Document:

KMI Exhibit 10.2

Exhibit 10.2

RETENTION AND RELOCATION AGREEMENT

This Retention Agreement (“Agreement”) is entered into as of March 5, 2007 between Kinder Morgan, Inc. (together with its successors hereinafter “KM”), and Scott E. Parker (“Employee or Parker”).

WHEREAS, the parties desire to provide Employee incentive with certain retention payments; and 

WHREAS, the parties desire to provide for the relocation of Employee; and

WHEREAS, the parties have negotiated certain terms to extend past active employment, including, without limitation, terms relating to non-competition, non-solicitation, and confidentiality; and

WHEREAS, Employee agrees that ample consideration is provided to ensure enforcement of such provisions and the waiver of certain rights as set forth herein; 

NOW THEREFORE, in consideration of the foregoing premises and the following promises, the parties agree as follows:

1

Intent of the Parties.  It is the intent of the parties that Employee shall be employed at will by KM.  Employee acknowledges and agrees that this Agreement shall not be interpreted to entitle Employee to any payment upon separation from the employ of KM, except as provided in section 5.

2

Definitions.

(a)

KM Releasees.  “KM Releasees” as used in this Agreement shall mean and include Kinder Morgan, Inc., any present or former parent, sister, affiliate, subsidiary or related company, and any of its and their respective offices and branches, successors, predecessors and assigns. 

(b)

Termination for Cause.  “Termination for Cause” shall mean termination of Employee by KM because of Employee’s (i) grand jury indictment or prosecutorial information charging Employee with illegal or fraudulent acts; (ii) conviction of a felony which in the reasonable, good faith opinion of KM would have an adverse impact on the reputation or business of KM; (iii) willful refusal, without proper legal or medical cause, to perform Employee’s duties and responsibilities; (iv) willfully engaging in conduct which Employee has reason to know is injurious to KM; (v) willful and material violation of any of KM’s written policies and procedures; or (vi) a material breach by Employee of any of the terms and conditions set forth in this Agreement.  Such termination shall be effected by notice thereof delivered by KM to Employee and shall be effective as of the date of such notice (“Notice Date”).  The parties agree that, except for a termination under (i), (ii) or (iv), Employee shall be given written notice from KM of the complaint and 30 days to cure it.

(c)

Confidential Information.  “Confidential Information” shall include all information comprising, concerning or relating to (i) the KM Releasees’ Customers (as defined below), providers, suppliers, and other business affiliates; (ii) KM Releasees’ policies, practices,

 

1

operating information, pricing, profits, margins, costs, expenses, return expectations, financial information, business plans, economic models and market approaches; and (iii) other information, techniques or approaches used by the KM Releasees and not generally known or applied in their respective industries.  Some or all of this information constitutes trade secrets; however, the Confidential Information covered in this Agreement need not satisfy the legal definition or requirements of a “trade secret” to be protected from disclosure hereunder.    However, Employee’s obligations under this Section shall not extend to: 1) Confidential Information which is or becomes part of the public domain or is available to the public by publication or otherwise without disclosure by Employee; or 2) Confidential Information which, either prior to or subsequent to the Company’s disclosure to Employee with an obligation of confidentiality, was disclosed to Employee, without obligation of confidentiality, by a third party who did not acquire such information, directly or indirectly, from Employee.  

(d)

Customer.  “Customer” shall include any person or entity to whom at any time prior to or during Employee’s employment, services or products are being sold by the KM Releasees, and any person or entity with whom, at any time prior to or during employment, the KM Releasees have established a strategic marketing alliance. 

3

KM’s Promises.

(a)

Long Term Incentive.  Employee shall be provided cash awards as long term incentives (“LTI”) pursuant to the terms of this Agreement and shall not be eligible for any other type of long term incentive awards.  Upon the close of the transaction under which the management of KM buys out KM – that is the purchase of the outstanding shares of KM stock so that it is no longer a publicly traded company (the “MBO”), Employee shall receive the LTI cash awards according to the following schedule:

1 Year from date of MBO Close:

$500,000

2 Years from date of MBO Close:

$500,000

3 Years from date of MBO Close:

$2,000,000

If Employee’s employment is terminated for Cause or by Employee’s resignation prior to the date the LTI award comes due, Employee shall not be eligible for such award.

(b)

Quarterly Payments.  As an incentive for Employee to continue his at will employment with KM, so long as Employee remains employed by KM, Employee shall receive quarterly cash payments of fifty thousand dollars ($50,000), less applicable tax deductions and withholdings.  These quarterly payments shall commence as of the first quarter after the MBO and shall increase in accordance with Paragraph 3(d) below.  The quarterly payments shall cease upon Employee’s separation from the employ of KM for any reason; however, if Employee’s employment terminates in mid-quarter, that quarter shall be paid unless the separation is for Cause or by Employee resignation.  For purposes of this Agreement, a “quarter” shall mean the close of the first payroll period in each of the months of January, April, July, and October.  

(c)

Annual Incentive Plan Participation.  In each year that Employee is employed by KM, Employee shall be eligible to participate, pursuant to the terms and conditions of the KM annual incentive plan.  If Employee's employment is terminated for Cause or by Employee's

 

2

resignation prior to payment of the annual incentive award in any given year, Employee shall not be eligible for that award.  

(d)

Relocation.  Employee may elect to relocate to Lombard, Illinois anytime before January 1, 2009.  Upon written notice from Employee to KM that Employee is relocating, Employee shall be provided his choice of (i) $100,000 for relocation, less applicable and required withholdings, or (ii) up to $100,000 for relocation, less any applicable and required withholdings, paid to outside relocation vendors pursuant to the terms of KM’s policies and procedures governing relocation, a copy of which shall be provided upon request to Employee.  In the event Employee elects option (ii) and the amount paid by KM is less than $100,000, Employee shall receive the difference between the amount paid by KM and the $100,000, less any applicable and required withholdings.  If Employee’s employment terminates within one year after the receipt of the relocation payment, for Cause or by Employee resignation, then Employee shall provide any relocation payment received from KM, or paid by KM on behalf of Employee, back to KM.  Upon relocating to Lombard, Employee shall split his working time evenly between Houston, Texas and Lombard, Illinois.  Employee’s work related travel may originate out of Lombard or Houston, and it is anticipated that will occur on a relatively even basis.  Upon completing the relocation, the Quarterly Payments referenced in Paragraph 3(b) above shall increase to $65,000. 

4.

Employee’s Promises.  Employee acknowledges and agrees that: 1) KM and the KM Releasees are engaged in, among other things, the natural gas pipeline business (the “Business”); 2) the Business is conducted throughout the states of Texas, Oklahoma, Nebraska, Colorado, Illinois, Iowa, Kansas, Wisconsin, Louisiana, Arkansas, New Mexico, Wyoming, and Arizona; 3) the KM Releasees have provided, and shall continue to provide, Employee with Confidential Information, proprietary information and trade secrets of and concerning the KM Releasees, their actual and potential Customers, providers, suppliers, and other business affiliates; 4) Employee’s work for KM has given, and will continue to give, Employee access to actual and potential Customers, providers, suppliers, and other business affiliates with whom the KM Releasees have expended substantial efforts to successfully establish goodwill; and 4) the agreements and covenants contained in this Paragraph 4, including its subparts, are essential to protect the Business and the trade secrets, Confidential Information, proprietary information, goodwill and other legitimate interests of the KM Releasees.  Accordingly, Employee agrees and covenants as follows:

(a)

Confidential Information.  Employee shall not, at any time during or after his employment with KM, disclose or use any Confidential Information of KM, except as needed to perform his duties as an employee for the benefit of KM.  It is anticipated by the parties that, in his role as President, Employee’s duties will require him to disclose confidential information for the furtherance of KM’s business.  As such, the Parties agree that, during Employee’s employment, unless KM notifies Employee to the contrary, Employee may exercise his discretion in the release of Confidential Information without being in breach of this sub-paragraph, so long as Employee acts in good faith and exclusively for the furtherance of KM’s business. 

