Exhibit 10.106

CREDIT AGREEMENT

dated as of December 23, 2002

among

PUGET SOUND ENERGY, INC.,

VARIOUS FINANCIAL INSTITUTIONS,

BANK ONE, NA,
as Administrative Agent,

UNION BANK OF CALIFORNIA, N.A.,
as Syndication Agent,

and

KEYBANK NATIONAL ASSOCIATION,
as Documentation Agent

UNION BANK OF CALIFORNIA, INC.
CO-LEAD ARRANGER

BANC ONE CAPITAL MARKETS, INC.
CO-LEAD ARRANGER AND SOLE BOOK RUNNER

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CREDIT AGREEMENT

        This Credit Agreement dated as of December 23, 2002 is among Puget Sound
Energy, Inc., a Washington corporation, the Lenders and Bank One, NA, a national
banking association having its principal office in Chicago, Illinois, as LC
Issuer and as Administrative Agent. The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

      As used in this Agreement:

        “Acquisition” means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise, or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.

        “Advance” means a borrowing hereunder (i) made by all of the Lenders on
the same Borrowing Date, or (ii) converted or continued by all of the Lenders on
the same date of conversion or continuation, consisting, in either case, of the
aggregate amount of the several Loans of the same Type and, in the case of
Eurodollar Loans, for the same Interest Period.

        “Affected Loan” means a Floating Rate Loan made by a Lender which, but
for the circumstances described in Section 3.3, would be a Eurodollar Loan.

        “Affiliate” of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.

        “Administrative Agent” means Bank One in its capacity as contractual
representative of the Lenders pursuant to Article X, and not in its individual
capacity as a Lender, and any successor Administrative Agent appointed pursuant
to Article X.

        “Aggregate Commitment” means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof.

        “Aggregate Outstanding Credit Exposure” means, at any time, the
aggregate of the Outstanding Credit Exposure of all the Lenders.

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        “Agreement” means this credit agreement, as it may be amended or
modified and in effect from time to time.

        “Agreement Accounting Principles” means generally accepted accounting
principles in the United States as in effect from time to time.

        “Alternate Base Rate” means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 0.5% per annum.

        “Applicable Base Rate Margin” means, with respect to Floating Rate
Advances, the applicable percentage rate per annum determined from time to time
in accordance with the Pricing Schedule.

        “Applicable Fee Rate” means, the applicable percentage rate per annum
determined from time to time in accordance with the Pricing Schedule.

        “Applicable Eurodollar Margin” means, with respect to Eurodollar
Advances, the applicable percentage rate per annum determined from time to time
in accordance with the Pricing Schedule.

        “Applicable LC Fee Rate” means, the applicable percentage rate per annum
determined from time to time in accordance with the Pricing Schedule.

        “Arrangers” means, collectively, (i) Banc One Capital Markets, Inc., a
Delaware corporation, and its successors, in its capacity as Co-Lead Arranger
and Sole Book Runner and (ii) Union Bank of California, N.A., a national banking
association, and its successors, in its capacity as Co-Lead Arranger.

        “Article” means an article of this Agreement unless another document is
specifically referenced.

        “Authorized Officer” means any of the Chief Executive Officer, the
President, any Vice President, the Treasurer or any Assistant Treasurer of the
Borrower, acting singly.

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

        “Benefit Plan” means an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code as to which the Borrower or any member of the Controlled Group
may have any liability.

        "Borrower" means Puget Sound Energy, Inc., a Washington corporation, and
its successors and permitted assigns.

        “Borrowing Date” means a date on which an Advance is made hereunder.

        “Borrowing Notice” is defined in Section 2.2.3.

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

        “Capitalized Lease” of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.

        “Capitalized Lease Obligations” of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.

        “Cash Equivalent Investments” means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Moody’s, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.

      “Change” is defined in Section 3.2.

        “Change in Control” means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the SEC under the Securities and Exchange Act of 1934) of 20% or more
(by number of votes) of the outstanding shares of voting stock of the Borrower.

        “Closing Date” means the date first above written.

        “Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

        “Commitment” means, for each Lender, the obligation of such Lender to
make Loans to, and to participate in Facility LCs issued upon the application
of, the Borrower in an aggregate amount not exceeding the amount set forth
opposite its name on Schedule 2 hereto or as set forth in any Lender Assignment
relating to any assignment that has become effective pursuant to Section 12.3.2,
as such amount may be modified from time to time pursuant to the terms hereof.

        “Commitment Fee” is defined in Section 2.4.

        “Consolidated Indebtedness” means at any time all Indebtedness of the
Borrower and its Subsidiaries calculated on a consolidated basis as of such
time.

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        “Contingent Obligation” of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take or pay contract, application for a Letter of Credit or the
obligations of any such Person as general partner of a partnership with respect
to the liabilities of the partnership.

        “Controlled Group” means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.

        “Conversion/Continuation Notice” is defined in Section 2.2.4.

        “Credit Extension” means the making of an Advance or the issuance of a
Facility LC hereunder.

        “Credit Extension Date” means the Borrowing Date for an Advance or the
issuance date for a Facility LC.

        “Default” means an event described in Article VII.

        “EBIT” means, for any period, the sum of (a) consolidated net income (or
net loss) of the Borrower and its Subsidiaries for such period as determined in
accordance with Agreement Account Principles plus (b) interest expense for such
period to the extent included in the determination of such consolidated net
income (or loss) plus (c) all taxes accrued for such period on or measured by
income to the extent included in the determination of such consolidated net
income (or loss).

        “Environmental Laws” means any and all federal, state, local and foreign
laws, judicial decisions, regulations, ordinances, rules, judgments, orders,
decrees, plans, injunctions, permits, concessions, grants, franchises, licenses,
agreements and other governmental restrictions relating to (i) the protection of
the environment, (ii) the effect of the environment on human health, (iii)
emissions, discharges or releases of pollutants, contaminants, hazardous
substances or wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.

        “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.

        “ERISA Affiliate” means, with respect to any Person, any other Person,
including a Subsidiary or other Affiliate of such first Person, that is a member
of any group of organizations within the meaning of Sections 414(b), (c), (m) or
(o) of the Code of which such first Person is a member.

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        “Eurodollar Advance” means an Advance which bears interest at a
Eurodollar Rate requested by the Borrower pursuant to Section 2.2.

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

        “Eurodollar Loan” means a Loan which bears interest at a Eurodollar Rate
requested by the Borrower pursuant to Section 2.2.

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

        “Excluded Taxes” means, in the case of each Lender or applicable Lending
Installation and the Administrative Agent, taxes imposed on its overall pre-tax
net or gross income, and franchise taxes imposed on it by (i) the jurisdiction
under the laws of which such Lender or the Administrative Agent is incorporated
or organized or (ii) the jurisdiction in which the Administrative Agent’s or
such Lender’s principal executive office or such Lender’s applicable Lending
Installation is located.

        “Exhibit” refers to an exhibit to this Agreement, unless another
document is specifically referenced.

        “Existing Agreement” means the Credit Agreement dated as of December 18,
1996 among the Borrower, various financial institutions and Bank of America NW,
N.A. (doing business as SeaFirst Bank), as agent, as amended.

        “Extension Request” is defined in Section 2.17.

        “Facility LC” is defined in Section 2.16.1.

        “Facility LC Application” is defined in Section 2.16.3.

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        “Facility Termination Date” means December 22, 2003 or any later date as
may be specified as the Facility Termination Date in accordance with Section
2.17 or any earlier date on which the Aggregate Commitment is reduced to zero or
otherwise terminated pursuant to the terms hereof.

        “Federal Funds Effective Rate” means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.

        “FERC” means the Federal Energy Regulatory Commission.

        “Floating Rate Advance” means an Advance which, except as otherwise
provided in Section 2.8, bears interest by reference to the Alternate Base Rate.

        “Floating Rate Loan” means a Loan which, except as otherwise provided in
Section 2.8, bears interest by reference to the Alternate Base Rate.

        “FRB” means the Board of Governors of the Federal Reserve System.

        “Governmental Approval” means any authorization, consent, approval,
license or exception of, registration or filing with, or report or notice to,
any governmental unit.

        “Indebtedness” of a Person means such Person’s (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person’s business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, bankers’ acceptances, or
other instruments, (v) obligations to purchase accounts, securities or other
Property arising out of or in connection with the sale of the same or
substantially similar accounts, securities or Property, (vi) Capitalized Lease
Obligations, (vii) other obligations for borrowed money or other financial
accommodation which in accordance with Agreement Accounting Principles would be
shown as a liability on the consolidated balance sheet of such Person, (viii)
net liabilities under interest rate swap, exchange or cap agreements,
obligations or other liabilities with respect to accounts or notes, (ix) sale
and leaseback transactions which do not create a liability on the consolidated
balance sheet of such Person, (x) obligations in connection with other
transactions which are the functional equivalent, or take the place, of
borrowing but which do not constitute a liability on the consolidated balance
sheet of such Person and (xi) Contingent Obligations; provided that, except for
purposes of Section 7.5, the following shall not constitute “Indebtedness”: (a)
obligations with respect to Trust Preferred Securities that are not due and
unpaid; and (b) obligations arising under Qualified Receivables Transactions.

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        “Interest Period” means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two, three or six months
thereafter; provided that if there is no such numerically corresponding day in
such next, second, third or sixth succeeding month, such Interest Period shall
end on the last Business Day of such next, second, third or sixth succeeding
month. If an Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall end on the next succeeding Business
Day; provided, further that if said next succeeding Business Day falls in a new
calendar month, such Interest Period shall end on the immediately preceding
Business Day.

        “Investment” of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests, notes, debentures or other securities owned by such Person; deposit
accounts and certificates of deposit owned by such Person; and structured notes,
derivative financial instruments and other similar instruments or contracts
owned by such Person.

        “LC Fee” is defined in Section 2.16.4.

        “LC Issuer” means Bank One (or any subsidiary or Affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.

        “LC Obligations” means, at any time, the sum, without duplication, of
(i) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time, plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at such time.

        “LC Payment Date” is defined in Section 2.16.5.

        “Lender Assignment” is defined in Section 12.3.1.

        “Lenders” means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.

        “Lending Installation” means, with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or Affiliate of such Lender
or the Administrative Agent listed on the signature pages hereof or on a
Schedule or otherwise selected by such Lender or the Administrative Agent
pursuant to Section 2.14.

        “Letter of Credit” of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.

        “Lien” means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other pledge and security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).

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        “Loan” means with respect to a Lender, any loan made by such Lender
pursuant to Article II (or in the case of a loan made pursuant to Section 2.2,
any conversion or continuation thereof).

        “Loan Documents” means this Agreement, each Note issued pursuant to
Section 2.10 and the Facility LC Applications.

        “Material Adverse Effect” means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), operations or prospects
of the Borrower and its Subsidiaries taken as a whole, (ii) the ability of the
Borrower to perform its obligations under the Loan Documents or (iii) the
validity or enforceability of any of the Loan Documents with respect to and
against the Borrower.

        “Material Indebtedness” is defined in Section 7.5.

        “Modify” and “Modification” are defined in Section 2.16.1.

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

        “Mortgages” means, collectively, (a) the First and Refunding Mortgage
dated as of June 2, 1924 issued by the Borrower (as successor to Puget Sound
Power & Light Company) in favor of State Street Bank and Trust Company (as
successor to Old Colony Trust Company), as trustee, and (b) the Indenture of
First Mortgage dated as of April 1, 1957 issued by the Borrower (as successor to
Puget Sound Power & Light Company) in favor of BNY Midwest Trust Company (as
successor to Harris Trust and Savings Bank), as trustee.

        “Multiemployer Benefit Plan” means a Benefit Plan maintained pursuant to
a collective bargaining agreement or any other arrangement to which the Borrower
or any member of the Controlled Group is a party to which more than one employer
is obligated to make contributions.

        “Net Worth” means the Borrower’s consolidated stockholders’ equity.

        “Non-U.S.        Lender” is defined in Section 3.5(iv).

        “Note” means a promissory note, substantially in the form of Exhibit E
hereto, issued at the request of a Lender pursuant to Section 2.10 to evidence
its Loans.

        “Obligations” means all unpaid principal of and accrued and unpaid
interest on the Loans, all Reimbursement Obligations, all accrued and unpaid
fees and all expenses, reimbursements, indemnities and other obligations of the
Borrower to the Lenders or to any Lender, the Administrative Agent, the LC
Issuer or any indemnified party arising under the Loan Documents.

        “Other Taxes” is defined in Section 3.5(ii).

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        “Outstanding Credit Exposure” means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Loans outstanding at such time
plus (ii) an amount equal to its Pro Rata Share of the LC Obligations at such
time.

        “Participants”is defined in Section 12.2.1.

        “Payment Date” means the last day of each calendar quarter.

        “PBGC” means the Pension Benefit Guaranty Corporation, or any successor
thereto.

        “Permitted Acquisition” means an Acquisition (i) which has been
recommended or approved by the board of directors or other governing body of the
Person that is the object of such Acquisition, (ii) which occurs when no Default
or Unmatured Default exists, (iii) after giving effect to which (a) no Default
or Unmatured Default will exist and (b) the Borrower will be in pro forma
compliance with the financial covenants set forth in Sections 6.11 and 6.12
(assuming that such Acquisition had occurred on the last day of the fiscal
quarter most recently ended from the date which is one year prior to the date of
such Acquisition), and (iv) which is of a Person in the same general line of
business as the Borrower and its Subsidiaries.

        “Person” means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

        “Pricing Schedule” means Schedule 1 attached hereto.

        “Plan” means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.

        “Prime Rate” means a rate per annum equal to the corporate base rate or
prime rate of interest announced by Bank One or by its parent, Bank One
Corporation, from time to time, changing when and as said corporate base rate or
prime rate changes.

        “Property” of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.

        “Pro Rata Share” means, with respect to a Lender, a percentage equal to
such Lender’s Commitment divided by the Aggregate Commitment.

        “PUHCA” means the Public Utility Holding Company Act of 1935, as amended
from time to time, and any rule or regulation issued thereunder.

        “Purchasers”is defined in Section 12.3.1.

        “Qualified Receivables Transaction” means any transaction or series of
transactions that may be entered into by the Borrower or any Subsidiary pursuant
to which the Borrower or any Subsidiary may sell, convey, pledge or otherwise
transfer to a newly-formed Subsidiary or other special purpose entity, or any
other Person, any accounts receivable (including chattel paper, instruments and
general intangibles) or notes receivable and the rights and certain other
property related thereto, provided that (i) all of the terms and conditions of
such transaction or series of transactions, including without limitation the
amount and type of any recourse to the Borrower or any Subsidiary with respect
to the assets transferred, are acceptable to the Administrative Agent and the
Required Lenders and (ii) the Receivables Transaction Attributed Indebtedness
incurred in such transaction or series of transactions does not exceed
$175,000,000 at any time outstanding. For the avoidance of doubt, the
transactions contemplated by the Receivables Purchase Agreement dated as of
December 23, 2002 by and among Rainier Receivables, Inc., the Borrower, as
servicer, the purchasers party thereto from time to time and Bank One, as agent,
as amended, restated or otherwise modified, shall constitute a “Qualified
Receivables Transaction.”

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        “Receivables Transaction Attributed Indebtedness” means, with respect to
any Qualified Receivables Transaction on any date of determination, the
unrecovered purchase price on such date of all assets sold, conveyed, pledged or
otherwise transferred by the Borrower or any Subsidiary to the third-party
conduit entity or other receivables credit provider under such Qualified
Receivables Transaction.

        “Regulation D” means Regulation D of the FRB as from time to time in
effect and any successor thereto or other regulation or official interpretation
of the FRB relating to reserve requirements applicable to member banks of the
Federal Reserve System.

        “Regulation U” means Regulation U of the FRB as from time to time in
effect and any successor or other regulation or official interpretation of the
FRB relating to the extension of credit by banks for the purpose of purchasing
or carrying margin stocks applicable to member banks of the Federal Reserve
System.

