construction by a Constituent Company or a Significant Subsidiary of the assets so Disposed of, if a Constituent Company or a Significant Subsidiary shall concurrently with such Disposition lease back such assets as lessee, or (4) other Dispositions not otherwise permitted by this Section 10.4(c); provided that (i) after giving effect thereto, no Default or Event of Default shall have occurred and be continuing and (ii) the aggregate net book value of all property Disposed of pursuant to this Section 10.4(c)(4) during the period of 12 consecutive months ending on the date of such Disposition would not exceed (A) an amount equal to 15% of Consolidated Total Assets determined as of the end of the then most recently ended fiscal quarter of the Parent Guarantor and (B) in the case of a Disposition by the Company or any of its Significant Subsidiaries, an amount equal to 15% of the Company’s Consolidated Subsidiary Total Assets determined as of the end of the then most recently ended fiscal quarter of the Company.
Notwithstanding the foregoing, the Constituent Companies may, or may permit any Significant Subsidiary to, make a Disposition of assets and such assets shall not be 

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subject to, or included in, the foregoing limitation and computation contained in clause (4) of the preceding paragraph to the extent, and from the date, that the Net Cash Proceeds (if any) from such Disposition are, within 365 days after such Disposition, either (A) reinvested in (or used, directly or indirectly, to purchase or otherwise acquire) productive assets by a Constituent Company or a Significant Subsidiary to be used in the business of such Constituent Company or such Significant Subsidiary or (B) applied, or offered to be applied, to the payment or prepayment of any outstanding Indebtedness of a Constituent Company or a Significant Subsidiary other than, in the case of a Constituent Company, outstanding Subordinated Debt (in connection with any offer to prepay, whether or not such offer is accepted by the applicable holder of such Indebtedness); provided that in the course of making such application or offer, the Company shall offer to prepay each outstanding Note in accordance with Section 8.8 in a principal amount which equals the Ratable Portion for such Note.
(d)    The Parent Guarantor will not Dispose of any of the voting capital stock or other equity or voting interests that are ordinarily entitled, in the absence of contingencies, to vote in the election of directors of the Company or Maui Electric; provided that this provision shall not prohibit the ability of either the Company or Maui Electric (or both) to be merged into the Parent Guarantor or the Company or Maui Electric to be merged into one another or into another Subsidiary (which is or by reason of such transfer becomes a Significant Subsidiary) in which a Constituent Company owns all of the voting capital stock or other equity or voting interests that are ordinarily entitled, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such Subsidiary (a “Surviving Subsidiary”); provided further that if the Company shall be merged into the Parent Guarantor, Maui Electric or a Surviving Subsidiary, the Parent Guarantor, Maui Electric or such Surviving Subsidiary, as applicable, shall have executed and delivered to each holder of the Notes its assumption of the due and punctual performance and observance of each covenant and condition of the Company under this Agreement and the Notes, the Parent Guarantor shall have confirmed in writing its guarantee of the Obligations so assumed (if the assumption is not by the Parent Guarantor) and the Parent Guarantor shall have caused to be delivered to each holder of the Notes an opinion of nationally recognized independent counsel, or other independent counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof; and provided further, that the limitation on Dispositions provided for in this Section 10.4(d) shall continue with respect to each Surviving Subsidiary.
Section 10.5    Limitation on Restrictive Agreements.  The Constituent Companies will not, and will not permit any of their Significant Subsidiaries to, enter into, incur, permit to exist, directly or indirectly, any agreement or arrangement that prohibits, restricts or imposes any condition upon the ability of any Significant Subsidiary to (a) make any Restricted Payments or to repay any Indebtedness owed to its parent Constituent Company, (b) make loans or advances to its parent Constituent Company or (c) transfer any of its property or assets to its parent Constituent Company, provided that the foregoing shall not apply to restrictions and conditions (1) imposed by law or regulation or by order of any regulatory agency, body or authority, including under agreements with regulatory agencies, bodies or authorities, (2) contained in or 

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otherwise expressly permitted by this Agreement, (3) existing on the date of this Agreement and identified on Schedule 10.5, and amendments and modifications thereto, so long as such amendments and modifications do not materially expand the scope of any such restriction or condition, or (4) that are entered into, incurred or permitted to exist following the date hereof that are not materially more expansive in scope than the restrictions and conditions referred to in this Section 10.5.
Section 10.6    Transactions with Affiliates.  Except as specifically permitted by this Agreement to be entered into with an Affiliate, the Constituent Companies will not, and will not permit any of their Significant Subsidiaries to, sell, transfer, lease or otherwise Dispose of (including pursuant to a merger) any property or assets to, or purchase, lease or otherwise acquire (including pursuant to a merger) any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions at prices and on terms and conditions not materially less favorable to such Constituent Company or such Significant Subsidiary than could be obtained on an arm’s length basis from unrelated third parties, (b) transactions requiring the payment of fees, expenses, indemnities or other payments pursuant to the inter-company management or service agreements in existence on the date of this Agreement and set forth on Schedule 10.6 or any amendment thereto or replacement thereof to the extent such an amendment or replacement is not adverse to the Purchasers or any other holder of the Notes in any material respect and/or (c) transactions between a Constituent Company and its Subsidiaries or between Subsidiaries. 
Section 10.7    Line of Business.  The Constituent Companies will not, and will not permit any of their Significant Subsidiaries to, engage in any business, if, as a result, when taken as a whole, the general nature of the business of the Constituent Companies and the Significant Subsidiaries would be substantially changed from the general nature of the business of the Constituent Companies and the Significant Subsidiaries on the date of this Agreement as described in the Memorandum; provided, that this provision shall not be interpreted to prevent changes in the general nature of the business of a Constituent Company or any Significant Subsidiary that are similar to changes occurring generally or commonly in the industries in which they are currently operating.
Section 10.8    Terrorism Sanctions Regulations.  The Constituent Companies will not, and will not permit any Controlled Entity to, (a) become, own or control a Blocked Person or any Person that is the target  of sanctions imposed by the United Nations or by the European Union, or (b) directly or indirectly to have any investment in or engage in any dealing or transaction (including, without limitation, any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (1) would cause any holder to be in violation of any law or regulation applicable to such holder, or (2) is prohibited by or subject to sanctions under any U.S. Economic Sanctions, or (c) engage, nor shall any Affiliate of either engage, in any activity that could subject such Person or any holder to sanctions under CISADA or any similar law or regulation with respect to Iran or any other country that is subject to U.S. Economic Sanctions.

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	SECTION 11.
	Events of Default.

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:
(a)    the Company defaults in the payment of any principal or Make-Whole Amount on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or
(b)    the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or
(c)    default shall occur in the performance of or compliance with any term contained in Section 7.1(d), Section 10.1 through Section 10.5, inclusive, Section 10.7 or Section 10.8; or 
(d)    default shall occur in the performance of or compliance with any term contained herein (other than those referred to in Sections 11(a), (b) and (c)) and such default is not remedied within 30 days after the earlier of (1) a Constituent Company obtaining Knowledge of such default and (2) a Constituent Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or
(e)    any representation or warranty made in writing by or on behalf of a Constituent Company in this Agreement or made in any writing by or on behalf of a Constituent Company or by any officer of a Constituent Company furnished in connection with the transactions contemplated hereby or thereby proves to have been false or incorrect in any material respect on the date as of which made; or
(f)    (1) a Constituent Company or any Significant Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount of at least $50,000,000 beyond any period of grace provided with respect thereto, or (2) a Constituent Company or any Significant Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount of at least $50,000,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment or (3) as a consequence of the occurrence or continuation of any event or condition (other than (i) the passage of time, (ii) any notice of voluntary prepayment delivered by a Constituent Company or any Significant Subsidiary, and any voluntary prepayment pursuant thereto, so long as no default or event of default exists with respect to such Indebtedness, (iii) any Change in Control or Disposition of assets which triggers the obligation or right of the Company to offer to prepay Notes pursuant to Section 8.7 or 8.8, and any voluntary prepayment pursuant thereto, (iv) any voluntary sale of assets by a 

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Constituent Company or any Significant Subsidiary as a result of which any Indebtedness secured by such assets is required to be prepaid or (v) the right of the holder of Indebtedness to convert such Indebtedness into Equity Interests) (A) a Constituent Company or any Significant Subsidiary has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $50,000,000 or (B) one or more Persons have the right to require the Constituent Company or any Subsidiary to purchase or repay such Indebtedness; or
(g)    a Constituent Company or any Significant Subsidiary (1) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (2) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (3) makes an assignment for the benefit of its creditors, (4) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (5) is adjudicated as insolvent or to be liquidated or (6) takes corporate action for the purpose of any of the foregoing; or
(h)    a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by a Constituent Company or any Significant Subsidiary, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of a Constituent Company or any Significant Subsidiary, or any such petition shall be filed against a Constituent Company or any Significant Subsidiary, and such order shall not have been stayed or vacated and such petition shall not be dismissed, in either case, within 60 days; or
(i)    one or more final judgments or orders for the payment of money aggregating in excess of $50,000,000 (excluding any amount that is covered by insurance where the relevant insurance company has been notified of the claim or judgment and has not expressly denied coverage in writing), including, without limitation, any such final order enforcing a binding arbitration decision, are rendered against one or more of the Constituent Companies and the Significant Subsidiaries and which judgments or orders are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or
(j)    if (1) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under Section 412 of the Code, (2) a notice of intent to terminate any Plan shall have been filed with the PBGC or the Company shall have taken any formal action to terminate any Plan or the PBGC shall have instituted proceedings under ERISA Section 4042 to terminate or appoint a trustee 

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to administer any Plan or the PBGC shall have notified a Constituent Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (3) the adjusted funding target attainment percentage (as defined in Section 436(j)(2) of the Code) under any of the Plans shall be less than 60%, (4) a Constituent Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (5) a Constituent Company or any ERISA Affiliate withdraws from any Multiemployer Plan or (6) a Constituent Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of a Constituent Company or any Subsidiary thereunder; and any such event or events described in clauses (1) through (6) above, either individually or together with any other such event or events, could reasonably be expected to have a Material Adverse Effect; or
(k)    the Parent Guarantor defaults in the performance or compliance with the Guaranty provided in Section 13 or the Guaranty provided in Section 13 shall for any reason cease to be, or be asserted in writing by the Parent Guarantor not to be, in full force and effect, and enforceable in accordance with its terms.
As used in Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in Section 3 of ERISA.
		
	SECTION 12.
	Remedies on Default, Etc.

Section 12.1    Acceleration.  
(a)    If an Event of Default with respect to a Constituent Company described in Section 11(g) or (h) (other than an Event of Default described in clause (1) of Section 11(g) or described in clause (6) of Section 11(g) by virtue of the fact that such clause encompasses clause (1) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.
(b)    If any other Event of Default has occurred and is continuing, the Required Holders may at any time at their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.
(c)    If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (1) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the applicable Default Rate to the full extent permitted by applicable law) and (2) the applicable Make-Whole Amount, if any, determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, 

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all of which are hereby waived.  The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for), and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default is intended to provide compensation for the deprivation of such right under such circumstances.
Section 12.2    Other Remedies.  If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.
Section 12.3    Rescission.  At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the Required Holders by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the applicable Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 18 and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes.  No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.
Section 12.4    No Waivers or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this Agreement or any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the Constituent Companies under Section 16, the Constituent Companies will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection action under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.
		
	SECTION 13.
	Guaranty.

Section 13.1    The Guaranty.  The Parent Guarantor hereby absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, to each holder of the Notes (a) the full and punctual payment when due, whether at maturity, by acceleration, by redemption or otherwise, of the principal of, Make-Whole Amount, if any, and interest 

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(including any interest accruing after the commencement of any proceeding in bankruptcy and any additional interest that would accrue but for the commencement of such proceeding) on the Notes and all other obligations of the Company under this Agreement and (b) the full and prompt performance and observance by the Company of each and all of the obligations, covenants and agreements required to be performed or owed by the Company under the terms of this Agreement and the Notes (all the foregoing being hereinafter collectively called the “Obligations”).  The Parent Guarantor further agrees (to the extent permitted by applicable law) that the Obligations may be extended or renewed, in whole or in part, without notice or further assent from it, and that it shall remain bound under this Section 13 notwithstanding any extension or renewal of any Obligation. 
Section 13.2    Waiver of Defenses.  The Parent Guarantor waives presentation to, demand of payment from and protest to the Company of any of the Obligations and also waives notice of protest for nonpayment.  The Parent Guarantor waives notice of any default under this Agreement, the Notes or the Obligations.  The obligation of the Parent Guarantor hereunder shall not be affected by (a) the failure of any holder of the Notes to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Agreement, the Notes or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Agreement, the Notes or any other agreement; (d) the release of any security held by any holder of the Notes for the Obligations or any of them or (e) any change in the ownership of the Company.
Section 13.3    Guaranty of Payment.  The Parent Guarantor further agrees that the guaranty herein constitutes a guaranty of payment when due (and not a guaranty of collection) and waives any right to require that any resort be had by any holder of the Notes to any other Person or to any security held for payment of the Obligations.
Section 13.4    Guaranty Unconditional.  The obligations of the Parent Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than payment of the Obligations in full), including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise.  Without limiting the generality of the foregoing, the obligations of the Parent Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any holder of the Notes to assert any claim or demand or to enforce any remedy under this Agreement, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of the Parent Guarantor or would otherwise operate as a discharge of the Parent Guarantor as a matter of law or equity.
Section 13.5    Reinstatement.  The Parent Guarantor further agrees that the guaranty herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of the principal of, Make-Whole Amount, if any, or interest on any of the 

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Obligations is rescinded or must otherwise be restored by any holder of the Notes upon the bankruptcy or reorganization of the Company or otherwise.
Section 13.6    Payment on Demand.  In furtherance of the foregoing and not in limitation of any other right which any holder of the Notes has at law or in equity against the Parent Guarantor by virtue hereof, upon the failure of the Company to pay any of the Obligations when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, the Parent Guarantor hereby promises to and shall, upon demand by any holder of the Notes, forthwith pay, or cause to be paid, in cash, to the holders an amount equal to the sum of (a) the unpaid amount of such Obligations then due and owing and (b) accrued and unpaid interest on such Obligations then due and owing (but only to the extent not prohibited by applicable law).
Section 13.7    Stay of Acceleration.  The Parent Guarantor further agrees that, as between itself, on the one hand, and the holders of the Notes, on the other hand, (a) the maturity of the Obligations guaranteed hereby may be accelerated as provided in this Agreement for the purposes of the guaranty herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby and (b) in the event of any such declaration of acceleration of such Obligations, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Parent Guarantor for the purposes of this guaranty.
Section 13.8    No Subrogation.  Notwithstanding any payment or payments made by the Parent Guarantor hereunder, the Parent Guarantor shall not be entitled to be subrogated to any of the rights of any holder of the Notes against the Company or any collateral security or guaranty or right of offset held by any holder for the payment of the Obligations, nor shall the Parent Guarantor seek or be entitled to seek any contribution or reimbursement from the Company in respect of payments made by the Parent Guarantor hereunder, until all amounts owing to the holders of the Notes by the Company on account of the Obligations are paid in full.  If any amount shall be paid to the Parent Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held by the Parent Guarantor in trust for the holders of the Notes, segregated from other funds of the Parent Guarantor, and shall, forthwith upon receipt by the Parent Guarantor, be turned over to the holders of the Notes in the exact form received by the Parent Guarantor (duly indorsed by the Parent Guarantor to the holders of the Notes, if required), to be applied against the Obligations. 
Section 13.9    Marshalling.  No holder of the Notes shall be under any obligation:  (a) to marshal any assets in favor of the Parent Guarantor or in payment of any or all of the liabilities of the Company under or in respect of the Notes and this Agreement or the obligations of the Parent Guarantor hereunder or (b) to pursue any other remedy that the Parent Guarantor may or may not be able to pursue itself and that may lighten the Parent Guarantor’s burden, any right to which the Parent Guarantor hereby expressly waives.
Section 13.10    Consideration.  The Parent Guarantor has received, or shall receive, direct or indirect benefits from the making of this guaranty.

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	SECTION 14.
	Registration; Exchange; Substitution of Notes; Company’s Agent.

Section 14.1    Registration of Notes.  The Company shall keep at its principal executive office, or cause to be kept at the office of either the Parent Guarantor or the Company’s Agent, a register for the registration of record ownership, and registration of transfers of record ownership, of all Notes.  The name and address of each holder of Notes (which holder may be a nominee if so designated in writing by the beneficial owner of such Note or Notes), each transfer of any Note and the name and address of each transferee thereof shall be registered in such register.  If any holder of one or more Notes is shown to be a nominee with respect to such Notes, then the name and address of the beneficial owner of such Note or Notes shall also be registered in such register as an owner and holder thereof, in which event, for purposes of Sections 7, 8.7, 8.8, 12, 18.2 and 19, and only for purposes of those Sections, “holder” shall mean the beneficial owner of the applicable Note whose name and address appears in such register and not such nominee.  Prior to due presentment for registration of transfer, the Person(s) in whose name any Note(s) shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof (except as provided in the previous sentence), and the Company (and the Company’s Agent) shall not be affected by any notice or Knowledge to the contrary.  The Company (or the Company’s Agent) shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of the Notes.
Section 14.2    Transfer and Exchange of Notes.  Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 19(3)) or to the Company’s Agent (if such Agent is at the time designated), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, delivery and mailing address, e-mail address, facsimile number and other information for notices of each transferee of such Note or part thereof), within 10 Business Days thereafter, the Company shall execute and deliver or cause the Company’s Agent to deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof), in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 1.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Company or the Company’s Agent may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred in denominations of less than $100,000, provided that, if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000.  Any transferee, by its acceptance of a new Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.3.
Section 14.3    Replacement of Notes.  Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 19(3)), or upon receipt by the Company’s Agent (if such Agent is at the time designated) at the address and to the attention of the Person designated by the Company as set forth in the most recent written designation of such 

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Agent provided to holders, of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and
(a)    in the case of loss, theft or destruction, of indemnity reasonably satisfactory to the Company (provided that if the holder of such Note is, or is a nominee for, a Purchaser or another holder of a Note with a minimum net worth of at least $50,000,000 or that is a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or
(b)    in the case of mutilation, upon surrender and cancellation thereof,
within 10 Business Days thereafter, the Company at its own expense shall execute and deliver (or cause the Company’s Agent to deliver), in lieu thereof, a new Note in the remaining unpaid principal amount thereof, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.
Section 14.4    The Company’s Agent.  The Company may from time to time appoint, and may at any time cancel the appointment of, either the Parent Guarantor or a bank, trust company or nationally recognized transfer agent to serve as its agent (the “Company’s Agent”) to perform on behalf of the Company its obligations under this Section 14 as well as certain other administrative obligations of the Company under this Agreement, including serving as paying agent and delivering any notices and documents required to be delivered by the Company.  The Company has appointed U.S. Bank National Association as the initial Company’s Agent.  In the event such appointment is cancelled or any other appointment shall be made, written notice shall be given of any such cancellation of appointment or appointment, which notice shall set forth the name, delivery and mailing address, e-mail address, facsimile number and other information for notices for the Company, the Parent Guarantor or any replacement of the Company’s Agent.  During such time as a Person is appointed to serve as the Company’s Agent, every act, omission, undertaking, notice, document delivery or other communication by the Company’s Agent in such capacity shall be binding for all purposes on the Company as if such act, omission, notice, document delivery or other communication had been performed, omitted, given, delivered or communicated by the Company.
		
	SECTION 15.
	Payments on Notes.

Section 15.1    Place of Payment.  Subject to Section 15.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at U.S. Bank National Association, 100 Wall Street, Suite 1600, New York, New York 10005.  The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

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Section 15.2    Home Office Payment.  So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 15.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, interest and all other amounts becoming due hereunder by the method and at the address specified for such purpose below such Purchaser’s name in Schedule A, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of such Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office.  Prior to any sale or other disposition of any Note held by any Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note in exchange for a new Note or Notes pursuant to Section 14.2.  The Company will afford the benefits of this Section 15.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 15.2.
		
	SECTION 16.
	Expenses, Etc.

Section 16.1    Transaction Expenses.  Whether or not the transactions contemplated hereby are consummated, the Constituent Companies will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Required Holders, local or other counsel) incurred by the Purchasers and each other holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or the Notes or by reason of being a holder of any Note, (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of a Constituent Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO; provided, that such reimbursed costs and expenses shall not exceed $1,350.  The Constituent Companies will pay, and will save each Purchaser and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses, if any, owing to brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes).
Section 16.2    Survival.  The obligations of the Constituent Companies under this Section 16 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement.
		
	SECTION 17.
	Survival of Representations and Warranties; Entire Agreement.

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All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note.  All statements contained in any certificate or other instrument delivered by or on behalf of a Constituent Company pursuant to this Agreement shall be deemed representations and warranties of such Constituent Company under this Agreement.  Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between each Purchaser and the Constituent Companies and supersede all prior agreements and understandings relating to the subject matter hereof.
		
	SECTION 18.
	Amendment and Waiver.

Section 18.1    Requirements.  This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), only with the written consent of the Constituent Companies and the Required Holders, except that: 
(a)    no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 22 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing; 
(b)    no amendment or waiver may, without the written consent of the holder of each Note at the time outstanding, (1) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of (i) interest on the Notes or (ii) the Make-Whole Amount, (2) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver or (3) amend any of Sections 8, 11(a), 11(b), 12, 13, 18 or 21.
Section 18.2    Solicitation of Holders of Notes.
(a)    Solicitation.  The Constituent Companies will provide each holder of a Note (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes.  The Constituent Companies will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 18 to each holder of a Note promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.
(b)    Payment.  The Constituent Companies will not, directly or indirectly, pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of a Note as consideration for or as an inducement to the entering into by such holder of any waiver or amendment of any of the terms and provisions hereof or of any 

-43-

Note unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of a Note even if such holder did not consent to such waiver or amendment.
(c)    Consent in Contemplation of Transfer.  Any consent made pursuant to this Section 18 by a holder of Notes that has transferred or has agreed to transfer its Notes to a Constituent Company or any other Person and has provided or has agreed to provide such written consent as a condition to such transfer shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.
Section 18.3    Binding Effect, Etc.  Any amendment or waiver consented to as provided in this Section 18 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Constituent Companies without regard to whether such Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between a Constituent Company and any holder of a Note and no delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note.  
Section 18.4    Notes Held by a Constituent Company, Etc.  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by a Constituent Company or any of its Affiliates shall be deemed not to be outstanding.
		
	SECTION 19.
	Notices.

All notices, document deliveries and communications provided for hereunder shall be in writing and sent (a) by facsimile (so long as such facsimile produces a transmission receipt), (b) by registered or certified mail with return receipt requested (postage prepaid), (c) by an internationally or nationally recognized overnight delivery service (with charges prepaid) or (d) by e-mail.  Any such notice must be sent:
(1)    if to any Purchaser or its nominee, to such Purchaser or nominee at its facsimile, delivery, mailing or e-mail address specified for such communications in Schedule A,
(2)    if to any other holder of any Note, to such holder at its facsimile, delivery, mailing or e-mail address as such other holder shall have specified to the Constituent Companies in writing,
(3)    if to the Parent Guarantor, 

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Hawaiian Electric Company, Inc.
Attention:  Ms. Tayne S.Y. Sekimura
Senior Vice President and Chief Financial Officer
900 Richards Street (if by hand delivery or overnight courier)
Honolulu, Hawaii 96813
Telephone No.:  (808) 543-7840
P.O. Box 2750 (if by mail)
Honolulu, Hawaii 96840-001
(808) 203-1176 (if by facsimile)
tayne.sekimura@hawaiianelectric.com and lorie.nagata@hawaiianelectric.com (if by e-mail), or
(4)    if to the Company, 
Hawaii Electric Light Company, Inc.
Attention:  Ms. Tayne S.Y. Sekimura
Financial Vice President
900 Richards Street (if by hand delivery or overnight courier)
Honolulu, Hawaii 96813
Telephone No.:  (808) 543-7840
P.O. Box 2750 (if by mail)
Honolulu, Hawaii 96840-001
(808) 203-1176 (if by facsimile)
tayne.sekimura@hawaiianelectric.com and lorie.nagata@hawaiianelectric.com (if by e-mail), or
 (5)    if to the Company’s Agent,

U.S. Bank National Association
Global Corporate Trust Services
Attention:  Paul Vaden
Vice President
214 N. Tryon Street, 27th Floor (if by mail, hand delivery or overnight courier)
Charlotte, North Carolina  28202
Telephone No.:  (704) 335-4654
(704) 335-4676 (if by facsimile)
paul.vaden@usbank.com (if by e-mail)
A Constituent Company, the Company’s Agent, any Purchaser and any other holder of a Note may change its facsimile, delivery, mailing or e-mail address for all communications 

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hereunder by (i) notice to the Purchasers and other holders of outstanding Notes, in the case of a change by a Constituent Company or the Company’s Agent, and (ii) by notice to the Constituent Companies, in the case of a change by a Purchaser or other holder of one or more outstanding Notes.
Notices, document deliveries and other communications given in accordance with this Section 19 will be deemed given on the date of receipt if sent in accordance with the most recent facsimile, hand delivery, mailing or e-mail instructions received from the recipient; provided that notices, document deliveries and other communications sent by facsimile or e-mail will be deemed received when sent unless the sender shall have received a transmission or delivery failure report in relation to such facsimile or e-mail message.
		
	SECTION 20.
	Reproduction of Documents.

This Agreement and all documents relating hereto, including, without limitation, (a) consents, waivers, amendments and other modifications that may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any holder of a Note, may be reproduced by such Purchaser or holder by any photographic, photostatic, electronic, digital or other similar process and such Purchaser or holder may destroy any original document so reproduced.  Each Constituent Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser or holder in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 20 shall not prohibit a Constituent Company or any other Purchaser or holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.
		
	SECTION 21.
	Confidential Information.

For the purposes of this Section 21, “Confidential Information” shall mean information delivered to any Purchaser by or on behalf of a Constituent Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of such Constituent Company or such Subsidiary; provided, that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by a Constituent Company or any Subsidiary unless the direct or indirect source of such information is known by such Purchaser to be obligated to hold such information in confidence or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available.  Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser; provided, that such 

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Purchaser may deliver or disclose Confidential Information to (1) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes), (2) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 21, (3) any other holder of any Note, (4) any Institutional Investor to which such Purchaser sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 21), (5) any Person from which such Purchaser offers to purchase any Security of a Constituent Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 21), (6) any federal or state regulatory authority having jurisdiction over such Purchaser, (7) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio or (8) any other Person to which such delivery or disclosure may be necessary or appropriate (i) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (ii) in response to any subpoena or other legal process (and, subject to clause (iv) below, if not prohibited by applicable law or regulation, such Purchaser shall use commercially reasonable efforts to give notice thereof to the Constituent Companies prior to such disclosure), (iii) in connection with any litigation to which such Purchaser is a party (and, subject to clause (iv) below, if not prohibited by applicable law or regulation, such Purchaser shall use commercially reasonable efforts to give notice thereof to the Constituent Companies prior to such disclosure) or (iv) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes or this Agreement.  Each holder of a Note, by its acceptance of such Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 21 as though it were a party to this Agreement.  On reasonable request by a Constituent Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Constituent Companies embodying the provisions of this Section 21.
In the event that as a condition to receiving access to information relating to a Constituent Company or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from the terms of this Section 21, the terms of this Section 21 shall not be amended thereby and, as between such Purchaser or such holder and the Constituent Companies, this Section 21 shall supersede the terms of any such other confidentiality undertaking.
		
	SECTION 22.
	Substitution of Purchaser.

Each Purchaser shall have the right to substitute any one of its Affiliates or another Purchaser or any one of such other Purchaser’s Affiliates (a “Substitute Purchaser”) as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Constituent Companies, which notice shall be signed by both such Purchaser and such Substitute 

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Purchaser, shall contain such Substitute Purchaser’s agreement to be bound by this Agreement and shall contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 22), shall be deemed to refer to such Substitute Purchaser in lieu of such original Purchaser.  In the event that such Substitute Purchaser is so substituted as a Purchaser hereunder and such Substitute Purchaser thereafter transfers to such original Purchaser all of the Notes then held by such Substitute Purchaser, upon receipt by the Constituent Companies of notice of such transfer, any reference to such Substitute Purchaser as a “Purchaser” in this Agreement (other than in this Section 22), shall no longer be deemed to refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.
		
	SECTION 23.
	Miscellaneous.

