EXECUTION COPY

EXHIBIT 10(b)

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| **364 DAY CREDIT AGREEMENT        dated as of May 7, 2003        among        CLECO POWER LLC,        as Borrower        The Lenders Party Hereto        BANK ONE, NA,        as Syndication Agent        WESTLB AG, NEW YORK BRANCH        as Documentation Agent        and        THE BANK OF NEW YORK,         as Administrative Agent                                                                                                                         **

**BNY CAPITAL MARKETS,        INC.,        as Lead Arranger and Book Runner** |
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**Bryan Cave LLP        245 Park Avenue        New York, New York 10167**

 

 

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|                                                  | **TABLE OF CONTENTS **                                       | **Page** |
|-------------------------------------------------------|-------------------------------------------------------------------|----------|
| ARTICLE 1.                                       | DEFINITIONS                                                       | 1   |
|      Section      1.1        | Defined      Terms                                                | 1        |
|      Section      1.2        | Terms Generally                                                   | 15       |
|      Section      1.3   | Accounting      Terms                                             | 16  |
| ARTICLE      2.                                  | AMOUNT      AND TERMS OF LOANS                                    | 16  |
|      Section      2.1        | Revolving      Credit Loans                                       | 16       |
|      Section      2.2        | Notes                                                             | 16       |
|      Section      2.3        | Revolving      Credit Loans; Procedure                            | 16       |
|      Section      2.4        | Competitive      Bid Loans; Procedure                             | 18       |
|      Section      2.5        | Termination,      Reduction and Increase of Aggregate Commitments | 20       |
|      Section      2.6        | Prepayments      of the Loans                                     | 21       |
|      Section      2.7        | Conversions      and Continuations                                | 21       |
|      Section      2.8        | Letters      of Credit                                            | 23       |
|      Section      2.9        | Interest      Rate and Payment Dates                              | 26       |
|      Section      2.10       | Substituted      Interest                                         | 27       |
|      Section      2.11       | Taxes                                                             | 28       |
|      Section      2.12       | Increased      Costs; Illegality                                  | 29       |
|      Section      2.13       | Break Funding      Payments                                       | 31       |
|      Section      2.14       | Lenders'      Records                                         | 31       |
|      Section      2.15       | Extension      of Commitment Period and Maturity Date             | 31       |
|      Section      2.16  | Substitution      of Lender                                       | 31  |
| ARTICLE      3.                                  | FEES; PAYMENTS                                                    | 33  |
|      Section      3.1        | Fees                                                              | 33       |
|      Section      3.2   | Pro Rata      Treatment and Application of Principal Payments     | 34  |
| ARTICLE      4.                                  | REPRESENTATIONS      AND WARRANTIES                               | 35  |
|      Section      4.1        | Subsidiaries;      Capitalization                                 | 35       |
|      Section      4.2        | Existence      and Power                                          | 35       |
|      Section      4.3        | Authority                                                         | 36       |
|      Section      4.4        | Binding      Agreement                                            | 36       |
|      Section      4.5        |  Litigation      and Regulatory Proceedings                  | 36       |
|      Section      4.6        | Required      Consents                                            | 36       |
|      Section 4.7             | No Conflicting Agreements,      Compliance with Laws              | 37       |
|      Section 4.8             | Governmental Regulations                                          | 37       |
|      Section      4.9        | Federal      Reserve Regulations; Use of Loan Proceeds            | 37       |
|      Section      4.10       | Plans                                                             | 37       |
|      Section      4.11       | Financial      Statements                                         | 38       |
|      Section      4.12       | Property                                                          | 38       |
|      Section      4.13  | Environmental      Matters                                        | 38  |
| ARTICLE      5.                                  | CONDITIONS      TO EFFECTIVENESS                                  | 39  |
|      Section      5.1        | Evidence      of Action                                           | 39       |
|      Section      5.2        | This Agreement                                                    | 39       |
|      Section      5.3        | Notes                                                             | 39       |
|      Section      5.4        | Approvals                                                         | 39       |
|      Section      5.5        | Certain      Agreements                                           | 40       |
|      Section      5.6        | Opinion      of Counsel to the Borrower                           | 40       |
|      Section      5.7        | Terminating      Indebtedness                                     | 40       |

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|                                                  | **TABLE OF CONTENTS      (continued)**                       | **Page** |
|-------------------------------------------------------|--------------------------------------------------------------|----------|
|                                                  |                                                         |     |
|      Section      5.8        | 2003 Senior      Notes                                       | 40       |
|      Section      5.9        | Compliance;      Officer's Certificate                   | 40       |
|      Section      5.10  | Fees and      Expenses                                       | 40  |
| ARTICLE      6.                                  | CONDITIONS      OF LENDING ‐ ALL LOANS                 | 41  |
|      Section      6.1        | Compliance                                                   | 41       |
|      Section      6.2        | Credit      Request; Competitive Bid Request                 | 41       |
|      Section      6.3   | Law                                                          | 41       |
|      Section      6.4   | Other Documents                                              | 41  |
| ARTICLE      7.                                  | AFFIRMATIVE      COVENANTS                                   | 41  |
|      Section      7.1        | Financial      Statements                                    | 41       |
|      Section      7.2        | Certificates;      Other Information                         | 42       |
|      Section      7.3        | Legal Existence                                              | 43       |
|      Section      7.4        | Taxes                                                        | 43       |
|      Section      7.5        | Insurance                                                    | 43       |
|      Section      7.6        | Payment      of Indebtedness and Performance of Obligations  | 44       |
|      Section      7.7        | Condition      of Property                                   | 44       |
|      Section      7.8        | Observance      of Legal Requirements                        | 44       |
|      Section      7.9        | Inspection      of Property; Books and Records; Discussions  | 44       |
|      Section      7.10       | Licenses,      Intellectual Property                         | 45       |
|      Section      7.11       | Financial      Covenants                                     | 45       |
|      Section      7.12       | Material/Immaterial      Designation of Subsidiaries         | 45       |
|      Section      7.13  | Use of      Proceeds                                         | 45  |
| ARTICLE      8.                                  | NEGATIVE      COVENANTS                                      | 46  |
|      Section      8.1        | Liens                                                        | 46       |
|      Section      8.2        | Merger,      Consolidation, Purchase or Sale of Assets, Etc. | 48       |
|      Section      8.3        | Loans,      Advances, etc.                                   | 49       |
|      Section      8.4   | Amendments,      etc. of Certain Agreements                  | 50  |
| ARTICLE      9.                                  | EVENTS      OF DEFAULT                                       | 50  |
| ARTICLE      10.                                 | THE ADMINISTRATIVE      AGENT                                | 52  |
|      Section      10.1       | Appointment                                                  | 52       |
|      Section      10.2       | Delegation      of Duties                                    | 53       |
|      Section      10.3       | Exculpatory      Provisions                                  | 53       |
|      Section      10.4       | Reliance      by Administrative Agent                        | 53       |
|      Section      10.5       | Notice      of Default                                       | 54       |
|      Section      10.6       | Non Reliance      on Administrative Agent and Other Lenders  | 54       |
|      Section      10.7       | Administrative      Agent in Its Individual Capacity         | 54       |
|      Section      10.8  | Successor      Administrative Agent                          | 54  |
| ARTICLE      11.                                 | OTHER PROVISIONS                                             | 55  |
|      Section      11.1       | Amendments      and Waivers                                  | 55       |
|      Section      11.2       | Notices                                                      | 56       |
|      Section      11.3       | Survival                                                     | 56       |
|      Section      11.4       | Expenses;      Indemnity; Damage Waiver                      | 57       |

**(ii)**

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|                                             | **TABLE OF CONTENTS      (continued)**                          | **Page** |
|--------------------------------------------------|-----------------------------------------------------------------|----------|
|                                             |                                                            |     |
|      Section      11.5  | Lending      Offices                                            | 58       |
|      Section      11.6  | Assignments      and Participations                             | 58       |
|      Section      11.7  | Counterparts;      Integration; Effectiveness                   | 60       |
|      Section      11.8  | Severability                                                    | 60       |
|      Section      11.9  | Right of      Set off                                           | 60       |
|      Section      11.10 | Governing      Law; Jurisdiction; Consent to Service of Process | 61       |
|      Section      11.11 | **WAIVER      OF JURY TRIAL**                                   | 61       |
|      Section      11.12 | Headings                                                        | 62       |

 

**SCHEDULES:**

| Schedule 1.1  | List of Existing Letters      of Credit            |
|---------------|----------------------------------------------------|
| Schedule 4.1  | List of Subsidiaries                               |
| Schedule 4.5  | List of Litigation and      Regulatory Proceedings |
| Schedule 4.13 | List of Environmental      Matters                 |
| Schedule 8.1  | List of Existing Liens                             |

**EXHIBITS:**

| Exhibit A | List of Commitments                               |
|-----------|---------------------------------------------------|
| Exhibit B | Form of Note                                      |
| Exhibit C | Form of Credit Request                            |
| Exhibit D | Form of Competitive Bid      Request              |
| Exhibit E | Form of Invitation to      Bid                    |
| Exhibit F | Form of Competitive Bid                           |
| Exhibit G | Form of Competitive Bid      Accept/Reject Letter |
| Exhibit H | Form of Competitive Bid      Loan Confirmation    |
| Exhibit I | Form of Notice of Conversion/Continuation         |
| Exhibit J | Form of Assignment and      Acceptance Agreement  |
| Exhibit K | Form of Opinion of Counsel to the Borrower        |
| Exhibit L | Form of Increase Supplement                       |
| Exhibit M | Form of Compliance Certificate                    |

**(iii)**

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              364 DAY CREDIT AGREEMENT, dated as of May 7,  2003, by and among CLECO POWER LLC, the Lenders party hereto, BANK ONE, NA, as  syndication agent hereunder, WESTLB AG, NEW YORK BRANCH, as documentation agent  hereunder, and THE BANK OF NEW YORK, as Administrative Agent for the Lenders hereunder.

# ARTICLE 1.    DEFINITIONS

## Section 1.1           Defined Terms

                         As used in this Agreement, terms defined in the  preamble have the meanings therein indicated, and the following terms have the  following meanings:

                         "ABR Advances": the Revolving Credit Loans  (or any portions thereof) at such time as they (or such portions) are made and/or  being maintained at a rate of interest based upon the Alternate Base Rate.

                         "Accountants": PricewaterhouseCoopers, L.L.P.  (or any successor thereto), or such other firm of certified public accountants  of recognized national standing selected by the Borrower. 

                         "Administrative Agent": BNY, in its capacity  as administrative agent for the Lenders hereunder.

                         "Administrative Questionnaire": an Administrative  Questionnaire in a form supplied by the Administrative Agent.

                         "Advance": with respect to a Revolving Credit  Loan, an ABR Advance or a Eurodollar Advance, as the case may be.

                         "Affected Advance": as defined in Section  2.10.

                         "Affiliate": with respect to a specified  Person, another Person that directly, or indirectly through one or more intermediaries,  controls or is controlled by or is under common control with the Person specified.

                         "Agents": collectively, the Administrative  Agent, the Syndication Agent and the Documentation Agent.

                         "Aggregate Commitments": on any date, the  sum of all Commitments on such date.  The initial amount of the Aggregate  Commitments on the Agreement Date is $80,000,000.

                         "Agreement": this 364 Day Credit Agreement.

                         "Agreement Date": the first date appearing  in this Agreement.

                         "Alternate Base Rate": on any date, a rate  of interest per annum equal to the higher of (i) the Federal Funds Rate in effect  on such date plus 1/2 of 1% or (ii) the BNY Rate in effect on such date.

                         "Applicable Facility Fee Percentage": with  respect to the amount of the Aggregate Commitments, at all times during which  the applicable Pricing Level set forth below is in effect, the percentage set  forth below next to such Pricing Level, subject to the provisos set forth below:

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| Pricing Level           | Applicable        Facility FeePercentage |
|-------------------------|------------------------------------------|
| Pricing Level        I  | 0.150%                                   |
| Pricing Level        II | 0.200%                                   |
| Pricing Level III       | 0.250%                                   |
| Pricing Level IV        | 0.300%                                   |
| Pricing Level V         | 0.500%                                   |
| Pricing Level VI        | 0.625%                                   |

                         Changes in the Applicable Facility Fee Percentage  resulting from a change in the Pricing Level shall become effective on the effective  date of any change in the Senior Debt Rating from S&P or Moody's.  Notwithstanding  anything herein to the contrary, in the event of a split in the Senior Debt Rating  from S&P and Moody's that would otherwise result in the application of more than  one Pricing Level (had the provisions regarding the applicability of other Pricing  Levels contained in the definitions thereof not been given effect), then the Applicable  Facility Fee Percentage shall be determined using the Pricing Level within which  the lower of the two rating categories would otherwise fall.

                         "Applicable Lending Office": in respect of  any Lender, (i) in the case of such Lender's ABR Advances and Competitive Bid  Loans, its Domestic Lending Office or (ii) in the case of such Lender's Eurodollar  Advances, its Eurodollar Lending Office.