(b)

Non-Disparagement Agreement.  Employee agrees and covenants that he will not, during employment by KM, or at any time thereafter, in any way disparage KM, its officers, directors, employees, consultants, agents, or business performance, methods, practices,

 

3

operations, decisions or plans to any third party; provided, however, that Employee shall not be held in breach of this provision should Employee be required to testify pursuant to subpoena under oath or as otherwise required by law, provided additionally that Employee testifies truthfully and that, prior to providing such testimony, Employee promptly notifies KM that his testimony is being sought so that KM may seek to protect its rights in relation to the testimony.  It is specifically agreed that nothing in this section is designed to limit Employee’s ability to engage, in good faith, in internal critiques of business decisions, performance and/or personnel during his employment with KM and that such critiques will not be considered a violation of this section.

(c)

Non-Solicitation of Employees.  Employee agrees and covenants that, during employment and for the two (2) year period from the date of termination of employment whether by retirement, resignation, or hereunder for any reason whatsoever Employee will not directly or indirectly, hire, encourage, entice, or otherwise solicit any employee of the KM Releasees, or aid any third party to hire, encourage, entice or solicit any employee of the KM Releasees, to leave employment with the KM Releasees in order to accept employment elsewhere outside KM.  For purposes of this paragraph, “employment elsewhere” shall include any relationship of employer/employee, any relationship of principal/independent contractor and any relationship of client/consultant.

(d)

Non-Competition.  Employee agrees and covenants that, during employment and for the three (3) year  period from the date of termination of employment whether by retirement, resignation, or hereunder for any reason whatsoever, Employee will not, directly or indirectly, engage, as employee, owner, consultant, advisor, officer, director or partner, or through stock ownership, investment of capital, lending of money or property, or rendering of services or otherwise, either alone or in association with others, in the operation of any type of business or enterprise which is in competition with, or which is directly or indirectly detrimental to, the KM Releases in the natural gas pipeline business, including KM’s Business in which Employee was or is engaged or involved in to any degree or extent during employment, in any geographic area in which the KM Releasees conducted such Business, provided, however, that the record or beneficial ownership by Employee of one percent (1%) or less of the outstanding publicly traded capital stock of any such business or enterprise shall not be deemed to be in violation of this Paragraph 4(d), provided further that Employee is not an employee, consultant, advisor, officer, director or partner of such business or enterprise.  

(e)

Confidentiality of this Agreement.  During the employment, and at any time thereafter, Employee agrees not to divulge, disclose or publicize in any manner to any third party, including but not limited to current or former employees of KM, the terms and conditions of this Agreement, except, with respect to disclosure by Employee (1) insofar as is necessary to enforce the Agreement, comply with this Agreement, applicable laws or regulations, or to respond to an order of a court or administrative agency for disclosure, (2) to Employee’s legal counsel, immediate family, or tax or financial advisors, on condition that any such person to whom the terms or conditions of this Agreement are disclosed shall be instructed not to disclose the terms or conditions to anyone else.  

(f)

Employee acknowledges and agrees that any material breach by him of the covenants, commitments and agreements in Paragraph 4, including its subparts, of this Agreement shall constitute a material breach of this Agreement and is likely to result in

 

4

irreparable injury to the KM Releasees that could not be compensated by money damages alone.  Employee therefore agrees that, notwithstanding any other provision of this Agreement, in addition to any other remedies the KM Releasees may have at law and/or equity, in the event that Employee has breached any of said provisions of this Agreement, KM shall be entitled, at its election, to immediately stop making any payments hereunder and/or to enforce the specific performance of this Agreement by Employee and/or to seek to enjoin Employee from activities in breach of said provisions of this Agreement without having to show that there are no other adequate remedies available, whether such breach of said provisions occurs during employment, or thereafter.

(g)

The parties stipulate and agree that the terms, covenants, commitments and agreements contained in this Paragraph 4, and its subparts, are fair and reasonable in all respects, including the scope, time period and geographical coverage, and that these restrictions are necessary for the reasonable protection of the legitimate business interests of the KM Releasees.  If, at the time of enforcement of any of these provisions, a court holds that the restrictions stated herein are unreasonable under the circumstances then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances will be substituted for the stated period, scope or area.  In such event, but only in such event, the parties hereto hereby specifically request a trial court or other tribunal presented with this Agreement for enforcement to reform it as to time, geographic area or scope of activities prohibited to the fullest extent allowed by law and to enforce this Agreement as so reformed.

5

Payment upon Termination.  If Employee’s employment is terminated for any of the following reasons, this Agreement shall be administered as follows:

(a)

Termination for Cause.  If termination of employment is for Cause then Employee from the date of termination forward shall not be entitled to any payment or other consideration of any type under this agreement, except for base salary payable for days worked up to the date of termination.  

(b)

 Other Involuntary Termination/Death/Disability.  If KM terminates Employee’s employment for any reason (including reasons such as the Company’s designation of Employee for inclusion in a reduction in force) other than for Cause, or if Employee resigns due to KM’s making a substantial reduction in Employee’s job title or responsibilities or due to KM relocating him other than to Lombard, Illinois, or if Employee’s employment ends due to death or due to disability that makes Employee unable to perform the essential functions of the job, with or without reasonable accommodation, Employee shall receive each of the unpaid LTI awards described in Paragraph 3(a), less customary and applicable deductions, provided, however, prior to payment, Employee (or in the event of death, the court-appointed representative of Employee’s estate) executes a release provided by the Company in a form substantially the same as that attached hereto as Exhibit A (the “Release”), and Employee does not revoke such Release within the revocation period set forth therein.   Employee also may be eligible for severance pursuant to the terms and conditions of KM’s Severance Plan.  Employee shall not be eligible for any other payment, under this Agreement, except as expressly set forth in this Paragraph 5(b). 

(c)

Retirement/Voluntary Separation.  If Employee retires or voluntarily separates from the employ of KM for any reason, from the date of retirement or voluntary separation

 

5

forward Employee shall not be entitled to any payment or other consideration of any type under this Agreement, except for base salary payable for days worked up to the date of termination.  

6.

Effect of No MBO.  If the MBO referenced in Paragraph 3(a) is not effectuated on or before September 1, 2007, then this Agreement shall automatically terminate, and neither Employee nor KM shall have any obligation arising out of this Agreement or the termination thereof.  

7.

Adequacy of Consideration.  By executing this Agreement, KM and Employee acknowledge the receipt and sufficiency of the consideration provided by the other in conjunction with executing this Agreement and the Release.  Each acknowledges and confirms to the other that the consideration provided by the other is good and valuable consideration legally supportive of each party’s respective rights, duties and obligations hereunder and under the Release.  By executing this Agreement, KM and Employee shall be estopped from raising and hereby expressly waive any defense regarding the receipt and/or legal sufficiency of the consideration provided by one to the other with respect to this Agreement and the Release.

8.

Assignability.  This Agreement shall inure to the benefit of, and be binding upon, Employee and Employee’s personal or legal representatives, employees, administrators, successors, heirs, distributees, devisees and legatees, and KM, its successors and assignees, provided, however, that neither KM nor Employee may assign any of Employee’s or KM’s obligations, rights or benefits hereunder without the prior written consent of the other.

9.

Headings.  The headings of sections and paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

10.

