Document:

<PAGE>

                                                                     EXHIBIT 4.6

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT
AND UNDER APPLICABLE STATE SECURITIES LAWS OR BOUNDLESS MOTOR SPORTS RACING,
INC. SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.

                       BOUNDLESS MOTOR SPORTS RACING, INC.

                                 PROMISSORY NOTE

U.S. $2,000,000                                                    JULY 30, 2004

            FOR VALUE RECEIVED, the undersigned, Boundless Motor Sports Racing,
Inc., a Colorado corporation (the "Company"), hereby promises to pay to the
order of BOUNDLESS INVESTMENTS, L.L.C. or any future permitted holder of this
promissory note (the "Payee"), at the principal office of the Payee set forth
herein, or at such other place as the holder may designate in writing to the
Company, the principal sum of up to TWO MILLION DOLLARS (U.S. $2,000,000), or
such other amount as may be outstanding hereunder, together with all accrued but
unpaid interest, in such coin or currency of the United States of America as at
the time shall be legal tender for the payment of public and private debts and
in immediately available funds, as provided in this promissory note (the
"Note").

            1. Principal and Interest Payments.

                  (a) The Company shall repay in full the entire principal
balance then outstanding under this Note in the manner provided in Section 1(c)
hereof on the first to occur (the "Maturity Date") of: (i) May 19, 2007; or (ii)
the acceleration of the obligations as contemplated by this Note. The Company
may prepay all or any part of this Note, in whole or in part at any time, as set
forth in Section 6 hereof.

                  (b) Interest on the outstanding principal balance of this Note
shall accrue at a rate of eight percent (8%) per annum. Interest on the
outstanding principal balance of the Note shall be computed on the basis of the
actual number of days elapsed and a year of three hundred and sixty (360) days
and shall be payable by the Company in full on the Maturity Date in cash or in
shares of Series A Convertible Preferred Stock, as contemplated in Section 1(c)
hereof. Furthermore, upon the occurrence of an Event of Default, then to the
extent permitted by law, the Company will pay interest to the Payee, payable on
demand, on the outstanding

<PAGE>

principal balance of the Note from the date of the Event of Default until
payment in full at the rate of twelve percent (12%) per annum.

                  (c) At the Maturity Date, the outstanding principal amount of
this Note plus all accrued and unpaid interest herein shall be due and payable
in cash or, at the option of the Payee, converted into shares of Series A
Convertible Preferred Stock of the Company which may be issued in connection
with an offering by the Company of its Series A Convertible Preferred Stock (the
"Series A Financing"). The Payee shall have the option to convert this Note plus
all accrued and unpaid interest into shares of Series A Convertible Preferred
Stock at any time following the date that is six (6) months following the
issuance date of this Note and prior to the Maturity Date. The principal amount
of this Note plus all accrued and unpaid interest shall convert into such number
of shares of Series A Convertible Preferred Stock equal to 110% of the principal
amount of this Note and all accrued interest outstanding divided by the stated
value per share of the Series A Convertible Preferred Stock. Upon conversion of
this Note into shares of Series A Convertible Preferred Stock, the Payee shall
also be entitled to receive warrants to purchase shares of common stock in the
same manner and on the same terms as the warrants issued to the investors in the
Series A Financing. Upon the conversion of this Note, the outstanding principal
amount of this Note, together with accrued interest hereon, shall be deemed to
be the consideration for the Payee's interest in the Series A Convertible
Preferred Stock upon consummation of the Series A Financing.

            2. Payment on Non-Business Days. Whenever any payment to be made
shall be due on a Saturday, Sunday or a public holiday under the laws of the
State of New York, such payment may be due on the next succeeding business day
and such next succeeding day shall be included in the calculation of the amount
of accrued interest payable on such date.

            3. Representations and Warranties of the Company. The Company
represents and warrants to the Payee as follows:

                  (a) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the state of Colorado, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as currently conducted.

                  (b) This Note has been duly authorized, validly executed and
delivered on behalf of the Company and is a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy or
other laws affecting the enforcement of creditors' rights generally, and the
Company has full power and authority to execute and deliver this Note and to
perform its obligations hereunder.

                  (c) The execution, delivery and performance of this Note will
not (i) conflict with or result in a breach of or a default under any of the
terms or provisions of, (A) the Company's certificate of incorporation or
by-laws, or (B) any material provision of any indenture, mortgage, deed of trust
or other material agreement or instrument to which the Company is a party or by
which it or any of its material properties or assets is bound, (ii) result

                                       2
<PAGE>

in a violation of any material provision of any law, statute, rule, regulation,
or any existing applicable decree, judgment or order by any court, Federal or
state regulatory body, administrative agency, or other governmental body having
jurisdiction over the Company, or any of its material properties or assets or
(iii) result in the creation or imposition of any material lien, charge or
encumbrance upon any material property or assets of the Company or any of its
subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of their
property or any of them is subject.

                  (d) No consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of the Company
is required in connection with the valid execution and delivery of this Note.

            4. Events of Default. The occurrence of any of the following events
shall be an "Event of Default" under this Note:

                  (a) the Company shall fail to make the payment of any amount
of any principal outstanding for a period of three (3) business days after the
date such payment shall become due and payable hereunder; or

                  (b) the Company shall fail to make any payment of interest for
a period of three (3) business days after the date such interest shall become
due and payable hereunder; or

                  (c) any representation, warranty or certification made by the
Company herein or in any certificate or financial statement shall prove to have
been false or incorrect or breached in a material respect on the date as of
which made; or

                  (d) the holder of any indebtedness ("Indebtedness") of the
Company or any of its subsidiaries shall accelerate any payment of any amount or
amounts of principal or interest on any indebtedness (the "Indebtedness") (other
than the Indebtedness hereunder) prior to its stated maturity or payment date
the aggregate principal amount of which Indebtedness of all such persons is in
excess of $300,000, whether such Indebtedness now exists or shall hereinafter be
created, and such accelerated payment entitles the holder thereof to immediate
payment of such Indebtedness which is due and owing and such indebtedness has
not been discharged in full or such acceleration has not been stayed, rescinded
or annulled within ten (10) business days of such acceleration; or

                  (e) A judgment or order for the payment of money shall be
rendered against the Company or any of its subsidiaries in excess of $300,000 in
the aggregate (net of any applicable insurance coverage) for all such judgments
or orders against all such persons (treating any deductibles, self insurance or
retention as not so covered) that shall not be discharged, and all such
judgments and orders remain outstanding, and there shall be any period of sixty
(60) consecutive days following entry of the judgment or order in excess of
$300,000 or the judgment or order which causes the aggregate amount described
above to exceed $300,000 during which a

                                       3
<PAGE>

stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

                  (f) the Company shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property or
assets, (ii) admit in writing its inability to pay its debts as such debts
become due, (iii) make a general assignment for the benefit of its creditors,
(iv) commence a voluntary case under the Bankruptcy Code or under the comparable
laws of any jurisdiction (foreign or domestic), (v) file a petition seeking to
take advantage of any bankruptcy, insolvency, moratorium, reorganization or
other similar law affecting the enforcement of creditors' rights generally, (vi)
acquiesce in writing to any petition filed against it in an involuntary case
under the Bankruptcy Code or under the comparable laws of any jurisdiction
(foreign or domestic), or (vii) take any action under the laws of any
jurisdiction (foreign or domestic) analogous to any of the foregoing; or

                  (g) a proceeding or case shall be commenced in respect of the
Company or any of its subsidiaries without its application or consent, in any
court of competent jurisdiction, seeking (i) the liquidation, reorganization,
moratorium, dissolution, winding up, or composition or readjustment of its
debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the
like of it or of all or any substantial part of its assets or (iii) similar
relief in respect of it under any law providing for the relief of debtors, and
such proceeding or case described in clause (i), (ii) or (iii) shall continue
undismissed, or unstayed and in effect, for a period of thirty (30) consecutive
days or any order for relief shall be entered in an involuntary case under the
Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or
domestic) against the Company or any of its subsidiaries or action under the
laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing
shall be taken with respect to the Company or any of its subsidiaries and shall
continue undismissed, or unstayed and in effect for a period of thirty (30)
consecutive days.

            5. Remedies Upon An Event of Default. If an Event of Default shall
have occurred and shall be continuing, the Payee of this Note may at any time at
its option, (a) declare the entire unpaid principal balance of this Note,
together with all interest accrued hereon, due and payable, and thereupon, the
same shall be accelerated and so due and payable; provided, however, that upon
the occurrence of an Event of Default described in (i) Sections 4(f) and (g),
without presentment, demand, protest, or notice, all of which are hereby
expressly unconditionally and irrevocably waived by the Company, the outstanding
principal balance and accrued interest hereunder shall be automatically due and
payable, and (ii) Sections 4(a) through (e), the Payee may demand the prepayment
of this Note pursuant to Section 6 hereof; or (b) subject to Section 7 hereof,
exercise or otherwise enforce any one or more of the Payee's rights, powers,
privileges, remedies and interests under this Note or applicable law. No course
of delay on the part of the Payee shall operate as a waiver thereof or otherwise
prejudice the right of the Payee. No remedy conferred hereby shall be exclusive
of any other remedy referred to herein or now or hereafter available at law, in
equity, by statute or otherwise. Notwithstanding the foregoing, Payee agrees
that its rights and remedies hereunder are limited to receipt of cash or shares
of Series K Convertible Preferred Stock in the amounts described herein.

                                       4
<PAGE>

            6. Prepayment. The Company may prepay, at the option of its Board of
Directors, all or any portion of the outstanding principal amount of this Note
and the accrued and unpaid interest thereon upon fifteen (15) business days
prior written notice to the Payee (the "Company Prepayment Notice"), without
penalty or premium. The Company may not deliver a Company Prepayment Notice to
the Payee unless the Company has clear and good funds for a minimum of the
amount it intends to prepay in a bank account controlled by the Company. The
Company Prepayment Notice shall state the date of prepayment (the "Company
Prepayment Date"), the amount of the Note of such Payee to be prepaid, the
amount of accrued and unpaid interest through the Company Prepayment Date and
shall call upon the Payee to surrender to the Company on the Company Prepayment
Date at the place designated in the Company Prepayment Notice such Payee's Note.
The Company Prepayment Date shall be no more than ten (10) trading days after
the date on which the Payee is notified of the Company's intent to prepay the
Note (the "Company Prepayment Notice Date"). If the Company fails to prepay this
Note by the eleventh (11th) trading day following the Company Prepayment Notice
Date, the prepayment will be declared null and void and the Company shall lose
its right to deliver a Company Prepayment Notice to the Payee in the future. On
or after the Company Prepayment Date, the Payee shall surrender this Note called
for prepayment to the Company at the place designated in the Company Prepayment
Notice and shall thereupon be entitled to receive payment of the prepayment
price. The Payee shall have the right to convert this Note in accordance with
Section 1(c) hereof at any time prior to the Company Prepayment Notice Date.

            7. Replacement. Upon receipt of a duly executed, notarized and
unsecured written statement from the Payee with respect to the loss, theft or
destruction of this Note (or any replacement hereof), and without requiring an
indemnity bond or other security, or, in the case of a mutilation of this Note,
upon surrender and cancellation of such Note, the Company shall issue a new
Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or
mutilated Note.

            8. Transferability. This Note shall be binding upon the Company and
its successors and assigns and the terms hereof shall inure to the benefit of
the Payee and its successors and permitted assigns. This Note may be transferred
or sold, subject to the provisions of Section 17 of this Note, or pledged,
hypothecated or otherwise granted as security by the Payee.

            9. Amendments. This Note may not be modified or amended in any
manner except in writing executed by the Company and the Payee.

            10. Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The Company will give written notice to the Payee
at least thirty (30) days prior to the date on which the Company closes its
books or

                                       5
<PAGE>

takes a record (x) with respect to any dividend or distribution upon the common
stock of the Company, (y) with respect to any pro rata subscription offer to
holders of common stock of the Company or (z) for determining rights to vote
with respect to a dissolution, liquidation or winding-up and in no event shall
such notice be provided to such holder prior to such information being made
known to the public. The Company will also give written notice to the Payee at
least twenty (20) days prior to the date on which dissolution, liquidation or
winding-up will take place and in no event shall such notice be provided to the
Payee prior to such information being made known to the public.

         Address of the Payee:     Boundless Investments, L.L.C.
                                   2501 Coolidge Road, Suite 501
                                   East Lansing, Michigan 48823
                                   Attention: Sam Eyde

         Address of the Company:   Boundless Motor Sports Racing, Inc.
                                   2500 McGee Drive, Suite 147
                                   Norman, Oklahoma 73072
                                   Attention: Paul Kruger
                                   Tel. No.: (405) 360-5047
                                   Fax No.:  (405) 360-5354

            11. Governing Law. This Note shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This Note shall not
be interpreted or construed with any presumption against the party causing this
Note to be drafted.

            12. Headings. Article and section headings in this Note are included
herein for purposes of convenience of reference only and shall not constitute a
part of this Note for any other purpose.

            13. Remedies, Characterizations, Other Obligations, Breaches and
Injunctive Relief. The remedies provided in this Note shall be cumulative and in
addition to all other remedies available under this Note, at law or in equity
(including, without limitation, a decree of specific performance and/or other
injunctive relief), no remedy contained herein shall be deemed a waiver of
compliance with the provisions giving rise to such remedy and nothing herein
shall limit a Payee's right to pursue actual damages for any failure by the
Company to comply with the terms of this Note. Amounts set forth or provided for
herein with respect to payments and the like (and the computation thereof) shall
be the amounts to be received by the Payee and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the
performance thereof).

            14. Failure or Indulgence Not Waiver. No failure or delay on the
part of the Payee in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof,

                                       6
<PAGE>

nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege.

            15. Enforcement Expenses. The Company agrees to pay all costs and
expenses of enforcement of this Note, including, without limitation, reasonable
attorneys' fees and expenses.

            16. Binding Effect. The obligations of the Company and the Payee set
forth herein shall be binding upon the successors and assigns of each such
party, whether or not such successors or assigns are permitted by the terms
hereof.

            17. Compliance with Securities Laws. The Payee of this Note
acknowledges that this Note is being acquired solely for the Payee's own account
and not as a nominee for any other party, and for investment, and that the Payee
shall not offer, sell or otherwise dispose of this Note other than in compliance
with the laws of the United States of America and as guided by the rules of the
Securities and Exchange Commission. This Note and any Note issued in
substitution or replacement therefore shall be stamped or imprinted with a
legend in substantially the following form:

            "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
            1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
            SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
            DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND
            UNDER APPLICABLE STATE SECURITIES LAWS OR BOUNDLESS MOTOR
            SPORTS RACING, INC. SHALL HAVE RECEIVED AN OPINION OF ITS
            COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
            SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
            SECURITIES LAWS IS NOT REQUIRED."

            18. Severability. The provisions of this Note are severable, and if
any provision shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Note in any jurisdiction.

            19. Consent to Jurisdiction. Each of the Company and the Payee (i)
hereby irrevocably submits to the jurisdiction of the United States District
Court sitting in the Southern District of New York and the courts of the State
of New York located in New York county for the purposes of any suit, action or
proceeding arising out of or relating to this Note and (ii) hereby waives, and
agrees not to assert in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. Each of the Company and the Payee
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address set forth in Section 11
hereof and agrees that such service shall constitute good and sufficient service
of process and notice

                                       7
<PAGE>

thereof. Nothing in this Section 19 shall affect or limit any right to serve
process in any other manner permitted by law.

            20. Company Waivers. Except as otherwise specifically provided
herein, the Company and all others that may become liable for all or any part of
the obligations evidenced by this Note, hereby waive presentment, demand, notice
of nonpayment, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, and do hereby
consent to any number of renewals of extensions of the time or payment hereof
and agree that any such renewals or extensions may be made without notice to any
such persons and without affecting their liability herein and do further consent
to the release of any person liable hereon, all without affecting the liability
of the other persons, firms or Company liable for the payment of this Note, AND
DO HEREBY WAIVE TRIAL BY JURY.

                  (a) No delay or omission on the part of the Payee in
exercising its rights under this Note, or course of conduct relating hereto,
shall operate as a waiver of such rights or any other right of the Payee, nor
shall any waiver by the Payee of any such right or rights on any one occasion be
deemed a waiver of the same right or rights on any future occasion.

                  (b) THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH
THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY
APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO
ANY PREJUDGMENT REMEDY WHICH THE PAYEE OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE
TO USE.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       8
<PAGE>

            IN WITNESS WHEREOF, the Company has executed and delivered this Note
as of the date first written above.

                                          BOUNDLESS MOTOR SPORTS RACING, INC.

                                          By: /s/ Paul A. Kruger
                                              Name: Paul A. Kruger
                                              Title: Chief Executive Officer

                                       9exv4w01

 

EXHIBIT 4.01

EXECUTION COPY

CREDIT AGREEMENT

among

PUBLIC SERVICE COMPANY OF COLORADO;

BANK ONE, NA,

as Administrative Agent;

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Syndication Agent;

and

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

Closing Date: May 14, 2004

$350,000,000 Revolving Credit Facility

BANC ONE CAPITAL MARKETS, INC.

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

Co-Lead Arrangers

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE I DEFINITIONS	 	 	1	 
	

	 	Section 1.1
	 	Definitions
	 	 	1	 
	

	 	Section 1.2
	 	Times
	 	 	11	 
	

	 	Section 1.3
	 	Accounting Terms and Determinations
	 	 	12	 
	ARTICLE II AMOUNT AND TERMS OF THE LOANS AND LETTERS OF CREDIT	 	 	12	 
	

	 	Section 2.1
	 	Committed Advances
	 	 	12	 
	

	 	Section 2.2
	 	Procedure for Making Advances
	 	 	13	 
	

	 	Section 2.3
	 	Interest
	 	 	13	 
	

	 	Section 2.4
	 	Limitation of Outstandings
	 	 	14	 
	

	 	Section 2.5
	 	Principal and Interest Payment Dates
	 	 	14	 
	

	 	Section 2.6
	 	Level Status and Margins
	 	 	15	 
	

	 	Section 2.7
	 	Letters of Credit
	 	 	16	 
	

	 	Section 2.8
	 	Facility and Utilization Fees
	 	 	20	 
	

	 	Section 2.9
	 	Other Fees
	 	 	21	 
	

	 	Section 2.10
	 	Termination or Reduction of the Commitment
	 	 	21	 
	

	 	Section 2.11
	 	Voluntary Prepayments
	 	 	21	 
	

	 	Section 2.12
	 	Computation of Interest and Fees
	 	 	21	 
	

	 	Section 2.13
	 	Payments
	 	 	22	 
	

	 	Section 2.14
	 	Payment on Nonbusiness Days
	 	 	22	 
	

	 	Section 2.15
	 	Use of Advances and Letters of Credit
	 	 	22	 
	

	 	Section 2.16
	 	Increased Costs or Reduction of Yield
	 	 	22	 
	

	 	Section 2.17
	 	Taxes
	 	 	23	 
	

	 	Section 2.18
	 	Capital Adequacy
	 	 	25	 
	

	 	Section 2.19
	 	Mandatory Assignment of Bank’s Interest
	 	 	26	 
	ARTICLE III CONDITIONS PRECEDENT	 	 	26	 
	

	 	Section 3.1
	 	Initial Conditions Precedent
	 	 	26	 
	

	 	Section 3.2
	 	Conditions Precedent to All Advances and Letters of Credit
	 	 	28	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES	 	 	28	 
	

	 	Section 4.1
	 	Corporate Existence and Power
	 	 	28	 
	

	 	Section 4.2
	 	Authorization of Borrowing; No Conflict as to Law or Agreements
	 	 	28	 
	

	 	Section 4.3
	 	Legal Agreements
	 	 	29	 
	

	 	Section 4.4
	 	Subsidiaries
	 	 	29	 
	

	 	Section 4.5
	 	Financial Condition; Other Information
	 	 	29	 
	

	 	Section 4.6
	 	Material Adverse Change
	 	 	30	 
	

	 	Section 4.7
	 	Litigation
	 	 	30	 
	

	 	Section 4.8
	 	Hazardous Substances
	 	 	30	 

-ii-

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	

	 	Section 4.9
	 	Regulation U
	 	 	30	 
	

	 	Section 4.10
	 	Taxes
	 	 	30	 
	

	 	Section 4.11
	 	Burdensome Restrictions
	 	 	31	 
	

	 	Section 4.12
	 	Titles and Liens
	 	 	31	 
	

	 	Section 4.13
	 	ERISA
	 	 	31	 
	

	 	Section 4.14
	 	Intentionally Omitted
	 	 	31	 
	

	 	Section 4.15
	 	Investment Company Act
	 	 	31	 
	

	 	Section 4.16
	 	Public Utility Holding Company Act
	 	 	31	 
	

	 	Section 4.17
	 	Intentionally Omitted
	 	 	32	 
	

	 	Section 4.18
	 	Intentionally Omitted
	 	 	32	 
	

	 	Section 4.19
	 	Solvency
	 	 	32	 
	

	 	Section 4.20
	 	Swap Obligations
	 	 	32	 
	

	 	Section 4.21
	 	Insurance
	 	 	32	 
	

	 	Section 4.22
	 	Compliance With Laws
	 	 	32	 
	ARTICLE V AFFIRMATIVE COVENANTS OF THE BORROWER	 	 	32	 
	

	 	Section 5.1
	 	Financial Statements; Other Notices
	 	 	32	 
	

	 	Section 5.2
	 	Books and Records; Inspection and Examination
	 	 	34	 
	

	 	Section 5.3
	 	Compliance with Laws
	 	 	34	 
	

	 	Section 5.4
	 	Payment of Taxes and Other Claims
	 	 	34	 
	

	 	Section 5.5
	 	Maintenance of Properties
	 	 	35	 
	

	 	Section 5.6
	 	Insurance
	 	 	35	 
	

	 	Section 5.7
	 	Preservation of Corporate Existence
	 	 	35	 
	

	 	Section 5.8
	 	Use of Proceeds
	 	 	35	 
	ARTICLE VI NEGATIVE COVENANTS	 	 	36	 
	

	 	Section 6.1
	 	Liens
	 	 	36	 
	

	 	Section 6.2
	 	Sale of Assets
	 	 	37	 
	

	 	Section 6.3
	 	Consolidation and Merger
	 	 	38	 
	

	 	Section 6.4
	 	Hazardous Substances
	 	 	38	 
	

	 	Section 6.5
	 	Restrictions on Nature of Business
	 	 	38	 
	

	 	Section 6.6
	 	Transactions with Affiliates
	 	 	38	 
	

	 	Section 6.7
	 	Ratio of Funded Debt to Total Capital
	 	 	39	 
	ARTICLE VII EVENTS OF DEFAULT, RIGHTS AND REMEDIES	 	 	39	 
	

	 	Section 7.1
	 	Events of Default
	 	 	39	 
	

	 	Section 7.2
	 	Rights and Remedies
	 	 	42	 
	

	 	Section 7.3
	 	Pledge of Cash Collateral Account
	 	 	43	 
	ARTICLE VIII THE AGENT	 	 	43	 
	

	 	Section 8.1
	 	Appointment; Nature of Relationship
	 	 	43	 

-iii-

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	

	 	Section 8.2
	 	Powers
	 	 	44	 
	

	 	Section 8.3
	 	General Immunity
	 	 	44	 
	

	 	Section 8.4
	 	No Responsibility for Loans, Recitals, etc.
	 	 	44	 
	

	 	Section 8.5
	 	Action on Instructions of Banks
	 	 	44	 
	

	 	Section 8.6
	 	Employment of Agents and Counsel
	 	 	45	 
	

	 	Section 8.7
	 	Reliance on Documents; Counsel
	 	 	45	 
	

	 	Section 8.8
	 	Agent’s Reimbursement and Indemnification
	 	 	45	 
	

	 	Section 8.9
	 	Notice of Default
	 	 	45	 
	

	 	Section 8.10
	 	Rights as a Bank
	 	 	46	 
	

	 	Section 8.11
	 	Bank Credit Decision
	 	 	46	 
	

	 	Section 8.12
	 	Successor Agent
	 	 	46	 
	

	 	Section 8.13
	 	Delegation to Affiliates
	 	 	47	 
	

	 	Section 8.14
	 	Titles
	 	 	47	 
	

	 	Section 8.15
	 	Distribution of Payments and Proceeds
	 	 	47	 
	

	 	Section 8.16
	 	Expenses
	 	 	48	 
	

	 	Section 8.17
	 	Payments Received Directly by Banks
	 	 	48	 
	ARTICLE IX ASSIGNMENTS AND PARTICIPATIONS	 	 	49	 
	

	 	Section 9.1
	 	Assignments
	 	 	49	 
	

	 	Section 9.2
	 	Participations
	 	 	52	 
	

	 	Section 9.3
	 	Limitation on Assignments and Participations
	 	 	52	 
	ARTICLE X MISCELLANEOUS	 	 	52	 
	

	 	Section 10.1
	 	Disclosure of Information
	 	 	52	 
	

	 	Section 10.2
	 	No Waiver; Cumulative Remedies
	 	 	53	 
	

	 	Section 10.3
	 	Amendments, Etc
	 	 	53	 
	

	 	Section 10.4
	 	Notice
	 	 	54	 
	

	 	Section 10.5
	 	Costs and Expenses
	 	 	54	 
	

	 	Section 10.6
	 	Indemnification by Borrower
	 	 	55	 
	

	 	Section 10.7
	 	Execution in Counterparts
	 	 	55	 
	

	 	Section 10.8
	 	Binding Effect, Assignment
	 	 	55	 
	

	 	Section 10.9
	 	Governing Law
	 	 	55	 
	

	 	Section 10.10
	 	Severability of Provisions
	 	 	56	 
	

	 	Section 10.11
	 	Consent to Jurisdiction
	 	 	56	 
	

	 	Section 10.12
	 	Waiver of Jury Trial
	 	 	56	 
	

	 	Section 10.13
	 	Recalculation of Covenants Following Accounting
Practices Change
	 	 	56	 
	

	 	Section 10.14
	 	Headings
	 	 	57	 
	

	 	Section 10.15
	 	USA Patriot Act Notification
	 	 	57	 
	

	 	Section 10.16
	 	Nonliability of Banks
	 	 	57	 

-iv-

 

TABLE OF CONTENTS

	 	 	 
	EXHIBITS AND SCHEDULES
	Exhibit A

	 	Commitment Amounts and Addresses
	Exhibit B

	 	Note
	Exhibit C

	 	Compliance Certificate
	Exhibit D

	 	Opinion of Borrower’s Counsel
	Exhibit E

	 	Assignment Certificate
	Exhibit F

	 	Borrowing Certificate
	 	 	 
	Schedule 2.7

	 	Transitional Letters of Credit
	Schedule 4.2

	 	Consents
	Schedule 4.4

	 	Subsidiaries
	Schedule 4.6

	 	Material Adverse Change
	Schedule 4.7

	 	Litigation
	Schedule 4.8

	 	Environmental Matters
	Schedule 4.22

	 	Compliance with Laws
	Schedule 6.1

	 	Liens

-v-

 

CREDIT AGREEMENT

Dated as of May 14, 2004

Public Service Company of Colorado, a Colorado corporation; the Banks, as
defined below; and Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, as administrative agent for the Banks;
agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions.