                         "Applicable Margin": 

                         (a)        subject  to the provisions of clause (b) below, with respect to the unpaid principal amount  of Eurodollar Advances and LC Fees at all times during which the applicable Pricing  Level set forth below is in effect, the percentage set forth below next to such  Pricing Level, subject to the provisos set forth in clause (d) below:

 

| Pricing Level           | ApplicableMargin |
|-------------------------|------------------|
| Pricing Level        I  | 0.725%           |
| Pricing Level        II | 0.800%           |
| Pricing Level III       | 1.000%           |
| Pricing Level IV        | 1.325%           |
| Pricing Level V         | 1.500%           |
| Pricing Level VI        | 2.375%           |

                         (b)        in  the event that the Borrower exercises its option under Section 2.15(b) to extend  the Maturity Date, the Applicable Margins set forth in clause (a) above shall  be increased by (i) for so long as the Senior Debt Rating is BBB‐ or higher by  S&P and Baa3 or higher by Moody's and no Event of Default has occurred  and is continuing, 1.00%, and (ii) for so long as the Senior Debt Rating is lower  than BBB‐ by S&P or Baa3 by Moody's or an Event of Default has occurred  and is continuing, 1.50%.

                         (c)         Changes in the Applicable Margin resulting from a change in the Pricing Level  shall become effective on the effective date of any change in the Senior Debt  Rating from S&P or Moody's.  Notwithstanding anything herein to the  contrary, in the event of a split in the Senior Debt Rating from S&P and  Moody's that would otherwise result in the application of more than one  Pricing

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  Level (had the provisions regarding  the applicability of other Pricing Levels contained in the definitions thereof  not been given effect), then the Applicable Margin shall be determined using  the Pricing Level within which the lower of the two rating categories would  otherwise fall.

                         "Approved  Fund": with respect to any Lender that is a fund that invests in  commercial loans, any other fund that invests in commercial loans and is  managed or advised by the same investment advisor as such Lender or by an  Affiliate of such investment advisor.

                         "Asset Sale": any sale, transfer or other  disposition by the Borrower or any of the Material Subsidiaries to any Person  of any Property (including any Stock or other securities of another Person) of  the Borrower or any of the Material Subsidiaries, other than inventory or accounts  receivables or other receivables sold, transferred or otherwise disposed of in  the ordinary course of business, provided that, notwithstanding anything  in this definition to the contrary, for purposes of the Loan Documents, the term  "Asset Sale" shall not include the creation or granting of any Lien other than  a conditional sale or other title retention arrangement.

                         "Assignment and Acceptance Agreement": an  assignment and acceptance agreement executed by a Lender and an assignee (with  the consent of any party whose consent is required by Section 11.6), and accepted  by the Administrative Agent, substantially in the form of Exhibit J.

                         "Bid Rate": as defined in Section 2.4(b).

                         "BNY": The Bank of New York.

                         "BNY Rate": the rate of interest per annum  publicly announced from time to time by BNY as its prime commercial lending rate  at its principal office in New York City; each change in the BNY Rate being effective  from and including the date such change is publicly announced as being effective.  The BNY Rate is not intended to be lowest rate of interest charged by BNY in connection  with extensions of credit to borrowers.

                         "Borrower": Cleco Power LLC, a Louisiana  limited liability company.

                         "Borrowing Date": any Business Day on which  (i) the Lenders make Revolving Credit Loans in accordance with a Credit Request,  (ii) one or more Lenders make Competitive Bid Loans pursuant to Competitive Bids  which have been accepted by the Borrower or (iii) the Issuing Bank issues a Letter  of Credit or a Letter of Credit is renewed, extended or amended.

                         "Business Day": for all purposes other than  as set forth in clause (ii) below, (i) any day other than a Saturday, a Sunday  or a day on which commercial banks located in New York City are authorized or  required by law or other governmental action to close and (ii) with respect to  all notices and determinations in connection with, and payments of principal and  interest on, Eurodollar Advances, any day which is a Business Day described in  clause (i) above and which is also a day on which dealings in foreign currency  and exchange and Eurodollar funding between banks may be carried on in London,  England.

                         "Capital Lease Obligations": with respect  to any Person, obligations of such Person with respect to leases which, in accordance  with GAAP, are required to be capitalized on the financial statements of such  Person.

                         "Change in Law": (i)  the adoption of any law, rule or regulation after the Agreement Date, (ii) any  change in any law, rule or regulation or in the interpretation or application  thereof by any 

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  Governmental Authority after the  Agreement Date or (iii) compliance by any Credit Party (or, for purposes of  Section 2.12(b), by any lending office of such Credit Party or by such Credit  Party's holding company, if any) with any request, guideline or directive  (whether or not having the force of law) of any Governmental Authority made or  issued after the Agreement Date.

                         "Change in Control": the occurrence of any  of the following: (i) the consummation of any transaction the result of which  is that any "person" or "group" (within the meaning of Section 13(d)(3) of the  Securities Exchange Act of 1934) becomes the "beneficial owner" (as such term  is defined in Rule 13d‐3 under the Securities Exchange Act of 1934) of more than  50% of the total voting power in the aggregate of all classes of the Voting Securities  of the Parent then outstanding, (ii) the occupation of a majority of the seats  (other than vacant seats) on the board of directors of the Parent by Persons who  were neither nominated by the board of directors of the Parent nor appointed by  directors so nominated or (iii) any change of control, fundamental change or any  similar circumstance which, under the documentation evidencing or governing any  other Indebtedness of the Borrower or any of the Subsidiaries of $15,000,000 or  more results in an obligation of the Borrower or such Subsidiary to prepay, purchase,  offer to purchase, redeem or defease any such Indebtedness.

                         "CLECO Mortgage": the Indenture of Mortgage,  dated as of July 1, 1950, made by the Borrower to Bank One Trust Company, N.A.,  as Trustee.

                         "Closing Date": the date on which the conditions  specified in Article 5 are satisfied (or waived in accordance with Section 11.1).

                         "Code": the Internal Revenue Code of 1986.

                         "Commitment": with respect to each Lender,  the commitment of such Lender to make Revolving Credit Loans and to acquire participations  in Letters of Credit hereunder in an aggregate outstanding amount not exceeding  the amount of such Lender's Commitment as set forth on Exhibit A, in the  initial Increase Supplement executed and delivered by such Lender, the Borrower  and the Administrative Agent, or in the Assignment and Acceptance Agreement pursuant  to which such Lender shall have assumed its Commitment, as applicable, as such  Commitment may be increased or reduced from time to time pursuant to Section 2.5  or pursuant to assignments by or to such Lender pursuant to Section 11.6. 

                         "Commitment Percentage": as of any date and  with respect to each Lender, the percentage equal to a fraction (i) the numerator  of which is the Commitment of such Lender on such date (or, if there are no Commitments  on such date, on the last date upon which one or more Commitments were in effect),  and (ii) the denominator of which is the sum of the Commitments of all Lenders  on such date (or, if there are no Commitments on such date, on the last date upon  which one or more Commitments were in effect).

                         "Commitment Period": the period from the  Agreement Date until the day before the Commitment Termination Date.

                         "Commitment Termination Date": the day which  is 364 days after the Agreement Date (or, if such date is not a Business Day,  the Business Day immediately preceding such day), as the same may be extended  from time to time in accordance with Section 2.15(a), or such earlier date on  which the Aggregate Commitments shall terminate in accordance with Section 2.5  or Article 9.

                         "Competitive Bid": an offer by a Lender,  in the form of Exhibit F, to make a Competitive Bid Loan.

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                           "Competitive Bid Accept/Reject Letter": a  notification given by the Borrower pursuant to Section 2.4 in the form of Exhibit  G.

                         "Competitive Bid Loan": each Loan from a  Lender to the Borrower pursuant to Section 2.4.

                         "Competitive Bid Loan Confirmation": a confirmation  by the Administrative Agent to a Lender of the acceptance by the Borrower of any  Competitive Bid (or Portion thereof) made by such Lender, substantially in the  form of Exhibit H.

                         "Competitive Bid Request": a request by the  Borrower, substantially in the form of Exhibit D, for Competitive Bids.

                         "Competitive Interest Period": as to any  Competitive Bid Loan, the period commencing on the date of such Competitive Bid  Loan and ending on the date requested in the Competitive Bid Request with respect  to such Competitive Bid Loan, which date shall not be earlier than 7 days after  the date of such Competitive Bid Loan or later than 180 days after the date of  such Competitive Bid Loan; provided, however, that if any Competitive  Interest Period would end on a day other than a Business Day, such Interest Period  shall be extended to the next succeeding Business Day, unless such next succeeding  Business Day would be a date on or after the Commitment Termination Date, in which  case such Competitive Interest Period shall end on the next preceding Business  Day, and provided further that no Competitive Interest Period shall end  after the Commitment Termination Date. Interest shall accrue from and including  the first day of a Competitive Interest Period to but excluding the last day of  such Competitive Interest Period.

                         "Compliance Certificate": a certificate substantially  in the form of Exhibit M.

                         "Contingent Obligation": as to any Person,  any obligation of such Person guaranteeing or in effect guaranteeing any return  on any investment made by another Person or any Indebtedness, lease, dividend  or other obligation of any other Person in any manner, whether contingent or whether  directly or indirectly, including any obligation in respect of the liabilities  of any partnership in which such other Person is a general partner, except to  the extent that such liabilities of such partnership are nonrecourse to such other  Person and its separate Property. The amount of any Contingent Obligation of a  Person shall be deemed to be an amount equal to the stated or determinable amount  of the primary obligation in respect of which such Contingent Obligation is made  or, if not stated or determinable, the maximum reasonably anticipated liability  in respect thereof as determined by such Person in good faith, provided  that, notwithstanding anything in this definition to the contrary, the amount  of any Contingent Obligation of a Person in respect of any agreement by any other  Person to purchase electricity, gas or fuel from a counterparty shall be deemed  to be the maximum reasonably anticipated liability of such other Person, as determined  in good faith by such Person, net of any obligation or liability of such counterparty  to purchase electricity, gas or fuel from such other Person, providedfurther that the obligations of such other Person to so purchase electricity,  gas or fuel from such counterparty shall be terminable at the election of such  other Person in the event of a default by such counterparty in its obligations  to so purchase electricity, gas or fuel for such other Person.

                         "Continuing Lenders": as defined in Section  2.15(a)(ii).

                         "Conversion/Continuation Date": the date  on which (i) a Eurodollar Advance is converted to an ABR Advance, (ii) the date  on which an ABR Advance is converted to a Eurodollar Advance or (iii) the date  on which a Eurodollar Advance is continued as a new Eurodollar Advance. 

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                           "Corporate Officer": with respect to the  Borrower, the chairman of the board, the president, any vice president, the chief  executive officer, the chief financial officer, the secretary, the treasurer,  or the controller thereof.

                         "Credit Parties": collectively, the Agents,  the Issuing Bank and the Lenders.

                         "Credit Request": a request for Revolving  Credit Loans and New Letters of Credit in the form of Exhibit C.

                         "Default": any of the events specified in  Article 9, whether or not any requirement for the giving of notice, the lapse  of time, or both, or any other condition, has been satisfied.

                         "Documentation Agent"; WestLB AG, New York  Branch, in its capacity as documentation agent for the Lenders hereunder.

                         "Dollars" and "$": lawful currency  of the United States.

                         "Domestic Lending Office": in respect of  any Lender, initially, the office or offices of such Lender designated as such  on its Administrative Questionnaire; thereafter, such other office of such Lender  through which it shall be making or maintaining ABR Advances or Competitive Bid  Loans, as reported by such Lender to the Administrative Agent and the Borrower,  provided that any Lender may so report different Domestic Lending Offices  for all of its ABR Advances and all of its Competitive Bid Loans, whereupon references  to the Domestic Lending Office of such Lender shall mean either or both of such  offices, as applicable. 

                         "EBITDA": for any period, net income for  such period of the Borrower and the Subsidiaries, determined on a consolidated  basis in accordance with GAAP, plus, without duplication and to the extent  deducted in determining such net income, the sum of (i) Interest Expense for such  period, (ii) provision for income taxes for such period, (iii) the aggregate amount  attributable to depreciation and amortization for such period, and (iv) the aggregate  amount of items to the extent constituting extraordinary non‐recurring or non‐operating  charges or expenses during such period and minus, without duplication and  to the extent added in determining such net income for such period, the aggregate  amount of extraordinary, non‐recurring and non‐operating additions to income during  such period.

                         "Eligible Assignee": any of the following:  (i) commercial banks, finance companies, insurance companies and other financial  institutions and funds (whether a corporation, partnership or other entity) engaged  generally in making, purchasing or otherwise investing in commercial loans in  the ordinary course of its business; provided that any such entity shall  be entitled, as of the date such entity becomes a Lender, to receive payments  under its Note without deduction or withholding with respect to United States  federal income tax, (ii) each of the Lenders and (iii) any Affiliate or Approved  Fund of a Lender.

                         "Employee Stock Ownership Plan": The Cleco  Utility Group Inc. 401(k) Savings and Investment Plan ESOP Trust.

                         "Environmental Laws": any and all federal,  state and local laws relating to the use, storage, transporting, manufacturing,  handling, discharge, disposal or recycling of Hazardous Substances or pollutants  and including (i) the Comprehensive Environmental Response, Compensation and Liability  Act, as amended, 42 USCA � et seq., (ii) the Resource Conservation and Recovery  Act of 1976, as amended, 42 USCA � et seq., (iii) the Toxic Substance Control  Act, as amended, 15 USCA � et. seq., (iv) the Water Pollution Control Act,  as amended, 33 USCA � et. seq., (v) the Clean Air Act, as 

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  amended, 42 USCA  � et seq., (vi) the Hazardous Materials Transportation Authorization Act of  1994, as amended, 49 USCA � et seq., and (viii) all rules and regulations  under any of the foregoing and under any analogous state laws, judgments, decrees  and injunctions and any analogous state laws applicable to the Borrower or any  of the Material Subsidiaries. 

