Document:

ex1002.htm

    

      
        Exhibit
          10.2

         

        Execution
          Copy

        
          

          

        

         

        

      

      

       

      $2,000,000,000

       

      AMENDED
        AND RESTATED

      CREDIT
        AGREEMENT

       

      among

       

      PACIFIC
        GAS AND ELECTRIC COMPANY,

      as
        Borrower,

       

      The
        Several Lenders from Time to Time Parties Hereto,

       

      CITICORP
        NORTH AMERICA, INC.,

      as
        Administrative Agent,

       

      JPMORGAN
        CHASE BANK, N.A.,

      as
        Syndication Agent,

       

      and

       

      BARCLAYS
        BANK Plc, BNP PARIBAS and DEUTSCHE BANK SECURITIES INC.

      as
        Documentation Agents

       

      Dated
        as of February 26, 2007

       

      
        

         

        
          

          

        

        

      

      CITIGROUP
        GLOBAL MARKETS, INC.

      and
        J.P. MORGAN SECURITIES INC.,

      as
        Joint Lead Arrangers and

      Joint
        Bookrunners

       

      

      
        
                

                    
      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      TABLE
        OF CONTENTS

       

      

       

      
        	 	 	 	
                Page

              
	
                SECTION
                  1.

              	
                    

              	
                DEFINITIONS

              	
                1

              
	
                1.1

              	 	
                Defined
                  Terms

              	
                1

              
	
                1.2

              	 	
                Other
                  Definitional Provisions

              	
                16

              
	 	 	 	 
	
                SECTION
                  2.

              	 	
                AMOUNT
                  AND TERMS OF COMMITMENTS

              	
                17

              
	
                2.1

              	 	
                Commitments

              	
                17

              
	
                2.2

              	 	
                Procedure
                  for Revolving Loan Borrowing

              	
                17

              
	
                2.3

              	 	
                Commitment
                  Increases.

              	
                18

              
	
                2.4

              	 	
                Swingline
                  Commitment

              	
                19

              
	
                2.5

              	 	
                Procedure
                  for Swingline Borrowing; Refunding of Swingline Loans

              	
                20

              
	
                2.6

              	 	
                Facility
                  Fees, Utilization Fees, etc

              	
                21

              
	
                2.7

              	 	
                Termination
                  or Reduction of Commitments; Extension of Termination Date

              	
                22

              
	
                2.8

              	 	
                Optional
                  Prepayments

              	
                24

              
	
                2.9

              	 	
                Conversion
                  and Continuation Options

              	
                24

              
	
                2.10

              	 	
                Limitations
                  on Eurodollar Tranches

              	
                25

              
	
                2.11

              	 	
                Interest
                  Rates and Payment Dates

              	
                25

              
	
                2.12

              	 	
                Computation
                  of Interest and Fees

              	
                25

              
	
                2.13

              	 	
                Inability
                  to Determine Interest Rate

              	
                26

              
	
                2.14

              	 	
                Pro
                  Rata Treatment and Payments; Notes

              	
                26

              
	
                2.15

              	 	
                Requirements
                  of Law

              	
                27

              
	
                2.16

              	 	
                Taxes

              	
                29

              
	
                2.17

              	 	
                Indemnity

              	
                31

              
	
                2.18

              	 	
                Change
                  of Lending Office

              	
                31

              
	
                2.19

              	 	
                Replacement
                  of Lenders

              	
                31

              
	 	 	 	 
	
                SECTION
                  3.

              	 	
                LETTERS
                  OF CREDIT

              	
                32

              
	
                3.1

              	 	
                L/C
                  Commitment

              	
                32

              
	
                3.2

              	 	
                Procedure
                  for Issuance of Letters of Credit

              	
                33

              
	
                3.3

              	 	
                Fees
                  and Other Charges.

              	
                33

              
	
                3.4

              	 	
                L/C
                  Participations.

              	
                33

              
	
                3.5

              	 	
                Reimbursement
                  Obligation of the Borrower

              	
                35

              
	
                3.6

              	 	
                Obligations
                  Absolute

              	
                35

              
	
                3.7

              	 	
                Letter
                  of Credit Payments

              	
                36

              
	
                3.8

              	 	
                Applications

              	
                36

              
	
                3.9

              	 	
                Actions
                  of Issuing Lenders

              	
                36

              
	
                3.10

              	 	
                Borrower’s
                  Indemnification

              	
                36

              
	
                3.11

              	 	
                Lenders’
                  Indemnification

              	
                37

              
	 	 	 	 
	
                SECTION
                  4.

              	 	
                REPRESENTATIONS
                  AND WARRANTIES

              	
                37

              
	
                4.1

              	 	
                Financial
                  Condition

              	
                37

              
	
                4.2

              	 	
                No
                  Change

              	
                38

              
	
                4.3

              	 	
                Existence;
                  Compliance with Law

              	
                38

              
	
                4.4

              	 	
                Power;
                  Authorization; Enforceable Obligations

              	
                38

              
	
                4.5

              	 	
                No
                  Legal Bar

              	
                38

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                4.6

              	 	
                Litigation

              	
                39

              
	
                4.7

              	 	
                No
                  Default

              	
                39

              
	
                4.8

              	 	
                Taxes

              	
                39

              
	
                4.9

              	 	
                Federal
                  Regulations

              	
                39

              
	
                4.10

              	 	
                ERISA

              	
                39

              
	
                4.11

              	 	
                Investment
                  Company Act; Other Regulations

              	
                40

              
	
                4.12

              	 	
                Use
                  of Proceeds

              	
                40

              
	
                4.13

              	 	
                Environmental
                  Matters

              	
                40

              
	
                4.14

              	 	
                Accuracy
                  of Information, etc

              	
                41

              
	
                4.15

              	 	
                Regulatory
                  Matters

              	
                42

              
	 	 	 	 
	
                SECTION
                  5.

              	 	
                CONDITIONS
                  PRECEDENT

              	
                42

              
	
                5.1

              	 	
                Conditions
                  to the Effective Date

              	
                42

              
	
                5.2

              	 	
                Conditions
                  to Each Credit Event

              	
                43

              
	 	 	 	 
	
                SECTION
                  6.

              	 	
                AFFIRMATIVE
                  COVENANTS

              	
                44

              
	
                6.1

              	 	
                Financial
                  Statements

              	
                44

              
	
                6.2

              	 	
                Certificates;
                  Other Information

              	
                44

              
	
                6.3

              	 	
                Payment
                  of Taxes

              	
                45

              
	
                6.4

              	 	
                Maintenance
                  of Existence; Compliance

              	
                45

              
	
                6.5

              	 	
                Maintenance
                  of Property; Insurance

              	
                45

              
	
                6.6

              	 	
                Inspection
                  of Property; Books and Records; Discussions

              	
                45

              
	
                6.7

              	 	
                Notices

              	
                46

              
	
                6.8

              	 	
                Maintenance
                  of Licenses, etc

              	
                46

              
	 	 	 	 
	
                SECTION
                  7.

              	 	
                NEGATIVE
                  COVENANTS

              	
                46

              
	
                7.1

              	 	
                Consolidated
                  Capitalization Ratio

              	
                47

              
	
                7.2

              	 	
                Liens

              	
                47

              
	
                7.3

              	 	
                Fundamental
                  Changes

              	
                47

              
	 	 	 	 
	
                SECTION
                  8.

              	 	
                EVENTS
                  OF DEFAULT

              	
                47

              
	 	 	 	 
	
                SECTION
                  9.

              	 	
                THE
                  AGENTS

              	
                50

              
	
                9.1

              	 	
                Appointment

              	
                50

              
	
                9.2

              	 	
                Delegation
                  of Duties

              	
                50

              
	
                9.3

              	 	
                Exculpatory
                  Provisions

              	
                50

              
	
                9.4

              	 	
                Reliance
                  by Administrative Agent

              	
                51

              
	
                9.5

              	 	
                Notice
                  of Default

              	
                51

              
	
                9.6

              	 	
                Non-Reliance
                  on Agents and Other Lenders

              	
                51

              
	
                9.7

              	 	
                Indemnification

              	
                52

              
	
                9.8

              	 	
                Agent
                  in Its Individual Capacity

              	
                52

              
	
                9.9

              	 	
                Successor
                  Administrative Agent

              	
                52

              
	
                9.10

              	 	
                Documentation
                  Agents and Syndication Agent

              	
                53

              
	 	 	 	 
	
                SECTION
                  10.

              	 	
                MISCELLANEOUS

              	
                53

              
	
                10.1

              	 	
                Amendments
                  and Waivers

              	
                53

              
	
                10.2

              	 	
                Notices

              	
                55

              
	
                10.3

              	 	
                No
                  Waiver; Cumulative Remedies

              	
                56

              
	
                10.4

              	 	
                Survival
                  of Representations and Warranties

              	
                56

              
	
                10.5

              	 	
                Payment
                  of Expenses and Taxes

              	
                56

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                10.6

              	 	
                Successors
                  and Assigns; Participations and Assignments

              	
                57

              
	
                10.7

              	 	
                Adjustments;
                  Set off

              	
                60

              
	
                10.8

              	 	
                Counterparts

              	
                61

              
	
                10.9

              	 	
                Severability

              	
                61

              
	
                10.10

              	 	
                Integration

              	
                61

              
	
                10.11

              	 	
                GOVERNING
                  LAW

              	
                61

              
	
                10.12

              	 	
                Submission
                  To Jurisdiction; Waivers

              	
                61

              
	
                10.13

              	 	
                Acknowledgments

              	
                62

              
	
                10.14

              	 	
                Confidentiality

              	
                62

              
	
                10.15

              	 	
                WAIVERS
                  OF JURY TRIAL

              	
                63

              
	
                10.16

              	 	
                USA
                  Patriot Act

              	
                63

              
	
                10.17

              	 	
                Judicial
                  Reference

              	
                63

              

      

      

       

       

      SCHEDULES:

       

      
        	
                1.1A

              	
                Commitments

              

      

       

      EXHIBITS:

       

      
        	
                A

              	
                Form
                  of New Lender Supplement

              

      

      
        	
                B

              	
                Form
                  of Commitment Increase Supplement

              

      

      
        	
                C

              	
                Form
                  of Compliance Certificate

              

      

      
        	
                D

              	
                Form
                  of Closing Certificate

              

      

      
        	
                E

              	
                Form
                  of Assignment and Assumption

              

      

      
        	
                F

              	
                Form
                  of Legal Opinion of Orrick, Herrington & Sutcliffe
                  LLP

              

      

      
        	
                G

              	
                Form
                  of Exemption Certificate

              

      

      
        	
                H

              	
                Form
                  of Note

              

      

      

      
        
                

                              
                            
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      AMENDED
        AND RESTATED CREDIT AGREEMENT (this “Agreement”), dated as of February
        26, 2007, among PACIFIC GAS AND ELECTRIC COMPANY, a California corporation
        (the
“Borrower”), the several banks and other financial institutions or
        entities from time to time parties to this Agreement (the “Lenders”),
        CITIGROUP GLOBAL MARKETS, INC. and J.P. MORGAN SECURITIES INC., as joint
        lead
        arrangers and joint bookrunners (together and in such capacities, the
“Arrangers”), JPMORGAN CHASE BANK, N.A., as syndication agent (in such
        capacity, the “Syndication Agent”), BARCLAYS BANK Plc, BNP PARIBAS and
        DEUTSCHE BANK SECURITIES INC., as documentation agents (together and in such
        capacities, the “Documentation Agents”), and CITICORP NORTH AMERICA, INC.
        (“Citicorp”), as administrative agent (in such capacity, together with
        any successor thereto, the “Administrative Agent”).

       

      W
        I T N E S S E T H:

       

      WHEREAS,
        the Borrower, the Administrative Agent, the Syndication Agent, the Arrangers
        and
        certain of the Lenders have previously entered into a Credit Agreement, dated
        as
        of April 8, 2005, as amended by the First Amendment, dated as of
        November 30, 2005 (collectively, the “Existing Credit Agreement”),
        pursuant to which such Lenders made available to the Borrower (i) a
        facility permitting the issuance, for the Borrower’s account, of letters of
        credit to provide for payment under energy procurement contracts and (ii) a
        facility permitting the issuance, for the Borrower’s account, of letters of
        credit for purposes other than energy procurement and revolving credit loans
        and
        swingline loans; and

       

      WHEREAS,
        the Borrower, the Administrative Agent, the Syndication Agent, the Arrangers
        and
        the Lenders wish to amend and restate the Existing Credit Agreement upon
        the
        terms and conditions set forth herein;

       

      NOW,
        THEREFORE, IT IS AGREED THAT the Existing Credit Agreement shall be amended
        and
        restated in its entirety to read as follows:

       

      SECTION
        1.  DEFINITIONS

       

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

       

      “ABR”:  for
        any day, a rate per annum (rounded upwards, if necessary, to the next 1/16
        of
        1%) equal to the greater of (a) the Base Rate in effect on such day and
        (b) the Federal Funds Effective Rate in effect on such day plus1⁄2 of
        1%.  For purposes hereof, “Base Rate” shall mean the rate of
        interest per annum publicly announced from time to time by the Administrative
        Agent as its base rate in effect at its principal office in New York City
        (the
        Base Rate not being intended to be the lowest rate of interest charged by
        the
        Administrative Agent in connection with extensions of credit to
        debtors).  Any change in the ABR due to a change in the Base Rate or
        the Federal Funds Effective Rate shall be effective as of the opening of
        business on the effective day of such change in the Base Rate or the Federal
        Funds Effective Rate, respectively.

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                2

              

      

       

      “Act”:  as
        defined in Section 10.16.

       

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

       

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

       

      “Agreement”:  as
        defined in the preamble hereto.

       

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

       

      
        	
                Level

              	
                Rating

                S&P/Moody’s

              	
                Applicable
                  Margin

                for

                ABR
                  Loans

              	
                Applicable
                  Margin

                for

                Eurodollar
                  Loans

              
	
                1

              	
                A+/A1
                  or higher

              	
                0%

              	
                0.105%

              
	
                2

              	
                A/A2

              	
                0%

              	
                0.150%

              
	
                3

              	
                A-/A3

              	
                0%

              	
                0.190%

              
	
                4

              	
                BBB+/Baa1

              	
                0%

              	
                0.280%

              
	
                5

              	
                BBB/Baa2

              	
                0%

              	
                0.360%

              
	
                6

              	
                BBB-/Baa3

              	
                0%

              	
                0.425%

              
	
                7

              	
                BB+/Ba1
                  or lower

              	
                0%

              	
                0.600%

              

      

      

      Subject
        to the provisions of this paragraph regarding split ratings, changes in the
        Applicable Margins shall become effective on the date on which S&P and/or
        Moody’s changes its relevant Rating.  In the event the Ratings of
        S&P and Moody’s are in different levels set forth in the grid above, the
        higher of the two Ratings (i.e., the Rating set forth in the grid above
        opposite the lower numerical level number) shall govern.  In the event
        that, at any time, a Rating is not available from one of such rating agencies,
        the Applicable Margins shall be determined on the basis of the Rating from
        the
        other rating agency.  In the event that, at any time, Ratings from
        each such rating agency are not available for companies generally, the
        Applicable Margins shall be determined on the basis of the last Rating(s)
        made
        available.  In the event that, at any time, such Ratings are not
        available for the Borrower but are generally available for other companies,
        then
        the Applicable Margins shall be those set forth above opposite
        level 7.

       

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

       

      “Arrangers”:  as
        defined in the preamble hereto.

       

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

       

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

       

      
        
          

        

      

       

      
        	
                3

              

      

       

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

       

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

       

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

       

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

       

      “Borrower”:  as
        defined in the preamble hereto.

       

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

       

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

       

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

       

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

       

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

       

      “Citicorp”:  as
        defined in the preamble hereto.