Section 23.1    Successors and Assigns.  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.
Section 23.2    Payments Due on Non-Business Days.  Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or Make-Whole Amount, if any, or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.
Section 23.3    Accounting Terms; Change in GAAP.  
(a)    All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein, (1) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (2) all financial statements shall be prepared in accordance with GAAP.  For purposes of determining compliance with the covenants set out in this Agreement (including, without limitation, Section 9, Section 10 and the definition of “Indebtedness”), any election by the Parent Guarantor to measure any financial asset or liability using fair value (as permitted by Financial Accounting Standards Board Accounting Standard Codification Topic No. 825-10-25 - Fair Value Option, International Accounting Standard 39 - Financial Instruments; Recognition and Measurement or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.
(b)    If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in this Agreement, and the Constituent Companies or the Required Holders shall so request, representatives of the holders of the Notes 

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designated by the Required Holders at such time and the Constituent Companies shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Holders); provided that, until so amended, (1) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein, and (2) the Constituent Companies shall provide to the holders of the Notes that are Institutional Investors financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.
Section 23.4    Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.
Section 23.5    Construction, Etc.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.
Section 23.6    Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.  Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of an original, manually executed counterpart of such signature page.
Section 23.7    Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require or permit the application of the laws of a jurisdiction other than such State.
Section 23.8    Jurisdiction and Process; Waiver of Jury Trial.  
(a)    Each Constituent Company irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes.  To the fullest extent permitted by applicable law, each Constituent Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, 

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action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
(b)    Each Constituent Company consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 23.8(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 19 or at such other address of which such holder shall then have been notified pursuant to said Section.  Each Constituent Company agrees that such service upon receipt (1) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (2) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
(c)    Nothing in this Section 23.8 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against a Constituent Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
(d)    THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH. 
*     *     *     *     *

 

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The execution hereof by the Purchasers shall constitute a contract among the Company, the Parent Guarantor and the Purchasers for the uses and purposes and on the terms hereinabove set forth.

Very truly yours,

HAWAII ELECTRIC LIGHT COMPANY, INC.

/s/   Tayne S.Y. Sekimura    
Tayne S.Y. Sekimura
Financial Vice President

/s/  Lorie Ann Nagata    
Lorie Ann Nagata
Treasurer

HAWAIIAN ELECTRIC COMPANY, INC.

/s/  Tayne S.Y. Sekimura    
Tayne S.Y. Sekimura
Senior Vice President and Chief Financial Officer

/s/  Lorie Ann Nagata    
Lorie Ann Nagata
Treasurer

Signature Page to Note Purchase and Guaranty Agreement
Hawaii Electric Light Company, Inc.

	
		
	This Agreement is hereby accepted
and agreed to as of the date thereof.

	 

	 
	THE UNITED STATES LIFE INSURANCE COMPANY
    IN THE CITY OF NEW YORK
EAGLESTONE REINSURANCE COMPANY

	 
	

By: AIG Asset Management (U.S.),  LLC,
       as Investment Adviser

	 
	

By:   /s/   Michael Reynolds
Name:    Michael Reynolds
Title:      Vice President

Signature Page to Note Purchase and Guaranty Agreement
Hawaii Electric Light Company, Inc.

	
		
	This Agreement is hereby accepted
and agreed to as of the date thereof.

	 

	 
	JOHN HANCOCK LIFE INSURANCE COMPANY
   (U.S.A.)

	 
	

By   /s/   Gavin R. Danaher
  Name:    Gavin R. Danaher
  Title:      Managing Director

Signature Page to Note Purchase and Guaranty Agreement
Hawaii Electric Light Company, Inc.

	
		
	This Agreement is hereby accepted
and agreed to as of the date thereof.

	 

	 
	CONNECTICUT GENERAL LIFE INSURANCE COMPANY

	 
	

By:  Cigna Investments, Inc. (authorized 
          agent)

	 
	

By   /s/   Robert W. Eccles
  Name:    Robert W. Eccles
  Title:      Senior Managing Director

Signature Page to Note Purchase and Guaranty Agreement
Hawaii Electric Light Company, Inc.

INFORMATION RELATING TO PURCHASERS

	
					
	 
	 
Name and Address of Holder
	Principal Amount of 
Notes to be 
Purchased

	 
	The United States Life Insurance Company in the City 
   of New York
c/o AIG Asset Management 
2929 Allen Parkway, A36-04
Houston, Texas 77019-2155
	$4,000,000

	(1)
	

All payments to be by wire transfer of immediately available funds, with sufficient information (including PPN, interest rate, maturity date, interest amount, principal amount and premium amount, if applicable) to identify the source and application of such funds, to:

Provided separately to the Company 

	(2)
	

Payment notices, audit confirmations and related note correspondence to:

The United States Life Insurance Company in the City of New York (PA77)
c/o AIG Asset Management 
2929 Allen Parkway, A36-04
Houston, Texas 77019-2155
Attn:  Private Placements Portfolio Operations 
Email:  AIGGIGPVTPLACEMENTOPERATIONS@aig.com

	(3)
	

Duplicate payment notices (only) to:

The United States Life Insurance Company in the City of New York (PA77)
c/o State Street Bank Corporation, Insurance Services 
Fax:  (816) 871-5539 

	(4)
	

* Compliance reporting information (financial docs, officer’s certificates, etc.) to:

AIG Asset Management 
2929 Allen Parkway, A36-04
Houston, Texas  77019-2155
Attn:  Private Placements Compliance
Email:  complianceprivateplacements@aig.com

* Note:  Only two (2) complete sets of compliance information are required for all companies for which AIG Asset Management Group serves as investment adviser.

SCHEDULE A
(to Note Purchase and Guaranty Agreement)

	
					
	(5)
	

Delivery of the Notes:

Provided separately to the Company 

	(6)
	

Tax Identification No.:  Provided separately to the Company 

Nominee Name:  OCEANWHALE & CO.  

A-2

	
					
	 
	 
Name and Address of Holder
	 
	Principal Amount of 
Notes to be 
Purchased

	 
	Eaglestone Reinsurance Company
c/o AIG Asset Management 
2929 Allen Parkway, A36-04
Houston, Texas 77019-2155

	 
	$2,000,000

	(1)
	

All payments to be by wire transfer of immediately available funds, with sufficient information (including PPN, interest rate, maturity date, interest amount, principal amount and premium amount, if applicable) to identify the source and application of such funds, to:

Provided separately to the Company 

	(2)
	

Payment notices, audit confirmations and related note correspondence to:

Eaglestone Reinsurance Company (554920)
c/o AIG Asset Management 
2929 Allen Parkway, A36-04
Houston, Texas 77019-2155
Attn:  Private Placements Portfolio Operations 
Email:  AIGGIGPVTPLACEMENTOPERATIONS@aig.com

	(3)
	

Duplicate payment notices (only) to:

Eaglestone Reinsurance Company (554920)
c/o The Bank of New York Mellon
Attn:  P & I Department
Fax:  (718) 315-3076

	(4)
	

* Compliance reporting information (financial docs, officer’s certificates, etc.) to::

AIG Asset Management 
2929 Allen Parkway, A36-04
Houston, Texas  77019-2155
Attn:  Private Placements Compliance
Email:  complianceprivateplacements@aig.com

* Note:  Only two (2) complete sets of compliance information are required for all companies for which AIG Asset Management Group serves as investment adviser.

A-3

	
					
	(5)
	

Delivery of the Notes:

Provided separately to the Company 

	(6)
	

Tax Identification No.:  Provided separately to the Company 

Nominee Name:  HARE & CO., LLC 

A-4

	
					
	 
	 
Name and Address of Holder
	 
	Principal Amount of 
Notes to be 
Purchased

	 
	John Hancock Life Insurance Company (U.S.A.)
c/o John Hancock Financial Services
197 Clarendon Street
Boston, MA 02116

	 
	$13,000,000

	(1)
	

All payments to be by bank wire transfer of immediately available funds to:

Provided separately to the Company 

	(2)
	

All notices with respect to payments, prepayments (scheduled and unscheduled, whether partial or in full) and audit requests shall be sent to:

John Hancock Financial Services
197 Clarendon Street
Boston, MA 02116
Attention:  Investment Administration
Fax Number:  (617) 572-1799
Email:  InvestmentAdministration@jhancock.com

	(3)
	

All notices and communication with respect to compliance reporting, financial statements and related certifications shall be sent to:

John Hancock Financial Services
197 Clarendon Street
Boston, MA  02116
Attention:  Bond and Corporate Finance, C-2
powerteam@jhancock.com

	(4)
	

All other communications:

	 
	John Hancock Financial Services
197 Clarendon Street    
Boston, MA  02116
Attention:  Investment Law, C-3
Fax Number:  (617) 572-9269

	and
	John Hancock Financial Services
197 Clarendon Street    
Boston, MA  02116
Attention:  Bond and Corporate Finance, C-2
Email Address:  Powerteam@jhancock.com 

A-5

	
					
	(5)
	

Delivery of the Notes:

Provided separately to the Company 

	(6)
	

Tax Identification No.:  Provided separately to the Company 

Nominee Name:  None

A-6

	
					
	 
	 
Name and Address of Holder
	 
	Principal Amount of 
Notes to be 
Purchased

	 
	Connecticut General Life Insurance Company
c/o Cigna Investments, Inc.
Attention:  Fixed Income Securities
Wilde Building, A5PRI
900 Cottage Grove Rd
Bloomfield, Connecticut 06002

	 
	$6,000,000

	(1)
	

All payments by wire transfer of immediately available funds to:

Provided separately to the Company 

	(2)
	

Address for notices relating to payments:

CIG & Co.  
c/o Cigna Investments, Inc.
Attention:  Fixed Income Securities
Wilde Building, A5PRI
900 Cottage Grove Rd
Bloomfield, Connecticut 06002
E-Mail:  CIMFixedIncomeSecurities@Cigna.com

	(3)
	

Address for all other notices:

CIG & Co.  
c/o Cigna Investments, Inc.
Attention:  Fixed Income Securities
Wilde Building, A5PRI
900 Cottage Grove Rd
Bloomfield, Connecticut 06002
E-Mail:  CIMFixedIncomeSecurities@Cigna.com 

	(4)
	

Delivery of Notes:

Provided separately to the Company

	(5)
	

Tax Identification No.:  Provided separately to the Company 

Nominee Name:  CIG & Co.

47934-0000
CH2\17380855 1

A-7

DEFINED TERMS
As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:
“Accredited Investor” shall mean a Person who qualifies as an “accredited investor,” as defined under subsections (1), (2), (3) or (7) of Rule 501(a) of Regulation D promulgated by the SEC under the Securities Act, acting for its own account (and not for the account of others) or acting as a fiduciary or agent for others each of whom is an Accredited Investor.
“Affiliate” shall mean, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and, with respect to a Constituent Company, shall include any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting capital stock or other equity or voting interests of such Constituent Company or any Subsidiary that is ordinarily entitled, in the absence of contingencies, to vote in the election of directors (or Person performing similar functions) of such Constituent Company or such Subsidiary or any Person of which a Constituent Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting capital stock or other equity or voting interests.  As used in this definition, “Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.  Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of a Constituent Company.
“Agreement” shall mean this Agreement, including all Schedules and Exhibits attached to this Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.
“Anti-Corruption Laws” is defined in Section 5.16(d)(1).
“Anti-Money Laundering Laws” is defined in Section 5.16(c).
“Bank Credit Agreement” shall mean that certain Amended and Restated Credit Agreement, dated as of April 2, 2014, by and among the Parent Guarantor, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as syndication agent, Bank of America, N.A., Bank of Hawaii, Royal Bank of Canada, Union Bank, N.A. and U.S. Bank National Association, as co‐documentation agents, JPMorgan Chase Bank, N.A., as issuing bank, swingline lender and administrative agent, and J.P. Morgan Securities LLC and Wells Fargo Securities, LLC, as joint lead arrangers and joint book runners, as the same may be amended, supplemented, restated, refinanced, replaced or otherwise modified from time to time.
“Benefit Plan” shall mean any employee benefit plan as defined in Section 3(3) of ERISA (other than a Plan or Multiemployer Plan), and in respect of which the Parent Guarantor, any Subsidiary or any ERISA Affiliate is an “employer” as defined in Section 3(5) of ERISA.
“Blocked Person” is defined in Section 5.16(a).

SCHEDULE B
(to Note Purchase and Guaranty Agreement)

“Business Day” shall mean (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in Honolulu, Hawaii or New York, New York are required or authorized to be closed.
“Called Principal” is defined in Section 8.6.
“Capital Lease Obligations” of any Person shall mean the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP; provided, however, no power purchase agreement with an independent power producer or a power producer which is not an Affiliate of the Parent Guarantor shall constitute a Capital Lease Obligation.
“Change in Control” is defined in Section 8.7(f).
“Change in Control Proposed Prepayment Date” is defined in Section 8.7(b).
“CISADA” shall mean the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010, 22 U.S.C. 8501, as amended from time to time.
“Closing” is defined in Section 3.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time or as replaced by a successor federal tax statute (and any amendments thereto), and the rules and regulations promulgated thereunder from time to time.
“Company” or “Hawaii Electric Light” shall mean Hawaii Electric Light Company, Inc., a Hawaii corporation, or any successor of such entity that becomes such in the manner prescribed in Section 10.4.
“Company’s Agent” is defined in Section 14.4.
“Confidential Information” is defined in Section 21.
“Consolidated Capitalization” shall mean, at any date of determination with respect to the Parent Guarantor and its Subsidiaries on a consolidated basis, the sum of (a) Consolidated Funded Debt, (b) preferred stock of the Parent Guarantor and its Subsidiaries and (c) Consolidated Common Stock Equity.  The Parent Guarantor’s Consolidated Capitalization as of December 31, 2014 is annexed hereto as Schedule C (Consolidated Capitalization); for the avoidance of doubt, such Schedule is attached hereto for illustrative purposes only and is not intended to be a calculation of Consolidated Capitalization on or for any subsequent date of determination. 

B-2

“Consolidated Capitalization Ratio” shall mean, at any date of determination, the ratio of (a) Consolidated Common Stock Equity at such time to (b) Consolidated Capitalization at such time.
“Consolidated Common Stock Equity” shall mean, at any date of determination, with respect to the Parent Guarantor and its Subsidiaries on a consolidated basis, the sum of (a) common stock, (b) premium and/or expenses on common stock and preferred stock, (c) additional paid-in capital, and (d) retained earnings, excluding Accumulated Other Comprehensive Income or Loss (AOCI) as defined by GAAP, as such definitions now exist and as they may hereafter be amended but subject to Section 23.3, except with respect to matters affecting AOCI, and excluding adjustments made directly to stockholders’ equity as a result of any future issued accounting standards, adopted by the Parent Guarantor, that will require adjustments directly to stockholders’ equity.
“Consolidated Funded Debt” shall mean, at any date of determination with respect to the Parent Guarantor and its Subsidiaries on a consolidated basis, the sum of (a) net long-term debt, defined as the portion of outstanding debt for borrowed money (including under the notes the Parent Guarantor or its Subsidiaries have issued in borrowing proceeds of special purpose revenue bonds), bonds, debentures and similar debt obligations (including Capital Lease Obligations, Purchase Money Indebtedness, Indebtedness under credit agreements or note agreements of the Parent Guarantor or its Subsidiaries and any outstanding Notes), net of cash collateral or other funds on deposit with trustees and unamortized discounts in respect of such debt for borrowed money, bonds, debentures and similar debt obligations, that is due one year or more from the date of the relevant balance sheet on which such debt is included, (b) net long-term debt (as so defined) due within one year, defined as the portion of outstanding debt for borrowed money (including under the notes the Parent Guarantor or its Subsidiaries have issued in borrowing proceeds of special purpose revenue bonds), bonds and debentures and similar debt obligations (including Capital Lease Obligations, Purchase Money Indebtedness, Indebtedness under credit agreements or note agreements of the Parent Guarantor or its Subsidiaries and any outstanding Notes) that is due within one year from the date of the relevant balance sheet on which such long-term debt is included and (c) short-term borrowings, including Purchase Money Indebtedness, as included on and defined in the relevant balance sheet; provided, however, no Indebtedness of independent power producers, or other power producers which are not Affiliates of the Parent Guarantor, included on a balance sheet of the Parent Guarantor by reason of the application of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810 (formerly referred to as FASB Interpretation No. 46 (revised December 2003)) shall constitute Consolidated Funded Debt.  A schedule of Consolidated Funded Debt as of December 31, 2014 is annexed hereto as Schedule D (Consolidated Funded Debt); for the avoidance of doubt, such Schedule is attached hereto for illustrative purposes only and is not intended to be a calculation of Consolidated Funded Debt on or for any subsequent date of determination.
“Consolidated Subsidiary Capitalization” shall mean, at any date of determination with respect to the Company or any other Subsidiary of the Parent Guarantor on a consolidated basis, the sum of (a) Consolidated Subsidiary Funded Debt, (b) preferred stock of such Subsidiary and (c) Consolidated Subsidiary Common Stock Equity.

B-3

“Consolidated Subsidiary Common Stock Equity” shall mean, at any date of determination with respect to the Company or any other Subsidiary of the Parent Guarantor on a consolidated basis, the sum of (a) common stock, (b) premium and/or expenses on common stock and preferred stock, (c) additional paid-in capital, and (d) retained earnings, excluding Accumulated Other Comprehensive Income or Loss (AOCI) as defined by GAAP, as such definitions now exist and as they may hereafter be amended but subject to Section 23.3 except with respect to matters affecting AOCI, and excluding adjustments made directly to stockholders’ equity as a result of any future issued accounting standards, adopted by the Parent Guarantor, that will require adjustments directly to stockholders’ equity.
“Consolidated Subsidiary Funded Debt” shall mean, at any date of determination, with respect to the Company or any other Subsidiary of the Parent Guarantor on a consolidated basis, the sum of (a) net long-term debt, defined as the portion of outstanding bonds, debentures and similar debt obligations (including Capital Lease Obligations and Purchase Money Indebtedness), net of funds on deposit with trustees and unamortized discounts in respect of such bonds, debentures and obligations, that is due one year or more from the date of the relevant balance sheet on which such debt is included, (b) net long-term debt (as so defined) due within one year, defined as the portion of outstanding bonds and debentures and similar debt obligations (including Capital Lease Obligations and Purchase Money Indebtedness) that is due within one year from the date of the relevant balance sheet on which such long-term debt is included and (c) short-term borrowings, including Purchase Money Indebtedness, as included on and defined in the relevant balance sheet; provided, however, no Indebtedness of independent power producers, or other power producers which are not Affiliates, included on a balance sheet of the Parent Guarantor by reason of the application of Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) 810 (formerly referred to as FASB Interpretation No. 46 (revised December 2003)), shall constitute Consolidated Subsidiary Funded Debt.  A schedule of Consolidated Subsidiary Funded Debt as of December 31, 2014 is annexed hereto as Schedule E (Consolidated Subsidiary Funded Debt); for the avoidance of doubt, such Schedule is attached hereto for illustrative purposes only and is not intended to be a calculation of Consolidated Subsidiary Funded Debt on or for any subsequent date of determination. 
“Consolidated Subsidiary Funded Debt to Capitalization Ratio” shall mean, at any date of determination with respect to the Company or any other Significant Subsidiary, the ratio of (a) the Company's or such other Significant Subsidiary’s Consolidated Subsidiary Funded Debt to (b) its Consolidated Subsidiary Capitalization.
“Consolidated Subsidiary Total Assets” shall mean, at any date of determination, with respect to the Company or any other Subsidiary of the Parent Guarantor, the total assets, on a consolidated basis, of the Company and its Subsidiaries or such other Subsidiary and its Subsidiaries, determined in accordance with GAAP.
“Consolidated Total Assets” shall mean, at any date of determination, with respect to the Parent Guarantor and its Subsidiaries, the total assets, on a consolidated basis, of the Parent Guarantor and its Subsidiaries, determined in accordance with GAAP.
“Constituent Company” is defined in the first paragraph of this Agreement.

B-4

“Controlled Entity” shall mean any of the Subsidiaries of a Constituent Company and any of their or such Constituent Company’s respective Controlled Affiliates. As used in this definition, “Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting Securities, by contract or otherwise.
“Default” shall mean an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.
“Default Rate” shall mean, with respect to the Notes, that rate of interest per annum that is the greater of (a) 2.00% above the rate of interest stated in clause (a) of the first paragraph of the Notes or (b) 2.00% over the rate of interest publicly announced by Bank of America, N.A. in New York, New York as its “base” or “prime” rate.
“Disclosure Documents” is defined in Section 5.3.
“Discounted Value” is defined in Section 8.6.
“Disposition” shall mean, with respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof.  The terms “Dispose” and “Disposed of” shall have correlative meanings.
“Environmental Laws” shall mean any and all federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.
“Equity Interests” shall mean (a) shares of capital stock and any other equity security that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing company and (b) all warrants, options or other rights to acquire any Equity Interest described in clause (a) of this definition. 
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that is treated as a single employer together with the Parent Guarantor under Section 414 of the Code.
“ERISA Event” shall mean (a) any “reportable event,” as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure with respect to any Plan to pay the “minimum required contribution” (as defined in Section 430 of the Code or Section 303 of ERISA) and the continuance of such failure for more than 10 Business Days after a Responsible Officer of a Constituent Company becomes aware of such failure, whether or not waived; (c) the incurrence by the Parent Guarantor or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (d) the provision by the administrator of any Plan pursuant 

B-5

to Section 4041(a)(2) of ERISA of a notice of intent to terminate such Plan in a distress termination described in Section 4041(c) of ERISA; (e) the institution by the PBGC of proceedings to terminate any Plan, or the occurrence of any event or condition which might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Plan; (f) the imposition of liability on the Parent Guarantor, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or Section 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (g) the withdrawal of the Parent Guarantor, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by the Company, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or Section 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or Section 4042 of ERISA; (h) the assertion of a claim (other than routine claims for benefits) against any Plan (or any other Benefit Plan) or the assets thereof, or against the Parent Guarantor, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Benefit Plan that is not covered by ERISA fiduciary insurance; (i) receipt from the Internal Revenue Service of notice of the failure of any Plan (or any Benefit Plan intended to be qualified under Section 401(a) of the Code) to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any Plan to qualify for exemption from taxation under Section 501(a) of the Code which is not eligible to be corrected pursuant to Employee Plans Compliance Resolution System or subsequent Internal Revenue Service correction program; or (j) the imposition of a Lien pursuant to the Code or ERISA with respect to any Plan.
“Event of Default” is defined in Section 11.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“Fitch” shall mean Fitch Ratings, Ltd.
“Form 8-K” is defined in Section 7.1(g). 
“Form 10-K” is defined in Section 7.1(b). 
“Form 10-Q” is defined in Section 7.1(a). 
“GAAP” shall mean generally accepted accounting principles as in effect from time to time in the United States of America; provided, however, that if the SEC shall require at such future time the replacement of GAAP with another system of accounting principles, GAAP as used herein shall be deemed to refer to such SEC required or approved accounting principles (however named).
“Governmental Authority” shall mean
(a)    the government of

B-6

(1)    the United States of America or any State or other political subdivision thereof, or
(2)    any other jurisdiction in which a Constituent Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of a Constituent Company or any Subsidiary, or
(b)    any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government, including the Hawaii Public Utilities Commission, the SEC and the Federal Energy Regulatory Commission.
“Governmental Official” shall mean any governmental official or employee, employee of any government-owned or government-controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.
 “Guarantee” or “Guaranty” of or by any Person (the “guarantor”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect:
(a)    to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof;
(b)    to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof;
(c)    to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation; or 
(d)    as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation;
provided that the term “Guarantee” or “Guaranty” shall not include endorsements for collection or deposit in the ordinary course of business.  The amount of any Guarantee of any guarantor shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made and (b) the maximum amount for which such guarantor may be liable pursuant to the terms of the instrument embodying such Guarantee, unless such primary obligation and the maximum amount for which such guarantor may be liable are not stated or determinable, in which case the amount of such Guarantee shall be such guarantor’s maximum reasonably anticipated liability in respect thereof as determined by the Parent Guarantor in good faith.  The term “Guaranteed” has a meaning correlative thereto.
“Hazardous Materials” shall mean any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal of which may be 

B-7

required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited or penalized by any applicable law including, but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.
“HEI” shall mean Hawaiian Electric Industries, Inc., a Hawaii corporation.
“holder” shall mean, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company, the Parent Guarantor or the Company’s Agent pursuant to Section 14.1, provided, however, that if the Company (or the Parent Guarantor or the Company’s Agent, as applicable) is advised in writing that such Person is only a nominee and the beneficial owner of the Note is another specified Person, then for the limited purposes set forth in Section 14.1, “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.
“Indebtedness” of any Person shall mean, without duplication:
(a)    all obligations of such Person for borrowed money and its redemption obligations in respect of mandatorily redeemable preferred stock;
(b)    all obligations of such Person evidenced by bonds, debentures, notes or similar instruments;
(c)    all obligations of such Person upon which interest charges are customarily paid;
(d)    all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person;
(e)    all obligations of such Person in respect of the deferred purchase price of property or services (excluding accounts payable incurred in the ordinary course of business);
(f)    all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed;
(g)    all Guarantees by such Person of Indebtedness of others;
(h)    all Capital Lease Obligations of such Person;
(i)    all obligations, contingent or otherwise, of such Person as an account party in respect of issued and outstanding letters of credit and letters of guaranty; and 

B-8

(j)    all obligations, contingent or otherwise, of such Person in respect of issued and outstanding bankers’ acceptances.
The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“INHAM Exemption” is defined in Section 6.3(e).
“Institutional Investor” shall mean (a) any Purchaser of a Note (or, if the Purchaser is a nominee, the beneficial owner of the Note), (b) any holder of a Note holding (together with one or more of its Affiliates) more than $5,000,000 of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form and (d) any Related Fund of any holder of any Note.
“International Emergency Economic Powers Act” shall mean the International Emergency Economic Powers Act, 50 U.S.C. 1701, as amended from time to time.
“Investment Grade Rating” shall mean a rating equal to or higher than “BBB-” by Fitch or S&P and “Baa3” or higher by Moody’s.
“Knowledge” when modifying a representation, warranty or other statement of any Person, shall mean that the fact or situation described therein is known by such Person (or, (a) in the case of a Constituent Company, known by any Responsible Officer of such Constituent Company, or, (b) in the case of any other Person other than a natural Person, known by any officer of such Person) making the representation, warranty or other statement, or with the exercise of reasonable due diligence under the circumstances (in accordance with the standard of what a reasonable Person in similar circumstances would have done) would have been known by such Person (or, (a) in the case of a Constituent Company, would have been known by any Responsible Officer of such Constituent Company, or, (b) in the case of any other Person other than a natural Person, would have been known by any officer of such Person).
“Lien” shall mean, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or capital lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).
“Make-Whole Amount” is defined in Section 8.6.
“Material” shall mean material in relation to the business, operations, affairs, financial condition, assets or properties of the Parent Guarantor and its Subsidiaries, taken as a whole.

B-9

“Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Parent Guarantor and its Subsidiaries, taken as a whole, (b) the ability of a Constituent Company to perform its obligations under this Agreement and, in the case of the Company, the Notes or (c) the validity or enforceability of this Agreement or the Notes.
“Maturity Date” shall mean in respect of each Note as defined in the first paragraph of such Note.
“Maui Electric” shall mean Maui Electric Company, Limited, a Hawaii corporation. 
“Memorandum” is defined in Section 5.3.
“Moody’s” shall mean Moody’s Investors Service, Inc.
“Multiemployer Plan” shall mean any Plan that is a “multiemployer plan” (as such term is defined in Section 4001(a)(3) of ERISA).
“NAIC” shall mean the National Association of Insurance Commissioners or any successor thereto.
“NAIC Annual Statement” is defined in Section 6.3(a).
“Net Cash Proceeds” from a Disposition shall mean the aggregate cash proceeds received by a Constituent Company or any Significant Subsidiary, as the case may be, in respect of such Disposition, net of the costs, fees and expenses relating to such Disposition including, without limitation, legal, accounting and investment banking fees, sales commissions, any pension or post-employment benefit liabilities or obligations and taxes paid or payable as a result of such Disposition (after taking into account any available tax credits or deductions).
“Notes” is defined in Section 1.
“Obligations” is defined in Section 13.1.
“OFAC” is defined in Section 5.16(a).
“OFAC Listed Person” is defined in Section 5.16(a).
“OFAC Sanctions Program” shall mean any economic or trade sanction that OFAC is responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.
“Officer’s Certificate” shall mean a certificate of a Senior Financial Officer or of any other officer of the Company or the Parent Guarantor, as the context requires, whose responsibilities extend to the subject matter of such certificate.
“Parent Guarantor” shall mean Hawaiian Electric Company, Inc., a Hawaii corporation, or any successor of such entity that becomes such in the manner prescribed in Section 10.4.