                         "ERISA": the Employee Retirement Income Security  Act of 1974. 

                         "ERISA Affiliate": any trade or business  (whether or not incorporated) that, together with the Borrower or any Subsidiary,  is treated as a single employer under Section 414(b) or (c) of the Code or, solely  for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as  a single employer under Section 414 of the Code.

                         "ERISA Event": (i) any "reportable event",  as defined in Section 4043 of ERISA or the regulations issued thereunder with  respect to a Plan (other than an event for which the 30 day notice period is waived);  (ii) the existence with respect to any Plan of an "accumulated funding deficiency"  (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not  waived; (iii) the filing pursuant to Section 412(d) of the Code or Section 303(a)  of ERISA of an application for a waiver of the minimum funding standard with respect  to any Plan; (iv) the incurrence by the Borrower, any Subsidiary or any ERISA  Affiliate of any liability under Title IV of ERISA with respect to the termination  of any Plan; (v) the receipt by the Borrower, any Subsidiary or any ERISA Affiliate  from the PBGC or a plan administrator of any notice relating to an intention to  terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi)  the incurrence by the Borrower, any Subsidiary or any ERISA Affiliate of any liability  with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer  Plan; or (vii) the receipt by the Borrower, any Subsidiary or any ERISA Affiliate  of any notice, or the receipt by any Multiemployer Plan from the Borrower, any  Subsidiary or any ERISA Affiliate of any notice, concerning the imposition of  Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected  to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

                         "Eurodollar Advances": collectively, the  Revolving Credit Loans (or any portions thereof) at such time as they (or such  portions) are made and/or being maintained at a rate of interest based upon the  Eurodollar Rate.

                         "Eurodollar Interest Period": with respect  to any Eurodollar Advance requested by the Borrower, the period commencing on,  as the case may be, the Borrowing Date or the Conversion/Continuation Date with  respect to such Eurodollar Advance and ending one, two, three or six months thereafter,  as selected by the Borrower in its irrevocable Credit Request or its irrevocable  Notice of Conversion/Continuation, provided, however, that (i) if  any Eurodollar Interest Period would otherwise end on a day which is not a Business  Day, such Eurodollar Interest Period shall be extended to the next succeeding  Business Day unless the result of such extension would be to carry such Interest  Period into another calendar month or beyond the Maturity Date, in which event  such Eurodollar Interest Period shall end on the immediately preceding Business  Day, (ii) any Eurodollar Interest Period that begins on the last Business Day  of a calendar month (or on a day for which there is no numerically corresponding  day in the calendar month at the end of such Eurodollar Interest Period) shall  end on the last Business Day of a calendar month and (iii) the Borrower shall  select Interest Periods so as not to have more than five different Eurodollar  Interest Periods outstanding at any one time for all Eurodollar Advances.

                         "Eurodollar Lending Office": in respect of  any Lender, initially, the office, branch or affiliate of such Lender designated  as such on its Administrative Questionnaire (or, if no such office branch or affiliate  is specified, its Domestic Lending Office); thereafter, such other office, branch  or affiliate of such Lender through which it shall be making or maintaining Eurodollar  Advances, as reported by such Lender to the Administrative Agent and the Borrower.

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                           "Eurodollar Rate": with respect to the Eurodollar  Interest Period applicable to any Eurodollar Advance, a rate of interest per annum,  as determined by the Administrative Agent and then rounded to the nearest 1/16  of 1% or, if there is no nearest 1/16 of 1%, then to the next higher 1/16 of 1%,  equal to the rate, as reported by BNY to the Administrative Agent, quoted by BNY  to leading banks in the interbank eurodollar market as the rate at which BNY is  offering Dollar deposits in an amount equal approximately to the Eurodollar Advance  of BNY to which such Eurodollar Interest Period shall apply for a period equal  to such Eurodollar Interest Period, as quoted at approximately 11:00 a.m. two  Business Days prior to the first day of such Eurodollar Interest Period.

                         "Event of Default": any of the events specified  in Article 9, provided that any requirement specified in Article 9 for  the giving of notice, the lapse of time, or both, or any other condition specified  in Article 9, has been satisfied.

                         "Evergreen Letter of Credit": any Letter  of Credit that, by its terms, provides that it shall be automatically renewed  or extended for a stated period of time at the end of its then scheduled expiry  date unless the Issuing Bank notifies the beneficiary thereof prior to such expiry  date that the Issuing Bank elects not to renew or extend such Letter of Credit.  

                         "Existing Letter of Credit": any letter of  credit set forth in Schedule 1.1, but not any renewal or extension thereof.

                         "Extension Request": as defined in Section  2.15(a)(i).

                         "Facility Fee": as defined in Section 3.1(a).

                         "Federal Funds Rate": for any day, a rate  per annum (expressed as a decimal, rounded upwards, if necessary, to the next  higher 1/100 of 1%), 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 by the Federal Reserve Bank of New York  on the Business Day next succeeding such day, provided that (i) if the  day for which such rate is to be determined is not a Business Day, the Federal  Funds Rate for such day shall be such rate on such transactions on the next preceding  Business Day as so published on the next succeeding Business Day, and (ii) if  such rate is not so published for any day, the Federal Funds Rate for such day  shall be the average of the quotations for such day on such transactions received  by BNY as determined by BNY and reported to the Administrative Agent.

                         "FERC": the Federal Energy Regulatory Commission  or any Governmental Authority succeeding to the functions thereof.

                         "FERC Order": that certain letter order issued  to the Borrower, dated July 26, 2002, in Docket No. ES02-43-000, issued by FERC,  or any renewal or replacement order thereof, together with any supplemental order  thereto, in each case authorizing the Borrower to issue notes or drafts maturing  not more than one year after the date of issue or renewal thereof or assumption  of liability thereon (in each case as described in Section 204(e) of the Federal  Power Act, as amended and in effect from time to time) in an aggregate principal  amount not less than the sum of the Commitments hereunder plus the aggregate principal  amount of any such notes or drafts of the Borrower (other than the Notes) outstanding  from time to time.

                         "Financial Statements": as defined in Section  4.11.

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                           "Foreign Lender": any Lender that is  organized under the laws of a jurisdiction other than United States, any State  thereof or the District of Columbia.

                         "GAAP": generally accepted accounting principles  set forth in the opinions and pronouncements of the Accounting Principles Board  and the American Institute of Certified Public Accountants and in the statements  and pronouncements of the Financial Accounting Standards Board or in such other  statement by such other entity as may be approved by a significant segment of  the accounting profession, which are applicable to the circumstances as of the  date of determination, consistently applied.  If at any time any change in  GAAP would affect the computation of any financial requirement set forth in this  Agreement, the Administrative Agent, the Lenders and the Borrower shall negotiate  in good faith to amend such requirement to reflect such change in GAAP (subject  to the approval of the Required Lenders), provided that, until so amended,  (i) such requirement shall continue to be computed in accordance with GAAP prior  to such change therein and (ii) the Borrower shall provide to the Credit Parties  financial statements and other documents required under this Agreement or as reasonably  requested hereunder setting forth a reconciliation between calculations of such  requirement made before and after giving effect to such change in GAAP.

                         "Governmental Authority": any nation or government,  any state or other political subdivision thereof, any entity exercising executive,  legislative, judicial, regulatory or administrative functions of or pertaining  to government and any court or arbitrator.

                         "Hazardous Substance": (i) any hazardous  or toxic substance, material or waste listed in the United States Department of  Transportation Hazardous Materials Table (49 CFR 𨴄.101) or by the Environmental  Protection Agency as hazardous substances (40 CFR Part 302), and amendments thereto  and replacements therefor, and (ii) any substance, pollutant or material defined  as, or designated in, any Environmental Law as a "hazardous substance," "toxic  substance," "hazardous material," "hazardous waste," "restricted hazardous waste,"  "pollutant," "toxic pollutant" or words of similar import.

                         "Highest Lawful Rate": as to any Lender,  the maximum rate of interest, if any, that at any time or from time to time may  be contracted for, taken, charged or received by such Lender on the Note held  thereby or which may be owing to such Lender pursuant to this Agreement and the  other Loan Documents under the laws applicable to such Lender and this transaction.

                         "Immaterial Subsidiary": any Subsidiary of  the Borrower that is not designated as a Material Subsidiary, or that is designated  as an Immaterial Subsidiary, in each case in accordance with the terms hereof.

                         "Increase Supplement": an increase supplement  in the form of Exhibit L.

                         "Increasing Lender": as defined in Section  2.5(d).

                         "Indebtedness": as to any Person, at a particular  time, all items which constitute, without duplication, (i) indebtedness for borrowed  money or the deferred purchase price of Property (other than trade payables incurred  in the ordinary course of business), (ii) indebtedness evidenced by notes, bonds,  debentures or similar instruments, (iii) obligations with respect to any conditional  sale or title retention agreement, (iv) indebtedness arising under acceptance  facilities and the amount available to be drawn under all letters of credit issued  for the account of such Person and, without duplication, all drafts drawn thereunder  to the extent such Person shall not have reimbursed the issuer in respect of  the issuer's payment of such drafts, (v) all liabilities secured by any Lien  on any Property owned by such Person even though such Person has not assumed  or otherwise become liable for the payment thereof (other than carriers',  warehousemen's, mechanics', repairmen's or other like non consensual statutory  Liens arising 

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  in the ordinary course of business), (vi) liabilities in respect of any  obligation (contingent or otherwise) to purchase, redeem, retire, acquire or  make any other payment in respect of any shares of equity securities or any  option, warrant or other right to acquire any shares of equity securities,  (vii) obligations under Capital Lease Obligations, and (viii) Contingent  Obligations of such Person in respect of Indebtedness of others.

                         "Indemnified Person": as defined in Section  11.4(b).

                         "Indenture": the Indenture, dated as of October  1, 1988, between the Borrower and The Bank of New York, as trustee.

                         "Intellectual Property": all copyrights,  trademarks, servicemarks, patents, trade names and service names.

                         "Inter‐Affiliate Policies Agreement": the  Inter‐Affiliate Policies and the Inter‐Affiliate Procedures of Cleco Corporation,  each dated as of December 4, 2002.

                         "Interest Coverage Ratio": as of any fiscal  quarter end, the ratio of (i) EBITDA for the period of the four consecutive fiscal  quarters ending thereon to (ii) Interest Expense for such period.

                         "Interest Expense": for any period, the interest  expense, both expensed and capitalized (including the interest component in respect  of Capital Lease Obligations), of the Borrower and its Subsidiaries during such  period, determined on a consolidated basis in accordance with GAAP.

                         "Interest Payment Date": (i) as to any ABR  Advance, the last day of each March, June, September and December commencing on  the first of such days to occur after such ABR Advance is made or any Eurodollar  Advance is converted to an ABR Advance, (ii) as to any Eurodollar Advance in respect  of which the Borrower has selected a Eurodollar Interest Period of one, two or  three months, the last day of such Interest Period, (iii) as to any Eurodollar  Advance in respect of which the Borrower has selected a Eurodollar Interest Period  of six months, the day which is three months after the first day of such Interest  Period and the last day of such Interest Period, (iv) as to any Competitive Bid  Loan as to which the Borrower has selected an Interest Period of 90 days or less,  the last day of such Competitive Interest Period, and (v) as to any Competitive  Bid Loan as to which the Borrower has selected a Competitive Interest Period of  more than 90 days, the day which is 90 days after the first day of such Competitive  Interest Period and the last day of each subsequent 90 day period thereafter or,  if sooner, the last day of such Competitive Interest Period.

                         "Interest Period": a Eurodollar Interest  Period or a Competitive Interest Period, as the context may require.

                         "Invitation to Bid": an invitation to make  Competitive Bids in the form of Exhibit E.

                         "Issuing Bank": BNY, in its capacity as issuer  of Letters of Credit.

                         "LC Disbursement": a payment made by the  Issuing Bank pursuant to a Letter of Credit.

                         "LC Exposure": at any time, (i) with respect  to all of the Lenders, the sum, without duplication, of (x) the aggregate undrawn  amount of all outstanding Letters of Credit at such time plus (y) the aggregate  amount of all LC Disbursements that have not yet been reimbursed by or on behalf  of the Borrower at such time and (ii) with respect to each Lender, its Commitment  Percentage of the amount determined under clause (i).

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                           "LC Fee": as defined in Section 3.1(c).

                         "Lenders": the Persons listed on Exhibit  A and any other Person that shall have become a party hereto pursuant to an  Assignment and Acceptance Agreement or an Increase Supplement, other than any  such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance  Agreement.

                         "Letter of Credit": any Existing Letter of  Credit and any New Letter of Credit.

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

                         "Loan Documents": collectively, this Agreement,  the Notes and the documentation relating to each Letter of Credit.

                         "Loans": the Revolving Credit Loans and/or  the Competitive Bid Loans, as the case may be.

                         "LPSC": the Louisiana Public Service Commission  or any Governmental Authority succeeding to the functions thereof.

                         "Margin Stock": any "margin stock", as defined  in Regulation U of the Board of Governors of the Federal Reserve System, as the  same may be amended or supplemented from time to time.

                         "Material Adverse Change": a material adverse  change in (i) the financial condition, operations, business, prospects or Property  of (a) the Borrower or (b) the Borrower and the Material Subsidiaries, taken as  a whole, (ii) the ability of the Borrower to perform its obligations under the  Loan Documents or (iii) the ability of the Credit Parties to enforce their rights  and remedies under the Loan Documents.