       

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

      
 

      
        
          

        

      

       

      
        	
                4

              

      

       

      “Commitment”:  as
        to any Lender, the obligation of such Lender, if any, to make Revolving Loans
        and participate in Swingline Loans and Letters of Credit in an aggregate
        principal and/or face amount not to exceed the amount set forth under the
        heading “Commitment” opposite such Lender’s name on Schedule 1.1A or in
        the Assignment and Assumption or New Lender Supplement pursuant to which
        such
        Lender became a party hereto, as the same may be changed from time to time
        pursuant to the terms hereof.  The original amount of the Total
        Commitments is $2,000,000,000.

       

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

       

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

       

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

       

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

       

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

       

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

       

      “Consolidated
        Capitalization”: on any date of determination, the sum of (a) Consolidated
        Total Debt on such date, plus without duplication, (b) (i) the amounts
        set forth opposite the captions “common shareholders’ equity” (or any similar
        caption) and “preferred stock” (or any similar caption) on the consolidated
        balance sheet, prepared in accordance with GAAP, of the Borrower and its
        Subsidiaries as of such date, and (ii) the outstanding principal amount of
        any
        junior subordinated deferrable interest debentures or other similar securities
        issued by the Borrower or any of its Subsidiaries after the Effective
        Date.

       

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

       

       “Consolidated
        Total Debt”:  at any date, the aggregate principal amount of all
        obligations of the Borrower and its Significant Subsidiaries at such date
        that
        in accordance with

       
        
          

        

      

       

      
        	
                5

              

      

       

      GAAP
        would be classified as debt on a consolidated balance sheet of the Borrower,
        and
        without duplication all Guarantee Obligations of the Borrower and its
        Significant Subsidiaries at such date in respect of obligations of any other
        Person that in accordance with GAAP would be classified as debt on a
        consolidated balance sheet of such Person; provided that, the
        determination of “Consolidated Total Debt” shall exclude, without
        duplication, (a) the Securitized Bonds, (b) Indebtedness of the Borrower
        and its
        Significant Subsidiaries in an amount equal to the amount of cash held as
        cash
        collateral for any fully cash collateralized letter of credit issued for
        the
        account of the Borrower or any Significant Subsidiary, (c) imputed Indebtedness
        of the Borrower or any Significant Subsidiary incurred in connection with
        power
        purchase agreements, (d) any junior subordinated deferrable interest debentures
        or other similar securities issued by the Borrower or any of its Subsidiaries
        after the Effective Date and (e) as of a date of determination, the amount
        of
        any securities included within the caption “preferred stock” (or any similar
        caption) on the consolidated balance sheet, prepared in accordance with GAAP,
        of
        the Borrower and its Subsidiaries as of such date.

       

      “Continuing
        Lender”:  as defined in Section 2.7.

       

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

       

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

       

      “Credit
        Event”:  as defined in Section 5.2.

       

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

       

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

       

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

       

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

       

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

       

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

       
        
          

        

      

       

      
        	
                6

              

      

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          	
                  Eurodollar
                    Base Rate

                
	
                  1.00
                    - Eurocurrency Reserve
                    Requirements

                

        

      

      

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

       
        
          

        

      

       

      
        	
                7

              

      

       

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

       

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

       

      “Existing
        Credit Agreement”:  has the meaning set forth in the first recital
        paragraph.

       

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

       

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

       

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

       

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

       

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

       

      
        	
                Level

              	
                Rating

                S&P/Moody’s

              	
                Facility
                  Fee Rate

              
	
                1

              	
                A+/A1
                  or higher

              	
                0.045%

              
	
                2

              	
                A/A2

              	
                0.050%

              
	
                3

              	
                A-/A3

              	
                0.060%

              
	
                4

              	
                BBB+/Baa1

              	
                0.070%

              
	
                5

              	
                BBB/Baa2

              	
                0.090%

              
	
                6

              	
                BBB-/Baa3

              	
                0.125%

              
	
                7

              	
                BB+/Ba1
                  or lower

              	
                0.150%

              

      

      

       

      Subject
        to the provisions of this paragraph regarding split ratings, changes in the
        Facility Fee Rate shall become effective on the date on which S&P and/or
        Moody’s changes its relevant Rating.  In the event the Ratings of
        S&P and Moody’s are in different levels set forth in the grid above, the
        higher of the two Ratings (i.e., the Rating set forth in the grid above
        opposite the lower numerical level number) shall govern.  In the event
        that, at any time, a Rating is not available from one of such rating agencies,
        the Facility Fee Rate shall be determined on the basis of the Rating from
        the
        other rating agency.  In the event that, at any time, Ratings from
        each such rating agency are not available for companies generally, the Facility
        Fee Rate shall be determined on the basis of the last Rating(s) made
        available.  In the event that, at any time, such Ratings are not
        available for the Borrower but are generally available for other companies,
        then
        the Facility Fee Rate shall be that set forth above opposite
        level 7.

       
        
          

        

      

       

      
        	
                8

              

      

       

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

       

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

       

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

       

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

       

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

       

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

       

      “Guarantee
        Obligation”:  as to any Person (the “guaranteeing person”),
        any obligation, including a reimbursement, counterindemnity or similar
        obligation, of the guaranteeing person that guarantees any Indebtedness,
        leases,
        dividends or other obligations (the “primary obligations”) of any other
        third Person (the “primary obligor”) in any manner, whether

       
        
          

        

      

       

      
        	
                9

              

      

      

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

       

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

       
        
          

        

      

       

      
        	
                10

              

      

       

      include
        the Indebtedness of any other entity (including any partnership in which
        such
        Person is a general partner) to the extent such Person is liable therefor
        as a
        result of such Person’s ownership interest in or other relationship with such
        entity, except to the extent the terms of such Indebtedness expressly provide
        that such Person is not liable therefor.

       

      “Indenture”:  the
        Indenture, dated as of April 22, 2005, which supplemented, amended and restated
        the Indenture of Mortgage, dated as of March 11, 2004, between the Borrower
        and the Indenture Trustee, as supplemented by the First Supplemental Indenture,
        dated as of March 23, 2004, the Second Supplemental Indenture, dated as of
        April 12, 2004, and as further supplemented or amended from time to
        time.

       

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

       

      “Information
        Memorandum”:  the information memorandum dated January 2007, and
        furnished to certain Lenders in connection with the syndication of the
        Commitments, as supplemented by each and all Specified Exchange Act Filings
        filed by the Borrower during the period from September 30, 2006 through the
        date of this Agreement.

       

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

       

      “Insolvent”:  pertaining
        to a condition of Insolvency.

       

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

       

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

       

      (i)  if
        any Interest Period would otherwise end on a day that is not a Business Day,
        such Interest Period shall be extended to the next succeeding Business
        Day

      
        
          

        

      

       

      
        	
                11

              

      

       

      unless
        the result of such extension would be to carry such Interest Period into
        another
        calendar month in which event such Interest Period shall end on the immediately
        preceding Business Day;

       

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

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

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

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

       

      “L/C
        Commitment”:  $950,000,000.

       

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

       

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

       

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

       

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

       

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

       

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

       
        
          

        

      

       

      
        	
                12

              

      

       

      “Loan
        Documents”:  this Agreement, the Notes and the Applications and,
        in each case, any amendment, waiver, supplement or other modification to
        any of
        the foregoing.

       

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

       

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

       

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

       

      “Mortgaged
        Property”:  as defined in the Indenture.

       

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

       

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

       

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

       

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

       

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

       

      “Non-Procurement
        Facility Limit”:  $1,050,000,000.

       

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

       

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

       

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

       

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

       

      “Obligations”:  the
        unpaid principal of and interest on (including, without limitation, interest
        accruing after the maturity of the Loans and Reimbursement Obligations and
        interest accruing after the filing of any petition in bankruptcy, or the
        commencement of any

       
        
          

        

      

       

      
        	
                13

              

      

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      “Procurement
        L/C Facility Limit”:  $950,000,000.

       
        
          

        

      

       

      
        	
                14

              

      

       

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

       

      “Rating”:  each
        rating announced by S&P and Moody’s in respect of the Borrower’s senior
        unsecured, non credit-enhanced debt.

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      “Securitized
        Bonds”:  any securitized bonds or similar asset-backed securities
        that are non-recourse to the Borrower, are issued by a special purpose
        subsidiary of the Borrower and

       
        
          

        

      

       

      
        	
                15

              

      

       

      are
        payable from a specific or dedicated rate component, including the approximately
        $2,900,000,000 in rate reduction certificates backed by transition property
        that
        were issued in 1997 and the approximately $2,700,000,000 in energy recovery
        bonds backed by energy recovery property that the Borrower issued in
        2005.

       

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

       

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

       

      “Specified
        Exchange Act Filings”:  the Borrower’s Form 10-K annual report for
        the year ended December 31, 2005 and each and all of the Form 10-Ks, Form
        10-Qs and Form 8-Ks (and to the extent applicable proxy statements) filed
        by the
        Borrower or PCG with the SEC after December 31, 2005 and prior to the date
        that is one Business Day before the date of this Agreement.

       

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

       

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

       

      “Swingline
        Commitment”:  the obligation of the Swingline Lender to make
        Swingline Loans pursuant to Section 2.4 in an aggregate principal amount at
        any one time outstanding not to exceed $200,000,000.

       

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

       

      “Swingline
        Loans”:  as defined in Section 2.4.

       
        
          

        

      

       

      
        	
                16

              

      

       

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

       

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

       

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

       

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

       

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

       

      “Transferee”:  any
        Assignee or Participant.

       

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

       

      “United
        States”:  the United States of America.

       

      “Utilization
        Fee Rate”:  for any day, 0.050% per annum.

       

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

       

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

       

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

       

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

       

      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

      

      
        	
                17

              

      

       

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

       

      SECTION
        2.  AMOUNT
        AND TERMS OF COMMITMENTS

       

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

       

      (b)  The
        Borrower shall repay all outstanding Revolving Loans on the Termination
        Date.

       

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

       
        

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            
18

           

        

      

       

      Noon,
        New York City time, on the Borrowing Date requested by the Borrower in funds
        immediately available to the Administrative Agent.  Such borrowing
        will then be made available to the Borrower by the Administrative Agent
        crediting the account of the Borrower on the books of such office with the
        aggregate of the amounts made available to the Administrative Agent by the
        Lenders and in like funds as received by the Administrative Agent.

       

      2.3  Commitment
        Increases.

       

      (a)  In
        the event that the Borrower wishes to increase the Total Commitments at any
        time
        when no Default or Event of Default has occurred and is continuing (or shall
        result of such increase) and subject to obtaining all necessary regulatory
        approvals, it shall notify the Administrative Agent in writing of the amount
        (the “Revolving Credit Offered Increase Amount”) of such proposed
        increase (such notice, a  “Commitment Increase Notice”) which
        shall be in a minimum amount equal to $10,000,000 and shall not exceed, in
        the
        aggregate, $1,000,000,000.  The Borrower shall offer each of the
        Lenders the opportunity to provide such Lender’s Percentage of the Revolving
        Credit Offered Increase Amount, and if any Lender declines such offer, in
        whole
        or in part, the Borrower may offer such declined amount to (i) other
        Lenders and/or (ii) other banks, financial institutions or other entities
        with the consent of the Administrative Agent and, unless any such other bank,
        financial institution or other entity would qualify as an Eligible Assignee,
        the
        Issuing Lender (which consents of the Administrative Agent and the Issuing
        Lender shall not be unreasonably withheld or delayed).  The Commitment
        Increase Notice shall specify the Lenders and/or banks, financial institutions
        or other entities that will be requested to provide such Revolving Credit
        Offered Increase Amount.  The Borrower or, if requested by the
        Borrower, the Administrative Agent will notify such Lenders, and/or banks,
        financial institutions or other entities of such offer.

       

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

       

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

       

      (d)  If
        any bank, financial institution or other entity becomes a New Revolving Credit
        Lender pursuant to Section 2.3(b) or any Lender’s Commitment is increased
        pursuant to Section 2.3(c), additional Revolving Loans made on or after the
        effectiveness thereof (the “Revolving Credit Re-Allocation Date”) shall
        be made pro rata based on the Percentages in

       
        
           

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      
        	
                19

              

      

       

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

       

      (e)  Notwithstanding
        anything to the contrary in this Section 2.3, (i) no Lender shall have
        any obligation to increase its Commitment unless it agrees to do so in its
        sole
        discretion and unless the Administrative Agent and the Issuing Lender consent
        to
        such increase (which consents of the Administrative Agent and the Issuing
        Lender
        shall not be unreasonably withheld or delayed) and (ii) in no event shall
        any transaction effected pursuant to this Section 2.3 (A) cause the Total
        Commitments to exceed $3,000,000,000 or (B) occur at a time at which a Default
        or an Event of Default has occurred and is continuing.

       

      (f)  The
        Administrative Agent shall have received on or prior to the Revolving Credit
        Re-Allocation Date, for the benefit of the Lenders, (i) a legal opinion of
        counsel to the Borrower covering such matters as are customary for transactions
        of this type as may be reasonably requested by the Administrative Agent,
        which
        opinions shall be substantially the same, to the extent appropriate, as the
        opinions rendered by counsel to the Borrower on the Effective Date and
        (ii) certified copies of resolutions of the board of directors of the
        Borrower authorizing the Borrower to borrow the Revolving Credit Offered
        Increase Amount.

       

      2.4  Swingline
        Commitment.   (a)   Subject to the terms and
        conditions hereof, the Swingline Lender agrees to make a portion of the credit
        otherwise available to the Borrower under the Commitments from time to time
        on
        or after the Effective Date during the Commitment Period by making swingline
        loans (“Swingline Loans”) to the Borrower; provided that
        (i) the aggregate principal amount of Swingline Loans outstanding at any
        time shall not exceed the Swingline Commitment then in effect (notwithstanding
        that the Swingline Loans outstanding at any time, when aggregated with the
        Swingline Lender’s other outstanding Revolving Loans, may exceed the Swingline
        Commitment or the Swingline Lender’s Commitment then in effect) and
        (ii) the Borrower shall not request, and the Swingline Lender shall not
        make, any Swingline Loan if, after giving effect to the making of such Swingline
        Loan, (x) the aggregate amount of the Available Commitments would be less
        than zero or (y) subject to Section 10.1, the aggregate outstanding
        principal amount of all Loans plus the aggregate outstanding amount of
        L/C

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                20

              

      

       

      Obligations
        in respect of Non-Procurement Letters of Credit would exceed the Non-Procurement
        Facility Limit.  During the Commitment Period, the Borrower may use
        the Swingline Commitment by borrowing, repaying and reborrowing, all in
        accordance with the terms and conditions hereof.  Swingline Loans
        shall be ABR Loans only.

       

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

       

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

       

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

       

      (c)  If
        prior to the time a Revolving Loan would have otherwise been made pursuant
        to
        Section 2.5(b), one of the events described in Section 8(f) shall have
        occurred and be continuing with respect to the Borrower or if for any other
        reason, as determined by the Swingline Lender in its sole discretion, Revolving
        Loans may not be made as contemplated by

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                21

              

      

       

      Section
        2.5(b), each Lender shall, on the date such Revolving Loan was to have been
        made
        pursuant to the notice referred to in Section 2.5(b), purchase for cash an
        undivided participating interest in the then outstanding Swingline Loans
        by
        paying to the Swingline Lender an amount (the “Swingline Participation
        Amount”) equal to (i) such Lender’s Percentage times
        (ii) the sum of the aggregate principal amount of Swingline Loans then
        outstanding that were to have been repaid with such Revolving
        Loans.

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                22

              

      

       

      Utilization
        Fee Rate on such average daily aggregate principal amount of the Loans and
        the
        L/C Obligations outstanding during such calendar quarter (or shorter period),
        payable in arrears on each Fee Payment Date.

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                23

              

      

       

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

       

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

       

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

      

       
        
          

        

      

       

      
        	
                24

              

      

      principal
        amount exceeding the aggregate Available Commitments (calculated on the basis
        of
        the Commitments of the Continuing Lenders).

       

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

       

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

       

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

      

      
        
          

        

       

      
        	
                25

              

      

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                26

              

      

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                27

              

      

       

      month,
        in which event such payment shall be made on the immediately preceding Business
        Day.  In the case of any extension of any payment of principal
        pursuant to the preceding two sentences, interest thereon shall be payable
        at
        the then applicable rate during such extension.