For all purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires, the terms defined in this Article have
the meanings assigned to them in this Article, and include the plural as well
as the singular.

     “Accounting Practices Change” means any change in the Borrower’s
accounting practices that is permitted or required under the standards of the
Financial Accounting Standards Board.

     “Acquisition Target” means any Person becoming a Subsidiary of the
Borrower after the date hereof; any Person that is merged into or consolidated
with the Borrower or any Subsidiary of the Borrower after the date hereof; or
any Person with respect to whom all or a substantial part of that Person’s
assets are acquired by the Borrower or any Subsidiary of the Borrower after the
date hereof.

     “Act” means the Securities Act of 1933, as amended.

     “Additional Bank” means a financial institution that becomes a Bank
pursuant to the procedures set forth in Section 9.1.

     “Advance” means an advance by the Banks to the Borrower pursuant to
Section 2.1, including without limitation, from and after the creation thereof
on the Loan Conversion Date, the Term Loan.

     “Affiliate” means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with such
Person. A Person shall be deemed to control another Person if the controlling
Person owns 25% or more of the voting securities (or other ownership interests)
of the controlled Person or possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of stock, by contract or otherwise.

     “Agent” means Bank One acting in its capacity as administrative agent for
itself and the other Banks hereunder.

     “Agreement” means this Credit Agreement, as it may be amended, modified or
restated from time to time in accordance with Section 10.3.

 

 

     “Alternate Base Rate” means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.

     “Assignment Agreement” has the meaning set forth in Section 9.1.

     “Authorizing Order” means any order of the Public Utilities Commission of
the State of Colorado or any other regulatory body having jurisdiction over the
Borrower or the Parent authorizing and/or restricting the indebtedness that may
be created from time to time hereunder (whether on account of Advances, Letters
of Credit or otherwise).

     “Bank One” means Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, in its individual capacity, and its
successors.

     “Banks” means Bank One, acting on its own behalf and not as Agent, each of
the undersigned financial institutions (unless such financial institution
ceases to be a “Bank” pursuant to the provisions of Section 9.1) and any
financial institution that becomes a Bank pursuant to the procedures set forth
in Section 9.1, collectively.

     “Borrower” means Public Service Company of Colorado, a Colorado
corporation and a party to this Agreement.

     “Borrowing” means a borrowing under Article II consisting of Advances made
to the Borrower at the same time by each of the Banks severally.

     “Business Day” means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Rate Fundings, a day (other than a Saturday or Sunday)
on which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial
lending activities and interbank wire transfers can be made on the Fedwire
system.

     “Capitalized Lease” means any lease that in accordance with GAAP should be
capitalized on the balance sheet of the lessee thereunder.

     “Cash Collateral Account” means an interest-bearing account maintained
with the Agent in which funds are deposited pursuant to Section 2.7(g) or
Section 7.2(c).

     “Change of Control” means, with respect to any corporation, either (i) the
acquisition by any “person” or “group” (as those terms are used in Sections
13(d) and 14(d) of the Exchange Act) of beneficial ownership (as defined in
Rules 13d-3 and 13d-5 of the SEC, except that a Person shall be deemed to have
beneficial ownership of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of 25% or more of the
then-outstanding voting capital stock of such corporation; or (ii) a change in
the composition of the board of directors of such corporation or any corporate
parent of such corporation such that continuing directors cease to constitute
more

2

 

than 50% of such board of directors. As used in this definition,
“continuing directors” means, as of any date, (i) those members of the board of
directors of the applicable corporation who assumed office prior to such date,
and (ii) those members of the board of directors of the applicable corporation
who assumed office after such date and whose appointment or nomination for
election by that corporation’s shareholders was approved by a vote of at least
50% of the directors of such corporation in office immediately prior to such
appointment or nomination.

     “Commitment” means, with respect to each Bank, that Bank’s commitment to
make Advances and participate in Letters of Credit pursuant to Article II.

     “Commitment Amount” means, with respect to each Bank, the amount set forth
opposite that Bank’s name in Exhibit A or on any Assignment Agreement, unless
said amount is reduced pursuant to Section 2.10, in which event it means the
amount to which said amount is reduced.

     “Commitment Termination Date” means May 13, 2005, or the earlier date of
termination in whole of the Commitments pursuant to Section 2.10 or 7.2.

     “Compliance Certificate” means a certificate in substantially the form of
Exhibit C, or such other form as the Borrower and the Required Banks may from
time to time agree upon in writing, executed by the president, chief financial
officer, treasurer or assistant treasurer of the Borrower, (i) setting forth
relevant facts in reasonable detail the computations as to whether or not the
Borrower is in compliance with the requirements set forth in Section 6.7, (ii)
stating that the financial statements delivered therewith have been prepared in
accordance with GAAP, subject, in the case of interim financial statements, to
year-end audit adjustments, and (iii) stating whether or not such officer has
knowledge of the occurrence of any Default or Event of Default hereunder not
theretofore reported or remedied and, if so, stating in reasonable detail the
facts with respect thereto.

     “Default” means an event that, with the giving of notice, the passage of
time or both, would constitute an Event of Default.

     “Effective Date” means the first date on or after the date hereof on which
all conditions set forth in Section 3.1 have been satisfied.

     “Eligible Lender” means (a) a financial institution organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $250,000,000; (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country,
and having a combined capital and surplus of at least $250,000,000, provided
that such bank is acting through a branch or agency located in the United
States; or (c) a person controlled by, controlling, or under common control
with any entity identified in clause (a) or (b) above.

     “Environmental Law” means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. § 1802 et seq., the Toxic Substances
Control Act, 15 U.S.C. § 2601 et seq., the Federal Water Pollution Control Act,
33 U.S.C. § 1252 et seq., the Clean Water Act, 33 U.S.C. § 1321 et seq., the
Clean Air Act, 42 U.S.C. § 7401 et seq., and any other federal, state, county,
municipal, local

3

 

or other statute, law, ordinance or regulation which may relate to or deal
with human health or the environment, all as may be from time to time amended.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

     “ERISA Affiliate” means any trade or business (whether or not
incorporated) that is, along with the Borrower, a member of a controlled group
of corporations or a controlled group of trades or businesses, as described in
sections 414(b) and 414(c), respectively, of the Internal Revenue Code of 1986,
as amended.

     “Eurodollar Base Rate” means, with respect to a Eurodollar Rate Funding
for the relevant Interest Period, the applicable British Bankers’ Association
Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters
Screen LIBOR01 as of 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period, and having a maturity equal to such Interest
Period, provided that (i) if Reuters Screen LIBOR01 is not available to the
Agent for any reason, the applicable Eurodollar Base Rate for the relevant
Interest Period shall instead be the applicable British Bankers’ Association
Interest Settlement Rate for deposits in U.S. dollars as reported by any other
generally recognized financial information service as of 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, and
having a maturity equal to such Interest Period, and (ii) if no such British
Bankers’ Association Interest Settlement Rate is available to the Agent, the
applicable Eurodollar Base Rate for the relevant Interest Period shall instead
be the rate determined by the Agent to be the rate at which Bank One or one of
its Affiliate banks offers to place deposits in U.S. dollars with first-class
banks in the London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, in the
approximate amount of Bank One’s relevant Eurodollar Rate Funding and having a
maturity equal to such Interest Period.

     “Eurodollar Rate” means, with respect to a Eurodollar Rate Funding for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar
Base Rate applicable to such Interest Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Interest
Period, plus (ii) the Eurodollar Rate Margin.

     “Eurodollar Rate Funding” means any Borrowing, or any portion of the
principal balance of the Advances, bearing interest at a Eurodollar Rate.

     “Eurodollar Rate Margin” means a percentage, determined as set forth in
Section 2.6.

     “Event of Default” has the meaning specified in Section 7.1.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Excluded Taxes” has the meaning specified in Section 2.17.

     “Facility Fee Rate” means a percentage, determined as set forth in Section
2.6.

     “Federal Funds Effective Rate” means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such

4

 

day (or, if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
at approximately 10:00 a.m. on such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by the
Agent in its sole discretion.

     “Fee Letters” means one or more separate agreements between the Borrower
and the Agent, setting forth the terms of certain fees to be paid by the
Borrower to the Agent for the Agent’s own behalf or for the benefit of the
Banks, as more fully set forth therein.

     “First Collateral Trust Securities” means securities issued pursuant to
the terms of the First Collateral Trust Securities Indenture.

     “First Collateral Trust Securities Indenture” means the Indenture dated as
of October 1, 1993 as amended from time to time, from the Borrower to U.S. Bank
Trust National Association (formerly, First Trust of New York, National
Association), as successor trustee to Morgan Guaranty Trust Company of New
York.

     “First Mortgage Bond Indenture” means the Indenture dated as of December
1, 1939 from the Borrower to U.S. Bank Trust National Association, as successor
trustee thereunder, as amended from time to time.

     “First Mortgage Bonds” means bonds issued pursuant to the terms of the
First Mortgage Bond Indenture.

     “Floating Rate” means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Floating Rate Margin, in each
case changing when and as the Alternate Base Rate changes.

     “Floating Rate Funding” means any Borrowing, or any portion of the
principal balance of the Advances, bearing interest at the Floating Rate.

     “Floating Rate Margin” means a percentage, determined as set forth in
Section 2.6.

     “Funded Debt” of any Person means (without duplication) (i) all
indebtedness of such Person for borrowed money; (ii) the deferred and unpaid
balance of the purchase price owing by such Person on account of any assets or
services purchased (other than trade payables and other accrued liabilities
incurred in the ordinary course of business that are not overdue by more than
180 days unless being contested in good faith) if such purchase price is (A)
due more than nine months from the date of incurrence of the obligation in
respect thereof or (B) evidenced by a note or a similar written instrument;
(iii) all Capitalized Lease obligations; (iv) all indebtedness secured by a
Lien on any property owned by such Person, whether or not such indebtedness has
been assumed by such Person or is nonrecourse to such Person; (v) notes payable
and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money (other than such notes or drafts
for the deferred purchase price of assets or services to the extent such
purchase price is excluded from clause (ii) above); (vi) indebtedness evidenced
by bonds, notes or similar written instruments; (vii) the face amount of all
letters of credit and bankers’ acceptances issued for the account of such
Person, and without duplication, all drafts

5

 

drawn thereunder (other than such letters of credit, bankers’ acceptances
and drafts for the deferred purchase price of assets or services to the extent
such purchase price is excluded from clause (ii) above); (viii) net obligations
of such Person under Swap Contracts which constitute interest rate agreements
or currency agreements; (ix) guaranty obligations of such Person with respect
to indebtedness for borrowed money of another Person (including Affiliates);
(x) all Off-Balance Sheet Liabilities of such Person; and (xi) in the case of
the Borrower, any amounts due under Trust Preferred Securities; provided,
however, that in no event shall any calculation of Funded Debt of the Borrower
include (y) deferred taxes, or (z) so long as First Mortgage Bonds are held as
security for First Collateral Trust Securities and have not been sold or
otherwise disposed of by foreclosure, any obligation of the Borrower under such
First Mortgage Bonds.

     “GAAP” means generally accepted accounting principles as in effect from
time to time applied on a basis consistent with the accounting practices
applied in the financial statements of the Borrower referred to in Section 4.5,
except for changes concurred in by Borrower’s independent public accountants
and disclosed in Borrower’s financial statements or notes thereto.

     “Hazardous Substance” means any asbestos, urea-formaldehyde,
polychlorinated biphenyls (“PCBs”), nuclear fuel or material, chemical waste,
radioactive material, explosives, known carcinogens, petroleum products and
by-products and other dangerous, toxic or hazardous pollutants, contaminants,
chemicals, materials or substances listed or identified in, or regulated by,
any Environmental Law.

     “Indentures” means the First Collateral Trust Securities Indenture and the
First Mortgage Bond Indenture.

     “Interest Period” means, with respect to any Advance bearing interest at a
Eurodollar Rate, a period of fourteen days or one, two, three or six months
beginning on a Business Day, as elected by the Borrower.

     “Investment Company Act” means the Investment Company Act of 1940, as
amended.

     “Issuing Bank” means Bank One, acting as the Bank issuing Letters of
Credit.

     “L/C Amount” means the sum of (i) the aggregate undrawn face amount of any
issued and outstanding Letters of Credit, plus (ii) amounts drawn under Letters
of Credit for which the Banks have neither been reimbursed nor made any
Advance.

     “L/C Application” has the meaning set forth in Section 2.7.

     “L/C Sublimit” means $50,000,000.

     “Letter of Credit” has the meaning set forth in Section 2.7.

     “Level Status” means Level I, Level II, Level III, Level IV or Level V,
each as determined pursuant to Section 2.6.

6

 

     “Lien” means any mortgage, deed of trust, lien, pledge, security interest
or other charge or encumbrance, of any kind whatsoever, including but not
limited to the interest of the lessor or titleholder under any Capitalized
Lease, title retention contract or similar agreement.

     “Loan Conversion Date” has the meaning set forth in Section 2.1.

     “Loan Documents” means this Agreement, the Notes, the L/C Applications and
the Fee Letters.

     “Material Adverse Change” means a material adverse change in the business,
condition (financial or otherwise), or operations of the Borrower and its
Subsidiaries taken as a whole.

     “Material Part of the Assets” means assets with a net book value in excess
of 10% of the total assets of the Borrower and its Subsidiaries on a
consolidated basis as determined in accordance with GAAP, as shown on the most
recent balance sheet of the Borrower and its Subsidiaries available as of the
date of the determination.

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

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

     “Note” has the meaning set forth in Section 2.1.

     “Obligations” means each and every debt, liability and obligation of every
type and description arising under any of the Loan Documents which the Borrower
may now or at any time hereafter owe to any Bank or the Agent, whether such
debt, liability or obligation now exists or is hereafter created or incurred,
whether it is direct or indirect, due or to become due, absolute or contingent,
primary or secondary, liquidated or unliquidated, or sole, joint, several or
joint and several, including but not limited to principal of and interest on
the Notes and all fees due under this Agreement, any Fee Letter or any other
Loan Documents and the obligation to fully fund the Cash Collateral Account
pursuant to Section 2.7(g) or 7.2(c).

     “Off-Balance Sheet Liability” of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease and (iii) all Synthetic Lease
Obligations of such Person. The amount of liability under a Sale and Leaseback
Transaction of any Person shall be the amount which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP if
such lease or agreement were accounted for as a Capitalized Lease.

     “Operating Lease” of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee.

     “Organizational Documents” means, (i) with respect to any corporation, the
articles of incorporation and bylaws of such corporation, (ii) with respect to
any partnership, the partnership agreement of such partnership, (iii) with
respect to any limited liability company, the articles of organization and
operating agreement of such company, and (iv) with respect to any entity, any

7

 

and all other shareholder, partner or member control agreements and
similar organizational documents relating to such entity.

     “Outstandings” means, at any time, an amount equal to the sum of (i) the
aggregate principal balance of the Advances then outstanding, and (ii) the L/C
Amount then outstanding.

     “Outstandings Percentage” means, at any time, the ratio (expressed as a
percentage) of the aggregate Outstandings to the aggregate Commitment Amounts.

     “Parent” means Xcel Energy Inc., a Minnesota corporation.

     “Participating Affiliate” means, (a) with respect to any Bank, (i) an
Affiliate of such Bank or (ii) any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by such Bank or an Affiliate of
such Bank and (b) with respect to any Bank that is a fund which invests in bank
loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Bank or by an Affiliate of such investment advisor.

     “Percentage” means, with respect to each Bank, the ratio of (i) that
Bank’s Commitment Amount, to (ii) the aggregate Commitment Amounts of all of
the Banks. For purposes of this definition only, following the Commitment
Termination Date, each Bank’s Commitment Amount shall be deemed to be the
principal balance outstanding of that Bank’s Note.

     “Permitted Swap Obligations” means all obligations (contingent or
otherwise) of the Borrower or any Subsidiary thereof existing or arising under
Swap Contracts, provided that each of the following criteria is satisfied: (a)
such obligations are (or were) entered into by such Person in the ordinary
course of business for the purpose of directly mitigating risks associated with
liabilities, commitments or assets, whether existing or anticipated to be
incurred, created or held by the Borrower and/or its Subsidiaries, changes in
the value of securities issued by the Borrower and/or its Subsidiaries in
conjunction with a securities repurchase program not otherwise prohibited
hereunder, and not for purposes of speculation or taking a “market view;” and
(b) such Swap Contracts do not contain any provision (“walk-away” provision)
exonerating the non-defaulting party from its obligations to make payments on
outstanding transactions to the defaulting party.

     “Person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

     “Plan” means an employee benefit plan established or maintained by the
Borrower or any Subsidiary or ERISA Affiliate and covered by Title IV of ERISA.

     “Prime Rate” means a rate per annum equal to the prime rate of interest
announced by Bank One or by its parent, BANK ONE CORPORATION (which is not
necessarily the lowest rate charged to any customer), from time to time,
changing when and as said prime rate changes.

8

 

     “Prior Credit Agreement” means the Credit Agreement dated May 16, 2003
among the Borrower, Bank One, NA, as administrative agent, Wells Fargo Bank,
National Association, as syndication agent and the other “Banks” named therein,
together with all amendments, modifications and restatements thereof.

     “PUHCA” has the meaning set forth in Section 4.16.

     “Reference Indebtedness” means the long-term senior unsecured indebtedness
of the Borrower.

     “Reportable Event” means (i) a “reportable event”, described in Section
4043 of ERISA and the regulations issued thereunder, in respect of any Plan,
(ii) a withdrawal from any Plan, as described in Section 4063 of ERISA, (iii)
an action to terminate a Plan for which a notice is required to be filed under
Section 4041 of ERISA, (iv) any other event or condition that could reasonably
be expected to constitute grounds for termination by the Pension Benefit
Guaranty Corporation of, or the appointment by the appropriate United States
District Court of a trustee to administer, any Plan, or (v) a complete or
partial withdrawal from a Multiemployer Plan as described in Sections 4203 and
4205 of ERISA.

     “Required Banks” means one or more Banks (including, where relevant,
Additional Banks) having an aggregate Percentage greater than 50%.

     “Reserve Requirement” means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
Eurocurrency liabilities.

     “Restricted Subsidiary” means a Subsidiary any of whose debts, liabilities
or obligations (i) have been guaranteed by the Borrower, (ii) with respect to
which the Borrower is in any other manner obligated for the payment of money or
otherwise to provide financial support, or (iii) are secured in whole or in
part by any property of the Borrower. Notwithstanding the foregoing, a
Subsidiary will not be treated as a Restricted Subsidiary to the extent that
the amount of such debts, liabilities or obligations of such Subsidiary so
guaranteed by the Borrower does not exceed $10,000,000; provided that the
aggregate amount of such debts, liabilities or obligations so guaranteed of all
Subsidiaries which are excluded from the definition of “Restricted Subsidiary”
by this sentence shall not exceed $10,000,000.

     “S&P” means Standard & Poors Ratings Group, a division of McGraw-Hill
Corporation.

     “SEC” means the Securities and Exchange Commission.

     “Sale and Leaseback Transaction” means any arrangement, directly or
indirectly, with any Person whereby a seller or transferor shall sell or
otherwise transfer any real or personal property and concurrently therewith
lease, or repurchase under an extended purchase contract, conditional sales or
other title retention agreement, the same or substantially similar property.

     “Solvent” means, with respect to any Person, that as of the date of
determination (i) the fair market value of the property of such Person is (A)
greater than the total liabilities (including contingent liabilities) of such
Person, and (B) not less than the amount that will be required to

9

 

pay the probable liabilities on such Person’s debts as they come due,
considering all financing alternatives and potential asset sales reasonably
available to such Person; (ii) such Person’s capital is not unreasonably small
in relation to its business or any contemplated or undertaken transaction;
(iii) such Person does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay such
debts as they become due; and (iv) such Person is “solvent” within the meaning
given that term and similar terms under applicable laws relating to fraudulent
transfers and conveyances. For purposes of this definition, the amount of any
contingent liability at any time shall be computed as the amount that, in light
of all of the facts and circumstances existing at such time, represents the
amount that would reasonably be expected to become an actual or matured
liability.

     “Subsidiary” means (i) any corporation of which more than 50% of the
outstanding shares of capital stock having general voting power under ordinary
circumstances to elect a majority of the board of directors of such
corporation, irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency, is at the time directly or indirectly owned by
the Borrower, by the Borrower and one or more other Subsidiaries, or by one or
more other Subsidiaries, (ii) any partnership of which more than 50% of the
partnership interest therein are directly or indirectly owned by the Borrower,
by the Borrower and one or more other Subsidiaries, or by one or more other
Subsidiaries, and (iii) any limited liability company or other form of business
organization the effective control of which is held by the Borrower, the
Borrower and one or more other Subsidiaries, or by one or more other
Subsidiaries.

     “Swap Contracts” means any agreement, whether or not in writing, relating
to any transaction that is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap or option, bond,
note or bill option, interest rate option, forward foreign exchange
transaction, cap, collar or floor transaction, currency swap, cross-currency
rate swap, swaption, currency option or any other similar transaction
(including any option to enter into any of the foregoing) or any combination of
the foregoing, and, unless the context otherwise clearly requires, any master
agreement relating to or governing any or all of the foregoing.