                         "Material Adverse Effect": a material adverse  effect on (i) the financial condition, operations, business, prospects or Property  of (a) the Borrower or (b) the Borrower and the Material Subsidiaries, taken as  a whole, (ii) the ability of the Borrower to perform its obligations under the  Loan Documents or (iii) the ability of the Credit Parties to enforce their rights  and remedies under the Loan Documents.

                         "Material Obligations": as of any date, Indebtedness  (other than Indebtedness under the Loan Documents) or operating leases of any  one or more of the Borrower or any Material Subsidiary or, in the case of the  Borrower only, any Contingent Obligation, in an aggregate principal amount exceeding  $20,000,000.  For purposes of determining Material Obligations, the "principal  amount" of Indebtedness, operating leases or Contingent Obligations at any time  shall be the maximum aggregate amount (giving effect to any netting agreements)  that the Borrower or such Material Subsidiary, as applicable, would be required  to pay if such Indebtedness, operating leases or Contingent Obligations became  due and payable on such day.

                         "Material Subsidiary": each Subsidiary  of the Borrower designated as such on Schedule 4.1 and any other Subsidiary  of the Borrower that has been designated as such in accordance with Section 7.12,  in each case unless and until such Subsidiary or other Subsidiary, as the case  may be, is designated as an Immaterial Subsidiary pursuant to such Section.

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                           "Material Total Assets": as of any date of  determination, the total assets of the Borrower and the Material Subsidiaries,  determined on a consolidated basis in accordance with GAAP.

                         "Maturity Date": the Commitment Termination  Date or, if the Borrower has duly extended the Maturity Date in accordance with  Section 2.15(b), the Repayment Extension Date.

                         "Maximum Offer": as defined in Section 2.4(b).

                         "Maximum Request": as defined in Section  2.4(a).

                         "Moody's": Moody's Investors Service, Inc.,  or any successor thereto.

                         "Multiemployer Plan": a multiemployer plan  as defined in Section 4001(a)(3) of ERISA.

                         "New Letter of Credit": any letter of credit  issued pursuant to this Agreement and any successive renewals or extensions thereof.

                         "Non‐Extending Lender": as defined in Section  2.15(a)(ii).

                         "Note": with respect to each Lender in respect  of such Lender's Revolving Credit Loans and Competitive Bid Loans, a promissory  note, substantially in the form of Exhibit B, payable to the order of such  Lender; each such promissory note having been made by the Borrower and dated the  Closing Date, including all replacements thereof and substitutions therefor.

                         "Notice of Conversion/Continuation": a notice  substantially in the form of Exhibit I.

                         "Parent": Cleco Corporation, a Louisiana  corporation.

                         "Participant": as defined in Section 11.6(e).

                         "PBGC": the Pension Benefit Guaranty Corporation  referred to and defined in ERISA and any successor entity performing similar functions.

                         "Permitted Liens": Liens permitted to exist  under Section 8.1.

                         "Person": any individual, firm, partnership,  joint venture, corporation, association, business enterprise, limited liability  company, joint stock company, unincorporated association, trust, Governmental  Authority or any other entity, whether acting in an individual, fiduciary, or  other capacity, and for the purpose of the definition of "ERISA Affiliate", a  trade or business.

                         "Plan": any employee pension benefit plan  (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA  or Section 412 of the Code or Section 302 of ERISA, and in respect of which the  Borrower, any Subsidiary or any ERISA Affiliate is (or, if such plan were terminated,  would under Section 4069 of ERISA be deemed to be) an "employer" as defined in  Section 3(5) of ERISA.

                         "Portion": as defined in Section 2.4(b).

                         "Pricing Level": Pricing Level I, Pricing  Level II, Pricing Level III, Pricing Level IV, Pricing Level V or Pricing Level  VI, as the context may require.

                         "Pricing Level I":  any time when (i)  no Event of Default has occurred and is continuing, (ii) the Senior Debt Rating  is A‐ or higher by S&P or A3 or higher by Moody's. 

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                           "Pricing Level II": any time when (i)  no Event of Default has occurred and is continuing, (ii) the Senior Debt Rating  is BBB+ or higher by S&P or Baa1 or higher by Moody's and (iii) Pricing Level  I does not apply.

                         "Pricing Level III": any time when (i) no  Event of Default has occurred and is continuing, (ii) the Senior Debt Rating is  BBB or higher by S&P or Baa2 or higher by Moody's and (iii) Pricing Levels I and  II do not apply.

                         "Pricing Level IV": any time when (i) no  Event of Default has occurred and is continuing, (ii) the Senior Debt Rating is  BBB‐ or higher by S&P or Baa3 or higher by Moody's and (iii) Pricing Levels I,  II and III do not apply.

                         "Pricing Level V": any time when (i) no Event  of Default has occurred and is continuing, (ii) the Senior Debt Rating is BB+  or higher by S&P or Ba1 or higher by Moody's and (iii) Pricing Levels I, II, III  and IV do not apply.

                         "Pricing Level VI": any time when none of  Pricing Levels I, II, III, IV or V is applicable.

                         "Property": all types of real, personal,  tangible, intangible or mixed property.

                         "Real Property": all real property owned  or leased (or previously owned or leased) by the Borrower or any of the Material  Subsidiaries (or any of their respective predecessors).

                         "Register": as defined in Section 11.6(c).

                         "Related Parties": with respect to any specified  Person, such Person's Affiliates and the respective directors, officers, employees,  agents and advisors of such Person and such Person's Affiliates.

                         "Required Deposit Amount": in the event that  as a result of the deposit of cash collateral with the Administrative Agent pursuant  to Section 2.8(i) the Borrower (i) is not required to grant a security interest  in such cash collateral to any other Person, an amount equal to the LC Exposure  on the date on which cash collateral is required to be deposited, or (ii) is required  to grant a security interest in such cash collateral to any other Person, an amount  equal to the LC Exposure on the date on which cash collateral is required to be  deposited multiplied by a fraction, the numerator of which is the sum of the LC  Exposure plus the principal amount of all other obligations to be secured  by such cash collateral and the denominator of which is the amount of such LC  Exposure.

                         "Required Lenders": at any time, Lenders  having Revolving Credit Exposures and unused Commitments representing at least  51% of the sum of the total Revolving Credit Exposures and unused Commitments  at such time; provided that, for purposes of declaring the Loans to be  due and payable pursuant to Article 9, and for all purposes after the Loans become  due and payable pursuant to Article 9 or the Commitments expire or terminate,  the outstanding Competitive Bid Loans of the Lenders shall be included in their  respective Revolving Credit Exposures in determining the Required Lenders.

                         "Repayment Extension Date": as defined  in Section 2.15(b).

                         "Revolving Credit Exposure": with respect  to any Lender at any time, the sum of the aggregate outstanding principal amount  of such Lender's Revolving Credit Loans and LC Exposure at such time.

                         "Revolving Credit Loan" and "Revolving  Credit Loans": as defined in Section 2.1.

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                           "S&P": Standard & Poor's Ratings Group, a  division of The McGraw Hill Companies, or any successor thereto.

                         "SEC": the Securities and Exchange Commission  or any Governmental Authority succeeding to the functions thereof.

                         "Senior Debt Rating": at any date, the credit  rating identified by S&P or Moody's as the credit rating which (i) it has assigned  to long term unsecured senior debt of the Borrower or (ii) would assign to long  term unsecured senior debt of the Borrower were the Borrower to issue or have  outstanding any long term unsecured senior debt on such date.  If either  (but not both) Moody's or S&P shall cease to be in the business of rating corporate  debt obligations, the Pricing Levels shall be determined on the basis of the ratings  provided by the other rating agency.

                         "Stock": any and all shares, rights,  interests, participations, warrants or other equivalents (however designated)  of equity in, or ownership of, any entity, including corporate stock, partnership  interests and membership and other limited liability company interests.

                         "Submission Deadline": as defined in Section  2.4(b).

                         "Subsidiary": as to any Person, any corporation,  association, partnership, limited liability company, joint venture or other business  entity of which such Person or any Subsidiary of such Person, directly or indirectly,  either (i) in respect of a corporation, owns or controls more than 50% of the  outstanding Stock having ordinary voting power to elect a majority of the board  of directors or similar managing body, irrespective of whether a class or classes  shall or might have voting power by reason of the happening of any contingency,  or (ii) in respect of an association, partnership, joint venture or other business  entity, is entitled to share in more than 50% of the profits and losses, however  determined. Unless the context otherwise requires, references to a Subsidiary  shall be deemed to be references to a Subsidiary of the Borrower.

                         "Syndication Agent": Bank One, NA, in its  capacity as syndication agent for the Lenders hereunder.

                         "Tax": any present or future tax, levy, impost,  duty, charge, fee, deduction or withholding of any nature, and whatever called,  by a Governmental Authority, on whomsoever and wherever imposed, levied, collected,  withheld or assessed.

                         "Tax on the Overall Net Income": as to any  Person, a Tax imposed by the jurisdiction in which that Person's principal office  (and/or, in the case of a Lender, its Domestic Lending Office) is located, or  by any political subdivision or taxing authority thereof, or in which that Person  is deemed to be doing business, on all or part of the net income, profits or gains  of that Person (whether worldwide, or only insofar as such income, profits or  gains are considered to arise in or to relate to a particular jurisdiction, or  otherwise).

                         "Term‐Out Fee": as defined in Section 3.1(b).

                         "Term Out Notice":  as defined in Section  2.15(b)

                         "Terminating Indebtedness": collectively,  the Indebtedness (together with all unpaid and accrued interest and fees and other  unpaid sums) of the Borrower under the 364 Day Credit Agreement, dated as of June  5, 2002, by and among the Borrower, the lenders party thereto, Bank One, NA, as  syndication agent, WestLB AG, New York Branch (formerly, Westdeutsche Landesbank  Girozentrale,  

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  New York Branch), as documentation agent, The Bank of Tokyo‐Mitsubishi  Ltd., as managing agent, Credit Suisse First Boston and Societe Generale, as co‐agents,  and BNY, as administrative agent, together with all agreements, instruments and  other documents executed or delivered in connection therewith.

                         "Total Capitalization": at any time, the  difference between (i) the sum of each of the following at such time with respect  to the Borrower and the Subsidiaries, determined on a consolidated basis in accordance  with GAAP: (a) preferred Stock (less deferred compensation relating to unallocated  convertible preferred Stock held by the Employee Stock Ownership Plan), plus (b)  common Stock and any premium on capital Stock thereon (as such term is used in  the Financial Statements), plus (c) retained earnings, plus (d) Total Indebtedness,  and (ii) treasury Stock at such time of the Borrower and the Subsidiaries, determined  on a consolidated basis in accordance with GAAP.

                         "Total Indebtedness": at any time, all Indebtedness  (net of unamortized premium and discount (as such term is used in the Financial  Statements)) at such time of the Borrower and the Subsidiaries, determined on  a consolidated basis in accordance with GAAP.

                         "2003 Indenture": Supplemental Indenture  No. 6, dated as of April 28,****2003, to the Indenture pursuant to which the  Borrower issued its 2003 Senior Notes.

                         "2003 Senior Notes": the 5.375% Senior Notes  due 2013 issued by the Borrower pursuant to the 2003 Indenture.

                         "United States": the United States of America.

                         "Voting Security": a security which ordinarily  has voting power for the election of the board of directors (or other governing  body), whether at all times or only so long as no senior class of stock has such  voting power by reason of any contingency.

                         "Withdrawal Liability": liability to a Multiemployer  Plan as a result of a complete or partial withdrawal from such Multiemployer Plan,  as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

## Section 1.2            Terms Generally

                         The definitions of terms herein shall apply equally  to the singular and plural forms of the terms defined. Whenever the context may  require, any pronoun shall include the corresponding masculine, feminine and neuter  forms. The words "include", "includes" and "including" shall be deemed to be followed  by the phrase "without limitation". The word "will" shall be construed to have  the same meaning and effect as the word "shall". Unless the context requires otherwise,  (i) any definition of or reference to any agreement, instrument or other document  herein shall be construed as referring to such agreement, instrument or other  document as from time to time amended, supplemented or otherwise modified, (ii)  any definition of or reference to any law shall be construed as referring to such  law as from time to time amended and any successor thereto and the rules and regulations  promulgated from time to time thereunder, (iii) any reference herein to any Person  shall be construed to include such Person's successors and assigns, (iv) the words  "herein", "hereof" and "hereunder", and words of similar import, shall be construed  to refer to this Agreement in its entirety and not to any particular provision  hereof, (v) all references herein to Articles, Sections, Exhibits and Schedules  shall be construed to refer to Articles and Sections of, and Exhibits and Schedules  to, this Agreement, (vi) the words "asset" and "property" shall be construed to  have the same meaning and effect and to refer to any and all tangible and intangible  assets and properties, including cash, securities, accounts and contract rights  and (vii) unless specifically provided in a Loan Document to the contrary, references  to a time shall refer to New York City time.

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**Section 1.3            Accounting Terms**

                         Except as otherwise expressly provided herein, all  terms of an accounting or financial nature shall be construed in accordance with  GAAP.  Unless the context otherwise requires, any reference to a fiscal period  shall refer to the relevant fiscal period of the Borrower.