       

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

       

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

       

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

       

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

       

      
        

      

    

     

    
      	
              28

            

    

     

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

     

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

     

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

     

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

     

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

    

     
      
        

      

    

     

    
      	
              29

            

    

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              30

            

    

     

    incremental
      taxes, interest or penalties that may become payable by the Administrative
      Agent
      or any Lender as a result of any such failure.

     

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

     

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

     

    (f)  If
      the Administrative Agent or any Lender determines, in its sole discretion,
      that
      it has received a refund of any Non-Excluded Taxes or Other Taxes as to which
      it
      has been indemnified by the Borrower or with respect to which the Borrower
      has
      paid amounts pursuant to this Section 2.16, it shall pay over such refund to
      the
      Borrower (but only to the extent of

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              31

            

    

     

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

     

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

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

     

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

     

    2.19  Replacement
      of Lenders.  The Borrower shall be permitted to replace any Lender
      that (a) requests (on its behalf or any of its Participants) reimbursement
      for amounts owing pursuant to Section 2.15 or 2.16(a) or (b) defaults in
      its obligation to make Loans hereunder, with a replacement financial
      institution; provided that (i) such replacement does not conflict
      with any Requirement of Law, (ii) no Event of Default shall have occurred
      and be continuing at the time of such replacement, (iii) prior to any such
      replacement, such Lender shall have taken no action under Section 2.18 which
      eliminates the continued need for payment of amounts owing pursuant to Section
      2.15 or 2.16(a), (iv) the replacement financial institution

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              32

            

    

     

    shall
      purchase, at par, all Loans and other amounts owing to such replaced Lender
      on
      or prior to the date of replacement, (v) the Borrower shall be liable to
      such replaced Lender under Section 2.17 if any Eurodollar Loan owing to such
      replaced Lender shall be purchased other than on the last day of the Interest
      Period relating thereto, (vi) the replacement financial institution, if not
      already a Lender, shall be reasonably satisfactory to the Administrative Agent,
      (vii) the replaced Lender shall be obligated to make such replacement in
      accordance with the provisions of Section 10.6 (provided that the
      Borrower shall be obligated to pay the registration and processing fee referred
      to therein), (viii) until such time as such replacement shall be
      consummated, the Borrower shall pay all additional amounts (if any) required
      pursuant to Section 2.15 or 2.16(a), as the case may be, and (ix) any such
      replacement shall not be deemed to be a waiver of any rights that the Borrower,
      the Administrative Agent or any other Lender shall have against the replaced
      Lender.

     

    SECTION
      3.  LETTERS
      OF CREDIT

     

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

    
       

      
        

      

    

     

    
      	
              33

            

    

     

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

     

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

     

    3.3  Fees
      and Other Charges.

     

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

     

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

     

    3.4  L/C
      Participations.

     

    (a)  Each
      Issuing Lender irrevocably agrees to grant and hereby grants to each L/C
      Participant, and, to induce each Issuing Lender to issue Letters of Credit
      hereunder, each L/C Participant irrevocably agrees to accept and purchase and
      hereby accepts and purchases from each Issuing Lender, on the terms and
      conditions hereinafter stated, for such L/C

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              34

            

    

     

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

     

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

     

    (c)  Whenever,
      at any time after an Issuing Lender has made payment under any Letter of Credit
      and has received from the Administrative Agent any L/C Participant’s pro
      rata share of such payment in accordance with Section 3.4(a), such Issuing
      Lender receives any payment related to such Letter of Credit (whether directly
      from the Borrower or otherwise, including proceeds of collateral applied thereto
      by such Issuing Lender), or any payment of interest on account thereof, such
      Issuing Lender will distribute to the Administrative Agent for

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              35

            

    

     

    the
      account of such L/C Participant (and thereafter the Administrative Agent will
      promptly distribute to such  L/C Participant) its pro rata share
      thereof; provided, however, that in the event that any such
      payment received by such Issuing Lender shall be required to be returned by
      such
      Issuing Lender, such L/C Participant shall return to the Administrative Agent
      for the account of such Issuing Lender (and thereafter the Administrative Agent
      shall promptly return to such Issuing Lender) the portion thereof previously
      distributed by such Issuing Lender.

     

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

     

    3.6  Obligations
      Absolute.  The Borrower’s obligations under this Section 3
      shall be absolute and unconditional under any and all circumstances and
      irrespective of any setoff, counterclaim or defense to payment that the Borrower
      may have or have had against any Issuing Lender, any beneficiary of a Letter
      of
      Credit or any other Person; other than with respect to any action taken or
      omitted by an Issuing Lender under or in connection with any Letter of Credit
      issued by it or the related drafts or documents found to constitute gross
      negligence or willful misconduct or not in accordance with the standards of
      care
      specified in the Uniform Commercial ode of the State of New York.  The
      Borrower also agrees with each Issuing Lender that such Issuing Lender shall
      not
      be responsible for, and the Borrower’s Reimbursement Obligations under
      Section 3.5 shall not be affected by, among other things, the validity or
      genuineness of documents or of any endorsements thereon, even though such
      documents shall in fact prove to be invalid, fraudulent or forged, or any
      dispute between or among the Borrower and any beneficiary of any Letter of
      Credit or any other party to which such Letter of Credit may be transferred
      or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              36

            

    

     

    any
      claims whatsoever of the Borrower against any beneficiary of such Letter of
      Credit or any such transferee.  No Issuing Lender shall be liable for
      any error, omission, interruption or delay in transmission, dispatch or delivery
      of any message or advice, however transmitted, in connection with any Letter
      of
      Credit, except for errors or omissions which resulted from the gross negligence
      or willful misconduct of such Issuing Lender.  The Borrower agrees
      that any action taken or omitted by an Issuing Lender under or in connection
      with any Letter of Credit issued by it or the related drafts or documents,
      if
      done in the absence of gross negligence or willful misconduct and in accordance
      with the standards or care specified in the Uniform Commercial Code of the
      State
      of New York, shall be binding on the Borrower and shall not result in any
      liability of such Issuing Lender to the Borrower.

     

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

     

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

     

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

     

    3.10  Borrower’s
      Indemnification.  The Borrower hereby agrees to indemnify and hold
      harmless each Lender, each Issuing Lender and the Administrative Agent, and
      their respective directors, officers, agents and employees from and against
      any
      and all claims and damages, losses, liabilities, costs or expenses which such
      Lender, such Issuing Lender or the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              37

            

    

     

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

     

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

     

    SECTION
      4.  REPRESENTATIONS
      AND WARRANTIES

     

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

     

    4.1  Financial
      Condition.  The audited consolidated balance sheet of the Borrower
      and its consolidated Subsidiaries as of December 31, 2006, and the related
      consolidated statement of operations and cash flows for the fiscal year ended
      on
      such date, reported on by Deloitte & Touche LLP, present fairly in all
      material respects the consolidated financial condition of the Borrower and
      its
      consolidated Subsidiaries as of such date, and the consolidated

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              38

            

    

     

    results
      of its operations and its consolidated cash flows for the respective fiscal
      year
      then ended.  All such financial statements, including the related
      schedules and notes thereto, have been prepared in accordance with GAAP applied
      consistently throughout the periods involved.

     

    4.2  No
      Change.  Since December 31, 2006, there has been no
      development or event that has had or could reasonably be expected to have a
      Material Adverse Effect, except as disclosed in the Specified Exchange Act
      Filings.

     

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

     

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

     

    4.5  No
      Legal Bar.  The execution, delivery and performance of this
      Agreement and the other Loan Documents, the issuance of Letters of Credit,
      the
      borrowings hereunder and the use of the proceeds thereof will not violate in
      any
      material respect any Requirement of Law or any Contractual Obligation of the
      Borrower or any of its Significant Subsidiaries and will not result in, or
      require, the creation or imposition of any Lien on any of their respective
      properties

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              39

            

    

     

    or
      revenues pursuant to any Requirement of Law or any such Contractual Obligation
      (other than the Liens created by the Indenture).

     

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

     

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

     

    4.7  No
      Default.  No Default or Event of Default has occurred and is
      continuing.

     

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

     

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

     

    4.10  ERISA.  Neither
      a Reportable Event (other than the Post-event Notices of Reportable Events
      filed
      with the PBGC on May 2, 2001, in respect of the April 6, 2001,
      bankruptcy filing of the Borrower, on July 16, 2003, in respect of the
      July 8, 2003, bankruptcy filing of National Energy & Gas
      Transmission (“NEGT”), and on November 4, 2004, in respect of the
      departure of NEGT from the Borrower controlled group of companies on
      October 29, 2004) nor an “accumulated funding deficiency” (within the
      meaning of Section 412 of the Code or Section 302 of ERISA) has
      occurred during the five year period prior to the date on which this
      representation is made or deemed made with respect to any Plan, and each Plan
      has complied with the applicable provisions of ERISA and the Code, except,
      in
      each case, to the extent that any such Reportable Event, “accumulated funding
      deficiency” or failure to comply with the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              40

            

    

     

    applicable
      provisions of ERISA or the Code could not reasonably be expected to result
      in a
      Material Adverse Effect.  No termination of a Single Employer Plan has
      occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such
      five-year period.  The present value of all accrued benefits under
      each Single Employer Plan (based on those assumptions used to fund such Plans)
      did not, as of the last annual valuation date prior to the date on which this
      representation is made or deemed made, exceed the value of the assets of such
      Plan allocable to such accrued benefits by a material amount.  Neither
      the Borrower nor any Commonly Controlled Entity has had a complete or partial
      withdrawal from any Multiemployer Plan that has resulted or could reasonably
      be
      expected to result in a material liability under ERISA, and neither the Borrower
      nor any Commonly Controlled Entity would become subject to any material
      liability under ERISA if the Borrower or any such Commonly Controlled Entity
      were to withdraw completely from all Multiemployer Plans as of the valuation
      date most closely preceding the date on which this representation is made or
      deemed made.  No such Multiemployer Plan is in Reorganization or
      Insolvent.

     

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

     

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

     

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

     

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

     

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

     

    (c)  Materials
      of Environmental Concern have not been transported or disposed of from the
      Properties in violation of, or in a manner or to a location that, to the
      Borrower’s

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              41

            

    

     

    knowledge,
      would give rise to liability under, any Environmental Law, nor have any
      Materials of Environmental Concern been generated, treated, stored or disposed
      of at, on or under any of the Properties in violation of, or in a manner that,
      to the Borrower’s knowledge, would give rise to liability under, any applicable
      Environmental Law;

     

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

     

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

     

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

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

     

    4.14  Accuracy
      of Information, etc.  No statement or information (other than
      projections, if any, and proforma information) contained
      in this Agreement, any other Loan Document, the Information Memorandum or any
      other document, certificate or statement furnished by or on behalf of the
      Borrower to the Administrative Agent or the Lenders, or any of them, for use
      in
      connection with the transactions contemplated by this Agreement or the other
      Loan Documents, contained as of the date such statement, information, document
      or certificate was so furnished (or, in the case of the Information Memorandum,
      as of the date of this Agreement), any untrue statement of a material fact
      or
      omitted to state a material fact necessary to make the statements contained
      herein or therein not misleading when taken as a whole.  The
      projections, if any, and proforma financial information contained
      in the materials referenced above are based upon good faith estimates and
      assumptions believed by management of the Borrower to be reasonable at the
      time
      made, it being recognized by the Lenders that such financial information as
      it
      relates to future events is not to be viewed as fact and that actual results
      during the period or periods covered by such financial information may differ
      from the projected results set forth therein by a material amount.  As
      of February 26, 2007, there is no fact known to the Borrower that could
      reasonably be expected to have a Material Adverse Effect that has not been
      expressly disclosed herein, in the other Loan Documents, in the Information
      Memorandum (including any attachments thereto), the Specified Exchange Act
      Filings or in any other documents, certificates and statements furnished to
      the
      Administrative Agent and the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              42

            

    

     

    Lenders
      for use in connection with the transactions contemplated hereby and by the
      other
      Loan Documents.

     

    4.15  Regulatory
      Matters.  Solely by virtue of the execution, delivery and
      performance of, or the consummation of the transactions contemplated by this
      Agreement, no Lender shall be or become subject to regulation (a) under the
      FPA or (b) as a “public utility” or “public service corporation” or the
      equivalent under any Requirement of Law.

     

    SECTION
      5.  CONDITIONS
      PRECEDENT

     

    5.1  Conditions
      to the Effective Date.  The occurrence of the Effective Date and
      the amendment and restatement of the Existing Credit Agreement is subject to
      the
      satisfaction of the following conditions precedent on or before March 5,
      2007:

     

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

     

    (b)  Financial
      Statements.  The Lenders shall have received the financial
      statements described in Section 4.1; provided, however, that
      this condition shall be satisfied if the financial statements described in
      Section 4.1 have been filed with the SEC prior to the Effective
      Date.

     

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

     

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

     

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

     

    (f)  Legal
      Opinion.  The Administrative Agent shall have received the legal
      opinion of Orrick, Herrington & Sutcliffe LLP, counsel to the Borrower,
      substantially in the form of Exhibit F.

    
      
        

      

     

    
      	
              43

            

    

     

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

     

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

     

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

     

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

     

    (b)  Representations
      and Warranties.  Each of the representations and warranties made
      by the Borrower in this Agreement that does not contain a materiality
      qualification (other than, with respect to any Credit Event after the Effective
      Date, the representations and warranties set forth in Section 4.2, 4.6(b)
      and 4.13) shall be true and correct in all material respects on and as of the
      date of such Credit Event as if made on and as of such date, and each of the
      representations and warranties made by the Borrower in this Agreement that
      contains a materiality qualification (other than, with respect to any Credit
      Event after the Effective Date, the representations and warranties set forth
      in
      Sections 4.2, 4.6(b) and 4.13) shall be true and correct on and as of such
      date
      (or, to the extent such representations and warranties specifically relate
      to an
      earlier date, that such representations and warranties were true and correct
      in
      all material respects, or true and correct, as the case may be, as of such
      earlier date).