        “Reimbursement Obligations” means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.16 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.

        “Reportable Event” means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan
excluding such events as to which the PBGC has by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.

        “Required Lenders” means Lenders in the aggregate having more than 50%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding more than 50% of the Aggregate Outstanding
Credit Exposure.

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

        “Response Date” is defined in Section 2.17.

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        “Risk-Based Capital Guidelines” is defined in Section 3.2.

        “S&P” means Standard and Poor’s Ratings Services, a division of The
McGraw Hill Companies, Inc.

        “Schedule” refers to a specific schedule to this Agreement, unless
another document is specifically referenced.

        “SEC” means the Securities and Exchange Commission.

        “Section” means a numbered section of this Agreement, unless another
document is specifically referenced.

        “Significant Subsidiary” means a “significant subsidiary” (as defined in
Regulation S-X of the SEC as in effect on the date of this Agreement) of the
Borrower.

        “Subsidiary” of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a “Subsidiary”
shall mean a Subsidiary of the Borrower.

        “Substantial Portion” means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 10% of
the consolidated assets of the Borrower and its Subsidiaries as would be shown
in the consolidated financial statements of the Borrower and its Subsidiaries as
at the beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.

        “Taxes” means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.

        “Tax-Free Debt” means Indebtedness of the Borrower to a state, territory
or possession of the United States or any political subdivision thereof issued
in a transaction in which such state, territory, possession or political
subdivision issued obligations the interest on which is excludable from gross
income pursuant to the provisions of Section 103 of the Code (or similar
provisions), as in effect at the time of issuance of such obligations, and debt
to a bank issuing a Letter of Credit with respect to the principal of or
interest on such obligations.

        “Total Capitalization” means, at any time, the sum of the following for
the Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with Agreement Accounting Principles (without duplication and
excluding minority interests in Subsidiaries):

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    (i)               Net Worth; plus

    (ii)               the aggregate obligations of the Borrower with respect to
the Trust Preferred Securities; plus

    (iii)               the aggregate outstanding principal amount of all
Consolidated Indebtedness.

        “Transferee”is defined in Section 12.4.

        “Trust Preferred Securities” means (a) the $200,000,000 8.4% Trust
Preferred Securities due June 30, 2041 issued by the Borrower on May 24, 2001
and (b) the $100,000,000 8.231% Trust Preferred Securities due June 1, 2027
issued by the Borrower on June 6, 1997.

        “Type” means with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance.

        “Unmatured Default” means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

ARTICLE II

THE CREDITS

    2.1.         The Facility. From and including the Closing Date and prior to
the Facility Termination Date, (a) each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to (i) make Loans to the Borrower
and (ii) participate in Facility LCs issued upon the request of the Borrower;
and (b) the LC Issuer agrees to issue Facility LCs on the terms and conditions
set forth in this Agreement.

    2.1.1.         Amount of Facility. In no event may the Aggregate Outstanding
Credit Exposure exceed the Aggregate Commitment.

    2.1.2.         Availability of Facility. Subject to the terms of this
Agreement, the facility is available from the date hereof to the Facility
Termination Date, and the Borrower may borrow, repay and reborrow at any time
prior to the Facility Termination Date. The Commitments to lend hereunder shall
expire on the Facility Termination Date.

    2.1.3.         Repayment of Facility. The Aggregate Outstanding Credit
Exposure and all other unpaid Obligations shall be paid in full by the Borrower
on the Facility Termination Date.

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    2.2.         Advances.

    2.2.1.        Advances. Each Advance hereunder shall consist of Loans made
from the Lenders ratably in proportion to the ratio that their respective
Commitments bear to the Aggregate Commitment.

    2.2.2.        Types of Advances. Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, as selected by the Borrower in
accordance with Section 2.2.3.

    2.2.3.        Method of Selecting Types and Interest Periods for Advances.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto, from time to time.
The Borrower shall give the Administrative Agent irrevocable notice (a
“Borrowing Notice”) not later than 12:00 noon (Chicago time) (a) on the
Borrowing Date of each Floating Rate Advance and (b) at least three Business
Days before the Borrowing Date of each Eurodollar Advance. A Borrowing Notice
shall specify:

        (i) the Borrowing Date, which shall be a Business Day, of such Advance;

        (ii) the aggregate amount of such Advance;

        (iii) the Type of Advance selected; and

        (iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto (which may not end after the scheduled Facility Termination
Date).

    2.2.4.         Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are either converted into Eurodollar Advances in
accordance with this Section 2.2.4 or are repaid in accordance with Section 2.6.
Each Eurodollar Advance shall continue as a Eurodollar Advance until the end of
the then applicable Interest Period therefor, at which time such Eurodollar
Advance shall be automatically converted into a Floating Rate Advance unless (x)
such Eurodollar Advance is or was repaid in accordance with Section 2.6 or (y)
the Borrower shall have given the Administrative Agent a Conversion/Continuation
Notice requesting that, at the end of such Interest Period, such Eurodollar
Advance continue as a Eurodollar Advance for the same or another Interest
Period. Subject to Section 2.5, the Borrower may elect from time to time to
convert all or any part of a Floating Rate Advance into a Eurodollar Advance.
The Borrower shall give the Administrative Agent irrevocable notice (a
“Conversion/Continuation Notice”) of each conversion of a Floating Rate Advance
into a Eurodollar Advance, or continuation of a Eurodollar Advance, not later
than 12:00 noon (Chicago time) at least three Business Days prior to the date of
the requested conversion or continuation, specifying:

        (i) the requested date, which shall be a Business Day, of such
conversion or continuation;

        (ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and

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        (iii) the amount of the Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the Interest Period
applicable thereto.

    2.3.                       Method of Borrowing. Not later than 12:00 noon
(Chicago time) on each Borrowing Date, each Lender shall make available its Loan
or Loans in funds immediately available in Chicago to the Administrative Agent
at its address specified pursuant to Article XIII. The Administrative Agent will
make the funds so received from the Lenders available to the Borrower at the
Administrative Agent’s aforesaid address.

    2.4.        Fees; Reductions in Aggregate Commitment.

    2.4.1.        The Borrower agrees to pay to the Administrative Agent for the
account of each Lender according to its Pro Rata Share a commitment fee at a per
annum rate equal to the Applicable Fee Rate on the daily unused portion of the
Aggregate Commitment (the “Commitment Fee”) from the date hereof to and
including the Facility Termination Date, payable on each Payment Date and on the
Facility Termination Date.

    2.4.2.        The Borrower agrees to pay to the Administrative Agent for the
account of each Lender on the Closing Date an upfront fee in the amount
previously agreed to among the Borrower, the Administrative Agent and such
Lender.

    2.4.3.        The Borrower may permanently reduce the Aggregate Commitment
in whole, or in part ratably among the Lenders in integral multiples of
$5,000,000, upon at least 10 Business Days’ written notice to the Administrative
Agent, which notice shall specify the amount of any such reduction, provided
that the amount of the Aggregate Commitment may not be reduced below Aggregate
Outstanding Credit Exposure. All accrued Commitment Fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Loans hereunder.

    2.5.        Minimum Amount of Each Advance; Limitation on Eurodollar
Advances. Each Advance shall at all times (including after giving effect to any
prepayment, conversion or continuation of all or part of an Advance) be in the
amount of $2,500,000 or a higher integral multiple of $500,000. The Borrower
shall not request a Eurodollar Advance if, after giving effect to the requested
Eurodollar Advance, more than seven separate Eurodollar Advances would be
outstanding.

    2.6.        Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances or, in
an aggregate amount of $2,500,000 or a higher integral multiple of $500,000, any
portion of the outstanding Floating Rate Advances upon one Business Day’s prior
notice to the Administrative Agent. The Borrower may from time to time pay,
subject to the payment of any funding indemnification amounts required by
Section 3.4 but without penalty or premium, all outstanding Eurodollar Advances
or, in an aggregate amount of $2,500,000 or a higher integral multiple of
$500,000, any portion of the outstanding Eurodollar Advances upon three Business
Days’prior notice to the Administrative Agent.

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    2.7.        Changes in Interest Rate, etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Floating Rate Advance is made or is converted from a
Eurodollar Advance pursuant to Section 2.2.4 to but excluding the date it
becomes due or is converted into a Eurodollar Advance pursuant to Section 2.2.4,
at a rate per annum equal to sum of the Alternate Base Rate for such day plus
the Applicable Base Rate Margin. Changes in the rate of interest on that portion
of any Floating Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at a rate per annum equal to sum of the Eurodollar Rate for such
day plus the Applicable Eurodollar Rate Margin.

    2.8.        Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.2.3 or Section 2.2.4, during the continuance of
a Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default the Required Lenders may, at their option,
by notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the Alternate Base Rate in effect from time to time plus 2%
per annum and (ii) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Alternate Base Rate in effect from time to time plus 2% per
annum and (iii) the LC Fee shall be increased by 2% per annum, provided that,
during the continuance of a Default under Section 7.6 or 7.7, the interest rates
set forth in clauses (i) and (ii) above and the increase in the LC Fee set forth
in clause (iii) above shall be applicable to all Credit Extensions without any
election or action on the part of the Administrative Agent or any Lender.

    2.9.        Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Administrative Agent at the Administrative Agent’s
address specified pursuant to Article XIII, or at any other Lending Installation
of the Administrative Agent specified in writing by the Administrative Agent to
the Borrower, by noon (Chicago time) on the date when due and shall (except in
the case of Reimbursement Obligations for which the LC Issuer has not been fully
indemnified by the Lenders, or as specifically required hereunder) be applied
ratably by the Administrative Agent among the Lenders. Each payment delivered to
the Administrative Agent for the account of any Lender shall be delivered
promptly by the Administrative Agent to such Lender in the same type of funds
that the Administrative Agent received at its address specified pursuant to
Article XIII or at any Lending Installation specified in a notice received by
the Administrative Agent from such Lender. The Administrative Agent is hereby
authorized to charge the account of the Borrower maintained with Bank One for
each payment of principal, interest, Reimbursement Obligations and fees as it
becomes due hereunder. Each reference to the Administrative Agent in this
Section 2.9 shall also be deemed to refer, and shall apply equally, to the LC
Issuer, in the case of payments required to be made by the Borrower to the LC
Issuer pursuant to 2.16.6.

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    2.10.        Noteless Agreement; Evidence of Indebtedness. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

    (ii)        The Administrative Agent shall also maintain accounts in which
it will record (a) the amount of each Loan made hereunder, the Type thereof and
the Interest Period with respect thereto, (b) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder, (c) the original stated amount of each Facility LC and the
amount of LC Obligations outstanding at any time, and (d) the amount of any sum
received by the Administrative Agent hereunder from the Borrower and each
Lender’s share thereof.

    (iii)        The entries made in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations recorded therein; provided that the failure of the
Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Obligations in accordance with the terms hereof.

    (iv)        Any Lender may request that its Loans be evidenced by a Note. In
such event, the Borrower shall prepare, execute and deliver to such Lender a
Note payable to the order of such Lender. Thereafter, the Loans evidenced by
such Note and interest thereon shall at all times (including after any
assignment pursuant to Section 12.3) be represented by a Note payable to the
order of the payee named therein or any assignee pursuant to Section 12.3,
except to the extent that any such Lender or assignee subsequently returns any
such Note for cancellation and requests that such Loans once again be evidenced
as described in paragraphs (i) and (ii) above.

    2.11.        Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Administrative Agent to extend, convert or continue Advances, to effect
selections of Types of Advances and to transfer funds based on telephonic
notices made pursuant to the terms of this Agreement by any person or persons
the Administrative Agent or any Lender in good faith believes to be acting on
behalf of the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically to the Administrative Agent. The Borrower
agrees to deliver promptly to the Administrative Agent a written confirmation,
if such confirmation is requested by the Administrative Agent or any Lender, of
each telephonic notice signed by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by the
Administrative Agent and the Lenders, the records of the Administrative Agent
and the Lenders shall govern absent manifest error.

    2.12.        Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date, on
any date on which such Floating Rate Advance is paid, whether due to
acceleration or otherwise, and at maturity. Interest accrued on that portion of
the outstanding principal amount of any Floating Rate Advance converted into a
Eurodollar Advance on a day other than a Payment Date shall be payable on the
date of conversion. Interest accrued on each Eurodollar Advance shall be payable
on the last day of its applicable Interest Period, on any date on which such
Eurodollar Advance is paid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurodollar Advance having an Interest Period
longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest, Commitment Fees and
LC Fees shall be calculated for actual days elapsed on the basis of a 360-day
year, except that interest on Floating Rate Advances accruing at a rate based on
the Prime Rate shall be computed on the basis of a 365- or 366-day year, as
applicable. Interest shall be payable for the day an Advance is made but not for
the day of any payment on the amount paid if payment is received prior to 12:00
noon (Chicago time). If any payment of principal of or interest on an Advance
shall become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing interest in
connection with such payment.

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    2.13.        Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Administrative Agent
will notify each Lender of the contents of each Aggregate Commitment reduction
notice, Borrowing Notice, Conversion/Continuation Notice and repayment notice
received by it hereunder. Promptly after notice from the LC Issuer, the
Administrative Agent will notify each Lender of the contents of each request for
issuance of a Facility LC hereunder. The Administrative Agent will notify each
Lender and the Borrower of the interest rate applicable to each Eurodollar
Advance promptly upon determination of such interest rate and will give each
Lender and the Borrower prompt notice of each change in the Alternate Base Rate.

    2.14.        Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, participation in LC Obligations and any Notes issued
hereunder shall be deemed held by each Lender or the LC Issuer, as the case may
be, for the benefit of any such Lending Installation. Each Lender and the LC
Issuer may, by written notice to the Administrative Agent and the Borrower in
accordance with Article XIII, designate replacement or additional Lending
Installations through which Loans will be made by it or Facility LCs will be
issued by it and for whose account payments under this Agreement are to be made.

    2.15.        Non-Receipt of Funds by the Administrative Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the Administrative
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a payment of principal, interest or fees to the Administrative
Agent for the account of the Lenders, that it does not intend to make such
payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such payment
shall, on demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Administrative Agent until the date the Administrative Agent recovers
such amount at a rate per annum equal to (x) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.

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    2.16.        Facility LCs.

    2.16.1.        Issuance. The LC Issuer hereby agrees, on the terms and
conditions set forth in this Agreement, to issue standby letters of credit
(each, a “Facility LC”) and to renew, extend, increase, decrease or otherwise
modify each Facility LC (“Modify,” and each such action a “Modification”), from
time to time from and including the date of this Agreement and prior to the
Facility Termination Date upon the request of the Borrower; provided that
immediately after each such Facility LC is issued or Modified, (i) the aggregate
amount of the outstanding LC Obligations shall not exceed $50,000,000 and (ii)
the Aggregate Outstanding Credit Exposure shall not exceed the Aggregate
Commitment. No Facility LC shall have an expiry date later than the earlier of
(x) one year after the Facility Termination Date and (y) one year after the date
of issuance. Notwithstanding the foregoing, if any Facility LC is outstanding on
the Facility Termination Date, the Borrower shall cause to be deposited with the
Administrative Agent cash collateral (or Cash Equivalent Investments) in an
amount equal to the stated amount of such Facility LC to secure the Borrower’s
reimbursement obligations thereunder.

    2.16.2.        Participations. Upon the issuance or Modification by the LC
Issuer of a Facility LC in accordance with this Section 2.16, the LC Issuer
shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably sold to each Lender, and each Lender shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably purchased from the LC Issuer, a participation in such Facility LC
(and each Modification thereof) and the related LC Obligations in proportion to
its Pro Rata Share.