B-10

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.
“Permitted Liens” is defined in Section 10.3.
“Person” shall mean an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, business entity or Governmental Authority.
“Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Parent Guarantor, any Subsidiary or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Principal Credit Agreement” shall mean (a) in the case of the Parent Guarantor, (1) the Bank Credit Agreement and each successor loan or credit agreement constituting the Parent Guarantor’s primary bank credit facility, with the same or different group of lenders and agents, so long as any such agreement is in effect and as it may be amended, supplemented, restated, refinanced, replaced or otherwise modified from time to time, (2) the Note Purchase Agreement dated as of April 19, 2012 by and among the Parent Guarantor and the purchasers listed on Schedule A thereto as it may be amended, supplemented, restated, refinanced, replaced or otherwise modified from time to time, (3) the Note Purchase Agreement dated as of September 13, 2012 by and among the Parent Guarantor and the purchasers listed on Schedule A thereto as it may be amended, supplemented, restated, refinanced, replaced or otherwise modified from time to time and (4) the Note Purchase Agreement dated as of October 3, 2013 by and among the Parent Guarantor and the purchasers listed on Schedule A thereto as it may be amended, supplemented, restated, refinanced, replaced or otherwise modified from time to time,  and (b) in the case of the Company, (1) the primary bank credit facility or similar agreement pursuant to which debt for borrowed money shall be, or is permitted to be, incurred so long as such agreement is in effect and as it may be amended, supplemented, restated, refinanced, replaced or otherwise modified from time to time, (2) the Note Purchase Agreement dated as of April 19, 2012 by and among the Parent Guarantor, the Company and the purchasers listed on Schedule A thereto as it may be amended, supplemented, restated, refinanced, replaced or otherwise modified from time to time and (3) the Note Purchase Agreement dated as of October 3, 2013 by and among the Parent Guarantor, the Company and the purchasers listed on Schedule A thereto as it may be amended, supplemented, restated, refinanced, replaced or otherwise modified from time to time.
“property” or “properties” shall mean, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.
“PTE” is defined in Section 6.3(a).
“Purchase Money Indebtedness” shall mean Indebtedness of a Constituent Company or any Subsidiary that is incurred to finance part or all of (but not more than) the purchase price of a tangible asset; provided that (a) such Constituent Company or such Subsidiary did not at any time prior to such purchase have any interest in such asset other than an option to purchase, a 

B-11

security interest, or an interest as lessee under an operating lease and (b) such Indebtedness is incurred at the time of, or within 90 days after, such purchase.
“Purchaser” or “Purchasers” shall mean each of the purchasers whose signatures appear at the end of this Agreement and such Purchaser’s successors and assigns (so long as any such assignment complies with Section 14.2); provided, however, that any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of a transfer thereof pursuant to Section 14.2 shall cease to be included within the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.
“QPAM Exemption” is defined in Section 6.3(d).
“Qualified Institutional Buyer” shall mean any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.
“Ratable Portion” for any Note shall mean an amount equal to the product of (a) the Net Cash Proceeds received by a Constituent Company or a Significant Subsidiary from a Disposition being applied, or offered to be applied, to the payment or prepayment of Indebtedness pursuant to clause (4) of the second paragraph of Section 10.4(c) multiplied by (b) a fraction, the numerator of which is the aggregate outstanding principal amount of such Note and the denominator of which is the aggregate outstanding principal amount of all Indebtedness of the Constituent Companies and the Significant Subsidiaries other than Subordinated Debt.
“Ratings Agency” shall mean Fitch, Moody’s and S&P and, in each case, any successors thereto.
“Ratings Period” is defined in Section 8.7(f).
“Reinvestment Yield” is defined in Section 8.6.
“Related Fund” shall mean, with respect to any holder of any Note, any fund or entity that (a) invests in Securities or bank loans and (b) is advised or managed by such holder, the same investment advisor as such holder or by an Affiliate of such holder or such investment advisor.
“Remaining Average Life” is defined in Section 8.6.
“Remaining Scheduled Payments” is defined in Section 8.6.
“Required Holders” shall mean, at any time, the holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by a Constituent Company or any of its Affiliates).
“Responsible Officer” shall mean a Senior Financial Officer and any other officer of the Company or the Parent Guarantor, as the context requires, with responsibility for the administration of the relevant portion of this Agreement (which, in the case of Sections 5.8, 5.16 and 5.18, shall include the chief legal officer of the Company).

B-12

“Restricted Payment” shall mean, with respect to any Person, (a) any dividend or other distribution (whether in cash, Securities or other property) by such entity with respect to any Equity Interests of such Person, (b) any payment (whether cash, Securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interest, and (c) any payment of principal, interest or premium or any purchase, redemption, retirement, acquisition or defeasance with respect to any subordinated debt of such Person.
“S&P” shall mean Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc.
“Sale of Assets Prepayment Date” is defined in Section 8.8(a).
“Sale of Assets Prepayment Event” is defined in Section 8.8(a). 
“SEC” shall mean the Securities and Exchange Commission of the United States, or any successor thereto.
“Securities” or “Security” shall have the meaning specified in Section 2(1) of the Securities Act.
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“Senior Financial Officer” shall mean the chief financial officer, principal accounting officer, treasurer or controller of the Company or the Parent Guarantor, as the context requires.
“Settlement Date” is defined in Section 8.6.
“Significant Subsidiary” shall mean (a) in the case of a Constituent Company, each Subsidiary of such Constituent Company having 15% or more of the total assets, or 15% or more of the total operating income, of the Parent Guarantor and its Subsidiaries on a consolidated basis, in either case as the consolidated total assets and consolidated total operating income of the Parent Guarantor and its Subsidiaries are reflected in the most recent annual or quarterly consolidated financial statements of the Parent Guarantor delivered pursuant to Section 7.1 and (b) in the case of the Parent Guarantor shall always include the Company and Maui Electric.
“Source” is defined in Section 6.3.
“Subordinated Debt” shall mean all unsecured Indebtedness of a Constituent Company which shall contain or have applicable thereto subordination provisions providing for the subordination thereof to other Indebtedness of such Constituent Company (including, without limitation, the obligations of such Constituent Company under this Agreement and, in the case of the Company, the Notes).
“Subsidiary” shall mean, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of 

B-13

contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of a Constituent Company.
“Substitute Purchaser” is defined in Section 22.
“Sudan Accountability and Divestment Act” shall mean the Sudan Accountability and Divestment Act of 2007, 50 U.S.C. 1701, as amended from time to time.
“Surviving Subsidiary” is defined in Section 10.4(d). 
“SVO” shall mean shall mean the Securities Valuation Office of the NAIC or any successor to such Office.
“Trading with the Enemy Act” shall mean the Trading with the Enemy Act of 1917, 12 U.S.C. 95a, as amended from time to time.
 “USA PATRIOT Act” shall mean United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“U.S. Economic Sanctions” is defined in Section 5.16(a).

B-14

HAWAIIAN ELECTRIC
CONSOLIDATED CAPITALIZATION, CONSOLIDATED FUNDED DEBT AND 
CONSOLIDATED SUBSIDIARY FUNDED DEBT ILLUSTRATIONS (HAWAII ELECTRIC LIGHT AND MAUI ELECTRIC, INDIVIDUALLY)
AS OF DECEMBER 31, 2014
	
																								
	($thousands)
	HAWAIIAN ELECTRIC
	 
	HAWAII ELECTRIC LIGHT
	 
	MAUI ELECTRIC
	 
	RHI
	 
	UBC
	 
	Eliminations
	 
	CONSOLIDATED
	 

	ST borrowings from non-affiliates
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	 
	 
	—
	

	 

	ST borrowings between Hawaiian Electric, Hawaii Electric Light, Maui Electric, Renewable Hawaii, Inc., Uluwehiokama Biofuels Corporation
	—
	

	 
	10,500
	

	 
	5,600
	

	 
	—
	

	 
	—
	

	 
	(16,100
	)
	 
	—
	

	 

	ST borrowings from HEI
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	 
	 
	—
	

	 

	Capital lease obligations, including current portion
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	 
	 
	—
	

	 

	Purchase money indebtedness
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	 
	 
	—
	

	 

	Borrowings under Syndicated Credit Agreement
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	 
	 
	—
	

	 

	Revenue bonds, including current portion
	292,000
	

	 
	93,000
	

	 
	77,000
	

	 
	—
	

	 
	—
	

	 
	 
	 
	462,000
	

	 

	 
	Less funds on deposit with trustees
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 

	 
	Less unamortized discount
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 

	Other long-term debt – taxable unsecured senior notes
	507,000
	

	 
	87,000
	

	 
	99,000
	

	 
	—
	

	 
	—
	

	 
	 
	 
	693,000
	

	 

	Other long-term debt – unsecured (QUIDS), including current portion
	31,546
	

	 
	10,000
	

	 
	10,000
	

	 
	—
	

	 
	—
	

	 
	 
	 
	51,546
	

	 

	 
	Funded debt
	830,546
	

	 
	200,500
	

	 
	191,600
	

	 
	—
	

	 
	—
	

	 
	(16,100
	)
	 
	1,206,546
	

	(2)

	 
	 
	 
	 
	(3)
	 
	(3)
	 
	 
	 
	 
	 
	 
	 

	Cumulative preferred stock - not subject to mandatory redemption
	22,293
	

	 
	7,000
	

	 
	5,000
	

	 
	—
	

	 
	—
	

	 
	 
	 
	34,293
	

	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Common stock
	105,388
	

	 
	24,133
	

	 
	16,876
	

	 
	781
	

	 
	585
	

	 
	(42,375
	)
	 
	105,388
	

	 

	Premium and/or expense on common & preferred stock
	578,938
	

	 
	102,856
	

	 
	93,354
	

	 
	

-
	

	 
	

-
	

	 
	(196,210
	)
	 
	578,938
	

	 

	Retained earnings
	997,773
	

	 
	154,808
	

	 
	146,277
	

	 
	(704
	)
	 
	(561
	)
	 
	(299,820
	)
	 
	997,773
	

	 

	 
	Common stock equity (a)
	1,682,099
	

	 
	281,797
	

	 
	256,507
	

	 
	77
	

	 
	24
	

	 
	(538,405
	)
	 
	1,682,099
	

	 

	 
	Capitalization  (a) 
	2,534,938
	

	 
	489,297
	

	 
	453,107
	

	 
	77
	

	 
	24
	

	 
	(554,505
	)
	 
	2,922,938
	

	(1)

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Notes:
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	(1)
	Consolidated Capitalization
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	(2)
	Consolidated Funded Debt
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	(3)
	Consolidated Subsidiary Funded Debt, individually
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	(a)
	Excludes AOCI Income or Loss
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

SCHEDULE C, D, E 
 (to Note Purchase and Guaranty Agreement)

DISCLOSURE MATERIALS

		
	•
	Hawaiian Electric’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014

		
	•
	Hawaiian Electric’s Quarterly Reports on Form 10-Q for quarters ended March 31, 2015 and June 30, 2015

		
	•
	Hawaiian Electric’s Current Reports on Form 8-K filed January 30, 2015 (report dated January 29, 2015), April 16, 2015 (report dated April 15, 2015), June 3, 2015 (report dated May 28, 2015), August 25, 2015 (report dated August 20, 2015) and October 14, 2015 (report dated October 12, 2015)

SCHEDULE 5.3
(to Note Purchase and Guaranty Agreement)

SUBSIDIARIES OF PARENT GUARANTOR AND OWNERSHIP OF SUBSIDIARY STOCK

	
				
	Subsidiary
	Jurisdiction
	Owner
	Shares Owned (% of outstanding Common Stock)

	

Maui Electric*  
 
	

Hawaii
	

Hawaiian Electric
	

100%

	

Hawaii Electric Light*  
 
	

Hawaii
	
Hawaiian Electric
	

100%

	

Renewable Hawaii, Inc.   

	

Hawaii
	
Hawaiian Electric
	

100%

	

Uluwehiokama Biofuels Corporation 
 
	

Hawaii
	
Hawaiian Electric
	

100%

	

HECO Capital Trust III  

	

Delaware
	
Hawaiian Electric
	

100%**

Note:  Hawaii Electric Light and Maui Electric each have issued cumulative preferred stock, none of which is owned by Hawaiian Electric or any of its Subsidiaries.

* Denotes Significant Subsidiaries

** Trust Common Securities Ownership.  Trust Preferred Securities are publicly traded and none are owned by Hawaiian Electric or any of its Subsidiaries.

SCHEDULE 5.4
 (to Note Purchase and Guaranty Agreement)

PARENT GUARANTOR’S AFFILIATES

	
	
	Affiliate

	

HEI

	

ASB Hawaii, Inc.

	

American Savings Bank, F.S.B.

	

HEI Properties, Inc.   

	

Hawaiian Electric Industries Capital Trust II 

	

Hawaiian Electric Industries Capital Trust III 

	

The Old Oahu Tug Service, Inc.

S-5.4-2

THE COMPANY’S AND PARENT GUARANTOR’S DIRECTORS AND SENIOR OFFICERS

	
		
	HAWAII ELECTRIC LIGHT
	 

	Name

	Position

	Alan M. Oshima
	Chairman of the Board

	Constance H. Lau
	Director

	Jay M. Ignacio
	Director, President

	Tayne S. Y. Sekimura
	Director, Financial Vice President

	Susan A. Li 
	Vice President & Secretary

	Lorie Ann Nagata
	Treasurer

	HAWAIIAN ELECTRIC
	 

	Name

	Position

	Constance H. Lau
	Chairman of the Board

	Don E. Carroll
	Director

	Thomas B. Fargo
	Director

	Peggy Y. Fowler
	Director

	Timothy E. Johns
	Director

	Micah A. Kane
	Director

	Bert A. Kobayashi, Jr.
	Director

	Alan M. Oshima
	Director, President & CEO

	Kelvin H. Taketa
	Director

	Jimmy D. Alberts
	Senior VP, Customer Service

S-5.4-3

	
		
	Susan A. Li

	Senior VP, General Counsel, Chief Compliance Officer & Corporate Secretary

	Stephen M. McMenamin
	Senior VP & Chief Information Officer

	Tayne S. Y. Sekimura
	Senior VP & Chief Financial Officer

	Patricia U. Wong
	Senior VP, Corporate Services

	Lorie Ann Nagata
	Treasurer

	Patsy H. Nanbu
	Controller

S-5.4-4

FINANCIAL STATEMENTS

		
	•
	Consolidated Financial Statements for the fiscal year ended December 31, 2014

		
	•
	Consolidated Financial Statements for the fiscal year ended December 31, 2013

		
	•
	Consolidated Financial Statements for the fiscal year ended December 31, 2012

		
	•
	Consolidated Financial Statements for the quarter ended June 30, 2015

		
	•
	Consolidated Financial Statements for the quarter ended March 31, 2015

SCHEDULE 5.5
(to Note Purchase and Guaranty Agreement)

GOVERNMENTAL AUTHORIZATIONS

Approvals of the issuance of the Notes are required to be obtained from the Public Utilities Commission of the State of Hawaii and have been obtained in the following three Decisions and Orders:

		
	•
	Hawaii Public Utilities Commission Decision and Order dated November 1, 2011 and Order No. 30268 dated March 19, 2012 in Docket No. 2011-0068 for the Issuance of Unsecured Obligations and Guarantees

		
	•
	Hawaii Public Utilities Commission Decision and Order No. 32860 dated May 26, 2015 in Docket No. 2014-0299 for Issuance of Unsecured Obligations, Guarantees and Authorization to Enter into Related Agreements

SCHEDULE 5.7
(to Note Purchase and Guaranty Agreement)

EXISTING INDEBTEDNESS

HAWAIIAN ELECTRIC AND SUBSIDIARIES
AS OF JUNE 30, 2015

	
							
	 
	(in thousands)
	 
	 

	 
	Short-term debt - unsecured
	 
	 

	 
	Commercial Paper (net of discount)
	 
	$
	88,993
	

	 
	$200 Million Syndicated Credit Facility under the Amended and Restated Credit Agreement dated as of April 2, 2014, to expire on April 2, 2019.  The Credit Agreement requires maintenance of a capitalization ratio by Company and restricts guarantees of subsidiary debt, and incurrence of debt by subsidiaries, if a specified ratio will be exceeded.
	 
	$   0
	

	 
	 
	 
	 

	 
	Long-term debt
	 
	 

	 
	Unsecured notes payable to Department of Budget and Finance of the State of Hawaii and assigned by the Department to the indenture trustee for the payment of amounts owing to the holders of special purpose revenue bonds and refunding special purpose revenue bonds (subsidiary obligations unconditionally guaranteed by Hawaiian Electric):
	 
	 

	 
	Hawaiian Electric, 6.50%, series 2009, due 2039
	 
	$
	90,000
	

	 
	Hawaii Electric Light, 6.50%, series 2009, due 2039
	 
	60,000
	

	 
	Hawaiian Electric, 4.65%, series 2007A, due 2037
	 
	100,000
	

	 
	Hawaii Electric Light, 4.65%, series 2007A, due 2037
	 
	20,000
	

	 
	Maui Electric, 4.65%, series 2007A, due 2037
	 
	20,000
	

	 
	Hawaiian Electric, 4.60%, refunding series 2007B, due 2026
	 
	62,000
	

	 
	Hawaii Electric Light, 4.60%, refunding series 2007B, due 2026
	 
	8,000
	

	 
	Maui Electric, 4.60%, refunding series 2007B, due 2026
	 
	55,000
	

	 
	Hawaiian Electric, 4.80%, refunding series 2005A, due 2025
	 
	40,000
	

	 
	Hawaii Electric Light, 4.80%, refunding series 2005A, due 2025
	 
	5,000
	

	 
	Maui Electric, 4.80%, refunding series 2005A, due 2025
	 
	2,000
	

	 
	Total obligations to the State of Hawaii
	 
	462,000
	

	 
	        Other long-term debt – unsecured:
	 
	 

	 
	Hawaii Electric Light, 3.83%, Series 2013A, due 2020
	 
	 
	14,000
	

	 
	Hawaiian Electric, 4.45%, Series 2013A, due 2022
	 
	 
	40,000
	

	 
	Hawaii Electric Light, 4.45%, Series 2013B, due 2022
	 
	 
	12,000
	

	 
	Hawaiian Electric, 4.84%, Series 2013B, due 2027
	 
	 
	50,000
	

	 
	Hawaii Electric Light, 4.84%, Series 2013C, due 2027
	 
	 
	30,000
	

	 
	Maui Electric, 4.84%, Series 2013A, due 2027
	 
	 
	20,000
	

	 
	Hawaiian Electric, 5.65%, Series 2013C, due 2043
	 
	 
	50,000
	

	 
	Maui Electric, 5.65%, Series 2013B, due 2043
	 
	 
	20,000
	

	 
	Hawaiian Electric, 3.79%, Series 2012A, due 2018
	 
	 
	30,000
	

	 
	Hawaii Electric Light, 3.79%, Series 2012A, due 2018
	 
	 
	11,000
	

	 
	 
	 
	 
	

	

SCHEDULE 5.15
(to Note Purchase and Guaranty Agreement)

	
							
	 
	Maui Electric, 3.79%, Series 2012A, due 2018
	 
	 
	9,000
	

	 
	Hawaiian Electric, 4.03%, Series 2012B, due 2020
	 
	 
	62,000
	

	 
	Maui Electric, 4.03%, Series 2012B, due 2020
	 
	 
	20,000
	

	 
	Hawaiian Electric, 4.55%, Series 2012C, due 2023
	 
	 
	50,000
	

	 
	Hawaii Electric Light, 4.55%, Series 2012B, due 2023
	 
	 
	20,000
	

	 
	Maui Electric, 4.55%, Series 2012C, due 2023
	 
	 
	30,000
	

	 
	Hawaiian Electric, 4.72%, Series 2012D, due 2029
	 
	 
	35,000
	

	 
	Hawaiian Electric, 5.39%, Series 2012E, due 2042
	 
	 
	150,000
	

	 
	Hawaiian Electric, 4.53%, Series 2012F, due 2032
	 
	 
	40,000
	

	 
	6.50 %, series 2004, Junior subordinated deferrable interest debentures, due 2034
	 
	 
	51,546
	

	 
	Total long-term debt
	 
	744,546
	

	 
	 
	 
	

	

	 
	Customer Deposits
	 
	

	

	 
	Deposits are used to secure customers' accounts
	 
	 

	 
	Hawaiian Electric
	 
	$
	14,561
	

	 
	Hawaii Electric Light
	 
	3,598
	

	 
	Maui Electric
	 
	4,075
	

	 
	Total customer deposits
	 
	22,234
	

S-5.15-2

STATUS UNDER CERTAIN STATUTES

Federal Power Act
Hawaiian Electric, Hawaii Electric Light and Maui Electric are not generally subject to regulation by the Federal Energy Regulatory Commission (FERC) under the Federal Power Act, except that they are subject to the provisions of Section 210 under which FERC may order the utility to interconnect with qualifying cogenerators and small power producers and to wheel power to other electric utilities.

Public Utility Holding Company Act of 2005
Hawaiian Electric is a holding company within the meaning of the Public Utility Holding Company Act of 2005 and would be subject to the record retention, accounting and reporting requirements of that Act except that it obtained a waiver from those requirements shortly after the Act was adopted.

SCHEDULE 5.17
(to Note Purchase and Guaranty Agreement)

EXISTING LIENS

	
						
	Debtor
	Secured Party
	Jurisdiction
	UCC File Number
	UCC File Date
	Collateral Description*

	Hawaiian Electric 
	Hitachi Credit America Corp. (as assignee of Hannon Armstrong Hawaii Funding Corp.)
	Hawaii
	2001-180919
	11/19/2001
	All money due and to become due under a 2001 task order with a U.S. Navy ordering agency, including all proceeds- approximate remaining balance $0.00.

	Hawaiian Electric 
	J.P. Morgan Leasing, Inc. (assignment)
	Hawaii
	2004-085035
	04/29/2004
	All money due and to become due under a 2001 task order with a U.S. Navy ordering agency, including all proceeds- approximate remaining balance $0.00.

	Hawaiian Electric 
	Hitachi Credit America Corp.
	Hawaii
	2006-185362
	10/10/2006
	Continuation Statement of 2001-180919 continued for additional period provided by applicable law

	Hawaiian Electric 
	J.P. Morgan  Leasing Inc.
	Hawaii
	2006-192912
	10/23/2006
	Continuation Statement of 2001-180919 continued for additional period provided by applicable law

SCHEDULE 10.3
(to Note Purchase and Guaranty Agreement)

	
						
	Hawaiian Electric 
	J.P. Morgan Leasing Inc.
	Hawaii
	2011-138648
	08/30/2011
	Continuation Statement of 2001-180919 continued for additional period provided by applicable law

	Hawaiian Electric 
	Hitachi Credit America Corp.
	Hawaii
	2011-194210
	11/18/2011
	Continuation Statement of 2001-180919 continued for additional period provided by applicable law

	Hawaii Electric Light 
	South City Bank (secured party) & Central Leasing Corporation (additional secured party)
	Hawaii
	A-43741113
	12/23/2011
	Lease Agreement
For Equipment (Flex Pay Collar and Meter & Cable)- approximate remaining balance $16,800.00.

	Hawaii Electric Light 
	Bank of the West (secured party) & Pure Health Solutions, Inc. (assignor)
	Hawaii
	A-44840919
	04/11/2012
	Rental Agreement dtd 3/15/2012 (PWLR) - approximate remaining balance $20,200.

	Hawaii Electric Light 
	First Partners Bank (secured party) & Central Leasing Corporation (additional secured party)
	Hawaii
	A-49240672
	06/25/2013
	Equipment Schedule “A” dated 12/20/12 to a Master Lease Agreement (Homeplug Native Assembly & Long Pin Meter Interface Cable) - approximate remaining balance $11,500.00.

S-10.3-2

RESTRICTIVE AGREEMENTS

The following restrictions and conditions exist on October 15, 2015:

		
	1.
	The Bank Credit Agreement restricts the ability of Hawaiian Electric and its “Significant Subsidiaries,” as defined therein, to sell, transfer, lease or otherwise dispose of any property or assets to any of its Affiliates, as defined therein, on a non-arms length basis.  

		
	2.
	Hawaiian Electric, Maui Electric and Hawaii Electric Light are subject to restrictive covenants in connection with the offer and sale in March 2004 of Cumulative Quarterly Income Preferred Securities, as disclosed in the Registration Statements on Form S-3, Regis. Nos. 333-111073, 333-111073-01, 333-111073-02 and 333-111073-03 filed with the SEC, which descriptions are incorporated herein by reference.

		
	3.
	Hawaiian Electric, Maui Electric and Hawaii Electric Light are subject to restrictive covenants in connection with their cumulative preferred stock financings to the effect that, until dividends have been paid or declared or set apart for payment on all shares of the respective company’s cumulative preferred stock, (a) no distributions on the respective company’s common stock or any future class of stock except cumulative preferred stock shall be made and (b) the respective company shall not purchase or otherwise acquire any of the respective company’s common stock or any future class of stock except cumulative preferred stock.  In the event of liquidation, dissolution, receivership, bankruptcy, disincorporation or winding up of the affairs of the respective company, cumulative preferred stockholders are entitled to the par value of their shares and accrued and unpaid dividends, before any distribution is made to holders of the respective company's common stock or any future class of stock except cumulative preferred stock.

		
	4.
	Hawaiian Electric is subject to restrictive covenants in connection with its cumulative preferred stock financings to the effect that, as long as any shares of the respective series of cumulative preferred stock are outstanding, Hawaiian Electric shall not affect the merger or consolidation of Hawaiian Electric, or sell, lease or exchange all or substantially all of the property and assets of Hawaiian Electric, without first obtaining the consent in writing of the holders of at least 75% of each of the respective outstanding series of cumulative preferred stock, provided that said consent shall not be required to make a mortgage, pledge, assignment or transfer of all or any part of its assets as security for any obligation or liability of any kind or nature.

SCHEDULE 10.5
(to Note Purchase and Guaranty Agreement)

		
	5.
	Hawaiian Electric, Maui Electric and Hawaii Electric Light are subject to restrictive covenants in connection with their special purpose revenue bonds which contain provisions to the effect that Hawaiian Electric, Maui Electric and Hawaii Electric Light shall not dissolve or otherwise dispose of all or substantially all its assets, and will not consolidate with or merge into another entity or permit other entities to consolidate with or merge into it, unless certain specific requirements are met.  

		
	6.
	Hawaiian Electric, Maui Electric and Hawaii Electric Light are subject to restrictive covenants in connection with their Note Purchase Agreements dated as of April 19, 2012 and October 3, 2013, and Hawaiian Electric’s Note Purchase Agreement dated as of September 13, 2012 (collectively, the “Prior Note Agreements”), pursuant to which several series of unsecured notes were issued in private placements.  The Prior Note Agreements contain affirmative and negative restrictions, including a negative covenant that Hawaiian Electric will not permit the ratio of any Significant Subsidiaries’ Consolidated Subsidiary Funded Debt to its Capitalization exceed a specified level, and this restriction could operate indirectly to restrict the ability of Significant Subsidiaries to make Restricted Payments to Hawaiian Electric.  Hawaiian Electric also entered into two similar Note Purchase Agreements of the same April 19 and October 3 dates under which it is a “Guarantor” of Maui Electric (in one such Agreement) and a Guarantor of Hawaii Electric Light (in another such Agreement).  Each of these agreements contains similar negative covenants relating to Maui Electric and Hawaii Electric Light (as well as Hawaiian Electric) relating to their respective Consolidated Subsidiary Funded Debt to Capitalization ratios and those of their respective Significant Subsidiaries.  The affirmative and negative restrictions are disclosed in the Current Reports on Form 8-K filed with the Securities and Exchange Commission on April 23, 2012, September 14, 2012 and October 3, 2013, which descriptions are incorporated herein by reference.

		
	7.
	Hawaiian Electric, Maui Electric and Hawaii Electric Light are subject to restrictive covenants in connection with their Note Purchase Agreements being entered into concurrently on or about October 15, 2015 (together, the “2015 Note Agreements”) and to which this Schedule 10.5 relates and pursuant to which unsecured notes are being issued in a private placement.  The 2015 Note Agreements contain affirmative and negative covenants which are similar to those in the Prior Note Agreements which are discussed in item 6 of this Schedule 10.5

S-10.5-2

AFFILIATE TRANSACTIONS

Administrative Services Agreements

	
				
	Administrative Service Agreement
	Affiliate Providing Services
	Affiliate Purchasing Services
	Original Agreement Date

	HEI1 and Hawaiian Electric
	HEI
	Hawaiian Electric
	February 5, 2014

	HEI and Hawaii Electric Light2 
	HEI
	Hawaii Electric Light
	February 5, 2014

	HEI and Maui Electric3
	HEI
	Maui Electric
	February 5, 2014

	Hawaiian Electric/Hawaii Electric Light/Maui Electric and Renewable Hawaii, Inc. (RHI)4
	Hawaiian Electric/Hawaii Electric Light/Maui Electric
	RHI
	January 1, 2003

	Hawaiian Electric and Uluwehiokama Biofuels Corporation (UBC)5
	Hawaiian Electric
	UBC
	May 14, 2008

	Hawaiian Electric and HEI
	Hawaiian Electric
	HEI
	August 10, 1994

	Hawaiian Electric and HEI Diversified, Inc., now known as American Savings Bank Hawaii (ASB Hawaii)6
	Hawaiian Electric
	ASB Hawaii
	August 15, 1994

	Hawaiian Electric and American Savings Bank, F.S.B. (ASB)7
	Hawaiian Electric
	ASB
	November 8, 1996

	Hawaiian Electric and Hawaiian Tug & Barge Corp., now known as The Old Oahu Tug Service, Inc. (TOOTS)
	Hawaiian Electric
	TOOTS
	August 5, 19948

______________________________________ 
1 HEI is the parent company of Hawaiian Electric.
2 Hawaii Electric Light is a subsidiary of Hawaiian Electric.
3  Maui Electric is a subsidiary of Hawaiian Electric.
4  RHI is a subsidiary of Hawaiian Electric.
5  UBC is a subsidiary of Hawaiian Electric.
6  ASB Hawaii (formerly American Savings Holdings, Inc.) is the parent company of American Savings Bank, and is a subsidiary of HEI.
7 ASB is a subsidiary of ASB Hawaii, which is a subsidiary of HEI.
8  Agreement is extended on an annual basis.  The current extension is dated March 9, 2015 and expires December 31, 2015.