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

          44

      

      
        
        

      

    

    
       

          SECTION
        6.  AFFIRMATIVE
        COVENANTS

       

    

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

     

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

     

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

     

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

     

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

     

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

     

    (a)  within
      two days after the delivery of any financial statements pursuant to
      Section 6.1, (i) a certificate of a Responsible Officer stating that
      such Responsible Officer has obtained no knowledge of any Default or Event
      of
      Default except as specified in such certificate and (ii) in the case of
      quarterly or annual financial statements, a Compliance Certificate,
      substantially in the form of Exhibit C, containing all information and
      calculations reasonably necessary for determining compliance by the Borrower
      with the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              45

            

    

     

    provisions
      of this Agreement referred to therein as of the last day of the fiscal quarter
      or fiscal year of the Borrower, as the case may be;

     

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

     

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

     

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

     

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

     

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

     

    6.6  Inspection
      of Property; Books and Records; Discussions.  (a) Keep proper
      books of records and account in which full, true and correct entries in
      conformity with GAAP and all Requirements of Law shall be made of all dealings
      and transactions in relation to its business and activities and (b) unless
      a Default or Event of Default has occurred and is

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              46

            

    

     

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

     

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

    (a)  when
      known to a Responsible Officer, the occurrence of any Default or Event of
      Default;

     

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

     

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

     

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

     

    SECTION
      7.  NEGATIVE
      COVENANTS

     

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

     

    
      
        

      

    

     

    
      	
              47

            

    

     

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

     

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

     

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

     

    SECTION
      8.  EVENTS
      OF DEFAULT

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              48

            

    

     

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

     

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

     

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

     

    (f)  (i) the
      Borrower or any of its Significant Subsidiaries shall commence any case,
      proceeding or other action (A) under any existing or future law of any
      jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
      reorganization or relief of debtors, seeking to have an order for relief entered
      with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
      seeking reorganization, arrangement, adjustment,

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              49

            

    

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

     

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

     

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

     

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

     

    then,
      and in any such event, (A) if such event is an Event of Default specified
      in clause (i) or (ii) of paragraph (f) above with respect to the
      Borrower, automatically the Commitments shall immediately terminate and the
      Loans (with accrued interest thereon) and all other amounts owing under this
      Agreement and the other Loan Documents (including all amounts of L/C
      Obligations, whether or not the beneficiaries of the then outstanding Letters
      of
      Credit shall have presented the documents required thereunder) shall immediately
      become due and payable, and (B) if such event is any other Event of
      Default, either or both of the following actions may be
      taken:  (i) with the consent of the Required Lenders, the
      Administrative Agent may, or upon the request of the Required Lenders, the
      Administrative Agent shall, by notice to the Borrower declare the Commitments
      to
      be terminated forthwith, whereupon the Commitments shall immediately terminate;
      and (ii) with the consent of the Required Lenders, the Administrative Agent
      may, or upon the request of the Required Lenders, the Administrative Agent
      shall, by notice to the Borrower, declare the Loans (with accrued interest
      thereon) and all other amounts owing under this Agreement and the other Loan
      Documents (including all amounts of L/C Obligations, whether or not the
      beneficiaries of the then outstanding Letters of Credit shall have

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              50

            

    

     

    presented
      the documents required thereunder) to be due and payable forthwith, whereupon
      the same shall immediately become due and payable.  With respect to
      all Letters of Credit with respect to which presentment for honor shall not
      have
      occurred at the time of an acceleration pursuant to this paragraph, the Borrower
      shall at such time deposit in a cash collateral account opened by the
      Administrative Agent an amount equal to the aggregate then undrawn and unexpired
      amount of such Letters of Credit.  Amounts held in such cash
      collateral account shall be applied by the Administrative Agent to the payment
      of drafts drawn under such Letters of Credit, and the unused portion thereof
      after all such Letters of Credit shall have expired or been fully drawn upon,
      if
      any, shall be applied to repay other obligations of the Borrower hereunder
      and
      under the other Loan Documents.  After all such Letters of Credit
      shall have expired or been fully drawn upon, all Reimbursement Obligations
      shall
      have been satisfied and all other obligations of the Borrower hereunder and
      under the other Loan Documents shall have been paid in full, the balance, if
      any, in such cash collateral account shall be returned to the Borrower (or
      such
      other Person as may be lawfully entitled thereto).  Except as
      expressly provided above in this Section, presentment, demand, protest and
      all
      other notices of any kind are hereby expressly waived by the
      Borrower.

     

    SECTION
      9.  THE
      AGENTS

     

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

     

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

     

    9.3  Exculpatory
      Provisions.  Neither any Agent nor any of their respective
      officers, directors, employees, agents, attorneys in fact or affiliates shall
      be
      (i) liable for any action lawfully taken or omitted to be taken by it or
      such Person under or in connection with this Agreement or any other Loan
      Document (except to the extent that any of the foregoing are found by a final
      and nonappealable decision of a court of competent jurisdiction to have resulted
      from its or such Person’s own gross negligence or willful misconduct) or
      (ii) responsible in any manner to any of the Lenders for any recitals,
      statements, representations or warranties made by the Borrower or any officer
      thereof contained in this Agreement or any other Loan Document or in any
      certificate, report, statement or other document referred to or provided for
      in,
      or received

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              51

            

    

     

    by
      the Agents under or in connection with, this Agreement or any other Loan
      Document or for the value, validity, effectiveness, genuineness, enforceability
      or sufficiency of this Agreement or any other Loan Document or for any failure
      of the Borrower to perform its obligations hereunder or
      thereunder.  The Agents shall not be under any obligation to any
      Lender to ascertain or to inquire as to the observance or performance of any
      of
      the agreements contained in, or conditions of, this Agreement or any other
      Loan
      Document, or to inspect the properties, books or records of the
      Borrower.

     

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

     

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

     

    9.6  Non-Reliance
      on Agents and Other Lenders.  Each Lender expressly acknowledges
      that neither the Agents nor any of their respective officers, directors,
      employees, agents, attorneys in fact or affiliates have made any representations
      or warranties to it and that no act by any Agent hereafter taken, including
      any
      review of the affairs of the Borrower or any of its affiliates, shall be deemed
      to constitute any representation or warranty by any Agent to any
      Lender.  Each Lender represents to the Agents that it has,
      independently and without reliance upon any Agent or any other Lender, and
      based
      on such documents and information as it has

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              52

            

    

     

    deemed
      appropriate, made its own appraisal of and investigation into the business,
      operations, property, financial and other condition and creditworthiness of
      the
      Borrower and its affiliates and made its own decision to make its Loans
      hereunder and enter into this Agreement.  Each Lender also represents
      that it will, independently and without reliance upon any Agent or any other
      Lender, and based on such documents and information as it shall deem appropriate
      at the time, continue to make its own credit analysis, appraisals and decisions
      in taking or not taking action under this Agreement and the other Loan
      Documents, and to make such investigation as it deems necessary to inform itself
      as to the business, operations, property, financial and other condition and
      creditworthiness of the Borrower and its affiliates.  Except for
      notices, reports and other documents expressly required to be furnished to
      the
      Lenders by the Administrative Agent hereunder, the Administrative Agent shall
      not have any duty or responsibility to provide any Lender with any credit or
      other information concerning the business, operations, property, condition
      (financial or otherwise), prospects or creditworthiness of the Borrower or
      any
      of its affiliates that may come into the possession of the Administrative Agent
      or any of its officers, directors, employees, agents, attorneys in fact or
      affiliates.

     

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

     

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

     

    9.9  Successor
      Administrative Agent.  The Administrative Agent may resign as
      Administrative Agent upon 10 days’ notice to the Lenders and the
      Borrower.  If the Administrative Agent shall resign as Administrative
      Agent under this Agreement and the other Loan Documents, then the Required
      Lenders shall appoint from among the Lenders a successor

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              53

            

    

     

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

     

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

     

    SECTION
      10.  MISCELLANEOUS

     

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

     

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

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              54

            

    

     

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

     

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

     

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

     

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

     

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

     

    (vii)  amend,
      modify or waive any provision of Section 5.1 without the consent of all the
      Lenders; or

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              55

            

    

     

    Notwithstanding
      anything to the contrary herein but subject to obtaining all necessary
      regulatory approvals, in addition to the amendments described above, each of
      the
      Procurement L/C Facility Limit and the Non-Procurement Facility Limit may be
      changed by the Borrower by written notice to the Administrative Agent and the
      Issuing Lenders and no consent of any other party shall be required;
provided that, (a) the aggregate amount of L/C Obligations may not
      exceed the L/C Commitment and (b) the sum of the Procurement L/C Facility
      Limit and the Non-Procurement Facility Limit may not exceed the Total
      Commitments; provided that any notice delivered pursuant to
      Section 2.1 or Section 2.4 which would, after giving effect to the
      Loans requested to be made, cause the aggregate outstanding principal amount
      of
      the Loans plus the aggregate outstanding amount of L/C Obligations in respect
      of
      Non-Procurement Letters of Credit to exceed the Non-Procurement Facility Limit
      shall be deemed to be a notice by the Borrower hereunder.

     

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

     

    
      	
              Borrower:

            	
              Pacific
                Gas and Electric Company

              c/o PG&E Corporation

              One Market Street

              
                Spear
                  Tower, Suite 2400

              

            

    

    
      	
               

            	
              San
                Francisco, California 94105

            

    

    
      	
               

            	
              Attention:  Assistant
                Treasurer

            

    

    
      	
               

            	
              Telecopy:    (415)
                267-7265/7268

            

    

    
      	
               

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

            

    

     

    
      	
              with
                a copy to:

            	
              Pacific
                Gas and Electric Company

            

    

    
      	
               

            	
              c/o
                PG&E Corporation

            

    

    
      	
               

            	
              One
                Market

            

    

    
      	
               

            	
              Spear
                Tower, Suite 2400

            

    

    
      	
               

            	
              San
                Francisco,
                California  94105

            

    

    
      	
               

            	
              Attention:   Chief
                Counsel, Corporate

            

    

    
      	
               

            	
              Telecopy:   (415)
                817-8225

            

    

    
      	
               

            	
              Telephone:  (415)
                817-8200

            

    

     

    
      	
              Administrative
                Agent:

            	
              Citicorp
                North America, Inc.

            

    

    
      	
               

            	
              Two
                Penns Way

            

    

    
      	
               

            	
              Suite
                200

            

    

    
      	
               

            	
              New
                Castle, Delaware 19720

            

    

    
      	
               

            	
              Attention:  Heather
                Puchalski

            

    

    
      	
               

            	
              Telecopy:     (212)
                994-0961

            

    

    
      	
               

            	
              Telephone:   (302)
                894-6021

            

    

     

     

    
      
        
        

      

      
        
        

        
          

          56

      

      
        
        

      

    

     

    
      	
              Issuing
                Lenders:

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

            

    

     

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

     

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

     

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

     

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

     

    10.5  Payment
      of Expenses and Taxes.  The Borrower agrees (a) to pay or
      reimburse the Administrative Agent, each Issuing Lender and the Lenders for
      all
      their respective reasonable out of pocket costs and expenses incurred in
      connection with the development, preparation and execution of, and any
      amendment, supplement or modification to, this Agreement and the other Loan
      Documents and any other documents prepared in connection herewith or therewith,
      and the consummation of the transactions contemplated hereby and thereby,
      including the reasonable fees and disbursements of only one counsel and special
      California regulatory counsel to the Administrative Agent and filing and
      recording fees and expenses, with statements with respect to the foregoing
      to be
      submitted to the Borrower prior to the Effective Date (in the case of amounts
      to
      be paid on the Effective Date) and from time to time thereafter on a quarterly
      basis or such other periodic basis as the Administrative Agent shall deem
      appropriate, (b) to pay or reimburse each Lender, each Issuing Lender and
      the Administrative Agent for all its costs and expenses incurred in connection
      with the enforcement or preservation of any rights under this Agreement, the
      other Loan Documents and any such other documents, including the fees and
      disbursements of only one counsel to the Administrative Agent, the Lenders
      and
      the Issuing Lenders, (c) to pay, indemnify, and hold each Lender, each
      Issuing Lender and the Administrative Agent harmless from, any and all recording
      and filing fees and any and all liabilities with respect to, or resulting from
      any delay in paying, stamp, excise and Other Taxes, if any, that may be payable
      or determined to be payable in connection

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              57

            

    

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              58

            

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              59

            

    

     

    this
      Agreement as a sale by such Lender of a participation in such rights and
      obligations in accordance with paragraph (c) of this Section.

     

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

     

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

     

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

     

    (ii)  Notwithstanding
      anything to the contrary herein, a Participant shall not be entitled to receive
      any greater payment under Section 2.15 or 2.16 than the applicable Lender would
      have been entitled to receive with respect to the participation sold to such
      Participant, unless the sale of the participation to such Participant is made
      with the Borrower’s prior written

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              60

            

    

     

    consent
      to such greater payments.  Any Participant that is a Non-U.S. Lender
      shall not be entitled to the benefits of Section 2.16 unless such Participant
      complies with Section 2.16(d).

     

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

     

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

     

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

     

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

     

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

    
      
        

      

     

    
      	
              61

            

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        

      

    

     

    
      	
              62

            

    

     

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

     

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

     

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

     

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

     

    10.13  Acknowledgments.  The
      Borrower hereby acknowledges that:

     

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

     

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

     

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

     

    10.14  Confidentiality.  Each
      of the Administrative Agent and each Lender agrees to keep confidential in
      accordance with such party’s customary practices (and in any event in compliance
      with applicable law regarding material non-public information) all non-public
      information provided to it by the Borrower, the Administrative Agent or any
      Lender pursuant to or in connection with this Agreement that is designated
      by
      the provider thereof as confidential; provided that nothing herein shall
      prevent the Administrative Agent or any Lender from disclosing any such
      information (a) to the Administrative Agent, any other Lender or any
      affiliate thereof, (b) subject to an agreement to comply with the
      provisions of this Section or substantially equivalent provisions, to any actual
      or prospective Transferee or any direct or indirect counterparty to any Swap
      Agreement (or any professional advisor to such counterparty), (c) to its
      employees, directors, agents, attorneys, accountants and other professional
      advisors or those of any of its affiliates (as long as such attorneys,
      accountants and other professional advisors are subject to confidentiality
      requirements substantially equivalent to this Section), (d) upon the
      request or demand of any Governmental Authority, (e) in response to any
      order of

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              63

            

    

     

    any
      court or other Governmental Authority or as may otherwise be required pursuant
      to any Requirement of Law, (f) if requested or required to do so in
      connection with any litigation
      or similar proceeding, (g) that has been publicly disclosed, (h) to
      the National Association of Insurance Commissioners or any similar organization
      or any nationally recognized rating agency that requires access to information
      about a Lender’s investment portfolio in connection with ratings issued with
      respect to such Lender, or (i) in connection with the exercise of any
      remedy hereunder or under any other Loan Document, provided that, in the
      case of clauses (d), (e) and (f) of this Section 10.14, with the exception
      of disclosure to bank regulatory authorities, the Borrower (to the extent
      legally permissible) shall be given prompt prior notice so that it may seek
      a
      protective order or other appropriate remedy.

     

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

     

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

     

    10.17  Judicial
      Reference.  If any action or proceeding is filed in a court of the
      State of California by or against any party hereto in connection with any of
      the
      transactions contemplated by this Agreement or any other Loan Document, (i)
      the
      court shall, and is hereby directed to, make a general reference pursuant to
      California Code of Civil Procedure Section 638 to a referee (who shall be a
      single active or retired judge) to hear and determine all of the issues in
      such
      action or proceeding (whether of fact or of law) and to report a statement
      of
      decision, provided that at the option of any party to such proceeding, any
      such
      issues pertaining to a “provisional remedy” as defined in California Code of
      Civil Procedure Section 1281.8 shall be heard and determined by the court,
      and
      (ii) without limiting the generality of Section 10.5, the Borrower
      shall be solely responsible to pay all fees and expenses of any referee
      appointed in such action or proceeding.