    2.16.3.        Notice. Subject to Section 2.16.1, the Borrower shall give
the LC Issuer notice prior to 12:00 noon (Chicago time) at least three Business
Days prior to the proposed date of issuance or Modification of each Facility LC,
specifying the beneficiary, the proposed date of issuance or Modification and
the expiry date of such Facility LC, and describing the proposed terms of such
Facility LC and the nature of the transactions proposed to be supported thereby.
Upon receipt of such notice, the LC Issuer shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Lender, of the contents thereof and of the amount of such Lender’s participation
in such proposed Facility LC. The issuance or Modification by the LC Issuer of
any Facility LC shall, in addition to the conditions precedent set forth in
Article IV (the satisfaction of which the LC Issuer shall have no duty to
ascertain), be subject to the conditions precedent that such Facility LC shall
be satisfactory to the LC Issuer and that the Borrower shall have executed and
delivered such application agreement and/or such other instruments and
agreements relating to such Facility LC as the LC Issuer shall have reasonably
requested (each, a “Facility LC Application”). In the event of any conflict
between the terms of this Agreement and the terms of any Facility LC
Application, the terms of this Agreement shall control.

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    2.16.4.        LC Fees. The Borrower shall pay to the Administrative Agent,
for the account of the Lenders ratably in accordance with their respective Pro
Rata Shares, with respect to each Facility LC, a letter of credit fee at a per
annum rate equal to the Applicable LC Fee Rate in effect from time to time on
the undrawn stated amount available under such standby Facility LC, such fee to
be payable in arrears on each Payment Date (each such fee described in this
sentence, an “LC Fee”). The Borrower shall also pay to the LC Issuer for its own
account (x) at the time of issuance of each Facility LC, a fronting fee in an
amount to be agreed upon between the LC Issuer and the Borrower, and
(y) documentary and processing charges in connection with the issuance or
Modification of and draws under Facility LCs in accordance with the LC Issuer’s
standard schedule for such charges as in effect from time to time.

    2.16.5.        Administration; Reimbursement by Lenders. Upon receipt from
the beneficiary of any Facility LC of any demand for payment under such Facility
LC, the LC Issuer shall notify the Administrative Agent and the Administrative
Agent shall promptly notify the Borrower and each other Lender as to the amount
to be paid by the LC Issuer as a result of such demand and the proposed payment
date (the “LC Payment Date”). The responsibility of the LC Issuer to the
Borrower and each Lender shall be only to determine that the documents
(including each demand for payment) delivered under each Facility LC in
connection with such presentment shall be in conformity in all material respects
with such Facility LC. The LC Issuer shall endeavor to exercise the same care in
the issuance and administration of the Facility LCs as it does with respect to
letters of credit in which no participations are granted, it being understood
that in the absence of any gross negligence or willful misconduct by the LC
Issuer, each Lender shall be unconditionally and irrevocably liable without
regard to the occurrence of any Default or any condition precedent whatsoever,
to reimburse the LC Issuer on demand for (i) such Lender’s Pro Rata Share of the
amount of each payment made by the LC Issuer under each Facility LC to the
extent such amount is not reimbursed by the Borrower pursuant to Section 2.16.6
below, plus (ii) interest on the foregoing amount to be reimbursed by such
Lender, for each day from the date of the LC Issuer’s demand for such
reimbursement (or, if such demand is made after 12:00 noon (Chicago time) on
such date, from the next succeeding Business Day) to the date on which such
Lender pays the amount to be reimbursed by it, at a rate of interest per annum
equal to the Federal Funds Effective Rate for the first three days and,
thereafter, at a rate of interest equal to the rate applicable to Floating Rate
Advances.

    2.16.6.                      Reimbursement by Borrower. The Borrower shall
be irrevocably and unconditionally obligated to reimburse the LC Issuer on or
before the applicable LC Payment Date for any amounts paid or to be paid by the
LC Issuer upon any drawing under any Facility LC, without presentment, demand,
protest or other formalities of any kind; provided that neither the Borrower nor
any Lender shall hereby be precluded from asserting any claim for direct (but
not consequential) damages suffered by the Borrower or such Lender to the
extent, but only to the extent, caused by (i) the willful misconduct or gross
negligence of the LC Issuer in determining whether a request presented under any
Facility LC issued by it complied with the terms of such Facility LC or (ii) the
LC Issuer’s failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and conditions
of such Facility LC. All such amounts paid by the LC Issuer and remaining unpaid
by the Borrower shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to (x) the rate applicable to Floating Rate Advances
for such day if such day falls on or before the applicable LC Payment Date and
(y) the sum of 2% plus the rate applicable to Floating Rate Advances for such
day if such day falls after such LC Payment Date. The LC Issuer will pay to each
Lender ratably in accordance with its Pro Rata Share all amounts received by it
from the Borrower for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Facility LC issued by the LC Issuer,
but only to the extent such Lender has made payment to the LC Issuer in respect
of such Facility LC pursuant to Section 2.16.5.

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    2.16.7.        Obligations Absolute. The Borrower’s obligations under this
Section 2.16 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the LC Issuer, any Lender or any
beneficiary of a Facility LC. The Borrower further agrees with the LC Issuer and
the Lenders that the LC Issuer and the Lenders shall not be responsible for, and
the Borrower’s Reimbursement Obligation in respect of any Facility LC shall not
be affected by, among other things, the validity or genuineness of documents or
of any endorsements thereon, even if such documents should in fact prove to be
in any or all respects invalid, fraudulent or forged, or any dispute between or
among the Borrower, any of its Affiliates, the beneficiary of any Facility LC or
any financing institution or other party to whom any Facility LC may be
transferred or any claims or defenses whatsoever of the Borrower or of any of
its Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Facility LC. The Borrower
agrees that any action taken or omitted by the LC Issuer or any Lender under or
in connection with each Facility LC and the related drafts and documents, if
done without gross negligence or willful misconduct, shall be binding upon the
Borrower and shall not put the LC Issuer or any Lender under any liability to
the Borrower. Nothing in this Section 2.16.7 is intended to limit the right of
the Borrower to make a claim against the LC Issuer for damages as contemplated
by the proviso to the first sentence of Section 2.16.6.

    2.16.8.        Actions of LC Issuer. The LC Issuer shall be entitled to
rely, and shall be fully protected in relying, upon any Facility LC, draft,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document reasonably 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, independent accountants and other experts selected
by the LC Issuer. The LC Issuer 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 2.16, the LC Issuer 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 Facility LC.

    2.16.9.        Indemnification. The Borrower hereby agrees to indemnify and
hold harmless each Lender, the LC Issuer 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, the LC Issuer or the Administrative Agent may incur (or which may be
claimed against such Lender, the LC Issuer 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 Facility LC
or any actual or proposed use of any Facility LC, including, without limitation,
any claims, damages, losses, liabilities, costs or expenses which the LC Issuer
may incur by reason of or in connection with the failure of any other Lender to
fulfill or comply with its obligations to the LC Issuer hereunder (but nothing
herein contained shall affect any rights the Borrower may have against any
defaulting Lender); provided that the Borrower shall not be required to
indemnify any Lender, the LC Issuer 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 the LC
Issuer in determining whether a request presented under any Facility LC complied
with the terms of such Facility LC, (y) the LC Issuer’s failure to pay under any
Facility LC after the presentation to it of a request strictly complying with
the terms and conditions of such Facility LC or (z) disputes, not involving the
Borrower, among the Lenders, LC Issuer or Administrative Agent relating to a
Facility LC. Nothing in this Section 2.16.9 is intended to limit the obligations
of the Borrower under any other provision of this Agreement.

    2.16.10.        Lenders’ Indemnification. Each Lender shall, ratably in
accordance with its Pro Rata Share, indemnify the LC Issuer, 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 the LC Issuer’s failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and conditions
of the Facility LC) that such indemnitees may suffer or incur in connection with
this Section 2.16 or any action taken or omitted by such indemnitees hereunder.

    2.16.11.        Rights as a Lender. In its capacity as a Lender, the LC
Issuer shall have the same rights and obligations as any other Lender.

    2.17.        Extension of Facility Termination Date. The Borrower may
request an extension of the Facility Termination Date by submitting a request
for an extension to the Administrative Agent (an “Extension Request”) at least
30 days but no more than 60 days prior to the Facility Termination Date. The
Extension Request must specify the new Facility Termination Date requested by
the Borrower and the date (which must be at least 10 days after the Extension
Request is delivered to the Administrative Agent) as of which the Lenders must
respond to the Extension Request (the “Response Date”). The new Facility
Termination Date shall be no more than 364 days after the Facility Termination
Date in effect at the time the Extension Request is received, including the
Facility Termination Date as one of the days in the calculation of the days
elapsed. Promptly upon receipt of an Extension Request, the Administrative Agent
shall notify each Lender of the contents thereof and shall request each Lender
to respond to the Extension Request. Each Lender approving the Extension Request
shall deliver its written consent no later than the Response Date. The response
by each Lender to the Extension Request shall be in such Lender’s sole and
absolute discretion. The failure of any Lender to respond to an Extension
Request on or before the Response Date shall be deemed to be a refusal by such
Lender to consent to the Extension Request. If the consent of each of the
Lenders is received by the Administrative Agent (or, in the case of a
non-consenting Lender or Lenders, such Lender or Lenders are replaced by the
Borrower pursuant to Section 3.7 not later than five days prior to the existing
Facility Termination Date and, at the time of such replacement, each replacement
Lender consents to the Extension Request), the Facility Termination Date
specified in the Extension Request shall become effective on the existing
Facility Termination Date and the Administrative Agent shall promptly notify the
Borrower and each Lender of the new Facility Termination Date.

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ARTICLE III

YIELD PROTECTION; TAXES

    3.1.           Yield Protection. If, on or after the date of this Agreement,
the adoption of any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law), or any change in the interpretation or administration thereof by any
governmental or quasi-governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender or applicable Lending Installation or the LC Issuer with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:

    (i)            subjects any Lender or any applicable Lending Installation or
the LC Issuer to any Taxes, or changes the basis of taxation of payments (other
than with respect to Excluded Taxes) to any Lender or the LC Issuer in respect
of its Eurodollar Loans, Facility LCs or participations therein, or

    (ii)            imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any
Lender or the LC Issuer or any applicable Lending Installation (other than
reserves and assessments taken into account in determining the interest rate
applicable to Eurodollar Advances), or

    (iii)            imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation or the LC
Issuer of making, funding or maintaining its Eurodollar Loans or of issuing or
participating in Facility LCs or reduces any amount receivable by any Lender or
any applicable Lending Installation or the LC Issuer in connection with its
Eurodollar Loans, Facility LCs or participations therein, or requires any Lender
or any applicable Lending Installation or the LC Issuer to make any payment
calculated by reference to the amount of Eurodollar Loans, Facility LCs or
participations therein held or interest received by it, by an amount deemed
material by such Lender or the LC Issuer, as the case may be,

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation in connection with such Eurodollar Loans, Commitment,
Facility LCs or participations therein then, within 15 days of demand by such
Lender or the LC Issuer, as the case may be, the Borrower shall pay such Lender
such additional amount or amounts as will compensate such Lender or the LC
Issuer, as the case may be, for such increased cost or reduction in amount
received.

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    3.2.           Changes in Capital Adequacy Regulations. If a Lender or the
LC Issuer determines the amount of capital required or expected to be maintained
by such Lender or the LC Issuer, any Lending Installation of such Lender or any
corporation controlling such Lender or the LC Issuer is increased as a result of
a Change, then, within 15 days of demand by such Lender or the LC Issuer, the
Borrower shall pay such Lender the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital which
such Lender reasonably determines is attributable to this Agreement, its
Outstanding Credit Exposure or its Commitment to make Loans and issue or
participate in Facility LCs, as the case may be, hereunder (after taking into
account such Lender’s or the LC Issuer’s policies as to capital adequacy). The
Administrative Agent agrees to notify the Borrower of any Change within 60 days
after the Administrative Agent becomes aware of such Change. “Change” means (i)
any change after the date of this Agreement in the Risk-Based Capital Guidelines
or (ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender or the LC Issuer. “Risk-Based Capital Guidelines” means
(i) the risk-based capital guidelines in effect in the United States on the date
of this Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled “International Convergence of
Capital Measurements and Capital Standards,” including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.

    3.3.           Availability of Types of Advances. If (x) any Lender
determines that maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, or if (y) prior to the first day of the
applicable Interest Period, the Required Lenders determine that (i) deposits of
a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
(a) in the case of clause (x) above, such Lender shall promptly notify the
Borrower and the Administrative Agent and, so long as such circumstances shall
continue, (i) such Lender shall have no obligation to make Eurodollar Loans or
convert Floating Rate Loans into Eurodollar Loans (but shall make Floating Rate
Loans concurrently with the making of or conversion into Eurodollar Loans by the
Lenders which are not so affected, in each case in an amount equal to such
Lender’s share of all Eurodollar Loans which would be made or converted into at
such time in the absence of such circumstances) and (ii) on the last day of the
current Interest Period for each Eurodollar Loan of such Lender (or, in any
event, on such earlier date as may be required by the relevant law, regulation
or interpretation), such Eurodollar Loan shall, unless then paid in full,
automatically convert to a Floating Rate Loan, and (b) in the case of clause (y)
above, the Administrative Agent shall suspend the availability of future
Eurodollar Advances and any requested borrowing of, conversion into or
continuation of a Eurodollar Advance shall instead be made as, remain or be
converted into a Floating Rate Advance. Each Floating Rate Loan made pursuant to
clause (a) above shall remain outstanding for the same period as the Eurodollar
Advance of which such Floating Rate Loan would be a part absent the
circumstances described in such clause (a).

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    3.4.           Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment or otherwise, or a
Eurodollar Advance is not made on the date specified by the Borrower for any
reason other than default by the Lenders, the Borrower will indemnify each
Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain such Eurodollar Advance.

    3.5.           Taxes. (i) All payments by the Borrower to or for the account
of any Lender or the Administrative Agent hereunder or under any Note or
Facility LC Application shall be made free and clear of and without deduction
for any and all Taxes. If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder to any Lender, the LC
Issuer or the Administrative Agent, (a) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.5) such Lender, the
LC Issuer or the Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (b)
the Borrower shall make such deductions, (c) the Borrower shall pay the full
amount deducted to the relevant authority in accordance with applicable law and
(d) the Borrower shall furnish to the Administrative Agent the original copy of
a receipt evidencing payment thereof within 30 days after such payment is made.

    (ii)            In addition, the Borrower hereby agrees to pay any present
or future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or Facility LC Application or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note or Facility LC Application
(“Other Taxes”).

    (iii)            The Borrower hereby agrees to indemnify the Administrative
Agent, the LC Issuer and each Lender for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed on amounts
payable under this Section 3.5) paid by the Administrative Agent, the LC Issuer
or such Lender and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto relating to this Agreement. Payments
due under this indemnification shall be made within 30 days of the date the
Administrative Agent, the LC Issuer or such Lender makes demand therefor
pursuant to Section 3.6.

    (iv)            Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (each a “Non-U.S. Lender”) agrees
that it will, within 10 Business Days after the date of this Agreement, (i)
deliver to each of the Borrower and the Administrative Agent two duly completed
copies of United States Internal Revenue Service Form W-8ECI or W-8BEN,
certifying in either case that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, and (ii) deliver to the Administrative Agent a United States
Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is
entitled to an exemption from United States backup withholding tax. Each
Non-U.S. Lender further undertakes to deliver to each of the Borrower and the
Administrative Agent (x) renewals or additional copies of such form (or any
successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by the Borrower or the Administrative
Agent. All forms or amendments described in the preceding sentence shall certify
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and the Administrative Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.

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    (v)            For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to clause (iv), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section 3.5 with respect to Taxes imposed by the
United States; provided that, should a Non-U.S. Lender which is otherwise exempt
from or subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (iv), above, the
Borrower shall take such steps as such Non-U.S. Lender shall reasonably request
to assist such Non-U.S. Lender to recover such Taxes.

    (vi)            Any Lender that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this Agreement or
any Note pursuant to the law of any relevant jurisdiction or any treaty shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, 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.