# ARTICLE 2.     AMOUNT AND TERMS OF LOANS

## Section 2.1            Revolving Credit Loans

                         Subject to the terms and conditions hereof, each  Lender severally agrees to make revolving credit loans (each a "Revolving Credit  Loan" and, as the context may require, collectively with all other Revolving  Credit Loans of such Lender and with the Revolving Credit Loans of all other Lenders,  the "Revolving Credit Loans") to the Borrower from time to time during  the Commitment Period, provided, however, that immediately after  giving effect thereto (i) such Lender's Revolving Credit Exposure would not exceed  such Lender's Commitment, and (ii) the sum of the Revolving Credit Exposures of  all Lenders plus the aggregate outstanding principal balance of all Lenders'  Competitive Bid Loans would not exceed the Aggregate Commitments.  During  the Commitment Period, the Borrower may borrow, prepay in whole or in part and  reborrow under the Aggregate Commitments, all in accordance with the terms and  conditions of this Agreement.  The Borrower hereby unconditionally promises  to pay to the Administrative Agent for the account of each Lender the then outstanding  principal balance of each Revolving Credit Loan on the Maturity Date.

## Section 2.2            Notes

                         The Revolving Credit Loans and Competitive Bid Loans  made by a Lender shall be evidenced by a promissory note of the Borrower, substantially  in the form of Exhibit B, payable to the order of such Lender and representing  the obligation of the Borrower to pay the sum of (i) the aggregate unpaid principal  balance of all Revolving Credit Loans made by such Lender plus (ii) the  aggregate unpaid principal balance of all Competitive Bid Loans made by such Lender,  in each case with interest thereon as prescribed in Section 2.9.  Each Note  shall (a) be dated the Closing Date, (b) be stated to mature on the Maturity Date  and (c) bear interest from the date thereof on the unpaid principal balance thereof  at the applicable interest rate or rates per annum determined as provided in Section  2.9, payable as specified in Section 2.9. 

## Section 2.3            Revolving Credit Loans; Procedure

                         (a)              The Borrower may borrow Revolving Credit Loans under the Aggregate Commitments  on any Business Day during the Commitment Period, provided, however,  that the Borrower shall notify the Administrative Agent (by telephone or facsimile)  no later than (i) 11:00 a.m., three Business Days prior to the requested Borrowing  Date, in the case of Eurodollar Advances, and (ii) 11:30 a.m., on the requested  Borrowing Date, in the case of ABR Advances, in each case specifying (A) the aggregate  principal amount to be borrowed under the Aggregate Commitments, (B) the requested  Borrowing Date, (C) whether such borrowing is to consist of one or more Eurodollar  Advances, ABR Advances, or a combination thereof, and (D) if the borrowing is  to consist of one or more Eurodollar Advances, the length of the Eurodollar Interest  Period for each such Eurodollar Advance, providedfurther, however,  that no Eurodollar Interest Period selected in respect of any Revolving Credit  Loan shall end after the Maturity Date.  If the Borrower fails to give timely  notice in connection with a request for a Eurodollar Advance, the Borrower shall  be deemed to have elected that such Advance shall be made as an ABR Advance.   Each such notice shall be irrevocable and confirmed promptly by delivery to the  Administrative Agent of a Credit Request.  Each ABR Advance shall be in  an aggregate principal amount 

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equal to $5,000,000 or an integral multiple of $1,000,000  in excess thereof, provided that an ABR Advance may be in an aggregate  amount that is equal to the entire unused balance of the Aggregate Commitments  or in an aggregate amount that is required to finance the reimbursement of an  LC Disbursement as contemplated by Section 2.8(e).  Each Eurodollar Advance  shall be in an aggregate principal amount equal to $5,000,000 or an integral multiple  of $1,000,000 in excess thereof.

                         (b)             Upon receipt of each notice of borrowing from the Borrower, the Administrative  Agent shall promptly notify each Lender thereof.  Subject to its receipt  of the notice referred to in the preceding sentence, each Lender will make the  amount of its Commitment Percentage of each borrowing available to the Administrative  Agent for the account of the Borrower at the office of the Administrative Agent  provided for in Section 11.2 not later than 2:00 p.m. on the relevant Borrowing  Date requested by the Borrower, in funds immediately available to the Administrative  Agent at such office.  The amounts so made available to the Administrative  Agent on such Borrowing Date will then, subject to the satisfaction of the terms  and conditions of this Agreement, be made available on such date to the Borrower  by the Administrative Agent at the office of the Administrative Agent provided  for in Section 11.2 by crediting the account of the Borrower on the books of such  office with the aggregate of said amounts received by the Administrative Agent.  

                         (c)              Unless the Administrative Agent shall have received prior notice from a Lender  (by telephone or otherwise, such notice to be promptly confirmed by facsimile  or other writing) that such Lender will not make available to the Administrative  Agent such Lender's Commitment Percentage of the Revolving Credit Loans requested  by the Borrower in accordance with paragraph (b) of this Section or Section 2.8(e),  the Administrative Agent may assume that such Lender has made such share available  to the Administrative Agent on the Borrowing Date in accordance with this Section,  provided that such Lender received notice of the proposed borrowing from  the Administrative Agent, and the Administrative Agent may, in reliance upon such  assumption, make available to the Borrower on the Borrowing Date a corresponding  amount.  If and to the extent such Lender shall not have so made its Commitment  Percentage of such Loans available to the Administrative Agent, such Lender and  the Borrower severally agree to pay to the Administrative Agent forthwith on demand  such corresponding amount (to the extent not previously paid by the other), together  with interest thereon for each day from the date such amount is made available  to the Borrower to the date such amount is paid to the Administrative Agent, at  a rate per annum equal to, in the case of the Borrower, the applicable interest  rate set forth in Section 2.9 for such Loans, and, in the case of such Lender,  the Federal Funds Rate in effect on each such day (as determined by the Administrative  Agent in accordance with the definition of "Federal Funds Rate" set forth in Section  1.1).  Such payment by the Borrower, however, shall be without prejudice  to its rights against such Lender.  If such Lender shall pay to the Administrative  Agent such corresponding amount, such amount so paid shall constitute such Lender's  Revolving Credit Loan as part of the Revolving Credit Loans for purposes of this  Agreement, which Revolving Credit Loan shall be deemed to have been made by such  Lender on the Borrowing Date applicable to such Revolving Credit Loans.   The failure of any Lender to make its Commitment Percentage of any requested Revolving  Credit Loan available to the Administrative Agent pursuant to this Section shall  not relieve any other Lender of such other Lender's obligation to make its own  Commitment Percentage of such Revolving Credit Loan available to the Administrative  Agent in accordance with this Section, provided, however, that no  Lender shall be liable or responsible for the failure by any other Lender to make  any Revolving Credit Loans required to be made by such other Lender.

                         (d)             If a Lender makes a new Revolving Credit Loan on a Borrowing Date on which the  Borrower is to repay a Revolving Credit Loan from such Lender, such Lender shall  apply the proceeds of such new Revolving Credit Loan to make such repayment, and  only the excess of the proceeds of such new Revolving Credit Loan over the Revolving  Credit Loan being repaid need be made available to the Administrative Agent, for  the Borrower's account.

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                           (e)              Without in any way limiting the obligation of the Borrower to confirm in writing  any telephonic notice of borrowing given to the Administrative Agent, the Administrative  Agent may act without liability upon the basis of telephonic notice of such borrowing  believed by the Administrative Agent in good faith to be from an authorized officer  of the Borrower prior to receipt of written confirmation.  In each such case,  the Administrative Agent's records with regard to any such telephone notice shall  be presumptively correct, absent manifest error.

## Section 2.4            Competitive Bid Loans; Procedure

                         (a)              The Borrower may make Competitive Bid Requests by 11:00 a.m. at least two Business  Days prior to the proposed Borrowing Date for one or more Competitive Bid Loans.   Each Competitive Bid Request given to the Administrative Agent (which shall promptly  on the same day give notice thereof to each Lender by facsimile of an Invitation  to Bid if the Competitive Bid Request is not rejected pursuant to this Section),  shall be by telephone (confirmed by facsimile or other written electronic means  promptly on the same day by the delivery of a Competitive Bid Request signed by  the Borrower), and shall specify (i) the proposed Borrowing Date, which shall  be a Business Day, (ii) the aggregate amount of the requested Competitive Bid  Loans (the "Maximum Request"), which amount (A) shall not exceed an amount  which, on the proposed Borrowing Date and after giving effect to the requested  Competitive Bid Loans, would cause the sum of the Revolving Credit Exposures of  all Lenders plus the aggregate outstanding principal balance of all Lenders'  Competitive Bid Loans to exceed the Aggregate Commitments and (B) shall be in  a principal amount equal to $3,000,000 or an integral multiple of $1,000,000 in  excess thereof, (iii) the Competitive Interest Period(s) therefor and the last  day of each such Competitive Interest Period, and (iv) if more than one Competitive  Interest Period is so specified, the principal amount allocable to each such Competitive  Interest Period (which amount shall not be less than $3,000,000 or an integral  multiple of $1,000,000 in excess thereof).  A Competitive Bid Request that  does not conform substantially to the form of Exhibit D shall be rejected,  and the Administrative Agent shall promptly notify the Borrower of such rejection.   Notwithstanding anything contained herein to the contrary, (1) not more than three  Competitive Interest Periods may be requested pursuant to any Competitive Bid  Request and (2) not more than five Competitive Bid Loans may be outstanding at  any one time.

                         (b)             Each Lender in its sole discretion may (but is not obligated to) submit one or  more Competitive Bids to the Administrative Agent not later than 10:00 a.m. at  least one Business Day prior to the proposed Borrowing Date specified in such  Competitive Bid Request (such time being herein called the "Submission Deadline"),  by facsimile or other writing, and thereby irrevocably offer to make all or any  part (any such part referred to as a "Portion") of any Competitive Bid  Loan described in the relevant Competitive Bid Request at a rate of interest per  annum (each a "Bid Rate") specified therein in an aggregate principal amount  of not less than $3,000,000 or an integral multiple of $1,000,000 in excess thereof,  provided that Competitive Bids submitted by the Administrative Agent may  only be submitted if the Administrative Agent notifies the Borrower of the terms  of its Competitive Bid not later than thirty minutes prior to the Submission Deadline.   Multiple Competitive Bids may be delivered to and by the Administrative Agent.   The aggregate Portions of Competitive Bid Loans for any or all Competitive Interest  Periods offered by each Lender in its Competitive Bid may exceed the Maximum Request  contained in the relevant Competitive Bid Request, provided that each Competitive  Bid shall set forth the maximum aggregate amount of the Competitive Bid Loans  offered thereby which the Borrower may accept (the "Maximum Offer"), which Maximum  Offer shall not exceed the Maximum Request.  If any Lender shall elect not  to make a Competitive Bid, such Lender shall so notify the Administrative Agent  by facsimile not later than the Submission Deadline therefor, provided,  however, that the failure by any Lender to give any such notice shall not  obligate such Lender to make any Competitive Bid Loan.

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                           (c)              The Administrative Agent shall promptly give notice by telephone (promptly confirmed  by facsimile or other writing) to the Borrower of all Competitive Bids received  by the Administrative Agent prior to the Submission Deadline which comply in all  material respects with this Section.  The Borrower shall, in its sole discretion  but subject to Section 2.4(d), irrevocably accept or reject any such Competitive  Bid (or any Portion thereof) not later than 1:00 p.m. on the day of the Submission  Deadline by notice to the Administrative Agent by telephone (confirmed by facsimile  or other writing in the form of a Competitive Bid Accept/Reject Letter promptly  the same day).  Promptly upon receipt by the Administrative Agent of such  a Competitive Bid Accept/Reject Letter, the Administrative Agent will give notice  to each Lender that submitted a Competitive Bid as to the extent, if any, that  such Lender's Competitive Bid shall have been accepted.  If the Administrative  Agent fails to receive notice from the Borrower of its acceptance or rejection  of any Competitive Bids at or prior to 1:00 p.m. on the day of the Submission  Deadline, all such Competitive Bids shall be deemed to have been rejected by the  Borrower, and the Administrative Agent will give to each Lender that submitted  a Competitive Bid notice of such rejection by telephone on such day.  In  due course following the acceptance of any Competitive Bid, the Administrative  Agent shall notify each Lender which submitted a Competitive Bid, in the form  of a Competitive Bid Loan Confirmation, of the amount, maturity date and Bid Rate  for each Competitive Bid Loan.

                         (d)             If the Borrower accepts a Portion of a proposed Competitive Bid Loan for a single  Competitive Interest Period at the Bid Rate provided therefor in a Lender's Competitive  Bid, such Portion shall be in a principal amount of $3,000,000 or an integral  multiple of $1,000,000 in excess thereof (subject to such lesser allocation as  may be made pursuant to the provisions of this Section 2.4(d)).  The aggregate  principal amount of Competitive Bid Loans accepted by the Borrower following Competitive  Bids responding to a Competitive Bid Request shall not exceed the Maximum Request.   The aggregate principal amount of Competitive Bid Loans accepted by the Borrower  pursuant to a Lender's Competitive Bid shall not exceed the Maximum Offer therein  contained.  If the Borrower accepts any Competitive Bid Loans or Portion  offered in any Competitive Bid, the Borrower must accept Competitive Bids (and  Competitive Bid Loans and Portions thereby offered) based exclusively upon the  successively lowest Bid Rates within each Competitive Interest Period and no other  criteria.  If two or more Lenders submit Competitive Bids with identical  Bid Rates for the same Competitive Interest Period and the Borrower accepts any  thereof, the Borrower shall, subject to the first three sentences of this Section  2.4(d), accept all such Competitive Bids as nearly as possible in proportion to  the amounts of such Lenders' respective Competitive Bids with identical Bid Rates  for such Competitive Interest Period, provided that if the amount of Competitive  Bid Loans to be so allocated is not sufficient to enable each such Lender to make  such Competitive Bid Loan (or Portions thereof) in an aggregate principal amount  of $3,000,000 or an integral multiple of $1,000,000 in excess thereof, the Borrower  shall round the Competitive Bid Loans (or Portions thereof) allocated to such  Lender or Lenders as the Borrower shall select as necessary to a minimum of $1,000,000  or an integral multiple of $500,000 in excess thereof.