    

     

    *           *           *

     

    

    
      
        
                

                    
      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

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

     

    PACIFIC
      GAS AND ELECTRIC COMPANY

     

    

     

    
      	
               

            	
              By:

            	
              /s/
                Christopher P. Johns

            	 

    

    
      	
               

            	
              Name:

            	
              Christopher
                P. Johns

            

    

    
      	
               

            	
              Title:

            	
              Senior
                Vice President,

            

    

    
      	
               

            	
              Chief
                Financial Officer and Treasurer

            

    

     

    

     

    

    
      
        
                

                    -Signature
              Page-      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    CITICORP
      NORTH AMERICA, INC., as Administrative Agent and as a Lender

     

    

     

    
      	
               

            	
              By:

            	
              /s/
                Nietzsche Rodricks

            	 

    

    
      	
               

            	
              Name:

            	
              Nietzsche
                Rodricks

            

    

    
      	
               

            	
              Title:

            	
              Vice
                President

            

    

     

    

     

    

     

    

     

    

    
      
        
                

                    -Signature
              Page-         

                    Amended
              and Restated Credit
              Agreement          

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    JPMORGAN
      CHASE BANK, N.A., as Syndication Agent, as Issuing Lender and as a
      Lender

     

     

    
      	
               

            	
              By:

            	
              /s/
                Thomas Casey

            	 

    

    
      	
               

            	
              Name:

            	
              Thomas
                Casey

            

    

    
      	
               

            	
              Title:

            	
              Vice
                President

            

    

     

    

     

    

    
      
        
                

                    -Signature
              Page-             

                    Amended
              and Restated Credit Agreement      

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    BARCLAYS
      BANK Plc, as Co-Documentation Agent and as a Lender

     

     

     

    
      	
               

            	
              By:

            	
              /s/
                Sydney Dennis

            	 

    

    
      	
               

            	
              Name:

            	
              Sydney
                Dennis

            

    

    
      	
               

            	
              Title:

            	
              Director

            

    

     

    

    
      
        
                

                    -Signature
              Page-             

                    Amended
              and Restated Credit
              Agreement            

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
              
          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    BNP
      PARIBAS, as Co-Documentation Agent and as a Lender

     

     

     

    
      	
               

            	
              By:

            	
              /s/
                Francis J. Delaney

            	 

    

    
      	
               

            	
              Name:

            	
              Francis
                J. Delaney

            

    

    
      	
               

            	
              Title:

            	
              Managing
                Director

            

    

     

    

     

    
      	
               

            	
              By:

            	
              /s/
                Timothy Vincent

            	 

    

    
      	
               

            	
              Name:

            	
              Timothy
                Vincent

            

    

    
      	
               

            	
              Title:

            	
              Managing
                Director

            

    

     

    

     

    

    
      
        
             

                    -Signature
              Page-            

                    Amended
              and Restated Credit
              Agreement           

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
              
          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    DEUTSCHE
      BANK SECURITIES INC.,

    as
      Co-Documentation Agent

     

     

    
      	
               

            	
              By:

            	
              /s/
                Rainer Meier

            	 

    

    
      	
               

            	
              Name:

            	
              Rainer
                Meier

            

    

    
      	
               

            	
              Title:

            	
              Vice
                President

            

    

     

     

    
      	
               

            	
              By:

            	
              /s/
                Ming K. Chu

            	 

    

    
      	
               

            	
              Name:

            	
              Ming
                K. Chu

            

    

    
      	
               

            	
              Title:

            	
              Vice
                President

            

    

     

    

     

    

     

    DEUTSCHE
      BANK AG, New York Branch,

    as
      a Lender

     

     

    
      	
               

            	
              By:

            	
              /s/
                Rainer Meier

            	 

    

    
      	
               

            	
              Name:

            	
              Rainer
                Meier

            

    

    
      	
               

            	
              Title:

            	
              Vice
                President

            

    

     

    

     

    
      	
               

            	
              By:

            	
              /s/
                Ming K. Chu

            	 

    

    
      	
               

            	
              Name:

            	
              Ming
                K. Chu

            

    

    
      	
               

            	
              Title:

            	
              Vice
                President

            

    

     

    

     

    

     

    

     

    

    
      
        
                

                    -Signature
              Page-            

                    Amended
              and Restated Credit
              Agreement             

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

            
         

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    
      	
               

            	
              BANK
                OF AMERICA, N.A., as a Lender

            

    

     

    

     

    
      	
               

            	
              By:

            	
              /s/
                Kevin Bertelsen

            	 

    

    
      	
               

            	
              Name:

            	
              Kevin
                Bertelsen

            

    

    
      	
               

            	
              Title:

            	
              Senior
                Vice President

            

    

     

    

     

    

     

    

    
      
        
                

                    -Signature
              Page-             

                    Amended
              and Restated Credit
              Agreement             

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                          
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    LEHMAN
      BROTHERS BANK FSB, as a Lender

     

     

    
      	
               

            	
              By:

            	
              /s/
                Gary Taylor

            	 

    

    
      	
               

            	
              Name:

            	
              Gary
                Taylor

            

    

    
      	
               

            	
              Title:

            	
              Senior
                Vice President

            

    

    
 

     

    
      	
               

            	
              By:

            	 	 

    

    
      	
               

            	
              Name:

            

    

    
      	
               

            	
              Title:

            

    

     

    

    
      
        
             

                    -Signature
              Page-             

                    Amended
              and Restated Credit
              Agreement            

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
          

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    UBS
      LOAN FINANCE LLC, as a Lender

     

     

     

    
      	
               

            	
              By:

            	
              /s/
                Richard L. Tavrow

            	 

    

    
      	
               

            	
              Name:

            	
              Richard
                L. Tavrow

            

    

    
      	
               

            	
              Title:

            	
              Director

            

    

     

    

     

    
      	
               

            	
              By:

            	
              /s/
                Irja R. Otsa

            	 

    

    
      	
               

            	
              Name:

            	
              Irja
                R. Otsa

            

    

    
      	
               

            	
              Title:

            	
              Associate
                Director

            

    

     

    

    
      
        
             

                    -Signature
              Page-             

                    Amended
              and Restated Credit
              Agreement         

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                          
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    ABN
      AMRO BANK, N.V., as a Lender

     

     

     

    
      	
               

            	
              By:

            	
              /s/
                Kris Grosshans

            	 

    

    
      	
               

            	
              Name:

            	
              Kris
                Grosshans

            

    

    
      	
               

            	
              Title:

            	
              Managing
                Director

            

    

     

    

     

    
      	
               

            	
              By:

            	
              /s/
                Ece Bennett

            	 

    

    
      	
               

            	
              Name:

            	
              Ece
                Bennett

            

    

    
      	
               

            	
              Title:

            	
              Director

            

    

     

    

    
      
        
                

                    -Signature
              Page-            

                    Amended
              and Restated Credit
              Agreement           

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
          

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    MORGAN
      STANLEY BANK, as a Lender

     

     

     

    
      	
               

            	
              By:

            	
              /s/
                Daniel Twenge

            	 

    

    
      	
               

            	
              Name:

            	
              Daniel
                Twenge

            

    

    
      	
               

            	
              Title:

            	
              Authorized
                Signatory

            

    

    
      	
               

            	
              Morgan
                Stanley Bank

            

    

     

    

     

    

    
      
        
                

                    -Signature
              Page-             

                    Amended
              and Restated Credit
              Agreement         

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    UNION
      BANK OF CALIFORNIA, N.A., as a Lender

     

     

     

    
      	
               

            	
              By:

            	
              /s/
                Dennis G. Blank

            	 

    

    
      	
               

            	
              Name:

            	
              Dennis
                G. Blank

            

    

    
      	
               

            	
              Title:

            	
              Vice
                President

            

    

     

    

    
      
        
                

                    -Signature
              Page-             

                    Amended
              and Restated Credit
              Agreement           

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
          

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    WILLIAM
      STREET COMMITMENT CORPORATION(Recourse only to the assets of William Street
      Commitment Corporation),  as a Lender

     

     

     

    
      	
               

            	
              By:

            	
              /s/
                Mark Walton

            	 

    

    
      	
               

            	
              Name:

            	
              Mark
                Walton

            

    

    
      	
               

            	
              Title:

            	
              Assistant
                Vice-President

            

    

     

    

     

    

    
      
        
                

                    -Signature
              Page-            

                    Amended
              and Restated Credit
              Agreement            

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                          
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    MIZUHO
      CORPORATE BANK, LTD., as a Lender

     

     

     

    
      	
               

            	
              By:

            	
              /s/
                Raymond Ventura

            	 

    

    
      	
               

            	
              Name:

            	
              Raymond
                Ventura

            

    

    
      	
               

            	
              Title:

            	
              Deputy
                General Manager

            

    

     

    

     

    

    
      
        
                

                    -Signature
              Page      

                    Amended
              and Restated Credit
              Agreement        

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    MELLON
      BANK, N.A., as a Lender

     

     

     

    
      	
               

            	
              By:

            	
              /s/
                Mark W. Rogers

            	 

    

    
      	
               

            	
              Name:

            	
              Mark
                W. Rogers

            

    

    
      	
               

            	
              Title:

            	
              Vice
                President

            

    

     

    

     

    

    
      
        
                

                    -Signature
              Page-         

                    Amended
              and Restated Credit
              Agreement           

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                          
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    THE
      BANK OF NEW YORK, as a Lender

     

     

     

    
      	
               

            	
              By:

            	
              /s/
                Jesus Williams

            	 

    

    
      	
               

            	
              Name:

            	
              Jesus
                Williams

            

    

    
      	
               

            	
              Title:

            	
              Vice
                President

            

    

     

    

     

    

    
      
        
          
              

                    -Signature
              Page-           

                    Amended
              and Restated Credit
              Agreement          

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
          

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    US
      BANK NATIONAL ASSOCIATION, as a Lender

     

     

     

    
      	
               

            	
              By:

            	
              /s/
                James W. Henken

            	 

    

    
      	
               

            	
              Name:

            	
              James
                W. Henken

            

    

    
      	
               

            	
              Title:

            	
              Vice
                President

            

    

     

    

    
      
        
                

                    -Signature
              Page-           

                    Amended
              and Restated Credit
              Agreement          

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
          

          

          
          

        

        
          
          

          
            

          

        

        
          
          

                

                    SCHEDULE
              1.1A      
                        

                    COMMITMENTS            
    

        

      

    

    

    
      	
              Lender

            	
              Commitment

               

            
	
              Citicorp
                North America, Inc.

            	
              $212,745,298.70

            
	
              JPMorgan
                Chase Bank, N.A.

            	
              $212,745,298.67

            
	
              Bank
                of America, N.A.

            	
              $171,131,225.80

            
	
              Barclays
                Bank PLC

            	
              $171,131,225.80

            
	
              BNP
                Paribas

            	
              $171,131,225.80

            
	
              Deutsche
                Bank AG, New York Branch

            	
              $171,131,225.80

            
	
              Lehman
                Brothers Bank, FSB

            	
              $127,647,179.20

            
	
              UBS
                Loan Finance LLC

            	
              $127,647,179.20

            
	
              ABN
                AMRO Bank N.V.

            	
              $95,735,384.40

            
	
              Morgan
                Stanley Bank

            	
              $95,735,384.40

            
	
              Union
                Bank of California, N.A.

            	
              $95,735,384.40

            
	
              William
                Street Commitment Corporation

            	
              $95,735,384.40

            
	
              Mizuho
                Corporate Bank, Ltd.

            	
              $88,643,874.45

            
	
              Mellon
                Bank, N.A.

            	
              $78,006,609.51

            
	
              The
                Bank of New York

            	
              $49,640,569.69

            
	
              US
                Bank National Association

            	
              $35,457,549.78

            
	 	 
	
              TOTAL

            	
              $2,000,000,000.00

            

    

    

     

    

    
      
        
                

                    Schedule
              1.1A       

            Amended
              and Restated Credit
              Agreement        

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                     
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      A

    

    FORM
      OF

    NEW
      LENDER SUPPLEMENT

    

    Reference
      is made to the $2,000,000,000 Amended and Restated Credit Agreement, dated
      as of
      February 26, 2007 (as amended, supplemented or otherwise modified from time
      to
      time, the “Credit Agreement”), among Pacific Gas and Electric Company, a
      California corporation (the “Borrower”), the Lenders parties thereto,
      Citigroup Global Markets, Inc. and J.P. Morgan Securities Inc., as joint lead
      arrangers and joint bookrunners, JPMorgan Chase Bank, as syndication agent,
      Barclays Bank Plc, BNP Paribas and Deutsche Bank Securities Inc., as
      documentation agents, and Citicorp North America, Inc., as administrative agent
      (in such capacity, the “Administrative Agent”).  Unless
      otherwise defined herein, terms defined in the Credit Agreement and used herein
      shall have the meanings given to them in the Credit Agreement.

    

    The
      New Revolving Credit Lender identified on Schedule l hereto (the “New
      Lender”), the Administrative Agent, the Issuing Lender and the Borrower
      agree as follows:

    

    SECTION
      11.  The
      New Lender hereby irrevocably makes a Commitment to the Borrower in the amount
      set forth on Schedule 1 hereto (the “New Commitment”) pursuant to Section
      2.3(b) of the Credit Agreement.  From and after the Effective Date (as
      defined below), the New Lender will be a Lender under the Credit Agreement
      with
      respect to the New Commitment.

    

    SECTION
      12.  The
      Administrative Agent (a) makes no representation or warranty and assumes no
      responsibility with respect to any statements, warranties or representations
      made in or in connection with the Credit Agreement or with respect to the
      execution, legality, validity, enforceability, genuineness, sufficiency or
      value
      of the Credit Agreement; and (b) makes no representation or warranty and assumes
      no responsibility with respect to the financial condition of the Borrower,
      any
      of its Subsidiaries or any other obligor or the performance or observance by
      the
      Borrower, any of its Subsidiaries or any other obligor of any of their
      respective obligations under the Credit Agreement or any other instrument or
      document furnished pursuant hereto or thereto.

    

    SECTION
      13.  The
      New Lender (a) represents and warrants that it is legally authorized to enter
      into this New Lender Supplement; (b) confirms that it has received a copy of
      the
      Credit Agreement, together with copies of the most recent financial statements
      delivered or deemed delivered pursuant to Section 6.1 of the Credit Agreement
      and such other documents and information as it has deemed appropriate to make
      its own credit analysis and decision to enter into this New Lender Supplement;
      (c) agrees that it will, independently and without reliance upon the
      Administrative Agent or any other Lender and based on such documents and
      information as it shall deem appropriate at the time, continue to make its
      own
      credit decisions in taking or not taking action under the Credit Agreement
      or
      any other instrument or document furnished pursuant hereto or thereto; (d)
      appoints and authorizes the Administrative Agent to

    

    
      
        
                

                    Exhibits            

                    Amended
              and Restated Credit
              Agreement            

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
             
          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              2

            

    

     

    take
      such action as agent on its behalf and to exercise such powers and discretion
      under the Credit Agreement or any other instrument or document furnished
      pursuant hereto or thereto as are delegated to the Administrative Agent by
      the
      terms thereof, together with such powers as are incidental thereto; and (e)
      agrees that it will be bound by the provisions of the Credit Agreement and
      will
      perform in accordance with its terms all the obligations which by the terms
      of
      the Credit Agreement are required to be performed by it as a
      Lender.

    

    SECTION
      14.  The
      effective date of this New Lender Supplement shall be the Effective Date of
      the
      New Commitment described in Schedule 1 hereto (the “Effective
      Date”).  Following the execution of this New Lender Supplement by
      each of the New Lender, the Borrower and the Issuing Lender, it will be
      delivered to the Administrative Agent for acceptance and recording by it
      pursuant to the Credit Agreement, effective as of the Effective Date (which
      shall not, unless otherwise agreed to by the Administrative Agent, be earlier
      than five Business Days after the date of such acceptance and recording by
      the
      Administrative Agent).

    

    SECTION
      15.  Upon
      such acceptance and recording, from and after the Effective Date, the
      Administrative Agent shall make all payments in respect of the New Commitment
      (including payments of principal, interest, fees and other amounts) to the
      New
      Lender for amounts which have accrued on and subsequent to the Effective
      Date.

    

    SECTION
      16.  From
      and after the Effective Date, the New Lender shall be a party to the Credit
      Agreement and, to the extent provided in this New Lender Supplement, shall
      have
      the rights and obligations of a Lender thereunder and shall be bound by the
      provisions thereof.

    

    SECTION
      17.  This
      New Lender Supplement shall be governed by, and construed and interpreted in
      accordance with, the laws of the State of New York.

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this New Lender Supplement
      to be
      executed as of ________ ___, 200__ by their respective duly authorized officers
      on Schedule 1 hereto.

     

    

     

    [Remainder
      of page intentionally left blank.  Schedule 1 to
      follow.]

     

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement       

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                        
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Schedule
      1

     

    to
      New Lender Supplement

     

    Name
      of New
      Lender:                                  _______________________________________               

     

    Effective
      Date of New
      Commitment:              _______________________________________                                                                             

     

    Principal
      Amount of New
      Commitment:      $  _______________________________________                                                                                         

     

    
      	
               

              [NAME
                OF NEW LENDER]

               

              By:
                _______________________________

                      Name:

                      Title:

               

               

              PACIFIC
                GAS AND ELECTRIC COMPANY

               

              By:  _______________________________                             

                    Name:

                    Title:

            	 
	
               

               

              CITICORP
                NORTH AMERICA, INC.,

              as
                Administrative Agent

            	 
	
               

              By: ________________________________                             

                   Name:

                   Title:

            	 
	
               

               

              JPMORGAN
                CHASE BANK, N.A.,

              as
                Issuing Lender

            	 
	
               

              By: _________________________________                            

                   Name:

                   Title:

            	 

    

    

    
      
        
               

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement         

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                         
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      B

     

    FORM
      OF

    COMMITMENT
      INCREASE SUPPLEMENT

     

    Reference
      is made to the $2,000,000,000 Amended and Restated Credit Agreement, dated
      as of
      February 26, 2007 (as amended, supplemented or otherwise modified from time
      to
      time, the “Credit Agreement”), among Pacific Gas and Electric Company, a
      California corporation (the “Borrower”), the Lenders parties thereto,
      Citigroup Global Markets, Inc. and J.P. Morgan Securities Inc., as joint lead
      arrangers and joint bookrunners, JPMorgan Chase Bank, as syndication agent,
      Barclays Bank Plc, BNP Paribas and Deutsche Bank Securities Inc., as
      documentation agents, and Citicorp North America, Inc., as administrative agent
      (in such capacity, the “Administrative Agent”).  Unless
      otherwise defined herein, terms defined in the Credit Agreement and used herein
      shall have the meanings given to them in the Credit Agreement.