    (vii)            If the U.S. Internal Revenue Service or any other
governmental authority of the United States or any other country or any
political subdivision thereof asserts a claim that the Administrative Agent did
not properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered or properly completed, because
such Lender failed to notify the Administrative Agent of a change in
circumstances which rendered its exemption from withholding ineffective, or for
any other reason), such Lender shall indemnify the Administrative Agent fully
for all amounts paid, directly or indirectly, by the Administrative Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the
Administrative Agent under this subsection, together with all costs and expenses
related thereto (including attorneys’ fees and time charges of attorneys for the
Administrative Agent, which attorneys may be employees of the Administrative
Agent). The obligations of the Lenders under this Section 3.5(vii) shall survive
the payment of the Obligations and termination of this Agreement.

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    3.6.           Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the
unavailability of Eurodollar Advances under Section 3.3, so long as such
designation is not, in the judgment of such Lender, disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to the
Borrower (with a copy to the Administrative Agent) as to the amount due, if any,
under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in
reasonable detail the calculations upon which such Lender determined such amount
and shall be final, conclusive and binding on the Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a Eurodollar Loan shall be calculated as though each Lender
funded its Eurodollar Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case or
not. Unless otherwise provided herein, the amount specified in the written
statement of any Lender shall be payable on demand after receipt by the Borrower
of such written statement. The obligations of the Borrower under Sections 3.1,
3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of
this Agreement.

    3.7.           Replacement of Affected Lender. At any time any Lender (i) is
affected by the circumstances described in Section 3.1, 3.2, 3.3 or 3.5 or (ii)
does not consent to an Extension Request made pursuant to Section 2.17, the
Borrower may replace such Lender as a party to this Agreement with one or more
other bank(s) or financial institution(s) reasonably satisfactory to the
Administrative Agent, such bank(s) or financial institution(s) to have a
Commitment or Commitments, as the case may be, in such amounts as shall be
reasonably satisfactory to the Administrative Agent (and upon notice from the
Borrower such Lender shall assign, without recourse or warranty, its Commitment,
its Loans, its Note and all of its other rights and obligations hereunder to
such replacement bank(s) or other financial institution(s) for a purchase price
equal to the sum of the principal amount of the Loans so assigned and, as
applicable, all accrued and unpaid interest thereon, its share of all accrued
and unpaid commitment fees and usage fees, any amounts payable under Section 3.4
as a result of such Lender receiving payment of any Eurodollar Loan prior to the
end of an Interest Period therefor and all other obligations owed to such Lender
hereunder).

ARTICLE IV

CONDITIONS PRECEDENT

    4.1.           Effectiveness. This Agreement shall not become effective
until the Borrower has furnished the Administrative Agent with sufficient copies
for the Lenders of each of the following:

    (i)            Copies, certified by the Secretary or an Assistant Secretary
of the Borrower, of the Articles of Incorporation and Bylaws of the Borrower,
together with all amendments thereto, and a certificate of good standing for the
Borrower from the State of Washington certified by the Secretary of State of
Washington.

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    (ii)            Copies, certified by the Secretary or an Assistant Secretary
of the Borrower, of resolutions of the Board of Directors of the Borrower
authorizing the execution and delivery of the Loan Documents.

    (iii)            An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify by name and title and
bear the signatures of the Authorized Officers, upon which certificate the
Administrative Agent and the Lenders shall be entitled to rely until informed of
any change in writing by the Borrower.

    (iv)            A certificate, signed by the Chief Financial Officer of the
Borrower, stating that on the date of the effectiveness hereof no Default or
Unmatured Default has occurred and is continuing.

    (v)            A written opinion of Perkins Coie LLP, counsel for the
Borrower, substantially in the form of Exhibit A.

    (vi)            Any Note requested by a Lender pursuant to Section 2.10
payable to the order of such requesting Lender.

    (vii)            Written money transfer instructions, in substantially the
form of Exhibit D, addressed to the Administrative Agent and signed by an
Authorized Officer, together with such other related money transfer
authorizations as the Administrative Agent may have reasonably requested.

    (viii)            Evidence that the Existing Agreement has been or
concurrently with the Closing Date is being terminated.

    (ix)            Such other documents as the Administrative Agent or its
counsel may have reasonably requested.

    4.2.           Each Credit Extension. The Lenders shall not be required to
make any Credit Extension unless on the applicable Credit Extension Date:

    (i)            No Default or Unmatured Default exists or will result from
such Credit Extension.

    (ii)            The representations and warranties contained in Article V
are true and correct as of such Credit Extension Date except to the extent any
such representation or warranty is stated to relate solely to an earlier date,
in which case such representation or warranty shall have been true and correct
on and as of such earlier date.

    (iii)            All legal matters incident to the making of such Credit
Extension are reasonably satisfactory to the Administrative Agent, the Lenders
and their counsel.

        Each Borrowing Notice with respect to an Advance and each request for
issuance of a Facility LC shall constitute a representation and warranty by the
Borrower that the conditions contained in Sections 4.2(i) and (ii) have been
satisfied. The Administrative Agent, at the request of any Lender, may require a
duly completed compliance certificate in substantially the form of Exhibit B as
a condition to making a Credit Extension.

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ARTICLE V

REPRESENTATIONS AND WARRANTIES

    The Borrower represents and warrants to the Lenders that:

    5.1.           Corporate Existence, etc. Each of the Borrower and each of
its Significant Subsidiaries: (a) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation; (b) has all requisite corporate power, and has all material
governmental licenses, authorizations, consents and approvals, necessary to own
its Property and carry on its business as now being conducted; and (c) is
qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure so
to qualify would have a Material Adverse Effect.

    5.2.           Litigation and Contingent Obligations. There are not, in any
court or before any arbitrator of any kind or before or by any governmental
body, any actions, suits or proceedings pending or, to the Borrower’s knowledge,
threatened (a) against or affecting the Borrower or any Subsidiary or any of
their respective businesses or properties except for actions, suits or
proceedings (i) that exist as of the date of this Agreement and are disclosed in
the Borrower’s Annual Report on Form 10-K for the year ended December 31, 2001,
the Borrower’s Quarterly Reports on Form 10-Q for the quarters ended March 31,
2002, June 30, 2002 or September 30, 2002 or on Schedule 5.2 and (ii) which,
singly or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect, (b) which seeks to prevent, enjoin or delay the making of any
Credit Extension or (c) affecting in an adverse manner the binding nature,
validity or enforceability of any Loan Document. Other than any liability
incident to any litigation, arbitration or proceeding described in subclause
(a)(i) and (a)(ii) of the foregoing sentence, the Borrower has no material
contingent obligations.

    5.3.           No Breach. None of the execution and delivery of this
Agreement or any Facility LC Application, the consummation of the transactions
herein or therein contemplated or compliance with the terms and provisions
hereof or thereof will conflict with or result in a breach of, or require any
consent under, the Articles of Incorporation or Bylaws of the Borrower, or
(except for notices to and consents of the Washington Utilities and
Transportation Commission referred to in Section 5.5) any applicable law, rule
or regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which the
Borrower or any of its Subsidiaries is a party or by which it is bound or to
which it is subject, or constitute a default under any such agreement or
instrument, or result in or require the creation or imposition of any Lien upon
any of the revenues or assets of the Borrower or any of its Subsidiaries
pursuant to the terms of any such agreement or instrument.

    5.4.           Corporate Action. The Borrower has all necessary corporate
power and authority to execute, deliver and perform its obligations under this
Agreement and the other Loan Documents; the execution, delivery and performance
by the Borrower of its obligations under this Agreement and the other Loan
Documents have been duly authorized by all necessary corporate action on its
part; and this Agreement has been duly and validly executed and delivered by the
Borrower and constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms, except as limited by applicable bankruptcy laws or
similar laws of general applicability affecting creditors’ rights.

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    5.5.           Approvals. Except for any required consents of the Washington
Utilities and Transportation Commission which are and shall continue to be in
full force and effect and notices to such commission, no authorizations,
approvals or consents of, and no filings or registrations with, any governmental
or regulatory authority or agency (other than informational filings) are
necessary for the execution, delivery or performance by the Borrower of this
Agreement or any other Loan Document or for the validity or enforceability
hereof or thereof.

    5.6.           Use of Proceeds. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying margin stock, as defined in Regulation U, and
no part of the proceeds of any Loan will be used to buy or carry any margin
stock. No part of the proceeds of any Loan will be used to acquire stock of any
corporation the board of directors of which has publicly stated its opposition
to such acquisition or fails to endorse such acquisition.

    5.7.           ERISA. The Borrower and its ERISA Affiliates have fulfilled
their respective obligations under the minimum funding standards of ERISA and
the Code with respect to each Benefit Plan, are in compliance in all material
respects with the presently applicable provisions of ERISA and the Code, and
have not incurred any liability pursuant to Title IV of ERISA to the PBGC or any
liability in excess of $10,000,000, individually or in the aggregate, to any
Benefit Plan.

    5.8.           Taxes. United States Federal income tax returns of the
Borrower and its Subsidiaries have been examined and closed through the period
ended December 31, 1999. The Borrower and its Subsidiaries have filed all United
States Federal and state income tax returns which are required to be filed by
them and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and by proper proceedings.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes and other governmental charges are, in the
opinion of the Borrower, adequate.

    5.9.           Public Utility Holding Company Act. The Borrower is a
wholly-owned Subsidiary of Puget Energy, Inc., which is exempt, pursuant to
Section 3(a)(1) of PUHCA and the rules of the SEC thereunder, from regulation
under PUHCA, except Section 9(a)(2) of PUHCA.

    5.10.           Material Adverse Change. Since December 31, 2001, there has
been no change from that reflected in the financial statements referred to in
Schedule 5.11 in the business, operations or financial condition of the Borrower
and its Subsidiaries which has had or could reasonably be expected to have a
Material Adverse Effect.

    5.11.           Financial Statements. (i) Schedule 5.11 sets forth a
complete list of the financial statements submitted prior to the date hereof by
the Borrower to the Lenders in connection with this Agreement and (ii) all
financial statements listed in Schedule 5.11 or delivered pursuant to Section
6.9(i) or (ii) are complete and correct and present fairly, in accordance with
Agreement Accounting Principles, the consolidated financial position of the
Borrower and its Subsidiaries as at their respective dates and the consolidated
results of operations, retained earnings and, as applicable, changes in
financial position or cash flows of the Borrower and its Subsidiaries for the
respective periods to which such statements relate.

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    5.12.           Environmental Matters. In the ordinary course of its
business, the officers of the Borrower consider the effect of Environmental Laws
on the business of the Borrower and its Subsidiaries, in the course of which
they identify and evaluate potential risks and liabilities accruing to the
Borrower due to Environmental Laws. On the basis of this consideration, the
Borrower has concluded that Environmental Laws cannot reasonably be expected to
have a Material Adverse Effect. Neither the Borrower not any Subsidiary has
received any notice to the effect that its operations are not in material
compliance with any of the requirements of applicable Environmental Laws or are
the subject of any federal or state investigation evaluating whether any
remedial action is needed to respond to a release of any toxic or hazardous
waste or substance into the environment, which noncompliance or remedial action
could reasonably be expected to have a Material Adverse Effect.

    5.13.           Investment Company Act. Neither the Borrower nor any
Subsidiary is an “investment company” or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended.

    5.14.           Subsidiaries. Schedule 5.14 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of capital stock or
other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and nonassessable.

    5.15.           Accuracy of Information. No information, exhibit or report
furnished by the Borrower or any Subsidiary to the Administrative Agent or any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading.

    5.16.           Compliance with Laws. The Borrower and its Subsidiaries have
complied in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof having jurisdiction over the conduct of
their respective businesses or the ownership of their respective Property,
except for any failure to comply with any of the foregoing which could not
reasonably be expected to have a Material Adverse Effect.

    5.17.           Insurance. The Borrower and its Subsidiaries maintain with
financially sound and reputable insurance companies (or through a self-insurance
program) insurance on all their Property of a character usually insured by
entities in the same or similar businesses similarly situated against loss or
damage of the kinds and in the amounts, customarily insured against by such
entities, and maintain such other insurance as is usually carried by such
entities.

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ARTICLE VI

COVENANTS

        So long as any Lender has any Commitment hereunder, any Facility LCs are
outstanding or any Obligations are unpaid, the Borrower shall, unless the
Required Lenders otherwise consent in writing:

    6.1.           Preservation of Existence and Business. Preserve and
maintain, and cause each Significant Subsidiary to preserve and maintain, its
corporate existence and all of its material rights, privileges, licenses and
franchises, except as permitted by Section 6.13, and carry on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted.

    6.2.           Preservation of Property. Maintain, and cause each
Significant Subsidiary to maintain, all of its Property necessary to operate its
business in good working order and condition, ordinary wear and tear excepted
(it being understood that this covenant relates only to the good working order
and condition of such Property and shall not be construed as a covenant of the
Borrower or any Significant Subsidiary not to dispose of any such Property by
sale, lease, transfer or otherwise or to discontinue operation thereof if the
Borrower reasonably determines that such discontinuation is necessary).

    6.3.           Payment of Taxes. Pay and discharge, and cause each
Significant Subsidiary to pay and discharge, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property, and (b) all lawful claims which, if
unpaid, might by law become a Lien upon its property; provided that the Borrower
and its Significant Subsidiaries shall not be required to pay or discharge any
such tax, assessment, charge or claim (i) which is being contested by it in good
faith and by proper procedures or (ii) the non-payment of which will not
constitute a Material Adverse Effect.

    6.4.           Compliance with Applicable Laws and Contracts. Comply, and
cause each Subsidiary to comply, with the requirements of all applicable laws,
rules, regulations and Governmental Approvals, and all orders, writs,
injunctions or decrees of any court or governmental authority or agency,
including, without limitation, Environmental Laws, if failure to comply with
such requirements would have a Material Adverse Effect.

    6.5.           Preservation of Loan Document Enforceability. Take all
reasonable actions (including obtaining and maintaining in full force and effect
consents and Governmental Approvals), and cause each Subsidiary to take all
reasonable actions, that are required so that its obligations under the Loan
Documents will at all times be legal, valid, binding and enforceable in
accordance with their respective terms.

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    6.6.           Insurance. Maintain, and cause each Significant Subsidiary to
maintain, with responsible insurance companies or through the Borrower’s program
of self-insurance, insurance against at least such risks and in at least such
amounts as is customarily maintained by similar businesses, or as may be
required by any applicable law, rule or regulation, any Governmental Approval,
or any order, writ, injunction or decree of any court or governmental authority
or agency.

    6.7.           Use of Proceeds. Use, directly or indirectly, the proceeds of
the Loans for general corporate purposes of the Borrower (in compliance with all
applicable legal and regulatory requirements).

    6.8.           Visits, Inspections and Discussions. Permit, and cause each
Subsidiary to permit, representatives of any Lender or the Administrative Agent,
during normal business hours and upon reasonable notice to the Borrower, to
examine, copy and make extracts from its books and records, to inspect its
Property, and to discuss its business and affairs with its officers and
independent certified accountants, all to the extent reasonably requested by
such Lender or the Administrative Agent (provided that the Borrower reserves the
right to restrict access to any of its generating facilities in accordance with
reasonably adopted procedures relating to safety and security, and to the extent
reasonably requested to maintain normal operations of the Borrower; provided,
further, that, Sections 9.6 and 10.8 hereof notwithstanding, the costs and
expenses incurred by any Lender or the Administrative Agent or their agents or
representatives in connection with any such examinations, visits or discussions
occurring or made prior to the occurrence of any Default shall be for the
account of such Lender or the Administrative Agent, as applicable).

    6.9.           Information to be Furnished. Furnish to the Administrative
Agent with copies sufficient for each Lender:

    (i)            Form 10-Q; Quarterly Financial Statements. As soon as
available and in any event within 60 days after the close of each of the first
three quarterly accounting periods in each fiscal year of the Borrower, a copy
of the Quarterly Report on Form 10-Q (or any successor form) for the Borrower
for such quarter.