SCHEDULE 10.6
(to Note Purchase and Guaranty Agreement)

FORM OF NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE.  NO TRANSFER, SALE OR OTHER DISPOSITION OF THIS NOTE MAY BE MADE UNLESS A REGISTRATION STATEMENT WITH RESPECT TO THIS NOTE HAS BECOME EFFECTIVE UNDER THE ACT AND SUCH REGISTRATION OR QUALIFICATION AS MAY BE REQUIRED UNDER THE SECURITIES LAWS OF ANY STATE HAS BECOME EFFECTIVE, OR AN EXEMPTION FROM SUCH REGISTRATIONS AND/OR QUALIFICATIONS IS AVAILABLE UNDER THE ACT AND SUCH LAWS.  EACH TRANSFEREE OF THIS NOTE, BY ACCEPTANCE OF THIS NOTE REGISTERED IN ITS NAME (OR THE NAME OF ITS NOMINEE) WILL BE DEEMED TO HAVE MADE CERTAIN REPRESENTATIONS SET FORTH IN THE NOTE PURCHASE AND GUARANTY AGREEMENT PURSUANT TO WHICH THIS NOTE WAS ISSUED.

Hawaii Electric Light Company, Inc.
5.23% Senior Note, Series 2015A, due October 1, 2045	
		
	No. AR-_______
	___________, 20__

	$____________
	PPN 41975* AN5

For value received, the undersigned, Hawaii Electric Light Company, Inc. (herein called the “Company”), a corporation organized and existing under the laws of the State of Hawaii, hereby promises to pay to ________________, or registered assigns, the principal sum of ________________ Dollars (or so much thereof as shall not have been prepaid) on October 1, 2045 (the “Maturity Date”) with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 5.23% per annum from the date hereof, payable semiannually, on the first day of April and October in each year, commencing with the first day of April [or October]1 next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (1) 7.23% or (2) 2.00% over the rate of interest publicly announced by Bank of America, N.A. from time to time in New York, New York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).
Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at U.S. Bank National Association in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note and Guaranty Agreement referred to below.
This Note is one of the Series 2015A Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase and Guaranty Agreement dated as of October 15, 2015 (as from 

_____________________________
      1   To be included in Notes issued after October 15, 2015. 

EXHIBIT 1
(to Note Purchase and Guaranty Agreement)

time to time amended, the “Note and Guaranty Agreement”), among the Company, Hawaiian Electric Company, Inc., a Hawaii corporation (the “Parent Guarantor”), and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof at original issuance or upon subsequent transfer, to have (i) agreed to the confidentiality provisions set forth in Section 21 of the Note and Guaranty Agreement and (ii) made the representations set forth in Section 6 of the Note and Guaranty Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note and Guaranty Agreement.
Payment of the principal of, Make-Whole Amount, if any, and interest on this Note has been absolutely, unconditionally and irrevocably guaranteed by the Parent Guarantor in accordance with the terms of the Note and Guaranty Agreement.
This Note is a registered Note and, as provided in the Note and Guaranty Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the Person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and, except as otherwise provided in Section 14.1 of the Note and Guaranty Agreement, for all other purposes, and the Company will not be affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note and Guaranty Agreement, but not otherwise.
If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note and Guaranty Agreement.
This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice of law principles of the law of such State that would require or permit the application of the laws of a jurisdiction other than such State. 
	
		
	 
	HAWAII ELECTRIC LIGHT COMPANY, INC.

	Seal
	By___________________________________ 

	 
	        Its__________________________________                                                                    

	 
	By___________________________________ 

	 
	        Its__________________________________                                                                    

E-1-2

FORM OF OPINION OF THE VICE PRESIDENT-GENERAL COUNSEL 
OF THE PARENT GUARANTOR
The closing opinion of Susan A. Li, Esq., Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary to the Parent Guarantor, which is called for by Section 4.4(a) of the Agreement, shall be dated the date of the Closing and addressed to each Purchaser, shall be satisfactory in scope and form to each Purchaser and shall be to the effect that:
		
	1.
	The Company is a corporation duly incorporated under the laws of the Republic of Hawaii and validly existing and in good standing under the laws of the State of Hawaii and has the corporate power and the corporate authority to execute and perform the Agreement and to issue the Notes. The Parent Guarantor is a corporation duly incorporated under the laws of the Kingdom of Hawaii and validly existing and in good standing under the laws of the State of Hawaii and has the corporate power and the corporate authority to execute and perform the Agreement.  Maui Electric is a corporation duly incorporated under the laws of the Territory of Hawaii and validly existing and in good standing under the laws of the State of Hawaii. 

		
	2.
	The Company has the full corporate power and the corporate authority to conduct the activities in which it is now engaged and, to my knowledge, does not itself conduct any business or own or lease any property in any jurisdiction outside the State of Hawaii that would require it to qualify to do business as a foreign corporation and where the failure to be so qualified would reasonably be expected to have a Material Adverse Effect.

		
	3.
	The Parent Guarantor has the full corporate power and the corporate authority to conduct the activities in which it is now engaged and, to my knowledge, does not itself conduct any business or own or lease any property in any jurisdiction outside the State of Hawaii that would require it to qualify to do business as a foreign corporation and where the failure to be so qualified would reasonably be expected to have a Material Adverse Effect.

		
	4.
	To my knowledge, Maui Electric, a Hawaii corporation, does not conduct any business or own or lease any property in any jurisdiction outside the State of Hawaii that would require it to qualify to do business as a foreign corporation and where the failure to be so qualified would reasonably be expected to have a Material Adverse Effect.

		
	5.
	The Parent Guarantor is the record owner of all of the issued and outstanding shares of common stock of each of the Company and Maui Electric and all such shares have been duly issued and are fully paid and non-assessable and are owned by the Parent Guarantor.

		
	6.
	The Agreement has been duly authorized by all necessary corporate action on the part of each Constituent Company and has been duly executed and delivered by each Constituent Company. 

EXHIBIT 4.4(a)
(to Note Purchase and Guaranty Agreement)

		
	7.
	The Notes have been duly authorized by all necessary corporate action on the part of the Company and have been duly executed and delivered by the Company. The Notes will constitute valid obligations of the Company except as may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principals of equity (regardless of whether considered in a proceeding in equity or at law).

		
	8.
	No approval, consent or withholding of objection on the part of, or filing, registration or qualification with, any Governmental Authority of the State of Hawaii is necessary in connection with the execution and delivery by a Constituent Company of the Agreement or, in the case of the Company, the Notes, except for the approvals of the Public Utilities Commission of the State of Hawaii, which approvals have been obtained. Nothing has come to my attention to cause me to believe that such approvals have been vacated, amended or modified. 

		
	9.
	To my knowledge, the issuance and sale of the Notes and the execution, delivery and performance by the Company of the Agreement do not conflict with or result in any breach of any of the provisions of or constitute a default under or result in the creation or imposition of any Lien upon any of the property of the Company pursuant to the provisions of any agreement or other instrument to which the Company is a party or by which the Company may be bound.

		
	10.
	To my knowledge, the execution, delivery and performance by the Parent Guarantor of the Agreement do not conflict with or result in any breach of any of the provisions of or constitute a default under or result in the creation or imposition of any Lien upon any of the property of the Parent Guarantor pursuant to the provisions of any agreement or other instrument to which the Parent Guarantor or any Significant Subsidiary thereof is a party or by which the Parent Guarantor or any Significant Subsidiary thereof may be bound.

		
	11.
	The issuance and sale of the Notes and the execution, delivery and performance by the Company of the Agreement do not conflict with any law, rule or regulation or order, judgment or decree of any Governmental Authority of the State of Hawaii or the United States of America applicable to the Company or result in any breach of any of the provisions of or constitute a default under or result in the creation or imposition of any Lien upon any of the property of the Company pursuant to the provisions of the Articles of Incorporation, as amended, or the Amended and Restated By-laws of the Company. 

		
	12.
	The execution, delivery and performance by the Parent Guarantor of the Agreement do not conflict with any law, rule or regulation or order, judgment or decree of any Governmental Authority of the State of Hawaii or the United States of America applicable to the Parent Guarantor or any Significant Subsidiary thereof or result in any breach of any of the provisions of or constitute a default under or result in the creation or imposition of any Lien upon any of the property of the Parent Guarantor 

E.4.4(a)-2

pursuant to the provisions of the Articles of Incorporation, as amended, or the Amended and Restated By-laws of the Parent Guarantor. 

The opinion of Susan A. Li, Esq., Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary of the Parent Guarantor, shall cover such other matters relating to the sale of the Notes as any Purchaser may reasonably request and shall provide that (i) subsequent Institutional Investor holders of the Notes may rely upon such opinion and (ii) such opinion may be provided to Governmental Authorities including, without limitation, the NAIC.  With respect to matters of fact on which such opinion is based, such counsel shall be entitled to rely on appropriate certificates of public officials and officers of the Constituent Companies.

E.4.4(a)-3

FORM OF OPINION OF SPECIAL COUNSEL 
FOR THE CONSTITUENT COMPANIES
The closing opinion of Pillsbury Winthrop Shaw Pittman LLP, special counsel for the Constituent Companies, which is called for by Section 4.4(b) of the Agreement, shall be dated the date of the Closing and addressed to each Purchaser, shall be satisfactory in scope and form to each Purchaser and shall be to the effect that:
		
	1.
	The Agreement constitutes a valid and legally binding agreement of each Constituent Company, enforceable against such Constituent Company in accordance with its terms.

		
	2.
	The Notes, upon execution and delivery thereof in accordance with the Agreement and payment therefor pursuant to the Agreement, will constitute the valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms.

		
	3.
	The offer, sale and delivery of the Notes to you in accordance with the Agreement do not require registration under the Securities Act of 1933 or qualification of an indenture of either Constituent Company under the Trust Indenture Act of 1939.

		
	4.
	Neither Constituent Company is, and immediately after giving effect to the offering and sale of the Notes and the application of the proceeds thereof will be, required to register as an “investment company” within the meaning of the Investment Company Act of 1940.

		
	5.
	The issuance of the Notes and the use of the proceeds of the sale of the Notes in accordance with the provisions of the Agreement do not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System.

		
	6.
	No Governmental Approval (as defined below) under the Applicable Law (as defined below) is required to be obtained or made by either Constituent Company for the execution and delivery by such Constituent Company of, or the performance by such Constituent Company of its obligations under, the Notes (in the case of the Company) or the Agreement (including the issuance and sale of the Notes by the Company thereunder) other than those Governmental Approvals that have been previously obtained or made. 

		
	7.
	Neither the execution and delivery by either Constituent Company of, nor the performance by such Constituent Company of its obligations under, the Notes (in the case of the Company) or the Agreement will violate the Applicable Law.

As used in such opinion, (a) “Governmental Approval” means any authorization, consent, approval or license (or the like) of, or exemption (or the like) from, or registration or filing (or the like) with, or report or notice (or the like) to, any governmental unit, agency, commission, department or other authority that may be applicable to each Constituent Company or any Affiliate or any of its properties, (b) “Applicable Law” means the federal law of the United States of America or the law of the State of New York that in our experience is normally 

EXHIBIT 4.4(b)
(to Note Purchase and Guaranty Agreement)

applicable to transactions of the type contemplated by the Agreement, but without our having made any special investigation with respect to any other law (including charters, ordinances, bylaws and other laws enacted by political subdivisions of the State of New York) and other than any federal or state securities or “blue sky” laws or the antifraud laws of any jurisdiction and (c) “Affiliate” means any person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, either Constituent Company.  
The opinion of Pillsbury Winthrop Shaw Pittman LLP, shall cover such other matters relating to the sale of the Notes as any Purchaser may reasonably request and shall provide that (i) subsequent Institutional Investor holders of the Notes may rely upon such opinion and (ii) such opinion may be provided to Governmental Authorities including, without limitation, the NAIC. The opinions may be limited to the laws of the State of New York and the federal laws of the United States.  With respect to matters of fact on which such opinion is based, such counsel shall be entitled to rely on appropriate certificates of public officials and officers of each Constituent Company.

E.4.4(b)-2

FORM OF OPINION OF SPECIAL COUNSEL 
TO THE PURCHASERS

The closing opinion of Schiff Hardin LLP, special counsel to the Purchasers, called for by Section 4.4(c) of the Agreement, shall be dated the date of the Closing and addressed to the Purchasers, shall be satisfactory in form and substance to the Purchasers and shall be to the effect that:
1.    Each Constituent Company is a corporation in good standing under the laws of the State of Hawaii.
2.    The Agreement and the Notes being delivered on the date hereof constitute the legal, valid and binding contracts of the Company, enforceable against the Company in accordance with their respective terms.
3.    The Agreement constitutes the legal, valid and binding contract of the Parent Guarantor, enforceable against the Parent Guarantor in accordance with its terms.
4.    The issuance, sale and delivery of the Notes being delivered on the date hereof and the delivery of the Guaranty provided in Section 13 under the circumstances contemplated by this Agreement do not, under existing law, require the registration of such Notes under the Securities Act or the qualification of an indenture under the Trust Indenture Act of 1939, as amended.
The opinion of Schiff Hardin LLP shall also state that the opinions of Susan A. Li, Esq., Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary and Pillsbury Winthrop Shaw Pittman LLP are satisfactory in scope and form to Schiff Hardin LLP and that, in their opinion, the Purchasers are justified in relying thereon. 
In rendering the opinion set forth in paragraph 1 above, Schiff Hardin LLP may rely, as to matters referred to in paragraph 1, solely upon an examination of a certificate of good standing of each Constituent Company from the Director of the Department of Commerce and Consumer Affairs of the State of Hawaii.  The opinion of Schiff Hardin LLP is limited to the laws of the State of New York and the federal laws of the United States.
With respect to matters of fact upon which such opinion is based, Schiff Hardin LLP may rely on appropriate certificates of public officials and officers of the Constituent Companies and upon representations of the Constituent Companies and the Purchasers delivered in connection with the issuance and sale of the Notes.

47934-0000
CH2\17383393.1  

EXHIBIT 4.4(c)
(to Note Purchase and Guaranty Agreement)Exhibit

[Execution Version]

CREDIT AGREEMENT 
 
dated as of 
 
October 15, 2015 
 
among
 
TUCSON ELECTRIC POWER COMPANY,
as Borrower, 

THE LENDERS PARTY HERETO,

JPMORGAN CHASE BANK, N.A., SUNTRUST BANK
and WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Co-Syndication Agents,
 
THE BANK OF NOVA SCOTIA and U.S. BANK NATIONAL ASSOCIATION,
as Co-Documentation Agents,

and

MUFG UNION BANK, N.A., 
as Administrative Agent

MUFG UNION BANK, N.A., J.P. MORGAN SECURITIES LLC, SUNTRUST ROBINSON HUMPHREY, INC. and WELLS FARGO SECURITIES, LLC,
as Joint Lead Arrangers and Joint Bookrunners 

66587785_8

TABLE OF CONTENTS	
				
	 
	 
	 
	Page

	ARTICLE I
	Definitions
	1

	 
	 
	 
	 

	SECTION 1.01.
	 
	Defined Terms
	1

	SECTION 1.02.
	 
	Classification of Loans and Borrowings
	18

	SECTION 1.03.
	 
	Terms Generally
	18

	SECTION 1.04.
	 
	Accounting Terms; GAAP
	18

	SECTION 1.05.
	 
	Pro Forma Calculations
	18

	 
	 
	 
	 

	ARTICLE II
	The Credits
	19

	 
	 
	 
	 

	SECTION 2.01.
	 
	Commitments
	19

	SECTION 2.02.
	 
	Loans and Borrowings
	19

	SECTION 2.03.
	 
	Requests for Borrowings
	19

	SECTION 2.04.
	 
	Letters of Credit
	20

	SECTION 2.05.
	 
	Funding of Borrowings
	25

	SECTION 2.06.
	 
	Interest Elections
	25

	SECTION 2.07.
	 
	Termination and Reduction of Commitments
	26

	SECTION 2.08.
	 
	Extension of the Final Maturity Date
	27

	SECTION 2.09.
	 
	Repayment of Loans; Evidence of Debt
	28

	SECTION 2.10.
	 
	Prepayment of Loans
	29

	SECTION 2.11.
	 
	Fees
	30

	SECTION 2.12.
	 
	Interest
	31

	SECTION 2.13.
	 
	Alternate Rate of Interest
	31

	SECTION 2.14.
	 
	Increased Costs
	32

	SECTION 2.15.
	 
	Break Funding Payments
	33

	SECTION 2.16.
	 
	Taxes
	34

	SECTION 2.17.
	 
	Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	38

	SECTION 2.18.
	 
	Mitigation Obligations; Replacement of Lenders
	39

	SECTION 2.19.
	 
	Illegality
	40

	SECTION 2.20.
	 
	Defaulting Lenders
	40

	 
	 
	 
	 

	ARTICLE III
	Representations and Warranties
	43

	 
	 
	 
	 

	SECTION 3.01.
	 
	Organization; Powers
	43

	SECTION 3.02.
	 
	Authorization; Enforceability
	43

	SECTION 3.03.
	 
	Governmental Approvals; No Conflicts
	43

	SECTION 3.04.
	 
	Financial Condition; No Material Adverse Change
	44

	SECTION 3.05.
	 
	Properties
	44

	SECTION 3.06.
	 
	Litigation and Environmental Matters
	44

	SECTION 3.07.
	 
	Compliance with Laws and Agreements
	45

	SECTION 3.08.
	 
	Federal Regulations
	45

	SECTION 3.09.
	 
	Investment Company Status
	45

	SECTION 3.10.
	 
	Taxes
	45

i

66587785_8

Page

	
				
	SECTION 3.11.
	 
	ERISA
	46

	SECTION 3.12.
	 
	Disclosure
	46

	SECTION 3.13.
	 
	Solvency
	46

	SECTION 3.14.
	 
	Labor Matters
	46

	SECTION 3.15.
	 
	Anti-Terrorism Laws; OFAC
	46

	SECTION 3.16.
	 
	Anti-Corruption Laws
	47

	 
	 
	 
	 

	ARTICLE IV
	Conditions Precedent
	47

	 
	 
	 
	 

	SECTION 4.01.
	 
	Effective Date
	48

	SECTION 4.02.
	 
	Each Credit Event
	49

	 
	 
	 
	 

	ARTICLE V
	Affirmative Covenants
	50

	 
	 
	 
	 

	SECTION 5.01.
	 
	Financial Statements; Ratings Changes and Other Information
	50

	SECTION 5.02.
	 
	Notices of Material Events
	52

	SECTION 5.03.
	 
	Existence; Conduct of Business
	53

	SECTION 5.04.
	 
	Payment of Obligations
	53

	SECTION 5.05.
	 
	Maintenance of Properties; Insurance
	53

	SECTION 5.06.
	 
	Books and Records; Inspection Rights
	53

	SECTION 5.07.
	 
	Compliance with Laws
	53

	SECTION 5.08.
	 
	Use of Proceeds and Letters of Credit
	54

	SECTION 5.09.
	 
	Environmental Laws
	54

	SECTION 5.10.
	 
	Further Assurances
	54

	 
	 
	 
	 

	ARTICLE V
	Negative Covenants
	54

	 
	 
	 
	 

	SECTION 6.01.
	 
	Liens
	55

	SECTION 6.02.
	 
	Fundamental Changes
	55

	SECTION 6.03.
	 
	Sale of Assets
	56

	SECTION 6.04.
	 
	Restricted Payments
	57

	SECTION 6.05.
	 
	Leverage Ratio
	57

	SECTION 6.06.
	 
	Transactions with Affiliates
	57

	SECTION 6.07.
	 
	Anti-Corruption Laws; Sanctions
	58

	 
	 
	 
	 

	ARTICLE VII
	Events of Default
	58

	 
	 
	 

	ARTICLE VIII
	The Administrative Agent
	61

	 
	 
	 

	ARTICLE IX
	Miscellaneous
	63

	 
	 
	 
	 

	SECTION 9.01.
	 
	Notices
	63

	SECTION 9.02.
	 
	Waivers; Amendments
	65

	SECTION 9.03.
	 
	Expenses; Indemnity; Damage Waiver
	66

	SECTION 9.04.
	 
	Successors and Assigns
	68

ii

66587785_8

Page

	
				
	SECTION 9.05.
	 
	Survival
	72

	SECTION 9.06.
	 
	Counterparts; Integration; Effectiveness
	72

	SECTION 9.07.
	 
	Severability
	72

	SECTION 9.08.
	 
	Right of Setoff
	73

	SECTION 9.09.
	 
	Governing Law; Jurisdiction; Consent to Service of Process
	73

	SECTION 9.10.
	 
	WAIVER OF JURY TRIAL
	74

	SECTION 9.11.
	 
	Headings
	74

	SECTION 9.12.
	 
	Confidentiality
	74

	SECTION 9.13.
	 
	Interest Rate Limitation
	75

	SECTION 9.14.
	 
	Patriot Act Notice
	75

SCHEDULES:
Schedule 1.01 – Pricing Schedule 
Schedule 2.01 – Commitments 
Schedule 2.04 – Existing Letters of Credit 

EXHIBITS:
		
	Exhibit A 
	–    Form of Assignment and Assumption 

		
	Exhibit B-1 
	–    Form of Opinion of Todd C. Hixon, Esq., General Counsel for the Borrower 

		
	Exhibit B-2 
	–    Form of Opinion of Morgan, Lewis & Bockius LLP, New York counsel for the Borrower

		
	Exhibit C-1
	–    Form of U.S. Tax Compliance Certificate (Foreign Lenders That Are Not Partnerships)

		
	Exhibit C-2
	–    Form of U.S. Tax Compliance Certificate (Foreign Participants That Are Not Partnerships)

		
	Exhibit C-3
	–    Form of U.S. Tax Compliance Certificate (Foreign Participants That Are Partnerships)

		
	Exhibit C-4
	–    Form of U.S. Tax Compliance Certificate (Foreign Lenders That Are Partnerships)

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This CREDIT AGREEMENT, dated as of October 15, 2015 (this “Agreement”), among TUCSON ELECTRIC POWER COMPANY, an Arizona corporation, the lenders listed on the signature pages hereto as “Lenders” (the “Lenders”), the other LENDERS from time to time party hereto, JPMORGAN CHASE BANK, N.A., SUNTRUST BANK and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Co-Syndication Agents,  THE BANK OF NOVA SCOTIA and U.S. BANK NATIONAL ASSOCIATION, as Co-Documentation Agents, and MUFG UNION BANK, N.A., as Administrative Agent.
PRELIMINARY STATEMENTS
WHEREAS, the Borrower has requested the Lenders to provide the credit facilities hereinafter described in the amounts and on the terms and conditions set forth herein; and
WHEREAS, the Lenders have agreed to provide such credit facilities on the terms and conditions set forth herein, and the Administrative Agent has agreed to act as agent for the Lenders on such terms and conditions.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I 
Definitions
SECTION 1.01.    Defined Terms.  As used in this Agreement (including the recitals hereto), the following terms have the meanings specified below:
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
“ACC” means the Arizona Corporation Commission.
“ACC Order” means the Order issued by the ACC on February 6, 2013 in Docket No. E-01933A-12-0176 (In the Matter of the Application of Tucson Electric Power Company for a Financing Order Authorizing Various Financing Transactions), Decision No. 73658. 
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
“Administrative Agent” means MUFG, in its capacity as administrative agent for the Lenders.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

66587785_8

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Agents” means the Administrative Agent, the Co-Syndication Agents and the Co-Documentation Agents.
“Aggregate Commitments” and “Commitments” means the total of the Lenders’ Commitments hereunder.  The Aggregate Commitments shall in no event exceed $250,000,000.
“Aggregate Exposure” means, at any time, the sum of (a) the aggregate outstanding principal amount of Loans at such time plus (b) the LC Exposure at such time.  The Aggregate Exposure of any Lender at any time shall be its Applicable Percentage of the total Aggregate Exposure at such time.
 “Agreement” has the meaning assigned to such term in the preamble hereto.
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Reference Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%, and (c) the Adjusted LIBO Rate for an Interest Period of one month beginning on such day (or, if such day is not a Business Day, the immediately preceding Business Day) plus 1.0%.  Any change in the Alternate Base Rate due to a change in the Reference Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Reference Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption, including, without limitation, the FCPA.
“Anti-Terrorism Laws” has the meaning provided in Section 3.15(a).
“Applicable Margin” means for any day, with respect to any Eurodollar Loan or ABR Loan, as the case may be, the applicable percentage per annum determined in accordance with the Pricing Schedule attached hereto as Schedule 1.01.
“Applicable Percentage” means, for any Lender on any date of determination, the percentage obtained by dividing the amount of such Lender’s Commitment on such date by the Aggregate Commitments on such date, and multiplying the quotient so obtained by 100%; provided, that in the event that the Commitments have been terminated, each Lender’s Applicable Percentage shall be calculated on the basis of the Commitments in effect immediately prior to such termination, giving effect to any assignments.  

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“Applicable Rate” means:
(i)    in the case of each ABR Loan, a rate per annum equal at all times to the Alternate Base Rate in effect from time to time plus the Applicable Margin in effect from time to time; and 
(ii)    in the case of each Eurodollar Loan, a rate per annum during each Interest Period equal at all times to the sum of the Adjusted LIBO Rate for such Interest Period plus the Applicable Margin in effect from time to time during such Interest Period.
“Approved Fund” means, with respect to any Lender that is a fund that invests in commercial loans, any other fund that invests in commercial loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.
“Arrangers” means MUFG, J.P. Morgan Securities LLC, SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC, as Joint Lead Arrangers and Joint Bookrunners for the credit facilities established by this Agreement.
“Assignment and Assumption” means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.
“Authorized Officer” means the president, any vice president, the chief financial officer, the principal accounting officer, the treasurer or the controller of the Borrower.
“Availability Period” means, in respect of each Lender, the period from and including the Effective Date to but excluding the Termination Date applicable to such Lender.
“Board” means the Board of Governors of the Federal Reserve System of the United States of America.
“Borrower” means Tucson Electric Power Company, an Arizona corporation.
“Borrowing” means Loans of the same Type, made (or deemed made), converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.
“Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03.
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City or Los Angeles, California are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

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“Capital Lease Investment” of any Person means the aggregate outstanding capitalized amount of Capital Lease Obligations of the Borrower and the Consolidated Subsidiaries that are owned by such Person and in respect of which such Person has the right to receive all future payments to be made.
“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.
“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Administrative Agent or the Fronting Banks (as applicable) and the Lenders, as collateral for the LC Exposure or the obligations of the Lenders to fund participations in respect thereof (as the context may require), cash or deposit account balances or, if the Fronting Bank(s) benefitting from such collateral shall agree in its sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to (a) the Administrative Agent and (b) the applicable Fronting Banks.  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“Change in Control” means the failure of UNS Energy to own and control, of record and beneficially, directly or indirectly, Capital Stock of the Borrower representing 100% of the aggregate ordinary voting power of the Borrower, free and clear of all Liens.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.