                         (e)              Not later than 2:00 p.m. on the relevant Borrowing Date, each Lender whose Competitive  Bid was accepted by the Borrower shall make available to the Administrative Agent  at its office provided for in Section 11.2, in immediately available funds, the  proceeds of such Lender's Competitive Bid Loan(s). The amounts so made available  to the Administrative Agent on such Borrowing Date will then, subject to the satisfaction  of the terms and conditions of this Agreement, as determined by the Administrative  Agent, be made available on such date to the Borrower by the Administrative Agent  at the office of the Administrative Agent provided for in Section 11.2 by crediting  the account of the Borrower on the books of such office with the aggregate of  said amounts received by the Administrative Agent. 

                         (f)               All notices required by this Section 2.4 shall be given in accordance with Section  11.2.

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                           (g)              The Competitive Bid Loans made by each Lender shall be evidenced by a Note referred  to in Section 2.2. Each Competitive Bid Loan shall be due and payable on the last  day of the Competitive Interest Period applicable thereto.

## Section 2.5            Termination, Reduction and Increase of Aggregate Commitments

                         (a)              Unless previously terminated, the Commitments shall terminate on the Commitment  Termination Date.

                         (b)             The Borrower may at any time terminate, or from time to time reduce, the Aggregate  Commitments, provided that (i) the Borrower shall not terminate or reduce  the Aggregate Commitments if, after giving effect to any concurrent prepayment  of Loans in accordance with Section 2.6, the sum of the Revolving Credit Exposures  of all Lenders plus the outstanding principal balance of all Competitive  Bid Loans would exceed the total Aggregate Commitments, and (ii) each such reduction  shall be in an amount that is an integral multiple of $1,000,000 and not less  than $5,000,000.

                         (c)              The Borrower shall notify the Administrative Agent of any election to terminate  or reduce the Aggregate Commitments under paragraph (b) of this Section at least  three Business Days prior to the effective date of such termination or reduction,  specifying such election and the effective date thereof.  Promptly following  receipt of any notice, the Administrative Agent shall advise the Lenders of the  contents thereof.  Each notice delivered by the Borrower pursuant to this  Section shall be irrevocable, provided that a notice of termination of  the Aggregate Commitments delivered by the Borrower may state that such notice  is conditioned upon the effectiveness of other credit facilities, in which case  such notice may be revoked by the Borrower (by notice to the Administrative Agent  on or prior to the specified effective date) if such condition is not satisfied.   Each reduction, and any termination, of the Aggregate Commitments shall be permanent  and each reduction of the Aggregate Commitments shall be made ratably among the  Lenders in accordance with their respective Commitments. 

                         (d)             The Borrower may at any time and from time to time prior to the Commitment Termination  Date, at its sole cost, expense and effort, request any one or more of the Lenders  to increase its Commitment (the decision to increase the Commitment of a Lender  to be within the sole and absolute discretion of such Lender), or any other Person  reasonably satisfactory to the Administrative Agent and the Issuing Bank to provide  a new Commitment, by submitting an Increase Supplement duly executed by the Borrower  and each such Lender (each, an "Increasing Lender") or other Person, as  the case may be. If such Increase Supplement is in all respects reasonably satisfactory  to the Administrative Agent, the Administrative Agent shall execute such Increase  Supplement and deliver a copy thereof to the Borrower and each such Increasing  Lender or other Person, as the case may be. Upon execution and delivery of such  Increase Supplement by the Administrative Agent, (x) in the case of each such  Increasing Lender, its Commitment shall be increased to the amount set forth in  such Increase Supplement, (y) in the case of each such other Person, such other  Person shall become a party hereto and shall for all purposes of the Loan Documents  be deemed a "Lender" having a Commitment as set forth in such Increase Supplement,  and (z) in each case, the Commitment of such Increasing Lender or such other Person,  as the case may be, shall be as set forth in the applicable Increase Supplement;  provided that:

                                   (i)                immediately after giving effect thereto, the sum of the Aggregate Commitments  after all increases shall not exceed $100,000,000;

                                   (ii)               each such increase shall be in an amount not less than $5,000,000 or such amount  plus an integral multiple of $1,000,000;

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                                     (iii)             if Revolving Credit Loans would be outstanding immediately after giving effect  to each such increase, then simultaneously with such increase (A) each such Lender,  each such other Person and each other Lender shall be deemed to have entered into  a master assignment and acceptance agreement, in form and substance substantially  similar to Exhibit J, pursuant to which each such other Lender shall have  assigned to each such Lender and each such other Person a portion of its Revolving   Credit Loans necessary to reflect proportionately the Commitments as adjusted  in accordance with this subsection (d), and (B) in connection with such assignment,  each such Lender and each such other Person shall pay to the Administrative Agent,  for the account of the other Lenders, such amount as shall be necessary to appropriately  reflect the assignment to it of Revolving Credit Loans, and in connection with  such master assignment each such other Lender may treat the assignment of Eurodollar  Advances as a prepayment of such Eurodollar Advances for purposes of Section 2.13;  and

                                   (iv)             each such other Person shall have delivered to the Administrative Agent and the  Borrower all forms, if any, that are required to be delivered by such other Person  pursuant to Section 2.11.

## Section 2.6            Prepayments of the Loans

                         (a)              Voluntary Prepayments. The Borrower may, at its option, prepay the Revolving  Credit Loans without premium or penalty, in full at any time or in part from time  to time, by notifying the Administrative Agent in writing no later than 11:30  a.m. on the proposed prepayment date, in the case of ABR Advances, and at least  three Business Days prior to the proposed prepayment date, in the case of Eurodollar  Advances, specifying the Revolving Credit Loans to be prepaid, the amount to be  prepaid and the date of prepayment.  The Borrower may not prepay the Competitive  Bid Loans.  Each such notice of a prepayment under this Section shall be  irrevocable and the amount specified in such notice shall be due and payable on  the date specified.  Upon receipt of such notice, the Administrative Agent  shall promptly notify each Lender thereof.  Each partial prepayment shall  be in an aggregate principal amount of (i) $5,000,000 or an integral multiple  of $1,000,000 in excess thereof or (ii) if the outstanding principal balance of  the Revolving Credit Loans is less that the minimum amount set forth in clause  (a)(i) of this Section, then such lesser outstanding principal balance, as the  case may be.  After giving effect to any partial prepayment with respect  to Eurodollar Advances which were made (whether as the result of a borrowing or  a conversion) on the same date and which had the same Interest Period, the outstanding  principal amount of such Eurodollar Advances shall exceed (subject to Section  2.7) $5,000,000 or an integral multiple of $1,000,000 in excess thereof.   If any prepayment is made in respect of any Eurodollar Advance, in whole or in  part, prior to the last day of the applicable Eurodollar Interest Period, the  Borrower agrees to indemnify the Lenders in accordance with Section 2.13.

                         (b)             Mandatory Prepayments Relating to Reductions or Termination of the Aggregate  Commitments.  Concurrently with each reduction or termination of the  Aggregate Commitments under Section 2.5, the Borrower shall prepay the Revolving  Credit Loans by the amount, if any, by which the aggregate unpaid principal balance  of all Lenders' Revolving Credit Loans and Competitive Bid Loans exceeds the amount  of the Aggregate Commitments after giving effect to such reduction or termination,  as the case may be.

                         (c)              In General.  Any prepayments under this Section shall be applied pro  rata according to the Commitment Percentage of each Lender.

## Section 2.7            Conversions and Continuations

                         (a)              The Borrower may elect from time to time to convert Eurodollar Advances to ABR  Advances by giving the Administrative Agent at least one Business Day's prior  irrevocable notice 

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of such election (confirmed by the delivery of a Notice of  Conversion/Continuation), specifying the amount to be so converted, provided  that any such conversion of Eurodollar Advances shall only be made on the last  day of the Interest Period applicable thereto.  In addition, the Borrower  may elect from time to time to (i) convert ABR Advances to Eurodollar Advances  and (ii) to continue Eurodollar Advances by selecting a new Eurodollar Interest  Period therefor, in each case by giving the Administrative Agent at least three  Business Days' prior irrevocable notice of such election (confirmed by the delivery  of a Notice of Conversion/Continuation), in the case of a conversion to, or continuation  of, Eurodollar Advances, specifying the amount to be so converted and the initial  Eurodollar Interest Period relating thereto, provided that any such conversion  of ABR Advances to Eurodollar Advances shall only be made on a Business Day and  any such continuation of Eurodollar Advances shall only be made on the last day  of the Eurodollar Interest Period applicable to the Eurodollar Advances which  are to be continued as such new Eurodollar Advances.  The Administrative  Agent shall promptly provide the Lenders with a copy of each such Notice of Conversion/Continuation.   ABR Advances and Eurodollar Advances may be converted or continued pursuant to  this Section in whole or in part, provided that conversions of ABR Advances  to Eurodollar Advances, or continuations of Eurodollar Advances, shall be in an  aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000  in excess thereof.  If the Borrower fails to deliver a notice of conversion  or continuation in accordance with this Section with respect to any Advance prior  to the last day of the Interest Period applicable thereto, then, unless such Advance  is repaid as provided herein, on the last day of such Interest Period, such Advance  shall be converted to, or continued as, an ABR Advance.  

                         (b)             Notwithstanding anything in this Section to the contrary, no ABR Advance may be  converted to a Eurodollar Advance, and no Eurodollar Advance may be continued,  if a Default or Event of Default has occurred and is continuing either (i) at  the time the Borrower shall notify the Administrative Agent of its election to  convert or continue or (ii) on the requested Conversion/Continuation Date.   In such event, such ABR Advance shall be automatically continued as an ABR Advance,  or such Eurodollar Advance shall be automatically converted to an ABR Advance  on the last day of the Eurodollar Interest Period applicable to such Eurodollar  Advance.  If an Event of Default shall have occurred and be continuing, the  Administrative Agent shall, at the request of the Required Lenders, notify the  Borrower (by telephone or otherwise) that all, or such lesser amount as the Required  Lenders shall designate, of the outstanding Eurodollar Advances shall be automatically  converted to ABR Advances, in which event such Eurodollar Advances shall be automatically  converted to ABR Advances on the date such notice is given.

                         (c)              No Eurodollar Interest Period selected in respect of the conversion or continuation  of any Eurodollar Advance shall end after the Maturity Date.  

                         (d)             Each conversion or continuation shall be effected by each Lender by applying the  proceeds of its new ABR Advance or Eurodollar Advance, as the case may be, to  its Advances (or portion thereof) being converted (it being understood that such  conversion shall not constitute a borrowing for purposes of Articles 4, 5 or 6).  

                         (e)              Without in any way limiting the obligation of the Borrower to confirm in writing  any telephonic notice of borrowing given to the Administrative Agent, the Administrative  Agent may act without liability upon the basis of telephonic notice of such borrowing  believed by the Administrative Agent in good faith to be from an authorized officer  of the Borrower prior to receipt of written confirmation.  In each such case,  the Administrative Agent's records with regard to any such telephone notice shall  be presumptively correct, absent manifest error.

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## Section 2.8            Letters of Credit

                         (a)              General. Subject to the terms and conditions set forth herein, the Borrower  may request the issuance of New Letters of Credit denominated in Dollars for its  own account, in a form reasonably acceptable to the Administrative Agent and the  Issuing Bank, at any time and from time to time during the Commitment Period.   In the event of any inconsistency between the terms and conditions of this Agreement  and the terms and conditions of any form of letter of credit application or other  agreement submitted by the Borrower to, or entered into by the Borrower with,  the Issuing Bank relating to any Letter of Credit, the terms and conditions of  this Agreement shall control.  

                         (b)             Notice of Issuance; Amendment; Renewal; Extension; Certain Conditions.  To request the issuance of a New Letter of Credit (or the amendment, renewal or  extension of an outstanding Letter of Credit), the Borrower shall hand deliver  or facsimile (or transmit by electronic communication, if arrangements for doing  so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative  Agent (not later than three Business Days before the requested date of issuance,  amendment, renewal or extension) a notice requesting the issuance of a New Letter  of Credit, or identifying the Letter of Credit to be amended, renewed or extended,  and specifying the date of issuance, amendment, renewal or extension (which shall  be a Business Day), the date on which such Letter of Credit is to expire (which  shall comply with paragraph (c) of this Section), the amount of such Letter of  Credit, the name and address of the beneficiary thereof and such other information  as shall be necessary to prepare, amend, renew or extend such Letter of Credit,  provided that no such notice shall be required in connection with the automatic  extension of an Evergreen Letter of Credit.  If requested by the Issuing  Bank, the Borrower also shall submit a letter of credit application on the Issuing  Bank's standard form in connection with any request for a Letter of Credit.   A Letter of Credit shall be issued, amended, renewed or extended only if (and,  upon issuance, amendment, renewal or extension of each Letter of Credit, the Borrower  shall be deemed to represent and warrant that), after giving effect to such issuance,  amendment, renewal or extension, (i) the LC Exposure shall not exceed $25,000,000  and (ii) the sum of the total Revolving Credit Exposures of all Lenders plus the  outstanding principal balance of all Competitive Bid Loans shall not exceed the  Aggregate Commitments.