    (ii)            Form 10-K; Year-End Financial Statements; Accountants’
Certificates. As soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the Annual Report on Form
10-K (or any successor form) for the Borrower for such year, together with a
copy of the accompanying report of the Borrower’s independent certified public
accounting firm.

    (iii)            Officer’s Certificate as to Calculations. At the time that
financial statements are furnished pursuant to Section 6.9(i) or (ii), a
certificate of the Chief Financial Officer, the Treasurer, an Assistant
Treasurer or any other financial officer of the Borrower substantially in the
form of Exhibit B.

    (iv)            Other Reports. Promptly upon the filing thereof, copies of
all registration statements, monthly or other regular reports, including reports
on Form 8-K (or any successor form), filed with the SEC.

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    (v)            Requested Information. From time to time such other
information regarding the business, affairs, insurance or financial condition of
the Borrower or any of its Subsidiaries (including, without limitation, any
Benefit Plan and any reports of other information required to be filed under
ERISA) as any Lender or the Administrative Agent may reasonably request.

    (vi)            Notice of Defaults, Material Adverse Changes and Other
Matters. Prompt notice of:

    (a)               any Default or Unmatured Default, and

    (b)               any circumstance that has resulted in a Material Adverse
Effect or an adverse effect on the binding nature, validity or enforceability of
any Loan Document as an obligation of the Borrower.

    6.10.           Liens. Not permit to exist, and not permit any Significant
Subsidiary to permit to exist, any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, except for:

    (i)            Liens for taxes, assessments or charges imposed on the
Borrower or any Significant Subsidiary or any of their property by any
governmental authority not yet due or which are being contested in good faith by
appropriate proceedings if adequate reserves with respect thereto are maintained
on the books of the Borrower or any of its Subsidiaries, as the case may be, in
accordance with Agreement Accounting Principles;

    (ii)            Liens imposed by law, such as carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s or other like Liens incurred in the
ordinary course of business and securing obligations that are not yet due or
that are being contested in good faith by appropriate proceedings, and Liens
arising out of judgments or awards which secure payment of legal obligations
that would not constitute a Default under Section 7;

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

    (iv)            easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the use
of property or minor imperfections in title thereto which, in the aggregate, are
not material in amount, and which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the business of the Borrower or any of its Significant Subsidiaries;

    (v)            Liens under the Mortgages;

    (vi)            Permitted Encumbrances (as defined in the Mortgages);

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    (vii)            Liens securing the payment of Tax-Free Debt, provided that
each such Lien shall extend only to the property, and proceeds thereof, being
financed by the Tax-Free Debt secured thereby;

    (viii)            Liens on or over the whole or any part of the assets of
the Borrower as security for any indebtedness owing by the Borrower to any
Significant Subsidiary whose primary function is that of acting as a financing
Subsidiary of the Borrower and consisting of one or more loans made to the
Borrower by such Subsidiary and repayable on the same date as a loan or other
indebtedness incurred by such Subsidiary; provided that the aggregate principal
amount of the indebtedness secured by all such Liens shall not exceed the
aggregate principal amount of all such indebtedness incurred by such Subsidiary;
and provided, further, that the aggregate principal amount of the indebtedness
secured by all such Liens (exclusive of any Lien permitted by clause (xiii)
below) shall not exceed $50,000,000;

    (ix)            Liens over all or any part of the assets of the Borrower or
any Significant Subsidiary constituting a specific construction project or
generating plant as security for any indebtedness incurred for the purpose of
financing all or such part, as the case may be, of such construction project or
generating plant, and Liens and charges incidental to such construction;

    (x)            the right reserved to, or vested in, any municipality or
public authority by the terms of any right, power, franchise, grant, license or
permit, or by any provision of law, to purchase or recapture or designate a
purchaser of any property;

    (xi)            Liens on property or assets of any Significant Subsidiary in
favor of the Borrower;

    (xii)            Liens with respect to which cash in the amount of such
Liens has been deposited with the Administrative Agent;

    (xiii)            Liens incurred in connection with Qualified Receivables
Transactions;

    (xiv)            Liens on or over specific assets hereafter acquired which
are created or assumed contemporaneously with, or within 120 days after, such
acquisition, for the sole purpose of financing or refinancing the acquisition of
such assets, together with the proceeds and products of such assets;

    (xv)            Liens on conservation investment assets as security for
obligations incurred in financing or refinancing bondable conservation
investments in accordance with the laws of the State of Washington;

    (xvi)            Liens securing Capitalized Lease Obligations, provided that
any such Lien attaches solely to the property so leased; and

    (xvii)            other Liens securing Indebtedness in an aggregate amount
not exceeding $75,000,000.

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    6.11.           Debt to Capitalization Ratio. Not permit the aggregate
outstanding principal amount of all Consolidated Indebtedness to exceed 65% of
Total Capitalization as of the last day of any fiscal quarter of the Borrower.

    6.12.           Minimum Interest Coverage Ratio. Not permit the ratio of (i)
EBIT for any period of four consecutive fiscal quarters of the Borrower ending
on the last day of a fiscal quarter to (ii) consolidated interest expense of the
Borrower and its Subsidiaries for such period to be less than (a) 1.75 to 1.0
for the fiscal quarter ending December 31, 2002 and (b) 2.0 to 1.0 thereafter.

    6.13.           Merger and Consolidation. Not merge with or into or
consolidate with or into any other corporation or entity, unless (i) immediately
after giving effect thereto, no event shall occur and be continuing which
constitutes a Default or Unmatured Default, (ii) the surviving or resulting
person, as the case may be, assumes and agrees in writing to pay and perform all
of the obligations of the Borrower hereunder, (iii) the surviving or resulting
person, as the case may be, qualifies to do business in the State of Washington,
and (iv) the surviving or resulting person, as the case may be, has a net worth
(as determined in accordance with Agreement Accounting Principles) at least
equal to the net worth of the Borrower at the end of the fiscal quarter
immediately preceding the effective date of such consolidation or merger.

    6.14.           Disposition of Assets. Not sell, lease, assign, transfer or
otherwise dispose of any asset or interest therein, except that this Section
6.14 shall not apply to (a) any disposition of any asset or any interest therein
in the ordinary course of business, (b) any disposition of obsolete or retired
property not used or useful in its business, (c) any disposition of any asset or
interest therein (i) for cash or cash equivalents or (ii) in exchange for
utility plant, equipment or other utility assets, other than notes or other
obligations, in each case equal to the fair market value (as determined in good
faith by the Board of Directors of the Borrower) of such asset or interest
therein, and provided that such disposition does not constitute a disposition of
all or substantially all of the assets of the Borrower, (d) any disposition of
an asset or any interest therein (exclusive of any disposition permitted by
clause (e)) in exchange for notes or other obligations substantially equal to
the fair market value (as determined in good faith by the Board of Directors of
the Borrower) of such asset or interest therein, provided that the aggregate
amount of notes or other obligations received after the date hereof from any one
obligor in one transaction or a series of transactions shall not exceed 15% of
the net book value of the assets of the Borrower, (e) any disposition of
accounts receivable, notes receivable or unbilled revenue, the rights related to
any of the foregoing and property related to any of the foregoing in connection
with Qualified Receivables Transactions and (f) any other disposition of an
asset or interest therein (exclusive of any disposition permitted under any of
the foregoing clauses (a) through (e)) to an Affiliate of the Borrower in
exchange for notes or other obligations substantially equal to the fair market
value (as determined in good faith by the Board of Directors of the Borrower) of
such asset or interest therein, provided that the aggregate amount of notes or
other obligations received by the Borrower from Affiliates of the Borrower in
exchange for any asset or interest therein after the date hereof shall not
exceed 7.5% of the net book value of the assets of the Borrower.

    6.15.           Affiliates. Without limiting Section 6.14(e), not, and not
permit any Significant Subsidiary to, enter into any transaction (including,
without limitation, the purchase or sale of any Property or service, but
excluding any transaction between the Borrower and any Significant Subsidiary or
between Significant Subsidiaries) with, or make any payment or transfer to, any
Affiliate except (a) in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower’s or such Significant Subsidiary’s
business and upon fair and reasonable terms no less favorable to the Borrower or
such Significant Subsidiary than the Borrower or such Significant Subsidiary
would obtain in a comparable arms length transaction or (b) in connection with a
Qualified Receivables Transaction permitted under this Agreement.

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    6.16.           Investments. Not, and not permit any Subsidiary to, make or
suffer to exist any Investments (including, without limitation, loans and
advances to, and other Investments in, Subsidiaries), or commitments therefor,
or to create any Subsidiary or to become or remain a partner in any partnership
or joint venture, or to make any Acquisition of any Person, except:

    (i)        Cash Equivalent Investments;

    (ii)               existing Investments in Subsidiaries and other
Investments in existence on the date hereof and described in Schedule 6.16;

    (iii)               Investments made to consummate Permitted Acquisitions;

    (iv)               any loan or advance by any Subsidiary to the Borrower;

    (v)               Investments comprised of capital contributions (whether in
the form of cash, a note or other assets) or intercompany loans to a Subsidiary
or other special purpose entity created solely to engage in a Qualified
Receivables Transaction or otherwise resulting from transfers of assets
permitted by Section 6.14(e) to such a special purpose entity;

    (vi)               Derivative financial instruments and other similar
instruments entered into in the ordinary course of business for bona fide
hedging purposes and not for speculation; and

    (vii)               other Investments not to exceed $25,000,000 at any time
outstanding.

ARTICLE VII

DEFAULTS

        The occurrence of any one or more of the following events shall
constitute a Default:

    7.1.            Any representation or warranty made or deemed made by the
Borrower or any of its Subsidiaries to the Lenders or the Administrative Agent
under or in connection with this Agreement, any Loan Document, or any
certificate or information delivered in connection with this Agreement or any
other Loan Document shall be materially false on the date as of which made.

    7.2.            Nonpayment of principal of any Loan when due, nonpayment of
any Reimbursement Obligation within two Business Days after the same becomes due
(provided that the Borrower receives notice of the existence of such
Reimbursement Obligation), or nonpayment of interest upon any Loan or of any
facility fee, LC Fee or other obligations under any of the Loan Documents within
five days after the same becomes due.

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    7.3.            The breach by the Borrower of any of the terms or provisions
of Section 6.7, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15 or 6.16.

    7.4.            The breach by the Borrower (other than a breach which
constitutes a Default under another Section of this Article VII) of any of the
terms or provisions of this Agreement which is not remedied within thirty days
after written notice from the Administrative Agent or any Lender.

    7.5.            Failure of the Borrower or any Subsidiary to pay when due
any Indebtedness aggregating in excess of $25,000,000 (“Material Indebtedness”);
or the default by the Borrower or any Subsidiary in the performance (beyond the
applicable grace period with respect thereto, if any) of any term, provision or
condition contained in any agreement under which any such Material Indebtedness
was created or is governed, or any other event shall occur or condition exist,
the effect of which default or event is to cause, or to permit the holder or
holders of such Material Indebtedness to cause, such Material Indebtedness to
become due prior to its stated maturity; or any Material Indebtedness of the
Borrower or any Subsidiary shall be declared to be due and payable or required
to be prepaid or repurchased (other than by a regularly scheduled payment) prior
to the stated maturity thereof; or the Borrower or any of its Subsidiaries shall
not pay, or admit in writing its inability to pay, its debts generally as they
become due.

    7.6.            The Borrower or any Significant Subsidiary shall (i) have an
order for relief entered with respect to it under the Federal bankruptcy laws as
now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any Substantial Portion of its Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (v) take any corporate or partnership action to authorize or
effect any of the foregoing actions set forth in this Section 7.6 or (vi) fail
to contest in good faith any appointment or proceeding described in Section 7.7.

    7.7.            Without the application, approval or consent of the Borrower
or the applicable Significant Subsidiary, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for the Borrower or such
Significant Subsidiary or any Substantial Portion of its Property, or a
proceeding described in Section 7.6(iv) shall be instituted against the Borrower
or such Significant Subsidiary and such appointment continues undischarged or
such proceeding continues undismissed or unstayed for a period of 30 consecutive
days.

    7.8.            Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
portion of the Property of the Borrower or its Significant Subsidiaries which,
when taken together with all other Property of the Borrower and its Subsidiaries
so condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such action occurs,
constitutes a Substantial Portion.

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    7.9.            The Borrower or any Subsidiary shall fail within 60 days to
pay, bond or otherwise discharge one or more (i) judgments or orders for the
payment of money in excess of $25,000,000 (or the equivalent thereof in
currencies other than U.S. dollars) in the aggregate, or (ii) nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgments, in any such case,
is/are not stayed on appeal or otherwise being appropriately contested in good
faith.

    7.10.            The Borrower or any Subsidiary shall (i) be the subject of
any proceeding or investigation pertaining to the release by the Borrower, any
Subsidiary or any other Person of any toxic or hazardous waste or substance into
the environment, or (ii) violate any Environmental Law, which, in the case of an
event described in clause (i) or clause (ii), could reasonably be expected to
have a Material Adverse Effect.

    7.11.            Any Change in Control shall occur.

    7.12.            The Borrower or any ERISA Affiliate incurs any liability
pursuant to Title IV of ERISA to the PBGC (other than liability for premium
payments which are paid when due) or a Benefit Plan in excess of $10,000,000
pursuant to Title IV of ERISA, or the Borrower or any ERISA Affiliate incurs, or
receives notice of, any withdrawal liability pursuant to Title IV of ERISA to,
or from, a Benefit Plan or Multiemployer Benefit Plan (determined as of the date
of notice of such withdrawal liability) in excess of $10,000,000.

    7.13.            Any of the following events occur with respect to any
Benefit Plan of the Borrower or any ERISA Affiliate: (a) a Reportable Event, (b)
the failure to make a required installment or other payment (within the meaning
of section 302(f) of ERISA), (c) the appointment of a trustee to administer any
such Benefit Plan, (d) the institution by the PBGC of proceedings to terminate
any such Benefit Plan, (e) the implementation by the Borrower or any ERISA
Affiliate of any steps to terminate any such Benefit Plan, or (f) the receipt of
notice by the Borrower or any ERISA Affiliate that any Multiemployer Benefit
Plan is in reorganization or is insolvent and, in the case of any event
described in clauses (a) through (f) above, such occurrence, individually or
together with all other such occurrences, subjects the Borrower or any ERISA
Affiliate to a liability in excess of $25,000,000.

ARTICLE VIII

ACCELERATION,WAIVERS,AMENDMENTS AND REMEDIES

    8.1.           Acceleration. (i) If any Default described in Section 7.6 or
7.7 occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder and the obligation and power of the LC Issuer to issue Facility
LCs shall automatically terminate and the Obligations shall immediately become
due and payable without any election or action on the part of the Administrative
Agent, the LC Issuer or any Lender. If any other Default occurs and is
continuing, the Required Lenders (or the Administrative Agent with the consent
of the Required Lenders) may terminate or suspend the obligations of the Lenders
to make Loans hereunder and the obligation and power of the LC Issuer to issue
Facility LCs, or declare the Obligations to be due and payable, or both,
whereupon such obligations shall be terminated or suspended and/or the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower hereby
expressly waives.

    (ii)            If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder and the obligation and power of the LC Issuer to issue Facility LCs as
a result of any Default (other than any Default described in Section 7.6 or 7.7
with respect to the Borrower) and before any judgment or decree for the payment
of the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) shall so direct, the Administrative Agent shall, by
notice to the Borrower, rescind and annul such acceleration and/or termination.

    8.2.           Amendments. Subject to the provisions of this Article VIII,
the Required Lenders (or the Administrative Agent with the consent in writing of
the Required Lenders) and the Borrower may enter into agreements supplemental
hereto for the purpose of adding or modifying any provisions to the Loan
Documents or changing in any manner the rights of the Lenders or the Borrower
hereunder or waiving any Default hereunder; provided that no such supplemental
agreement shall, without the consent of all of the Lenders:

    (i)            Extend the final maturity of any Loan, or extend the expiry
date of any Facility LC to a date after the Facility Termination Date or
postpone any regularly scheduled payment of principal of any Loan or forgive all
or any portion of the principal amount thereof or reduce the rate or extend the
time of payment of interest or fees thereon or any Reimbursement Obligation
related thereto.