Controlling Law.  This Agreement shall be governed and construed in accordance with the laws of Texas.  The parties agree that any legal action regarding this Agreement must be filed in the state or federal courts in Houston, Texas.

11.

Entire Agreement.  This document constitutes the entire agreement of the parties on the subject matters addressed herein and may not be expanded or altered except by express written agreement executed by both.  

12.

Counterparts.  This Agreement may be executed in as many counterparts as may be deemed necessary and convenient, and by the different parties on separate counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. 

		
	KINDER MORGAN, INC. 

	EMPLOYEE

					
	By:

	/s/ Joseph Listengart

	 
	Signed:

	/s/ Scott E. Parker

	 
	 
	 
	Name:

	Scott E. Parker

	Title:

	Vice President and General Counsel

	 
	 
	 

	Date:

	March 5, 2007

	 
	Date:

	March 5, 2007

6

Exhibit A  

[Date]

[Sample – Not for Execution]

SEPARATION AGREEMENT

VIA HAND DELIVERY

Scott E. Parker

[Address]

Dear Scott:

 

This letter will confirm the termination of your employment from Kinder Morgan, Inc. (“KM”) due to your [RIF/resignation due to relocation, etc.], effective [Date].  By this letter, KM offers you, contingent on the termination of your employment on [Date], [$] as payment described in Paragraph 5(b) of your Retention and Relocation Agreement (hereinafter the “Additional Consideration”), to which you would not be entitled without your agreement to release any and all potential claims.  You have up to 21 days from the date of this letter to consider whether or not you wish to accept this offer, although you may accept it at any time within that 21-day period.  This offer will expire unless executed by you, and returned to KM, on or before [date + 21].  The specific terms and conditions of our Agreement are as follows:

1.

Your last day of employment will be [Date], and your employment will formally terminate on [Date] (“Last Day of Employment”).  You will receive your final paycheck, including payment of wages for your Last Day of Employment, less applicable deductions on the next scheduled payroll check.  You will not receive payment for any other separation pay of any type whatsoever.  In addition, you are receiving information concerning your rights to health care continuation coverage under COBRA and the status of your other benefits with this Agreement.

2.

Special Payment Under Retirement and Consulting Agreement: In addition, promptly following the eighth (8th) day after you sign this Agreement (assuming this Agreement has not been revoked by you as provided in paragraph 7(g) below) (the “Effective Date”), you will receive the Additional Consideration of [$], less applicable tax deductions and withholdings, as additional consideration for your release of the claims enumerated in paragraphs 6 and 7, below.  It is specifically understood and agreed that this payment will not increase the amount payable under any present benefit plan adopted or sponsored by KM; as examples, there will be no further retirement benefit accruals or contributions paid by KM to any plan on your behalf, vacation accruals or paid holidays. 

3.

Retirement Benefit Plans.  You may be eligible to receive the account balances of the profit sharing and 401(k) plans presently credited to your account(s), if any. You must contact your plan administrator if you desire a distribution from those plans. You also will retain your vested interest, if any, in the pension plan, payable in accordance with the plan's provisions. Amounts paid to Kinder Morgan, Inc. Employee Stock Purchase Plan for the calendar quarter will be promptly refunded.

4.

Condition of Payment.  As an additional condition to your receipt of the Additional Consideration, you agree that you will render services to KM through the termination date to the best of your ability should you be asked to do so.  

5.

Confidentiality of KM Information.  You agree that you shall not at any time or in any manner, either directly or indirectly, make any unauthorized use or disclosure of any knowledge or information that is unpublished, confidential, or of a proprietary nature, which you generated or acquired during the course of your past employment by KM, relating to KM’s business or to its processes or trade secrets, or to its sources of supply or customers, or to its marketing efforts or other marketing plans or contemplated marketing actions of KM; provided, however, nothing contained herein shall be construed to prevent you from using your general knowledge and skill whether acquired prior to or during your employment by KM.

Further, you specifically represent that, during your past employment or upon leaving KM's employment, you have not and will not remove from KM's premises, either directly or indirectly, any drawings, writing, prints, computer disks, any documents or anything containing, embodying, or disclosing any confidential or proprietary information or any of KM's trade secrets unless express written permission is given by a member of KM's executive management.

For purposes of this section, the term “confidential information”, “proprietary information” or “trade secrets” mean an information, whether oral, written, furnished to or obtained by you during your past employment by KM, which is neither a matter of public record nor previously published.    

6.

General Release.  You, for yourself and your representatives, heirs, executors, and assigns, hereby release and forever discharge KM, any present or former parent, sister, affiliate, subsidiary or related company, and any of its and their respective offices and branches, present or former shareholders, unit holders, partners, limited partners, officers, directors, employees, agents, representatives, legal representatives, accountants, successors, predecessors and assigns, from all claims, demands, and actions of any nature, known or unknown, and specifically included, but not limited to, those in any manner arising out of or involving any aspect of your employment or the termination of such employment, and including any rights or claims under the Age Discrimination in Employment Act of 1967 (including the Older Workers Benefit Protection Act of 1990) (together “ADEA”); Title VII of the Civil Rights Act of 1964; the Vocational Rehabilitation Act; the Americans with Disabilities Act of 1990; the Vietnam Era Veterans Readjustment Assistance Act; Executive Order 11246; the Civil Rights Act of 1871; the Civil Rights Act of 1991; the National Labor Relations Act; the Worker Adjustment and Retraining Notification Act; the anti-discrimination laws of the states of Texas; and including any and all other municipal, state, and/or federal statutory, executive order, or constitutional provisions pertaining to an employment relationship.  This release and waiver also specifically includes, but is not limited to, any claims in the nature of tort, statutory law, common law or contract claims, including specifically but not limited to any claim of wrongful discharge, unpaid wages, unpaid time off duty, unpaid vacation, stock or stock options, unpaid benefits, unpaid severance, intentional or negligent infliction of emotional distress, defamation, or other such claims in any manner arising out of or

 

2

involving any aspect of your employment or termination of your employment.  This release includes any and all claims concerning attorney fees, costs, and any and all other expenses related to the claims released herein.  Provided, however, that this release and waiver shall not apply to any rights which, by law, may not be waived or to rights and claims that arise after the Effective Date of this Agreement.

  

7.

ADEA Release.  By executing this Agreement, you knowingly and voluntarily waive any and all claims under the Age Discrimination in Employment Act (“ADEA”), and further agree with respect to the ADEA that:

a)

This waiver is part of an Agreement that is written in a manner that you understand.

b)

This waiver specifically refers to rights and claims arising under the ADEA.

c)

You do not waive any claims under the ADEA that may arise after the date that you execute this Agreement.

d)

You waive ADEA rights or claims.

e)

You have had an opportunity to consult with an attorney before executing this Agreement insofar as it relates to waiver of claims under the ADEA.

f)

You shall have a minimum of 21 days from the date you receive this Agreement within which to consider it insofar as it relates to claims under the ADEA, although you may accept the Agreement at any time within those 21 days, provided, however, that you may not sign this Agreement prior to your Last Day of Employment.  

g)

You shall have 7 days from the date you accept and sign this Agreement within which to revoke your acceptance of this agreement.  To be effective, such revocation must be made in writing and delivered to James E. Street, Vice President, Human Resources and Administration, 500 Dallas Street, Suite 1000, Houston, TX 77002 on or before the seventh (7th) day after you sign it.  If you revoke this Agreement it shall not be effective or enforceable and you shall not receive the Additional Consideration.

8.