     “Synthetic Lease Obligation” means the monetary obligation of a Person
under (i) a so-called synthetic or off-balance sheet or tax retention lease or
(ii) an agreement for the use or possession of property creating obligations
that do not appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person, would be characterized as indebtedness
of such Person (without regard to accounting treatment). The amount of
Synthetic Lease Obligations of any Person under any such lease or agreement
shall be the amount which would be shown as a liability on a balance sheet of
such Person prepared in accordance with GAAP if such lease or agreement were
accounted for as a Capitalized Lease.

     “Tangible Net Worth” means shareholder’s equity (including preferred
stock), less intangible assets included in calculating such shareholders’
equity, all determined in accordance with GAAP. For purposes of the foregoing
calculation, intangible assets shall include but not be limited to the value of
patents, trademarks, trade names, copyrights, licenses, premiums paid on
indebtedness, good will, prepaid expenses, deferred charges and treasury stock.
Tangible Net

10

 

Worth with respect to the Borrower shall at all times be determined with
respect to the Borrower and its Subsidiaries on a consolidated basis.

     “Term Loan” has the meaning set forth in Section 2.1.

     “Term Loan Maturity Date” means the first anniversary of the Loan
Conversion Date.

     “Total Capital” means the sum of (A) stockholder’s equity (which is the
sum of common stock, premium on common stock and retained earnings and which
excludes the Trust Preferred Securities to the extent included in Funded Debt),
and (B) Funded Debt, all determined with respect to the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP.

     “Transitional Letters of Credit” has the meaning set forth in Section
2.7(a).

     “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

     “Trust Preferred Securities” means any preferred securities issued by a
Trust Preferred Securities Subsidiary, where such preferred securities have the
following characteristics:

     (i) such Trust Preferred Securities Subsidiary lends substantially
all of the proceeds from the issuance of such preferred securities to the
Borrower or a wholly-owned direct or indirect Subsidiary of the Borrower
in exchange for subordinated debt issued by the Borrower or such
wholly-owned direct or indirect Subsidiary, respectively;

     (ii) such preferred securities contain terms providing for the
deferral of interest payments corresponding to provisions providing for
the deferral of interest payments on the subordinated debt; and

     (iii) the Borrower or a wholly-owned direct or indirect Subsidiary
of the Borrower (as the case may be) makes periodic interest payments on
the subordinated debt, which interest payments are in turn used by the
Trust Preferred Securities Subsidiary to make corresponding payments to
the holders of such preferred securities.

     “Trust Preferred Securities Subsidiary” means any Delaware business trust
(or similar entity) (i) all of the common equity interest of which is owned
(either directly or indirectly through one or more wholly-owned Subsidiaries of
the Borrower) at all times by the Borrower, (ii) that has been formed for the
purpose of issuing Trust Preferred Securities and (iii) substantially all of
the assets of which consist at all times solely of subordinated debt issued by
the Borrower or a wholly-owned direct or indirect Subsidiary of the Borrower
(as the case may be) and payments made from time to time on such subordinated
debt.

     “Utilization Fee Rate” means a percentage, determined as set forth in Section 2.8.

Section 1.2 Times.

All references to times of day in this Agreement shall be references to
Chicago, Illinois time unless otherwise specifically provided.

11

 

Section 1.3 Accounting Terms and Determinations.

Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP; provided that in the event of any Accounting Practices
Change, then the Borrower’s compliance with the covenant set forth in Section
6.7 shall be determined on the basis of generally accepted accounting
principles in effect immediately before giving effect to the Accounting
Practices Change, until such covenant is amended in a manner satisfactory to
the Borrower and the Required Banks in accordance with Section 10.13 hereof.

ARTICLE II

AMOUNT AND TERMS OF THE LOANS AND LETTERS OF CREDIT

Section 2.1 Committed Advances.

Each Bank agrees, severally but not jointly, on the terms and subject to the
conditions hereinafter set forth, to make Advances to the Borrower from time to
time during the period from the date hereof to and including the Commitment
Termination Date in an aggregate amount not to exceed at any time outstanding
that Bank’s Commitment Amount, less that Bank’s Percentage of the sum of the
then-outstanding L/C Amount. Within the limits of each Bank’s Commitment
Amount, the Borrower may borrow, prepay pursuant to Section 2.11 and reborrow
under this Section 2.1. If the Borrower so elects by delivery of a written
notice to the Agent at least three (3), but not more than ten (10), Business
Days prior to the date of the then current Commitment Termination Date, then on
such Commitment Termination Date (the “Loan Conversion Date”), (i) the
Borrower’s option to borrow additional Advances shall terminate, (ii) the
Commitments shall be terminated, (iii) unless otherwise agreed by each Bank in
writing, the Borrower shall deposit in the Cash Collateral Account, on the Loan
Conversion Date, an amount equal to the then-applicable L/C Amount, less the
balance (if any) then outstanding in the Cash Collateral Account and (iv) the
then outstanding principal amount of the Advances shall be converted to a term
loan (the “Term Loan”) which shall, in the case of each Bank, be in the amount
of such Bank’s outstanding Advances on such date, and which shall be due and
payable in full, together with accrued interest and all other Obligations, on
the Term Loan Maturity Date, with any prepayment thereof to be made subject to
Section 2.11; provided, that no such conversion shall occur if a Default or
Event of Default has occurred and is continuing either on the date of delivery
of such notice or on the Loan Conversion Date. Amounts repaid or prepaid
following the Loan Conversion Date may not be reborrowed. If such term loan
conversion has not previously been completed, then on the Commitment
Termination Date then in effect, the Commitments shall be terminated and all of
the Advances and other Obligations shall be due and payable.

The Advances made by each Bank under this Section 2.1 shall be evidenced by and
repayable with interest in accordance with a single promissory note of the
Borrower (each, a “Note”) payable to the order of that Bank, substantially in
the form of Exhibit B hereto, dated the date hereof. Each Advance shall bear
interest on the unpaid principal amount thereof from the date thereof until
paid as set forth in Section 2.3.

12

 

Section 2.2 Procedure for Making Advances.

Each Borrowing under Section 2.1 shall occur following written notice from the
Borrower to the Agent or telephonic request from any person purporting to be
authorized to request Advances on behalf of the Borrower. Each such notice or
request shall specify (i) the date of the requested Borrowing, (ii) the amount
thereof, and (iii) if any portion of such Borrowing will bear interest at a
Eurodollar Rate, the Interest Period selected by the Borrower with respect
thereto. Such notice or request must be received by the Agent not later than
10:00 a.m. on the day on which such Borrowing is to occur or, if all or any
portion of the Borrowing will bear interest at a Eurodollar Rate, not later
than three Business Days prior to the date on which such Borrowing is to occur.
Concurrent with any such notice or request, the Borrower shall deliver to the
Agent in writing (which may be by facsimile transmission) the certificate
required by Section 3.2(b). Upon receiving a request for a Borrowing under
Section 2.1, and in any event not later than 1:30 p.m. on the date that the
requested Borrowing is to occur, or, if the requested Borrowing is to bear
interest at a Eurodollar Rate, the close of business on the day that the
request is received, the Agent will notify the Banks of the amount of the
requested Borrowing, the amount of each Bank’s Advance with respect thereto,
and, if applicable, the fact that the Borrower has elected a Eurodollar Rate
and the Interest Period selected by the Borrower. Upon fulfillment of the
applicable conditions set forth in Article III, each Bank shall remit its
Percentage of the requested Borrowing to the Agent in immediately available
funds. So long as a Bank receives notice of the requested Borrowing prior to
1:30 p.m. on the date that the requested Borrowing is to occur, or, if the
requested Borrowing is to bear interest at a Eurodollar Rate, the close of
business on the day that the request is received, that Bank will make its
Advance with respect to that Borrowing available to the Agent by wire transfer
of immediately available funds to the Agent not later than 4:00 p.m. on the
date called for in such notice. Prior to the close of business on the day of
the requested Borrowing, the Agent shall disburse such funds by crediting the
same to the Borrower’s demand deposit account maintained with the Agent or in
such other manner as the Agent and the Borrower may from time to time agree.
The Agent shall have no obligation to disburse the requested Borrowing if any
condition set forth in Article III has not been satisfied on the day of the
requested Borrowing. Each Borrowing shall be in the amount of $1,000,000 or an
integral multiple thereof; provided, however, that any portion of such
Borrowing bearing interest at a Eurodollar Rate must be in the amount of
$5,000,000 or an integral multiple of $1,000,000 greater than $5,000,000. The
Borrower shall promptly confirm each telephonic request for an Advance by
executing and delivering an appropriate confirmation certificate to the Agent.
However, the Borrower shall be obligated to repay all Advances for which it
actually received the moneys (including but not limited to all Advances the
proceeds of which were deposited in any account of the Borrower) or in respect
of which the Agent reasonably believed the person requesting the same to be
authorized to do so, notwithstanding the fact that the person requesting the
same was not in fact authorized so to do. Any request for an Advance shall be
deemed to be a representation that the statements set forth in Section 3.2 are
correct.

Section 2.3 Interest.

     (a) Each Advance shall bear interest on the unpaid principal amount
thereof from the date thereof until paid as set forth in this Section
2.3.

13

 

     (b) Unless the Borrower elects a Eurodollar Rate pursuant to this
Section, the principal balance of each Advance shall bear interest at the
Floating Rate.

     (c) At the election of the Borrower, which may be exercised from
time to time, the Borrower may request in writing or by telephone that a
Eurodollar Rate be applicable for the portion of the outstanding
principal balance of the Advances (including any Advance requested or to
be requested) and for the Interest Period indicated by the Borrower in
its request. The portion of the outstanding balance of the Advances for
which a Eurodollar Rate is requested (i) must be in the amount (as to all
Advances combined) of $5,000,000 or an integral multiple of $1,000,000
greater than $5,000,000, and (ii) if such request relates to Advances
already outstanding, must, on the first day of the applicable Interest
Period, either (1) bear interest at the Floating Rate, or (2) bear
interest at a Eurodollar Rate with respect to which the Interest Period
expires on such first day. In no event may the Borrower select an
Interest Period extending beyond the Commitment Termination Date or, if
later, the Term Loan Maturity Date. A request for a Eurodollar Rate (i)
must be received by the Agent before 10:00 a.m. on the day three Business
Days before the first day of the proposed Interest Period (and the Agent
shall give the Banks prompt notice thereof), and (ii) may not be
rescinded by the Borrower after such request has been made. Subject to
the terms and conditions set forth herein, the applicable Eurodollar Rate
shall (subject to fluctuations in the applicable Eurodollar Rate Margin)
be the interest rate applicable for the proposed Interest Period to the
portion of the outstanding principal balance of the Advances to which the
Eurodollar Rate request related. At the termination of such Interest
Period, the interest rate applicable to the portion of the principal
balance of the Advances to which the Eurodollar Rate request was
applicable shall revert to the Floating Rate unless a new Eurodollar Rate
request is made by the Borrower in accordance with this Agreement.
Notwithstanding anything to the contrary in this Section, (i) the Agent
shall have no obligation to permit the application of a Eurodollar Rate
for any Interest Period if any Bank, in its sole discretion, determines
that deposits in amounts equal to the requested amount and maturing at
the end of the proposed Interest Period are not readily available to such
Bank from major banks in the London interbank market, and (ii) without
the consent of the Required Banks, the Agent will not permit the
application of a Eurodollar Rate for any Interest Period if a Default or
Event of Default has occurred and is continuing when the request for the
Eurodollar Rate is made. Absent manifest error, the records of the Agent
shall be conclusive evidence as to the amount of the Advances bearing
interest at a Eurodollar Rate, the applicable Eurodollar Rate and the
date on which the Interest Period applicable to such Eurodollar Rate
expires.

Section 2.4 Limitation of Outstandings.

In no event shall the aggregate Outstandings at any time prior to the
Commitment Termination Date exceed the aggregate amount of the Commitments.

Section 2.5 Principal and Interest Payment Dates.

     (a) Interest. Interest accruing on the principal balance of the
Floating Rate Advances shall be due and payable on the last day of each
March, June, September and

14

 

December and on the Commitment Termination Date or, if later, the
Term Loan Maturity Date. Interest accruing at a Eurodollar Rate shall be
due and payable on the last day of the applicable Interest Period or, if
an Interest Period is in excess of three months, on the date that is
three months after the beginning of the Interest Period and after each
such interest payment date thereafter, and on the last day of the
Interest Period and on the Commitment Termination Date or, if later, the
Term Loan Maturity Date.

     (b) Principal. The principal balance of the Advances (other than
the Term Loan) shall be due and payable in full on the Commitment
Termination Date. The principal balance of the Term Loan shall be due
and payable in full on the Term Loan Maturity Date.

Section 2.6 Level Status and Margins.

     (a) The Borrower’s Level Status shall be determined on the basis of
the rating accorded the Reference Indebtedness by S&P and Moody’s, in
accordance with the following table:

	 	 	 	 	 	 	 	 	 	 	 
	

	 	Level I 
	 	Level II
	 	Level III 
	 	Level IV 
	 	Level V

	S&P

	 	A- or better
	 	BBB+ or better, but

less than A-
	 	BBB or better, but

less than BBB+
	 	BBB- or better, but

less than BBB
	 	Less than BBB-
	 
	 	 	 	 	 	 	 	 	 	 
	Moody’s

	 	A3 or better
	 	Baa1 or better, but

less than A3
	 	Baa2 or better, but

less than Baa1
	 	Baa3 or better, but

less than Baa2
	 	Less than Baa3

If the ratings applied by S&P and Moody’s differ such that they do not fall
within a single column in the table set forth above, (i) if the applicable
columns are adjacent to each other, the Level Status in effect shall be based
on the leftmost of the applicable columns, (ii) if the applicable columns are
separated by a single column, the Level Status in effect shall be based on the
column between those two columns, and (iii) if the applicable columns are
separated by two or more columns, the Level Status in effect shall be based on
the column to the immediate left of the rightmost applicable column.

	 	(b)	 	In making the determinations under paragraph (a):
	 
	 	(i)	 	If either S&P or Moody’s changes the
meaning or designation for its ratings referenced
in paragraph (a), the criteria for Level Status
in the table in paragraph (a) shall be adjusted
in such manner as the Required Banks may
reasonably determine to correspond with the
applicable

15

 

	 	 	 	rating designations used by S&P or
Moody’s, as the case may be, in effect on the
date hereof.
	 
	 	(ii)	 	If either S&P or Moody’s, but not
both of them, ceases to rate the Reference
Indebtedness, the determination in paragraph (a)
shall be made on the basis of the rating accorded
by whichever one continues to rate such debt.
	 
	 	(iii)	 	If neither S&P nor Moody’s rates
the Reference Indebtedness, the Borrower shall be
deemed to be at Level Status V.

     (c) Subject to clauses (d) and (e) below, the Floating Rate Margin,
Eurodollar Rate Margin and Facility Fee Rate at any time shall be
determined from time to time on the basis of the Borrower’s Level Status,
in accordance with the following table:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Level I
	 	Level II
	 	Level III
	 	Level IV
	 	Level V

	Floating Rate Margin
	 	 	0	%	 	 	0	%	 	 	0	%	 	 	0	%	 	 	0.450	%
	Eurodollar Rate
Margin
	 	 	0.650	%	 	 	0.750	%	 	 	0.850	%	 	 	0.925	%	 	 	1.450	%
	Facility Fee Rate
	 	 	0.10	%	 	 	0.125	%	 	 	0.150	%	 	 	0.200	%	 	 	0.300	%

     (d) The Floating Rate Margin and the Eurodollar Rate Margin (with
respect to each Level Status above) will increase on the Loan Conversion
Date, if any, by 0.125% for Level I Status, 0.25% for Level II Status,
Level III Status and Level IV Status and 0.375% for Level V Status (it
being understood and agreed that each such increased interest rate will
be the interest rate applicable to the Floating Rate Margin and
Eurodollar Rate Margin for the Term Loan).

     (e) At the request of the Required Banks, upon the occurrence of any
Event of Default and so long as such Event of Default continues without
written waiver thereof by the requisite Banks, a default increment equal
to 200 basis points (2.00%) shall be added to the Floating Rate Margin
and Eurodollar Rate Margin. Inclusion of such default increment in
calculating the Floating Rate Margin and Eurodollar Rate Margin shall not
be deemed a waiver or excuse of any such Event of Default.

Section 2.7 Letters of Credit.

     (a) The Borrower may from time to time, on or prior to the
Commitment Termination Date, request that the Issuing Bank issue one or
more irrevocable standby letters of credit (each, a “Letter of Credit”)
for the account of the Borrower or any of its

16

 

Subsidiaries. No Letter of Credit shall be issued if (i) the face
amount of that Letter of Credit, together with the sum of the
then-applicable L/C Amount and the aggregate principal balance of the
Advances then outstanding, would exceed the aggregate Commitment Amounts,
or (ii) the face amount of that Letter of Credit, together with the
then-applicable L/C Amount, would exceed the L/C Sublimit. Schedule 2.7
contains a description of certain letters of credit issued for the
account of the Borrower prior to the Effective Date (such letters of
credit, the “Transitional Letters of Credit”). Subject to the
satisfaction of the conditions precedent set forth in Section 3.1, the
Transitional Letters of Credit shall be deemed to be Letters of Credit
issued pursuant to this Section 2.7.

     (b) At least three days prior to the issuance of each Letter of
Credit, the Borrower shall execute a letter of credit application and
reimbursement agreement (an “L/C Application”) in the Issuing Bank’s
standard form, as required by the Issuing Bank.

     (c) Each Letter of Credit shall be issued in a form acceptable to
the Issuing Bank. Unless otherwise approved by all of the Banks, no
Letter of Credit shall have an initial or any renewal term ending more
than one year after the date of issuance.

     (d) A fee shall be due and payable to the Agent for the benefit of
the Banks upon issuance of each Letter of Credit, computed at an annual
rate equal to the Eurodollar Rate Margin applied to the undrawn face
amount of that Letter of Credit outstanding from time to time, from and
including the date of issuance of that Letter of Credit until the
expiration thereof, payable in arrears on the last day of each calendar
quarter and on the Commitment Termination Date and, if later, the expiry
date of such Letter of Credit. The Borrower shall also pay to the
Issuing Bank for its own account a fronting fee at a rate per annum of
0.125% on each other Bank’s Percentage of the undrawn face amount of each
Letter of Credit, payable in arrears on the last day of each calendar
quarter and on the Commitment Termination Date and, if later, the expiry
date of such Letter of Credit. In addition, the Borrower shall pay or
reimburse the Issuing Bank for such normal and customary costs and
expenses as are incurred or charged by the Issuing Bank in issuing,
effecting payment under, amending or otherwise processing or
administering any Letter of Credit.

     (e) The Borrower shall be irrevocably and unconditionally obligated
to reimburse the Issuing Bank on demand (or, if demand is not earlier
made, on the Commitment Termination Date) for any amount paid by the
Issuing Bank upon any drawing under any Letter of Credit issued by the
Issuing Bank, without presentment, protest or other formalities of any
kind; provided that the Borrower shall not hereby be precluded from
asserting any claim for direct (but not consequential) damages suffered
by the Borrower to the extent, but only to the extent, caused by (i) the
willful misconduct or gross negligence of the Issuing Bank in determining
whether a request presented under any Letter of Credit issued by it
complied with the terms of such Letter of Credit or (ii) the Issuing
Bank’s failure to pay under any Letter of Credit issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit. All such amounts paid by the
Issuing Bank and remaining unpaid by the Borrower after demand for
payment thereof shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 2% plus the rate
applicable to

17

 

Floating Rate Advances. The Issuing Bank shall provide notice to
the Borrower of payment made by the Issuing Bank on any drawing under any
Letter of Credit within one Business Day of such payment.

     (f) Each Bank shall be deemed to hold a participation interest in
each Letter of Credit equal to that Bank’s Percentage of the face amount
of that Letter of Credit. If the Issuing Bank makes any payment pursuant
to the terms of any Letter of Credit and is not promptly reimbursed, the
Issuing Bank may request that each other Bank pay such Bank’s Percentage
of the unreimbursed amount. Upon receipt of any such request prior to
1:30 p.m. on a Business Day, the recipient shall be unconditionally and
irrevocably obligated to pay its Percentage of the unreimbursed amount to
the Issuing Bank in immediately available funds prior to 3:00 p.m. on
such date. Notices received after 1:30 p.m. shall be deemed to have been
received on the following Business Day. If payment is not made by a Bank
when due hereunder, interest on the unpaid amount shall accrue from and
including the date of the Issuing Bank’s request to the date of payment
at the Federal Funds Effective Rate. After making any payment to the
Issuing Bank under this subsection in connection with a particular Letter
of Credit, a Bank shall be entitled to participate to the extent of its
Percentage in the related reimbursements received by the Issuing Bank
from the Borrower or otherwise. Upon receiving any such reimbursement,
the Issuing Bank will distribute to each Bank its Percentage of such
reimbursement. At the option of the Agent, any payment by a Bank
hereunder may be deemed an Advance in accordance with Section 2.1 and
payable under the Notes.

     (g) Unless otherwise agreed by each Bank in writing, the Borrower
shall deposit in the Cash Collateral Account, on the Commitment
Termination Date, an amount equal to the then-applicable L/C Amount, less
the balance (if any) then outstanding in the Cash Collateral Account.

     (h) The Borrower’s obligations under this Section 2.7 shall be
absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Bank, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the
Issuing Bank and the Banks that neither the Issuing Bank nor any Bank
shall be responsible for, and the Borrower’s reimbursement obligation in
respect of any Letter of Credit shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, any of its Affiliates, the beneficiary of any Letter of
Credit or any financing institution or other party to whom any Letter of
Credit may be transferred or any claims or defenses whatsoever of the
Borrower or of any of its Affiliates against the beneficiary of any
Letter of Credit or any such transferee. The Issuing Bank shall not be
liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit. The Borrower agrees that any
action taken or omitted by the Issuing Bank or any Bank under or in
connection with any Letter of Credit and the related drafts and
documents, if done without gross negligence or willful misconduct, shall
be binding upon the Borrower and shall not put the Issuing Bank or any

18

 

Bank under any liability to the Borrower. Nothing in this Section
2.7(h) or Section 2.7(i) is intended to limit the right of the Borrower
to make a claim against the Issuing Bank for damages as contemplated by
the proviso to the first sentence of Section 2.7(e).

     (i) The Issuing Bank shall be entitled to rely, and shall be fully
protected in relying, upon any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile, telex or teletype message, statement, order or other
document believed in good faith by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the Issuing Bank. The Issuing Bank shall be fully
justified in failing or refusing to take any action under this Agreement
unless it shall first have received such advice or concurrence of the
Required Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks against any and
all liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. Notwithstanding any other
provision of this Section 2.7, the Issuing Bank shall in all cases be
fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of the Required Banks, and such
request and any action taken or failure to act pursuant thereto shall be
binding upon the Banks and any future holders of a participation in any
Letter of Credit.

     (j) The Borrower hereby agrees to indemnify and hold harmless each
Bank, the Issuing Bank and the Agent, and their respective directors,
officers, agents and employees, from and against any and all claims and
damages, losses, liabilities, costs or expenses which such Bank, the
Issuing Bank or the Agent may incur (or which may be claimed against such
Bank, the Issuing Bank or the Agent by any Person whatsoever) by reason
of or in connection with the issuance, execution and delivery or transfer
of or payment or failure to pay under any Letter of Credit or any actual
or proposed use of any Letter of Credit, including, without limitation,
any claims, damages, losses, liabilities, costs or expenses which the
Issuing Bank may incur by reason of or in connection with (i) the failure
of any other Bank to fulfill or comply with its obligations to the
Issuing Bank hereunder (but nothing herein contained shall affect any
rights the Borrower may have against any defaulting Bank) or (ii) by
reason of or on account of the Issuing Bank issuing any Letter of Credit
which specifies that the term “Beneficiary” included therein includes any
successor by operation of law of the named Beneficiary, but which Letter
of Credit does not require that any drawing by any such successor
Beneficiary be accompanied by a copy of a legal document, satisfactory to
the Issuing Bank, evidencing the appointment of such successor
Beneficiary; provided that the Borrower shall not be required to
indemnify any Bank, the Issuing Bank or the Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (x) the willful misconduct or gross negligence
of the Issuing Bank in determining whether a request presented under any
Letter of Credit issued by the Issuing Bank complied with the terms of
such Letter of Credit or (y) the Issuing Bank’s failure to pay under any
Letter of Credit after the presentation to it of a request strictly
complying with the terms and conditions of such Letter of Credit. Nothing
in this Section 2.7(j) is intended to limit the obligations of the
Borrower under any other provision of this Agreement.