    (ii)            Reduce the percentage specified in the definition of
Required Lenders.

    (iii)            Extend the Facility Termination Date or reduce the amount
of, or extend the payment date for, the payments required under Section 2.1.3 or
increase the amount of the Aggregate Commitment, the Commitment of any Lender
hereunder or the commitment to issue Facility LCs, or permit the Borrower to
assign its rights under this Agreement.

    (iv)            Amend this Section 8.2.

No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent, and no amendment of any provision relating to the LC Issuer shall be
effective without the written consent of the LC Issuer. The Administrative Agent
may waive payment of the fee required under Section 12.3.2 without obtaining the
consent of any other party to this Agreement.

    8.3.           Preservation of Rights. No delay or omission of the Lenders,
the LC Issuer or the Administrative Agent to exercise any right under the Loan
Documents shall impair such right or be construed to be a waiver of any Default
or an acquiescence therein, and the making of a Credit Extension notwithstanding
the existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Administrative Agent, the LC Issuer and the Lenders until the Obligations
have been paid in full.

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ARTICLE IX

GENERAL PROVISIONS

    9.1.           Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive the making
of the Credit Extensions herein contemplated.

    9.2.           Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any applicable
statute or regulation.

    9.3.           Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.

    9.4.           Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Administrative Agent, the LC
Issuer and the Lenders and supersede all prior agreements and understandings
among the Borrower, the Administrative Agent, the LC Issuer and the Lenders
relating to the subject matter thereof other than documentation of the fees
described in Section 2.16.4 and Section 10.13.

    9.5.           Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the extent to which
the Administrative Agent is authorized to act as such). The failure of any
Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns; provided
that the parties hereto expressly agree that the Arrangers shall enjoy the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on their own behalf
and in their own name to the same extent as if they were a party to this
Agreement.

    9.6.           Expenses; Indemnification. (i) The Borrower shall reimburse
the Administrative Agent and each Arranger for their reasonable costs, internal
charges and reasonable out-of-pocket expenses (including reasonable attorneys’
fees and time charges of attorneys for the Administrative Agent and the
Arrangers, which attorneys may be employees of the Administrative Agent or
either Arranger) paid or incurred by the Administrative Agent or either Arranger
in connection with the preparation, negotiation, execution, delivery,
syndication, distribution (including via the internet), amendment and
modification of the Loan Documents and the review and administration of the Loan
Documents in connection with any request made by the Borrower; provided that the
Borrower shall only be required to reimburse the Administrative Agent and the
Arrangers for the fees and time charges of one law firm. The Borrower also
agrees to reimburse the Administrative Agent, the LC Issuer, the Arrangers and
the Lenders for their reasonable costs, internal charges and out-of-pocket
expenses (including reasonable attorneys’ fees and time charges of attorneys for
the Administrative Agent, the LC Issuer, the Arrangers and the Lenders, which
attorneys may be employees of the Administrative Agent, the LC Issuer, the
Arrangers or the Lenders) paid or incurred by the Administrative Agent, the LC
Issuer, either Arranger or any Lender in connection with the collection and
enforcement of the Loan Documents during the existence of any Default.

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    (ii)            The Borrower hereby further agrees to indemnify the
Administrative Agent, the LC Issuer, each Arranger, each Lender, their
respective Affiliates, and each of their directors, officers and employees
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Administrative Agent, either Arranger,
any Lender or any Affiliate is a party thereto) which any of them may pay or
incur arising out of or relating to this Agreement, the other Loan Documents,
the transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Credit Extension hereunder except to
the extent that they are determined in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the party seeking indemnification. The obligations of the
Borrower under this Section 9.6 shall survive the termination of this Agreement.

    9.7.           Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Administrative Agent
with sufficient counterparts so that the Administrative Agent may furnish one to
each of the Lenders.

    9.8.           Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.

    9.9.           Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.

    9.10.           Nonliability of Lenders. The relationship between the
Borrower on the one hand and the Lenders, the LC Issuer and the Administrative
Agent on the other hand shall be solely that of borrower and lender. Neither the
Administrative Agent, the LC Issuer nor any Lender shall have any fiduciary
responsibilities to the Borrower. Neither the Administrative Agent, the LC
Issuer nor any Lender undertakes any responsibility to the Borrower to review or
inform the Borrower of any matter in connection with any phase of the Borrower’s
business or operations. The Borrower agrees that neither the Administrative
Agent, the LC Issuer nor any Lender shall have liability to the Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by the
Borrower in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Administrative Agent, the LC Issuer nor any Lender shall have any liability with
respect to, and the Borrower hereby waives, releases and agrees not to sue for,
any special, indirect or consequential damages suffered by the Borrower in
connection with, arising out of, or in any way related to the Loan Documents or
the transactions contemplated thereby.

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    9.11.           Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, (ii) to legal counsel, accountants and other
professional advisors to such Lender, (iii) to regulatory officials, (iv) to any
Person as requested pursuant to or as required by law, regulation, or legal
process, (v) to any Person in connection with any legal proceeding to which such
Lender is a party, (vi) permitted by Section 12.4 or (vii) made with the consent
of the Borrower.

    9.12.           Non-reliance. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U) for the
repayment of the Credit Extensions provided for herein.

    9.13.           Disclosure. The Borrower and each Lender hereby (i)
acknowledge and agree that Bank One and/or its Affiliates from time to time may
hold investments in, make other loans to or have other relationships with the
Borrower and its Affiliates, and (ii) waive any liability of Bank One or such
Affiliate of Bank One to the Borrower or any Lender, respectively, arising out
of or resulting from such investments, loans or relationships other than
liabilities arising out of the gross negligence or willful misconduct of Bank
One or its Affiliates.

ARTICLE X

THE ADMINISTRATIVE AGENT

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

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

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

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

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

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

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

    10.8.           Administrative Agent’s Reimbursement and Indemnification.
The Lenders agree to reimburse and indemnify the Administrative Agent ratably in
proportion to their respective Commitments (or, if the Commitments have been
terminated, in proportion to their Commitments immediately prior to such
termination) (i) for any amounts not reimbursed by the Borrower for which the
Administrative Agent is entitled to reimbursement by the Borrower under the Loan
Documents, (ii) for any other expenses incurred by the Administrative Agent on
behalf of the Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents (including, without
limitation, for any expenses incurred by the Administrative Agent in connection
with any dispute between the Administrative Agent and any Lender or between two
or more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby (including, without limitation, for any
such amounts incurred by or asserted against the Administrative Agent in
connection with any dispute between the Administrative Agent and any Lender or
between two or more of the Lenders), or the enforcement of any of the terms of
the Loan Documents or of any such other documents, provided that (i) no Lender
shall be liable for any of the foregoing to the extent any of the foregoing is
found in a final non-appealable judgment by a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of the
Administrative Agent and (ii) any indemnification required pursuant to Section
3.5(vii) shall, notwithstanding the provisions of this Section 10.8, be paid by
the relevant Lender in accordance with the provisions thereof. The obligations
of the Lenders under this Section 10.8 shall survive payment of the Obligations
and termination of this Agreement.

    10.9.           Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Unmatured
Default hereunder unless the Administrative Agent has received written notice
from a Lender or the Borrower referring to this Agreement describing such
Default or Unmatured 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 prompt notice thereof to the Lenders.

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

    10.11.           Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent, or any
other Lender and based on the financial statements prepared by the Borrower and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent, or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.

    10.12.           Successor Administrative Agent. The Administrative Agent
may resign at any time by giving written notice thereof to the Lenders and the
Borrower, such resignation to be effective upon the appointment of a successor
Administrative Agent or, if no successor Administrative Agent has been
appointed, 45 days after the retiring Administrative Agent gives notice of its
intention to resign. The Administrative Agent may be removed at any time with or
without cause by written notice received by the Administrative Agent from the
Required Lenders, such removal to be effective on the date specified by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
with the consent of the Borrower (so long as no Default or Unmatured Default
exists), which consent shall not be unreasonably withheld or delayed, shall have
the right to appoint, on behalf of the Borrower and the Lenders, a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Lenders within thirty days after the resigning
Administrative Agent’s giving notice of its intention to resign, then the
resigning Administrative Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Administrative Agent. Notwithstanding the previous
sentence, the Administrative Agent may at any time without the consent of the
Borrower or any Lender, appoint any of its Affiliates which is a commercial bank
as a successor Administrative Agent hereunder. If the Administrative Agent has
resigned or been removed and no successor Administrative Agent has been
appointed, the Lenders may perform all the duties of the Administrative Agent
hereunder and the Borrower shall make all payments in respect of the Obligations
to the applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted the
appointment. Any such successor Administrative Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Administrative Agent. Upon the effectiveness of the
resignation or removal of the Administrative Agent, the resigning or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the
resignation or removal of an Administrative Agent, the provisions of this
Article X shall continue in effect for the benefit of such Administrative Agent
in respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Administrative Agent by merger, or the
Administrative Agent assigns its duties and obligations to an Affiliate pursuant
to this Section 10.12, then the term “Prime Rate” as used in this Agreement
shall mean the prime rate, corporate base rate or other analogous rate of the
new Administrative Agent.

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    10.13.           Administrative Agent’s Fee. The Borrower agrees to pay to
the Administrative Agent, for its own account, the fees agreed to by the
Borrower and the Administrative Agent pursuant to the commitment letter dated of
even date herewith, or as otherwise agreed from time to time.

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

    10.15.           Other Agents. No Lender identified on the facing page of
this Agreement or otherwise herein, or in any amendment hereof or other document
related hereto, as being the “Syndication Agent” or the “Documentation Agent”
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement in such capacity. Each Lender acknowledges that it has not
relied, and will not rely, on any Person so identified in deciding to enter into
this Agreement or in taking or refraining from taking any action hereunder or
pursuant hereto.

ARTICLE XI

SETOFF; PAYMENTS

    11.1.           Setoff. In addition to, and without limitation of, any
rights of the Lenders under applicable law, if the Required Lenders determine
that the Borrower is insolvent, however evidenced, or any Default occurs and is
continuing, any and all deposits (including all account balances, whether
provisional or final and whether or not collected or available) and any other
Indebtedness at any time held or owing by any Lender or any Affiliate of any
Lender to or for the credit or account of the Borrower, may be offset and
applied toward the payment of the Obligations owing to such Lender, whether or
not the Obligations, or any part thereof, shall then be due.

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    11.2.           Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Outstanding Credit Exposure (other
than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater
proportion than that received by any other Lender, such Lender agrees, promptly
upon demand, to purchase a portion of the Aggregate Outstanding Credit Exposure
held by the other Lenders so that after such purchase each Lender will hold its
Pro Rata Share of the Aggregate Outstanding Credit Exposure. If any Lender,
whether in connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligations or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their respective Pro Rata
Share of the Aggregate Outstanding Credit Exposure. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.

ARTICLE XII

BENEFIT OF AGREEMENT;ASSIGNMENTS; PARTICIPATIONS

    12.1.           Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender of its rights and
obligations under the Loan Documents must be made in compliance with Section
12.3. The parties to this Agreement acknowledge that clause (ii) of this Section
12.1 relates only to absolute assignments and does not prohibit assignments
creating security interests, including, without limitation, any pledge or
assignment by any Lender of all or any portion of its rights under this
Agreement and any Note to a Federal Reserve Bank; provided that no such pledge
or assignment creating a security interest shall release the transferor Lender
from its obligations hereunder unless and until the parties thereto have
complied with the provisions of Section 12.3. The Administrative Agent may treat
the Person which made any Loan or which holds any Note as the owner thereof for
all purposes hereof unless and until such Person complies with Section 12.3;
provided that the Administrative Agent may in its discretion (but shall not be
required to) follow instructions from the Person which made any Loan or which
holds any Note to direct payments relating to such Loan or Note to another
Person. Any assignee of the rights to any Loan or any Note agrees by acceptance
of such assignment to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the owner of the
rights to any Loan (whether or not a Note has been issued in evidence thereof),
shall be conclusive and binding on any subsequent holder or assignee of the
rights to such Loan.

    12.2.           Participations.

    12.2.1.                  Permitted Participants; Effect. Any Lender may at
any time sell to one or more banks or other entities (“Participants”)
participating interests in any Outstanding Credit Exposure of such Lender, any
Note held by such Lender, any Commitment of such Lender or any other interest of
such Lender under the Loan Documents; provided that such Lender shall promptly
provide written notice of such sale to the Borrower. In the event of any such
sale by a Lender of participating interests to a Participant, such Lender’s
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the owner of its Outstanding Credit
Exposure and the holder of any Note issued to it in evidence thereof for all
purposes under the Loan Documents, all amounts payable by the Borrower under
this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under the Loan Documents.

    12.2.2.           Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Credit Extension or Commitment in
which such Participant has an interest which forgives principal, interest, fees
or any Reimbursement Obligations or reduces the interest rate or fees payable
with respect to any such Loan or Commitment, extends the Facility Termination
Date, postpones any date fixed for any regularly-scheduled payment of principal
of, or interest or fees on, any such Credit Extension or Commitment, releases
any guarantor of any such Credit Extension or releases all or substantially all
of the collateral, if any, securing any such Credit Extension.

    12.2.3.           Benefit of Setoff. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in Section 11.1
in respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Loan Documents, provided that each
Lender shall retain the right of setoff provided in Section 11.1 with respect to
the amount of participating interests sold to each Participant. The Lenders
agree to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 11.2 as if each Participant were a Lender.
The Borrower further agrees that each Participant shall be entitled to the
benefits of Sections 3.1, 3.2, 3.4 and 3.5 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 12.3,
provided that (i) a Participant shall not be entitled to receive any greater
payment under Section 3.1, 3.2, 3.4 or 3.5 than the Lender which sold the
participating interest to such Participant would have received had it retained
such interest for its own account, unless the sale of such interest to such
Participant is made with the prior written consent of the Borrower, and (ii) any
Participant not incorporated under the laws of the United States of America or
any State thereof agrees to comply with the provisions of Section 3.5 to the
same extent as if it were a Lender.

    12.3.           Assignments.

    12.3.1.           Permitted Assignments. Any Lender may at any time assign
to one or more banks or other entities (“Purchasers”) all or any part of its
rights and obligations under the Loan Documents (“Lender Assignment”). Such
Lender Assignment shall be substantially in the form of Exhibit C or in such
other form as may be agreed to by the parties thereto. The consent of the
Borrower and the Administrative Agent shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not a Lender or an
Affiliate thereof; provided that if a Default has occurred and is continuing,
the consent of the Borrower shall not be required. Such consents shall not be
unreasonably withheld or delayed. Each such assignment with respect to a
Purchaser which is not a Lender or an Affiliate thereof shall (unless each of
the Borrower and the Administrative Agent otherwise consents) be in an amount
not less than the lesser of (i) $5,000,000 or (ii) the remaining amount of the
assigning Lender’s Commitment (calculated as at the date of such assignment) or
outstanding Loans (if the applicable Commitment has been terminated).

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    12.3.2.           Effect; Effective Date. Upon (i) delivery to the
Administrative Agent of an assignment, together with any consents required by
Section 12.3.1, and (ii) payment of a $3,500 fee to the Administrative Agent for
processing such assignment (unless such fee is waived by the Administrative
Agent), such assignment shall become effective on the effective date specified
in such assignment. The assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the purchase
of the Commitment and Outstanding Credit Exposure under the applicable
assignment agreement constitutes “plan assets” as defined under ERISA and that
the rights and interests of the Purchaser in and under the Loan Documents will
not be “plan assets” under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by or on behalf of the Lenders
and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto, and no
further consent or action by the Borrower, the Lenders or the Administrative
Agent shall be required to release the transferor Lender with respect to the
percentage of the Aggregate Commitment and Loans assigned to such Purchaser.
Upon the consummation of any assignment to a Purchaser pursuant to this Section
12.3.2, the transferor Lender, the Administrative Agent and the Borrower shall,
if the transferor Lender or the Purchaser desires that its Loans be evidenced by
Notes, make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Commitments, as adjusted pursuant
to such assignment.