By entering into this Agreement, you acknowledge that you have been advised, and that you understand, that except as is expressly provided herein, you are knowingly and voluntarily relinquishing any and all rights you may have to recover damages from the persons and entities released herein, in your own lawsuit or proceeding or in a lawsuit or proceeding instituted by another person, entity or agency with respect to any claim or cause of action of any type arising or which may have arisen at any time prior to the Effective Date of this Agreement.

9.

Miscellaneous.

a)

This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, notwithstanding any conflict of law principles.  Venue related to all cause of actions arising from or related to this Agreement, to your employment, or to termination of your employment shall be exclusively in the state or federal courts located in Houston, Texas.

3

b)

This Agreement is contractual and not a mere recital.  This Agreement constitutes the entire contract between you and KM.  No amendment to this Agreement shall be effective unless it is in writing and signed by duly authorized representatives of both parties hereto.  The Parties acknowledge, and do not hereby extinguish, the continuing nature and effect of the obligations contained in Paragraphs 4 (including all sub-parts) of the Retention and Separation Agreement.

c)

This Agreement is binding upon and inures to the benefit of the heirs, personal representatives, successors and assigns of both parties hereto.

d)

You specifically acknowledge that this Agreement is freely and voluntarily executed by you, knowingly and voluntarily, after careful consideration.

e)

You specifically acknowledge that this Agreement is intended to be a valid legal, instrument, and no provision of this Agreement which shall be deemed unenforceable shall in any way invalidate any other provision of this Agreement, all of which remains in full force and effect.

f)

The headings of this Agreement are intended for convenience of reference and shall not control or affect its meaning or construction of any provision hereof.

g)

You and KM agree not to divulge, disclose or publicize in any manner to any third party, including current or former employees of KM, the terms and conditions of this Agreement, except (1) insofar as is necessary to enforce the Agreement, comply with applicable laws or regulations, or to respond to an order of a court or administrative agency for disclosure, (2) their respective legal counsel, KM’s internal officials and staff (only to the extent necessary for internal reporting purposes), and (3) that such terms may be disclosed to your immediate family, tax, legal or financial advisors, if any, on condition that any such person to whom the terms or conditions of this Agreement are disclosed shall be instructed not to disclose the terms or conditions to anyone else. 

h)

Nothing in this Agreement, including the payment of any sum by KM or its execution by KM, constitutes an admission by KM or any of its present or former officers, directors, agents, representatives, or employees of any liability, act, practice, policy, or omission in connection with your employment or its termination in violation of any law or duty, any liability being expressly denied of any law or duty.

10.

Attorney Review.  We encourage you to have an attorney of your choosing review this Agreement prior to your signature.  By voluntarily executing this Agreement, you confirm that you are relying upon your own judgment, and not upon any representation of KM, its directors, officers, employees, and agents, other than as set forth herein.  

4

If you wish to accept this offer, please sign on or after the Last Day of Employment in the space provided below and return this letter Agreement to Kinder Morgan, Inc., c/o Jim Street, Vice President Human Resources and Administration, 500 Dallas Street, Suite 1000, Houston, TX 77002.

Sincerely,

James E. Street

Vice President, Human Resources and Administration

Kinder Morgan, Inc.

AGREED TO AND ACCEPTED this ____ day of ________________________, 200_.

______________________________

Scott E. Parker

[social security number]

5ex1001.htm

     

     

    
       

      Exhibit
        10.1

       

      Execution
        Copy

    

    
      

      

    

    

     

    $200,000,000

     

    AMENDED
      AND RESTATED

    CREDIT
      AGREEMENT

     

    among

     

    PG&E
      CORPORATION,

     

    as
      Borrower,

     

    The
      Several Lenders from Time to Time Parties Hereto,

     

    BNP
      PARIBAS,

    as
      Administrative Agent,

     

    

    DEUTSCHE
      BANK SECURITIES INC.,

    as
      Syndication Agent,

     

    and

     

    ABN
      AMRO BANK N.V., BANK OF AMERICA, N.A. and BARCLAYS BANK Plc,

    as
      Documentation Agents

     

    

     

    Dated
      as of February 26, 2007

     

    
      

      
        

        

      

       

      

    

    BANC
      OF AMERICA SECURITIES LLC

    and

    BARCLAYS
      CAPITAL,

    as
      Joint Lead Arrangers and

    Joint
      Bookrunners

     

    

    
      
        
                

                    
      
      

            
              	              

                                      LOSANGELES
                        618830 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

            	
              32

            
	
              3.3

            	 	
              Fees
                and Other Charges.

            	
              33

            
	
              3.4

            	 	
              L/C
                Participations.

            	
              33

            
	
              3.5

            	 	
              Reimbursement
                Obligation of the Borrower

            	
              34

            
	
              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

            	
              37

            
	
              4.3

            	 	
              Existence;
                Compliance with Law

            	
              38

            
	
              4.4

            	 	
              Power;
                Authorization; Enforceable Obligations

            	
              38

            
	
              4.5

            	 	
              No
                Legal Bar

            	
              38

            
	
              4.6

            	 	
              Litigation

            	
              38

            

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

    
      	
              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

            	
              41

            
	 	 	 	 
	
              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

            	
              43

            
	
              6.1

            	 	
              Financial
                Statements

            	
              43

            
	
              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

            	
              46

            
	
              7.2

            	 	
              Liens

            	
              46

            
	
              7.3

            	 	
              Fundamental
                Changes

            	
              48

            
	
              7.4

            	 	
              Ownership
                of PG&E Utility Common Stock

            	
              48

            
	 	 	 	 
	
              SECTION
                8.

            	 	
              EVENTS
                OF DEFAULT

            	
              48

            
	 	 	 	 
	
              SECTION
                9.

            	 	
              THE
                AGENTS

            	
              51

            
	
              9.1

            	 	
              Appointment

            	
              51

            
	
              9.2

            	 	
              Delegation
                of Duties

            	
              51

            
	
              9.3

            	 	
              Exculpatory
                Provisions

            	
              51

            
	
              9.4

            	 	
              Reliance
                by Administrative Agent

            	
              52

            
	
              9.5

            	 	
              Notice
                of Default

            	
              52

            
	
              9.6

            	 	
              Non-Reliance
                on Agents and Other Lenders

            	
              52

            
	
              9.7

            	 	
              Indemnification

            	
              53

            
	
              9.8

            	 	
              Agent
                in Its Individual Capacity

            	
              53

            
	
              9.9

            	 	
              Successor
                Administrative Agent

            	
              53

            
	
              9.10

            	 	
              Documentation
                Agents and Syndication Agent

            	
              54

            
	 	 	 	 
	
              SECTION
                10.

            	 	
              MISCELLANEOUS

            	
              54

            
	
              10.1

            	 	
              Amendments
                and Waivers

            	
              54

            
	
              10.2

            	 	
              Notices

            	
              55

            
	
              10.3

            	 	
              No
                Waiver; Cumulative Remedies

            	
              56

            
	
              10.4

            	 	
              Survival
                of Representations and Warranties

            	
              57

            
	
              10.5

            	 	
              Payment
                of Expenses and Taxes

            	
              57

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    
      	
              10.6

            	 	
              Successors
                and Assigns; Participations and Assignments

            	
              58

            
	
              10.7

            	 	
              Adjustments;
                Set off

            	
              61

            
	
              10.8

            	 	
              Counterparts

            	
              61

            
	
              10.9

            	 	
              Severability

            	
              62

            
	
              10.10

            	 	
              Integration

            	
              62

            
	
              10.11

            	 	
              GOVERNING
                LAW

            	
              62

            
	
              10.12

            	 	
              Submission
                To Jurisdiction; Waivers

            	
              62

            
	
              10.13

            	 	
              Acknowledgments

            	
              63

            
	
              10.14

            	 	
              Confidentiality

            	
              63

            
	