    

    The
      Lender identified on Schedule l hereto (the “Increasing Lender”), the
      Administrative Agent, the Issuing Lender and the Borrower agree as
      follows:

     

    1.  The
      Increasing Lender hereby irrevocably increases its Commitment to the Borrower
      by
      the amount set forth on Schedule 1 hereto under the heading “Principal Amount of
      Increased Commitment” (the “Increased Commitment”) pursuant to Section
      2.3(c) of the Credit Agreement.  From and after the Effective Date (as
      defined below), the Increasing Lender will be a Lender under the Credit
      Agreement with respect to the Increased Commitment as well as its existing
      Commitment under the Credit Agreement.

    

    SECTION
      18.  The
      Administrative Agent (a) makes no representation or warranty and assumes no
      responsibility with respect to any statements, warranties or representations
      made in or in connection with the Credit Agreement or with respect to the
      execution, legality, validity, enforceability, genuineness, sufficiency or
      value
      of the Credit Agreement; and (b) makes no representation or warranty and assumes
      no responsibility with respect to the financial condition of the Borrower,
      any
      of its Subsidiaries or any other obligor or the performance or observance by
      the
      Borrower, any of its Subsidiaries or any other obligor of any of their
      respective obligations under the Credit Agreement or any other instrument or
      document furnished pursuant hereto or thereto.

     

    SECTION
      19.  The
      Increasing Lender (a) represents and warrants that it is legally authorized
      to
      enter into this Commitment Increase Supplement; (b) confirms that it has
      received a copy of the Credit Agreement, together with copies of the most recent
      financial statements delivered or deemed delivered pursuant to Section 6.1
      of
      the Credit Agreement and such other documents and information as it has deemed
      appropriate to make its own credit analysis and decision to enter into this
      Commitment Increase Supplement; (c) agrees that it will, independently and
      without reliance upon the Administrative Agent or any other Lender and based
      on
      such documents and information as it shall deem appropriate at the time,
      continue to make its own credit decisions in taking or not taking action under
      the Credit Agreement or any other instrument or document furnished pursuant
      hereto or thereto; (d) appoints and authorizes

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement             

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              2

            

    

     

    the
      Administrative Agent to take such action as agent on its behalf and to exercise
      such powers and discretion under the Credit Agreement or any other instrument
      or
      document furnished pursuant hereto or thereto as are delegated to the
      Administrative Agent by the terms thereof, together with such powers as are
      incidental thereto; and (e) agrees that it will be bound by the provisions
      of
      the Credit Agreement and will perform in accordance with its terms all the
      obligations which by the terms of the Credit Agreement are required to be
      performed by it as a Lender.

    

    SECTION
      20.  The
      effective date of this Commitment Increase Supplement shall be the Effective
      Date of the Increased Commitment described in Schedule 1 hereto (the
“Effective Date”).  Following the execution of this Commitment
      Increase Supplement by each of the Increasing Lender, the Issuing Lender and
      the
      Borrower, it will be delivered to the Administrative Agent for acceptance and
      recording by it pursuant to the Credit Agreement, effective as of the Effective
      Date (which shall not, unless otherwise agreed to by the Administrative Agent,
      be earlier than five Business Days after the date of such acceptance and
      recording by the Administrative Agent).

    

    SECTION
      21.  Upon
      such acceptance and recording, from and after the Effective Date, the
      Administrative Agent shall make all payments in respect of the Increased
      Commitment (including payments of principal, interest, fees and other amounts)
      to the Increasing Lender for amounts which have accrued on and subsequent to
      the
      Effective Date.

    

    SECTION
      22.  This
      Commitment Increase Supplement shall be governed by, and construed and
      interpreted in accordance with, the laws of the State of New York.

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Commitment Increase
      Supplement to be executed as of ________ ___, 200__ by their respective duly
      authorized officers on Schedule 1 hereto.

     

    

     

    [Remainder
      of page intentionally left blank.  Schedule 1 to
      follow.]

     

    

    
      
        
                

                    Exhibits       

                    Amended
              and Restated Credit
              Agreement            

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
             
          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Schedule
      1

    to
      Commitment Increase Supplement

     

    

     

    Name
      of Increasing
      Lender:                          ______________________________________________________                                                          

     

    Effective
      Date of Increased
      Commitment:       ______________________________________________________                                                                           

     

    
      	
              Principal

              Amount
                of

              Increased
                Commitment:

            	
              Total
                Amount of Commitment

              of
                Increasing Lender

              (including
                Increased Commitment):

            
	
               

              $_____________________

            	
               

              $_____________________

            
	 	 
	
              [NAME
                OF INCREASING LENDER]

               

               

            	 
	
              By: ____________________________________             

                   Name:

                   Title:

            	 
	
               

              PACIFIC
                GAS AND ELECTRIC COMPANY

               

               

              By:
                ____________________________________                                                          

                    Name:

                    Title:

            	 
	
               

               

              Accepted:

               

              CITICORP
                NORTH AMERICA, INC.,

              as
                Administrative Agent

               

              By:  ___________________________________                                                    

                    Name:

                    Title:

            	 
	
               

              JPMORGAN
                CHASE BANK, N.A.,

              as
                Issuing Lender

               

              By: ____________________________________                                                             

                    Name:

                    Title:

            	 

    

    

    
      
        
                

                        

             

            Exhibits

            Amended
              and Restated Credit
              Agreement            

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
          

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    EXHIBIT
      C

     

    FORM
      OF COMPLIANCE CERTIFICATE

     

    This
      Compliance Certificate is delivered pursuant to Section 6.2 of the
      $2,000,000,000 Amended and Restated Credit Agreement, dated as of February
      26,
      2007 (as amended, supplemented or otherwise modified from time to time, the
      “Credit Agreement”), among Pacific Gas and Electric Company, a California
      corporation (the “Borrower”), the lenders parties thereto (the
“Lenders”), Citigroup Global Markets, Inc. and J.P. Morgan Securities
      Inc., as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank, as
      syndication agent, Barclays Bank Plc, BNP Paribas and Deutsche Bank Securities
      Inc., as documentation agents, and Citicorp North America, Inc., as
      administrative agent (the “Administrative Agent”).  Terms
      defined in the Credit Agreement are used herein as therein defined.

     

    The
      undersigned hereby certifies to the Administrative Agent and the Lenders as
      follows:

     

    1.  I
      am the duly elected, qualified and acting [Chief Financial Officer] [Treasurer]
      [Assistant Treasurer] of the Borrower.

     

    2.  I
      have reviewed and am familiar with the contents of this
      Certificate.

     

    3.  To
      the knowledge of the undersigned, during the fiscal period covered by the
      financial statements attached hereto as Attachment 1, no Default or
      Event of Default has occurred and is continuing [, except as set forth
      below].

     

    4.  Attached
      hereto as Attachment 2 are the computations showing compliance with
      the covenant set forth in Section 7.1 of the Credit Agreement.

     

    [Remainder
      of page intentionally left blank.  Schedule 1 to
      follow.]

     

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement             

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                          
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
      of
      the date set forth below.

     

    PACIFIC
      GAS AND ELECTRIC COMPANY

     

    By:     _____________________________________                                                                    

    
      	
               

            	
              Name:

            

    

    
      	
               

            	
              Title:

            

    

    

     

    

    Date:  ____________,
      200_

     

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement             

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
         

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Attachment
      1

                                                                                                         to
      Exhibit C

     

    Financial
      Statements

    Period
      Ended ____________, 20__

     

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement             

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                         
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Attachment
      2

    to
      Exhibit C

     

    

     

    The
      information described herein is as of ________, 20__.

     

    

     

    [Set
      forth Covenant Calculation]

     

    

     

    

     

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit Agreement     

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
         

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      D

     

    FORM
      OF CLOSING CERTIFICATE

     

    This
      Closing Certificate is delivered pursuant to Section 5.1(e) of the
      $2,000,000,000 Amended and Restated Credit Agreement, dated as of February
      26,
      2007 (as amended, supplemented or otherwise modified from time to time, the
      “Credit Agreement”), among Pacific Gas and Electric Company, a California
      corporation (the “Borrower”), the lenders parties thereto (the
“Lenders”), Citigroup Global Markets, Inc. and J.P. Morgan Securities
      Inc., as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank, as
      syndication agent, Barclays Bank Plc, BNP Paribas and Deutsche Bank Securities
      Inc., as documentation agents, and Citicorp North America, Inc., as
      administrative agent (in such capacity, the “Administrative
      Agent”).  Unless otherwise defined herein, terms defined in the
      Credit Agreement and used herein shall have the meanings given to them in the
      Credit Agreement.

     

    The
      undersigned Senior Vice President, Chief Financial Officer and Treasurer of
      the
      Borrower hereby certifies to the Administrative Agent and the Lenders as
      follows:

     

    1.           The
      representations and warranties of the Borrower set forth in the Credit Agreement
      that do not contain a materiality qualification are true and correct in all
      material respects on and as of the date hereof with the same effect as if made
      on the date hereof, and the representations and warranties of the Borrower
      set
      forth in the Credit Agreement that do contain a materiality qualification are
      true and correct on and as of the date hereof with the same effect as if made
      on
      the date hereof, except for any representations and warranties that specifically
      relate to an earlier date, in which case such representations and warranties
      were true and correct in all material respects, or true and correct, as the
      case
      may be, as of such earlier date.

     

    2.           Wondy
      Lee is the duly elected and qualified Assistant Secretary of the Borrower and
      the signature set forth for such officer below is such officer’s true and
      genuine signature.

     

    3.           No
      Default or Event of Default has occurred and is continuing as of the date
      hereof.

     

    4.           The
      conditions precedent set forth in Section 5.1 of the Credit Agreement were
      satisfied as of the Effective Date.

     

    5.           All
      governmental and third party consents and approvals necessary in connection
      with
      the Credit Agreement and the other Loan Documents and the transactions
      contemplated thereby have been obtained and are now in full force and
      effect.

     

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement           

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                         
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    The
      undersigned Assistant Secretary of the Borrower certifies as
      follows:

     

    1.           There
      are no liquidation or dissolution proceedings pending or to my knowledge
      threatened against the Borrower.

     

    2.           The
      Borrower is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of California.

     

    3.           Attached
      hereto as Annex 1 is a true and complete copy of resolutions duly
      adopted by the Board of Directors of the Borrower on December 15, 2004; such
      resolutions have not in any way been amended, modified, revoked or rescinded,
      have been in full force and effect since their adoption to and including the
      date hereof and are now in full force and effect and are the only corporate
      proceedings of the Borrower now in force relating to or affecting the Credit
      Agreement.

     

    4.           Attached
      hereto as Annex 2 is a true and complete copy of the Bylaws of the
      Borrower as in effect on the date hereof.

     

    5.           Attached
      hereto as Annex 3 is a true and complete copy of the Articles of
      Incorporation of the Borrower as in effect on the date hereof, and such Articles
      of Incorporation have not been amended, repealed, modified or
      restated.

     

    6.           The
      following persons are now duly elected and qualified officers of the Borrower
      holding the offices indicated next to their respective names below, and that
      the
      facsimile signatures affixed next to their respective names below are the
      facsimile signatures of such officers, and each of such officers is duly
      authorized to execute and deliver on behalf of the Borrower each of the Loan
      Documents to which it is a party and any certificate or other document to be
      delivered by the Borrower pursuant to the Loan Documents to which it is a
      party:

     

    
      	
              Name

            	 	
              Office

            	 	
              Signature

               

            
	
              Christopher
                P. Johns

            	 	
              Senior
                Vice President, Chief Financial Officer and Treasurer

            	 	 
	 	 	 	 	 
	
              G.
                Robert Powell

            	 	
              Vice
                President and Controller

            	 	 
	 	 	 	 	 
	
              Linda
                Y.H. Cheng

            	 	
              VP,
                Corporate Governance and Corporate Secretary

            	 	 
	 	 	 	 	 
	
              Eric
                Montizambert

            	 	
              Assistant
                Corporate Secretary

            	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the undersigned have executed this Closing Certificate as
      of
      the date set forth below.

     

    

     

    
      	 	 	 
	
              Christopher
                P.
                Johns

            	 	
              Wondy
                Lee

            
	
              Senior
                Vice President, Chief
                Financial Officer and Treasurer

            	 	
              Assistant
                Secretary

            
	 	 	 
	 	 	 
	
              Date:
                February 26, 2007

            	 	 

    

    

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement             

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                          
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    ANNEX
      1

     

    [Board
      Resolutions]

     

     

     

     

     

     

    

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement            

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                          
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    ANNEX
      2

     

    [Bylaws
      of the Company]

     

     

     

     

     

     

    

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement           

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                         
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    ANNEX
      3

     

    [Articles
      of Incorporation]

     

     

     

     

     

     

    

     

    

    

    
      
        
                

                    Exhibits            

                    Amended
              and Restated Credit
              Agreement        

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
         

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      E

     

    FORM
      OF

     

    ASSIGNMENT
      AND ASSUMPTION

     

    Reference
      is made to the $2,000,000,000
      Amended and Restated Credit Agreement, dated as of February 26, 2007 (as
      amended, supplemented or otherwise modified from time to time, the “Credit
      Agreement”), among Pacific Gas and Electric Company, a California
      corporation (the “Borrower”), the Lenders parties thereto, Citigroup
      Global Markets, Inc. and J.P. Morgan Securities Inc., as joint lead arrangers
      and joint bookrunners, JPMorgan Chase Bank, as syndication agent, Barclays
      Bank
      Plc, BNP Paribas and Deutsche Bank Securities Inc., as documentation agents,
      and
      Citicorp North America, Inc., as administrative agent (in such capacity, the
      “Administrative Agent”).  Unless otherwise defined herein,
      terms defined in the Credit Agreement and used herein shall have the meanings
      given to them in the Credit Agreement.

     

    The
      Assignor identified on Schedule l
      hereto (the “Assignor”) and the Assignee identified on Schedule l
      hereto (the “Assignee”) agree as follows:

     

    1.           The
      Assignor hereby irrevocably sells and assigns to the Assignee without recourse
      to the Assignor, and the Assignee hereby irrevocably purchases and assumes
      from
      the Assignor without recourse to the Assignor, as of the Effective Date (as
      defined below), (i) the interest described in Schedule 1 hereto in and to
      the Assignor’s rights and obligations under the Credit Agreement (the
“Assigned Facility”) in the principal amount set forth on Schedule 1
      hereto and (ii) to the extent permitted to be assigned under applicable law,
      all
      claims, suits, causes of action and any other right of the Assignor (in its
      capacity as a Lender) against any Person, whether known or unknown, arising
      under or in connection with the Credit Agreement, any other documents or
      instruments delivered pursuant thereto or the loan transactions governed thereby
      or in any way based on or related to any of the foregoing, including, but not
      limited to, contract claims, tort claims, malpractice claims, statutory claims
      and all other claims at law or in equity related to the rights and obligations
      sold and assigned pursuant to clause (i) above (the rights and obligations
      sold
      and assigned pursuant to clauses (i) and (ii) above being referred to herein
      collectively as, the “Assigned Interest”).