    12.4.           Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a “Transferee”) and
any prospective Transferee any and all information in such Lender’s possession
concerning the creditworthiness of the Borrower and its Subsidiaries; provided
that each Transferee and prospective Transferee agrees to be bound by Section
9.11 of this Agreement.

    12.5.           Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 3.5(iv).

ARTICLE XIII

NOTICES

    13.1.           Notices. Except as otherwise permitted by Section 2.11 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Administrative Agent, at its address or
facsimile number set forth on the signature pages hereof, (y) in the case of any
Lender, at its address or facsimile number set forth below its signature hereto
or (z) in the case of any party, at such other address or facsimile number as
such party may hereafter specify for the purpose by notice to the Administrative
Agent and the Borrower in accordance with the provisions of this Section 13.1.
Each such notice, request or other communication shall be effective (i) if given
by facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail,
four Business Days after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, or (iii) if given by any other
means, when delivered (or, in the case of electronic transmission, received) at
the address specified in this Section; provided that notices to the
Administrative Agent under Article II shall not be effective until received.

    13.2.           Change of Address. The Borrower, the Administrative Agent
and any Lender may each change the address for service of notice upon it by a
notice in writing to the other parties hereto.

ARTICLE XIV

COUNTERPARTS

        This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart.

ARTICLE XV

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

    15.1.           CHOICE OF LAW . THE LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS
SECTION 105/5-1 ET SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.

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

    15.3.            WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT, THE LC ISSUER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

--------------------------------------------------------------------------------

        IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the
Administrative Agent have executed this Agreement as of the date first above
written.

  PUGET SOUND ENERGY, INC.

By:

--------------------------------------------------------------------------------

Name:

--------------------------------------------------------------------------------

Title:

--------------------------------------------------------------------------------

Puget Sound Energy, Inc.
411 108th Ave. NE OBC-3
Bellevue, WA 98004
Attention: Donald E.Gaines
Telephone: 425-462-3870
FAX: 425-462-3515

S-1

--------------------------------------------------------------------------------

  BANK ONE, NA (MAIN OFFICE CHICAGO),
Individually, as LC Issuer and as Administrative Agent

By:  

--------------------------------------------------------------------------------

Name:  

--------------------------------------------------------------------------------

Title:

--------------------------------------------------------------------------------

      Operations Contact:       Bank One, NA
1 Bank One Plaza
Chicago, Illinois 60670
Attention: Kenneth Fecko
Telephone: 312-732-4616
FAX: 312-732-4840
Email: kenneth_fecko@bankone.com   Credit Contact:   Attention: Sharon Webb
Telephone: 312-732-7437
FAX: 312-732-5435
Email: sharon_k_webb@bankone.com

S-2

--------------------------------------------------------------------------------

  UNION BANK OF CALIFORNIA, N.A.,
Individually and as Syndication Agent

By:

--------------------------------------------------------------------------------

Name:

--------------------------------------------------------------------------------

Title:

--------------------------------------------------------------------------------

      Operations Contact:       Union Bank of California, N.A.
CLSO, Commercial Loan Operations
601 Potrero Grande, 2nd Floor
Monterey Park, CA 91754
Attention: Shirley Davis
Telephone: 323-720-2870
FAX: 323-720-2252/2251
Email: Shirley.Davis@uboc.com       Credit Contact:       Union Bank of
California, N.A.
445 South Figueroa Street
Los Angeles, CA 90071
Attention: Sonja I. Sevcik
Telephone: 213-236-5724
FAX: 213-236-4096

S-3

--------------------------------------------------------------------------------

  KEYBANK NATIONAL ASSOCIATION,
Individually and as Documentation Agent

By:

--------------------------------------------------------------------------------

Name:

--------------------------------------------------------------------------------

Title:

--------------------------------------------------------------------------------

Operations Contact:

KeyBank National Association
127 Public Square
Cleveland, OH 44114
Attention: Kathy Koenig
Telephone: 216-689-4228
FAX: 216-689-4981
Email: Kathy_A_Koenig@key.com

Credit Contact:

Attention: Sherrie Manson
Telephone: 216-689-3443
FAX: 216-689-4981
Email: Sherrie_Manson@key.com

S-4

--------------------------------------------------------------------------------

  JPMORGAN CHASE BANK

By:

--------------------------------------------------------------------------------

Name:

--------------------------------------------------------------------------------

Title:

--------------------------------------------------------------------------------

    Operations Contact:

JPMorgan Chase Bank
1111 Fanin, 10th Floor
Houston, TX 77002
Attention: Jamie Kurtz
Telephone: 713-750-23787
FAX: 713-427-6307
Email: jamie.kurtz@jpmorgan.com

Credit Contact:
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017
Attention: Michael DeForge
Telephone: 212-270-1656
FAX: 212-270-1603
Email: Michael.J.Deforge@jpmorgan.com

S-5

--------------------------------------------------------------------------------

  WASHINGTON MUTUAL BANK

By:

--------------------------------------------------------------------------------

Name:

--------------------------------------------------------------------------------

Title:

--------------------------------------------------------------------------------

    Operations Contact:

Washington Mutual Bank
1201 3rd Avenue, WMT 1445
Suite 1445
Seattle, WA 98101
Attention: Toni Dale
Telephone: 206-377-5214
FAX: 206-377-3812
Email: Toni.dale@wamu.net

Credit Contact:

Attention: Bruce Kendrex
Telephone: 206-377-3888
FAX: 206-377-3812
Email: Bruce.kendrex@wamu.net

S-6

--------------------------------------------------------------------------------

  U.S. BANK NATIONAL ASSOCIATION

By:

--------------------------------------------------------------------------------

Name:

--------------------------------------------------------------------------------

Title:

--------------------------------------------------------------------------------

    Operations Contact:

U.S. Bank National Association
1420 Fifth Avenue, 11th Floor
Seattle, WA 98101
Attention: Gail Fortun
Telephone: 206-587-5212
FAX: 206-344-3741
Email: Gail.Fortun@usbank.com

Credit Contact:

Attention: Wilfred Jack
Telephone: 206-344-3643
FAX: 206-344-3654
Email: Wilfred.Jack@usbank.com

S-7

--------------------------------------------------------------------------------

  BANK OF AMERICA, N.A.

By:

--------------------------------------------------------------------------------

Name:

--------------------------------------------------------------------------------

Title:

--------------------------------------------------------------------------------

    Operations Contact:

Bank of America, N.A.
800 5th Avenue, 35th Floor
Seattle, WA 98104
Attention: Shari Abbott
Telephone: 206-358-8549
FAX: 206-585-5641
Email: sharolynn.k.abbott@bankofamerica.com

Credit Contact:

Attention: Mary Knell
Telephone: 206-358-3588
FAX: 206-585-5641
Email: mary.knell@bankofamerica.com

S-8

--------------------------------------------------------------------------------

  WELLS FARGO BANK, NATIONAL ASSOCIATION

By:

--------------------------------------------------------------------------------

Name:

--------------------------------------------------------------------------------

Title:

--------------------------------------------------------------------------------

    Operations Contact:

Wells Fargo Bank, National Association
201 Third Street, MAC A0187-081
San Francisco, CA 94103
Attention: Ginnie Padgett
Telephone: 415-477-5374
FAX: 415-512-1943 or 415-979-0675

Credit Contact:

Wells Fargo Bank, National Association
999 Third Avenue, 11th Floor
MAC P6540-11E
Seattle, WA 98104
Attention: Deb Watson
Telephone: 206-292-3668
FAX: 206-292-3595
Email: watsonds@wellsfargo.com

S-9

--------------------------------------------------------------------------------

  PACIFIC NORTHWEST BANK

By:

--------------------------------------------------------------------------------

Name:

--------------------------------------------------------------------------------

Title:

--------------------------------------------------------------------------------

    Operations Contact:

Pacific Northwest Bank
1111 Third Avenue, Suite 250
Seattle, WA 98101
Attention: Carmen Moore
Telephone: 206-774-7976
FAX: 206-442-5042
Email: moorec@pnwbank.com

Credit Contact:

Attention: Carlos Guangorena
Telephone: 206-224-8784
FAX: 206-587-2632
Email: guangc@pnwbank.com

S-10

--------------------------------------------------------------------------------

EXHIBIT A
FORM OF OPINION OF
PERKINS COIE LLP

A-1

--------------------------------------------------------------------------------

EXHIBIT B
COMPLIANCE CERTIFICATE

To: The Lenders parties to the
Credit Agreement Described Below

            This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of December 23, 2002 (as amended, modified, renewed or
extended from time to time, the “Agreement”) among Puget Sound Energy, Inc. (the
“Borrower”), the lenders party thereto and Bank One, NA, as Administrative Agent
for the Lenders and as LC Issuer. Unless otherwise defined herein, capitalized
terms used in this Compliance Certificate have the meanings ascribed thereto in
the Agreement.

            THE UNDERSIGNED HEREBY CERTIFIES THAT:

            1. I am the duly elected _______________________ of the Borrower;

            2.  Set forth on Attachment 1 and Attachment 2 are true and correct
computations of the financial ratios and restrictions set forth in Sections 6.11
and 6.12 of the Agreement;

            3.  I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrower and its Subsidiaries during the
period from the Closing Date to the date of this Certificate (the “Compliance
Period”); and

            4.  The examinations described in paragraph 3 did not disclose, and
I have no knowledge of, the existence of any condition or event which
constitutes a Default or Unmatured Default during the Compliance Period, except
as set forth below.

            Described below are the exceptions, if any, to paragraph 4 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which the Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:

            The foregoing are made and delivered this_____________day
of____________,______.

B-1

--------------------------------------------------------------------------------

Attachment 1
6.11 Debt to Capitalization Ratio

1.   Consolidated Indebtedness $  

--------------------------------------------------------------------------------

2.   Net Worth $  

--------------------------------------------------------------------------------

3.   Capitalization (sum of item 1 and item 2) $  

--------------------------------------------------------------------------------

          4.   Ratio of item 1 to item 3   _________ to 1.0

Maximum allowed 0.65 to 1.0

B-2

--------------------------------------------------------------------------------

Attachment 2
6.12 Minimum Interest Coverage Ratio

1. Consolidated net income of the Borrower and its Subsidiaries for the four
fiscal quarters ended ______________(the "Computation Period") before dudecting
nterest expense and Federal income tax expense.

  $__________ 2. Consolidated interest expense of the Borrower and its
Subsidiearies for the Computation Period

  $ ___________ 3. Ratio of item 1 to item 2

_________ to 1.0

Minimum Required _________ to 1.0

B-3

--------------------------------------------------------------------------------

EXHIBIT C
ASSIGNMENT AGREEMENT

        This Assignment Agreement (this “Assignment Agreement”) between (the
“Assignor”) and (the “Assignee”) is dated as of _________, _____________.

        The parties hereto agree as follows:

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

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

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

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

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

C-1

--------------------------------------------------------------------------------

        6.  REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR’S
LIABILITY. The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder, (ii) such
interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor is
duly authorized. It is understood and agreed that the assignment and assumption
hereunder are made without recourse to the Assignor and that the Assignor makes
no other representation or warranty of any kind to the Assignee. Neither the
Assignor nor any of its officers, directors, employees, agents or attorneys
shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan Document,
(ii) any representation, warranty or statement made in or in connection with any
of the Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
property, books or records of the Borrower, or (vi) any mistake, error of
judgment, or action taken or omitted to be taken in connection with the Loans or
the Loan Documents.

        7.  REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee (i)
confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements requested by the Assignee and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement, (ii) agrees that
it will, independently and without reliance upon the Administrative Agent, the
Assignor or any other Lender and based on such documents and information at it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, (iii) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under the Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, (iv) confirms that the execution and delivery of
this Assignment Agreement by the Assignee is duly authorized, (v) agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a Lender, (vi)
agrees that its payment instructions and notice instructions are as set forth in
the attachment to Schedule 1, (vii) confirms that none of the funds, monies,
assets or other consideration being used to make the purchase and assumption
hereunder are “plan assets” as defined under ERISA and that its rights, benefits
and interests in and under the Loan Documents will not be “plan assets” under
ERISA, (viii) agrees to indemnify and hold the Assignor harmless against all
losses, costs and expenses (including, without limitation, reasonable attorneys’
fees) and liabilities incurred by the Assignor in connection with or arising in
any manner from the Assignee’s nonperformance of the obligations assumed under
this Assignment Agreement, and (ix) if applicable, attaches the forms prescribed
by the Internal Revenue Service of the United States certifying that the
Assignee is entitled to receive payments under the Loan Documents without
deduction or withholding of any United States federal income taxes.

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

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

C-2

--------------------------------------------------------------------------------

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

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

C-3

--------------------------------------------------------------------------------

SCHEDULE 1
to Assignment Agreement

1.         Description and Date of Credit Agreement: Credit Agreement dated as
of December 23, 2002 among Puget Sound Energy, Inc., various financial
institutions and Bank One, NA, as Administrative Agent.

2.         Date of Assignment Agreement: ___________, ______

3.         Amounts (As of Date of Item 2 above):

   Facility Facility Facility Facility   1*

--------------------------------------------------------------------------------

2*

--------------------------------------------------------------------------------

3*

--------------------------------------------------------------------------------

4*

--------------------------------------------------------------------------------

a. Assignee's percentage
of each Facility purchased
under the Assignment
Agreement**

___________% __________% __________% _________%
  b. Amount of each Facility purchased under the Assignment Agreement
$___________ $__________ $__________ $___________
  4. Assignee's Commitment (or Outstanding Credit Exposure with respect to
terminated Commitments) purchased hereunder:

$___________________________
  5. Proposed Effective Date: _______________________________
  6. Non-standard Rcordation Fee Arrangement N/A*** [Assignor/Assignee
to pay 100% of fee]
[Fee waived by Administrative Agent]

Accepted and Agreed:

S-1-1

--------------------------------------------------------------------------------

[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]    

By:  

--------------------------------------------------------------------------------

  By:  

--------------------------------------------------------------------------------

Title:  

--------------------------------------------------------------------------------

  Title:  

--------------------------------------------------------------------------------

ACCEPTED AND CONSENTED TO*****

BY

[NAME OF BORROWER] ACCEPTED AND CONSENTED TO****

BY

[NAME OF ADMINISTRATIVE AGENT]

By:  

--------------------------------------------------------------------------------

  By:  

--------------------------------------------------------------------------------

Title:  

--------------------------------------------------------------------------------

  Title:  

--------------------------------------------------------------------------------

* Insert specific facility names per Credit Agreement ** Percentage taken to 10
decimal places *** If fee is split 50-50, pick N/A as option **** Delete if not
required by Credit Agreement

S-1-2

--------------------------------------------------------------------------------

Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT

ADMINISTRATIVE INFORMATION SHEET

Attach Assignor’s Administrative Information Sheet, which must
include notice addresses for the Assignor and the Assignee
(Sample form shown below)

ASSIGNOR INFORMATION

Credit Contact:        

          Name:  

--------------------------------------------------------------------------------

  Telephone No.:  

--------------------------------------------------------------------------------

Fax No.:  

--------------------------------------------------------------------------------

  Telex No.:  

--------------------------------------------------------------------------------

      Answerback:  

--------------------------------------------------------------------------------

         

Payment Information:       Name & ABA # of Destination Bank:  

--------------------------------------------------------------------------------

    Account Name & Number for Wire Transfer:  

--------------------------------------------------------------------------------

    Other Instructions:  

--------------------------------------------------------------------------------

    Address for Notices for Assignee:

ASSIGNEE INFORMATION

Credit Contact:        

          Name:  

--------------------------------------------------------------------------------

  Telephone No.:  

--------------------------------------------------------------------------------

Fax No.:  

--------------------------------------------------------------------------------

  Telex No.:  

--------------------------------------------------------------------------------

      Answerback:  

--------------------------------------------------------------------------------

         

Key Operations Contacts:        

          Booking Installation:  

--------------------------------------------------------------------------------

  Booking Installation:  

--------------------------------------------------------------------------------

Name:  

--------------------------------------------------------------------------------

  Name:  

--------------------------------------------------------------------------------

Telephone No.:  

--------------------------------------------------------------------------------

  Telephone No.:  

--------------------------------------------------------------------------------

Fax No.:  

--------------------------------------------------------------------------------

  Fax No.:  

--------------------------------------------------------------------------------

Telex No.:  

--------------------------------------------------------------------------------

  Telex No.:  

--------------------------------------------------------------------------------

Answerback:  

--------------------------------------------------------------------------------

  Answerback:  

--------------------------------------------------------------------------------

S-1-3

--------------------------------------------------------------------------------

Payment Information:       Name & ABA # of Destination Bank:  

--------------------------------------------------------------------------------

    Account Name & Number for Wire Transfer:  

--------------------------------------------------------------------------------

    Other Instructions:  

--------------------------------------------------------------------------------

    Address for Notices for Assignee:

S-1-4

--------------------------------------------------------------------------------

BANK ONE INFORMATION

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

Initial Funding Contact: Subsequent Operations Contact:    

Name:    

--------------------------------------------------------------------------------

  Name:    

--------------------------------------------------------------------------------

Telephone No.:    (312)

--------------------------------------------------------------------------------

  Telephone No.    (312)

--------------------------------------------------------------------------------

Fax No.:    (312)

--------------------------------------------------------------------------------

  Fax No.:    (312)

--------------------------------------------------------------------------------

      Bank One Telex No.:    

--------------------------------------------------------------------------------

Initial Funding Standards:           Bank One wire Instructions: Bank One, NA,
ABA #
LS2 Incoming Account #
Ref:____________________       Address for Notices for Bank One:   1 Bank One
Plaza, Chicago, IL 60670
Attn:
Fax No. (312)       or (312)

S-1-5

--------------------------------------------------------------------------------

EXHIBIT D
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION

To: Bank One, NA, as Administrative Agent (the "Administrative Agent") under the
Credit Agreement Described Below.