              10.15

            	 	
              WAIVERS
                OF JURY TRIAL

            	
              63

            
	
              10.16

            	 	
              USA
                Patriot Act

            	
              64

            
	
              10.17

            	 	
              Judicial
                Reference

            	
              64

            

    

    

    
      
        
                

                              
                            
      

            
              	              

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    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 Revolving Note

     

     

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    

    AMENDED
      AND RESTATED CREDIT AGREEMENT (this “Agreement”), dated as of February
      26, 2007, among PG&E CORPORATION, a California corporation (the
“Borrower”), the several banks and other financial institutions or
      entities from time to time parties to this Agreement (the “Lenders”),
      BANC OF AMERICA SECURITIES LLC and BARCLAYS CAPITAL, a division of BARCLAYS
      BANK
      plc, as joint lead arrangers and joint bookrunners (together and in such
      capacities, the “Arrangers”), DEUTSCHE BANK SECURITIES INC., as
      syndication agent (in such capacity, the “Syndication Agent”), ABN AMRO
      BANK N.V., BANK OF AMERICA, N.A. and BARCLAYS BANK Plc, as documentation agents
      (together and in such capacities, the “Documentation Agents”), and BNP
      PARIBAS (“BNP”), 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, BNP and Deutsche
      Bank Securities Inc., as joint lead arrangers and joint bookrunners, and certain
      of the Lenders have previously entered into a Credit Agreement, dated as of
      December 4, 2004, as amended by the First Amendment, dated as of April 8, 2005
      (collectively, the “Existing Credit Agreement”), pursuant to which such
      Lenders made available to the Borrower a revolving credit facility, swingline
      credit facility and letter of credit facility; 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.

     

    “Act”:
      as defined in Section 10.16.

     

    

    
      
        
                

                    
      
      

            
              	              

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    “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
      below opposite the Applicable Rating Level for such day:

     

    
      
        	
                Applicable

                Rating

                Level

              	
                Applicable
                  Margin

                for

                ABR
                  Loans

              	
                Applicable
                  Margin

                for

                Eurodollar
                  Loans

              
	
                1

              	
                0%

              	
                0.105%

              
	
                2

              	
                0%

              	
                0.150%

              
	
                3

              	
                0%

              	
                0.190%

              
	
                4

              	
                0%

              	
                0.280%

              
	
                5

              	
                0%

              	
                0.360%

              
	
                6

              	
                0%

              	
                0.425%

              
	
                7

              	
                0%

              	
                0.600%

              

      

    

    

     

    “Applicable
      Rating”: shall be the rating announced by S&P and/or Moody’s, as the
      case may be, in respect of the Senior Debt of the PG&E Utility unless
both S&P and Moody’s provides a rating in respect of the Senior Debt
      of the Borrower, in which case the Applicable Rating shall be the rating
      announced by S&P and/or Moody’s, as the case may be, in respect of the
      Senior Debt of the Borrower.

     

    “Applicable
      Rating
      Level”:  (a) if an Applicable Rating of a rating agency is
      determined by reference to the Senior Debt of the PG&E Utility, the
      Applicable Rating Level shall be the numeric level immediately below the numeric
      level opposite such Applicable Rating in the grid below (unless the numeric
      level opposite the Applicable Rating of the Senior Debt of the PG&E Utility
      is level 7, in which case the Applicable Rating Level shall be level 7) and
      (b)
      if an Applicable Rating of a rating agency is determined by reference to the
      Senior Debt of the Borrower, the Applicable Rating Level shall be the numeric
      level opposite such Applicable Rating in the grid below; provided,
however, in the event the Applicable Ratings of S&P and Moody’s are
      in different numeric levels set forth in the grid below, the higher of the
      two
      Applicable Ratings (i.e., the Applicable Rating set forth in the grid below
      opposite the lower numerical level number) shall govern.  In the event
      that, at any time, an Applicable Rating is not available from one of such rating
      agencies, the Applicable Rating Level shall be determined on the sole basis
      of
      the Applicable 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 Rating Level shall be determined on the basis of
      the
      last Applicable Rating(s) made available.  In the event that, at any
      time, Applicable Ratings are not available for the Senior Debt of the PG&E
      Utility and the Borrower but are generally available for other companies, then
      the Applicable Rating Level shall be numeric level 7.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        3

      

    

    
      
        
          
            
              	 	
                      Applicable
                        Rating for

                      Senior
                        Debt of the Borrower

                    	
                      Applicable
                        Rating for

                      Senior
                        Debt of the PG&E Utility

                    
	
                      Applicable
                        

                      Rating
                        Level

                    	
                       

                      Moody’s

                    	
                       

                      S&P

                    	
                       

                      Moody’s

                    	
                       

                      S&P

                    
	
                      Level
                        1

                    	
                      A1
                        or higher

                    	
                      A+
                        or higher

                    	
                      A1
                        or higher

                    	
                      A+
                        or higher

                    
	
                      Level
                        2

                    	
                      A2

                    	
                      A

                    	
                      A2

                    	
                      A

                    
	
                      Level
                        3

                    	
                      A3

                    	
                      A-

                    	
                      A3

                    	
                      A-

                    
	
                      Level
                        4

                    	
                      Baa1

                    	
                      BBB+

                    	
                      Baa1

                    	
                      BBB+

                    
	
                      Level
                        5

                    	
                      Baa2

                    	
                      BBB

                    	
                      Baa2

                    	
                      BBB

                    
	
                      Level
                        6

                    	
                      Baa3

                    	
                      BBB-

                    	
                      Baa3

                    	
                      BBB-

                    
	
                      Level
                        7

                    	
                      Ba1
                        or lower

                    	
                      BB+
                        or lower

                    	
                      Ba1
                        or lower

                    	
                      BB+
                        or lower

                    

            

          

        

      

    

    

    “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.

     

    “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.

     

    

    
      
        
                

            
              	              

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    “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”: (a) any person or group (within the meaning of the Exchange Act
      and the rules of the SEC thereunder as of the Effective Date) shall become
      the
      Beneficial Owner of shares representing more than 30% of the voting power of
      the
      Borrower’s Capital Stock, or (b) occupation of a majority of the seats (other
      than vacant seats) on the Borrower’s board of directors (the “Board”) by
      persons who were neither nominated by the Board nor appointed by directors
      so
      nominated by the Board, provided that no event described in clauses (a)
      or (b) shall constitute a change of control if after giving effect to such
      event
      the ratings by Moody’s and S&P of the Borrower’s senior, unsecured,
      non-credit enhanced debt shall be at least the higher of (a) Baa3 from Moody’s
and BBB- from S&P and (b) the ratings by such rating agencies of such
      debt in effect before the earlier of the occurrence or the public announcement
      of such event.

     

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

     

    “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 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
      $200,000,000.

     

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

     

    “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.

     

    

    
      
        
                

            
              	              

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

     

    “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.

     

    “Confidential
      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.

     

    “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 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.

     

    

    
      
        
                

            
              	              

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    “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.

     

    “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 Issuing Lender and the
      Borrower shall have consented to the designation of such Person as an Eligible
      Assignee (such consent of the Borrower not to be unreasonably
      withheld).

     

     “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

     

    

    
      
        
                

            
              	              

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    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 11:00A.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).

     

    “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”:  BNP Paribas.

     

    “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).

     

    

    
      
        
                

            
              	              

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    “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 Applicable Rating Level for such
      day:

     

    
      
        	
                Applicable
                  Rating

                Level

              	
                Facility

                Fee
                  Rate

              
	
                1

              	
                0.045%

              
	
                2

              	
                0.050%

              
	
                3

              	
                0.060%

              
	
                4

              	
                0.070%

              
	
                5

              	
                0.090%

              
	
                6

              	
                0.125%

              
	
                7

              	
                0.150%

              

      

    

    

     

    “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

     

    

    
      
        
                

            
              	              

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    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 directly 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

     

    

    
      
        
                

            
              	              

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    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 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.