19

 

     (k) Each Bank shall, ratably in accordance with its Percentage,
indemnify the Issuing Bank, its affiliates and its directors, officers,
agents and employees (to the extent not reimbursed by the Borrower)
against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees’ gross negligence or willful misconduct or
the Issuing Bank’s failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms and
conditions of the Letter of Credit) that such indemnitees may suffer or
incur in connection with this Section 2.7 or any action taken or omitted
by such indemnitees hereunder.

Section 2.8 Facility and Utilization Fees.

     (a) The Borrower shall pay to the Agent, for the benefit of the
Banks, a facility fee at an annual rate equal to the then-applicable
Facility Fee Rate applied to the aggregate amount of the Commitments
outstanding or, if after the Loan Conversion Date, the outstanding
principal amount of Advances hereunder from the date of this Agreement
through the Commitment Termination Date or, if later, the Term Loan
Maturity Date.

     (b) The Borrower shall pay to the Agent, for the benefit of the
Banks, a utilization fee at an annual rate equal to the then-applicable
Utilization Fee Rate applied to the average daily Outstandings. The
Utilization Fee Rate in effect on any day shall be an annual rate
determined on the basis of the Outstandings Percentage and Level Status
on that day, in accordance with the following table:

	 	 	 	 	 	 	 	 	 
	Outstandings 	 	 	 	 
	Percentage/ Level	 	 	 	 
	Status
	 	33-1/3% or less
	 	More than 33-1/3%

	Level I
	 	 	0	%	 	 	0.125	%
	Level II
	 	 	0	%	 	 	0.125	%
	Level III
	 	 	0	%	 	 	0.125	%
	Level IV
	 	 	0	%	 	 	0.250	%
	Level V
	 	 	0	%	 	 	0.250	%

Notwithstanding the foregoing, the applicable Utilization Fee Rate set
forth in the rightmost column above will be the Utilization Fee Rate
applicable to the Term Loan from and after the Loan Conversion Date, if
any, regardless of the Outstandings Percentage.

     (c) The facility fee and utilization fee set forth in this Section
shall be due and payable quarterly in arrears on the last day of each
March, June, September and December until the Commitment Termination Date
or, if later, the Term Loan Maturity

20

 

Date. Any facility and utilization fees remaining unpaid on the
Commitment Termination Date or, if later, the Term Loan Maturity Date,
shall be due and payable on that date.

Section 2.9 Other Fees.

The Borrower shall pay to the Agent (i) for the benefit of the Banks, the
upfront fee set forth in the Fee Letters (without duplication), and (ii) for
the Agent’s own account and not for the benefit of the Banks, certain
additional fees in the amounts set forth in the Fee Letters.

Section 2.10 Termination or Reduction of the Commitment.

The Borrower shall have the right at any time and from time to time upon three
Business Days’ prior notice to the Agent (which shall promptly notify the
Banks) permanently to terminate the Commitments in whole or permanently to
reduce the Commitment Amounts in part, without penalty or premium, provided
that (i) the Commitments may not be terminated while any Advance or L/C Amount
remains outstanding, (ii) each partial reduction shall be in the aggregate
amount of $5,000,000 or a multiple thereof, (iii) any partial reduction of the
Commitment Amounts shall be pro rata as to each Bank in accordance with that
Bank’s Percentage, and (iv) no reduction shall reduce the Commitment Amounts to
an amount less than the sum of the aggregate Advances and the L/C Amount
outstanding (after giving effect to any prepayments of Advances to be made on
or prior to the effective date of such reduction) at the time.

Section 2.11 Voluntary Prepayments.

The Borrower may prepay the Advances in whole or in part, without penalty or
premium, at any time and from time to time; provided that (i) any prepayment by
the Borrower hereunder shall be applied pro rata to the prepayment of each
Bank’s Advances, (ii) any prepayment of the Advances shall include accrued
interest on the portion of the principal balance prepaid, (iii) any prepayment
of any portion of the principal balance of any Advances which, at the time of
such prepayment, bears interest at a Eurodollar Rate shall be accompanied by
compensation as specified in Section 2.16(b), and (iv) each prepayment of the
Advances (other than prepayment of the Advances in full) shall be in the
principal amount of $1,000,000 or higher integral multiples of $1,000,000,
provided that any prepayment of any portion of the Advances bearing interest at
a Eurodollar Rate shall be made in a principal amount of $5,000,000 or higher
integral multiple of $1,000,000. Each partial prepayment of principal on the
Advances shall be applied, first, to that portion of such Advances bearing
interest at the Floating Rate, and, second, to that portion of such Advances
bearing interest at a Eurodollar Rate; provided that, so long as no Default or
Event of Default has occurred and is continuing, the Borrower may direct such
prepayment to be applied in an alternative order.

Section 2.12 Computation of Interest and Fees.

All interest on Floating Rate Fundings accruing based on the Prime Rate will be
calculated based on the actual days elapsed in a year of 365 or 366 days, as
the case may be. All other interest and all fees hereunder shall be computed on
the basis of actual number of days elapsed in a year of 360 days.

21

 

Section 2.13 Payments.

All payments of principal of and interest on the Advances, of L/C Amounts and
of fees hereunder shall be made to the Agent in immediately available funds,
without setoff or counterclaim. Payments received after noon on any day shall
be deemed received on the next succeeding Business Day. The Borrower agrees
that the amount shown on the books and records of each Bank as being the
principal balance of that Bank’s Obligations, if any, shall be prima facie
evidence of such principal balance. The Borrower hereby authorizes the Agent
to charge against the Borrower’s account with the Agent an amount equal to the
accrued interest and fees from time to time due and payable to the Agent and
the Banks under this Agreement, or (at the Banks’ option) to effect a Borrowing
in such amount, all without receipt of any request for such charge or
Borrowing.

Section 2.14 Payment on Nonbusiness Days.

Whenever any payment to be made under this Agreement shall be stated to be due
on a day other than a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in each case be
included in the computation of payment of interest on such Obligations or the
fees hereunder, as the case may be.

Section 2.15 Use of Advances and Letters of Credit.

The proceeds of each Borrowing, and each Letter of Credit, shall be used by the
Borrower for its general corporate purposes (including commercial paper
backup). Notwithstanding the foregoing, in no event shall the proceeds of any
Borrowing or any Letter of Credit be used by the Borrower to finance the
acquisition of 5% or more of any class of the capital stock of any corporation
unless, prior to making such acquisition, the Borrower has obtained written
approval for such acquisition from the board of directors of such corporation.
The limitation set forth in the preceding sentence is in addition to, and not
in lieu of, the restriction set forth in Section 4.9.

Section 2.16 Increased Costs or Reduction of Yield.

In addition to any interest payable on Advances made hereunder and any fees or
other amounts payable hereunder, the Borrower agrees:

     (a) If at any time after the date hereof any adoption of or change
in any applicable law, rule or regulation or the interpretation or
administration thereof by any governmental authority (including, without
limitation, Regulation D of the Federal Reserve Board):

	 	(i)	 	shall subject any Bank to any tax, duty or other
charges with respect to this Agreement, or shall materially
change the basis of taxation of payments to any Bank of the
principal of or interest on any portion of the principal
balance of that Bank’s Advances bearing interest at a
Eurodollar Rate (except for the imposition of or changes in
the rate of Excluded Taxes); or

22

 

	 	(ii)	 	shall impose or deem applicable or increase any
reserve, special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by
any Bank (other than reserves and assessments described in the
definition of “Reserve Requirement” and taken into account in
determining the applicable Eurodollar Rate) because of any
portion of the principal balance of that Bank’s Advances
bearing interest at a Eurodollar Rate and the result of any of
the foregoing would be to increase the cost to that Bank of
making or maintaining any such portion or to reduce any sum
received or receivable by that Bank with respect to such
portion;

then, within 30 days after demand by any Bank the Borrower shall pay that
Bank such additional amount or amounts as will compensate that Bank for
such increased cost or reduction. A Bank shall not make demand hereunder
unless that Bank is generally imposing such increased costs on its
similarly situated customers. No Bank may demand such compensation more
than 90 days following the end of the Interest Period with respect to
which such demand is made; provided, however, that the foregoing shall in
no way limit the right of any Bank to demand compensation to the extent
that such compensation relates to the retroactive application of any law,
rule or regulation if such demand is made within 90 days after the
adoption of or change in such law, rule or regulation. A certificate in
reasonable detail of that Bank setting forth the basis for the
determination of such additional amount or amounts shall be promptly
submitted by that Bank to the Borrower and shall, in the absence of
manifest error, be conclusive and binding as to such amount or amounts.

     (b) The Borrower shall also compensate any Bank, upon written
request by that Bank (which request shall set forth the basis for
requesting such amounts), for all losses and expenses in respect of any
interest or other consideration paid by that Bank to lenders of funds
borrowed by it or deposited with it to maintain any portion of the
principal balance of the Advances at a Eurodollar Rate which that Bank
may sustain to the extent not otherwise compensated for hereunder and not
mitigated by the reemployment of such funds if any prepayment of any such
portion occurs on a date that is not the expiration date of the relevant
Interest Period or if a Borrowing or prepayment in whole or in part of an
Advance bearing interest at a Eurodollar Rate fails to occur. A
certificate as to any such loss or expense (including calculations, in
reasonable detail, showing how that Bank computed such loss or expense)
shall be promptly submitted by that Bank to the Borrower and shall, in
the absence of manifest error, be conclusive and binding as to the amount
thereof. Such loss or expense may be computed as though that Bank
acquired deposits in the London interbank market to fund that portion of
the principal balance whether or not that Bank actually did so.

Section 2.17 Taxes.

     (a) All payments made by the Borrower to the Agent or any Bank
(herein any “Payee”) under or in connection with this Agreement or the
Notes shall be made without any setoff or other counterclaim, and free
and clear of and without deduction for or on account of any present or
future taxes now or hereafter imposed by any governmental or

23

 

other authority, except to the extent that such deduction or
withholding is compelled by law. As used herein, the term “Taxes” shall
include all income, excise and other taxes of whatever nature (other than
taxes based on or measured by the net income of the Payee (or franchise
taxes in lieu thereof) and imposed by the government or other authority
of the country, state or political subdivision in which such Payee is
incorporated or in which its principal executive office or the office
through which the Payee is acting is located (“Excluded Taxes”)) as well
as all levies, imposts, duties, charges, or fees of whatever nature. If
the Borrower is compelled by law to make any such deductions or
withholdings it will:

	 	(i)	 	pay to the relevant authorities the full amount
required to be so withheld or deducted;
	 
	 	(ii)	 	except to the extent that such deduction or
withholding results from a breach by any Payee of the
representations and covenants contained in Section 2.17(b) or
the relevant Assignment Agreement, pay such additional amounts
(including, without limitation, any penalties, interest or
expenses) as may be necessary in order that the net amount
received by each Payee after such deductions or withholdings
(including any required deduction or withholding on such
additional amounts) shall equal the amount such Payee would
have received had no such deductions or withholdings been
made; and
	 
	 	(iii)	 	promptly forward to the Agent (for delivery to
such Payee) an official receipt or other documentation
reasonably satisfactory to the Agent evidencing such payment
to such authorities.

     (b) If any Taxes otherwise payable by the Borrower pursuant to
Section 2.17(a) are directly asserted against any Payee, such Payee may
pay such Taxes and the Borrower promptly shall reimburse such Payee to
the full extent otherwise required by such paragraph. The obligations of
the Borrower under this Section 2.17 shall survive any termination of
this Agreement. Each Bank by its execution of this Agreement represents
(and each additional Bank by its execution of any Assignment Agreement
pursuant to Section 9.1 shall be deemed to represent) to each other Bank,
the Agent and the Borrower that if such Bank is organized under the laws
of any jurisdiction other than the United States or any state thereof,
such Bank has furnished to the Agent and the Borrower either U.S.
Internal Revenue Service Form W-8BEN, or U.S. Internal Revenue Service
Form W-8ECI, as applicable (wherein such Bank claims entitlement to
complete exemption from U.S. Federal withholding tax on all interest
payments hereunder).

     (c) The amount that the Borrower shall be required to pay to any
Bank pursuant to Section 2.17(a) or 2.17(b) shall be reduced by the
amount of any offsetting tax benefit which such Bank receives as a result
of the Borrower’s payment to the relevant authorities as reasonably
determined by such Bank; provided, however, that (i) such Bank shall be
the sole judge of the amount of such tax benefit and the date on which it
is received, (ii) no Bank shall be obliged to disclose information
regarding its tax affairs or tax computations, (iii) nothing herein shall
interfere with a Bank’s right to

24

 

manage its tax affairs in whatever manner it sees fit, and (iv) if
such Bank shall subsequently determine that it has lost the benefit of
all or a portion of such tax benefit, the Borrower shall promptly remit
to such Bank the amount certified by such Bank to be the amount necessary
to restore such Bank to the position it would have been in if no payment
had been made pursuant to this Section 2.17(c).

     (d) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political
subdivision thereof asserts a claim that the Agent or the Borrower did
not properly withhold tax from amounts paid to or for the account of any
Bank (because the appropriate form was not delivered or properly
completed, because such Bank failed to notify the Agent or the Borrower
of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Bank shall
indemnify the Agent or the Borrower, as applicable, fully for all amounts
paid, directly or indirectly, by the Agent or the Borrower, as
applicable, as tax, withholding therefor, or otherwise, including
penalties and interest, and including taxes imposed by any jurisdiction
on amounts payable to the Agent or the Borrower, as applicable, under
this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent or
the Borrower, as applicable, which attorneys may be employees of the
Agent or the Borrower, as applicable). The obligations of the Bank under
this Section 2.17(d) shall survive the payment of the Obligations and
termination of this Agreement.

Section 2.18 Capital Adequacy.

If any Bank determines at any time that its Return has been reduced as a result
of any Capital Adequacy Rule Change, that Bank may require the Borrower to pay
it the amount necessary to restore its Return to what it would have been had
there been no Capital Adequacy Rule Change. For purposes of this Section:

     (a) “Return”, for any period, means the percentage determined by
dividing (i) the sum of interest and ongoing fees earned by a Bank under
this Agreement during such period, by (ii) the average capital that Bank
or its holding company is required to maintain during such period as a
result of its being a party to this Agreement, as determined by that Bank
based upon its total capital requirements and a reasonable attribution
formula that takes account of the Capital Adequacy Rules then in effect.
Return may be calculated for each calendar quarter and for the shorter
period between the end of a calendar quarter and the date of termination
in whole of this Agreement.

     (b) “Capital Adequacy Rule” means any law, rule, regulation or
guideline regarding capital adequacy that applies to any Bank, or the
interpretation thereof by any governmental or regulatory authority.
Capital Adequacy Rules include rules requiring financial institutions to
maintain total capital in amounts based upon percentages of outstanding
loans, binding loan commitments and letters of credit.

     (c) “Capital Adequacy Rule Change” means any change in any Capital
Adequacy Rule occurring after the date of this Agreement, but the term
does not include any changes in applicable requirements that at the date
hereof are scheduled to take place

25

 

under the existing Capital Adequacy Rules or any increases in the
capital that any Bank is required to maintain to the extent that the
increases are required due to a regulatory authority’s assessment of the
financial condition of that Bank.

     (d) “Bank” includes (but is not limited to) the Banks, as defined
elsewhere in this Agreement; any participant in the loans made hereunder
(to the extent provided in Section 9.2 only); and any bank holding
company with respect to any of the foregoing.

The initial notice sent by a Bank shall be sent as promptly as practicable
after that Bank learns that its Return has been reduced, shall include a demand
for payment of the amount necessary to restore that Bank’s Return for the
quarter in which the notice is sent and, if applicable, the preceding quarter,
and shall state in reasonable detail the cause for the reduction in its Return
and its calculation of the amount of such reduction. Thereafter, that Bank may
send a new notice with respect to each calendar quarter setting forth the
calculation of the reduced Return for that quarter and including a demand for
payment of the amount necessary to restore its Return for that quarter. In
such event, the Borrower shall pay the Bank such amount within 30 days after
demand by such Bank. A Bank’s calculation in any such notice shall be
conclusive and binding absent demonstrable error. A Bank shall not make demand
hereunder unless that Bank is generally imposing such increased costs on its
similarly situated customers. No Bank may demand any compensation hereunder
more than 45 days following the end of the quarter for which compensation is
sought.

Section 2.19 Mandatory Assignment of Bank’s Interest.

If any Bank delivers to the Borrower a demand for compensation pursuant to
Section 2.16(a) or a demand for payment pursuant to Section 2.17 or 2.18 or if
at any time the long-term unenhanced credit rating of any Bank falls below Baa2
from Moody’s or below BBB from S&P or if such Bank is no longer rated by S&P or
Moody’s, the Borrower may (so long as no Default or Event of Default has
occurred and is continuing) at its expense require such Bank to assign, in
whole and in accordance with Section 9.1 (including the execution of an
Assignment Agreement and all other applicable documents, and the payment of any
fees required under Section 9.1), all of its rights and obligations hereunder
and under such Bank’s Note, including but not limited to such Bank’s
Commitment, to an Eligible Bank identified by the Borrower and willing to
become a Bank hereunder. Such Bank may be an existing Bank hereunder.
Notwithstanding the foregoing, the Borrower may not compel the resignation of
any Bank as the Agent except as provided in Section 8.12.

ARTICLE III

CONDITIONS PRECEDENT

Section 3.1 Initial Conditions Precedent.

The obligation of the Banks to make any Advance or issue any Letter of Credit
is subject to the condition precedent that the Agent shall have received on or
before the day of the first Advance or Letter of Credit (and, in any event, not
later than May 14, 2004) all of the following, in form and substance
satisfactory to each Bank:

26

 

     (a) This Agreement, duly executed by the Borrower, the Agent and
each of the Banks.

     (b) The Notes, dated the date hereof, properly executed on behalf of
the Borrower.

     (c) The Fee Letters, properly executed on behalf of the Borrower.

     (d) A certificate of the secretary or an assistant secretary of the
Borrower (i) certifying that the execution, delivery and performance of
the Loan Documents and other documents contemplated hereunder have been
duly approved by all necessary action of the Board of Directors of the
Borrower, and attaching true and correct copies of the applicable
resolutions granting such approval, (ii) certifying that attached to such
certificate are true and correct copies of the Organizational Documents
of the Borrower, together with such copies, and (iii) certifying the
names of the officers of the Borrower that are authorized to sign the
Loan Documents and other documents contemplated hereunder, together with
the true signatures of such officers; all of the foregoing being
accompanied by any other information required by Section 326 of the USA
PATRIOT ACT or necessary for the Agent or any Bank to verify the identity
of the Borrower as required by Section 326 of the USA PATRIOT Act which
is requested in writing by the Agent or such Bank prior to the date of
this Agreement.

     (e) A certificate of good standing of the Borrower, dated not more
than twenty days before such date.

     (f) Copies of order(s) of the Public Utilities Commission of the
State of Colorado approving the execution, delivery and performance by
the Borrower of this Agreement and the other Loan Documents to which it
is a party and the transactions contemplated hereby and thereby.

     (g) Signed copies of opinions of counsel for the Borrower, addressed
to the Banks in substantially the forms of Exhibit D hereto.

     (h) All fees required to be paid as of the date hereof under this
Agreement or any Fee Letter.

     (i) Evidence that concurrently with the effectiveness of this
Agreement, all amounts (other than (i) reimbursement obligations with
respect to the Transitional Letters of Credit and (ii) any other amounts
waived by the requisite lenders under the Prior Credit Agreement) payable
under the Prior Credit Agreement will be paid and the commitments
thereunder will be terminated.

     (j) Such other documents as the Agent or the Required Banks may deem
necessary or advisable in connection with the credit facility evidenced
hereby and which are requested in a writing delivered to the Borrower
prior to the date of this Agreement.

27

 

Section 3.2 Conditions Precedent to All Advances and Letters of Credit.

The obligation of the Banks to make any Advance (including the initial Advance)
or to issue any Letter of Credit shall be subject to the further conditions
precedent that on the date of such Advance or Letter of Credit:

     (a) The representations and warranties contained in Article IV are
correct in all material respects on and as of the date of making such
Advance or issuance of such Letter of Credit as though made on and as of
such date, except to the extent that such representations and warranties
relate solely to an earlier date.

     (b) The Borrower has delivered to the Agent a certificate in the
form of Exhibit F hereto, duly executed by the chief financial officer,
treasurer, secretary, assistant secretary, general counsel or deputy
general counsel of the Borrower, specifically confirming the Borrower’s
legal authority to obtain such Advance or Letter of Credit.

     (c) No event has occurred and is continuing, or would result from
such Advance or Letter of Credit, which constitutes a Default or an Event
of Default.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Banks as follows:

Section 4.1 Corporate Existence and Power.

The Borrower and its Subsidiaries are each corporations duly incorporated,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation, and are each duly licensed or qualified to
transact business in all jurisdictions where the character of the property
owned or leased or the nature of the business transacted by them makes such
licensing or qualification necessary, except where the failure to be so
licensed or qualified (i) will not permanently preclude the Borrower or any
Subsidiary from maintaining any material action in any such jurisdiction even
though such action arose in whole or in part during the period of such failure,
and (ii) will not result in any other Material Adverse Change. The Borrower
has all requisite corporate power and authority to conduct its business, to own
its properties and to execute, deliver, and perform all of its obligations
under the Loan Documents.

Section 4.2 Authorization of Borrowing; No Conflict as to Law or Agreements.

     (a) The execution, delivery and performance by the Borrower of the
Loan Documents, the borrowings from time to time hereunder and the
consummation of the transactions herein and therein contemplated, have
been duly authorized by all necessary corporate action and do not and
will not (i) require any consent or approval of the stockholders of the
Borrower, or any authorization, consent, approval, order, filing,
registration or qualification by or with any governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, other than those consents described in Schedule 4.2, each of
which has been obtained and is in full force and effect,

28

 

(ii) violate any provision of any law, rule or regulation
(including, without limitation, Regulation X of the Board of Governors of
the Federal Reserve System and Section 7 of the Exchange Act or any
regulation promulgated thereunder) or of any order, writ, injunction or
decree presently in effect having applicability to the Borrower or of the
Organizational Documents of the Borrower, (iii) result in a breach of or
constitute a default under any indenture or loan or credit agreement or
any other material agreement, lease or instrument to which the Borrower
or any Subsidiary is a party or by which it or its properties may be
bound or affected, or (iv) result in, or require, the creation or
imposition of any Lien or other charge or encumbrance of any nature
(other than the Liens created under this Agreement) upon or with respect
to any of the properties now owned or hereafter acquired by the Borrower
or any Subsidiary, except in the case of clause (ii) or (iii) above any
such breach, violation or default which would not, individually or in the
aggregate, result in a Material Adverse Change.

     (b) The Public Utilities Commission of the State of Colorado has
issued its Authorizing Orders authorizing the incurrence by the Borrower
of the Borrowings under this Agreement.

Section 4.3 Legal Agreements.

This Agreement and the other Loan Documents constitute the legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms, except to the extent that such
enforcement may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally or by general equitable
principles.

Section 4.4 Subsidiaries.

Schedule 4.4 hereto is a complete and correct list of all Subsidiaries as of
the date of this Agreement and of the percentage of the ownership of the
Borrower or any other Subsidiary in each as of the date of this Agreement. The
Borrower has no Restricted Subsidiaries as of the date hereof except as
designated on Schedule 4.4. Except as otherwise indicated in that Schedule, all
shares of each Subsidiary owned by the Borrower or by any such other Subsidiary
are validly issued and fully paid and nonassessable.