                         (c)              Expiration Date. Each Letter of Credit shall expire at or prior to the  close of business on the earlier of (i) the date that is one year after the date  of the issuance of such Letter of Credit (or, in the case of any renewal or extension  thereof, one year after such renewal or extension) and (ii) the date that is ten  Business Days prior to the Commitment Termination Date, provided that any  Letter of Credit may provide for the renewal thereof for any period so long as  such period ends (x) ten Business Days prior to the Commitment Termination Date  or (y) if the Borrower shall have deposited cash collateral with the Administrative  Agent as required by Section 2.8(i), ten Business Days prior to the the date that  is one year after the date of the issuance of such Letter of Credit (or, in the  case of any renewal or extension thereof, one year after such renewal or extension).

                         (d)             Participations. By the issuance of a New Letter of Credit (or an amendment  to a New Letter of Credit increasing the amount thereof) or, in the case of an  Existing Letter of Credit, the execution and delivery of this Agreement, and without  any further action on the part of the Issuing Bank or the Lenders, the Issuing  Bank hereby grants to each Lender, and each such Lender hereby acquires from the  Issuing Bank, a participation in each Letter of Credit equal to such Lender's  Commitment Percentage of the aggregate amount available to be drawn under such  Letter of Credit.  In consideration and in furtherance of the foregoing,  each such Lender hereby absolutely and unconditionally agrees to pay to the Administrative  Agent, for the account of the Issuing Bank, such Lender's Commitment Percentage  of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower  on the date due as provided in paragraph (e) of this Section, or of any reimbursement  payment required to be refunded to the Borrower for any reason.  Each Lender  acknowledges and agrees that its obligation to acquire  

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participations pursuant  to this paragraph in respect of Letters of Credit is absolute and unconditional  and shall not be affected by any circumstance whatsoever, including any amendment,  renewal or extension of any Letter of Credit or the occurrence and continuance  of a Default or reduction or termination of the Commitments, and that each such  payment shall be made without any offset, abatement, withholding or reduction  whatsoever; provided, however, that no Lender shall be obligated  to make any payment to the Administrative Agent for any wrongful LC Disbursement  made by the Issuing Bank as a result of acts or omissions constituting willful  misconduct or gross negligence on the part of the Issuing Bank. Without limiting  the foregoing or any other provision of this Agreement, this Agreement (and the  obligations of each Lender under this subsection (d)) may not be terminated prior  to the expiration or other termination of all Letters of Credit and the repayment  of all LC Disbursements or the purchase by the Lenders of their participations  in any unreimbursed LC Disbursements and the reimbursement of the same by the  Borrower.

###                          (e)              Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect  of a Letter of Credit, then the Issuing Bank shall either (i) notify the Borrower  to reimburse the Issuing Bank therefor, in which case the Borrower shall reimburse  such LC Disbursement by paying to the Administrative Agent an amount equal to  such LC Disbursement and any accrued interest thereon not later than 2:00 p.m.  on the date that such LC Disbursement is made, if the Borrower shall have received  notice of such LC Disbursement prior to 11:00 a.m. on such date, or if such notice  has not been received by the Borrower prior to such time on such date, then not  later than 2:00 p.m. on (A) the Business Day that the Borrower receives such notice,  if such notice is received prior to 11:00 a.m. on the day of receipt or (B) the  Business Day immediately following the day that the Borrower receives such notice,  if such notice is not received prior to such time on the day of receipt, provided  that, if the LC Disbursement is equal to or greater than $1,000,000, the Borrower  may, subject to the conditions of borrowing set forth herein, request in accordance  with Section 2.3 that such payment be financed with an ABR Advance in an equivalent  amount and, to the extent so financed, the Borrower's obligation to make such  payment shall be discharged and replaced by the resulting ABR Advance or (ii)  notify the Administrative Agent that the Issuing Bank is requesting that the Lenders  make ABR Advances in an amount equal to such LC Disbursement and any accrued interest  thereon, in which case (A) the Administrative Agent shall notify each Lender of  the details thereof and of the amount of such Lender's Revolving Credit Loan to  be made as part of such ABR Advances, and (B) each Lender shall, whether or not  any Default shall have occurred and be continuing, any representation or warranty  shall be accurate, any condition to the making of any loan hereunder shall have  been fulfilled, or any other matter whatsoever, make the Revolving Credit Loan  to be made by it under this paragraph by wire transfer of immediately available  funds to the account of the Administrative Agent most recently designated by it  for such purpose by notice to the Lenders on (1) the Business Day that such Lender  receives such notice, if such notice is received prior to 12:00 noon, on the day  of receipt or (2) the Business Day immediately following the day that such Lender  receives such notice, if such notice is not received prior to such time on the  day of receipt.  Such Revolving Credit Loans shall, for all purposes hereof,  be deemed to be ABR Advances made pursuant to Section 2.3, and the Lenders obligations  to make such Revolving Credit Loans shall be absolute and unconditional. The Administrative  Agent will make such Revolving Credit Loans available to the Issuing Bank by promptly  crediting or otherwise transferring the amounts so received, in like funds, to  the Issuing Bank for the purpose of repaying in full the LC Disbursement and all  accrued interest thereon.

                         (f)               Obligations Absolute. The Borrower's obligations to reimburse LC Disbursements  as provided in paragraph (e) of this Section shall be absolute, unconditional  and irrevocable, and shall be performed strictly in accordance with the terms  of this Agreement under any and all circumstances whatsoever and irrespective  of (i) any lack of validity or enforceability of any Letter of Credit or this  Agreement, or any term or provision therein or herein, (ii) any draft or other  document presented under a Letter of Credit proving to be forged, fraudulent or  invalid in any respect or any statement therein being untrue or inaccurate in  any respect, (iii) payment by the Issuing Bank under a  

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Letter of Credit against  presentation of a draft or other document that does not comply with the terms  of such Letter of Credit or (iv) any other event or circumstance whatsoever, whether  or not similar to any of the foregoing, that might, but for the provisions of  this Section, constitute a legal or equitable discharge of, or provide a right  of setoff against, the Borrower's obligations hereunder.  Neither any Credit  Party nor any of their respective Related Parties shall have any liability or  responsibility by reason of or in connection with the issuance or transfer of  any Letter of Credit or any payment or failure to make any payment thereunder  (irrespective of any of the circumstances referred to in the preceding sentence),  or any error, omission, interruption, loss or delay in transmission or delivery  of any draft, notice or other communication under or relating to any Letter of  Credit (including any document required to make a drawing thereunder), any error  in interpretation of technical terms or any consequence arising from causes beyond  the control of the Issuing Bank; provided that the foregoing shall not  be construed to excuse the Issuing Bank from liability to the Borrower to the  extent of any direct damages (as opposed to consequential damages, claims in respect  of which are hereby waived by the Borrower to the extent permitted by applicable  law) suffered by the Borrower that are caused by the Issuing Bank's failure to  exercise care when determining whether drafts and other documents presented under  a Letter of Credit comply with the terms thereof. The parties hereto expressly  agree that, in the absence of gross negligence or willful misconduct on the part  of the Issuing Bank (as finally determined by a court of competent jurisdiction),  the Issuing Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the  parties agree that, with respect to documents presented which appear on their  face to be in substantial compliance with the terms of a Letter of Credit, the  Issuing Bank may, in its sole discretion, either accept and make payment upon  such documents without responsibility for further investigation, regardless of  any notice or information to the contrary, or refuse to accept and make payment  upon such documents if such documents are not in strict compliance with the terms  of such Letter of Credit.

                         (g)              Disbursement Procedures. The Issuing Bank shall, promptly following its  receipt thereof, examine all documents purporting to represent a demand for payment  under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative  Agent and the Borrower by telephone (confirmed by facsimile) of such demand for  payment and whether the Issuing Bank has made or will make an LC Disbursement  thereunder; provided that any failure to give or delay in giving such notice  shall not relieve the Borrower of its obligation to reimburse the Issuing Bank  and the Lenders with respect to any such LC Disbursement.

                         (h)              Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,  unless the Borrower shall reimburse such LC Disbursement in full on the date such  LC Disbursement is made, the unpaid amount thereof shall bear interest, for each  day from and including the date such LC Disbursement is made to but excluding  the date that the Borrower reimburses such LC Disbursement, at the rate per annum  then applicable to ABR Advances; provided that, if the Borrower fails to  reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section,  then Section 2.9(b) shall apply. Interest accrued pursuant to this paragraph shall  be for the account of the Issuing Bank, except that interest accrued on and after  the date of payment by any Lender pursuant to paragraph (e) of this Section to  reimburse the Issuing Bank shall be for the account of such Lender to the extent  of such payment.

                         (i)               Cash Collateral. In the event that (i) an Event of Default shall occur  and be continuing or (ii) any Letters of Credit are outstanding on or after the  tenth Business Day prior to the Commitment Termination Date (or any LC Disbursements  remain unreimbursed on or after such date), the Borrower shall deposit with the  Administrative Agent in immediately available funds on the Business Day on which  it receives notice from the Administrative Agent or Required Lenders demanding  the deposit of cash collateral in the case of clause (i), or on or before the  tenth Business Day prior to the Commitment Termination Date in the case of clause  (ii), an amount equal to the Required Deposit Amount, which amount shall be held  by the Administrative Agent as cash collateral pursuant to a cash  

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collateral agreement  in form and substance satisfactory to the Administrative Agent and the Issuing  Bank to secure the Borrower's reimbursement obligations with respect to LC Disbursements.   Notwithstanding the foregoing, the obligation to deposit such cash collateral  shall become effective immediately, and such deposit shall become immediately  due and payable, without demand or other notice of any kind, upon the occurrence  of any Event of Default with respect to the Borrower described in clause (h) or  (i) of Article 9. The Administrative Agent shall have exclusive dominion and control,  including the exclusive right of withdrawal, over such account. Such deposit shall  not bear interest, nor shall the Administrative Agent be under any obligation  whatsoever to invest the same, provided, however, that, at the request  of the Borrower, such deposit shall be invested by the Administrative Agent in  direct short term obligations of, or short term obligations the principal of and  interest on which are unconditionally guaranteed by, the United States, in each  case maturing no later than the expiry date of the Letter of Credit giving rise  to the relevant LC Exposure.  Interest or profits, if any, on such investments  shall accumulate in such account.  Moneys in such account shall be applied  by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements  for which it has not been reimbursed and, to the extent not so applied, shall  be held for the satisfaction of the reimbursement obligations of the Borrower  for the LC Exposure at such time or, if the maturity of the Loans has been accelerated  (but subject to the consent of Required Lenders), be applied to satisfy other  obligations of the Borrower under this Agreement. If the Borrower is required  to provide cash collateral hereunder as a result of clause (i) of the first sentence  of this subsection, the amount thereof (to the extent not applied as aforesaid)  shall be returned to the Borrower within three Business Days after all Events  of Default have been cured or waived.  If the Borrower is required to provide  cash collateral hereunder as a result of clause (ii) of the first sentence of  this subsection, the amount thereof (to the extent not applied as aforesaid) shall  be returned to the Borrower when the LC Exposure is zero and all Letters of Credit  shall have been returned to the Issuing Bank and shall have been cancelled.

## Section 2.9            Interest Rate and Payment Dates

                         (a)              Prior to Maturity. Except as otherwise provided in Section 2.9(b), prior  to maturity, the Loans shall bear interest on the outstanding principal balance  thereof at the applicable interest rate or rates per annum set forth below:

**
ADVANCES

RATE

Each ABR Advance

Alternate Base Rate.

Each Eurodollar Advance

Eurodollar        Rate for the applicable Eurodollar Interest Period plus the Applicable        Margin.

Each Competitive Bid Loan

Bid Rate applicable thereto for the applicable Competitive        Interest Period.
**

                         (b)             Late Charges. If all or any portion of the principal balance of or interest  payable on any of the Loans, any reimbursement obligation in respect of any LC  Disbursement or any other amount payable under the Loan Documents shall not be  paid when due (whether at the stated maturity thereof, by acceleration or otherwise),  such overdue balance or amount shall bear interest at a rate per annum (whether  before or after the entry of a judgment thereon) equal to (i) in the case of the  principal balance of any Loan, 2% plus the rate which would otherwise be  applicable pursuant to Section 2.9(a), or (ii) in the case of any other amount,  2% plus the Alternate Base Rate, in each case from the date of such nonpayment  to, but not including, the date such balance or such amount, as the case may be,  is paid in full.  All such interest shall be payable on demand.