Re: Credit Agreement dated as of December 23, 2002 (as the same may be amended
or modified, the "Credit Agreement"), among Puget Sound Energy, Inc. (the
"Borrower"), the Lenders named therein, the LC Issuer and the Administrative
Agent.

        Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned thereto in the Credit Agreement.

        The Administrative Agent is specifically authorized and directed to act
upon the following standing money transfer instructions with respect to the
proceeds of Advances or other extensions of credit from time to time until
receipt by the Administrative Agent of a specific written revocation of such
instructions by the Borrower, provided, however, that the Administrative Agent
may otherwise transfer funds as hereafter directed in writing by the Borrower in
accordance with Section 13.1 of the Credit Agreement or based on any telephonic
notice made in accordance with Section 2.11 of the Credit Agreement.

Facility Identification Number(s)

--------------------------------------------------------------------------------

    Customer/Account Name

--------------------------------------------------------------------------------

    Transfer Funds To

--------------------------------------------------------------------------------

    For Account No.

--------------------------------------------------------------------------------

    Reference/Attention To

--------------------------------------------------------------------------------

   

Authorized Officer (Customer Representative) Date     12/23/02    

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

(Please Print) Signature     Bank Officer Name      

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

(Please Print) Signature

D-1

--------------------------------------------------------------------------------

EXHIBIT E
NOTE

[Date]

        Puget Sound Energy, Inc., a Washington corporation (the “Borrower”),
promises to pay to the order of ____________________________________ (the
“Lender”) the aggregate unpaid principal amount of all Loans made by the Lender
to the Borrower pursuant to Section 2.2 of the Agreement (as hereinafter
defined), in immediately available funds at the main office of Bank One, NA in
Chicago, Illinois, as Administrative Agent, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement. The Borrower shall pay the principal of and accrued and unpaid
interest on the Loans in full on the Facility Termination Date.

        The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.

        This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Credit Agreement dated as of December 23, 2002 (which, as it
may be amended or modified and in effect from time to time, is herein called the
“Agreement”) among the Borrower, the lenders party thereto, including the
Lender, and Bank One, NA, as Administrative Agent, to which Agreement reference
is hereby made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which this Note may be prepaid or its
maturity date accelerated. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the Agreement.

PUGET SOUND ENERGY

By:

--------------------------------------------------------------------------------

Print Name:

--------------------------------------------------------------------------------

Title:

--------------------------------------------------------------------------------

E-1

--------------------------------------------------------------------------------

SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO

NOTE OF________________________,

DATED ______________________,

Date

--------------------------------------------------------------------------------

Principal
amount of
Loan

--------------------------------------------------------------------------------

Maturity
of Interest
Period

--------------------------------------------------------------------------------

Prinicpal
Amount
Paid

--------------------------------------------------------------------------------

Unpaid
Balance

--------------------------------------------------------------------------------

E-2

--------------------------------------------------------------------------------

EXHIBIT F
TELEPHONIC NOTICES

G-1

--------------------------------------------------------------------------------

SCHEDULE 1

PRICING SCHEDULE

        The Applicable Eurodollar Margin, the Applicable Base Rate Margin, the
Applicable Fee Rate and the Applicable LC Fee Rate shall be determined from time
to time based upon the Moody’s Rating and the S&P Rating of the Borrower as set
forth in the table below:

[PRICING GRID REDACTED]

        For the purposes of this Schedule, the following terms have the
following meanings:

        “Moody’s Rating” means, at any time, the rating issued by Moody’s
Investors Service, Inc. and then in effect with respect to the Borrower’s
senior, unsecured non-credit-enhancement long-term debt.

        “S&P Rating” means, at any time, the rating issued by Standard & Poor’s
Ratings Services, a division of The McGraw Hill Companies, Inc. and then in
effect with respect to the Borrower’s senior, unsecured non-credit-enhancement
long-term debt.

        The credit rating in effect on any date for purposes of this Schedule 3
is that in effect at the close of business on such date. If at any time the
Borrower has no Moody’s Rating or no S&P Rating, Level VI Status shall apply.

        “Level I Status” exists at any date if, on such date, the Borrower’s
Moody’s Rating is Baa1 or better and the Borrower’s S&P Rating is BBB+ or
better.

        “Level II Status” exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status and (ii) the Borrower’s Moody’s Rating is
Baa2 or better and the Borrower’s S&P Rating is BBB or better.

S-3-1

--------------------------------------------------------------------------------

        “Level III Status” exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status or Level II Status and (ii) the Borrower’s
Moody’s Rating is Baa3 or better and the Borrower’s S&P Rating is BBB- or
better.

        “Level IV Status” exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status, Level II Status or Level III Status and
(ii) the Borrower’s Moody’s Rating is Ba1 and the Borrower’s S&P Rating is BBB-
or the Borrower’s Moody’s Rating is Baa3 and the Borrower’s S&P Rating is BB+.

        “Level V Status” exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status, Level II Status, Level III Status or Level
IV Status and (ii) the Borrower’s Moody’s Rating is Ba1 and the Borrower’s S&P
Rating is BB+.

        “Level VI Status” exists at any date if, on such date, the Borrower has
not qualified for Level I Status, Level II Status, Level III Status, Level IV
Status or Level V Status.

S-3-2

--------------------------------------------------------------------------------

SCHEDULE 2

COMMITMENTS OF THE LENDERS

Lender Commitment     Bank One, NA   $  50,000,000   Union Bank of California,
N.A  $  50,000,000   KeyBank National Association  $  50,000,000   JPMorgan
Chase Bank  $  35,000,000   Washington Mutual Bank  $  20,000,000   Pacific
Northwest Bank  $  15,000,000   U.S. Bank National Association  $  10,000,000  
Wells Fargo Bank, National Association  $  10,000,000   Bank of America, N.A 
$  10,000,000

--------------------------------------------------------------------------------

         TOTAL   $250,000,000  

S-2-1

--------------------------------------------------------------------------------

SCHEDULE 5.11

FINANCIAL STATEMENTS

1

--------------------------------------------------------------------------------

SCHEDULE 5.14

SUBSIDIARIES

Subsidiary

--------------------------------------------------------------------------------

Jurisdiction of
Organization

--------------------------------------------------------------------------------

Owned
By

--------------------------------------------------------------------------------

Percent
Ownership

--------------------------------------------------------------------------------

1

--------------------------------------------------------------------------------

SCHEDULE 6.16

INVESTMENTS

S-5.5-1

--------------------------------------------------------------------------------

Table of Contents

(continued)

Page

-v-

                                                  Table of Contents

                                                                                                                Page

                                        -i-

ARTICLE I             DEFINITIONS................................................................................1

ARTICLE II            THE CREDITS...............................................................................12

         2.1.     The Facility..................................................................................12

         2.2.     Advances......................................................................................13

         2.3.     Method of Borrowing...........................................................................14

         2.4.     Fees; Reductions in Aggregate Commitment......................................................14

         2.5.     Minimum Amount of Each Advance; Limitation on Eurodollar Advances.............................14

         2.6.     Optional Principal Payments...................................................................14

         2.7.     Changes in Interest Rate, etc.................................................................15

         2.8.     Rates Applicable After Default................................................................15

         2.9.     Method of Payment.............................................................................15

         2.10.    Noteless Agreement; Evidence of Indebtedness..................................................16

         2.11.    Telephonic Notices............................................................................16

         2.12.    Interest Payment Dates; Interest and Fee Basis................................................16

         2.13.    Notification of Advances, Interest Rates, Prepayments and Commitment Reductions...............17

         2.14.    Lending Installations.........................................................................17

         2.15.    Non-Receipt of Funds by the Administrative Agent..............................................17

         2.16.    Facility LCs..................................................................................18

         2.17.    Extension of Facility Termination Date........................................................21

2.17.Extension of Facility Termination Date; YIELD PROTECTION; TAXES............................................21

         3.1.     Yield Protection..............................................................................22

         3.2.     Changes in Capital Adequacy Regulations.......................................................23

         3.3.     Availability of Types of Advances.............................................................23

         3.4.     Funding Indemnification.......................................................................24

         3.5.     Taxes.........................................................................................24

         3.6.     Lender Statements; Survival of Indemnity......................................................26

         3.7.     Replacement of Affected Lender................................................................26

ARTICLE IV            CONDITIONS PRECEDENT......................................................................26

         4.1.     Effectiveness.................................................................................26

         4.2.     Each Credit Extension.........................................................................27

ARTICLE V             REPRESENTATIONS AND WARRANTIES............................................................28

         5.1.     Corporate Existence, etc......................................................................28

         5.2.     Litigation and Contingent Obligations.........................................................28

         5.3.     No Breach.....................................................................................28

         5.4.     Corporate Action..............................................................................28

         5.5.     Approvals.....................................................................................29

         5.6.     Use of Proceeds...............................................................................29

         5.7.     ERISA.........................................................................................29

         5.8.     Taxes.........................................................................................29

         5.9.     Public Utility Holding Company Act............................................................29

         5.10.    Material Adverse Change.......................................................................29

         5.11.    Financial Statements..........................................................................29

         5.12.    Environmental Matters.........................................................................30

         5.13.    Investment Company Act........................................................................30

         5.14.    Subsidiaries..................................................................................30

         5.15.    Accuracy of Information.......................................................................30

         5.16.    Compliance with Laws..........................................................................30

         5.17.    Insurance.....................................................................................30

ARTICLE VI            COVENANTS.................................................................................31

         6.1.     Preservation of Existence and Business........................................................31

         6.2.     Preservation of Property......................................................................31

         6.3.     Payment of Taxes..............................................................................31

         6.4.     Compliance with Applicable Laws and Contracts.................................................31

         6.5.     Preservation of Loan Document Enforceability..................................................31

         6.6.     Insurance.....................................................................................32

         6.7.     Use of Proceeds...............................................................................32

         6.8.     Visits, Inspections and Discussions...........................................................32

         6.9.     Information to be Furnished...................................................................32

         6.10.    Liens.........................................................................................33

         6.11.    Debt to Capitalization Ratio..................................................................35

         6.12.    Minimum Interest Coverage Ratio...............................................................35

         6.13.    Merger and Consolidation......................................................................35

         6.14.    Disposition of Assets.........................................................................35

         6.15.    Affiliates....................................................................................35

         6.16.    Investments...................................................................................36

ARTICLE VII           DEFAULTS..................................................................................36

ARTICLE VIII          ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES............................................38

         8.1.     Acceleration..................................................................................38

         8.2.     Amendments....................................................................................39

         8.3.     Preservation of Rights........................................................................39

ARTICLE IX            GENERAL PROVISIONS........................................................................40

         9.1.     Survival of Representations...................................................................40

         9.2.     Governmental Regulation.......................................................................40

         9.3.     Headings......................................................................................40

         9.4.     Entire Agreement..............................................................................40

         9.5.     Several Obligations; Benefits of this Agreement...............................................40

         9.6.     Expenses; Indemnification.....................................................................40

         9.7.     Numbers of Documents..........................................................................41

         9.8.     Accounting....................................................................................41

         9.9.     Severability of Provisions....................................................................41

         9.10.    Nonliability of Lenders.......................................................................41

         9.11.    Confidentiality...............................................................................42

         9.12.    Non-reliance..................................................................................42

         9.13.    Disclosure....................................................................................42

ARTICLE X             THE ADMINISTRATIVE AGENT..................................................................42

         10.1.    Appointment; Nature of Relationship...........................................................42

         10.2.    Powers........................................................................................43

         10.3.    General Immunity..............................................................................43

         10.4.    No Responsibility for Loans, Recitals, etc....................................................43

         10.5.    Action on Instructions of Lenders.............................................................43

         10.6.    Employment of Administrative Agents and Counsel...............................................44

         10.7.    Reliance on Documents; Counsel................................................................44

         10.8.    Administrative Agent's Reimbursement and Indemnification......................................44

         10.9.    Notice of Default.............................................................................44

         10.10.   Rights as a Lender............................................................................45

         10.11.   Lender Credit Decision........................................................................45

         10.12.   Successor Administrative Agent................................................................45

         10.13.   Administrative Agent's Fee....................................................................46

         10.14.   Delegation to Affiliates......................................................................46

         10.15.   Other Agents..................................................................................46
ARTICLE XI            SETOFF; PAYMENTS..........................................................................46

         11.1.    Setoff........................................................................................46

         11.2.    Ratable Payments..............................................................................46

ARTICLE XII           BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.........................................47

         12.1.    Successors and Assigns........................................................................47

         12.2.    Participations................................................................................47

         12.3.    Assignments...................................................................................48

         12.4.    Dissemination of Information..................................................................49

         12.5.    Tax Treatment.................................................................................49

ARTICLE XIII          NOTICES...................................................................................49

         13.1.    Notices.......................................................................................49

         13.2.    Change of Address.............................................................................50

ARTICLE XIV           COUNTERPARTS..............................................................................50

ARTICLE XV            CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL .............................50

         15.1.CHOICE OF LAW.....................................................................................50

         15.2.CONSENT TO JURISDICTION...........................................................................50

         15.3.WAIVER OF JURY TRIAL..............................................................................51

                                                SCHEDULES AND EXHIBITS

Schedule 1........Pricing Schedule

Schedule 2........Commitments of the Lenders

Schedule 5.2......Litigation and Contingent Obligations

Schedule 5.11 Financial Statements

Schedule 5.14  Subsidiaries

Schedule 6.16.....Investments

Exhibit A.........Form of Opinion of Perkins Coie LLP

Exhibit B.........Compliance Certificate

Exhibit C.........Assignment Agreement

Exhibit D.........Loan/Credit Related Money Transfer Authorization

Exhibit E.........Note

Exhibit F.........Telephonic Notices