Section 4.5 Financial Condition; Other Information.

The Borrower has heretofore furnished to the Banks the audited consolidated
financial statements of the Borrower and its Subsidiaries for the year ended
and as of December 31, 2003 and the unaudited consolidated financial statements
of the Borrower and its Subsidiaries for the quarter ended and as of March 31,
2004. Those financial statements fairly present in all material respects the
financial condition of the Borrower on the dates thereof and the results of its
operations and cash flows for the periods then ended, and were prepared in
accordance with GAAP as then in effect. The information, exhibits and reports
furnished by the Borrower to the Agent and the Banks, taken as a whole, in
connection with the negotiation of or compliance with the Loan Documents do not
contain any untrue statement of a material fact or omit to state a

29

 

material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.

Section 4.6 Material Adverse Change.

Except as described in Schedule 4.6, there has been no Material Adverse Change
since December 31, 2003.

Section 4.7 Litigation.

Except as set forth in Schedule 4.7, there are no actions, suits or proceedings
pending or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any Subsidiary or the properties of the Borrower or any
Subsidiary before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which could reasonably
be expected to effect a Material Adverse Change. Other than any liability
incident to any litigation, arbitration or proceeding which could not
reasonably be expected to cause a Material Adverse Change, the Borrower has no
material contingent obligations related to litigation, arbitration or other
proceedings not disclosed in the Borrower’s most recent Annual Report on Form
10-K or Quarterly Report on Form 10-Q, as applicable.

Section 4.8 Hazardous Substances.

Except as set forth in Schedule 4.8, to the best of the Borrower’s knowledge
after reasonable inquiry, (i) neither the Borrower nor any Subsidiary or other
Person has ever caused or permitted any Hazardous Substance to be disposed of
on, under or at any real property which is operated by the Borrower or any
Subsidiary or in which the Borrower or any Subsidiary has any interest, except
to the extent that such disposal can not reasonably be expected to result in a
Material Adverse Change; and (ii) no such real property has ever been used
(either by the Borrower or by any Subsidiary or other Person) as a dump site or
permanent or temporary storage site for any Hazardous Substance in a manner
that could reasonably be expected to result in a Material Adverse Change.

Section 4.9 Regulation U.

Neither the Borrower nor any Subsidiary is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any Advance will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.

Section 4.10 Taxes.

The Borrower and its Subsidiaries have each filed all federal, state and local
tax returns which to the knowledge of the officers of the Borrower or any
Subsidiary are required to be filed, and the Borrower and its Subsidiaries have
each (i) withheld all taxes as shown on said returns to the extent such taxes
are required to be withheld and (ii) paid or caused to be paid to the
respective taxing authorities all taxes as shown on said returns or on any
assessment received by it to the extent such taxes have become due, in each
case, other than taxes (A) whose amount,

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applicability or validity is being contested in good faith by appropriate
proceedings and for which the Borrower or applicable Subsidiary has provided
adequate reserves in accordance with GAAP or (B) where failure to pay such tax,
assessment, charge or claim could not reasonably be expected to result in
aggregate liability in excess of $10,000,000.

Section 4.11 Burdensome Restrictions.

Neither the Borrower nor any Subsidiary is a party to or bound by any
agreement, or subject to any restriction in any Organizational Document, or any
requirement of law, which would reasonably be expected to effect a Material
Adverse Change.

Section 4.12 Titles and Liens.

The Borrower or one of its Subsidiaries has good title to each of the
properties and assets material to the operations of the Borrower and its
Subsidiaries, taken as a whole, which it purports to own or which are reflected
as owned on its books and records, in each case free and clear of all Liens and
encumbrances, except for Liens and encumbrances permitted by Section 6.1 and
covenants, restrictions, rights, easements and minor irregularities in title
which do not materially interfere with the business or operations of the
Borrower and its Subsidiaries taken as a whole.

Section 4.13 ERISA.

No Plan will have an accumulated funding deficiency (as such term is defined in
Section 302 of ERISA) in excess of $50,000,000 as of the last day of the most
recent fiscal year of such Plan ended prior to the date hereof, and no
liability to the Pension Benefit Guaranty Corporation or the Internal Revenue
Service in excess of such amount has been, or is expected by the Borrower or
any Subsidiary or ERISA Affiliate to be, incurred with respect to any Plan that
could become a liability of the Borrower or any Subsidiary.

Section 4.14 Intentionally Omitted.

Section 4.15 Investment Company Act.

The Borrower is not an “investment company,” as such term is defined in the
Investment Company Act.

Section 4.16 Public Utility Holding Company Act.

The Borrower is subject to the Public Utility Holding Company Act of 1935, as
amended (“PUHCA”), as a “subsidiary” of a registered “holding company” within
the meaning of PUHCA. However, the transactions contemplated by this Agreement
are exempt from any requirement for SEC approval under PUHCA.

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Section 4.17 Intentionally Omitted.

Section 4.18 Intentionally Omitted.

Section 4.19 Solvency.

The Borrower is and, upon the making of any Advance and the issuance of any
Letter of Credit will be, Solvent.

Section 4.20 Swap Obligations.

Neither the Borrower nor any of its Subsidiaries has incurred any outstanding
obligations under any Swap Contracts, other than Permitted Swap Obligations.

Section 4.21 Insurance.

The properties of the Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of the
Borrower, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower and such Subsidiaries
operate.

Section 4.22 Compliance With Laws.

Except as disclosed in Schedule 4.22, the Borrower and its Subsidiaries have
complied in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof having jurisdiction over the conduct of
their respective businesses or the ownership of their respective properties,
assets and rights.

ARTICLE V

AFFIRMATIVE COVENANTS OF THE BORROWER

So long as any Note shall remain unpaid or any Commitment or L/C Amount shall
be outstanding, the Borrower will comply with the following requirements,
unless the Required Banks shall otherwise consent in writing:

Section 5.1 Financial Statements; Other Notices.

The Borrower will deliver to the Agent and each Bank:

     (a) As soon as available, and in any event within 100 days after the
end of each fiscal year of the Borrower, a copy of the annual audit
report of the Borrower and its Subsidiaries prepared by nationally
recognized independent certified public accountants, which annual report
shall include the balance sheet of the Borrower and its Subsidiaries as
at the end of such fiscal year and the related statements of income,
shareholders’ equity and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended,

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all presented on a consolidated basis in reasonable detail and all
prepared in accordance with GAAP.

     (b) As soon as available and in any event within 55 days after the
end of each of the first three quarters of each fiscal year of the
Borrower, a balance sheet of the Borrower and its Subsidiaries as at the
end of such quarter and related statements of earnings and cash flows of
the Borrower and its Subsidiaries for such quarter and for the year to
date, in reasonable detail and prepared on a consolidated basis in
accordance with GAAP, subject to year-end adjustments.

     (c) Concurrent with the delivery of any financial statements under
paragraph (a) or (b), a Compliance Certificate, duly executed by the
president, chief financial officer, treasurer or assistant treasurer of
the Borrower.

     (d) Promptly following the issuance of any Authorizing Order, a
favorable opinion of counsel to the Borrower, in form and substance
reasonably acceptable to the Agent, addressed to the Agent and the Banks,
advising the Agent and the Banks of such issuance, stating the
restrictions, if any, that such Authorizing Order imposes on the
Borrower’s ability to obtain Borrowings or Letters of Credit hereunder,
and attaching a copy of such Authorizing Order.

     (e) Immediately after the commencement thereof, notice in writing of
all litigation and of all proceedings before any governmental or
regulatory agency affecting the Borrower or any Restricted Subsidiary of
the type described in Section 4.7 or which seek a monetary recovery
against the Borrower or any Restricted Subsidiary combined in excess of
$50,000,000.

     (f) As promptly as practicable (but in any event not later than five
Business Days) after an officer of the Borrower obtains knowledge of the
occurrence of any Default or Event of Default, notice of such occurrence,
together with a detailed statement by a responsible officer of the
Borrower of the steps being taken by the Borrower to cure the effect of
such event.

     (g) Promptly upon becoming aware of any Reportable Event or the
occurrence of any prohibited transaction (as defined in Section 4975 of
the Internal Revenue Code or Section 406 of ERISA) in connection with any
Plan or any trust created thereunder which could reasonably be expected
to result in a liability to the Borrower or any Subsidiary in excess of
$50,000,000, a written notice specifying the nature thereof, what action
the Borrower has taken, is taking or proposes to take with respect
thereto, and, when known, any action taken or threatened by the Internal
Revenue Service, the Pension Benefit Guaranty Corporation or the
Department of Labor with respect thereto.

     (h) Promptly upon their receipt, copies of (a) all notices received
by the Borrower, any Restricted Subsidiary or ERISA Affiliate of the
Pension Benefit Guaranty Corporation’s intent to terminate any Plan or to
have a trustee appointed to administer any Plan, and (b) all notices
received by the Borrower, any Restricted Subsidiary or any ERISA
Affiliate from a Multiemployer Plan concerning the imposition or amount
of

33

 

withdrawal liability imposed pursuant to Section 4202 of ERISA,
which withdrawal liability individually or in the aggregate exceeds
$50,000,000.

     (i) All notices required to be delivered under Section 10.13.

     (j) Promptly after it obtains knowledge of any such change, notice
(by telephone, followed by written notice transmitted promptly thereafter
in accordance with Section 10.4) of any change in the rating by S&P or
Moody’s of the Reference Indebtedness, together with the details thereof,
and of any announcement by S&P or Moody’s that its rating is “under
review” or that any such rating has been placed on a “CreditWatch List”®
or “watch list” or that any similar action has been taken by such rating
agency.

     (k) Such other information respecting the financial condition and
results of operations of the Borrower or any Subsidiary as any Bank may
from time to time reasonably request.

Section 5.2 Books and Records; Inspection and Examination.

The Borrower shall keep and maintain, and shall cause each of its Subsidiaries
to keep and maintain, in all material respects, proper books of record and
account in which entries in conformity with GAAP shall be made of all dealings
and transactions in relation to their respective businesses and activities.
Upon request of any Applicable Party, as defined below, the Borrower will, and
will cause each Subsidiary to, give any representative of such Applicable Party
access to, and permit such representative to examine, copy or make extracts
from, any and all books, records and documents in its possession (except to the
extent that such access is restricted by law or by a bona fide non-disclosure
agreement not entered into primarily for the purpose of evading the
requirements of this Section), to inspect any of its properties (subject to
such physical security requirements as the Borrower or the applicable
Subsidiary may require) and to discuss its affairs, finances and accounts with
any of its principal officers, all at such times during normal business hours,
upon reasonable notice, and as often as such Applicable Party may reasonably
request. As used in this Section 5.2, “Applicable Party” means (i) so long as
any Event of Default has occurred and is continuing, the Agent or any Bank, and
(ii) at all other times, the Agent. The provisions of this Section 5.2 shall in
no way preclude any Bank from discussing the general affairs, finances and
accounts of the Borrower with any of its principal officers at such times
during normal business hours and as often as may be agreed to between the
Borrower and such Bank.

Section 5.3 Compliance with Laws.

The Borrower will, and will cause each Subsidiary to, comply with the
requirements of applicable laws and regulations, the noncompliance with which
would effect a Material Adverse Change.

Section 5.4 Payment of Taxes and Other Claims.

The Borrower will, and will cause each Subsidiary to, pay or discharge, when
due, (a) all taxes, assessments and governmental charges levied or imposed upon
it or upon its income or profits,

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or upon any properties belonging to it, prior to the date on which penalties
attach thereto, (b) all federal, state and local taxes required to be withheld
by it, and (c) all lawful claims for labor, materials and supplies which, if
unpaid, might by law become a lien or charge upon any properties of the
Borrower or any Subsidiary; provided, that neither the Borrower nor any
Subsidiary shall be required to pay any such tax, assessment, charge or claim
(i) whose amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary has
provided adequate reserves in accordance with GAAP or (ii) where failure to pay
such tax, assessment, charge or claim could not reasonably be expected to
result in a liability in excess of $10,000,000.

Section 5.5 Maintenance of Properties.

The Borrower will keep and maintain, and will cause each Subsidiary to keep and
maintain, all of its properties necessary or useful in its business in good
condition, repair and working order; provided, however, that nothing in this
Section shall prevent the Borrower or any Subsidiary from discontinuing the
operation and maintenance of, or disposing of, any of its properties if (i) (A)
such discontinuance or disposition is, in the reasonable judgment of the
Borrower or that Subsidiary, desirable in the conduct of its business, and (B)
no Default or Event of Default exists at the time of, or will be caused by,
such discontinuance or disposition, or (ii) such discontinuance or disposition
relates to obsolete or worn-out property.

Section 5.6 Insurance.

The Borrower will, and will cause each Restricted Subsidiary to, obtain and
maintain insurance with insurers reasonably believed by the Borrower or such
Restricted Subsidiary to be responsible and reputable, in such amounts and
against such risks as is usually carried by companies in similar circumstances
engaged in similar business and owning similar properties in the same general
areas in which the Borrower or that Restricted Subsidiary operates.

Section 5.7 Preservation of Corporate Existence.

The Borrower will, and will cause each Restricted Subsidiary to, preserve and
maintain its corporate existence and all of its rights, privileges and
franchises; provided, however, that neither the Borrower nor any Restricted
Subsidiary shall be required to preserve any of its rights, privileges and
franchises or to maintain its corporate existence if (i) its Board of Directors
shall reasonably determine that the preservation or maintenance thereof is no
longer desirable in the conduct of the business of the Borrower or that
Restricted Subsidiary, and (ii) no Default or Event of Default exists upon, or
will be caused by, the termination of such right, privilege, franchise or
existence; provided, further, that in no event shall the foregoing be construed
to permit the Borrower to terminate its corporate existence.

Section 5.8 Use of Proceeds.

The Borrower will, and will cause each Subsidiary to, use the proceeds of the
Advances and L/C Amounts for general corporate purposes (including, without
limitation, support of commercial paper) and to repay outstanding Advances and
L/C Amounts. The Borrower will not, nor will it permit any Subsidiary to, use
any of the proceeds of the Advances and L/C Amounts to purchase or carry any
“margin stock” (as defined in Regulation U) or to make any acquisition of any

35

 

corporation, partnership, limited liability company or other business entity
unless, prior to making such acquisition, the Borrower or such Subsidiary shall
have obtained written approval from the board of directors or other governing
body of such entity.

ARTICLE VI

NEGATIVE COVENANTS

So long as any Note shall remain unpaid or any Commitment or L/C Amount shall
be outstanding, the Borrower agrees that, without the prior written consent of
the Required Banks:

Section 6.1 Liens.

The Borrower will not create, incur, assume or suffer to exist any Lien on any
of its assets, now owned or hereafter acquired, and will not permit any
Subsidiary to create, incur, assume or suffer to exist any Lien on any of such
Subsidiary’s assets, now owned or hereafter acquired, relating to any
indebtedness of such Subsidiary with respect to which the Borrower has any
obligation for the payment of money; excluding, however, from the operation of
the foregoing:

     (a) Liens for taxes or assessments or other governmental charges to
the extent not required to be paid by Section 5.4.

     (b) Materialmen’s, merchants’, carriers’, worker’s, repairer’s, or
other like liens arising in the ordinary course of business to the extent
not required to be paid by Section 5.4.

     (c) Pledges or deposits to secure obligations under worker’s
compensation laws, unemployment insurance, social security and other
similar laws, or to secure the performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or leases or to secure
statutory obligations or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds in the ordinary course of business.

     (d) Zoning restrictions, easements, licenses, restrictions on the
use of real property or minor irregularities in title thereto, which do
not materially impair the use of such property in the operation of the
business of the Borrower and its Subsidiaries taken as a whole or the
value of such property for the purpose of such business.

     (e) Purchase money Liens upon or in property acquired after the date
hereof, provided that (i) such Lien is created not later than the 90th
day following the acquisition or completion of construction of such
property by the Borrower or its applicable Subsidiary, and (ii) no such
Lien extends or shall extend to or cover any property of the Borrower or
its Subsidiaries other than the property then being acquired, fixed
improvements then or thereafter erected thereon and improvements and
modifications thereto necessary to maintain such properties in working
order.

     (f) Liens granted by any Acquisition Target prior to the acquisition
by the Borrower or any Subsidiary of any interest in such Acquisition
Target or its assets, so long as (i) such Lien was granted by the
Acquisition Target prior to such acquisition and not in contemplation
thereof, and (ii) no such Lien extends to any assets of the Borrower

36

 

or any Subsidiary other than the assets of the Acquisition Target
and improvements and modifications thereto necessary to maintain such
properties in working order or, in the case of an asset transfer, the
assets so acquired by the Borrower or the applicable Subsidiary and
improvements and modifications thereto.

     (g) Liens (other than those described in subsection (e)) securing
any indebtedness for borrowed money in existence on the date hereof and
listed in Schedule 6.1 hereto.

     (h) Liens, if any, created under or in connection with this
Agreement or the Indentures.

     (i) Liens permitted under the Indentures as such Indentures exist on
the date hereof, without regard to any waiver, amendment, modification or
restatement thereof.

     (j) Liens securing any refinancing of indebtedness secured by the
Liens described in paragraphs (e), (f) and (g), so long as the amount of
such indebtedness secured by any such Lien does not exceed the amount of
such refinanced indebtedness immediately prior to the refinancing and
such Liens do not extend to assets other than those encumbered prior to
such refinancing and improvements and modifications thereto.

     (k) Liens granted by any Subsidiary of the Borrower in favor of the
Borrower or any wholly-owned Subsidiary of the Borrower.

     (l) Liens not otherwise described in this Section 6.1, so long as
the aggregate amount of indebtedness secured by all such Liens does not
at any time exceed 10% of the Tangible Net Worth of the Borrower and its
Subsidiaries.

Section 6.2 Sale of Assets.

The Borrower will not, and will not permit any Subsidiary to, sell, lease,
assign, transfer or otherwise dispose (each a “Disposition”) of all or in any
period of twelve consecutive months a Material Part of the Assets of the
Borrower and its Subsidiaries (whether in one transaction or in a series of
transactions) to any other Person other than (i) a Disposition in the ordinary
course of business, (ii) Dispositions of property no longer used or useful in
the business of the Borrower or any Subsidiary, (iii) Dispositions of assets
the net proceeds of which are invested or re-invested, or held in cash or
cash-equivalents for reinvestment, in other energy-related assets and (iv)
Dispositions by a Subsidiary of the Borrower to the Borrower or another
wholly-owned Subsidiary of the Borrower. Any such Dispositions pursuant to
clauses (i) – (iv) above shall not be included in determining if the Borrower
and/or its Subsidiaries disposed of a Material Part of its Assets.
Notwithstanding the foregoing, the transfer of operational control of the
transmission assets of the Borrower to a regional transmission organization,
independent system operator or independent transmission company approved by or
required by the Federal Energy Regulatory Commission (“FERC”), or successor
thereto, pursuant to FERC order, shall not be treated as a Disposition for
purposes of this Section 6.2.

37

 

Section 6.3 Consolidation and Merger.

The Borrower will not consolidate with or merge into any Person, or permit any
other Person to merge into it, or acquire (in a transaction analogous in
purpose or effect to a consolidation or merger) all or substantially all of the
assets of any other Person; provided, however, that the restrictions contained
in this Section shall not apply to or prevent the consolidation or merger of
any Person with, or a conveyance or transfer of its assets to, the Borrower so
long as (i) no Default or Event of Default exists at the time of, or will be
caused by, such consolidation, merger, conveyance or transfer, and (ii) the
Borrower shall be the continuing or surviving corporation.

Section 6.4 Hazardous Substances.

The Borrower will not, and will not permit any Subsidiary to, cause or permit
any Hazardous Substance to be disposed of in any manner, or on, under or at any
real property which is operated by the Borrower or any Subsidiary or in which
the Borrower or any Subsidiary has any interest, if such disposition could
reasonably be expected to result in a Material Adverse Change.

Section 6.5 Restrictions on Nature of Business.

The Borrower will not engage in any line of business materially different from
that presently engaged in by the Borrower.

Section 6.6 Transactions with Affiliates.

The Borrower will not (i) make any loan or capital contribution to, or any
other investment in, or make any other cash transfer to, any Affiliate of the
Borrower or (ii) enter into any transaction or series of transactions, whether
or not in the ordinary course of business, with any officer, director,
shareholder, Affiliate (other than a Subsidiary) of the Borrower; provided,
however, that the foregoing shall not prohibit any of the following:

     (a) Transactions made upon fair and reasonable terms no less
favorable to the Borrower than would obtain, taking into account all
facts and circumstances, in a comparable arm’s-length transaction with a
Person not an officer, director, shareholder or Affiliate of the
Borrower.

     (b) Dividends to the Parent.

     (c) Transactions with Affiliates which transactions are subject to
the jurisdiction of the Federal Energy Regulatory Commission (“FERC”),
the SEC or the Public Utilities Commission of the State of Colorado.

     (d) Allocation of taxes, tax benefits and tax credits in accordance
with the restrictions and requirements of PUHCA.

     (e) Contributions of capital to Subsidiaries, so long as such
transaction does not violate Section 6.2.

38

 

     (f) Any investment in a transmission company, or any operational
control agreement between a transmission company and the Borrower and/or
its Subsidiaries, necessary or appropriate in order to comply with the
requirements of FERC Order No. 2000 and implementing orders thereto.

Section 6.7 Ratio of Funded Debt to Total Capital.

The Borrower will not at any time permit its ratio of total Funded Debt to
Total Capital, determined on a consolidated basis with respect to the Borrower
and its Subsidiaries as at the end of each fiscal quarter of the Borrower, to
be greater than 0.60 to 1.

ARTICLE VII

EVENTS OF DEFAULT, RIGHTS AND REMEDIES

Section 7.1 Events of Default.

“Event of Default”, wherever used herein, means any one of the following
events:

     (a) Default in the payment of any principal of any Advance or L/C
Amount when it becomes due and payable.

     (b) Default in the payment of any interest on any Obligations or any
fees required under Section 2.8 or under Section 2.9 when the same become
due and payable and the continuance of such default for five Business
Days.

     (c) Default in the performance, or breach, of any covenant or
agreement on the part of the Borrower contained in Article VI hereof
(other than Section 6.4).

     (d) Default in the performance, or breach, of any covenant or
agreement of the Borrower in this Agreement or any other Loan Document
(including but not limited to Section 6.4, but excluding any other
covenant or agreement a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and the continuance
of such default or breach for a period of 30 days after the Agent, at the
request of any Bank, has given notice to the Borrower specifying such
default or breach and requiring it to be remedied.

     (e) Any representation or warranty made by the Borrower in this
Agreement or any other Loan Document or by the Borrower (or any of its
officers) in any certificate, instrument, or statement made or delivered
pursuant to or in connection with this Agreement, shall prove to have
been incorrect in any material respect when made.

     (f) Any Loan Document is determined by a court of competent
jurisdiction to be unenforceable in accordance with its terms, or the
Borrower or the Parent shall so assert.

     (g) A default in the payment when due (after giving effect to any
applicable grace period) of principal or interest with respect to any
indebtedness or any Swap Contract of the Borrower or any Subsidiary
(other than the Obligations) if the aggregate

39

 

amount of all such indebtedness as to which such payment defaults
exist is not less than $50,000,000.

     (h) A default (other than a default described in paragraph (g))
under (i) any bond, debenture, note or other evidence of indebtedness of
the Borrower or any Subsidiary (other than the Obligations) or under any
indenture or other instrument under which any such evidence of
indebtedness has been issued or by which it is governed and the
expiration of the applicable period of grace, if any, specified in such
evidence of indebtedness, indenture or other instrument if the effect of
such default is to cause or to permit the holder of such indebtedness (or
trustee or agent on behalf of such holder) to cause such indebtedness to
come due prior to its stated maturity or (ii) under any Swap Contract of
the Borrower or any Subsidiary if the effect of such default is to cause
or to permit the counterparty in respect of such Swap Contract to elect
an early termination date in respect of such Swap Contract; provided,
however, that no Event of Default shall be deemed to have occurred under
this paragraph if the aggregate amount owing as to all such indebtedness
and Swap Contracts as to which such defaults have occurred and are
continuing is less than $50,000,000; provided further that if such
default shall be cured by the Borrower or such Subsidiary, or waived by
the holders of such indebtedness or counterparties in respect of such
Swap Contracts, in each case prior to the commencement of any action
under Section 7.2 and as may be permitted by such evidence of
indebtedness, indenture, other instrument or Swap Contract, then the
Event of Default hereunder by reason of such default shall be deemed
likewise to have been thereupon cured or waived.