     

    “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

     

    

    
      
        
                

            
              	              

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    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
      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) BNP or any affiliate thereof
      selected by BNP with the consent of the Borrower (such consent not to be
      unreasonably withheld) and (b) any other Lender selected by the Borrower as
      an
      Issuing Lender with the consent of such Lender and the Administrative
      Agent.

     

    “L/C
      Commitment”:  $100,000,000.

     

    “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

     

    

    
      
        
                

            
              	              

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    (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.

     

    “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.

     

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

     

    “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-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 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

     

    

    
      
        
                

            
              	              

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    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).

     

    “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.

     

    “PG&E
      Utility”:  Pacific Gas and Electric Company, a California
      corporation.

     

    “PG&E
      Utility Credit Agreement”:  the $2,000,000,000 amended and
      restated credit agreement, dated as of February 26, 2007, among PG&E
      Utility, the lenders parties thereto, the syndication agent and the
      documentation agents named therein and Citicorp North America, Inc., as
      administrative agent (as amended, supplemented, restated or otherwise modified
      from time to time).

     

    “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.

     

    

    
      
        
                

            
              	              

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

     

    “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 PG&E Utility, are issued by a special purpose
      subsidiary of PG&E Utility and 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

     

    

    
      
        
                

            
              	              

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    1997
      and the approximately $2,700,000,000 in energy recovery bonds backed by energy
      recovery property that PG&E Utility issued in 2005.

     

    “Senior
      Debt”:  with respect to a Person means that Person’s senior
      unsecured, non-credit enhanced debt.

     

    “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 the PG&E Utility 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
      $100,000,000.

     

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

     

    

    
      
        
                

            
              	              

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    “Swingline
      Loans”:  as defined in Section 2.4.

     

    “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 and Interpretive 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.

     

    

    
      
        
                

            
              	              

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

     

    (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.  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
      Noon,
      New York City time, on the Borrowing Date requested by the Borrower in
      funds

     

    

    
      
        
                

            
              	              

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    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), 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 $5,000,000 and shall not exceed, in the
      aggregate, $100,000,000.  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 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 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

     

    

    
      
        
                

            
              	              

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    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 $300,000,000 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, the aggregate amount of the Available Commitments of all Lenders
      would be less than zero.  During the Commitment Period, the Borrower
      may use the

     

    

    
      
        
                

            
              	              

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    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 in excess 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 10:00A.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 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

     

    

    
      
        
                

            
              	              

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    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 applicable
      Utilization Fee Rate on such average daily aggregate principal amount of the
      Loans

     

    

    
      
        
                

            
              	              

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    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 thirty 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 thirty days after the date of such notice by the Administrative Agent
      to the Borrower, the Termination Date shall be automatically and immediately
      so
      extended as to the Continuing Lenders.  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.

     

    

    
      
        
                

            
              	              

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    (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

     

    

    
      
        
                

            
              	              

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    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.

     

    

    
      
        
                

            
              	              

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    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).

     

    (d)  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

     

    

    
      
        
                

            
              	              

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    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).

     

    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 pro rata 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 pro
      rata 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

     

    

    
      
        
                

            
              	              

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    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 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

     

    

    
      
        
                

            
              	              

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    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:

     

    (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

     

    

    
      
        
                

            
              	              

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    therefor,
      the Borrower shall pay to such Lender such additional amount or amounts as
      will
      compensate such Lender or such corporation for such reduction.

     

    (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

     

    

    
      
        
                

            
              	              

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    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 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-8 BEN, 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

     

    

    
      
        
                

            
              	              

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    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
      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

     

    

    
      
        
                

            
              	              

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    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 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.

     

    (a)  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 (i) the L/C Obligations
      would exceed the L/C Commitment or (ii) the aggregate amount of the Available
      Commitments would be less than zero.  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 one-year term may provide for the renewal thereof for additional
      one-year periods (which shall in no event extend beyond the date referred to
      in
      clause (y) above).

     

    (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

     

    

    
      
        
                

            
              	              

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    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 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

     

    

    
      
        
                

            
              	              

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    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 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

     

    

    
      
        
                

            
              	              

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    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 Code 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 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

     

    

    
      
        
                

            
              	              

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    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 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
      ffect any rights the Borrower may have against any defaulting Lender) or (ii)
      by
      reason of or on

     

    

    
      
        
                

            
              	              

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    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 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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
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    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,
      except (i) consents, authorizations, filings and notices which have been
      obtained or made and are in full force and effect and (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.  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.

     

    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 or revenues pursuant to any Requirement of Law or any such
      Contractual Obligation.

     

    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,
      hreatened 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.

     

    

    
      
        
                

            
              	              

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    (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 PG&E Utility, 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 PG&E
      Utility 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 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

     

    

    
      
        
                

            
              	              

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    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 Regulation X of the Board)
      that limits its ability to incur Indebtedness under this Agreement.

     

    4.12  Use
      of Proceeds.  The proceeds of the Revolving Loans and 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 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

     

    

    
      
        
                

            
              	              

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    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, parent-only financial statements and pro forma information)
      contained in this Agreement, any other Loan Document, the Confidential
      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
      Confidential 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, parent-only financial statements
      and pro forma 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 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, noLender shall be or become subject to regulation (i) under the
      FPA
      or (ii) as a “public utility” or “public service corporation” or the equivalent
      under any Requirement of Law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
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    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 1.1
      A.

     

    (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.

     

    (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 such 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).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
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    (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 Sections 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 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.

     

    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:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
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    (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 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

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
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    (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, provided that the
      foregoing shall not prohibit any merger, consolidation or amalgamation permitted
      under Section 7.3 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 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 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
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    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 Applicable Rating; 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:

     

    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,
      whether now owned or hereafter acquired, except:

     

    (a)  Liens
      for taxes, assessments or utility or governmental charges that are not yet
      due
      and payable or that are being contested in good faith by appropriate
      proceedings, provided that adequate reserves with respect thereto are
      maintained on the books of the Borrower in conformity with GAAP;

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        47

      

    

     

    (b)  statutory
      Liens of landlords or equipment lessors against any property of the Borrower,
      carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like
      Liens arising in the ordinary course of business that are not overdue for a
      period of more than 30 days or that are being contested in good faith by
      appropriate proceedings;

     

    (c)  pledges
      or deposits in connection with workers’ compensation, unemployment insurance,
      pension and other social security laws or regulations;

     

    (d)  deposits
      to secure the performance of bids, trade contracts (other than for borrowed
      money), leases, statutory obligations, surety and appeal bonds, performance
      bonds and other obligations of a like nature incurred in the ordinary course
      of
      business;

     

    (e)  easements,
      rights-of-way, restrictions (including zoning restrictions), minor defects
      or
      irregularities in title and other similar charges or encumbrances imposed by
      law
      or arising in the ordinary course of business that do not in any case materially
      detract from the value of the property subject thereto or materially interfere
      with the ordinary conduct of the business of the Borrower;

     

    (f)  Liens
      in favor of collecting or payor banks having a right of setoff, revocation,
      refund or chargeback with respect to money or instruments of the Borrower on
      deposit with such bank;

     

    (g)  judgment
      and attachment Liens not giving rise to an Event of Default under
      Section 8(h) or Liens (not constituting a judgment or attachment Lien
      giving rise to an Event of Default under Section 8(h)) created by or
      existing from any litigation or legal proceeding that is being contested in
      good
      faith by appropriate proceedings;