     

    2.           The
      Assignor (a) makes no representation or warranty and assumes no
      responsibility with respect to any statements, warranties or representations
      made in or in connection with the Credit Agreement or with respect to the
      execution, legality, validity, enforceability, genuineness, sufficiency or
      value
      of the Credit Agreement, any other Loan Document or any other instrument or
      document furnished pursuant thereto, other than that the Assignor has not
      created any adverse claim upon the interest being assigned by it hereunder
      and
      that such interest is free and clear of any such adverse claim; (b) makes
      no representation or warranty and assumes no responsibility with respect to
      the
      financial condition of the Borrower, any of its Subsidiaries or any other
      obligor or the performance or observance by the Borrower, any of its
      Subsidiaries or any other obligor of any of their respective obligations under
      the Credit Agreement or any other Loan Document or any other instrument or
      document furnished pursuant hereto or thereto; and (c) attaches any Note
      held by it evidencing the Assigned Facility and

     

    

    
      
        
                

                    Exhibits         

                    Amended
              and Restated Credit
              Agreement           

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
         

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (i) requests
      that the Administrative Agent, upon request by the Assignee, exchange the
      attached Note for a new Note payable to the Assignee and (ii) if the
      Assignor has retained any interest in the Assigned Facility, requests that
      the
      Administrative Agent exchange the attached Note for a new Note payable to the
      Assignor, in each case in amounts which reflect the assignment being made hereby
      (and after giving effect to any other assignments which have become effective
      on
      the Effective Date).

     

    3.           The
      Assignee (a) represents and warrants that it is legally authorized to enter
      into this Assignment and Assumption; (b) confirms that it has received a
      copy of the Credit Agreement, together with copies of the financial statements
      delivered or deemed delivered pursuant to Section 5.1(c) or Section 6.1
      thereof, as applicable, and such other documents and information as it has
      deemed appropriate to make its own credit analysis and decision to enter into
      this Assignment and Assumption; (c) agrees that it will, independently and
      without reliance upon the Assignor, the Agents or any other Lender and based
      on
      such documents and information as it shall deem appropriate at the time,
      continue to make its own credit decisions in taking or not taking action under
      the Credit Agreement, the other Loan Documents or any other instrument or
      document furnished pursuant hereto or thereto; (d) appoints and authorizes
      the Agents to take such action as agent on its behalf and to exercise such
      powers and discretion under the Credit Agreement, the other Loan Documents
      or
      any other instrument or document furnished pursuant hereto or thereto as are
      delegated to the Agents by the terms thereof, together with such powers as
      are
      incidental thereto; and (e) agrees that it will be bound by the provisions
      of the Credit Agreement and will perform in accordance with its terms all the
      obligations which by the terms of the Credit Agreement are required to be
      performed by it as a Lender including, if it is organized under the laws of
      a
      jurisdiction outside the United States, its obligation pursuant to
      Section 2.16(d) of the Credit Agreement.

     

    4.           The
      effective date of this Assignment and Assumption shall be the Effective Date
      of
      Assignment described in Schedule 1 hereto (the “Effective
      Date”).  Following the execution of this Assignment and
      Assumption, it will be delivered to the Administrative Agent for acceptance
      by
      it and recording by the Administrative Agent pursuant to the Credit Agreement,
      effective as of the Effective Date (which shall not, unless otherwise agreed
      to
      by the Administrative Agent, be earlier than five Business Days after the date
      of such acceptance and recording by the Administrative Agent).

     

    5.           Upon
      such acceptance and recording, from and after the Effective Date, the
      Administrative Agent shall make all payments in respect of the Assigned Interest
      (including payments of principal, interest, fees and other amounts) [to the
      Assignor for amounts which have accrued to the Effective Date and to the
      Assignee for amounts which have accrued subsequent to the Effective Date] [to
      the Assignee whether such amounts have accrued prior to the Effective Date
      or
      accrue subsequent to the Effective Date.  The Assignor and the
      Assignee shall make all appropriate adjustments in payments by the Agent for
      periods prior to the Effective Date or with respect to the making of this
      assignment directly between themselves.]

     

    

    
      
        
              

                    Exhibits         

                    Amended
              and Restated Credit
              Agreement          

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
              
        

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    6.           From
      and after the Effective Date, (a) the Assignee shall be a party to the
      Credit Agreement and, to the extent provided in this Assignment and Assumption,
      have the rights and obligations of a Lender thereunder and under the other
      Loan
      Documents and shall be bound by the provisions thereof and (b) the Assignor
      shall, to the extent provided in this Assignment and Assumption, relinquish
      its
      rights and be released from its obligations under the Credit
      Agreement.

     

    7.           This
      Assignment and Assumption shall be governed by, and construed and interpreted
      in
      accordance with, the laws of the State of New York.

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption
      to be executed as of the date first above written by their respective duly
      authorized officers on Schedule 1 hereto.

     

    
      	
              [ASSIGNOR]

            	
              [ASSIGNEE]

            
	 	 
	 	 
	
              By:  ________________________________                                                    

            	
              By:    ______________________________                                                  

            
	
              Name:

            	
              Name:

            
	
              Title:

            	
              Title:

            

    

    

     

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement         

                    Pacific
              Gas and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                        

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Schedule
      1

    to
      Assignment and Assumption

     

    

     

    Name
      of Assignor: _______________________

     

    Name
      of Assignee: _______________________

     

    Effective
      Date of Assignment: _________________

     

    

     

    
      	
               

              Assigned
                Facility

            	
              Principal

              Amount
                Assigned

            	
              [Percentage
                Assigned]*

            
	 	
              $_______

            	
              ___.___%

            
	 	 	 
	 	 	 

    

    

     

    

     

    
      	
              [Name
                of Assignor]

            	 
	
               

               

              By:                                                                

                     Name:

                     Title:

            	 
	
              [Name
                of Assignee]

               

               

              By:                                                                

                     Name:

                     Title:

               

            	 
	 	 

    

    

      

      *Calculate
        the
        Commitment Percentage that is assigned to at least 10 decimal places and
        show as
        a percentage of the aggregate commitments of all Lenders.

       

       

      Exhibits

      Amended
        and Restated Credit Agreement

      Pacific
        Gas and Electric Company

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

     

    
    

    
      	
              Consented
                to:

            	 
	
              PACIFIC
                GAS AND ELECTRIC COMPANY**

            	 
	
               

               

               

              By:  ____________________________________                                                              

                     Name:

                     Title:

            	 
	
               

              Accepted
                and Consented to:

               

              [CITICORP
                NORTH AMERICA, INC., as

              Administrative
                Agent]**

               

            	 
	
              By:  ____________________________________                                                              

                     Name:

                     Title:

               

            	 
	
              Consented
                to:

              [JPMORGAN
                CHASE BANK, N.A., as Issuing Lender]**

            	 
	
               

               

              By:  ____________________________________                                                              

                     Name:

                     Title:

               

            	 

    

    

    _______________________________________ 

    
      **
        As applicable
        pursuant to Section 10.6(b).

       

       

    

    

    
      
        
                

                    Exhibits      

                    Amended
              and Restated Credit
              Agreement             

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                
          

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      F

     

    

     

    FORM
      OF LEGAL OPINION OF ORRICK, HERRINGTON & SUTCLIFFE LLP

     

     

     

     

     

     

     

    

    
      
        
             

                    Exhibits            

                    Amended
              and Restated Credit
              Agreement           

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
             
          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      G

     

    FORM
      OF EXEMPTION CERTIFICATE

     

    Reference
      is made to the $2,000,000,000 Amended and Restated Credit Agreement, dated
      as of
      February 26, 2007 (as amended, supplemented or otherwise modified from time
      to
      time, the “Credit Agreement”), among Pacific Gas and Electric Company, a
      California corporation (the “Borrower”), the Lenders parties thereto,
      Citigroup Global Markets, Inc. and J.P. Morgan Securities Inc., as joint lead
      arrangers and joint bookrunners, JPMorgan Chase Bank, as syndication agent,
      Barclays Bank Plc, BNP Paribas and Deutsche Bank Securities Inc., as
      documentation agents, and Citicorp North America, Inc., as administrative agent
      (in such capacity, the “Administrative Agent”).  Unless
      otherwise defined herein, terms defined in the Credit Agreement and used herein
      shall have the meanings given to them in the Credit Agreement.

     

    [______________________]
      (the “Non-U.S. Lender”) is providing this certificate pursuant to
      Section 2.16(d) of the Credit Agreement.  The Non-U.S. Lender
      hereby represents and warrants that:

     

    1.           The
      Non-U.S. Lender is the sole record and beneficial owner of the Loans or the
      obligations evidenced by Note(s) in respect of which it is providing this
      certificate.

     

    2.           The
      Non-U.S. Lender is not a “bank” for purposes of Section 881(c)(3)(A) of the
      Internal Revenue Code of 1986, as amended (the “Code”).  In
      this regard, the Non-U.S. Lender further represents and warrants
      that:

     

    (a)          the
      Non-U.S. Lender is not subject to regulatory or other legal requirements as
      a
      bank in any jurisdiction; and

     

    (b)          the
      Non-U.S. Lender has not been treated as a bank for purposes of any tax,
      securities law or other filing or submission made to any Governmental Authority,
      any application made to a rating agency or qualification for any exemption
      from
      tax, securities law or other legal requirements;

     

    3.           The
      Non-U.S. Lender is not a ten percent (10%) shareholder of the Borrower within
      the meaning of Section 881(c)(3)(B) of the Code; and

     

    4.           The
      Non-U.S. Lender is not a controlled foreign corporation receiving interest
      from
      a related person within the meaning of Section 881(c)(3)(C) of the
      Code.

     

    [Remainder
      of page intentionally left blank.]

     

    

    
      
        
                

                    Exhibits           

                    Amended
              and Restated Credit
              Agreement       

              Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            

                 

                 
   

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESS WHEREOF, the undersigned has executed this certificate as of the date
      set forth below.

     

    [NAME
      OF NON-U.S. LENDER]

     

    By:         ___________________________________                                                                  

    
      	
               

            	
              Name:

            

    

    
      	
               

            	
              Title:

            

    

    

    Date:  ____________________

     

     

     

     

     

     

     

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement        

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
         

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      H

     

    FORM
      OF NOTE

     

    THIS
      NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT IN
      COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
      BELOW.  TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY
      MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT
      TO THE TERMS OF SUCH CREDIT AGREEMENT.

     

    
      
        	
                 

                $__________

              	
                 

                                                     New
                  York, New York

                                    as
                  of [_________], 200[_]

                 

              
	 	 

      

    

    

     

    FOR
      VALUE RECEIVED, PACIFIC GAS AND ELECTRIC COMPANY, a California corporation
      (the
“Borrower”), DOES HEREBY PROMISE TO PAY to the order of [insert name of
      Lender] (the “Lender”) at the office of CITIBANK NORTH AMERICA, INC., at
      [________________________], in lawful money of the United States of America
      in
      immediately available funds, the principal amount of ____________________
      DOLLARS ($__________), or, if less, the aggregate unpaid principal amount of
      all
      Revolving Loans (as defined in the Credit Agreement referred to below) made
      by
      the Lender to the Borrower pursuant to the Credit Agreement referred to below,
      whichever is less, on such date or dates as is required by said Credit
      Agreement, and to pay interest on the unpaid principal amount from time to
      time
      outstanding hereunder, in like money, at such office, and at such times and
      in
      such amounts as set forth in Section 2.11 of said Credit Agreement.

     

    The
      holder of this Note is authorized to indorse on the schedules annexed hereto
      and
      made a part hereof or on a continuation thereof which shall be attached hereto
      and made a part hereof the date, the Type and amount of each Revolving Loan
      made
      pursuant to the Credit Agreement and the date and amount of each payment or
      prepayment of principal thereof, each continuation thereof, each conversion
      of
      all or a portion thereof to another Type and, in the case of Eurodollar Loans,
      the length of each Interest Period with respect thereto.  Each such
      indorsement shall constitute primafacie evidence of the accuracy
      of the information indorsed. The failure to make any such indorsement or any
      error in any such indorsement shall not affect the obligations of the Borrower
      in respect of any Revolving Loan.

     

    The
      Borrower hereby waives demand, presentment for payment, protest, notice of
      any
      kind (including, but not limited to, notice of dishonor, notice of protest,
      notice of intention to accelerate or notice of acceleration), other than notice
      required pursuant to the Credit Agreement and diligence in collecting and
      bringing suit against any party hereto.  The nonexercise by the holder
      of this Note of any of its rights hereunder in any particular instance shall
      not
      constitute a waiver thereof in that or any subsequent instance.

     

    

    
      
        
                

                    Exhibits             

                    Amended
              and Restated Credit
              Agreement            

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
         

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    This
      Note (a) is one of the promissory notes referred to in the $2,000,000,000
      Amended and Restated Credit Agreement, dated as of February 26, 2007 (as
      amended, supplemented or otherwise modified from time to time the “Credit
      Agreement”), among the Borrower, the Lenders parties thereto, Citigroup
      Global Markets, Inc. and J.P. Morgan Securities Inc., as joint lead arrangers
      and joint bookrunners, JPMorgan Chase Bank, as syndication agent, Barclays
      Bank
      Plc, BNP Paribas and Deutsche Bank Securities Inc., as documentation agents,
      as
      documentation agents, and Citicorp North America, Inc., as administrative agent
      (in such capacity, the “Administrative Agent”), (b) is subject to the
      provisions of the Credit Agreement and (c) is subject to optional prepayment
      in
      whole or in part and acceleration of the maturity hereof upon the occurrence
      of
      certain events, all as provided in the Credit Agreement.  Terms
      defined in the Credit Agreement are used herein as therein defined.

     

     

     

     

     

     

     

     

    

    
      
        
                

                    Exhibits       

                    Amended
              and Restated Credit
              Agreement          

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                         
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    NOTWITHSTANDING
      ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT AGREEMENT, THIS
      NOTE
      MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE WITH THE
      REGISTRATION AND OTHER PROVISIONS OF SECTION 10.6 OF THE CREDIT
      AGREEMENT.

     

    THIS
      NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
      THE
      LAWS OF THE STATE OF NEW YORK.

     

    

     

       
      PACIFIC GAS AND ELECTRIC COMPANY

     

    

     

    
      	
              By:

            	 _______________________________________________________

    

    
      	
               

            	
                    Name:

            

    

    
      	
               

            	
                    Title:

            

    

     

     

     

     

     

     

     

    

    
      
        
                

                    Exhibits       

                    Amended
              and Restated Credit Agreement      

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                         
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Schedule
      A

    to
      Note

     

    LOANS,
      CONVERSIONS AND REPAYMENTS OF ABR LOANS

     

    
      	
              Date

            	
              Amount
                of ABR Loans

            	
              Amount

              Converted
                to

              ABR
                Loans

            	
              Amount
                of Principal of Base

              Rate
                Loans Repaid

            	
              Amount
                of ABR Loans

              Converted
                to

              Eurodollar
                Loans

            	
              Unpaid
                Principal Balance of

              ABR
                Loans

            	
              Notation
                Made By

            
	
               

               

            	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 

    

     

     

     

     

     

     

     

    
 

    

    
      
        
                

                    Exhibits         

                    Amended
              and Restated Credit
              Agreement         

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)              
            	 	 

            
      

                    
        

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Schedule
      B

    to
      Note

     

    LOANS,
      CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS

     

    
      	
              Date

            	
              Amount
                of Eurodollar

              Loans

            	
              Amount
                Converted to

              Eurodollar
                Loans

            	
              Interest
                Period and

              Eurodollar
                Rate with

              Respect
                Thereto

            	
              Amount
                of Principal of

              Eurodollar
                Loans Repaid

            	
              Amount
                of Eurodollar

              Loans
                Converted to

              ABR
                Loans

            	
              Unpaid
                Principal

              Balance
                of Eurodollar

              Loans

            	
              Notation

              Made
                By

            
	
               

               

            	 	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 	 
	
               

               

            	 	 	 	 	 	 	 

    

     

     

     

     

     

    
 

    

    

    

    
      
        
                

                    Exhibits            

                    Amended
              and Restated Credit
              Agreement           

                    Pacific
              and Electric
              Company      
      

            
              	              

                                      LOSANGELES
                        618833 v1
                        (2K)ex1003.htm

    

      Exhibit
        10.3

       

      PG&E
        CORPORATION

       

      2006
        LONG-TERM INCENTIVE PLAN

       

      RESTRICTED
        STOCK GRANT

       

      PG&E
        CORPORATION, a California corporation, hereby grants shares of
        Restricted Stock to the Recipient named below.  The shares of
        Restricted Stock have been granted under the PG&E Corporation 2006 Long-Term
        Incentive Plan, as amended on February 15, 2006 and December 20, 2006 (the
        “LTIP”).  The terms and conditions of the Restricted Stock are set
        forth in this cover sheet and in the attached Restricted Stock Agreement
        (the
“Agreement”).