     (i) The Borrower or any Restricted Subsidiary shall be adjudicated
to be bankrupt or insolvent, or admit in writing its inability to pay its
debts as they mature, or make an assignment for the benefit of creditors;
or the Borrower or any Restricted Subsidiary shall apply for or consent
to the appointment of any receiver, trustee, or similar officer for it or
for all or any substantial part of its property; or such receiver,
trustee or similar officer shall be appointed without the application or
consent of the Borrower or such Restricted Subsidiary, and such
appointment shall continue undischarged for a period of 60 days; or the
Borrower or any Restricted Subsidiary shall institute (by petition,
application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution,
liquidation or similar proceeding relating to it under the laws of any
jurisdiction; or any such proceeding shall be instituted (by petition,
application or otherwise) against the Borrower or any Restricted
Subsidiary and shall continue undischarged for 60 days; or any judgment,
writ, warrant of attachment or execution or similar process shall be
issued or levied against a substantial part of the property of the
Borrower or any Restricted Subsidiary and such judgment, writ, or similar
process shall not be released, vacated, stayed or fully bonded within 60
days after its issue or levy.

     (j) A petition shall be filed by the Borrower or any Restricted
Subsidiary under the United States Bankruptcy Code naming the Borrower or
that Restricted Subsidiary as debtor; or an involuntary petition shall be
filed against the Borrower or any Restricted Subsidiary under the United
States Bankruptcy Code, and such petition shall not have been dismissed
within 60 days after such filing; or an order for relief shall be

40

 

entered in any case under the United States Bankruptcy Code naming
the Borrower or any Restricted Subsidiary as debtor.

     (k) The Parent shall cease to own 100% of all classes of capital
stock of the Borrower; or a Change of Control shall occur with respect to
the Parent.

     (l) The rendering against the Borrower or any Subsidiary of a final
judgment, decree or order for the payment of money if the amount of such
judgment, decree or order, together with the amount of all other such
judgments, decrees and orders then outstanding, less (in each case) the
portion thereof covered by insurance proceeds, is greater than
$50,000,000 and if such judgment, decree or order remains unsatisfied and
in effect for any period of 30 consecutive days without a stay of
execution.

     (m) Any Plan shall have been terminated as a result of which the
Borrower or any Subsidiary or ERISA Affiliate has incurred an unfunded
liability in excess of $50,000,000; or a trustee shall have been
appointed by an appropriate United States District Court to administer
any Plan, or the Pension Benefit Guaranty Corporation shall have
instituted proceedings to terminate any Plan or to appoint a trustee to
administer any Plan and in either case such action could reasonably be
expected to result in liability to the Borrower or any Subsidiary in
excess of $50,000,000; or withdrawal liability in excess of $50,000,000
shall have been asserted against the Borrower or any Subsidiary or ERISA
Affiliate by a Multiemployer Plan; or the Borrower or any Subsidiary or
ERISA Affiliate shall have incurred any joint and several liability to
the Pension Benefit Guaranty Corporation, the Internal Revenue Service or
the Department of Labor, or the Borrower or any Subsidiary shall have
incurred any other liability to the Pension Benefit Guaranty Corporation,
the Internal Revenue Service or the Department of Labor, in excess of
$50,000,000 with respect to any Plan; or any Reportable Event that the
Required Banks may determine in good faith could reasonably be expected
to constitute grounds for the termination of any Plan by the Pension
Benefit Guaranty Corporation, for the appointment by the appropriate
United States District Court of a trustee to administer any Plan or for
the imposition of withdrawal liability with respect to a Multiemployer
Plan, and which, in any such case, could reasonably be expected to result
in liability to the Borrower or any Subsidiary or any ERISA Affiliate in
excess of $50,000,000, shall have occurred and be continuing 30 days
after written notice to such effect shall have been given to the Borrower
by the Banks.

     (n) Any Authorizing Order or other governmental license or other
permission necessary for the maintenance of Obligations outstanding or
the conduct of the Borrower’s business substantially as presently
conducted shall be suspended or revoked or shall fail to be renewed upon
expiration.

     (o) Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
Material Part of the Assets of the Borrower and its Subsidiaries.

     (p) Failure of the Borrower to maintain on deposit in the Cash
Collateral Account on and after the Commitment Termination Date if
required by Section 2.7 (or

41

 

earlier, if required pursuant to Section 7.2(c)) an amount equal to
the aggregate face amount of all outstanding Letters of Credit.

Section 7.2 Rights and Remedies.

Upon the occurrence of an Event of Default or at any time thereafter until such
Event of Default is waived by the Required Banks or cured, the Agent may, with
the consent of the Required Banks, and shall, upon the request of the Required
Banks, exercise any or all of the following rights and remedies:

     (a) The Agent may, by notice to the Borrower, declare the
Commitments to be terminated, whereupon the same shall forthwith
terminate.

     (b) The Agent may, by notice to the Borrower, declare the entire
unpaid principal amount of the Notes then outstanding, all interest
accrued and unpaid thereon, and all other Obligations payable under this
Agreement to be forthwith due and payable, whereupon the Notes, all such
accrued interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by the Borrower.

     (c) If any Letter of Credit remains outstanding, the Agent may, by
notice to the Borrower, require the Borrower to deposit in the Cash
Collateral Account an amount in immediately available funds that,
together with any other amounts then in the Cash Collateral Account,
equals the aggregate face amount of all such outstanding Letters of
Credit.

     (d) The Banks may, without notice to the Borrower and without
further action, apply any and all money owing by any Bank to the Borrower
to the payment of the Obligations then outstanding, including accrued
interest. For purposes of this paragraph (d), “Bank” means the Banks, as
defined elsewhere in this Agreement, and any participant in the loans
made hereunder; provided, however, that each such participant, by
exercising its rights under this paragraph (d), agrees that it shall be
obligated under Section 8.17 with respect to such payment as if it were a
Bank for purposes of that Section.

     (e) The Agent may exercise and enforce all rights and remedies
available to it in respect of the Cash Collateral Account.

     (f) The Agent and the Banks may exercise any other rights and
remedies available to them by law or agreement.

Notwithstanding the foregoing, upon the occurrence of an Event of Default
described in Section 7.1(j) hereof (whether or not such Event of Default also
arises under Section 7.1(i) hereof), the Commitments shall terminate and the
entire unpaid principal amount of the Notes then outstanding, all interest
accrued and unpaid thereon, and all other amounts payable under this Agreement
shall be immediately due and payable without presentment, demand, protest or
notice of any kind.

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Section 7.3 Pledge of Cash Collateral Account.

The Borrower hereby pledges, and grants to the Agent, as agent for the Banks,
including the Issuing Bank, a security interest in, all sums held in the Cash
Collateral Account from time to time and all proceeds thereof as security for
the payment of all amounts due and to become due from the Borrower to the
Issuing Bank, the Agent and/or the Banks pursuant to this Agreement, including
but not limited to both principal of and interest on the Advances and all
renewals, extensions and modifications thereof and any notes issued in
substitution therefor, and specifically including the Borrower’s obligation to
reimburse the Issuing Bank for any amount drawn under any Letter of Credit,
whether such reimbursement obligation arises directly under this Agreement or
under a separate reimbursement agreement. Upon request of the Borrower, the
Agent shall permit the Borrower to withdraw from the Cash Collateral Account,
so long as no Default or Event of Default then exists, the lesser of (i) the
Excess Balance (as defined below), or (ii) the balance of the Cash Collateral
Account. If a Default or Event of Default then exists, the Agent shall, upon
the request of the Borrower apply the Excess Balance to the payment of the
Obligations; provided further that if there are no Obligations (other than
Obligations in respect of outstanding Letters of Credit), the Agent shall, upon
request of the Borrower, release to the Borrower an amount by which the balance
in the Cash Collateral Account exceeds 110% of the L/C Amount. As used herein,
“Excess Balance” means (A) after the Commitment Termination Date, the amount by
which the balance of the Cash Collateral Account exceeds the L/C Amount, and
(B) prior to the Commitment Termination Date, the balance of the Cash
Collateral Account. The Agent shall have full control of the Cash Collateral
Account, and, except as set forth above, the Borrower shall have no right to
withdraw the funds maintained in the Cash Collateral Account.

ARTICLE VIII

THE AGENT

Section 8.1 Appointment; Nature of Relationship.

Bank One is hereby appointed by each of the Banks as its contractual
representative (herein referred to as the “Agent”) hereunder and under each
other Loan Document, and each of the Banks irrevocably authorizes the Agent to
act as the contractual representative of such Bank with the rights and duties
expressly set forth herein and in the other Loan Documents. The Agent agrees
to act as such contractual representative upon the express conditions contained
in this Article VIII. Notwithstanding the use of the defined term “Agent,” it
is expressly understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Bank by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Banks with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Banks’
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Banks, (ii) is a “representative” of the Banks within the
meaning of Section 9-105 of the Uniform Commercial Code and (iii) is acting as
an independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of
the Banks hereby agrees to assert no claim against the Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Bank hereby waives.

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Section 8.2 Powers.

The Agent shall have and may exercise such powers under the Loan Documents as
are specifically delegated to the Agent by the terms of each thereof, together
with such powers as are reasonably incidental thereto. The Agent shall have no
implied duties to the Banks, or any obligation to the Banks to take any action
thereunder except any action specifically provided by the Loan Documents to be
taken by the Agent.

Section 8.3 General Immunity.

Neither the Agent nor any of its directors, officers, agents or employees shall
be liable to the Borrower, the Banks or any Bank for any action taken or
omitted to be taken by it or them hereunder or under any other Loan Document or
in connection herewith or therewith except to the extent such action or
inaction is determined in a final non-appealable judgment by a court of
competent jurisdiction to have arisen from the gross negligence or willful
misconduct of such Person.

Section 8.4 No Responsibility for Loans, Recitals, etc.

Neither the Agent nor any of its directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into, or verify (a)
any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Bank; (c) the satisfaction of any condition
specified in Article III, except receipt of items required to be delivered
solely to the Agent; (d) the existence or possible existence of any Default or
Event of Default; (e) the validity, enforceability, effectiveness, sufficiency
or genuineness of any Loan Document or any other instrument or writing
furnished in connection therewith, or (f) the financial condition of the
Borrower or of any of the Borrower’s Subsidiaries. The Agent shall have no
duty to disclose to the Banks information that is not required to be furnished
by the Borrower to the Agent at such time, but is voluntarily furnished by the
Borrower to the Agent (either in its capacity as Agent or in its individual
capacity).

Section 8.5 Action on Instructions of Banks.

The Agent shall in all cases be fully protected in acting, or in refraining
from acting, hereunder and under any other Loan Document in accordance with
written instructions signed by the Required Banks (or, when expressly required
hereunder, all of the Banks), and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all of the Banks. The
Banks hereby acknowledge that the Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Banks. The Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Banks
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.

44

 

Section 8.6 Employment of Agents and Counsel.

The Agent may execute any of its duties as Agent hereunder and under any other
Loan Document by or through employees, agents, and attorneys-in-fact and shall
not be answerable to the Banks, except as to money or securities received by it
or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning the contractual arrangement between
the Agent and the Banks and all matters pertaining to the Agent’s duties
hereunder and under any other Loan Document.

Section 8.7 Reliance on Documents; Counsel.

The Agent shall be entitled to rely upon any Note, notice, consent,
certificate, affidavit, letter, telegram, statement, paper or document believed
by it to be genuine and correct and to have been signed or sent by the proper
person or persons, and, in respect to legal matters, upon the opinion of
counsel selected by the Agent, which counsel may be employees of the Agent.

Section 8.8 Agent’s Reimbursement and Indemnification.

The Banks agree to reimburse and indemnify the Agent ratably in proportion to
their respective Commitments (or, if the Commitments have been terminated, in
proportion to their Commitments immediately prior to such termination) (i) for
any amounts not reimbursed by the Borrower for which the Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses incurred by the Agent on behalf of the Banks, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents (including, without limitation, for any expenses incurred by the
Agent in connection with any dispute between the Agent and any Bank or between
two or more of the Banks) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection with any
dispute between the Agent and any Bank or between two or more of the Banks), or
the enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (i) no Bank shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 2.17(d) shall, notwithstanding the provisions of this
Section 8.8, be paid by the relevant Bank in accordance with the provisions
thereof. The obligations of the Banks under this Section 8.8 shall survive
payment of the Obligations and termination of this Agreement.

Section 8.9 Notice of Default.

The Agent shall not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the Agent has received written
notice from a Bank or the Borrower referring to this Agreement describing such
Default or Event of Default and stating

45

 

that such notice is a “notice of default”. In the event that the Agent
receives such a notice, the Agent shall give prompt notice thereof to the
Banks.

Section 8.10 Rights as a Bank.

In the event the Agent is a Bank, the Agent shall have the same rights and
powers hereunder and under any other Loan Document with respect to its
Commitment and its Advances as any Bank and may exercise the same as though it
were not the Agent, and the term “Bank” or “Banks” shall, at any time when the
Agent is a Bank, unless the context otherwise indicates, include the Agent in
its individual capacity. The Agent and its Affiliates may accept deposits
from, lend money to, and generally engage in any kind of trust, debt, equity or
other transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower or any of its Subsidiaries in which the
Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person. The Agent, in its individual capacity, is not obligated to
remain a Bank.

Section 8.11 Bank Credit Decision.

Each Bank acknowledges that it has, independently and without reliance upon the
Agent, the Arranger or any other Bank and based on the financial statements
prepared by the Borrower and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and the other Loan Documents. Each Bank also acknowledges that
it will, independently and without reliance upon the Agent, the Arranger or any
other Bank 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 this Agreement and the other Loan Documents.

Section 8.12 Successor Agent.

The Agent may resign at any time by giving written notice thereof to the Banks
and the Borrower, such resignation to be effective upon the appointment of a
successor Agent or, if no successor Agent has been appointed, forty-five days
after the retiring Agent gives notice of its intention to resign. The Agent
may be removed at any time with or without cause by written notice received by
the Agent from the Required Banks, such removal to be effective on the date
specified by the Required Banks; provided that the Agent may not be removed
unless the Agent (in its individual capacity) and any affiliate thereof acting
as Issuing Bank is relieved of all of its duties as Issuing Bank pursuant to
documentation reasonably satisfactory to such Person on or prior to the date of
such removal. Upon any such resignation or removal, the Required Banks shall
have the right to appoint, on behalf of the Borrower and the Banks, a Bank as a
successor Agent. If no successor Agent shall have been so appointed by the
Required Banks within thirty days after the resigning Agent’s giving notice of
its intention to resign, then the resigning Agent may appoint, on behalf of the
Borrower and the Banks, a successor Agent. Notwithstanding the foregoing, (i)
the Agent may at any time without the consent of any Bank and with the consent
of the Borrower, not to be unreasonably withheld or delayed, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder and (ii)
so long as no Event of Default exists, no successor Agent may be appointed
without the prior written consent of the Borrower, not to be unreasonably
withheld or delayed. If the Agent has resigned or been removed and no

46

 

successor Agent has been appointed, the Banks may perform all the duties of the
Agent hereunder and the Borrower shall make all payments in respect of the
Obligations to the applicable Bank and for all other purposes shall deal
directly with the Banks. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $100,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning or removed Agent. Upon the effectiveness of the resignation or
removal of the Agent, the resigning or removed Agent shall be discharged from
its duties and obligations hereunder and under the Loan Documents. After the
effectiveness of the resignation or removal of an Agent, the provisions of this
Article VIII shall continue in effect for the benefit of such Agent in respect
of any actions taken or omitted to be taken by it while it was acting as the
Agent hereunder and under the other Loan Documents. In the event that there is
a successor to the Agent by merger, or the Agent assigns its duties and
obligations to an Affiliate pursuant to this Section 8.12, then the term “Prime
Rate” as used in this Agreement shall mean the prime rate, base rate or other
analogous rate of the new Agent.

Section 8.13 Delegation to Affiliates.

The Borrower and the Banks agree that the Agent may delegate any of its duties
under this Agreement to any of its Affiliates. Any such Affiliate (and such
Affiliate’s directors, officers, agents and employees) which performs duties in
connection with this Agreement shall be entitled to the same benefits of the
indemnification, waiver and other protective provisions to which the Agent is
entitled under Articles VIII and X.

Section 8.14 Titles.

The Persons identified on the cover page, the signature pages or otherwise in
this Agreement, or in any document related hereto, as being the “Syndication
Agent” or “Co-Lead Arrangers” shall have no right, power, obligation,
liability, responsibility or duty under this Agreement or any other Loan
Document on account of such identification other than those applicable in their
capacity (if any) as Banks. Each Bank acknowledges that it has not relied, and
will not rely, on any Person so identified in deciding to enter into this
Agreement or in taking or refraining from taking any action hereunder or
pursuant hereto.

Section 8.15 Distribution of Payments and Proceeds.

     (a) After deduction of any costs of collection as hereinafter
provided, the Agent shall remit to each Bank that Bank’s Percentage of
all payments of principal, interest, Letter of Credit fees payable under
Section 2.7(d) and facility and utilization fees payable under Section
2.8 that are received by the Agent under the Loan Documents. Each Bank’s
interest in the Loan Documents shall be payable solely from payments,
collections and proceeds actually received by the Agent under the Loan
Documents; and the Agent’s only liability to the Banks hereunder shall be
to account for each Bank’s Percentage of such payments, collections and
proceeds in accordance with this Agreement. If the Agent is ever
required for any reason to refund any such payments, collections or
proceeds, each Bank will refund to the Agent, upon demand, its Percentage

47

 

of such payments, collections or proceeds, together with its
Percentage of interest or penalties, if any, payable by the Agent in
connection with such refund. The Agent may, in its sole discretion, make
payment to the Banks in anticipation of receipt of payment from the
Borrower. If the Agent fails to receive any such anticipated payment
from the Borrower, each Bank shall promptly refund to the Agent, upon
demand, any such payment made to it in anticipation of payment from the
Borrower, together with interest for each day on such amount until so
refunded at a rate equal to the Federal Funds Effective Rate for each
such day.

     (b) Notwithstanding the foregoing, if any Bank has wrongfully
refused to fund its Percentage of any Borrowing or other Advance as
required hereunder, or if the principal balance of any Bank’s Note is for
any other reason less than its Percentage of the aggregate principal
balances of the Notes then outstanding, the Agent may remit all payments
received by it to the other Banks until such payments have reduced the
aggregate amounts owed by the Borrower to the extent that the aggregate
amount owing to such Bank hereunder is equal to its Percentage of the
aggregate amount owing to all of the Banks hereunder. The provisions of
this paragraph are intended only to set forth certain rules for the
application of payments, proceeds and collections in the event that a
Bank has breached its obligations hereunder and shall not be deemed to
excuse any Bank from such obligations.

Section 8.16 Expenses.

All payments, collections and proceeds received or effected by the Agent may be
applied, first, to pay or reimburse the Agent for all costs, expenses, damages
and liabilities at any time incurred by or imposed upon the Agent in connection
with this Agreement or any other Loan Document (including but not limited to
all reasonable attorney’s fees, foreclosure expenses and advances made to
protect the security of collateral, if any, but excluding any costs, expenses,
damages or liabilities arising from the gross negligence or willful misconduct
of the Agent). If the Agent does not receive payments, collections or proceeds
from the Borrower or its properties sufficient to cover any such costs,
expenses, damages or liabilities within 30 days after their incurrence or
imposition, each Bank shall, upon demand, remit to the Agent its Percentage of
the difference between (i) such costs, expenses, damages and liabilities, and
(ii) such payments, collections and proceeds.

Section 8.17 Payments Received Directly by Banks.

If any Bank or other holder of a Note shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or
otherwise) on account of principal of or interest on any Note other than
through distributions made in accordance with Section 8.2, such Bank or holder
shall promptly give notice of such fact to the Agent and shall purchase from
the other Banks or holders such participations in the Notes held by them as
shall be necessary to cause the purchasing Bank or holder to share the excess
payment or other recovery ratably with each of them; provided, however, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Bank or holder, the purchase shall be rescinded
and the purchasing Bank restored to the extent of such recovery (but without
interest thereon).

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ARTICLE IX

ASSIGNMENTS AND PARTICIPATIONS

Section 9.1 Assignments.

     (a) Any Bank may, at any time, assign a portion of its Obligations
and Commitment to an Eligible Lender (an “Applicant”) on any date (the
“Adjustment Date”) selected by such Bank subject to the terms and
provisions of this Section 9.1. The aggregate principal amount of the
Obligations and Commitment so assigned in any assignment shall be not
less than $5,000,000, and the assigning Bank shall retain at least
$5,000,000 of such Obligations and Commitment for its own account;
provided, however, that the foregoing restriction shall not apply to a
Bank assigning its entire Obligations and Commitment to the Applicant.
Any Bank proposing an assignment hereunder shall give notice of such
assignment to the Agent and the Borrower at least ten Business Days prior
to such assignment (unless the Agent consents to a shorter period of
time). Such notice shall specify the identity of such Applicant and the
Percentage which it proposes that such Applicant acquire (which
Percentage shall be the same for the Commitment and the Note held by the
assigning Bank). Any assignment hereunder may be made only with the prior
written consent of the Agent, the Issuing Bank and the Borrower;
provided, however, that (i) in no event shall such consent be
unreasonably withheld, and (ii) the consent of the Borrower shall not be
required if a Default or Event of Default has occurred and is continuing
at the time of such assignment.

     (b) Subject to the prior written consent of the Agent and the
Borrower (if applicable), to confirm the status of each Applicant as a
party to this Agreement and to evidence the assignment of the applicable
portion of the assigning Bank’s Commitment, Letter of Credit
participations and Advances in accordance herewith:

	 	(i)	 	the Borrower, such Bank, such Applicant, the
Issuing Bank and the Agent shall, on or before the Adjustment
Date, execute and deliver to the Agent an Assignment Agreement
(provided that, if a Default or Event of Default has occurred
and is continuing on the applicable Adjustment Date, the
assignment will be effective whether the Borrower signs it or
not), in substantially the form of Exhibit E (an “Assignment
Agreement”); and
	 
	 	(ii)	 	the Borrower will, at its own expense and in
exchange for the assigning Bank’s Note, execute and deliver to
the assigning Bank a new Note, payable to the order of the
Applicant in an amount corresponding to the applicable
interest in the assigning Bank’s rights and obligations
acquired by such Applicant pursuant to such assignment, and,
if the assigning Bank has retained interests in such rights
and obligations, a new Note, payable to the order of that Bank
in an amount corresponding to such retained interests. Such
new Notes shall be in an aggregate principal amount equal to
the principal amount of the Note to be replaced by such new
Notes (or, if less, the Commitment Amount of the assigning
Bank prior to giving effect to such assignment, unless such
assignment is made after the Commitment Termination Date, in
which case the aggregate principal

49

 

	 	 	 	amount of the new Notes shall equal the outstanding principal
balance of the Note to be replaced by such new Notes), shall
be dated the effective date of such assignment and shall
otherwise be in the form of the Note to be replaced thereby.
Such new Notes shall be issued in substitution for, but not
in satisfaction or payment of, the Note being replaced
thereby; and

Upon the execution and delivery of such Assignment Agreement and such Notes,
(a) this Agreement shall deemed to be amended to the extent, and only to the
extent, necessary to reflect the addition of such Additional Bank and the
resulting adjustment of Percentages arising therefrom, (b) the assigning Bank
shall be relieved of all obligations hereunder to the extent of the reduction
of all obligations hereunder and to the extent of the reduction of such Bank’s
Percentage, and (c) the Additional Bank shall become a party hereto and shall
be entitled to all rights, benefits and privileges accorded to a Bank herein
and in each other document or instrument executed pursuant hereto and subject
to all obligations of a Bank hereunder, including the right to approve or
disapprove actions which, in accordance with the terms hereof, require the
approval of the Required Banks or all Banks, and the obligations to make
Advances hereunder. In the case of an assignment covering all of the assigning
Bank’s rights, benefits and obligations under this Agreement, such Bank shall
cease to be a Bank hereunder but shall continue to be entitled to the benefits
of, and subject to, those provisions of this Agreement and the other Loan
Documents which survive payment of the Obligations and termination of the Loan
Documents.