     

    (h)  Liens
      securing Indebtedness incurred to finance the purchase, lease, improvement
      or
      construction of capital assets, provided that (A) any such Lien shall
      extend solely to the item or items of such property (or improvement thereon)
      so
      purchased, leased, improved or constructed, and (B) any such Lien shall be
      created contemporaneously with, or within 90 days after, the purchase, lease,
      improvement or construction of such property;

     

    (i)  Liens
      existing on assets of a Person immediately prior to its being consolidated
      with
      or merged into the Borrower, or any Liens existing on any assets acquired by
      the
      Borrower at the time such assets are so acquired (whether or not the
      Indebtedness or other obligations secured thereby shall have been assumed),
      provided that (A) no such Lien shall have been created in contemplation of
      such
      consolidation or merger or such acquisition of assets, and (B) no such Lien
      shall extend to any other assets of the Borrower; and

     

    (j)  Liens
      on Capital Stock of PG&E Utility other than any Lien which secures equally
      and ratably (A) the Obligations and (B) Indebtedness in an aggregate principal
      amount not exceeding $2,000,000,000.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
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    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, 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, as the case may be, 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, as the case
      may be, 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.

     

    7.4  Ownership
      of PG&E Utility Common Stock.  Permit ownership by the
      Borrower, at any time, either directly, or indirectly through one or more
      Subsidiaries, of less than 80% of the outstanding common stock of PG&E
      Utility and less than 70% of the outstanding voting stock of PG&E
      Utility.

     

    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

     

    (c)  the
      Borrower shall default in the observance or performance of any agreement
      contained in Sections 7.1, 7.3 or 7.4 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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        49

      

    

     

    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, 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) 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
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    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 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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
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    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
      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

     

    
      
         

      

      
         

        
          

        

      

      
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      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 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,
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
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      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 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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        54

      

       

      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);

     

    (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 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        55

      

    

     

    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.

     

    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 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        56

      

       

      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:

            	
              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:

            	
              PG&E
                Corporation

              One
                Market Street

              Spear
                Tower, Suite 2400

              San
                Francisco, California  94105

            
	 	
              Attention:
                Chief Counsel, Corporate

            
	 	
              Telecopy:
                (415) 817-8225

            
	 	
              Telephone:
                (415) 817-8200

            
	 	 
	
              Administrative
                Agent:

            	
              BNP
                Paribas

              787
                7th Avenue

              New
                York, New York 10019

            
	 	
              Attention:  Michelle
                Bruno

            
	 	
              Telecopy:  (212)
                471-6697

            
	 	
              Telephone:  (212)
                471-6642

            
	 	 
	
              Issuing
                Lender:

            	
              As
                notified by the 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 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        57

      

       

      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 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 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 

    
      
        
        

      

      
        
        

        
          

        

      

      
        58

      

       

      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:

     

    (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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        59

      

                                        

                                      
           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 $5,000,000
        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 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 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
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      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 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 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        61

      

       

      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.

     

    (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 

    
      
        
        

      

      
        
        

        
          

        

      

      
        62

      

       

      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;

     

    (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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        63

      

    

     

    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 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.

    
      
        
        

      

      
        
        

        
          

        

      

      
        64

      

    

     

    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
                        618830 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.

     

    
      	 	
              PG&E
                CORPORATION

               

               

            	 
	 	
              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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

                            BNP
      PARIBAS, as
      Administrative Agent, Issuing Lender 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

                            DEUTSCHE
      BANK
      SECURITIES INC.,

                            as
      Syndication
      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
      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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

                                                               
      ABN AMRO BANK N.V., as Co-Documentation Agent and 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

                            BANK
      OF AMERICA,
      N.A., as Co-Documentation Agent and as a Lender

     

    
      	
               

            	
              By:

            	
                /s/
                Kevin Bertelsen

            	 

    

    
      	
               

            	
              Name:

            	
              Kevin
                Bertelsen

            

    

    
      	
               

            	
              Title:

            	
              Senior
                Vice President

            

    

     

    

    
      
        
                

                    -Signature
              Page-      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

                            CITICORP
      NORTH
      AMERICA, INC.,

                            as
      a
      Lender

     

    

     

     

    
      	 	
              By:

            	   /s/
              Nietzsche Rodricks

      	
               

            	
              Name:

            	
              Nietzsche
                Rodricks

            

    

    
      	
               

            	
              Title:

            	
              Vice
                President

            

    

     

    

    
      
        
                

                    -Signature
              Page-      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

                            JPMORGAN
      CHASE BANK,
      N.A.,

                            as
      a
      Lender

     

    

     

     

    
      	 	
              By:

            	   /s/
              Thomas Casey

      	
               

            	
              Name:

            	
              Thomas
                Casey

            

    

    
      	
               

            	
              Title:

            	
              Vice
                President

            

    

     

    

    
      
        
                

                    -Signature
              Page-      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      

                    
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

                

                    SCHEDULE
              1.1A                           
     
                

                    COMMITMENTS       
    

        

      

    

    

    
      
        	
                Lender

              	
                Commitment

                 

              
	
                Citicorp
                  North America, Inc.

              	
                $21,274,529.87

              
	
                JPMorgan
                  Chase Bank, N.A.

              	
                $21,274,529.87

              
	
                Bank
                  of America, N.A.

              	
                $17,113,122.58

              
	
                Barclays
                  Bank PLC

              	
                $17,113,122.58

              
	
                BNP
                  Paribas

              	
                $17,113,122.58

              
	
                Deutsche
                  Bank AG, New York Branch

              	
                $17,113,122.58

              
	
                Lehman
                  Brothers Bank, FSB

              	
                $12,764,717.92

              
	
                UBS
                  Loan Finance LLC

              	
                $12,764,717.92

              
	
                ABN
                  AMRO Bank N.V.

              	
                $9,573,538.44

              
	
                Morgan
                  Stanley Bank

              	
                $9,573,538.44

              
	
                Union
                  Bank of California, N.A.

              	
                $9,573,538.44

              
	
                William
                  Street Commitment Corporation

              	
                $9,573,538.44

              
	
                Mizuho
                  Corporate Bank, Ltd.

              	
                $8,864,387.44

              
	
                Mellon
                  Bank, N.A.

              	
                $7,800,660.95

              
	
                The
                  Bank of New York

              	
                $4,964,056.97

              
	
                US
                  Bank National Association

              	
                $3,545,754.98

              
	 	 
	
                TOTAL

              	
                $200,000,000.00

              

      

    

    

     

    

    
      
        
                

                    Schedule
              1.1A      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      A

    

    FORM
      OF

    NEW
      LENDER SUPPLEMENT

    

    Reference
      is made to the $200,000,000 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 PG&E Corporation, a California
      corporation (the “Borrower”), the Lenders parties thereto, Banc of
      America Securities LLC and Barclays Capital, a division of Barclays Bank Plc,
      as
      joint lead arrangers and joint bookrunners, Deutsche Bank Securities Inc.,
      as
      syndication agent, ABN AMRO Bank N.V., Bank of America, N.A. and Barclays Bank
      Plc, as documentation agents, and BNP Paribas, 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:

    

      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.

    

      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.

    

      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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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.

    

      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).

    

      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.

    

      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.