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“Co-Documentation Agents” means The Bank of Nova Scotia and U.S. Bank National Association, in their capacity as co-documentation agents for the Lenders.
“Commitment” means, with respect to each Lender, the commitment of such Lender to make Loans hereunder and to participate in Letters of Credit and LC Disbursements, expressed as an amount representing the maximum aggregate permitted amount of such Lender’s Aggregate Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.07 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.  
“Commitment Fee Rate” means for any day, the applicable percentage per annum determined in accordance with the Pricing Schedule attached hereto as Schedule 1.01. 
“Consolidated Net Worth” means, at any date, the sum as of such date of (a) the par value (or value stated on the books of the Borrower) of all classes of Capital Stock of the Borrower and its Subsidiaries, excluding the Borrower’s Capital Stock owned by the Borrower and/or its Subsidiaries, plus (or minus in the case of a surplus deficit) (b) the amount of consolidated surplus, whether capital or earned, of the Borrower, determined in accordance with GAAP as of the date of determination (excluding the effect on the Borrower’s accumulated other comprehensive income/loss of the ongoing application of Accounting Standards Codification Topic 815).
“Consolidated Subsidiary” means, at any date, each Subsidiary the accounts of which would be consolidated with those of the Borrower in the Borrower’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date.
“Consolidated Total Capitalization” means, with respect to the Borrower at any time, the sum of Consolidated Net Worth and Consolidated Total Indebtedness of the Borrower at such time. 
“Consolidated Total Indebtedness” means, as of the last day of any fiscal quarter, (a) the sum (without duplication) for the Borrower and the Consolidated Subsidiaries as of such day of (i) the aggregate outstanding principal amount of the Loans and LC Disbursements, (ii) the aggregate LC Outstandings of all Letters of Credit outstanding on such day, (iii) the aggregate outstanding principal amount of other Indebtedness for borrowed money (including Guarantees thereof) and (iv) the aggregate outstanding capitalized amount of Capital Lease Obligations, minus (b) the sum (without duplication) as of such day of (i) the aggregate outstanding capitalized amount of the Capital Lease Investments of the Borrower and the Consolidated Subsidiaries as of such day and (ii) to the extent included in clause (a)(iii) above, any Treasury Indebtedness of the Borrower and the Consolidated Subsidiaries as of such day, all as determined on a consolidated basis in accordance with GAAP; provided, however, that there shall be disregarded for purposes of the determination of Consolidated Total Indebtedness the aggregate outstanding principal amount of any Indebtedness for borrowed money of the Borrower or any of its Subsidiaries for which (1) cash in an amount sufficient to repay and discharge in full such Indebtedness on its scheduled maturity date or redemption date shall have been irrevocably deposited in trust with a trustee, escrow agent, 

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paying agent or similar agent for the payment thereof on such maturity date or redemption date (as the case may be), and (2) the Borrower or such Subsidiary (as the case may be) shall have irrevocably instructed such trustee, escrow agent, paying agent or similar agent (as the case may be) to apply all such cash to the repayment and discharge of such Indebtedness on such maturity date or redemption date (as the case may be).
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.
“Co-Syndication Agents” means JPMorgan Chase Bank, N.A., SunTrust Bank and Wells Fargo Bank, National Association, in their capacity as co-syndication agents for the Lenders.
“Covered Affiliate” means any Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by the Borrower. 
“Debtor Relief Laws” means the Bankruptcy Code of the United States and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“Declining Lender” has the meaning specified in Section 2.08(b).
“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“Defaulting Lender” means, subject to Section 2.20(b), any Lender that, as determined by the Administrative Agent, (a) has failed to fund any portion of its Loans hereunder, within three (3) Business Days of the date required to be funded by it hereunder, unless such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular Default, if any) has not been satisfied, (b) has failed to fund any portion of its participations in respect of Letters of Credit or any other amounts required to be funded or paid by such Lender hereunder (other than its Loans), within three (3) Business Days of the date required to be funded by it hereunder, (c) has notified the Borrower, the Administrative Agent or any Fronting Bank that it does not intend to comply with its funding obligations, or has made a public statement to that effect, with respect to its funding obligations hereunder (unless such notice or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular Default, if any) to funding a Loan under this Agreement cannot be satisfied) or under other agreements in which it commits to extend credit, (d) has failed, within three (3) Business Days after request by the Administrative Agent, to confirm in a manner satisfactory to the Administrative Agent that it will comply with its funding obligations, or (e) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator, 

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assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment, provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority.
“Disclosure Documents” means (i) the Annual Report on Form 10-K of the Borrower for the fiscal year ended December 31, 2014, as filed with the SEC, (ii) the Quarterly Reports on Form 10-Q of the Borrower for the fiscal quarters ended March 31, 2015 and June 30, 2015, as filed with the SEC, and (iii) the Current Reports on Form 8-K of the Borrower as filed with the SEC on February 23, 2015, March 4, 2015, June 4, 2015 and August 14, 2015. 
“Dodd-Frank Act” means the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111-203), as amended.
“dollars” or “$” refers to lawful money of the United States of America.
“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
“Embargoed Person” means at any time (a) any Person listed in any Sanctions-related list of designated persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury or any EU member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any Person or Persons described in the foregoing clauses (a) and (b).
“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

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“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Sections 302 and 303 of ERISA and Sections 412 and 430 of the Code, is treated as a single employer under Section 414 of the Code.
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) a determination that any Plan is in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA); (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC of any notice of its intent to institute proceedings to terminate any Plan or to appoint a trustee to administer any Plan under Section 4042 of ERISA or the providing of notice by a plan administrator of the intent to terminate any Plan under Section 4041 of ERISA; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
“Event of Default” has the meaning assigned to such term in Article VII.
“Excepted Property” has the meaning assigned to such term in the Indenture (as in effect on the date hereof).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.18(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.16, amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender became a party hereto or to such Lender immediately before it 

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changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.16(g) and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Existing Credit Agreement” means the Second Amended and Restated Credit Agreement, dated as of November 9, 2010, as amended by Amendment No. 1 thereto, dated as of November 18, 2011, among the Borrower, the lenders and issuing banks named therein and from time to time party thereto, the co-syndication agents named therein, the co-documentation agents named therein, and MUFG, as administrative agent.
“Existing Letters of Credit” means the letters of credit set forth on Schedule 2.04 that have been issued for the account of the Borrower pursuant to the Existing Credit Agreement.
“Extension Effective Date” has the meaning specified in Section 2.08(c).
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code.
“FCPA” shall mean the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.
“Federal Funds Effective Rate” means, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“Final Maturity Date” has the meaning assigned to such term in the definition of “Termination Date” set forth in this Section 1.01
“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.
“Fronting Bank” means each Lender (or other commercial bank or financial institution satisfactory to the Administrative Agent) executing this Agreement as a Fronting Bank, in its capacity as an issuer of Letters of Credit hereunder, and each of its successors in such capacity as provided in Section 2.04(j).
“Fronting Exposure” means, at any time there is a Defaulting Lender, such Defaulting Lender’s Applicable Percentage of the aggregate LC Exposure, other than LC Exposure as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

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“GAAP” means generally accepted accounting principles in the United States of America.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement or other interest or currency exchange rate hedging arrangement.
“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person 

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is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes. 
“Indenture” means the Indenture, dated as of November 1, 2011, between the Borrower and U.S. Bank National Association, as trustee, as amended, supplemented or otherwise modified from time to time.
“Index Debt” means the Indebtedness of the Borrower under this Agreement.
“Information Memorandum” means the Confidential Information Memorandum dated September 2015 relating to the Borrower and the Transactions.
“Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.06.
“Interest Payment Date” means (a) with respect to any ABR Loan, the last Business Day of each March, June, September and December, commencing with December 31, 2015, and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.
“Interest Period” means, with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing (which initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing) and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.
“IRS” means the United States Internal Revenue Service.
“LC Disbursement” means a payment made by a Fronting Bank pursuant to a Letter of Credit.

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“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time. 
“LC Outstandings” means, for any Letter of Credit on any date of determination, the maximum amount available to be drawn under such Letter of Credit at any time on or after such date (assuming the satisfaction of all conditions for drawing enumerated therein).
“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
“Letter of Credit” means any letter of credit issued (or deemed issued) pursuant to Section 2.04(b), as such letter of credit may from time to time be amended, modified or extended in accordance with the terms of this Agreement.
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the greater of (a) zero percent (0%) and (b) the rate per annum determined by the Administrative Agent at approximately 11:00 a.m., London time, on the date that is two (2) Business Days prior to the commencement of such Interest Period by reference to the ICE Benchmark Administration Limited interest settlement rates for deposits in dollars (as set forth by the Bloomberg Information Service or any successor thereto or any other service selected by the Administrative Agent which has been nominated by ICE Benchmark Administration Limited (or any other Person which takes over the administration of the London interbank offered rate from ICE Benchmark Administration Limited) as an authorized information vendor for the purpose of displaying such rates) for a period equal to such Interest Period; provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate per annum at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period would be offered to the Administrative Agent in the London interbank market at approximately 12:00 noon, London time, on the date that is two (2) Business Days prior to the beginning of such Interest Period.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
“Loan Documents” means this Agreement and any promissory notes delivered pursuant to Section 2.09.
“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

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“Material Adverse Effect” means a material adverse effect on (a) the financial condition, assets, results of operations or business of the Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower to perform any of its obligations under any Loan Document or (c) the rights of or benefits available to the Administrative Agent or the Lenders under any Loan Document.
“Material Indebtedness” means Indebtedness (other than the Loans, LC Disbursements and Letters of Credit), or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower and the Significant Subsidiaries in an aggregate principal amount exceeding $40,000,000; provided however, that, solely for purposes of clause (g) of Article VII hereof, the contingent Guarantee obligation of the Borrower or a Significant Subsidiary in respect of Material Indebtedness of one of its subsidiaries that is not a Significant Subsidiary shall not constitute Material Indebtedness of the Borrower or such Significant Subsidiary unless and until such Guarantee obligation is no longer contingent.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.  “Material Indebtedness” shall not include at any time any Indebtedness that is non-recourse to the Borrower and its Significant Subsidiaries.
“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.
“MUFG” means MUFG Union Bank, N.A., a national banking association.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Obligations” means (a)(i) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans and LC Disbursements, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each other payment required to be made by the Borrower under this Agreement in respect of any Letter of Credit, when and as due, and (iii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Borrower under this Agreement and the other Loan Documents; and (b) the due and punctual performance of all other covenants, agreements, obligations and liabilities of the Borrower under or pursuant to this Agreement and the other Loan Documents.
“OFAC” has the meaning assigned to such term in the definition of “Embargoed Person” set forth in this Section 1.01.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing 

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such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.18(b)). 
“Participant” has the meaning assigned to such term in Section 9.04(e).
“Participant Register” has the meaning assigned to such term in Section 9.04(e).
“Patriot Act” has the meaning assigned to such term in Section 9.14.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“Permitted Secured Debt” has the meaning assigned to such term in the Indenture (as in effect on the date hereof); provided, that, for purposes of this Agreement, each reference in such defined term (or in any definitions used in such defined term) to the “Company” shall mean and be a reference to the Borrower or any of its Significant Subsidiaries (including, without limitation, San Carlos).
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Sections 412 and 430 of the Code or Sections 302 and 303 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA. 

“Platform” means Debt Domain, Intralinks, DebtX, Syndtrak or a substantially similar electronic transmission system.
“Rating Agencies” means each of Moody’s and S&P.
“Recipient” means (a) the Administrative Agent, (b) any Lender or (c) any Fronting Bank, as applicable.
“Reference Rate” means the variable rate of interest per annum established by MUFG from time to time as its “reference rate”.  Such “reference rate” is set by MUFG as a general reference rate of interest, taking into account such factors as MUFG may deem appropriate, it being understood 

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that many of MUFG’s commercial or other loans are priced in relation to such rate, that it is not necessarily the lowest or best rate actually charged to any customer and that MUFG may make various commercial or other loans at rates of interest having no relationship to such rate.  For purposes of this Agreement, each change in the Reference Rate shall be effective as of the opening of business on the date announced as the effective date of any change in such “reference rate”.
“Register” has the meaning assigned to such term in Section 9.04(c). 
“Regulation D” means Regulation D of the Board as in effect from time to time.
“Regulation U” means Regulation U of the Board as in effect from time to time.
“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, trustees, officers, employees, agents and advisors of such Person and such Person’s Affiliates.
“Required Lenders” means, at any time, Lenders having Aggregate Exposures and unused Commitments representing a majority of the sum of the total Aggregate Exposure and unused Commitments at such time; provided, that the Aggregate Exposure and unused Commitment of any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
“Requirement of Law” means, as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or assets or to which such Person or any of its property or assets is subject.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any shares of any class of Capital Stock of the Borrower, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such shares of Capital Stock of the Borrower or any option, warrant or other right to acquire any such shares of Capital Stock of the Borrower.
“Sale Leaseback” means any transaction or series of related transactions pursuant to which the Borrower or any of its Subsidiaries sells, transfers or otherwise disposes of any property, real or personal, whether now owned or hereafter acquired, and thereafter rents or leases such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold, transferred or disposed of.
“San Carlos” means San Carlos Resources Inc., an Arizona corporation.
“Sanctioned Country” means, at any time, a country or territory which is itself the subject or target of any territorial-based Sanctions (at the time of this Agreement, Cuba, the Crimea region of Ukraine, Iran, North Korea, Sudan and Syria).
“Sanctions” has the meaning assigned to such term in Section 6.07.

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“S&P” means Standard & Poor's Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any successor thereto.
“SEC” means the Securities and Exchange Commission.
“Significant Subsidiary” means (a) San Carlos, (b) any Subsidiary that directly or indirectly owns or Controls any other Significant Subsidiary and (c) any other Subsidiary of the Borrower whose direct or indirect proportionate share of consolidated total assets as of the end of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or 5.01(b) was greater than or equal to 15% of the consolidated total assets as of such date of the Borrower and the Consolidated Subsidiaries, taken as a whole.  For purposes of making the determinations required by this definition, revenues and assets of foreign Subsidiaries shall be converted into dollars at the rates used in preparing the consolidated balance sheet of the Borrower included in the applicable financial statements.
“Solvent” means, with respect to any Person, as of any date of determination, that (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature.  For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D).  Such reserve percentages shall include those imposed pursuant to Regulation D.  Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if 

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such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled by the parent or one or more subsidiaries of the parent.
“Subsidiary” means any subsidiary of the Borrower.
“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Termination Date” means the earlier to occur of (i) October 15, 2020, or such later date that may be established for any Lender from time to time pursuant to Section 2.08 (the “Final Maturity Date”), and (ii) the date of termination in whole of the Commitments available to the Borrower pursuant to Section 2.07 or Article VII.
“Transactions” means the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit.
“Treasury Indebtedness” means, with respect to any Person, the aggregate outstanding principal amount of Indebtedness of such Person and its subsidiaries that is owned by such Person or its subsidiaries and in respect of which such Person or one or more of its subsidiaries has the right to receive, pursuant to the terms of such Indebtedness, all future principal, interest and other payments to be made with respect thereto.
“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
“UNS Energy” means UNS Energy Corporation, an Arizona corporation.
“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” has the meaning specified in Section 2.16(g)(ii)(B)(3).
“Utility Business” means the business of producing, developing, generating, transmitting, distributing, selling or supplying electrical energy for any purpose, or any business incidental thereto or necessary in connection therewith, or any business reasonably desirable in connection therewith which the ACC or other utility regulatory body shall have authorized the Borrower to enter.

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“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“Withholding Agent” means the Borrower, the Administrative Agent and each Fronting Bank.
SECTION 1.02.    Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar Loan”).   Borrowings also may be classified and referred to by Type (e.g., a “Eurodollar Borrowing”).
SECTION 1.03.    Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
SECTION 1.04.    Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (including the effects of the application or discontinuance of the application of accounting for the effects of regulation to all or any portion of the Borrower’s operations), or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose, regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.
SECTION 1.05.    Pro Forma Calculations.  All pro forma calculations permitted or required to be made by the Borrower or any Subsidiary pursuant to this Agreement shall (a) 

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include only those adjustments that would be permitted or required by Regulation S-X under the Securities Act of 1933, as amended, and (b) be certified to by an Authorized Officer as having been prepared in good faith based upon assumptions believed to be reasonable.
ARTICLE II 
The Credits
SECTION 2.01.    Commitments.  Subject to the terms and conditions set forth herein, each Lender agrees to make Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in (a) such Lender’s Aggregate Exposure exceeding such Lender’s Commitment or (b) the total Aggregate Exposure exceeding the Aggregate Commitments.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans. 
SECTION 2.02.    Loans and Borrowings.
(a)    Each Loan shall be made as part of a Borrowing consisting of Loans of the same Type made by the Lenders ratably in accordance with their respective Commitments.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.
(b)    Subject to Section 2.13, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith.  Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.
(c)    At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000.  At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000; provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.04(f)(i).  Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of ten (10) Eurodollar Borrowings outstanding.
(d)    Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Termination Date.
SECTION 2.03.    Requests for Borrowings.  To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., Los Angeles, California time, three (3) Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 

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a.m., Los Angeles, California time, one (1) Business Day before the date of the proposed Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower.  Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:
(i)    the aggregate amount of the requested Borrowing;
(ii)    the date of such Borrowing, which shall be a Business Day;
(iii)    whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
(iv)    in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and
(v)    the location and number of the Borrower’s account to which funds are to be disbursed.
If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.
SECTION 2.04.    Letters of Credit.
(a)    General.  Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit for its own account, in a form reasonably acceptable to the Administrative Agent and the applicable Fronting Bank, at any time and from time to time during the period from the Effective Date through and including the date that occurs ten (10) Business Days prior to the latest Final Maturity Date.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, any Fronting Bank relating to any Letter of Credit or the obligation of the Fronting Bank to issue Letters of Credit hereunder, the terms and conditions of this Agreement shall control; provided, however, that any such agreement between the Borrower and any Fronting Bank may set forth the maximum aggregate stated amount of all Letters of Credit at any one time outstanding that such Fronting Bank will issue hereunder, and the obligation of such Fronting Bank to issue Letters of Credit hereunder shall be subject to such maximum amount.  
(b)    Issuance and Amendment.  To request the issuance of any Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), other than an Existing Letter of Credit, the Borrower shall hand deliver or telecopy (or transmit by electronic 

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communication, if arrangements for doing so have been approved by the applicable Fronting Bank) to the applicable Fronting Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (d) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  The Administrative Agent shall, promptly after its receipt thereof, distribute a copy of each such notice to the Lenders.  If requested by the applicable Fronting Bank, the Borrower also shall submit a letter of credit application on such Fronting Bank’s standard form in connection with any request for a Letter of Credit.  Upon the issuance, amendment, renewal or extension of any Letter of Credit, the applicable Fronting Bank shall provide notice and a copy thereof to the Administrative Agent, which shall promptly furnish copies thereof to the Lenders.  Notwithstanding any provision to the contrary contained in this Agreement, a Fronting Bank shall have no obligation to issue, amend, renew or extend any Letter of Credit if at such time a Defaulting Lender exists, unless (i) such Fronting Bank has entered into arrangements satisfactory to such Fronting Bank (in its sole discretion) with the Borrower or such Defaulting Lender to eliminate such Fronting Bank’s risk with respect to such Defaulting Lender’s Applicable Percentage of its participation interest in such Letter of Credit or (ii) such Fronting Bank is satisfied that such risk has been reallocated in its entirety to the non-Defaulting Lenders pursuant to Section 2.20(a)(iv).  In addition, no Fronting Bank shall be under any obligation to issue any Letter of Credit if any order, judgment or decree of any Governmental Authority shall by its terms purport to enjoin or restrain such Fronting Bank from issuing such Letter of Credit, or any law applicable to such Fronting Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Fronting Bank shall prohibit, or request that such Fronting Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Fronting Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such Fronting Bank is not otherwise compensated or required to be compensated hereunder), which restriction, reserve or capital requirement was not in effect on the date hereof, or shall impose upon such Fronting Bank any loss, cost or expense (not reimbursed or required to be reimbursed) that was not applicable on the date hereof and that such Fronting Bank in good faith deems material to it.  As of the Effective Date, each of the Existing Letters of Credit shall be deemed to be issued under this Agreement as a Letter of Credit.
(c)    Limitation of Amount.  A Letter of Credit shall be issued, amended or extended only if (and upon issuance, amendment or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment or extension, (i) the total Aggregate Exposure shall not exceed the Aggregate Commitments and (ii) the aggregate LC Outstandings of all Letters of Credit then outstanding (after giving effect to all issuances, amendments and extensions of Letters of Credit on such date) shall not exceed the lesser of (A) $50,000,000 and (B) the aggregate amount of the Commitments then scheduled to be in effect until the latest Final Maturity Date.

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(d)    Expiration Date.  Each Letter of Credit shall expire at or prior to the close of business on the earlier to occur of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five (5) Business Days prior to the latest Final Maturity Date; provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (ii) above).  
(e)    Participations of Lenders.  On the Effective Date, without any further action on the part of any Fronting Bank or the Lenders, each Fronting Bank issuing one or more Letters of Credit (whether on the Effective Date or at any time thereafter) pursuant to this Section hereby grants to each Lender, and each Lender hereby acquires from such Fronting Bank, a participation in each such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the applicable Fronting Bank, such Lender’s Applicable Percentage of each LC Disbursement made by such Fronting Bank and not reimbursed by the Borrower on the date due as provided in paragraph (f)(i) of this Section, or of any reimbursement payment in respect of an LC Disbursement required to be refunded to the Borrower for any reason.  Each Lender acknowledges and agrees that its obligation to acquire and fund participations in respect of Letters of Credit pursuant to this paragraph (e) is absolute, unconditional and irrevocable and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or the reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  For the avoidance of doubt, the parties hereto acknowledge and agree that the funding by a Lender of its participation interest in any LC Disbursement shall not constitute a reimbursement by the Borrower of such LC Disbursement. 
(f)    Reimbursement.  (i)  If any Fronting Bank shall make any LC Disbursement, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent, for the account of such Fronting Bank, an amount equal to such LC Disbursement not later than 11:00 a.m., Los Angeles, California time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 9:00 a.m., Los Angeles, California time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 11:00 a.m., Los Angeles, California time, on the Business Day immediately following the day that the Borrower receives such notice; provided that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Sections 2.01 and 2.03 that such payment be financed with an ABR Borrowing in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Borrowing.
(ii)    If the Borrower fails to make any payment due under paragraph (i) above with respect to an LC Disbursement, the Administrative Agent shall notify each Lender of the applicable LC Disbursement and such Lender’s Applicable Percentage thereof.  Upon receipt of such notice, each Lender shall make available to the Administrative Agent such Lender’s Applicable Percentage of the payment then due from the Borrower, in immediately 

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available funds, by 10:00 a.m., Los Angeles, California time, on the next succeeding Business Day after the date of such notice, in the same manner as provided in Section 2.05 with respect to Loans made by the Lenders, and the Administrative Agent shall promptly pay to the applicable Fronting Bank the amounts so received by it from the Lenders.  Promptly following receipt by the Administrative Agent of any payment pursuant to paragraph (i) above in respect of any LC Disbursement, the Administrative Agent shall distribute such payment to the applicable Fronting Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse such Fronting Bank in connection with an unreimbursed LC Disbursement, then to such Lenders as their interests may appear.  Any payment made by a Lender pursuant to this paragraph to reimburse a Fronting Bank for any LC Disbursement shall not constitute a Loan and shall not relieve the Borrower of its obligation, if any, to reimburse such LC Disbursement.  
(g)    Obligations Absolute.  The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (f) above shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, this Agreement or any other Loan Document, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by a Fronting Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.  None of the Administrative Agent, the Lenders, the Fronting Banks or any of their Related Parties shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the applicable Fronting Bank; provided that the foregoing shall not be construed to excuse such Fronting Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Fronting Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of a Fronting Bank (as finally determined by a court of competent jurisdiction), such Fronting Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the applicable Fronting Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any 

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notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.
(h)    Disbursement Procedures.  Each Fronting Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit.  Such Fronting Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such Fronting Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Fronting Bank and the Lenders with respect to any such LC Disbursement.
(i)    Interim Interest.  If a Fronting Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement (or such reimbursement obligation of the Borrower has been discharged pursuant to the terms of Section 2.04(f)(i)), at a fluctuating interest rate per annum equal to the sum of the Alternate Base Rate in effect from time to time plus the Applicable Margin for ABR Loans in effect from time to time; provided, that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (f) of this Section, then Section 2.12(b) shall apply.  Interest accrued pursuant to this paragraph shall be for the account of the applicable Fronting Bank, except that interest accrued on and after the date of payment by any Lender to reimburse a Fronting Bank shall be for the account of such Lender to the extent of such payment.
(j)    Replacement of a Fronting Bank.  Any Fronting Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent and such Fronting Bank; provided, however, that (i) each Fronting Bank shall be (A) a Lender or (B) another commercial bank or other financial institution satisfactory to the Administrative Agent, and (ii) the Administrative Agent shall review any such proposed agreement for form only and not with respect to the identity of any successor Fronting Bank or the identity of the Fronting Bank to be replaced.  The Administrative Agent shall notify the Lenders of any such replacement of a Fronting Bank.  At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Fronting Bank pursuant to Section 2.11(b) and shall return to such Fronting Bank each Letter of Credit issued by such Fronting Bank (except to the extent otherwise agreed by such Fronting Bank in its sole discretion).  From and after the effective date of any such replacement, (1) the successor Fronting Bank shall have all the rights and obligations of a Fronting Bank under this Agreement with respect to Letters of Credit to be issued by it on such effective date or thereafter and (2) references herein to the term “Fronting Bank” shall be deemed to refer to such successor or to any previous Fronting Bank, or to such successor and all previous Fronting Banks, as the context shall require.  After the replacement of a Fronting Bank hereunder, the replaced Fronting Bank shall remain a party hereto and shall continue to have all the rights and obligations of a Fronting Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement (including, without limitation, any Letters of Credit that such Fronting Bank agrees, in its sole discretion, may continue to remain outstanding hereunder following such replacement) but shall not be required to issue additional Letters of Credit.

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SECTION 2.05.    Funding of Borrowings.
(a)    Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 10:00 a.m., Los Angeles, California time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders.  The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable Borrowing Request; provided that Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.04(f) shall be remitted by the Administrative Agent to the applicable Fronting Bank.
(b)    Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may in its sole discretion assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.
SECTION 2.06.    Interest Elections.
(a)    Each Borrowing of Loans shall initially be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.  Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section.  The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.
(b)    To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower.

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(c)    Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:
(i)    the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii)    the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii)    whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and
(iv)    if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.
If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.
(d)    Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
(e)    If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing.  Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.07.    Termination and Reduction of Commitments.
(a)    The Commitment of each Lender shall automatically terminate on the Termination Date applicable to such Lender as provided in Section 2.08.  If any Letter of Credit remains outstanding on the Termination Date, the Borrower will deposit with the Administrative Agent an amount in Cash Collateral equal to 105% of the aggregate undrawn amount of such Letter of Credit to secure the Borrower’s reimbursement obligations with respect to any drawings that may occur thereunder.
(b)    The Borrower may at any time terminate, or from time to time reduce, the Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is 

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an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce any Commitments if, after giving effect to such termination or reduction and any concurrent prepayment of the Loans in accordance with Section 2.10, the total Aggregate Exposure would exceed the Aggregate Commitments. 
(c)    The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  
(d)    Any termination or reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.
SECTION 2.08.    Extension of the Final Maturity Date.
(a)    Not earlier than ninety (90) days, nor later than thirty (30) days, prior to each anniversary of the date hereof, the Borrower may request by written notice made to the Administrative Agent (which shall promptly notify the Lenders and the Fronting Banks thereof) a one-year extension of the Final Maturity Date applicable to each Lender.  Each Lender shall notify the Administrative Agent by the date specified by the Administrative Agent (which date shall be a Business Day and shall not be less than ten (10) days, nor more than twenty (20) days, prior to such anniversary date) that either (A) such Lender declines to consent to extending the Final Maturity Date or (B) such Lender consents to extending the Final Maturity Date.  Any Lender not responding within the above time period shall be deemed to have declined to extend the Final Maturity Date.  The consent of a Lender to any such extension shall be in the sole discretion of such Lender.  The Administrative Agent shall, after receiving the notifications from all of the Lenders or the expiration of such period, whichever is earlier, notify the Borrower and the Lenders of the results thereof.  The Borrower may request no more than two extensions pursuant to this Section.  
(b)    If any Lender declines, or is deemed to have declined, to consent to such request for extension (each a “Declining Lender”), the Borrower shall have the right to replace such Declining Lender in accordance with Section 2.18(b).  Any Lender replacing a Declining Lender shall be deemed to have consented to such request for extension (regardless of when such replacement is effective) and shall not be deemed to be a Declining Lender.
(c)    If the Required Lenders have consented to the extension of the Final Maturity Date, the Final Maturity Date of each Lender that consented to the extension shall be extended to the date that is one year after such Lender’s then-effective Final Maturity Date, effective as of the date to be determined by the Administrative Agent and the Borrower (the “Extension Effective Date”).  On or prior to the Extension Effective Date, the Borrower shall deliver to the Administrative 

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Agent, in form and substance reasonably satisfactory to the Administrative Agent, (i) the resolutions of the Borrower authorizing such extension and all consents, authorizations or approvals of Governmental Authorities (if any) required in connection with such extension, certified as being in effect as of the Extension Effective Date and the related incumbency certificate of the Borrower, (ii) a favorable opinion of counsel for the Borrower as to such matters as any Lender through the Administrative Agent may reasonably request and (iii) a certificate of the Borrower stating that on and as of such Extension Effective Date, and after giving effect to the extension to be effective on such date, all conditions precedent to a Borrowing under Section 4.02 are satisfied.  On each Extension Effective Date, each Declining Lender being replaced by the Borrower pursuant to Section 2.08(b) shall have received payment in full of the principal amount of all Loans outstanding owing to such Declining Lender and all interest thereon and all fees and other amounts (including, without limitation, any amounts payable pursuant to Section 2.15) payable to such Declining Lender accrued through such Extension Effective Date.  Promptly following such Extension Effective Date, the Administrative Agent shall distribute an amended Schedule 2.01 to this Agreement (which shall thereafter be incorporated into this Agreement) to reflect any changes in the Lenders and the Commitments as of such Extension Effective Date.
(d)    Each Fronting Bank may, in its sole discretion, elect not to serve in such capacity beyond the Final Maturity Date as in effect prior to an extension thereof; provided that (i) the Borrower and the Administrative Agent may appoint a replacement for such resigning Fronting Bank, and (ii) whether such replacement is appointed shall not otherwise affect the extension of the Final Maturity Date.  Notice of such election shall be made pursuant to the same time periods and in the same manner as applicable to the Lenders’ consent to an extension of the Final Maturity Date pursuant to subsection (a) above, although a Fronting Bank may consent to the extension of the Final Maturity Date in its capacity as a Lender while declining to serve as a Fronting Bank beyond the Final Maturity Date as in effect prior to an extension thereof.
SECTION 2.09.    Repayment of Loans; Evidence of Debt.
(a)    The Borrower hereby unconditionally promises to pay to the Administrative Agent, for the account of each Lender, the then unpaid principal amount of each Loan made by such Lender, all accrued and unpaid interest on such Loans and all other Obligations owing to such Lender, in each case, on the Termination Date applicable to such Lender.  
(b)    Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.  Each Fronting Bank shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Fronting Bank resulting from each LC Disbursement made by such Fronting Bank, including the amounts of principal and interest payable and paid to such Fronting Bank from time to time hereunder.
(c)    The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable 