     (c) In order to facilitate the addition of Additional Banks hereto,
the Borrower shall (subject to the written agreement of any prospective
Additional Bank to be subject to the confidentiality provisions of
Section 10.1) provide all reasonable assistance requested by each Bank
and the Agent relating thereto which shall not require undue effort or
expense on the part of the Borrower, including, without limitation, the
furnishing of such written materials and financial information regarding
the Borrower as any Bank or the Agent may reasonably request and the
participation by officers of the Borrower in a meeting or teleconference
call with any Applicant upon the reasonable request upon reasonable
notice of any Bank or the Agent.

     (d) Notwithstanding any other provision hereof:

	 	(i)	 	each Bank shall have the right at any time upon
written notice to the Borrower and the Agent (but without
requiring the consent of the Borrower or the Agent) to sell,
assign, transfer, or negotiate all or any part of its
Commitment, Advances, Notes, and other rights and obligations
under this Agreement and the Loan Documents to one or more
Affiliates of such Bank, provided that, unless consented to by
the Borrower and the Agent (which consent shall not be
unreasonably withheld), no such sale, assignment, transfer or
negotiation of Commitment shall relieve the transferring Bank
from its obligations (to the extent such Affiliate does not
fulfill its obligations) hereunder; and
	 
	 	(ii)	 	each Bank shall have the right at any time upon
written notice to the Borrower and the Agent (but without
requiring the consent of the Borrower or the Agent) to sell,
assign, transfer, or negotiate all or any part

50

 

	 		 	of its Commitment, Advances, Notes, and other rights and
obligations under this Agreement and the Loan Documents to
one or more Banks, and any such sale, assignment, transfer or
negotiation shall relieve the transferring Bank from its
obligations hereunder to the extent of the obligations so
transferred (except, in any event, to the extent that the
Borrower, any other Bank or the Agent has rights against such
transferring Bank as a result of any default by such
transferring Bank under this Agreement);

provided, however, that any partial sale, assignment, transfer or negotiation
pursuant to this Section shall be pro rata as to all of the Commitment,
Obligations and Advances transferred.

     (e) Simultaneous with any assignment under this Section, the Bank
making such assignment shall pay the Agent a transfer fee in the amount
of $3,500.

     (f) Notwithstanding anything to the contrary contained herein, any
Bank (a “Granting Bank”) may grant to a special purpose funding vehicle
(an “SPC”) of such Granting Bank, identified as such in writing from time
to time by the Granting Bank to the Agent and the Borrower, the option to
provide to the Borrower all or any part of any Advance that such Granting
Bank would otherwise be obligated to make to the applicable Borrower
pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to make any Advance, (ii) if an SPC
elects not to exercise such option or otherwise fails to provide all or
any part of such Advance, the Granting Bank shall be obligated to make
such Advance pursuant to the terms hereof, (iii) such Granting Bank’s
other obligations under this Agreement shall remain unchanged, (iv) such
Granting Bank shall remain solely responsible to the other parties hereto
for the performance of such obligations, and (v) the Borrower, the Agent
and the other Banks shall continue to deal solely and directly with such
Granting Bank in connection with such Granting Bank’s rights and
obligations under this Agreement (including any rights and obligations
assigned to such SPC). The making of an Advance by an SPC hereunder shall
be deemed to utilize the Commitment of the applicable Granting Bank to
the same extent, and as if, such Advance were made by such Granting Bank.
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 applicable Granting Bank). All
notices hereunder to any Granting Bank or the related SPC, and all
payments in respect of the Obligations due to such Granting Bank or the
related SPC, shall be made to such Granting Bank. In addition, each
Granting Bank shall vote as a Bank hereunder without giving effect to any
assignment under this paragraph (f), and no SPC shall have any vote as a
Bank under this Agreement for any purpose. 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 senior
indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the
United States or any State thereof. In addition, notwithstanding anything
to the contrary contained in this Section 9.1, any SPC may (i) with
notice to, but without the prior written consent of, the Borrower or the
Agent and without paying any transfer fee

51

 

therefor, assign all or a portion of its interests in its right to
repayment of any Advances to its Granting Bank or to any financial
institutions providing liquidity and/or credit support to or for the
account of such SPC to fund the Advances made by such SPC or to support
the securities (if any) issued by such SPC to fund such Advances and (ii)
disclose on a confidential basis, to the extent such disclosure would be
permitted under Section 10.1 as if such SPC were a Bank, any non-public
information relating to its Advances to any rating agency, commercial
paper dealer or provider of any surety, guarantee or credit or liquidity
enhancement to such SPC. No amendment to this paragraph (f) that affects
the rights of an SPC that has made an advance hereunder shall be
effective without the consent of such SPC.

     (g) Notwithstanding any other provision of this Agreement, any Bank
may at any time create a security interest in all or any portion of its
rights under this Agreement and that Bank’s Note in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of
the Federal Reserve System.

Section 9.2 Participations.

Each Bank may grant participations in a portion of its Advances, Letter of
Credit participations and Commitments to any Eligible Lender, upon prior
written notice to the Agent but without the consent of the Agent or the
Borrower. No holder of any such participation, other than an Affiliate of such
Bank, shall be entitled to require such Bank to take or omit to take any action
hereunder, except that such Bank may agree with such participant that such Bank
will not, without such participant’s consent, agree to any action described in
paragraph (a) of Section 10.3. No Bank shall, as between the Borrower and such
Bank, be relieved of any of its obligations hereunder as a result of any such
granting of a participation. The Borrower hereby acknowledges and agrees that
any participant described in this Section will, for purposes of Sections 2.16,
2.17 and 2.18 only, be considered to be a Bank hereunder (provided that such
participant shall not be entitled to receive any more than the Bank selling
such participation would have received had such sale not taken place).

Section 9.3 Limitation on Assignments and Participations.

Except as set forth in Sections 9.1 and 9.2, no Bank may assign any of its
rights or obligations under, or grant any participation in, any Loan Document
or Commitment.

ARTICLE X

MISCELLANEOUS

Section 10.1 Disclosure of Information.

The Agent and the Banks shall keep confidential (and cause their respective
officers, directors, employees, agents and representatives to keep
confidential) all information, materials and documents furnished by the
Borrower and its Subsidiaries to the Agent or the Banks pursuant to or in
connection with the Loan Documents (the “Disclosed Information”).
Notwithstanding the foregoing, the Agent and each Bank may disclose Disclosed
Information (i) to the Agent or any other Bank; (ii) to any Affiliate of any
Bank in connection with the transactions contemplated hereby, provided that
such Affiliate has been informed of the confidential nature of such

52

 

information; (iii) to legal counsel, accountants and other professional
advisors to the Agent or such Bank; (iv) to any regulatory body having
jurisdiction over any Bank or the Agent or any holding company thereof; (v) to
the extent required by applicable laws and regulations or by any subpoena or
similar legal process, or requested by any governmental agency or authority;
(vi) to the extent such Disclosed Information (A) becomes publicly available
other than as a result of a breach of this Agreement, (B) becomes available to
the Agent or such Bank on a non-confidential basis from a source other than the
Borrower or a Subsidiary, or (C) was available to the Agent or such Bank on a
non-confidential basis prior to its disclosure to the Agent or such Bank by the
Borrower or a Subsidiary; (vii) to the extent the Borrower or such Subsidiary
shall have consented to such disclosure in writing; (viii) to the extent
reasonably deemed necessary by the Agent or any Bank in the enforcement of the
remedies of the Agent and the Banks provided under the Loan Documents; or (ix)
in connection with any potential assignment or participation in the interest
granted hereunder, provided that any such potential assignee or participant
shall have executed a confidentiality agreement imposing on such potential
assignee or participant substantially the same obligations as are imposed on
the Agent and the Banks under this Section 10.1.

Section 10.2 No Waiver; Cumulative Remedies.

No failure or delay on the part of the Banks in exercising any right, power or
remedy under the Loan Documents shall operate as a waiver thereof; nor shall
any Bank’s acceptance of payments while any Default or Event of Default is
outstanding operate as a waiver of such Default or Event of Default, or any
right, power or remedy under the Loan Documents; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
under the Loan Documents. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided by law.

Section 10.3 Amendments, Etc.

No amendment or waiver of any provision of any Loan Document or consent to any
departure by the Borrower therefrom shall be effective unless the same shall be
in writing and signed by the Required Banks (or by the Agent with the consent
or at the request of the Required Banks), and any such waiver shall be
effective only in the specific instance and for the specific purpose for which
given. Notwithstanding the foregoing:

     (a) No such amendment or waiver shall be effective to do any of the
following unless signed by each of the Banks (or by the Agent with the
consent or at the request of each of the Banks):

	 	(i)	 	Increase the Commitment Amount of any Bank or
extend the Commitment Termination Date or the Term Loan
Maturity Date.
	 
	 	(ii)	 	Permit the Borrower to assign its rights under
this Agreement.
	 
	 	(iii)	 	Amend this Section, the definition of “Required
Banks” in Section 1.1, or any provision herein providing for
consent or other action by all Banks.

53

 

	 	(iv)	 	Forgive any indebtedness of the Borrower arising
under this Agreement or the Notes, or reduce the rate of
interest or any fees charged under this Agreement or the
Notes.
	 
	 	(v)	 	Postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of
principal, interest, facility fees or other material amounts
due to the Banks (or any of them) hereunder or under any other
Loan Document.
	 
	 	(vi)	 	Except pursuant to the terms hereof, release any
collateral in the Cash Collateral Account.

     (b) No amendment, waiver or consent shall affect the rights or
duties of the Agent under this Agreement or any other Loan Document
unless in writing and signed by the Agent.

     (c) No amendment, modification or (except as provided elsewhere
herein) termination of this Agreement or waiver of any rights of the
Borrower or obligations of any Bank or the Agent hereunder shall be
effective unless the Borrower shall have consented thereto in writing.

No notice to or demand on the Borrower in any case shall entitle the Borrower
to any other or further notice or demand in similar or other circumstances.

Section 10.4 Notice.

Except as otherwise expressly provided herein, all notices and other
communications hereunder shall be in writing and shall be (i) personally
delivered, (ii) transmitted by registered mail, postage prepaid, (iii) sent by
Federal Express or similar expedited delivery service, or (iv) transmitted by
telecopy, in each case addressed or transmitted by telecopy to the party to
whom notice is being given at its address or telecopier number (as the case may
be) as set forth in Exhibit A or in any applicable Assignment Agreement; or, as
to each party, at such other address or telecopier number as may hereafter be
designated in a notice by that party to the other party complying with the
terms of this Section. All such notices or other communications shall be
deemed to have been given on (i) the date received if delivered personally,
(ii) five business days after the date of posting, if delivered by mail, (iii)
the date of receipt, if delivered by Federal Express or similar expedited
delivery service, or (iv) the date of transmission if delivered by telecopy,
except that notices or requests to the Banks pursuant to any of the provisions
of Article II shall not be effective as to any Bank until received by that
Bank.

Section 10.5 Costs and Expenses.

The Borrower agrees to pay on demand (i) all costs and expenses incurred by the
Agent in connection with the negotiation, preparation, execution,
administration or amendment of the Loan Documents and the other instruments and
documents to be delivered hereunder and thereunder, and (ii) all costs and
expenses incurred by the Agent or any Bank in connection with the workout or
enforcement of the Loan Documents and the other instruments and documents to be
delivered hereunder and thereunder; including, in each case, reasonable fees
and

54

 

out-of-pocket expenses of counsel with respect thereto, whether paid to outside
counsel or allocated to the Agent or such Bank by in-house counsel. The
Borrower also agrees to pay and reimburse the Agent for all of its
out-of-pocket and allocated costs incurred in connection with each audit or
examination conducted by the Agent, its employees or agents, which audits and
examinations shall be for the sole benefit of the Agent and the Banks.

Section 10.6 Indemnification by Borrower.

The Borrower hereby agrees to indemnify the Agent and the Banks and each
officer, director, employee and agent thereof (herein individually each called
an “Indemnitee” and collectively called the “Indemnitees”) from and against any
and all losses, claims, damages, reasonable expenses (including, without
limitation, reasonable attorneys’ fees) and liabilities (all of the foregoing
being herein called the “Indemnified Liabilities”) incurred by an Indemnitee in
connection with or arising out of the execution or delivery of this Agreement
or any agreement or instrument contemplated hereby, the performance by the
parties hereto of their respective obligations hereunder or the use of the
proceeds of any Advance or Letter of Credit hereunder (including but not
limited to any such loss, claim, damage, expense or liability arising out of
any claim that any Environmental Law has been breached with respect to any
activity or property of the Borrower), except for any portion of such losses,
claims, damages, expenses or liabilities incurred solely as a result of the
gross negligence or willful misconduct of the applicable Indemnitee. If and to
the extent that the foregoing indemnity may be unenforceable for any reason,
the Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. All obligations provided for in this Section shall survive any
termination of this Agreement. Notwithstanding the foregoing, the Borrower
shall not be obligated to indemnify any Indemnitee in respect of any
Indemnified Liabilities arising as a result of the Issuing Bank’s failure to
pay under any Letter of Credit after the presentation to it of a request
strictly complying with the terms and conditions of such Letter of Credit.

Section 10.7 Execution in Counterparts.

This Agreement and the other Loan Documents may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which counterparts of this Agreement or such other
Loan Document, as the case may be, taken together, shall constitute but one and
the same instrument.

Section 10.8 Binding Effect, Assignment.

The Loan Documents shall be binding upon and inure to the benefit of the
Borrower and the Banks and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights thereunder or any
interest therein without the prior written consent of each of the Banks.

Section 10.9 Governing Law.

THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF
LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
(INCLUDING, WITHOUT LIMITATION, 735 ILCS

55

 

SECTION 105/5-1 ET SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.

Section 10.10 Severability of Provisions.

Any provision of this Agreement which is prohibited or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.

Section 10.11 Consent to Jurisdiction.

EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION
OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO,
ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS AND EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR
THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT
OF THE AGENT, ANY BANK OR THE ISSUING BANK TO BRING PROCEEDINGS AGAINST THE
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE AGENT OR ANY BANK OR ANY AFFILIATE OF THE AGENT OR ANY
BANK INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A
COURT IN CHICAGO, ILLINOIS.

Section 10.12 Waiver of Jury Trial.

THE BORROWER, THE AGENT AND THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH THIS AGREEMENT AND THE NOTES OR THE RELATIONSHIPS ESTABLISHED
HEREUNDER.

Section 10.13 Recalculation of Covenants Following Accounting Practices Change.

The Borrower shall notify the Agent of any Accounting Practices Change promptly
upon becoming aware of the same. Promptly following such notice, the Borrower
and the Agent shall negotiate in good faith in order to effect any adjustments
to Section 6.7 necessary to reflect the effects of such Accounting Practices
Change pursuant to an amendment in accordance with Section 9.2.

56

 

Section 10.14 Headings.

Article and Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.

Section 10.15 USA Patriot Act Notification

The following notification is provided to the Borrower pursuant to Section 326
of the USA Patriot Act of 2001, 31 U.S.C. Section 5318:

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government of the United States of America fight the funding of terrorism and
money laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each Person that opens
an account, including any deposit account, treasury management account, loan,
other extension of credit, or other financial services product. Accordingly,
when the Borrower opens an account, the Agent and the Banks will ask for the
Borrower’s name, tax identification number, business address, and other
information that will allow the Agent and the Banks to identify the Borrower.
The Agent and the Banks may also ask to see the Borrower’s legal organizational
documents or other identifying documents.

Section 10.16 Nonliability of Banks.

The relationship between the Borrower on the one hand and the Banks, the
Issuing Bank and the Agent on the other hand shall be solely that of borrower
and lender. Neither the Agent, either Co-Lead Arranger, any Bank nor the
Issuing Bank shall have any fiduciary responsibilities to the Borrower.
Neither the Agent, either Co-Lead Arranger, any Bank nor the Issuing Bank
undertakes any responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower’s business or
operations. The Borrower agrees that neither the Agent, either Co-Lead
Arranger, any Bank nor the Issuing Bank shall have liability to the Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by the
Borrower in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from (i) the gross negligence
or willful misconduct of the party from which recovery is sought or (ii) the
Issuing Bank’s failure to pay any Letter of Credit after the presentation to it
of a request strictly complying with the terms and conditions of such Letter of
Credit. Neither the Agent, either Co-Lead Arranger, any Bank nor the Issuing
Bank shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to sue for, any special, indirect or consequential
damages suffered by the Borrower in connection with, arising out of, or in any
way related to the Loan Documents or the transactions contemplated thereby.

[Signature Pages Follow]

57

 

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

PUBLIC SERVICE COMPANY OF

COLORADO

By /s/ Benjamin G. S. Fowke
   Its
Vice President, CFO and Treasurer

S-1

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

BANK ONE, NA

(Main Office, Chicago), as Administrative Agent

and as a Bank

By /s/ Jane Bek Keil
   Its
Director

S-2

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

WELLS FARGO BANK, NATIONAL

ASSOCIATION, as Syndication Agent and as a

Bank

By /s/ Scott D. Bjelde
   Its
Senior Vice President

By /s/ James D. Heintz
   Its
Senior Vice President

S-3

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

THE BANK OF NEW YORK, as

Co-Documentation Agent and a Bank

By /s/ Cynthia Howells
   Its
Vice President

S-4

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

KEYBANK NATIONAL ASSOCIATION, as

Co-Documentation Agent and a Bank

By /s/ Keven Smith
   Its
Vice President

S-5

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

UBS LOAN FINANCE LLC, as Co-

Documentation Agent and a Bank

By /s/ Wilfred V. Saint
   Its
Director

By /s/ Joseph Fernandes
   Its
Associate Director

S-6

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

U.S. BANK NATIONAL ASSOCIATION, as

a Bank

By /s/ Christine Geer
   Its
Corporate Banking Officer

S-7

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

CITIBANK, N.A., as a Bank

By /s/ J. Nicholas McKee
   Its
Managing Director

S-8

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

	 	 	 	 	 
	 	 	BARCLAYS BANK PLC, as a Bank
	 
	 	 	 	 
	

	 	By
	 	/s/ Sydney G. Dennis
	

	 	  Its
	 	  Director

S-9

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

	 	 	 	 	 
	 	 	THE BANK OF TOKYO-MITSUBISHI, LTD., HOUSTON

AGENCY, as a Bank
	 
	 	 	 	 
	

	 	By
	 	/s/ J. Mearns
	

	 	  Its
	 	 VP & Manager
	 
	 	 	 	 
	 	 	By
	

	 	 	 	

	

	 	  Its	 	 
	

	 	 	 	

S-10

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	CREDIT SUISSE FIRST BOSTON, acting through

its CAYMAN ISLANDS BRANCH, as a 

Bank
	 
	 	 	 	 	 	 
	

	 	By
	 	/s/ Sarah Wu
	 	/s/ Brian T. Caldwell
	

	 	  Its
	 	  Vice President
	 	Director

S-11

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

	 	 	 	 	 
	 	 	WILLIAM STREET CREDIT

CORPORATION, as a Bank
	 
	 	 	 	 
	

	 	By
	 	/s/ Jennifer M. Hill
	

	 	Its
	 	CFO

S-12

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

	 	 	 	 	 
	 	 	HARRIS NESBITT FINANCING, INC., as a 

Bank
	 
	 	 	 	 
	

	 	By
	 	/s/ Cahal B. Carmody
	

	 	Its
	 	  Vice President

S-13

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

	 	 	 	 	 
	 	 	COMMERZBANK AG, NEW YORK AND

GRAND CAYMAN BRANCHES, as a Bank
	 
	 	 	 	 
	

	 	By
	 	/s/ Timothy Chin
	

	 	Its
	 	Vice President
	 
	 	 	 	 
	

	 	By
	 	/s/ Andrew Kjoller
	

	 	Its
	 	Vice President

S-14

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

S-1

[Signature Page to Public Service Company of Colorado 2004 Credit Agreement]

 

EXHIBIT A

COMMITMENT AMOUNTS AND ADDRESSES

	 	 	 	 	 	 	 
	Name
	 	Commitment Amount
	 	Notice Address

	Public Service Company
of Colorado

	 	 	N/A	 	 	Xcel Energy Inc.

800 Nicollet Mall, Suite 2900

Minneapolis, MN 55402

Attention: Mary Schell

Telecopier: 612-215-5370
	 
	 	 	 	 	 	 
	Bank One, NA, as Agent

	 	 	N/A	 	 	One Bank One Plaza, Suite IL1-0367

Chicago, IL 60670-0363

Attention: Jane Bek Keil

Telecopier: 312-325-3020
	 
	 	 	 	 	 	 
	Bank One, NA (Main Office,
Chicago), as Co-Lead Arranger
and a Bank

	 	$	41,730,769.23	 	 	One Bank One Plaza, Suite IL1-0363

Chicago, IL 60670-0363

Attention: Jane Bek

Telecopier: 312-732-5435
	 
	 	 	 	 	 	 
	Wells Fargo Bank, National
Association, as Syndication
Agent and as a Bank

	 	$	41,730,769.23	 	 	MAC N9305-031

Sixth and Marquette

Minneapolis, MN 55479

Attention: Scott Bjelde

Telecopier: 612-667-2276
	 
	 	 	 	 	 	 
	The Bank of New York, as Co-
Documentation Agent and a
Bank

	 	$	29,615,384.62	 	 	One Wall Street, 19th Floor

New York, NY 10286

Attention: Cynthia Howells

Telecopier: 212-685-7552
	 
	 	 	 	 	 	 
	KeyBank National Association, as
Co-Documentation Agent and a
Bank

	 	$	29,615,384.62	 	 	127 Public Square, 6th Floor

Cleveland, OH 44114

Attention: Kathy A. Koenig

Telecopier: 216-689-4981
	 
	 	 	 	 	 	 
	UBS Loan Finance LLC, as Co-
Documentation Agent and a
Bank

	 	$	29,615,384.61	 	 	677 Washington Boulevard

Stamford, CT 06901

Attention: Marie Haddad

Telecopier: 203-719-3888
	 
	 	 	 	 	 	 
	Citibank, N.A., as a Bank

	 	$	29,615,384.62	 	 	388 Greenwich Street,
21st Floor

New York, NY 10013

Attention: Amit Vasani

Telecopier: 212-816-8098
	 
	 	 	 	 	 	 
	The Bank of
Tokyo-Mitsubishi, Ltd.,
Houston Agency as a Bank

	 	$	29,615,384.61	 	 	1100 Louisiana Street, Suite 2800

Houston, Texas 77002

Attention: John Mearns

Telecopier: 713-658-0116

Exhibit A-1

 

	 	 	 	 	 	 	 
	Harris Nesbitt Financing,
Inc., as a Bank

	 	$	26,923,076.92	 	 	700 Louisiana, Suite 4400

Houston, Texas 77002

Attention: Cahal Carmody

Telecopier: 713-223-4007
	 
	 	 	 	 	 	 
	Barclays Bank PLC, as a Bank

	 	$	26,923,076.92	 	 	200 Park Avenue, 4th Floor

New York, NY 10166

Attention: Sydney Dennis

Telecopier: 212-412-2441
	 
	 	 	 	 	 	 
	Commerzbank AG, New York
and Grand Cayman Branches,
as a Bank

	 	$	18,846,153.85	 	 	2 World Finance Center

New York, New York 10281-1050

Attention: Andrew Kjoller

Telecopier: 212-266-7530
	 
	 	 	 	 	 	 
	Credit Suisse First Boston,

acting through its Cayman

Islands Branch, as a Bank

	 	$	18,846,153.85	 	 	Eleven Madison Avenue

New York, NY 10010

Attention: Sarah Wu

Telecopier: 212-325-8321
	 
	 	 	 	 	 	 
	William Street Credit

Corporation, as a Bank

	 	$	13,461,538.46	 	 	85 Broad Street, 6th Floor

New York, NY 10004

Attention: Philip F. Green

Telecopier: 212-428-1022
	 
	 	 	 	 	 	 
	U.S. Bank National
Association, as a Bank

	 	$	13,461,538.46	 	 	800 Nicollet Mall

Minneapolis, MN 55402

Attention: Christine Geer

Telecopier: 612-303-2265

Exhibit B-2

 

EXHIBIT B

PROMISSORY NOTE

	 	 	 	 	 
	$ ___________

	 	 
	 	Chicago, Illinois

       
                   
           , 200    
               

     For value received, Public Service Company of Colorado, a Colorado
corporation (the “Borrower”), promises to pay on the Commitment Termination
Date or, if later, the Term Loan Maturity Date to the order of
                 
                 
   
                   
                   
 

(the “Bank”), at such
place as the Agent under the Credit Agreement defined below may from time to
time designate in writing, the principal sum of
                           
                    Dollars
($                
               
  ), or, if less, the aggregate unpaid principal amount of all
advances made by the Bank to the Borrower pursuant to Section 2.1 of the Credit
Agreement dated May 14, 2004 among the Borrower, Bank One, NA, as Agent (in
such capacity, the “Agent”), and various Banks, including the Bank (together
with all amendments, modifications and restatements thereof, the “Credit
Agreement”), and to pay interest on the principal balance of this Note
outstanding from time to time at the rate or rates and times determined
pursuant to the Credit Agreement. All terms defined in the Credit Agreement
and not otherwise defined in this Note shall have the meanings given them in
the Credit Agreement.