    

      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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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:

               

               

              PG&E
                CORPORATION

               

              By: _______________________________                                                            

                    Name:

                    Title:

            	 
	
               

              BNP
                PARIBAS,

              as
                Administrative Agent

            	 
	
              By:_________________________________                                                              

                   Name:

                   Title:

            	 
	
               

              BNP
                PARIBAS,

              as
                Issuing Lender

            	 
	
              By:__________________________________                                                              

                   Name:

                   Title:

            	 

    

    

    
      
        
                

                    Exhibits      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      B

     

    FORM
      OF

    COMMITMENT
      INCREASE SUPPLEMENT

     

    Reference
      is made to the $200,000,000 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 PG&E Corporation, a California
      corporation (the “Borrower”), the Lenders parties thereto, Banc of
      America Securities LLC and Barclays Capital, a division of Barclays Bank Plc,
      as
      joint lead arrangers and joint bookrunners, Deutsche Bank Securities Inc.,
      as
      syndication agent, ABN AMRO Bank N.V., Bank of America, N.A. and Barclays Bank
      Plc, as documentation agents, and BNP Paribas, 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.

    

      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.

     

      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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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.

    

      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).

    

      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.

    

      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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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:

            	 
	
               

              PG&E
                CORPORATION

               

              By:                                                          

                    Name:

                    Title:

            	 
	
               

              Accepted:

               

              BNP
                PARIBAS,

              as
                Administrative Agent

               

              By:                                                      

                    Name:

                    Title:

            	 

    

     

            

                Exhibits      
      

                Amended
          and Restated Credit
          Agreement      
      

                PG&E
          Corporation      
      

        
          	              

                                  LOSANGELES
                    618830 v1
                    (2K)              
            	 	 

        
      

                
      
    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
               

              BNP
                PARIBAS,

              as
                Issuing Lender

               

              By:                                                              

                    Name:

                    Title:

            	 

    

    

    
      
        
                

                    Exhibits      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    EXHIBIT
      C

     

    FORM
      OF COMPLIANCE CERTIFICATE

     

    This
      Compliance Certificate is delivered pursuant to Section 6.2 of the
      $200,000,000 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 PG&E Corporation, a California corporation
      (the “Borrower”), the lenders parties thereto (the “Lenders”),
      Banc of America Securities LLC and Barclays Capital, a division of Barclays
      Bank
      Plc, as joint lead arrangers and joint bookrunners, Deutsche Bank Securities
      Inc., as syndication agent, ABN AMRO Bank N.V., Bank of America, N.A. and
      Barclays Bank Plc, as documentation agents, and BNP Paribas, 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

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

     

     

    PG&E
      CORPORATION

     

    By:  ___________________________________                                                                         

    
      	
               

            	
              Name:

            

    

    
      	
               

            	
              Title:

            

    

    

     

    

    Date:  ____________,
      200_

     

    

    
      
        
                

                    Exhibits      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Attachment
      1

    to
      Exhibit C

     

    Financial
      Statements

    Period
      Ended ____________, 20__

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

    
      
        
                

                    Exhibits      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      D

     

    FORM
      OF CLOSING CERTIFICATE

     

    This
      Closing Certificate is delivered pursuant to Section 5.1(e) of the
      $200,000,000 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 PG&E Corporation, a California corporation
      (the “Borrower”), the lenders parties thereto (the “Lenders”),
      Banc of America Securities LLC and Barclays Capital, a division of Barclays
      Bank
      Plc, as joint lead arrangers and joint bookrunners, Deutsche Bank Securities
      Inc., as syndication agent, ABN AMRO Bank N.V., Bank of America, N.A. and
      Barclays Bank Plc, as documentation agents, and BNP Paribas, 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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 September 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

            	 

    

     

    

    
      
        
                

                    Exhibits      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

     

     

    

    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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
            

                Exhibits      
      

                Amended
          and Restated Credit
          Agreement      
      

                PG&E
          Corporation      
      

        
          	              

                                  LOSANGELES
                    618830 v1
                    (2K)              
            	 	 

        
      

                
      
    

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ANNEX
      1

     

    [Board
      Resolutions]

     

     

     

     

     

     

    

    

    
      
        
                

                    Exhibits      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    ANNEX
      2

     

    [Bylaws
      of the Company]

     

     

     

     

     

     

    

    

    
      
        
                

                    Exhibits      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    ANNEX
      3

     

    [Articles
      of Incorporation]

     

     

     

     

     

     

    

     

    

    

    
      
        
                

                    Exhibits      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      E

     

    FORM
      OF

    ASSIGNMENT
      AND ASSUMPTION

     

    Reference
      is made to the $200,000,000
      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 PG&E Corporation, a California corporation (the
“Borrower”), the Lenders parties thereto, Banc of America Securities LLC
      and Barclays Capital, a division of Barclays Bank Plc, as joint lead arrangers
      and joint bookrunners, Deutsche Bank Securities Inc., as syndication agent,
      ABN
      AMRO Bank N.V., Bank of America, N.A. and Barclays Bank Plc, as documentation
      agents, and BNP Paribas, 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                PG&E
          Corporation      
      

        
          	              

                                  LOSANGELES
                    618830 v1
                    (2K)              
            	 	 

        
      

                
      
    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	 
	
              Consented
                to:

               

               

            	 
	
              PG&E
                CORPORATION**

               

               

            	 
	
              By:  _____________________________________                                                              

                     Name:

                     Title:

            	 
	
               

              Accepted
                and Consented to:

               

              [BNP
                PARIBAS, as

              Administrative
                Agent]**

               

            	 
	
              By:   _____________________________________                                                             

                     Name:

                     Title:

               

            	 
	
              Consented
                to:

               

              [BNP
                PARIBAS, as Issuing Lender]**

               

               

            	 
	
              By:  _____________________________________                                                              

                     Name:

                     Title:

               

            	 

    

    

     

     

     

     

     

    ___________________________________ 

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

    

    

    
      
        
                

                    Exhibits      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      F

     

    

     

    FORM
      OF LEGAL OPINION OF ORRICK, HERRINGTON & SUTCLIFFE LLP

     

     

     

     

     

     

     

     

     

    

    
      
        
                

                    Exhibits      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      G

     

    FORM
      OF EXEMPTION CERTIFICATE

     

    Reference
      is made to the $200,000,000 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 PG&E Corporation, a California
      corporation (the “Borrower”), the Lenders parties thereto, Banc of
      America Securities LLC and Barclays Capital, a division of Barclays Bank Plc,
      as
      joint lead arrangers and joint bookrunners, Deutsche Bank Securities Inc.,
      as
      syndication agent, ABN AMRO Bank N.V., Bank of America, N.A. and Barclays Bank
      Plc, as documentation agents, and BNP Paribas, 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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, PG&E CORPORATION, a California corporation (the
“Borrower”), DOES HEREBY PROMISE TO PAY to the order of [insert name of
      Lender] (the “Lender”) at the office of BNP PARIBAS, 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 v1
                        (2K)              
            	 	 

            
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    This
      Note (a) is one of the promissory notes referred to in the $200,000,000 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, Banc of
      America Securities LLC and Barclays Capital, a division of Barclays Bank Plc,
      as
      joint lead arrangers and joint bookrunners, Deutsche Bank Securities Inc.,
      as
      syndication agent, ABN AMRO Bank N.V., Bank of America, N.A. and Barclays Bank
      Plc, as documentation agents, as documentation agents, and BNP Paribas, 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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.

     

    

     

    PG&E
      CORPORATION

     

    

     

    
      	
              By:

            	 ___________________________________

    

    
      	
               

            	
                    Name:

            

    

    
      	
               

            	
                    Title:

            

    

     

     

     

     

     

     

    
 

    
      
        
                

                    Exhibits      
      

                    Amended
              and Restated Credit
              Agreement      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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      
      

                    PG&E
              Corporation      
      

            
              	              

                                      LOSANGELES
                        618830 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
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                    Exhibits      
      

                    Amended
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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"}]]