       

      Date
        of
        Grant:                                January
        3, 20071

       

      Name
        of
        Recipient:                                     PETER
        A.
        DARBEE                                                

       

      Last
        Four Digits of Recipient’s Social Security
        Number:                      --2618                                

       

      Number
        of Shares of Restricted Stock
        Granted:                                       21,155                             

       

      

       

      By
        signing this cover sheet, you agree to all of the terms and conditions described
        in the attached Agreement. You and PG&E Corporation agree to execute such
        further instruments and to take such further action as may reasonably be
        necessary to carry out the intent of the attached Agreement.  You are
        also acknowledging receipt of this Grant, the attached Agreement, and a copy
        of
        the prospectus describing the LTIP and the Restricted Stock dated January
        1,
        2007.

       

      

       

      Recipient:
                                         /s/  Peter
        A.
        Darbee                                 

                                                                                        
        (Signature)

      

      

      Attachment

       

      

       

      Please
        sign and return to PG&E Corporation, Human Resources,

       

      One
        Market, Spear Tower, Suite 400, San Francisco, California
        94105

       

      

        

      

        
        
          	
                  1

                	
                  Due
                    to the death of former President Gerald Ford on December 26,
                    2006, the
                    federal government declared January 2, 2007 as a national day
                    of
                    mourning.  All federal offices and the New York Stock Exchange
                    were closed that day.  Thus, the date of grant for the
                    Restricted Stock is January 3,
                    2007.

                

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      PG&E
        CORPORATION

       

      2006
        LONG-TERM INCENTIVE PLAN

       

      RESTRICTED
        STOCK AGREEMENT

       

      
        	
                The
                  LTIP and Other Agreements

              	
                This
                  Agreement constitutes the entire understanding between you and
                  PG&E
                  Corporation regarding the Restricted Stock, subject to the terms
                  of the
                  LTIP.  Any prior agreements, commitments or negotiations are
                  superseded.  In the event of any conflict or inconsistency
                  between the provisions of this Agreement and the LTIP, the LTIP
                  shall
                  govern.  Capitalized terms that are not defined in this
                  Agreement are defined in the LTIP. For purposes of this Agreement,
                  employment with PG&E Corporation shall mean employment with any member
                  of the Participating Company Group.

              
	 	 
	
                Grant
                  of Restricted Stock

              	
                PG&E
                  Corporation grants you the number of shares of Restricted Stock
                  shown on
                  the cover sheet of this Agreement.  The shares of Restricted
                  Stock are subject to the terms and conditions of this Agreement
                  and the
                  LTIP.

              
	 	 
	
                Lapse
                  of Restrictions

              	
                As
                  long as you remain employed with PG&E Corporation, the restrictions
                  will lapse as to 100 percent of the total number of shares of Restricted
                  Stock originally subject to this Agreement, as shown above on the
                  cover
                  sheet, on the first business day of January of the fifth year following
                  the Date of Grant (the “Lapse Date”).  Except as described
                  below, all shares of Restricted Stock subject to this Agreement
                  as to
                  which the restrictions have not lapsed shall be forfeited upon
                  termination
                  of your employment.

                 

                To
                  the extent this Agreement provides for the continued lapse of restrictions
                  following the termination of employment, such continued lapse shall
                  be
                  subject to your continued compliance with certain post-employment
                  restrictions.

              
	 	 
	
                Voluntary
                  Termination

              	
                In
                  the event that you terminate your employment with PG&E Corporation
                  voluntarily, you will automatically forfeit to PG&E Corporation all of
                  the shares of Restricted Stock as to which the restrictions have
                  not
                  lapsed subject to this Agreement as of the date of such
                  Termination.

              
	 	 
	
                Termination
                  for Cause

              	
                If
                  your employment with PG&E Corporation is terminated by PG&E
                  Corporation for cause, you will automatically forfeit to PG&E
                  Corporation all shares of Restricted Stock as to which the restrictions
                  have not lapsed subject to this Agreement as of the date of such
                  termination.  In general, termination for “cause” means
                  termination of employment because of dishonesty, a criminal offense
                  or
                  violation of a work rule, and will be determined by and in the
                  sole
                  discretion of PG&E Corporation.

              
	 	 

      

      

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

      

      
        	
                Termination
                  other than for Cause

              	
                If
                  your employment with PG&E Corporation is terminated by PG&E
                  Corporation other than for cause before the restrictions on your
                  Restricted Stock lapse, a prorated portion of the restrictions
                  will lapse
                  immediately in accordance with the percentage of time you were
                  employed
                  with PG&E Corporation during the five-year period governing the
                  restrictions (or as otherwise described below in connection with
                  a Change
                  in Control during such period).  All other outstanding shares of
                  Restricted Stock shall automatically be forfeited to PG&E Corporation
                  upon such termination.

              
	 	 
	
                Retirement

              	
                In
                  the event of your Retirement, a prorated portion of the restrictions
                  will
                  vest immediately in accordance with the percentage of time you
                  were
                  employed with PG&E Corporation during the five-year period governing
                  the restrictions.  You will be considered to have retired if you
                  are age 55 or older on the date of termination and if you were
                  employed by
                  PG&E Corporation for at least five consecutive years ending on the
                  date of termination of your employment.

              
	 	 
	
                Death/Disability

              	
                If
                  your employment terminates due to your death or disability, the
                  restrictions on all of your shares of Restricted Stock shall lapse
                  on the
                  date of termination due to your death or disability.

              
	 	 
	
                Termination
                  Due to Disposition of Subsidiary

              	
                (1)
                  If your employment is terminated (other than for cause or your
                  voluntary
                  termination) by reason of a divestiture or change in control of
                  a
                  subsidiary of PG&E Corporation, which divestiture or change in control
                  results in such subsidiary no longer qualifying as a subsidiary
                  corporation under Section 424(f) of the Internal Revenue Code of
                  1986, as
                  amended (the “Code”), or (2) if your employment is terminated (other than
                  for cause or your voluntary termination) coincident with the sale
                  of all
                  or substantially all of the assets of a subsidiary of PG&E
                  Corporation, the restrictions on all shares of Restricted Stock
                  shall
                  lapse in the same manner as for “Termination other than for Cause”
                  described above.

              
	 	 
	
                Change
                  in Control

              	
                In
                  the event of a Change in Control, the surviving, continuing, successor,
                  or
                  purchasing corporation or other business entity or parent thereof,
                  as the
                  case may be (the “Acquiror”), may, without your consent, either
                  assume or continue PG&E Corporation’s rights and obligations under
                  this Agreement or provide substantially equivalent awards associated
                  with
                  the Acquiror’s stock.  If this Award is neither assumed nor
                  continued by the Acquiror or if the Acquiror does not provide a
                  substantially equivalent award, the restrictions on all of your
                  outstanding shares of Restricted Stock shall automatically lapse
                  and
                  become nonforfeitable immediately preceding, and contingent on,
                  the Change
                  in Control of PG&E Corporation.

              
	 	 

      

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

      

      
        	
                Termination
                  In Connection with a Change in Control

              	
                If
                  your employment is terminated in connection with a Change in Control
                  within three months before the Change in Control occurs or within
                  two
                  years following the Change in Control, the restrictions on all
                  of your
                  outstanding shares of Restricted Stock (to the extent the restrictions
                  did
                  not previously lapse upon failure of the Acquiror to assume or
                  continue
                  this Award) shall lapse and become nonforfeitable on the date of
                  termination of your employment.  PG&E Corporation shall have
                  the sole discretion to determine whether termination of your employment
                  was made in connection with a Change in Control.

              
	 	 
	
                Escrow

              	
                The
                  certificates for the Restricted Stock shall be deposited in escrow
                  with
                  the Corporate Secretary of PG&E Corporation to be held in accordance
                  with the provisions of this paragraph.  Each deposited
                  certificate shall be accompanied by any assignment documents PG&E
                  Corporation may require you to execute.  The deposited
                  certificates shall remain in escrow until such time as the certificates
                  are to be released or otherwise surrendered for cancellation as
                  discussed
                  below.

                 

                All
                  dividends, if any, on the Restricted Stock shall be held in escrow
                  and
                  subject to the same restrictions as the shares to which they
                  relate.

              
	 	 
	
                Release
                  of Shares and Withholding Taxes

              	
                The
                  shares of Restricted Stock held in escrow hereunder shall be subject
                  to
                  the following terms and conditions relating to their release from
                  escrow
                  or their surrender to PG&E Corporation:

                 

                ·  When
                  the restrictions as to your shares of Restricted Stock lapse as
                  described
                  above, the certificates for such shares shall be released from
                  escrow and
                  delivered to you, at your request within thirty (30) days of the
                  date the
                  restrictions lapsed.

                 

                ·  Upon
                  termination of your employment, any shares of Restricted Stock
                  as to which
                  the restrictions have not lapsed shall be forfeited and automatically
                  surrendered to PG&E Corporation as provided herein.

                 

                Note
                  that you must make arrangements acceptable to PG&E Corporation to
                  satisfy withholding or other taxes that may be due before your
                  shares will
                  be released to you.  If you so elect, PG&E Corporation will
                  assist you in selling your shares through a broker so that you
                  can use the
                  sales proceeds to satisfy applicable taxes.  You will receive
                  the remaining proceeds in cash.  However, if you wish to receive
                  the stock certificates in lieu of selling your shares, you will
                  need to
                  make arrangements to pay the applicable taxes either by check or
                  through
                  payroll deduction.  PG&E Corporation will notify you about
                  how to instruct PG&E Corporation to sell your shares when the
                  restrictions lapse or make other arrangements.

              
	 	 

      

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

      

      
        	
                Code
                  Section 83(b) Election

              	
                Under
                  Section 83(a) of the Code, the Fair Market Value of the Restricted
                  Stock
                  on the date any forfeiture restrictions applicable to such Restricted
                  Stock lapse will be reportable as ordinary income at that
                  time.  For this purpose, “forfeiture restrictions” include
                  surrender to PG&E Corporation of Restricted Stock as described
                  above.  You may elect to be taxed at the time the Restricted
                  Stock is granted to you, rather than when the restrictions lapse
                  by filing
                  an election under Section 83(b) of the Code with the Internal Revenue
                  Service within thirty (30) days after the Date of
                  Grant.  Failure to make this filing within the thirty (30) day
                  period will result in the recognition of ordinary income by you
                  (in the
                  event the Fair Market Value of the Restricted Stock increases after
                  the
                  date of purchase) as the forfeiture restrictions
                  lapse.  YOU ACKNOWLEDGE THAT IT IS YOUR SOLE
                  RESPONSIBILITY, AND NOT PG&E CORPORATION’S, TO FILE A TIMELY ELECTION
                  UNDER CODE SECTION 83(b).  YOU ARE RELYING SOLELY ON YOUR OWN
                  ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE
                  A CODE
                  SECTION 83(b) ELECTION.

              
	 	 
	
                Leaves
                  of Absence

              	
                For
                  purposes of this Agreement, if you are on an approved leave of
                  absence
                  from PG&E Corporation, or a recipient of PG&E Corporation
                  sponsored disability benefits, you will continue to be considered
                  as
                  employed.  If you do not return to active employment upon the
                  expiration of your leave of absence or the expiration of your PG&E
                  Corporation sponsored disability benefits, you will be considered
                  to have
                  voluntarily terminated your employment. See above under “Voluntary
                  Termination.”

                 

                PG&E
                  Corporation reserves the right to determine which leaves of absence
                  will
                  be considered as continuing employment and when your employment
                  terminates
                  for all purposes under this Agreement.

              
	 	 
	
                Voting
                  and Other Rights

              	
                Subject
                  to the terms of this Agreement, you shall have all the rights and
                  privileges of a shareholder of PG&E Corporation while the Restricted
                  Stock is held in escrow, including the right to vote.  As
                  described above, all dividends, if any, on the Restricted Stock
                  shall be
                  held in escrow and subject to the same restrictions as the shares
                  to which
                  they relate.

              
	 	 
	
                Restrictions
                  on

                Issuance

              	
                PG&E
                  Corporation will not issue any Restricted Stock if the issuance
                  of such
                  Restricted Stock at that time would violate any law or
                  regulation.

              
	 	 

      

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

      

      
        	
                Restrictions
                  on Resale and Hedge Transactions

              	
                By
                  signing this Agreement, you agree not to sell any Restricted Stock
                  before
                  the restrictions lapse or sell any shares acquired under this grant
                  at a
                  time when applicable laws, regulations or Company or underwriter
                  trading
                  policies prohibit sale.  In particular, in connection with any
                  underwritten public offering by PG&E Corporation of its equity
                  securities pursuant to an effective registration statement filed
                  under the
                  Securities Act of 1933, you shall not sell, make any short sale
                  of, loan,
                  hypothecate, pledge, grant any option for the purchase of, or otherwise
                  dispose or transfer for value or agree to engage in any of the
                  foregoing
                  transactions with respect to any shares acquired under this grant
                  without
                  the prior written consent of PG&E Corporation or its underwriters, for
                  such period of time after the effective date of such registration
                  statement as may be requested by PG&E Corporation or the
                  underwriters.

                 

                If
                  the sale of shares acquired under this grant is not registered
                  under the
                  Securities Act of 1933, but an exemption is available which requires
                  an
                  investment or other representation and warranty, you shall represent
                  and
                  agree that the Shares being acquired are being acquired for investment,
                  and not with a view to the sale or distribution thereof, and shall
                  make
                  such other representations and warranties as are deemed necessary
                  or
                  appropriate by PG&E Corporation and its counsel.

                 

                By
                  your acceptance of the grant, you agree that while the Restricted
                  Stock is
                  subject to restrictions, you will not enter into a corresponding
                  hedging
                  transaction relating to PG&E Corporation’s stock nor engage in any
                  short sale of PG&E Corporation’s stock.  This prohibition
                  shall not apply to transactions effected through PG&E Corporation’s
                  benefit plans that provide an opportunity to invest in Company
                  stock or
                  which provide compensation based on the price of Company
                  stock.

              
	 	 
	
                No
                  Retention Rights

              	
                This
                  Agreement is not an employment agreement and does not give you
                  the right
                  to be retained by PG&E Corporation.  Except as otherwise
                  provided in an applicable employment agreement, PG&E Corporation
                  reserves the right to terminate your employment at any time and
                  for any
                  reason.

              
	 	 
	
                Legends

              	
                All
                  certificates that may be issued to represent the Restricted Stock
                  issued
                  under this grant shall, where applicable, have endorsed thereon
                  the
                  following legends:

                 

                “THE
                  SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
                  ON TRANSFER SET FORTH IN AN AGREEMENT BETWEEN PG&E CORPORATION AND THE
                  REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST.  A
                  COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF PG&E
                  CORPORATION AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE CORPORATE
                  SECRETARY OF PG&E CORPORATION BY THE HOLDER OF
                  

              

      

       

      
        
          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

      
        	 	 RECORD
                OF THE SHARES REPRESENTED BY THIS
                CERTIFICATE.”
	 	 
	
                Applicable
                  Law

              	
                This
                  Agreement will be interpreted and enforced under the laws of the
                  State of
                  California.

              

      

       

      
        By
          signing the cover sheet of this Agreement, you agree to all of the terms
          and
          conditions described above and in the LTIP.

       

      
        
          
          

        

        
          A-6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}]]