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from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(d)    The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender, any Fronting Bank or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans and LC Disbursements in accordance with the terms of this Agreement.
(e)    Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.10.    Prepayment of Loans.
(a)    The Borrower shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, without premium or penalty (subject, in the case of any prepayment of a Eurodollar Borrowing, to Section 2.15), subject to prior notice in accordance with paragraph (d) of this Section.
(b)    On the date of any termination of the Commitments, the Borrower shall repay or prepay all outstanding Borrowings.  If, as a result of any partial reduction of the Commitments, the total Aggregate Exposure would exceed the Aggregate Commitments after giving effect thereto, then the Borrower shall, on the date of such reduction, repay or prepay Borrowings in an amount equal to such excess.
(c)     Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (d) of this Section.
(d)    The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., Los Angeles, California time, three (3) Business Days before the date of prepayment, or (ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., Los Angeles, California time, one (1) Business Day before the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided, that if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.07, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.07.  Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each partial prepayment of any Borrowing 

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shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued interest to the extent required by Section 2.12 and by any amounts required to be paid pursuant to Section 2.15 in connection with such prepayment.
SECTION 2.11.    Fees.
(a)    The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at a rate per annum equal to the Commitment Fee Rate in effect from time to time on the daily unused amount of the Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which such Commitment terminates.  Accrued commitment fees shall be payable quarterly in arrears on the last Business Day of March, June, September and December of each year, commencing with December 31, 2015, and on the date on which the Commitment of any Lender terminates.  All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(b)    The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which participation fee shall accrue at a rate per annum equal to the Applicable Margin in effect from time to time for Eurodollar Loans, on the daily aggregate amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements), during the period from and including the Effective Date to but excluding the Final Maturity Date applicable to such Lender, and (ii) to each Fronting Bank, for its own account, a fronting fee payable in the amounts and at the times separately agreed upon by the Borrower and such Fronting Bank, as well as such Fronting Bank’s standard fees with respect to the issuance, amendment, renewal, transfer or extension of any Letter of Credit or processing of drawings thereunder.  Accrued participation fees in respect of Letters of Credit shall be payable quarterly in arrears on the last Business Day of March, June, September and December of each year, commencing with December 31, 2015; provided that all such accrued fees shall also be payable on the date on which the Commitment of any Lender terminates, and any such fees accruing for the account of any Lender after the date on which the Commitment of such Lender terminates shall be payable on demand; provided, further, that upon the occurrence and during the continuance of an Event of Default, the participation fees payable pursuant to clause (i) above shall be increased by 200 basis points per annum.  Any other fees payable to any Fronting Bank pursuant to this paragraph shall be payable within ten (10) days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). 
(c)    The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon by the Borrower and the Administrative Agent.
(d)    All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the applicable Fronting Bank, in the case of fees 

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payable to any Fronting Bank) for distribution, in the case of commitment fees and participation fees, to the Lenders entitled thereto.  Fees paid shall not be refundable under any circumstances.
SECTION 2.12.    Interest.
(a)    The Borrower shall pay interest on the unpaid principal amount of each Loan owing to each Lender from the date of such Loan until such principal amount shall be paid in full, at the Applicable Rate for such Loan.
(b)    Notwithstanding the foregoing, upon the occurrence and during the continuance of an Event of Default, (i) each ABR Loan shall bear interest at a rate of 2.0% per annum in excess of the rate set forth in paragraph (a) of this Section and (ii) each Eurodollar Loan shall bear interest at a rate of 2.0% per annum in excess of the rate set forth in paragraph (a) of this Section until the Interest Period applicable thereto shall have expired and thereafter at a per annum rate equal to the Applicable Rate for ABR Loans plus 2.0%.  In addition, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (A) in the case of overdue principal of any Loan, 2.0% plus the rate otherwise applicable to such Loan as provided in paragraph (a) of this Section or (B) in the case of any other amount, 2.0% plus the Applicable Rate for ABR Loans.
(c)    Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments, and accrued interest on each LC Disbursement shall be payable in arrears on each Interest Payment Date applicable to ABR Loans; provided that (i) interest accrued pursuant to paragraph (b) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan or LC Disbursement, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.
(d)    All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Reference Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.  
SECTION 2.13.    Alternate Rate of Interest.  If prior to the commencement of any Interest Period for a Eurodollar Borrowing:
(a)    the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period; or

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(b)    the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.14.    Increased Costs.  
(a)    If any Change in Law shall:
(i)    impose, modify or deem applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender, any Fronting Bank or the Administrative Agent (except any such reserve requirement reflected in the Adjusted LIBO Rate, where applicable); 
(ii)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes and (B) Excluded Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(iii)    impose on any Lender, any Fronting Bank, the Administrative Agent or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender, such Fronting Bank or the Administrative Agent of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, such Fronting Bank or the Administrative Agent hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender, such Fronting Bank or the Administrative Agent, as the case may be, such additional amount or amounts as will compensate such Lender, such Fronting Bank or the Administrative Agent, as the case may be, for such additional costs incurred or reduction suffered.
(b)    If any Lender or any Fronting Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or such Fronting Bank’s capital or on the capital of such Lender’s or such Fronting Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by such 

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Fronting Bank, to a level below that which such Lender or such Fronting Bank or such Lender’s or such Fronting Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Fronting Bank’s policies and the policies of such Lender’s or such Fronting Bank’s holding company with respect to capital adequacy and liquidity requirements), then from time to time the Borrower will pay to such Lender or such Fronting Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Fronting Bank or such Lender’s or such Fronting Bank’s holding company for any such reduction suffered.
(c)    A certificate of a Lender or a Fronting Bank setting forth the amount or amounts necessary to compensate such Lender or such Fronting Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender or such Fronting Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.
(d)    Failure or delay on the part of any Lender or any Fronting Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or such Fronting Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or a Fronting Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or such Fronting Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such Fronting Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.
SECTION 2.15.    Break Funding Payments.  In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default and the acceleration of the maturity of the Loans), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Loan or LC Disbursement on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.10(d) and is revoked in accordance therewith), (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.18, or (e) the revocation of any notice of prepayment pursuant to Sections 2.07 and 2.10, then, in any such event, the Borrower shall compensate each applicable Lender for the loss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss, cost or expense to any applicable Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate 

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which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the Eurodollar market.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.
SECTION 2.16.    Taxes.
(a)    Defined Terms.  For purposes of this Section 2.16, the term “Lender” includes any Fronting Bank, and the term “applicable law” includes FATCA.
(b)    Payments Free of Taxes.  Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law.  If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(c)    Payment of Other Taxes by the Borrower.  The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(d)    Indemnification by the Borrower.  The Borrower shall indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or a Fronting Bank (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or a Fronting Bank, shall be conclusive absent manifest error.
(e)    Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(e) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes 

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attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).
(f)    Evidence of Payments.  As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 2.16, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(g)    Status of Lenders.  (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.16(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(ii)    Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person, 
(A)    any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
(B)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time 

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thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(1)    in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of the applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or any successor form) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, the applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or any successor form) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2)    executed copies of IRS Form W-8ECI (or any successor form);
(3)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit C-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of the applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or any successor form); or
(4)    to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by a completed withholding statement and an applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or other applicable version of IRS Form W-8), a U.S. Tax Compliance Certificate substantially in the form of Exhibit C-2 or Exhibit C-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable (or any successor forms); provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit C-4 on behalf of each such direct and indirect partner;
(C)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming 

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exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D)    each Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent any such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement and any non-U.S. laws and other guidance relating to an applicable intergovernmental agreement for the implementation of FATCA.
Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(h)    Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.16 (including by the payment of additional amounts pursuant to this Section 2.16), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(i)    Survival.  Each party’s obligations under this Section 2.16 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

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SECTION 2.17.    Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a)    The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest, fees or reimbursements of LC Disbursements, or of amounts payable under Section 2.14, 2.15 or 2.16, or otherwise) prior to 10:00 a.m., Los Angeles, California time, on the date when due, in immediately available funds, without set-off, counterclaim, recoupment or deduction of any kind.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its offices located at 445 South Figueroa Street, Los Angeles, California 90071 (or such other office as the Administrative Agent shall from time to time designate to the Borrower), except that payments pursuant to Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein.  The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder or under any other Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any fees payable pursuant to Section 2.11 or any payment accruing interest, such fees and such interest shall be payable for the period of such extension.  All payments under each Loan Document shall be made in dollars.
(b)    If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.
(c)    If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in the LC Disbursements of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements 

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to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(d)    Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or any Fronting Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or such Fronting Bank, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders and each of the Fronting Banks, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such Fronting Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(e)    If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(e) or (f), 2.05(b) or 2.17(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.18.    Mitigation Obligations; Replacement of Lenders.
(a)    If any Lender requests compensation under Section 2.14, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b)    If (i) any Lender requests compensation under Section 2.14, (ii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, (iii) any Lender defaults in its obligation to fund Loans hereunder or is otherwise a Defaulting Lender, (iv) any Lender is a Declining Lender or (v) any Lender has not consented to a proposed amendment, waiver or modification under this Agreement that requires the consent of all Lenders and which has been approved by the Required Lenders, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the 

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Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all of its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (A) the Borrower shall have received the prior written consent of the Administrative Agent and each Fronting Bank, which consent shall not unreasonably be withheld, (B) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (C) in the case of any such assignment resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. 
SECTION 2.19.    Illegality.  Notwithstanding any other provision of this Agreement, if any Change in Law makes it unlawful, or any Governmental Authority asserts that it is unlawful, for any Lender to perform its obligations hereunder to make, continue or convert into Eurodollar Loans, then, on notice thereof and demand therefor by such Lender to the Borrower through the Administrative Agent, (a) the obligation of such Lender to make, continue or convert into Eurodollar Loans shall be suspended until the Administrative Agent notifies the Borrower that such Lender has determined that the circumstances causing such suspension no longer exist, and (b) the Borrower shall forthwith prepay in full all Eurodollar Loans of such Lender then outstanding, together with accrued and unpaid interest thereon, unless the Borrower, within five (5) Business Days of such notice and demand, converts all Eurodollar Loans of all Lenders then outstanding into ABR Loans in accordance with the terms hereof. 
SECTION 2.20.    Defaulting Lenders. 
(a)    Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
(i)    Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 9.02.
(ii)    Reallocation of Payments.  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise, and including any amounts made available to the Administrative Agent by such Defaulting Lender pursuant to Section 9.08), shall be applied at such time or times as may be determined by the Administrative Agent as follows:  first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro 

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rata basis of any amounts owing by such Defaulting Lender to the Fronting Banks hereunder; third, if so determined by the Administrative Agent or requested by any Fronting Bank, to be held as Cash Collateral for future funding obligations of such Defaulting Lender of any participations in any Letters of Credit; fourth, to the payment of any amounts owing to the Lenders or the Fronting Banks as a result of any judgment of a court of competent jurisdiction obtained by any Lender or any Fronting Bank against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, as the Borrower may request (so long as no Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; sixth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; seventh, so long as no Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction, provided that if such payment is a payment of the principal amount of any LC Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, such payment shall be applied solely to pay LC Disbursements owed to the applicable Fronting Banks on a pro rata basis (or, to the extent that the non-Defaulting Lenders have reimbursed such Fronting Banks for such LC Disbursements, to the non-Defaulting Lenders on a pro rata basis) prior to being applied to the payment of any LC Disbursements owed to such Defaulting Lender; and provided, further, that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the applicable Loans of all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with the Commitments.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.20(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents thereto.
(iii)    Certain Fees.  Such Defaulting Lender shall not be entitled to receive any commitment fee pursuant to Section 2.11(a) or any participation fee pursuant to Section 2.11(b), in each case for any period during which it is a Defaulting Lender.
(iv)    Reallocation of Applicable Percentages to Reduce Fronting Exposure.  During any period in which there is a Defaulting Lender under this Agreement, for purposes of computing the amount of the obligation of each non-Defaulting Lender hereunder to acquire or fund participations in Letters of Credit pursuant to Section 2.04(e) (including, without limitation, for purposes of determining the amount of participation fees payable to such non-Defaulting Lender pursuant to Section 2.11(b)), the “Applicable 

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Percentage” of each non-Defaulting Lender hereunder shall be computed without giving effect to the Commitment of such Defaulting Lender; provided, that (A) each such reallocation shall be given effect only if, at the date the applicable Lender becomes a Defaulting Lender, no Default exists, and (B) the obligation of each non-Defaulting Lender to acquire or fund participations in Letters of Credit at any time shall not exceed the unused positive difference, if any, of (1) the Commitment of such non-Defaulting Lender minus (B) the Aggregate Exposure of such non-Defaulting Lender at such time. 
(b)    Defaulting Lender Cure.  If the Borrower, the Administrative Agent and the Fronting Banks agree in writing in their sole discretion that a Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), such Lender will, to the extent applicable, take such action as the Administrative Agent may determine to be necessary to cause the funded and unfunded participations in Letters of Credit and Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.20(a)(iv)), whereupon that Lender will cease to be a Defaulting Lender, provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while such Lender was a Defaulting Lender, and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender.
(c)    Cash Collateral.  At any time that there shall exist a Defaulting Lender, immediately upon the request of the Administrative Agent or any Fronting Bank, the Borrower shall deliver to the Administrative Agent Cash Collateral in an amount sufficient to cover all Fronting Exposure (after giving effect to Section 2.20(a)(iv) and any Cash Collateral provided by the Defaulting Lender).   All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at the Administrative Agent.  The Borrower, and to the extent provided by any Lender, such Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the Fronting Banks and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to this subsection (c).  If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent as herein provided, or that the total amount of such Cash Collateral is less than the applicable Fronting Exposure and other obligations secured thereby, the Borrower or the relevant Defaulting Lender will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this subsection (c), Section 2.20(a)(ii) or Article VII in respect of Letters of Credit shall be held and applied to the satisfaction of the specific LC Exposure, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the 

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Cash Collateral was so provided, prior to any other application of such property as may be provided for herein.  Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 9.04(b)(iv)) or (ii) the Administrative Agent’s good faith determination that there exists excess Cash Collateral, provided that (x) any Cash Collateral furnished by or on behalf of the Borrower shall not be released during the continuance of a Default (and following application as provided in this subsection (c) may, during the continuance of an Event of Default, be otherwise applied in accordance with Article VII), and (y) the Person providing Cash Collateral and the Fronting Banks may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.
ARTICLE III 
Representations and Warranties
The Borrower represents and warrants to the Administrative Agent, the Lenders and the Fronting Banks that:
SECTION 3.01.    Organization; Powers.  The Borrower and each of its Consolidated Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite corporate, partnership, limited liability company or other applicable organizational power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business, and is in good standing, in every jurisdiction where such qualification is required.
SECTION 3.02.    Authorization; Enforceability.  The Transactions are within the Borrower’s organizational powers and have been duly authorized by all necessary corporate and, if required, stockholder action.  This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Loan Document to which the Borrower is to be a party, when executed and delivered by the Borrower, will constitute, a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03.    Governmental Approvals; No Conflicts.  The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except for such approvals of the ACC (including, without limitation, the ACC Order) that have been obtained and are in full force and effect, (b) will not violate any Requirement of Law, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Consolidated Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Consolidated Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Consolidated Subsidiaries.  

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SECTION 3.04.    Financial Condition; No Material Adverse Change.
(a)    The audited consolidated balance sheet and related statements of income, stockholders’ equity and cash flows of the Borrower and its Consolidated Subsidiaries for the fiscal year ended December 31, 2014 and the most recent financial statements delivered by the Borrower pursuant to Section 5.01(a) or (b), in each case, present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its Consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements delivered pursuant to Section 5.01(a).  Neither the Borrower nor any of its Consolidated Subsidiaries had, at the date of the most recent balance sheet referred to above, any Guarantee, contingent liability or liability for taxes, or any long-term lease or unusual forward or long-term commitment, including any interest rate or foreign currency swap or exchange transaction, which, in any case, is material to the Borrower and its Consolidated Subsidiaries, taken as a whole, and which is not reflected in the foregoing statements or in the notes thereto.  During the period from December 31, 2014 to and including the Effective Date there has been no sale, transfer or other disposition by the Borrower or any of its Consolidated Subsidiaries of any part of its business or property, and no purchase or other acquisition of any business or property (including any Capital Stock of any other Person), which, in either case, is material in relation to the consolidated financial condition of the Borrower and its Consolidated Subsidiaries taken as a whole at December 31, 2014.
(b)    Except to the extent that any specific change is explicitly disclosed in the Disclosure Documents, since December 31, 2014, there has been no material adverse change in the financial condition, results of operations, business or prospects of the Borrower and its Consolidated Subsidiaries, taken as a whole.
SECTION 3.05.    Properties.
(a)    Other than as explicitly disclosed in the Disclosure Documents, each of the Borrower and its Consolidated Subsidiaries has good title to, or valid leasehold interests in, and enjoys peaceful and undisturbed possession of, all its real and personal property material to its business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.
(b)    Each of the Borrower and its Consolidated Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06.    Litigation and Environmental Matters.
(a)    Except as explicitly disclosed in the Disclosure Documents, there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Consolidated Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination 

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and that, if adversely determined, would, individually or in the aggregate, result in a Material Adverse Effect or (ii) that involve any of the Loan Documents or the Transactions.
(b)    Except as explicitly disclosed in the Disclosure Documents, and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its Consolidated Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.
(c)    Except as explicitly disclosed in the Disclosure Documents, there has been no change in the status of any matters disclosed in the Disclosure Documents that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.
SECTION 3.07.    Compliance with Laws and Agreements.  Except as explicitly disclosed in the Disclosure Documents, each of the Borrower and its Consolidated Subsidiaries is in compliance with all Requirements of Law, including the Fair Labor Standards Act, the Americans with Disabilities Act, the FCPA and Anti-Terrorism Laws, applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to be in compliance, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.  No Default has occurred and is continuing.
SECTION 3.08.    Federal Regulations.  No part of the proceeds of any Loans will be used for “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the regulations of the Board.  If requested by any Lender or the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
SECTION 3.09.    Investment Company Status.
(a)    Neither the Borrower nor any of its Consolidated Subsidiaries is an “investment company” or a company “controlled” by an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.
(b)    The Borrower is not subject to regulation under any Requirement of Law (other than Regulation X of the Board and Requirements of Law pertaining to utility regulation) which limits its ability to incur Indebtedness.
SECTION 3.10.    Taxes.  Each of the Borrower and its Consolidated Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, 

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as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.11.    ERISA.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.  The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan by an amount that has resulted or could reasonably be expected to result in a Material Adverse Effect.  The present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such underfunded Plans by an amount that has resulted or could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.12.    Disclosure.  The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  Neither the Information Memorandum (insofar as it relates to the Borrower and its Subsidiaries) nor any of the other reports, financial statements, certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent, any Lender or any Fronting Bank in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder (as modified or supplemented by, and taken together with, other information so furnished) contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to forward looking statements, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time and notes that there can be no assurance that such expectations, beliefs or projections will be achieved or accomplished and that such projections are subject to an increasing degree of uncertainty as they relate to later periods of time.
SECTION 3.13.    Solvency.  The Borrower is Solvent.
SECTION 3.14.    Labor Matters.  There are no strikes or other labor disputes against the Borrower or any of its Subsidiaries pending or, to the knowledge of the Borrower, threatened that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect.  Hours worked by and payment made to employees of the Borrower and its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law dealing with such matters that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect.  All payments due from the Borrower or any of its Subsidiaries on account of employee health and welfare insurance that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect if not paid have been paid or accrued as a liability on the books of the Borrower or the relevant Subsidiary.
SECTION 3.15.    Anti-Terrorism Laws; OFAC. 

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(a)    None of the Borrower, any of its Subsidiaries or, to the knowledge of the Borrower, any of its Covered Affiliates or any of the respective officers, directors, employees, brokers or agents of the Borrower, such Subsidiary or such Covered Affiliate is in violation of any Requirement of Law relating to terrorism or money laundering (“Anti-Terrorism Laws”), including, without limitation, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and the Patriot Act.
(b)    None of the Borrower, any of its Subsidiaries or, to the knowledge of the Borrower, any of its Covered Affiliates or any of the respective officers, directors, employees, brokers or agents of the Borrower, such Subsidiary or such Covered Affiliate, is an Embargoed Person.
(c)    None of the Borrower, any of its Subsidiaries or, to the knowledge of the Borrower, any of its Covered Affiliates or any of the respective officers, directors, employees, brokers or agents of the Borrower, such Subsidiary or such Covered Affiliate (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of an Embargoed Person, (ii) deals in, or otherwise engages in any transaction relating to, any property or interest in property blocked pursuant to any Anti-Terrorism Law or Sanctions, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purposes of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law or Sanctions.
(d)    No broker or other agent (other than the Arrangers in connection with the syndication of the credit facilities established by this Agreement) is acting for the benefit of the Borrower or, to the knowledge of the Borrower, any of its Covered Affiliates, or benefiting in any capacity, in each case in connection with the Loan Documents.
SECTION 3.16.    Anti-Corruption Laws.   None of the Borrower, any of its Subsidiaries or, to the knowledge of the Borrower, any of its Covered Affiliates or any of the respective officers, directors, employees, brokers, agents or other Person acting on behalf of the Borrower, such Subsidiary or such Covered Affiliate, is aware of or has taken any action, directly or indirectly, that would result in a violation by such Persons of the FCPA or any other applicable Anti-Corruption Law, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA or any other applicable Anti-Corruption Law.  The Borrower and its Subsidiaries have conducted their businesses in all material respects in compliance with Anti-Corruption Laws and Sanctions and have instituted and maintain and will enforce policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents.
ARTICLE IV 
Conditions Precedent

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SECTION 4.01.    Effective Date.  This Agreement and the obligations of the Lenders to make Loans and acquire participations in Letters of Credit, and the obligations of the Fronting Banks to issue Letters of Credit hereunder, shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):
(a)    The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy or other electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.
(b)    The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of each of (i) Todd C. Hixon, Esq., General Counsel for the Borrower, substantially in the form of Exhibit B‐1, and (ii) Morgan, Lewis & Bockius LLP, New York counsel for the Borrower, substantially in the form of Exhibit B‐2, and covering such other matters relating to the Borrower, the Loan Documents or the Transactions as the Required Lenders shall reasonably request.  The Borrower hereby requests such counsel to deliver such opinions.
(c)    The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Borrower, the authorization of the Transactions and any other legal matters relating to the Borrower, the Loan Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.
(d)    The conditions set forth in paragraphs (b) and (c) of Section 4.02 shall be satisfied, and the Administrative Agent shall have received a certificate, dated the Effective Date and signed by an Authorized Officer, confirming compliance with such conditions as of the Effective Date.
(e)    The Administrative Agent and the Arrangers shall have received all fees and other amounts due and payable on or prior to the Effective Date, including all up-front fees and, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder or under any other Loan Document.
(f)     The Administrative Agent shall have received copies of (i) all ACC orders (including, without limitation, the ACC Order) authorizing the Transactions and (ii) the Indenture (including all supplements and amendments thereto), in each case, certified by an authorized officer of the Borrower as being true, correct and complete copies thereof and as being in full force and effect.
(g)    The Borrower and its Subsidiaries shall not have any indebtedness or preferred stock outstanding other than (a) the Obligations and (b) the Indebtedness described in the Disclosure Documents.

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(h)    All requisite Governmental Authorities (including, without limitation, the ACC and all other regulatory authorities) and third parties shall have approved or consented to this Agreement and the other Loan Documents and the other transactions contemplated hereby and thereby to the extent required, no stay of any applicable regulatory approval shall have been issued and there shall be no litigation or other governmental, administrative or judicial action, actual or, to the knowledge of the Borrower, threatened, that could reasonably be expected to restrain, prevent or impose burdensome conditions on this Agreement and the other Loan Documents or the Transactions.
(i)    The Administrative Agent and the Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act.
(j)    The Capital Stock of the Borrower (to the extent owned by UNS Energy, which owns all Capital Stock of the Borrower) shall all be free and clear of any Liens.
(k)    The Borrower shall have repaid the outstanding principal amount of all loans under the Existing Credit Agreement, together with all accrued and unpaid interest thereon and all fees, costs, expenses and other amounts payable thereunder, in full (whether through the Borrowing of Loans hereunder on the Effective Date or otherwise), and shall have terminated (or caused to be terminated) all letters of credit issued thereunder (other than the Existing Letters of Credit).  The Existing Credit Agreement and all related loan documents shall have been terminated.
SECTION 4.02.    Each Credit Event.  The obligation of a Fronting Bank to issue a Letter of Credit (or to issue any amendment of a Letter of Credit having the effect of extending the stated expiration date thereof, increasing the amount available for drawing thereunder or otherwise altering any of the material conditions thereof), and the obligation of each Lender to make a Loan on the occasion of any Borrowing that increases the amount of the Loans of any Lender outstanding, shall be subject to the satisfaction of the following conditions:
(a)    The Administrative Agent shall have received a Borrowing Request with respect to any such Borrowing.
(b)    The representations and warranties of the Borrower set forth in this Agreement and the other Loan Documents (other than, with respect to any such issuance or Borrowing made after the Effective Date, the representations and warranties set forth in Sections 3.04(b), 3.06(a)(i) and 3.06(c)) shall be true and correct on and as of the date of such issuance or Borrowing, as the case may be, both before and after giving effect thereto and (in the case of any Borrowing) to the application of the proceeds thereof, as though made on and as of such date (except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct as of such earlier date).
(c)    At the time of and immediately after giving effect to such issuance or Borrowing (as the case may be), no Default or Event of Default shall have occurred and be continuing.