     This Note is issued pursuant to, and is subject to, the Credit Agreement,
which provides (among other things) for the amount and date of payments of
principal and interest required hereunder, for the acceleration of this Note
upon an Event of Default and for the mandatory and voluntary prepayment of this
Note.

     The Borrower shall pay all costs of collection, including reasonable
attorneys’ fees and legal expenses, if this Note is not paid when due, whether
or not legal proceedings are commenced.

[Signature Page Follows]

Exhibit B-1

 

     Presentment or other demand for payment, notice of dishonor and protest
are expressly waived.

	 	 	 	 	 
	 	 	PUBLIC SERVICE COMPANY OF

COLORADO
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	Its	 	 
	

	 	 	 	

Exhibit B-2

 

EXHIBIT C

COMPLIANCE CERTIFICATE

                                      ,                    

Bank One, NA,

     for itself and as Agent under the Credit

     Agreement described below

The Banks, as defined under the Credit

     Agreement described below

Compliance Certificate

Ladies and Gentlemen:

     Reference is made to the Credit Agreement dated May 14, 2004 among Public
Service Company of Colorado (the “Borrower”), Bank One, NA, as Agent, and the
Banks, as defined therein (the “Credit Agreement”).

     All terms defined in the Credit Agreement and not otherwise defined herein
shall have the meanings given them in the Credit Agreement.

     This is a Compliance Certificate submitted in connection with the
Borrower’s financial statements (the “Statements”) as
of                  
                   
  ,
                    (the “Effective Date”).

     I hereby certify to you as follows:

     (a)
I am the                                         [**president/chief
financial officer/treasurer/assistant treasurer] of the Borrower,
and I am familiar with the financial statements and financial
affairs of the Borrower.

     (b) The Statements have been prepared in accordance with GAAP,
**[subject to year-end audit adjustments].

     (c) The computation on Annex 1 hereto sets forth the
Borrower’s compliance or non-compliance with the requirements set
forth in Section 6.7 as of the Effective Date.

I have no knowledge of the occurrence of any Default or Event of Default,
except as set forth in the attachments, if any, hereto.

Exhibit C-1

 

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	PUBLIC SERVICE COMPANY OF COLORADO
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	Its	 	 
	

	 	 	 	

Exhibit C-2

 

ANNEX 1 TO COMPLIANCE CERTIFICATE

Funded Debt to Total Capital (Section 6.7)

	 	 	 	 	 	 	 
	1.	 	Funded Debt
	

	 	(a)
	 	Long-Term debt (including current maturities)
	 	$ _____________
	

	 	(b)
	 	Commercial paper and other short term debt
	 	$ _____________
	

	 	(c)
	 	Letters of Credit
	 	$ _____________
	

	 	(d)
	 	Net liabilities under Swap Contracts
	 	$ _____________
	

	 	(e)
	 	Capitalized Lease Obligations
	 	$ _____________
	

	 	(f)
	 	Off-Balance Sheet Liabilities (including Sale	 	 
	

	 	 	 	and Leaseback Transactions and Synthetic	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	Lease Obligations)
	 	$ _____________
	 
	 	 	 	 	 	 
	

	 	(g)
	 	Trust Preferred Securities of the Borrower
	 	$ _____________
	

	 	(h)
	 	Guarantees of indebtedness of others
	 	$ _____________
	

	 	(i)
	 	Other Funded Debt
	 	$ _____________
	

	 	(j)
	 	Total Funded Debt (sum of Items 1(a) through 1(i))
	 	      $ _____________
	 
	 	 	 	 	 	 
	2.	 	Total Capital
	

	 	(a)
	 	Common Stock
	 	$ _____________
	

	 	(b)
	 	Premium on Common Stock
	 	$ _____________
	

	 	(c)
	 	Retained Earnings
	 	$ _____________
	

	 	(d)
	 	Stockholder’s Equity	 	 
	

	 	 	 	(sum of Items 2(a), 2(b) and 2(c)
	 	$ _____________
	

	 	(e)
	 	Funded Debt (from Item 1(j) above)
	 	$ _____________
	

	 	(f)
	 	Total Capital (sum of Items 2(d) and 2(e))
	 	     $ _____________
	 
	 	 	 	 	 	 
	3.	 	Funded Debt to Total Capital (Ratio of Item 1(j) to
Item 2(f))
	 
	 	 	 	 	 	 
	 	 	(not to be greater than 0.60 to 1.0)	 	                    to 1.

Exhibit C-3

 

EXHIBIT D

OPINION LETTERS

[Attached]

Exhibit D-1

 

EXHIBIT E

ASSIGNMENT AGREEMENT

     This
Assignment Agreement (this “Assignment Agreement”) between
                   
                   
                   

(the “Assignor”) and        
                   
           
(the “Assignee”) is dated as of        
                   
            , 20        
           .
The parties hereto agree as follows:

     1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement
(which, as it may be amended, modified, renewed or extended from time to time
is herein called the “Credit Agreement”) described in Item 1 of Schedule 1
attached hereto (“Schedule 1”). Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement.

     2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor’s rights and obligations under the Credit
Agreement and the other Loan Documents, such that after giving effect to such
assignment the Assignee shall have purchased pursuant to this Assignment
Agreement the percentage interest specified in Item 3 of Schedule 1 of all
outstanding rights and obligations under the Credit Agreement and the other
Loan Documents relating to the facilities listed in Item 3 of Schedule 1. The
aggregate Commitment (or Loans, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4 of
Schedule 1.

     3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
“Effective Date”) shall be the later of the date specified in Item 5 of
Schedule 1 or two Business Days (or such shorter period agreed to by the Agent)
after this Assignment Agreement, together with any consents required under the
Credit Agreement, are delivered to the Agent. In no event will the Effective
Date occur if the payments required to be made by the Assignee to the Assignor
on the Effective Date are not made on the proposed Effective Date.

     4. PAYMENT OBLIGATIONS. In consideration for the sale and assignment of
Loans hereunder, the Assignee shall pay the Assignor, on the Effective Date,
the amount agreed to by the Assignor and the Assignee. On and after the
Effective Date, the Assignee shall be entitled to receive from the Agent all
payments of principal, interest and fees with respect to the interest assigned
hereby. The Assignee will promptly remit to the Assignor any interest on Loans
and fees received from the Agent which relate to the portion of the Commitment
or Loans assigned to the Assignee hereunder for periods prior to the Effective
Date and not previously paid by the Assignee to the Assignor. In the event
that either party hereto receives any payment to which the other party hereto
is entitled under this Assignment Agreement, then the party receiving such
amount shall promptly remit it to the other party hereto.

     5. RECORDATION FEE. The Assignor and Assignee each agree to pay one-half
of the recordation fee required to be paid to the Agent in connection with this
Assignment Agreement unless otherwise specified in Item 6 of Schedule 1.

     6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR’S
LIABILITY. The Assignor represents and warrants that (i) it is the legal and

Exhibit E-1

 

beneficial owner of the interest being assigned by it hereunder, (ii) such
interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor
is duly authorized. It is understood and agreed that the assignment and
assumption hereunder are made without recourse to the Assignor and that the
Assignor makes no other representation or warranty of any kind to the Assignee.
Neither the Assignor nor any of its officers, directors, employees, agents or
attorneys shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan
Document, including without limitation, documents granting the Assignor and the
other Banks a security interest in assets of the Borrower or any guarantor,
(ii) any representation, warranty or statement made in or in connection with
any of the Loan Documents, (iii) the financial condition or creditworthiness of
the Borrower or any guarantor, (iv) the performance of or compliance with any
of the terms or provisions of any of the Loan Documents, (v) inspecting any of
the property, books or records of the Borrower, (vi) the validity,
enforceability, perfection, priority, condition, value or sufficiency of any
collateral securing or purporting to secure the Loans or (vii) any mistake,
error of judgment, or action taken or omitted to be taken in connection with
the Loans or the Loan Documents.

     7. REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee (i)
confirms that it has received a copy of the Credit Agreement, together with

copies of the financial statements requested by the Assignee and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement, (ii) agrees that
it will, independently and without reliance upon the Agent, the Assignor or any
other Bank and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, (iii) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto, (iv) confirms
that the execution and delivery of this Assignment Agreement by the Assignee is
duly authorized, (v) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Documents are required to
be performed by it as a Bank, (vi) agrees that its payment instructions and
notice instructions are as set forth in the attachment to Schedule 1, (vii)
confirms that none of the funds, monies, assets or other consideration being
used to make the purchase and assumption hereunder are “plan assets” as defined
under ERISA and that its rights, benefits and interests in and under the Loan
Documents will not be “plan assets” under ERISA, and (viii) agrees to indemnify
and hold the Assignor harmless against all losses, costs and expenses
(including, without limitation, reasonable attorneys’ fees) and liabilities
incurred by the Assignor in connection with or arising in any manner from the
Assignee’s nonperformance of the obligations assumed under this Assignment
Agreement. The Assignee (a) represents and warrants to the Agent and the
Borrower that under applicable law and treaties no tax will be required to be
withheld by the Agent or the Borrower with respect to any payments to be made
to the Assignee hereunder, (b) agrees to furnish (if it is organized under the
laws of any jurisdiction other than the United States or any State thereof) to
the Agent and the Borrower prior to the time that the Agent or Borrower is
required to make any payment of principal, interest or fees hereunder,
duplicate executed originals of U.S. Internal Revenue Service Form W-8ECI or
W-8BEN (or appropriate replacement forms) and agrees to provide new Forms
W-8ECI or W-BEN (or appropriate replacement forms) upon the expiration of any
previously delivered form or comparable statements in accordance with
applicable U.S.

Exhibit E-2

 

law and regulations and amendments thereto, duly executed and completed by
the Assignee and (c) agrees to comply with all applicable U.S. laws and
regulations with regard to such withholding tax exemption.

     8. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.

     9. NOTICES. Notices shall be given under this Assignment Agreement in the
manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall
be the address set forth in the attachment to Schedule 1.

     10. COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement may be
executed in counterparts. Transmission by facsimile of an executed counterpart
of this Assignment Agreement shall be deemed to constitute due and sufficient
delivery of such counterpart and such facsimile shall be deemed to be an
original counterpart of this Assignment Agreement.

     IN WITNESS WHEREOF, the duly authorized officers of the parties hereto
have executed this Assignment Agreement by executing Schedule 1 hereto as of
the date first above written.

Exhibit E-3

 

SCHEDULE 1

to Assignment Agreement

	 	 	 	 	 	 	 
	1.	 	Description and Date of Credit Agreement:	 	 
	 
	 	 	 	 	 	 
	 	 	Credit Agreement dated as of May 14, 2004 among Public Service Company of
Colorado, the lenders named therein including the Assignor, and Bank
One, NA individually and as Agent for such lenders, as it may be
amended from time to time.

	 
	 	 	 	 	 	 
	2.	 	Date of Assignment Agreement:	 	, 20                    
	 
	 	 	 	 	 	 
	3.	 	Amounts (As of Date of Item 2 above):	 	 
	 
	 	 	 	 	 	 
	

	 	a.
	 	Assignee’s percentage
of Aggregate Commitment
(Advances) purchased
under the Assignment
Agreement**
	 	                    %
	 
	 	 	 	 	 	 
	

	 	b.
	 	Amount of Assignor’s
Commitment purchased
under the Assignment
Agreement**
	 	$                    
	 
	 	 	 	 	 	 
	4.	 	Assignee’s Commitment (or Loans	 	 
	 
	 	 	 	 	 	 
	with respect to terminated	 	 
	 
	 	 	 	 	 	 
	Commitments) purchased	 	 
	 
	 	 	 	 	 	 
	hereunder:	 	$        
                                
	 
	 	 	 	 	 
	5.	 	Proposed Effective Date:	 	             
                               
	 
	 	 	 	 	 	 
	6.	 	Non-standard Recordation Fee	 	 

Arrangement

N/A***

[Assignor/Assignee

to pay 100% of fee]

[Fee waived by Agent]

Exhibit E-4

 

	 	 	 	 	 	 	 
	Accepted and Agreed:	 	 	 	 
	 
	 	 	 	 	 	 
	[NAME OF ASSIGNOR]	 	[NAME OF ASSIGNEE]
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	

	 	

	 	 	 	

	 
	 	 	 	 	 	 
	Title

	 	 	 	Title	 	 
	

	 	

	 	 	 	

	 
	 	 	 	 	 	 
	

Exhibit E-5

 

	 	 	 	 	 	 	 
	ACCEPTED AND CONSENTED TO****BY	 	ACCEPTED AND CONSENTED
	 
	 	 	 	 	 	 
	

	 	 	 	TO BY
	 
	 	 	 	 	 	 
	PUBLIC SERVICE	 	BANK ONE, NA, as Agent
	 
	 	 	 	 	 	 
	COMPANY OF COLORADO	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	

	 	

	 	 	 	

	 
	 	 	 	 	 	 
	Title

	 	 	 	Title	 	 
	

	 	

	 	 	 	

	 
	 	 	 	 	 	 
	

	 	 	 
	**

	 	Percentage taken to 10 decimal places
	 
	 	 
	***

	 	If fee is split 50-50, pick N/A as option
	 
	 	 
	****

	 	Delete if not required by Credit Agreement

Exhibit E-6

 

Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT

ADMINISTRATIVE INFORMATION SHEET

Attach Assignor’s Administrative Information Sheet, which must

include notice addresses for the Assignor and the Assignee

(Sample form shown below)

ASSIGNOR INFORMATION

Contact:

	 	 	 	 	 	 	 
	Name:

	 	 	 	Telephone No.:
	

	 	

	 	 	 	

	Fax No.:

	 	 	 	Telex No.:	 	 
	

	 	

	 	 	 	

	 	 	 	 	Answerback:

Payment Information:

Name & ABA # of Destination Bank:

Account Name & Number for Wire Transfer:

Other Instructions:

Address for Notices for Assignor:

ASSIGNEE INFORMATION

Credit Contact:

	 	 	 	 	 	 	 
	Name:

	 	 	 	Telephone No.:
	

	 	

	 	 	 	

	 
	 	 	 	 	 	 
	Fax No.:

	 	 	 	Telex No.:	 	 
	

	 	

	 	 	 	

	 	 	 	 	Answerback:

Exhibit E-7

 

	 	 	 
	Key Operations Contacts:
	 	 
	 
	 	 
	Booking Installation:

	 	Booking Installation:
	 
	 	 
	Name:

	 	Name:
	 
	 	 
	Telephone No.:

	 	Telephone No.:
	 
	 	 
	Fax No.:

	 	Fax No.:
	 
	 	 
	Telex No.:

	 	Telex No.:
	 
	 	 
	Answerback:

	 	Answerback:

Payment Information:

Name & ABA # of Destination Bank:

Account Name & Number for Wire Transfer:

Other Instructions:

Address for Notices for Assignee:

Exhibit E-8

 

     BANK ONE INFORMATION

Assignee will be called promptly upon receipt of the signed agreement.

	 	 	 
	Initial Funding Contact:

	 	Subsequent Operations Contact:
	 
	 	 
	Name:

	 	Name:
	 
	 	 
	Telephone No.: (312)

	 	Telephone No.: (312)
	 
	 	 
	Fax No.: (312)

	 	Fax No.: (312)

Bank One Telex No.: 190201 (Answerback: FNBC UT)

	 	 	 
	Initial Funding Standards:
	 	 
	 
	 	 
	Libor Fund 2 days after rates are set.
	 	 
	 
	 	 
	Bank One Wire Instructions:

	 	1 Bank One, NA, ABA # 071000013
	 
	 	 
	

	 	LS2 Incoming Account # 481152860000
	 
	 	 
	

	 	Ref:                                        
	 
	 	 
	Address for Notices for Bank One:

	 	1 Bank One Plaza, Chicago, IL 60670
	 
	 	 
	

	 	Attn: Agency Compliance Division,
	

	 	Suite IL1-0353
	 
	 	 
	

	 	Fax No. (312) 732-2038 or (312) 732-4339

Exhibit E-9

 

EXHIBIT F

BORROWING CERTIFICATE

                                      , 200__

Bank One, NA,

for itself and as Agent under the Credit

Agreement described below

1 Bank One Plaza

Chicago, Illinois 60670

The Banks, as defined under the Credit

Agreement described below

     Re: $350,000,000 Public Service Company of Colorado Credit Facility

Ladies and Gentlemen:

     Reference is made to the Credit Agreement dated May 14, 2004 (together
with all amendments, modifications and restatements thereof, the “Credit
Agreement”) among Public Service Company of Colorado (the “Borrower”), Bank
One, NA, as Agent, and Banks that are parties thereto. As used herein, terms
defined in the Credit Agreement and not otherwise defined herein have the
meanings given them in the Credit Agreement.

     The Borrower has requested [a Borrowing to be made under Section 2.1 of
the Credit Agreement] [a Letter of Credit to be issued under Section 2.7 of the
Credit Agreement] as more specifically described on Attachment 1.

     I hereby certify to you that the [Borrowing/Letter of Credit (including
the Borrower’s obligation to reimburse the Banks on account of any draw under
such Letter of Credit)] requested by the Borrower (i) has been duly authorized
by the Borrower’s board of directors pursuant to its resolution
dated                  
                     
         , (ii) has been duly authorized by the Public Utilities
Commission of the State of Colorado pursuant to its order dated
                                       
[** alternate for clause (ii): does not and will not
require any authorization, consent or approval of the Public Utilities
Commission of the State of Colorado], and (iii) does not and will not require
any other authorization, consent or approval by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
other than those that have been obtained, copies of which have been delivered
to the Agent pursuant to Section 5.1(d).

Exhibit F-1

 

     I further certify to you that the [Borrowing/Letter of Credit (including
the Borrower’s obligation to reimburse the Banks on account of any draw under
such Letter of Credit)] requested by the Borrower complies with all applicable
requirements of each board resolution and the authorization of the Public
Utilities Commission of the State of Colorado described above, including but
not limited to any applicable limitation on the aggregate amount of debt that
the Borrower may have outstanding at any one time.

	 	 	 	 	 
	 	 	PUBLIC SERVICE COMPANY OF

COLORADO
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	

	

	 	Its	 	 
	

	 	 	 	

Exhibit F-2

 

Attachment 1

Terms of Borrowing:

	1.	 	The Business Day of the proposed Borrowing is    
                .
	 
	2.	 	The aggregate amount of the proposed Borrowing is $  
               
  .
	 
	3.	 	The proposed Borrowing is to be comprised of $                     of Advances to bear
interest at the Base Rate and $                     of Advances to bear interest at the
Eurodollar Rate.
	 
	4.	 	The duration of the Interest Period for Advances that bear interest at the
Eurodollar Rate shall be     months.

Terms of Letter of Credit:

	 	1.	 	The proposed date of issuance is      
              .
	 
	 	2.	 	The stated amount of the Letter of Credit is $    
                .
	 
	 	3.	 	The Letter of Credit is to be issued to    
                .
	 
	 	4.	 	The expiration date of the Letter of Credit is  
               
  .

Exhibit F-3

 

SCHEDULE 2.7

TRANSITIONAL LETTERS OF CREDIT

	 	 	 	 	 	 	 	 	 
	Letter of Credit #
	 	Beneficiary
	 	Amount
	 	Expiration Date

	SLT751320

	 	Antelope Real Estate Co. LLC
	 	$	1,200,000	 	 	July 2, 2004
	SLT430100

	 	Independent System Operator
	 	   CAD1,240,000
	 	March 26, 2005
	0043001

	 	US EPA
	 	$	250,000	 	 	February 24, 2005

 

 

SCHEDULE 4.2

CONSENTS

The approvals or authorizations of the following regulatory bodies, depending
upon the characterization of the Borrowings under the Agreement, may be
required and have each been obtained and are in full force and effect:

     Public Utilities Commission of the State of Colorado

 

 

SCHEDULE 4.4

SUBSIDIARIES

1480 Welton, Inc. (100%)

Green and Clear Lakes Company (100%)

P.S.R. Investments, Inc. (100%)

Various ditch and water companies

None of the above Subsidiaries are Restricted Subsidiaries.

 

 

SCHEDULE 4.6

MATERIAL ADVERSE CHANGE

1. See disclosure regarding the Borrower and its Subsidiaries in the Borrower’s
Annual Report on Form 10-K for the year ended December 31, 2003 (the “2003 Form
10-K”) and the Borrower’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2004 (the “3/31/04 Form 10-Q”).

2. On May 4, 2004, the Colorado Public Utilities Commission (CPUC) gave
preliminary approval to a 2.3 percent increase in Public Service Company of
Colorado’s electricity rates to cover the costs of purchasing generation
capacity from new independent power producers. The Purchased Capacity Cost
Adjustment (PCCA) would be in effect from June 1, 2004, to Dec. 31, 2006, and
would pass through approximately $73.7 million in new capacity costs to Xcel
Energy customers. The costs are associated with recent contracts to purchase
additional electricity, primarily from natural gas-fired power plants, to
ensure adequate supply for customers through 2006. The CPUC disallowed about
31 percent, or $34.7 million, of the company’s requested increase, ruling that
some of the contracts did not warrant extraordinary, accelerated recovery
allowed under the new adjustment.

 

 

SCHEDULE 4.7

LITIGATION

1. See disclosure regarding pending regulatory matters under the heading
Utility Regulation — Pending Regulatory Matters — PSCo in Item 1 of the 2003
Form 10-K, regarding legal proceedings of the Borrower in Note 13 to the
Consolidated Financial Statements contained in the 2003 Form 10-K and regarding
pending regulatory matters of the Borrower under the heading Regulation in Note
2 and regarding legal proceedings of the Borrower in Note 3 to the Financial
Statements contained in the 3/31/04 Form 10-Q.

 

 

SCHEDULE 4.8

ENVIRONMENTAL MATTERS

See disclosure regarding environmental contingencies of the Borrower in Note 13
to the Consolidated Financial Statements contained in the 2003 Form 10-K.

 

 

SCHEDULE 4.22

COMPLIANCE WITH LAWS

1. See disclosure regarding pending regulatory matters under the heading
Utility Regulation — Pending Regulatory Matters — PSCo in Item 1 of the 2003
Form 10-K, regarding legal proceedings of the Borrower in Note 13 to the
Consolidated Financial Statements contained in the 2003 Form 10-K and regarding
pending regulatory matters of the Borrower under the heading Regulation in Note
2 and regarding legal proceedings of the Borrower in Note 3 of the Financial
Statements contained in the 3/31/04 Form 10-Q.

 

 

SCHEDULE 6.1

LIENS

None

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