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Each Borrowing that increases the amount of the Loans of any Lender outstanding and each issuance of a Letter of Credit (or any amendment of a Letter of Credit having the effect of extending the stated expiration thereof, increasing the amount available for drawing thereunder or otherwise altering any of the material terms or conditions thereof) shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (b) and (c) of this Section.
ARTICLE V 
Affirmative Covenants
Until the Commitments have expired or been terminated, the principal of and interest on each Loan and all fees and other amounts payable hereunder and under the other Loan Documents have been paid in full, all Letters of Credit have expired or terminated and all LC Disbursements have been reimbursed in full, the Borrower covenants and agrees with the Administrative Agent, the Fronting Banks and the Lenders that:
SECTION 5.01.    Financial Statements; Ratings Changes and Other Information.  The Borrower will furnish to the Administrative Agent (and the Administrative Agent will, promptly after its receipt thereof, forward such copies to the Lenders):
(a)    as soon as available and in any event within sixty (60) days after the end of each of the first three fiscal quarterly periods of each fiscal year of the Borrower, or fifteen (15) days after the date on which its quarterly report for such fiscal quarterly period is to be filed with the SEC in order to have been considered filed on a timely basis, whichever is later, consolidated statements of income of the Borrower and its Consolidated Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period, consolidated statements of cash flows of the Borrower and its Consolidated Subsidiaries from the beginning of the applicable fiscal year to the end of such period and the related consolidated balance sheets as of the end of such period, setting forth in each case in comparative form (i) in the case of such consolidated statements of income and consolidated statements of cash flows, the corresponding consolidated figures for the corresponding period in the preceding fiscal year and (ii) in the case of such consolidated balance sheets, the corresponding consolidated figures as of the end of the immediately preceding fiscal year, accompanied by a certificate of an Authorized Officer, which certificate shall state that the financial statements fairly present in all material respects the consolidated financial condition and results of operations, as the case may be, of the Borrower and its Consolidated Subsidiaries in accordance with GAAP, consistently applied (except where noted), as of the end of, and for, such period (subject to normal year-end audit adjustments and the absence of footnotes);
(b)    as soon as available and in any event within one hundred and five (105) days after the end of each fiscal year of the Borrower, or fifteen (15) days after the date on which its annual report for such fiscal year is to be filed with the SEC in order to have been considered filed on a timely basis, whichever is later, consolidated statements of income and cash flows of the Borrower and its Consolidated Subsidiaries for such year and the related consolidated balance sheets as of the end of such year, setting forth in each case in comparative form the corresponding consolidated figures for the preceding fiscal year, and accompanied by an opinion of independent 

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public accountants of recognized national standing selected by the Borrower, which opinion shall not contain any qualification or exception as to the scope of such audit and shall state that the consolidated financial statements fairly present in all material respects the consolidated financial condition and results of operations of the Borrower and its Consolidated Subsidiaries as of the end of, and for, such fiscal year and have been prepared in accordance with GAAP, consistently applied (except where noted);
(c)    concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of an Authorized Officer (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.05 (including, without limitation, a listing of any Indebtedness for borrowed money of the Borrower or any of its Subsidiaries that has been disregarded for purposes of the determination of Consolidated Total Indebtedness pursuant to the proviso contained in the definition thereof set forth in Section 1.01) and (iii) if not otherwise disclosed in such financial statements or any such prior financial statements or certificates, stating whether any change in GAAP or in the application thereof has occurred since December 31, 2014 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;
(d)    promptly upon their becoming available, copies of all registration statements (other than on Form S-8 or any successor form) and regular periodic reports, if any, that the Borrower shall have filed pursuant to Section 13(a) or 15 of the Exchange Act with the SEC (or any governmental agency substituted therefor) or filed with any national securities exchange;
(e)    promptly upon the mailing thereof to the shareholders of the Borrower generally, copies of all financial statements, reports and proxy statements so mailed;
(f)    promptly upon their becoming available, copies of all current reports on Form 8-K filed by the Borrower with the SEC, and all similar reports filed with any national securities exchange;
(g)    as soon as practicable and in any event within five (5) Business Days after the Borrower receives written notice of an upgrading or a downgrading of the Index Debt by any Rating Agency, a notice of such upgrading or downgrading; 
(h)    promptly upon their becoming available, copies of (i) any supplemental indentures or other amendments or modifications to the Indenture; and any notices of defaults under the Indenture or acceleration of any debentures, notes or other securities issued thereunder; (ii) notices of default under the documentation for any Sale Leaseback of the Borrower or any Consolidated Subsidiary, any notices of non-payment of rent or any other material amounts owing under any such Sale Leaseback documentation and any notices of acceleration of any amounts due under any such Sale Leaseback documentation; and (iii) any written notices from the ACC of non-compliance by the Borrower or any of its Consolidated Subsidiaries with any material ACC decision or with any other rules, regulations or orders of the ACC, and any written notices of any extraordinary audit or investigation by the ACC into the business, affairs or operations of the Borrower or any of its Consolidated Subsidiaries;

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(i)    if requested by the Administrative Agent, concurrently with any delivery of financial statements under clause (a) or (b) above, consolidating statements of income and cash flows for the applicable periods and the consolidating balance sheets as of the end of such periods, accompanied (i) in the case of a delivery of financial statements under clause (a) above, by a certificate of an Authorized Officer, which certificate shall state that such financial statements fairly present in all material respects the consolidating financial condition and results of operations, as the case may be, of the Borrower and its Consolidated Subsidiaries in accordance with GAAP, consistently applied (except where noted), as of the end of, and for, the applicable period (subject to normal year-end audit adjustments), and (ii) in the case of a delivery of financial statements under clause (b) above, by (A) a certificate of an Authorized Officer, which certificate shall state that such consolidating financial statements fairly present in all material respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries as of the end of, and for, the applicable fiscal year and have been prepared in accordance with GAAP, consistently applied (except where noted), and (B) a certificate of the independent public accountants referred to in clause (b) above, which certificate should state that such consolidating financial statements are the consolidating financial statements that served as the basis for the audited consolidated financial statements in respect of which such accountants delivered the opinion referred to in such clause (b); and
(j)    promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.
So long as the Borrower files periodic reports under the Exchange Act and the financial statements contained in any quarterly or annual reports filed with the SEC are prepared in accordance with the Exchange Act and the rules and regulations promulgated thereunder, such financial statements may be delivered by the Borrower in satisfaction of its obligations to deliver consolidated financial statements pursuant to clauses (a) or (b), as the case may be, of this Section 5.01.
SECTION 5.02.    Notices of Material Events.  The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following:
(a)    the occurrence of any Default;
(b)    the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate thereof as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;
(c)    the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $40,000,000; and
(d)    any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

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Each notice delivered under this Section shall be accompanied by a statement of an Authorized Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.03.    Existence; Conduct of Business.  The Borrower will, and will cause each of its Consolidated Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business, except to the extent the failure to do so could not reasonably be expected to result in a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.02.
SECTION 5.04.    Payment of Obligations.  The Borrower will, and will cause each of its Consolidated Subsidiaries to, pay its obligations, including Tax liabilities and assessments (including water assessments by the Arizona State Land Department), that, if not paid, could reasonably be expected to result in a Material Adverse Effect, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto to the extent required by and otherwise in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05.    Maintenance of Properties; Insurance.  The Borrower will, and will cause each of its Consolidated Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted; provided that the Borrower or any of its Consolidated Subsidiaries may discontinue the operation of any of its properties to the extent, in the judgment of the Borrower, it is no longer advisable to operate such property, or to the extent the Borrower or such Subsidiary intends to sell or otherwise dispose of such property, which disposition is not prohibited by Section 6.03; and (b) maintain, with financially sound and reputable insurance companies, or through its own program of self-insurance, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.
SECTION 5.06.    Books and Records; Inspection Rights.  The Borrower will, and will cause each of its Consolidated Subsidiaries to, keep proper books of record and account in which entries are made of all dealings and transactions in relation to its business and activities, all in accordance with customary and prudent business practices.  The Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, and, subject to contractual or statutory limitations regarding confidential or proprietary information, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.
SECTION 5.07.    Compliance with Laws.  The Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property (including, without limitation, ERISA and Environmental Laws), except where the failure to do so, individually or in the aggregate, could not reasonably be 

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expected to result in a Material Adverse Effect.  The Borrower will maintain in effect policies and procedures designed to promote compliance by the Borrower, its Subsidiaries and their respective officers, directors, employees and agents with the FCPA and any other applicable Anti-Corruption Laws.  The Borrower will provide such information and take such actions as are reasonably requested by the Administrative Agent or any Lender in order to assist the Administrative Agent and the Lenders in maintaining compliance with the Patriot Act.
SECTION 5.08.    Use of Proceeds and Letters of Credit.  The proceeds of the Loans and the Letters of Credit will be used only for general corporate purposes.  No part of the proceeds of any Loan or of any Letter of Credit will be used, whether directly or indirectly, for any purpose that entails a violation of any of the regulations of the Board, including Regulations U and X.  
SECTION 5.09.    Environmental Laws.
(a)    The Borrower will, and will cause each of its Consolidated Subsidiaries to, comply with, and use commercially reasonable efforts to insure compliance by all tenants and subtenants, if any, with, all Environmental Laws, and will, and will cause each of its Consolidated Subsidiaries to, obtain and comply with and maintain, and use commercially reasonable efforts to insure that all tenants and subtenants obtain and comply with and maintain, any and all licenses, approvals, registrations or permits required by Environmental Laws, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.
(b)    The Borrower will, and will cause each of its Consolidated Subsidiaries to, conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws, except to the extent that the failure to take such actions could not reasonably be expected to have a Material Adverse Effect, and promptly comply with all lawful orders and directives of all Governmental Authorities respecting Environmental Laws, except to the extent that the same are being contested in good faith by appropriate proceedings and the pendency of such proceedings could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.10.    Further Assurances.  The Borrower will, and will cause each of its Consolidated Subsidiaries to, execute any and all further documents, agreements and instruments, and take all such further actions, which may be required under any applicable law, or which the Administrative Agent or the Required Lenders may reasonably request, to effectuate the transactions contemplated by the Loan Documents, all at the expense of the Borrower.  
ARTICLE VI 
Negative Covenants
Until the Commitments have expired or been terminated, the principal of and interest on each Loan and all fees and other amounts payable hereunder and under the other Loan Documents have been paid in full, all Letters of Credit have expired or terminated and all LC Disbursements have been reimbursed in full, the Borrower covenants and agrees with the Lenders that: 

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SECTION 6.01.    Liens.  The Borrower will not, and will not permit any of its Significant Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on any of its assets or properties (real, personal or mixed, of whatever kind or nature and wherever located, and whether now owned or hereafter acquired by the Borrower or any Significant Subsidiary, including, without limitation, any income or proceeds therefrom, but excluding any Excepted Property) to secure any Securities (as defined in the Indenture) or any other Indebtedness (other than Permitted Secured Debt), whether pursuant to Section 605 of the Indenture or otherwise, unless the Borrower shall make effective provision whereby the Loans, the LC Disbursements and all other Obligations are secured equally and ratably with such Securities or such other Indebtedness, as the case may be (for so long as such Securities or such other Indebtedness, as the case may be, are so secured), pursuant to documentation (including, without limitation, to the extent deemed necessary or advisable by the Administrative Agent, an intercreditor agreement) in form and substance satisfactory to the Administrative Agent and the Required Lenders, together with such certificates, legal opinions and other documents as may be reasonably requested by the Administrative Agent in connection therewith. 
SECTION 6.02.    Fundamental Changes.
(a)    The Borrower will not, and will not permit any of its Significant Subsidiaries to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) its assets as an entirety or substantially as an entirety, or all or substantially all of the Capital Stock of any of its Significant Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing:
(i)    any Person may merge into the Borrower in a transaction in which the Borrower is the surviving corporation;
(ii)    any Significant Subsidiary may merge with or into or consolidate with any other Person in a transaction in which the surviving entity is a Significant Subsidiary; 
(iii)    any Significant Subsidiary may transfer its assets as an entirety or substantially as an entirety, or all or substantially all of the Capital Stock of any of its Significant Subsidiaries, in a transaction permitted under Section 6.03; and 
(iv)    the Borrower may merge with or into or consolidate with or transfer its assets as an entirety or substantially as an entirety to any Person, so long as (A) immediately prior to and immediately after giving effect to such merger, consolidation or transfer, the Person with or into which the Borrower shall ultimately merge or consolidate or to whom the Borrower shall ultimately transfer its assets as an entirety or substantially as an entirety is in the Utility Business; (B) the Required Lenders shall have determined (so long as such determination is exercised in good faith and after consultation with the Borrower) that the rating of the senior unsecured long-term Indebtedness of the surviving Person of any such merger, consolidation or transfer of assets that is not guaranteed and 

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does not benefit from any other credit enhancement shall be at least BBB- or higher by S&P and Baa3 or higher by Moody’s (unless the requirements of this clause (B) shall have been waived by the Required Lenders); provided that the requirement of this clause (B) shall be deemed to have been satisfied if, prior to the consummation of any such merger, consolidation or transfer, the Borrower shall have delivered written evidence from each such Rating Agency to the effect that, upon such merger, consolidation or transfer, the applicable rating of such surviving Person would be equal to or higher than the ratings specified in this clause (B); (C) in the case of any merger or consolidation or transfer of assets in which the Borrower is not the surviving corporation, the Person formed by any such consolidation or transfer of assets or into which the Borrower shall be merged or consolidated or to which such assets are transferred shall have executed an agreement in form reasonably satisfactory to the Administrative Agent containing an assumption by the surviving Person of the due and punctual performance of each obligation, agreement, covenant and condition of each of the Loan Documents to be performed or complied with by the Borrower; and (D) the Administrative Agent shall have received an opinion of counsel, in form and substance reasonably satisfactory to the Administrative Agent and its counsel, with respect to the due authorization, execution, delivery, validity and enforceability of the assumption agreement referred to in clause (C) of this Section 6.02(a)(iv) and such other matters as the Required Lenders may reasonably require.
(b)    The Borrower will not, and will not permit any of its Significant Subsidiaries to, engage to any material extent in any business other than the Utility Business.
SECTION 6.03.    Sale of Assets.
(a)    The Borrower will not, and will not permit any of its Consolidated Subsidiaries to, convey, sell, lease, assign, transfer or otherwise dispose of, or enter into any Sale Leaseback with respect to, any of its property, business or assets (including leasehold interests), whether now owned or hereafter acquired, except:
(i)    inventory and other property in the ordinary course of business; 
(ii)    sales of accounts receivable;
(iii)    property in connection with any securitization (e.g., stranded costs) or sale of assets required by law; 
(iv)    the Borrower and its Consolidated Subsidiaries may sell, transfer or otherwise dispose of other assets in transactions not permitted under any of clauses (i), (ii) and (iii) above; provided that the aggregate book value of all assets sold, transferred or otherwise disposed of by the Borrower and its Consolidated Subsidiaries pursuant to this clause (iv) during the term of this Agreement shall at no time exceed in the aggregate 15% of the consolidated assets of the Borrower as set forth in the most recent balance sheet of the Borrower delivered to the Administrative Agent pursuant to Section 5.01(a) or 5.01(b) hereof; and

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(v)    any sale of the Borrower’s assets as an entirety or substantially as an entirety in accordance with Section 6.02, provided that any assets of the Borrower not included in such sale shall be deemed to have been disposed of in a transaction subject to the limitations of this Section 6.03, including the percentage limitation set forth in clause (iv) above;
provided, that any Consolidated Subsidiary may convey, sell, lease, assign, transfer or otherwise dispose of any of its property, business or assets to the Borrower or any other Consolidated Subsidiary.  Investments by the Borrower and the Consolidated Subsidiaries in, and contributions by the Borrower and the Consolidated Subsidiaries to, Consolidated Subsidiaries shall be deemed not to constitute transfers of assets subject to the limitations of this Section 6.03 to the extent such investments or contributions are made in cash.
(b)    Without limitation of subsection (a) above, the Borrower will not, and will not permit any of its Consolidated Subsidiaries to, convey, sell, lease, assign, transfer or otherwise dispose of, or enter into any Sale Leaseback with respect to, all or substantially all of its generating assets (including leasehold interests), whether now owned or hereafter acquired, except as required by applicable law.
SECTION 6.04.    Restricted Payments.
(a)    The Borrower will not declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment at any time that any Default has occurred and is continuing or would occur as a result of such action, except that (i) the Borrower may declare and pay dividends with respect to its capital stock payable solely in additional shares of its common stock and (ii) the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries.
(b)    The Borrower will not, and will not permit any Consolidated Subsidiary to, directly or indirectly, purchase or acquire any Capital Stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make any loans or advances to, Guarantee any obligations of, or make any investment or otherwise acquire any other interest in, any Affiliate of the Borrower (other than a Consolidated Subsidiary) (each of the foregoing, an “Affiliate Investment”), at any time that a Default has occurred and is continuing or, as a result of the making of such Affiliate Investment, would occur or would be deemed to occur pursuant to the next sentence.  For purposes of determining whether a Default would be deemed to occur under Section 6.05 as a result of an Affiliate Investment, the applicable computations shall be made as if the Affiliate Investment were a dividend and did not result in the creation of any asset.
SECTION 6.05.    Leverage Ratio.  The Borrower will not permit the ratio of (a) Consolidated Total Indebtedness at the end of any fiscal quarter, commencing with the fiscal quarter ended September 30, 2015, to (b) Consolidated Total Capitalization at the end of such fiscal quarter, to be greater than 0.65 to 1.0.
SECTION 6.06.    Transactions with Affiliates.  The Borrower will not, and will not permit any of the Consolidated Subsidiaries to, sell, lease or otherwise transfer any property or 

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assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates which are not Consolidated Subsidiaries, except, subject to Section 6.03 and the other terms and conditions contained in this Agreement and the other Loan Documents, (a) at prices and on terms and conditions (i) not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties or (ii) as approved by the ACC or the Federal Energy Regulatory Commission, (b) transactions between or among the Borrower and the Consolidated Subsidiaries not involving any other Affiliate, (c) any Restricted Payment permitted by Section 6.04(a), (d) shared corporate or administrative services and staffing with Affiliates, including accounting, legal, human resources and treasury operations, provided on customary terms for similarly situated companies, (e) tax sharing arrangements on customary terms for similarly situated companies, (f) customary fees paid to members of the board of directors of the Borrower and the Consolidated Subsidiaries who are not officers of the Borrower or any Subsidiary and (g) transactions to acquire, either through asset purchases, mergers or purchases of Capital Stock, the business and operations of Southwest Energy Solutions, Inc.
SECTION 6.07.    Anti-Corruption Laws; Sanctions.  The Borrower will not, directly or indirectly, use the proceeds of the Loans or any Letter of Credit, or lend, contribute or otherwise make available such proceeds or any Letter of Credit to any Subsidiary, other Affiliate of the Borrower, joint venture partner or other Person, (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of the FCPA or any other applicable Anti-Corruption Law, (b) to fund or facilitate any activities of or business or transaction with any Embargoed Person or any activities or business in any Sanctioned Country, or (c) in any other manner that would result in a violation of any sanctions administered or enforced by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, any EU member state or other relevant sanctions authority (collectively, “Sanctions”) by any Person (including, without limitation any Person participating in the Loans, whether as Lender, Fronting Bank, underwriter, advisor, investor or otherwise).
ARTICLE VII 
Events of Default
If any of the following events (“Events of Default”) shall occur:
(a)    the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise, subject in the case of any such reimbursement obligation to a grace period of two (2) days;
(b)    (i) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) days; or (ii) the Borrower shall fail to deposit, post, deliver or otherwise furnish Cash Collateral when required to do so pursuant to the terms of this Agreement, and such failure shall continue unremedied for a period of five (5) days;

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(c)    any representation or warranty made or deemed made by or on behalf of the Borrower or any Consolidated Subsidiary in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;
(d)    the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.03 (with respect to the Borrower’s existence) or 5.08 or in Article VI;
(e)    the Borrower shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of thirty (30) days after notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender);
(f)    the Borrower or any Significant Subsidiary shall fail to make any payment of principal (regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable;
(g)    any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption (other than pursuant to provisions permitting the tendering of such Indebtedness from time to time for repurchase or redemption without regard to the occurrence or non-occurrence of any event or condition) or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(h)    an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Significant Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Significant Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;
(i)    the Borrower or any Significant Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the 

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Borrower or any Significant Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(j)    the Borrower or any Significant Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;
(k)    one or more judgments for the payment of money in an aggregate amount in excess of $40,000,000 shall be rendered against the Borrower, any Significant Subsidiary or any combination thereof and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Significant Subsidiary to enforce any such judgment;
(l)    an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, has resulted or could reasonably be expected to result in a Material Adverse Effect; 
(m)    any Change in Control shall occur; or
(n)    any material provision of this Agreement or any other Loan Document to which the Borrower is a party shall for any reason, except to the extent permitted by the express terms hereof or thereof, cease to be valid and binding on or enforceable against the Borrower, or the Borrower shall so assert in writing;
then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, in each case by notice to the Borrower, take any or all of the following actions, at the same or different times: (i) terminate the Aggregate Commitments, and thereupon the Aggregate Commitments shall terminate immediately, (ii) declare the Loans and LC Disbursements then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans and LC Disbursements so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower, and/or (iii) require the Borrower to (in which case the Borrower shall) deposit immediately with the Administrative Agent Cash Collateral in an amount equal to the aggregate undrawn amount of all outstanding Letters of Credit at such time, to be held by the Administrative Agent (for the benefit of the Fronting Banks and the Lenders) as security for the Borrower’s reimbursement obligations in respect of such Letters of Credit; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Aggregate Commitments shall automatically terminate and the principal of the Loans and LC Disbursements then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder and the Cash Collateral referred to in clause (iii) above, shall automatically become due and payable, 

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without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.  Notwithstanding anything to the contrary contained herein, no notice given or declaration made by the Administrative Agent pursuant to this Article VII shall affect (1) the obligation of any Fronting Bank to make any payment under any Letter of Credit issued by such Fronting Bank in accordance with the terms of such Letter of Credit or (2) the participatory interest of each Lender in each such payment.  
ARTICLE VIII 
The Administrative Agent
Each of the Lenders and the Fronting Banks hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.  The Required Lenders, with the consent of the Borrower (provided that such consent shall not be required if an Event of Default under clause (a), (b), (h), (i) or (j) of Article VII shall have occurred and is continuing), or the Borrower, with the consent of the Required Lenders, may at any time replace the Administrative Agent (it being understood that any such replacement Administrative Agent shall be a Person that serves as administrative agent for other credit facilities of a comparable size), provided that the Required Lenders or the Borrower may not replace the Administrative Agent unless, after giving effect to such replacement and each contemporaneous assignment, the Required Lenders or the Borrower shall have arranged in connection with such replacement, to the extent requested by the Administrative Agent, that (a) neither the Administrative Agent nor any of its Affiliates shall have outstanding any Letter of Credit, Loan, LC Disbursement, Commitment or other obligation of any kind under this Agreement or any other Loan Document and (b) each of the Administrative Agent and its Affiliates shall have received payment in full of all amounts owing to it under or in respect of this Agreement and each other Loan Document.
The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank 

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serving as Administrative Agent or any of its Affiliates in any capacity.  The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.  
Notwithstanding anything herein to the contrary, neither any Arranger nor any Lender identified as a Co-Syndication Agent or a Co-Documentation Agent shall have any separate rights, duties, responsibilities, obligations or authority as Arranger, Co-Syndication Agent or Co-Documentation Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Fronting Banks and the Borrower.  Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor.  If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring 

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Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be any commercial bank organized under the laws of the United States of America or any State thereof having a combined capital and surplus and undivided profits of not less than $500,000,000, or an Affiliate of any such bank.
Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder.  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
ARTICLE IX 
Miscellaneous
SECTION 9.01.    Notices.  
(a)    Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:
(i)    if to the Borrower, to it at 88 East Broadway Boulevard, Tucson, Arizona 85701, Attention of Chief Financial Officer (Facsimile No. (520) 884-3612); 
(ii)    if to the Administrative Agent, to MUFG Union Bank, N.A., 445 South Figueroa Street, 15th Floor, Los Angeles, California 90071, Attention of Kevin Zitar (Facsimile No. (213) 236-4096); and 
(iii)    if to any other Agent or any Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

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Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient).  Notices delivered through electronic communications, to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).
(b)    Electronic Communications.  Notices and other communications to the Lenders and the Fronting Banks hereunder may be delivered or furnished by electronic communication (including e‐mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or Fronting Bank pursuant to Article II if such Lender or Fronting Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.
(c)    Change of Address, etc.  Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.
(d)    Platform.

(i)    The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Fronting Banks and the Lenders by posting the Communications on the Platform.  

(ii)    THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-

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INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM.  IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES (COLLECTIVELY, THE “AGENT PARTIES”) HAVE ANY LIABILITY TO THE BORROWER, ANY LENDER, ANY FRONTING BANK OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE PLATFORM.  “Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of the Borrower pursuant to any Loan Document or the transactions contemplated therein which is distributed to the Administrative Agent, any Lender or any Fronting Bank by means of electronic communications pursuant to this Section, including through the Platform.
SECTION 9.02.    Waivers; Amendments.
(a)    No failure or delay by the Administrative Agent, any Fronting Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent, the Fronting Banks and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of any Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or any Fronting Bank may have had notice or knowledge of such Default at the time.
(b)    Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Borrower, in each case with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, or change the definition of “Applicable Margin” or “Commitment Fee Rate”, in each case without the written 

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consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.17(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, or (v) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or any Fronting Bank hereunder without the prior written consent of the Administrative Agent or such Fronting Bank, as the case may be.  Notwithstanding the foregoing, any provision of this Agreement requiring the consent of a Lender unwilling to provide such consent may be amended by an agreement in writing entered into by the Borrower, the Required Lenders, the Fronting Banks and the Administrative Agent if (1) by the terms of such agreement the Commitment of each such opposing Lender shall terminate upon the effectiveness of such amendment and (2) at the time such amendment becomes effective, each such opposing Lender receives payment in full of the principal of and interest accrued on each Loan made by it and all other amounts owing to it or accrued for its account under the Loan Documents.  Notwithstanding any provision to the contrary contained herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), provided, however, that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender, (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms (A) affects any Defaulting Lender more adversely than other affected Lenders or (B) extends the date fixed for payment of principal or interest owing to such Defaulting Lender hereunder, reduces the principal amount of any obligation owing to such Defaulting Lender hereunder, or reduces the amount of or the rate of interest on any amount owing to such Defaulting Lender or of any fee payable to such Defaulting Lender hereunder, shall require the consent of such Defaulting Lender, and (z) any waiver, amendment or modification that alters the terms of this proviso shall require the consent of such Defaulting Lender.
SECTION 9.03.    Expenses; Indemnity; Damage Waiver.
(a)    The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Arrangers and their respective Affiliates (including due diligence expenses and the reasonable fees, charges and disbursements of counsel for the Administrative Agent and the Arrangers) in connection with the arrangement and syndication of the credit facilities provided for herein, the preparation, execution, delivery and administration of the Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated); (ii) all reasonable out-of-pocket expenses incurred by any Fronting Bank in connection with the issuance, amendment, transfer or extension of any Letter of Credit or any demand for payment thereunder; and (iii) all 

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out-of-pocket expenses incurred by the Administrative Agent, any Fronting Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, any Fronting Bank or any Lender, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. 
(b)    The Borrower shall indemnify the Administrative Agent, each Arranger, each Fronting Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”), against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated thereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal of any Fronting Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted primarily from the gross negligence or willful misconduct of such Indemnitee.
(c)    To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent, any Arranger or any Fronting Bank under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, such Arranger or such Fronting Bank, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, such Arranger or such Fronting Bank in its capacity as such.
(d)    To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

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(e)    All amounts due under this Section shall be payable promptly after delivery to the Borrower of a reasonably detailed statement therefor.
SECTION 9.04.    Successors and Assigns.
(a)    The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of any Fronting Bank that issues any Letter of Credit), except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of any Fronting Bank that issues any Letter of Credit) and, to the extent expressly contemplated hereby, the Related Parties of each of the Agents, the Arrangers, the Fronting Banks and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b)    Any Lender may assign to one or more assignees (other than (v) a natural person, (w) a Defaulting Lender, (x) any Subsidiary of a Defaulting Lender, (y) the Borrower and (z) any Affiliate or Subsidiary of the Borrower) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that (i) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund of any Lender, the Administrative Agent must give its prior written consent to such assignment (which consent shall not be unreasonably withheld), (ii) each of the Fronting Banks must give its prior written consent to such assignment (which consent shall not be unreasonably withheld), (iii) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund of any Lender, the Borrower must give its prior written consent to such assignment (which consent shall not be unreasonably withheld), (iv) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund of any Lender, or an assignment of the entire remaining amount of the assigning Lender’s Commitment, the amount of the Commitment of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall be in an aggregate amount of not less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, (v) in connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, any Fronting Bank or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all participations in Letters of Credit in accordance with its Applicable Percentage, (vi) each partial assignment by a Lender of its Commitment and Aggregate Exposure shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement in 

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respect of its Commitment and Aggregate Exposure, (vii) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, and (viii) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire; and provided further that any consent of the Borrower otherwise required under this paragraph shall not be required (A) if an Event of Default shall have occurred and be continuing or (B) in connection with the initial syndication of the Commitments and Loans.  Subject to acceptance and recording thereof pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 9.03).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (e) of this Section.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
(c)    The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in California a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Fronting Banks and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  In addition the Administrative Agent shall maintain in the Register information regarding the designation and revocation of designation of any Lender as a Defaulting Lender.  The Register shall be available for inspection by the Borrower, any Fronting Bank and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(d)    Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

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(e)    Any Lender may, without the consent of the Borrower, the Administrative Agent or any Fronting Bank, sell participations to one or more banks or other entities (other than (v) a natural person, (w) a Defaulting Lender, (x) any Subsidiary of a Defaulting Lender, (y) the Borrower and (z) any Affiliate or Subsidiary of the Borrower) (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Fronting Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of the Loan Documents; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant.  Subject to paragraph (f) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.17(c) as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any commitments, loans or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(f)    A Participant shall not be entitled to receive any greater payment under Section 2.14 or 2.16 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.16 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.16(g) as though it were a Lender.
(g)    Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge 

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or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.  In the case of any Lender that is a fund that invests in bank loans, such Lender may, without the consent of the Borrower, the Fronting Banks or the Administrative Agent, assign or pledge all or any portion of its rights under this Agreement, including the Loans and notes or any other instrument evidencing its rights as a Lender under this Agreement, to any holder of, trustee for, or any other representative of holders of, obligations owed or securities issued by, such fund, as security for such obligations or securities; provided that any foreclosure or similar action by such trustee or representative shall be subject to the provisions of paragraph (b) of this Section 9.04 concerning assignments.
(h)    Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement or the option to pay to the Administrative Agent for the account of the applicable Fronting Bank all or any part of such Granting Lender’s Applicable Percentage of any LC Disbursement made by such Fronting Bank and not reimbursed by the Borrower that such Granting Lender would otherwise be obligated to pay to the Administrative Agent for the account of the applicable Fronting Bank pursuant to this Agreement, as the case may be; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Loan or to pay such Granting Lender’s Applicable Percentage of any LC Disbursement reimbursement obligation and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan or to pay all or any part of such Granting Lender’s Applicable Percentage of any LC Disbursement reimbursement obligation, the Granting Lender shall be obligated to make such Loan or to pay its Applicable Percentage of any LC Disbursement reimbursement obligation, as the case may be, pursuant to the terms hereof.  The making of a Loan by an SPC or the payment by such SPC of such Granting Lender’s Applicable Percentage of any LC Disbursement reimbursement obligation hereunder shall utilize the applicable Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender or such LC Disbursement reimbursement obligations were paid by such Granting Lender.  Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Lender).  In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC in connection with its activities as an SPC hereunder any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof.  In addition, notwithstanding anything to the contrary in this Section 9.04, any SPC may (A) with notice to, but without the prior written consent of, the Borrower, the Fronting Banks and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans or LC Disbursement reimbursement obligations to the Granting Lender or to any financial institutions (consented to by the Borrower and the Administrative Agent) providing liquidity and/

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or credit support to or for the account of such SPC to support the funding or maintenance of Loans or payment of LC Disbursement reimbursement obligations and (B) disclose on a confidential basis consistent with the provisions of Section 9.12 any non-public information relating to its Loans or LC Disbursement reimbursement obligations to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC.  The provisions of this Section relating any SPC may not be amended without the written consent of such SPC.
SECTION 9.05.    Survival.  All covenants, agreements, representations and warranties made by the Borrower in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that any Agent, any Fronting Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as any Commitment has not expired or terminated.  The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06.    Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents, any separate letter agreements described in Section 2.04(a) between the Borrower and any Fronting Bank setting forth the maximum aggregate stated amount of all Letters of Credit that such Fronting Bank will issue under this Agreement and any separate letter agreements with respect to fees payable to the Agents, the Arrangers and the Fronting Banks constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07.    Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

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SECTION 9.08.    Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender, each Fronting Bank and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender, such Fronting Bank or such Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender or such Fronting Bank (as the case may be), irrespective of whether or not such Lender or such Fronting Bank (as the case may be) shall have made any demand under this Agreement and although such obligations may be unmatured; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.20 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Fronting Banks and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  The rights of each Lender, each Fronting Bank and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender, such Fronting Bank and their respective Affiliates may have.
SECTION 9.09.    Governing Law; Jurisdiction; Consent to Service of Process.
(a)    This Agreement shall be construed in accordance with and governed by the law of the State of New York.
(b)    The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, any Fronting Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.
(c)    The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

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(d)    Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01.  Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10.    WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11.    Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 9.12.    Confidentiality.  Each of the Administrative Agent, the Fronting Banks and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, auditors, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to any Agent, any Fronting Bank or any Lender on a nonconfidential basis from a source other than the Borrower.  For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to any Agent, any Fronting Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to 

74

66587785_8

do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
SECTION 9.13.    Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, or LC Disbursement,  together with all fees, charges and other amounts which are treated as interest on such Loan or such LC Disbursement under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan or such LC Disbursement in accordance with applicable law, the rate of interest payable in respect of such Loan or such LC Disbursement hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan or such LC Disbursement but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or LC Disbursements or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.
SECTION 9.14.    Patriot Act Notice.  Each Lender and each Agent (for itself and not on behalf of any other party) hereby notifies the Borrower that, pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107‐56, signed into law October 26, 2001 (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or such Agent, as applicable, to identify the Borrower in accordance with the Patriot Act.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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66587785_8

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
TUCSON ELECTRIC POWER COMPANY 
By:    /s/ Kentton C. Grant     
    Name:Kentton C. Grant     
    Title:Vice President and Treasurer    
MUFG UNION BANK, N.A., as Administrative Agent, as a Fronting Bank and as a Lender
By:    /s/ Jeffrey Fesenmaier     
    Name:Jeffrey Fesenmaier     
    Title:Managing Director    

S-1

Signature Page to Tucson Electric Power Company Credit Agreement

JPMORGAN CHASE BANK, N.A., as a Co‐Syndication Agent and as a Lender
By:    /s/ Nancy R. Barwig     
    Name:Nancy R. Barwig     
    Title:Credit Risk Director    

S-2

Signature Page to Tucson Electric Power Company Credit Agreement

SUNTRUST BANK, as a Co-Syndication Agent, as a Fronting Bank and as a Lender
By:    /s/ Yann Pirio     
    Name:Yann Pirio     
    Title:Managing Director    

S-3

Signature Page to Tucson Electric Power Company Credit Agreement

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Co-Syndication Agent and as a Lender
By:    /s/ Nick Schmiesing     
    Name:Nick Schmiesing     
    Title:Director    

S-4

Signature Page to Tucson Electric Power Company Credit Agreement

THE BANK OF NOVA SCOTIA, as a Co-Documentation Agent and as a Lender
By:    /s/ David Dewar     
    Name:David Dewar     
    Title:Director    

S-5

Signature Page to Tucson Electric Power Company Credit Agreement

U.S. BANK NATIONAL ASSOCIATION, as a Co-Documentation Agent and as a Lender
By:    /s/ Kevin Murphy     
    Name:Kevin Murphy     
    Title:Assistant Vice President    

S-6

Signature Page to Tucson Electric Power Company Credit Agreement

THE BANK OF NEW YORK MELLON, as a Lender
By:    /s/ Mark W. Rogers     
    Name:Mark W. Rogers     
    Title:Vice President    

S-7

Signature Page to Tucson Electric Power Company Credit Agreement

BRANCH BANKING AND TRUST COMPANY, as a Lender
By:    /s/ Sarah Bryson     
    Name:Sarah Bryson     
    Title:Vice President    

S-8

Signature Page to Tucson Electric Power Company Credit Agreement

COBANK, ACB, as a Lender
By:    /s/ John H. Kemper     
    Name:John H. Kemper     
    Title:Vice President    

S-9

Signature Page to Tucson Electric Power Company Credit Agreement

COMPASS BANK, as a Lender
By:    /s/ Marc K. Smith     
    Name:Marc K. Smith     
    Title:Senior Vice President    

S-10

Signature Page to Tucson Electric Power Company Credit Agreement

SCHEDULE 1.01

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

	
								
	

	Level 1
≥A+/A1
	Level 2
A/A2
	Level 3
A-/A3
	 Level 4
 BBB+/Baa1
	Level 5
BBB/Baa2
	Level 6
BBB-/Baa3
	Level 7
≤BB+/Ba1

	Applicable Margin -- Eurodollar Loans
	0.75%
	0.875%
	1.00%
	1.125%
	1.375%
	1.75%
	2.25%

	Applicable Margin --   ABR Loans
	0.00%
	0.00%
	0.00%
	0.125%
	0.375%
	0.75%
	1.25%

	Commitment Fee Rate
	0.075%
	0.100%
	0.125%
	0.175%
	0.225%
	0.275%
	0.400%

For purposes of this Pricing Schedule, the following terms have the following meanings:
“Level 1 Status” exists at any date if, at such date, the Index Debt is rated A+ or higher by S&P or A1 or higher by Moody’s.
“Level 2 Status” exists at any date if, at such date (i) the Index Debt is rated A or higher by S&P or A2 or higher by Moody’s and (ii) Level 1 Status does not exist.
“Level 3 Status” exists at any date if, at such date (i) the Index Debt is rated A- or higher by S&P or A3 or higher by Moody’s and (ii) neither Level 1 Status nor Level 2 Status exists.
“Level 4 Status” exists at any date if, at such date (i) the Index Debt is rated BBB+ or higher by S&P or Baa1 or higher by Moody’s and (ii) none of Level 1 Status, Level 2 Status or Level 3 Status exists.
“Level 5 Status” exists at any date if, at such date (i) the Index Debt is rated BBB or higher by S&P or Baa2 or higher by Moody’s and (ii) none of Level 1 Status, Level 2 Status, Level 3 Status or Level 4 Status exists. 

66587785_8

“Level 6 Status” exists at any date if, at such date (i) the Index Debt is rated BBB- or higher by S&P or Baa3 or higher by Moody’s and (ii) none of Level 1 Status, Level 2 Status, Level 3 Status, Level 4 Status or Level 5 Status exists. 
“Level 7 Status” exists at any date if, at such date, no other Status exists.
“Status” refers to the determination of which of Level 1 Status, Level 2 Status, Level 3 Status, Level 4 Status, Level 5 Status, Level 6 Status or Level 7 Status exists at any date.
Notwithstanding the foregoing, if the Index Debt is split-rated and the ratings differential is two or more ratings levels, the Status shall be determined assuming that (a) the higher rating is equal to the midpoint of the two ratings (e.g., for a split rating of A-/Baa2, BBB+ is the midpoint and will be deemed to be the higher rating, and for a split rating of BBB-/A2, Baa1 is the midpoint and will be deemed to be the higher rating) or (b) if there is no exact midpoint, the higher rating is equal to the higher of the two middle intermediate ratings (e.g., for a split rating of A-/Baa3, BBB+ is the higher of the two middle intermediate ratings and will be deemed to be the higher rating, and for a split rating of BBB-/A3, Baa1 is the higher of the two middle intermediate ratings and will be deemed to be the higher rating). 
If at any time the Index Debt is unrated by both Moody’s and S&P, Level 7 Status shall exist; provided that if the reason that there is no such Moody’s rating or S&P rating results from Moody’s or S&P, as the case may be, ceasing to issue debt ratings generally, then the Borrower and the Administrative Agent may select another nationally-recognized rating agency to substitute for Moody’s or S&P, as applicable, for purposes of this Pricing Schedule (and all references herein to Moody’s or S&P, as applicable, shall refer to such substitute rating agency), and until a substitute nationally-recognized rating agency is so selected the Status shall be determined by reference to the rating most recently in effect prior to such cessation; and provided, further, that if the Index Debt is rated by only one of Moody’s or S&P, the Status shall be determined by reference to the rating of such Rating Agency.
The Applicable Margin and Commitment Fee Rate shall be increased or decreased in accordance with the foregoing Pricing Schedule upon any change in the applicable ratings of the Index Debt.  The ratings of the Index Debt in effect at any date is that in effect at the close of business on such date.

2

66587785_8

SCHEDULE 2.01

Commitments

	
				
	Lender
	Commitments
	

	 
	 

	MUFG Union Bank, N.A.
	

	$32,500,000.00
	

	JPMorgan Chase Bank, N.A.
	

	$32,500,000.00
	

	SunTrust Bank
	

	$32,500,000.00
	

	Wells Fargo Bank, National Association
	

	$32,500,000.00
	

	The Bank of Nova Scotia
	

	$25,000,000.00
	

	U.S. Bank National Association
	

	$25,000,000.00
	

	The Bank of New York Mellon
	

	$17,500,000.00
	

	Branch Banking and Trust Company
	

	$17,500,000.00
	

	CoBank, ACB
	

	$17,500,000.00
	

	Compass Bank
	

	$17,500,000.00
	

	Aggregate Commitments
	

	$250,000,000.00
	

66587785_8

SCHEDULE 2.04

Existing Letters of Credit

None. 

66587785_8

EXHIBIT A
[**FORM OF**]
TUCSON ELECTRIC POWER COMPANY 
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Assignment Effective Date set forth below and is entered into by and between [the][each]1 Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each]2 Assignee identified in item 2 below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]3 hereunder are several and not joint.]4 Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by [the][each] Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto (the “Standard Terms and Conditions”) are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Assignment Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the Credit Agreement, and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

1 For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.
2 For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.
3   Select as appropriate.
4   Include bracketed language if there are either multiple Assignors or multiple Assignees.

A-1

66639525_6

		
	1.
	Assignor[s]:    __________________________________________

             
__________________________________________

		
	2.
	Assignee[s]:    __________________________________________

__________________________________________
[Assignee is an [Affiliate][Approved Fund] of [identify Lender]]

		
	3.
	Borrower:            Tucson Electric Power Company, an Arizona corporation

		
	4.
	Administrative Agent:        

MUFG Union Bank, N.A., as the administrative agent under Credit Agreement    
            
		
	5.
	Credit Agreement:        

The $250,000,000 Credit Agreement, dated as of October15, 2015, among Tucson Electric Power Company, an Arizona corporation, as Borrower, the Lenders named therein and from time to time party thereto, JPMorgan Chase Bank, N.A., SunTrust Bank and Wells Fargo Bank, National Association, as Co-Syndication Agents, The Bank of Nova Scotia and U.S. Bank National Association, as Co-Documentation Agents, and MUFG Union Bank, N.A., as Administrative Agent.

		
	6.
	Assigned Interest[s]:

	
					
	

Assignor[s]5
	

Assignee[s]6
	

Aggregate Amount of Commitment/Loans for all Lenders7
	Amount of Commitment/ Loans Assigned8
	Percentage Assigned of Commitment/ Loans8

	 
	 
	$
	$
	%

	 
	 
	$
	$
	%

	 
	 
	$
	$
	%

	 
	 
	$
	$
	%

5   List each Assignor, as appropriate.
6   List each Assignee, as appropriate.
7 Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date (if a Trade Date is designated) and the Assignment Effective Date.
8 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder. Each partial assignment by a Lender of its Commitment and Aggregate Exposure shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under the Credit Agreement in respect of its Commitment and Aggregate Exposure.

A-2

66639525_6

[7.    Trade Date:                ]9 
Assignment Effective Date:        , 20-    10 
The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR[S]

[NAME OF ASSIGNOR]

By:                                                   
 Name:
 Title:

[NAME OF ASSIGNOR]

By:                                                   
 Name:
 Title:

ASSIGNEE[S]

[NAME OF ASSIGNEE]

By:                                                   
 Name:
 Title:

[NAME OF ASSIGNEE]

By:                                                   
 Name:
 Title:

9   To be completed if the Assignor(s) and the Assignee(s) intend that the minimum assignment amount is to be determined as of the Trade Date.
10 To be inserted by Administrative Agent and which shall be the effective date of recordation of transfer in the Register therefor.

A-3

66639525_6

[Consented to and]11 Accepted:

MUFG UNION BANK, N.A., as
Administrative Agent

By:                                                   
 Name:
 Title:

12Consented to:

[NAME OF FRONTING BANK], as a Fronting Bank

By:                                                   
 Name:
 Title:

[Consented to:

TUCSON ELECTRIC POWER COMPANY, as
Borrower

By:                                                   
 Name:
 Title]:13 

11 Except in the case of an assignment by a Lender to another Lender, an Affiliate of a Lender or an Approved Fund of any Lender, the Administrative Agent must give its prior written consent to such assignment.
12 Each of the Fronting Banks must give its prior written consent to each assignment.
13 Except in the case of an assignment by a Lender to another Lender, an Affiliate of a Lender or an Approved Fund of any Lender, the Borrower must give its prior written consent to such assignment; provided, however, that the consent of the Borrower shall not be required (i) if an Event of Default shall have occurred and be continuing or (ii) in connection with the initial syndication of the Commitments and Loans.

A-4

66639525_6

ANNEX 1

TUCSON ELECTRIC POWER COMPANY

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION

1.Representations and Warranties.

1.1 Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (iv) it is not a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2. Assignee[s]. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 9.04 of the Credit Agreement (subject to such consents, if any, as may be required thereunder), (iii) from and after the Assignment Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based 

A-5

66639525_6

on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender attached to this Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; (b) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (c) agrees that (i) it will, independently and without reliance on the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender. If the Assignee is not already a Lender under the Credit Agreement, attached to this Assignment and Assumption is a completed Administrative Questionnaire as to the Assignee.

2.Payments. From and after the Assignment Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Assignment Effective Date and to [the][the relevant] Assignee  for amounts which have accrued from and after the Assignment Effective Date.

3.General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

A-6

66639525_6

EXHIBIT B-1
[Form of opinion of Todd C. Hixon, Esq.]

    
October __, 2015
MUFG Union Bank, N.A.,
  as Administrative Agent and a Lender
445 South Figueroa Street, 15th Floor
Los Angeles, California 90071

The Lenders listed on Schedule I hereto
Ladies and Gentlemen:
I am Vice President and General Counsel of Tucson Electric Power Company, an Arizona corporation (the “Company”), and have acted as such in connection with the Credit Agreement, dated as of October __, 2015, among the Company, the Lenders party thereto, JPMorgan Chase Bank, N.A., SunTrust Bank and Wells Fargo Bank, National Association, as Co-Syndication Agents, The Bank of Nova Scotia and U.S. Bank National Association, as Co-Documentation Agents, and MUFG Union Bank, N.A., as Administrative Agent (the “Credit Agreement”).
In so acting I have reviewed all corporate proceedings of the Company in connection with the authorization, execution and delivery of the Credit Agreement, the promissory notes executed and delivered by the Company on the date hereof pursuant to Section 2.09(e) of the Credit Agreement (the “Notes”) and the fee letter agreement, dated October __, 2015, between the Company and MUFG Union Bank, N.A., as Administrative Agent (the “Fee Letter”).  I have also examined such other documents and satisfied myself as to such other matters as I have deemed necessary as a basis for the opinions set forth below.  I have relied as to various questions of fact upon the representations and warranties of the Company contained in the Credit Agreement and the certificates of public officials and officers of the Company delivered thereunder. Unless otherwise specified herein, capitalized terms used herein have the respective meanings set forth in the Credit Agreement.
Based upon and subject to the foregoing, and subject also to the qualifications hereinafter set forth, I am of the opinion that:
1.The Company (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and (b) has the corporate power and authority to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged.

66799602_3

October __, 2015
Page 2

2.The Company has the corporate power and authority (a) to execute, deliver and perform the Credit Agreement, the Notes and the Fee Letter and (b) to borrow Loans and request the issuance of Letters of Credit under the Credit Agreement.  The Company has taken all necessary corporate action to authorize (i) the execution, delivery and performance of the Credit Agreement, the Notes and the Fee Letter and (ii) the borrowings of Loans and requests for issuance of Letters of Credit under the Credit Agreement.

3.The Credit Agreement, the Notes and the Fee Letter have been duly and validly executed and delivered on behalf of the Company.  The Credit  Agreement, the Notes and the Fee Letter constitute legal, valid and binding obligations of the Company, enforceable against it in accordance with their respective terms except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law) and subject to any principles of public policy limiting the right to enforce indemnification or contribution provisions contained in the Credit Agreement with respect to liabilities under federal or state securities laws.

4.No consent or authorization of, filing with or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the execution, delivery or performance by the Company of the Credit Agreement, the Notes or the Fee Letter or for borrowings of Loans and requests for issuance of Letters of Credit by the Company under the Credit Agreement, except the ACC Order (which has been obtained and is, to the best of my knowledge, in full force and effect); provided, however, that I express no opinion as to compliance with the securities or “blue sky” laws of any jurisdiction.

5.The execution, delivery and performance by the Company of the Credit Agreement, the Notes and the Fee Letter and the borrowings of Loans and requests for issuance of Letters of Credit under the Credit Agreement will not (a) violate any law, rule or regulation of any Governmental Authority, which, in my experience, is normally applicable to transactions of the type contemplated thereby or to entities similar to the Company, (b) violate any order of any Governmental Authority of which I have knowledge, (c) violate the Restated Articles of Incorporation, as amended, or Bylaws, as amended, of the Company, (d) violate or result in a default under any indenture, agreement or other instrument, of which I have knowledge, binding upon the Company or its assets (including, without limitation, the Indenture) or (e) result in, or require, the creation or imposition of 

66799602_3

October __, 2015
Page 3

any Lien on any of its properties or revenues other than as contemplated by the Credit Agreement.

6.Except as disclosed in the Disclosure Documents, there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to my knowledge, threatened against or affecting the Company or any of its Consolidated Subsidiaries (a) as to which there is, in my judgment, a reasonable possibility of an adverse determination and that, if adversely determined, would individually or in the aggregate, in my judgment, result in a Material Adverse Effect or (b) that involve the Credit Agreement or any other Loan Document, or any transactions contemplated therein.

This opinion is limited to the laws of the States of Arizona and New York, and the federal laws of the United States of America.  As to all matters of New York law, the Federal Power Act, as amended, or the Investment Company Act of 1940, as amended, I have relied, with your consent, upon the opinion of even date herewith rendered to you by Morgan, Lewis & Bockius LLP of New York, New York, and the opinions expressed herein upon such reliance are subject to the same assumptions, qualifications and limitations set forth therein.

66799602_3

October __, 2015
Page 4

Morgan, Lewis & Bockius LLP is authorized to rely upon this letter as to matters of Arizona law.  This letter is not being delivered for the benefit of, nor may it be relied upon by, any person or entity to which it is not specifically addressed or by which reliance is not expressly authorized hereby.  Notwithstanding the foregoing, persons who subsequently become Lenders (or participants in accordance with the terms of the Credit Agreement) may rely on this letter as of the time of its delivery on the date hereof as if this letter were addressed to them.
Very truly yours,

Todd C. Hixon, Esq.

66799602_3

SCHEDULE I
LENDERS
	
	
	 

	MUFG Union Bank, N.A.
JPMorgan Chase Bank, N.A.
SunTrust Bank
Wells Fargo Bank, National Association
The Bank of Nova Scotia
U.S. Bank National Association
The Bank of New York Mellon
Branch Banking and Trust Company
Compass Bank
CoBank, ACB

66799602_3

EXHIBIT B-2

[Form of opinion of Morgan, Lewis & Bockius, LLP]

October __, 2015

MUFG Union Bank, N.A.,
  as Administrative Agent and a Lender
445 South Figueroa Street, 15th Floor
Los Angeles, California 90071
The Lenders listed on Schedule I hereto

Ladies and Gentlemen:
We are counsel to Tucson Electric Power Company, an Arizona corporation (the “Company”), and have acted as such in connection with the Credit Agreement, dated as of October __, 2015, among the Company, the Lenders party thereto, JPMorgan Chase Bank, N.A., SunTrust Bank and Wells Fargo Bank, National Association, as Co-Syndication Agents,  The Bank of Nova Scotia and U.S. Bank National Association, as Co-Documentation Agents, and MUFG Union Bank, N.A., as Administrative Agent (the “Credit Agreement”).
In so acting we have reviewed all corporate proceedings of the Company in connection with the authorization, execution and delivery of the Credit Agreement, the promissory notes executed and delivered by the Company on the date hereof pursuant to Section 2.09(e) of the Credit Agreement (the “Notes”) and the fee letter agreement, dated October __, 2015, between the Company and MUFG Union Bank, N.A., as Administrative Agent (the “Fee Letter”).  We have also examined such other documents and satisfied ourselves as to such other matters as we have deemed necessary as a basis for the opinions set forth below.  We have relied as to various questions of fact upon the representations and warranties of the Company contained in the Credit Agreement and the certificates of public officials and officers of the Company delivered thereunder.  Unless otherwise specified herein, capitalized terms used herein have the respective meanings set forth in the Credit Agreement. 
Based upon and subject to the foregoing, and subject also to the qualifications hereinafter set forth, we are of the opinion that:

66799601_3

October __, 2015
Page 2

1.    The Company (a) is validly existing and in good standing under the laws of the jurisdiction of its organization, and (b) has the corporate power and authority to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged. 
2.    The Company has the corporate power and authority (a) to execute, deliver and perform the Credit Agreement, the Notes and the Fee Letter and (b) to borrow Loans and request the issuance of Letters of Credit under the Credit Agreement.  The Company has taken all necessary corporate action to authorize (i) the execution, delivery and performance of the Credit Agreement, the Notes and the Fee Letter, and (ii) the borrowings of Loans and requests for issuance of Letters of Credit under the Credit Agreement.
3.    The Credit Agreement, the Notes and the Fee Letter have been duly and validly executed and delivered on behalf of the Company.  The Credit Agreement, the Notes and the Fee Letter constitute legal, valid and binding obligations of the Company, enforceable against it in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law) and subject to any principles of public policy limiting the right to enforce indemnification or contribution provisions contained in the Credit Agreement with respect to liabilities under federal or state securities laws.
4.    No consent or authorization of, filing with or other act by or in respect of, any Governmental Authority of the State of New York, the Federal Energy Regulatory Commission (“FERC”) or the Arizona Corporation Commission (“ACC”) is required in connection with the execution, delivery or performance by the Company of the Credit Agreement, the Notes and the Fee Letter or for borrowings of Loans and requests for issuance of Letters of Credit by the Company under the Credit Agreement, except the ACC Order (which has been obtained and is, to the best of our knowledge, in full force and effect); provided, however, that we express no opinion in this paragraph as to compliance with the securities or “blue sky” laws of any jurisdiction.
5.    The execution, delivery and performance by the Company of the Credit Agreement, the Notes and the Fee Letter and the borrowings of Loans and requests for issuance of Letters of Credit under the Credit Agreement will not violate (a) any applicable law of the State of New York or any law administered by or any rule or regulation of the FERC or the ACC, (b) the Company’s Restated Articles of Incorporation, as amended, or Bylaws, as amended, (c) the Indenture or (d) any 

66799601_3

October __, 2015
Page 3

agreement or other instrument, of which we have knowledge, (1) to which the Company is a party relating to pollution control revenue bonds or industrial development revenue bonds issued to finance projects of the Company or (2) to which the Company is a party relating to any Sale Leaseback consummated prior to the date hereof, and will not result in, or require, the creation or imposition of any Lien on any of its properties or revenues other than as contemplated by the Credit Agreement.
6.    The Company is not an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.
This opinion is limited to the laws of the States of New York and Arizona, and the federal laws of the United States of America.  As to all matters of law of the State of Arizona, we have relied, with your consent, upon the opinion of even date herewith rendered to you by Todd C. Hixon, Esq., Vice President and General Counsel of the Company, and the opinions expressed herein upon such reliance are subject to the same assumptions, qualifications and limitations set forth therein.
Todd C. Hixon, Esq. is authorized to rely upon this letter as to matters of New York and, to the extent stated in his opinion, federal law.  This letter is not being delivered for the benefit of, nor may it be relied upon by, any person or entity to which it is not specifically addressed or by which reliance is not expressly authorized hereby.  Notwithstanding the foregoing, persons who subsequently become Lenders (or participants in accordance with the terms of the Credit Agreement) may rely on this letter as of the time of its delivery on the date hereof as if this letter were addressed to them.
Very truly yours,

66799601_3

SCHEDULE I
LENDERS
	
	
	 

	MUFG Union Bank, N.A.
JPMorgan Chase Bank, N.A.
SunTrust Bank
Wells Fargo Bank, National Association
The Bank of Nova Scotia
U.S. Bank National Association
The Bank of New York Mellon
Branch Banking and Trust Company
Compass Bank
CoBank, ACB

66799601_3

EXHIBIT C-1
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement, dated as of October 15, 2015 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Tucson Electric Power Company, an Arizona corporation (the “Borrower”), the Lenders named therein and from time to time party thereto, JPMorgan Chase Bank, N.A., SunTrust Bank and Wells Fargo Bank, National Association, as Co-Syndication Agents,  The Bank of Nova Scotia and U.S. Bank National Association, as Co-Documentation Agents, and MUFG Union Bank, N.A., as Administrative Agent.  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
Pursuant to the provisions of Section 2.16(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any promissory note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on the applicable IRS Form W-8BEN or IRS Form W‐8BEN-E (or any successor form).  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments. 

	
		
	[NAME OF LENDER]

	By:
	 

	 
	Name:  

	 
	Title:  

Date: ________ __, 20[  ]

66639527_5

EXHIBIT C-2
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement, dated as of October 15, 2015 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Tucson Electric Power Company, an Arizona corporation (the “Borrower”), the Lenders named therein and from time to time party thereto, JPMorgan Chase Bank, N.A., SunTrust Bank and Wells Fargo Bank, National Association, as Co-Syndication Agents,  The Bank of Nova Scotia and U.S. Bank National Association, as Co-Documentation Agents, and MUFG Union Bank, N.A., as Administrative Agent.  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
Pursuant to the provisions of Section 2.16(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on the applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or any successor form).  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

	
		
	[NAME OF PARTICIPANT]

	By:
	 

	 
	Name:  

	 
	Title:  

Date: ________ __, 20[  ]

66639527_5

EXHIBIT C-3
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement, dated as of October 15, 2015 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Tucson Electric Power Company, an Arizona corporation (the “Borrower”), the Lenders named therein and from time to time party thereto, JPMorgan Chase Bank, N.A., SunTrust Bank and Wells Fargo Bank, National Association, as Co-Syndication Agents,  The Bank of Nova Scotia and U.S. Bank National Association, as Co-Documentation Agents, and MUFG Union Bank, N.A., as Administrative Agent.  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
Pursuant to the provisions of Section 2.16(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code. 
The undersigned has furnished its participating Lender with IRS Form W-8IMY (or any successor form) accompanied by a completed withholding statement and one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) the applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or any successor form or other applicable version of IRS Form W-8) or (ii) an IRS Form W-8IMY (or any successor form) accompanied by the applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or any successor forms or other applicable version of IRS Form W-8) from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
	
		
	[NAME OF PARTICIPANT]

	By:
	 

	 
	Name:  

	 
	Title:  

Date: ________ __, 20[  ]

66639527_5

EXHIBIT C-4
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement, dated as of October 15, 2015 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Tucson Electric Power Company, an Arizona corporation (the “Borrower”), the Lenders named therein and from time to time party thereto, JPMorgan Chase Bank, N.A., SunTrust Bank and Wells Fargo Bank, National Association, as Co-Syndication Agents,  The Bank of Nova Scotia and U.S. Bank National Association, as Co-Documentation Agents, and MUFG Union Bank, N.A., as Administrative Agent.  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
Pursuant to the provisions of Section 2.16(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any promissory note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any promissory note(s) evidencing such Loan(s)), (iii) with respect to the extensions of credit pursuant to the Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY (or any successor form) accompanied by a completed withholding statement and one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) the applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or any successor form or other applicable version of IRS Form W-8) or (ii) an IRS Form W‐8IMY (or any successor form) accompanied by the applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or any successor forms or other applicable version of IRS Form W-8) from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
	
		
	[NAME OF LENDER]

	By:
	 

	 
	Name:  

	 
	Title:  

Date: ________ __, 20[  ]

66639527_5

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