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                           (c)              In General. Interest on (i) ABR Advances to the extent based on the BNY  Rate shall be calculated on the basis of a 365 or 366 day year (as the case may  be) and (ii) ABR Advances to the extent based on the Federal Funds Rate, on Eurodollar  Advances and on Competitive Bid Loans shall be calculated on the basis of a 360  day year, in each case, for the actual number of days elapsed, including the first  day but excluding the last.  Except as otherwise provided in Section 2.9(b),  interest shall be payable in arrears on each Interest Payment Date and upon each  payment (including prepayment) of the Loans (on the amount paid (or prepaid)).   Any change in the interest rate on the Loans resulting from a change in the Alternate  Base Rate shall become effective as of the opening of business on the day on which  such change shall become effective.  The Administrative Agent shall, as soon  as practicable, notify the Borrower and the Lenders of the effective date and  the amount of each such change in the BNY Rate, but any failure to so notify shall  not in any manner affect the obligation of the Borrower to pay interest on the  Loans in the amounts and on the dates required.  Each determination of the  Alternate Base Rate or a Eurodollar Rate by the Administrative Agent pursuant  to this Agreement shall be conclusive and binding on all parties hereto absent  manifest error.  At no time shall the interest rate payable on the Loans,  together with the Facility Fee, the Term‐Out Fee, the LC Fee and all other amounts  payable under the Loan Documents, to the extent the same are construed to constitute  interest, exceed the Highest Lawful Rate.  If any amount paid hereunder would  exceed the maximum amount of interest permitted by the Highest Lawful Rate, then  such amount shall automatically be reduced to such maximum permitted amount, and  interest for any subsequent period, to the extent less than the maximum amount  permitted for such period by the Highest Lawful Rate, shall be increased by the  unpaid amount of such reduction.  Any interest actually received for any  period in excess of such maximum allowable amount for such period shall be deemed  to have been applied as a prepayment of the Loans.  The Borrower acknowledges  that to the extent interest payable on ABR Advances is based on the BNY Rate,  such rate is only one of the bases for computing interest on loans made by the  Lenders, and by basing interest payable on ABR Advances on the BNY Rate, the Lenders  have not committed to charge, and the Borrower has not in any way bargained for,  interest based on a lower or the lowest rate at which the Lenders may now or in  the future make loans to other borrowers.

## Section 2.10       Substituted Interest Rate

                         In the event that (i) the Administrative Agent shall  have determined in the exercise of its reasonable discretion (which determination  shall be conclusive and binding upon the Borrower) that by reason of circumstances  affecting the interbank eurodollar market either reasonable means do not exist  for ascertaining the Eurodollar Rate or (ii) the Required Lenders shall have notified  the Administrative Agent that they have determined (which determination shall  be conclusive and binding on the Borrower) that the applicable Eurodollar Rate  will not adequately and fairly reflect the cost to such Lenders of maintaining  or funding loans bearing interest based on such Eurodollar Rate, with respect  to any portion of the Revolving Credit Loans that the Borrower has requested be  made as Eurodollar Advances or Eurodollar Advances that will result from the requested  conversion or continuation of any portion of the Advances into or as Eurodollar  Advances (each an "Affected Advance"), the Administrative Agent shall promptly  notify the Borrower and the Lenders (by telephone or otherwise, to be promptly  confirmed in writing) of such determination on or, to the extent practicable,  prior to the requested Borrowing Date or Conversion/Continuation Date for such  Affected Advances.  If the Administrative Agent shall give such notice, (a)  any Affected Advances shall be made as ABR Advances, (b) the Advances (or any  portion thereof) that were to have been converted to or continued as Affected  Advances shall be converted to or continued as ABR Advances and (c) any outstanding  Affected Advances shall be converted, on the last day of the then current Interest  Period with respect thereto, to ABR Advances.  Until any notice under clause  (i) or (ii), as the case may be, of this Section has been withdrawn by the Administrative  Agent (by notice to the Borrower promptly upon either (1) the Administrative Agent's  having determined that such circumstances affecting the interbank eurodollar  market no longer exist and that adequate and reasonable means do exist for  determining the Eurodollar Rate pursuant to Section 2.9 or (2) the  Administrative 

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  Agent having been notified by such Required Lenders that circumstances no  longer render the Advances (or any portion thereof) to be Affected Advances),  no further Eurodollar Advances shall be required to be made by the Lenders,  nor shall the Borrower have the right to convert or continue all or any  portion of the Loans to Eurodollar Advances. 

## Section 2.11       Taxes

                         (a)              Payments to be Free and Clear. Provided that all documentation, if any,  then required to be delivered by any Lender or the Administrative Agent pursuant  to Section 2.11(c) has been delivered, all sums payable by the Borrower under  the Loan Documents shall be paid free and clear of and (except to the extent required  by law) without any deduction or withholding on account of any Tax (other than  a Tax on the Overall Net Income of any Lender (for which payment need not be free  and clear, but no deduction or withholding shall be made unless then required  by applicable law)) imposed, levied, collected, withheld or assessed by or within  the United States or any political subdivision in or of the United States or any  other jurisdiction from or to which a payment is made by or on behalf of the Borrower  or by any federation or organization of which the United States or any such jurisdiction  is a member at the time of payment.

                         (b)             Grossing up of Payments. If the Borrower or any other Person is required  by law to make any deduction or withholding on account of any such Tax from any  sum paid or payable by the Borrower to the Administrative Agent or any Lender  under any of the Loan Documents:

                                   (i)                the Borrower shall notify the Administrative Agent and such Lender of any such  requirement or any change in any such requirement as soon as the Borrower becomes  aware of it;

                                   (ii)               the Borrower shall pay any such Tax before the date on which penalties attach  thereto, such payment to be made (if the liability to pay is imposed on the Borrower)  for its own account or (if that liability is imposed on the Administrative Agent  or such Lender, as the case may be) on behalf of and in the name of the Administrative  Agent or such Lender, as the case may be;

                                   (iii)             the sum payable by the Borrower to the Administrative Agent or a Lender in respect  of which the relevant deduction, withholding or payment is required shall be increased  to the extent necessary to ensure that, after the making of that deduction, withholding  or payment, the Administrative Agent or such Lender, as the case may be, receives  on the due date therefor a net sum equal to what it would have received had no  such deduction, withholding or payment been required or made; and

                                   (iv)             within 30 days after paying any sum from which it is required by law to make any  deduction or withholding, and within 30 days after the due date of payment of  any Tax which it is required by clause (ii) above to pay, the Borrower shall deliver  to the Administrative Agent and the applicable Lender evidence satisfactory to  the other affected parties of such deduction, withholding or payment and of the  remittance thereof to the relevant Governmental Authority;

                         (c)              provided that no additional amount shall be required to be paid to any Lender  under clause (iii) above except to the extent that any change after the date hereof  (in the case of each Lender listed on the signature pages hereof) or after the  date of the Assignment and Acceptance Agreement pursuant to which such Lender  became a Lender (in the case of each other Lender) if any such requirement for  a deduction, withholding or payment as is mentioned therein shall result in an  increase in the rate of such deduction, withholding or payment from that in effect  at the date of this Agreement or at the date of such Assignment and Acceptance  Agreement, as the case may be, in respect of payments to  

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such Lender, and providedfurther that any Lender claiming any additional amounts payable pursuant  to this Section 2.11 shall use reasonable efforts (consistent with its internal  policy and legal and regulatory restrictions) to change the jurisdiction of its  Applicable Lending Office or take other appropriate action if the making of such  a change or the taking of such action, as the case may be, would avoid the need  for, or reduce the amount of, any such additional amounts that may thereafter  accrue and would not, in the reasonable judgment of such Lender, be otherwise  disadvantageous to such Lender.

                         (d)             Tax Certificates. Each Foreign Lender shall deliver to the Borrower (with  a copy to the Administrative Agent), on or prior to the Agreement Date (in the  case of each Foreign Lender listed on the signature pages hereof) or on the effective  date of the Assignment and Acceptance Agreement pursuant to which it becomes a  Lender (in the case of each other Foreign Lender), and at such other times as  may be necessary in the determination of the Borrower or the Administrative Agent  (each in the reasonable exercise of its discretion), including upon the occurrence  of any event requiring a change in the most recent counterpart of any form set  forth below previously delivered by such Foreign Lender to the Borrower, such  certificates, documents or other evidence, properly completed and duly executed  by such Foreign Lender (i) two accurate and complete original signed copies of  Internal Revenue Service Form W8‐BEN or Form W8‐ECI, or successor applicable form  and (ii) an Internal Revenue Service Form W‐8 or W‐9 (or any other certificate  or statement of exemption required by Treasury Regulations Section 1.1441 4(a)  or Section 1.1441 6(c) or any successor thereto) to establish that such Foreign  Lender is not subject to deduction or withholding of United States federal income  tax under Section 1441 or 1442 of the Code or otherwise (or under any comparable  provisions of any successor statute) with respect to any payments to such Foreign  Lender of principal, interest, fees or other amounts payable under any of the  Loan Documents.  The Borrower shall not be required to pay any additional  amount to any such Foreign Lender under Section 2.11(b)(iii) if such Foreign Lender  shall have failed to satisfy the requirements of the immediately preceding sentence;  provided that if such Foreign Lender shall have satisfied such requirements  on the Agreement Date (in the case of each Foreign Lender listed on the signature  pages hereof) or on the effective date of the Assignment and Acceptance Agreement  pursuant to which it becomes a Lender (in the case of each other Foreign Lender),  nothing in this Section shall relieve the Borrower of its obligation to pay any  additional amounts pursuant to Section 2.11(b)(iii) in the event that, as a result  of any change in applicable law, such Foreign Lender is no longer properly entitled  to deliver certificates, documents or other evidence at a subsequent date establishing  the fact that such Foreign Lender is not subject to withholding as described in  the immediately preceding sentence.

## Section 2.12       Increased Costs; Illegality

                         (a)              If any Change in Law shall:

                                   (i)                impose, modify or deem applicable any reserve, special deposit or similar requirement  against assets of, deposits with or for the account of, or credit extended by,  any Credit Party (except any such reserve requirement reflected in the Eurodollar  Rate); or

                                   (ii)               impose on any Credit Party or the London interbank market any other condition  affecting this Agreement, any Eurodollar Loans made by such Credit Party or any  participation therein or any Letter of Credit or participation therein. 

and the result of any of  the foregoing shall be to increase the cost to such Credit Party of making or  maintaining any Eurodollar Loan or the cost to such Credit Party of issuing, participating  in or maintaining any Letter of Credit hereunder or to increase the cost to such  Credit Party or to reduce the amount of any sum received or receivable by such  Credit Party hereunder (whether of principal, interest or otherwise), then the  Borrower will pay to such Credit Party such additional amount or amounts as will  compensate such Credit Party for such additional costs incurred or reduction suffered.

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                           (b)             If any Credit Party determines that any Change in Law regarding capital requirements  has or would have the effect of reducing the rate of return on such Credit Party's  capital or on the capital of such Credit Party's holding company, if any, as a  consequence of this Agreement or the Loans made, the Letters of Credit issued  or the participations therein held, by such Credit Party to a level below that  which such Credit Party or such Credit Party's holding company could have achieved  but for such Change in Law (taking into consideration such Credit Party's policies  and the policies of such Credit Party's holding company with respect to capital  adequacy), then from time to time the Borrower will pay to such Credit Party such  additional amount or amounts as will compensate such Credit Party or such Credit  Party's holding company for any such reduction suffered; provided, however,  that such Credit Party or such Credit Party's holding company agrees to use reasonable  efforts (consistent with its internal policy and legal and regulatory restrictions)  to mitigate the consequences of any such Change in Law.

                         (c)              A certificate of a Credit Party setting forth the amount or amounts necessary  to compensate such Credit Party or its holding company, as applicable, as specified  in paragraph (a) or (b) of this Section shall be delivered to the Borrower and  shall be conclusive absent manifest error. The Borrower shall pay such Credit  Party the amount shown as due on any such certificate within 10 days after receipt  thereof. 

Failure or delay on the  part of any Credit Party to demand compensation pursuant to this Section shall  not constitute a waiver of such Credit Party's right to demand such compensation;  provided that no Lender shall be entitled to demand such compensation more  than 90 days following the last day of the Interest Period in respect of which  such demand is made; providedfurther, however, that the  foregoing proviso shall in no way limit the right of any Lender to demand or receive  such compensation to the extent that such compensation relates to the retroactive  application of any law, regulation, treaty or directive described above if such  demand is made within 90 days after the implementation of such retroactive law,  interpretation, treaty or directive. A statement setting forth the calculations  of any additional amounts payable pursuant to the foregoing submitted by a Lender  to the Borrower shall be conclusive absent manifest error. 

                         (d)             Notwithstanding any other provision of this Agreement, if, after the Agreement  Date, any Change in Law shall make it unlawful for any Lender to make or maintain  any Eurodollar Loan or to give effect to its obligations as contemplated hereby  with respect to any Eurodollar Loan, then, by written notice to the Borrower and  to the Administrative Agent:

                                   (i)                such Lender may declare that Eurodollar Advances will not thereafter (for the  duration of such unlawfulness) be made by such Lender hereunder (or be continued  for additional Interest Periods) and ABR Advances will not thereafter (for such  duration) be converted into Eurodollar Advances, whereupon any request for a Eurodollar  Advance or to convert an ABR Advance to a Eurodollar Advance or to continue a  Eurodollar Advance, as applicable, for an additional Interest Period shall, as  to such Lender only, be deemed a request for an ABR Advance (or a request to continue  an ABR Advance as such for an additional Interest Period or to convert a Eurodollar  Advance into an ABR Advance, as applicable), unless such declaration shall be  subsequently withdrawn; and

                                   (ii)               such Lender may require that all outstanding Eurodollar Advances made by it be  converted to ABR Advances, in which event all such Eurodollar Advances shall be  automatically converted to ABR Advances, as of the effective date of such notice  as provided in the last sentence of this paragraph; 

provided, that such  Lender agrees to use reasonable efforts (consistent with its internal policy and  legal and regulatory restrictions) to designate a different Eurodollar Lending  Office or take other appropriate action if the making of such designation or the  taking of such action, as the case may be, would allow 

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  such Lender or its Eurodollar  Lending Office to continue to perform its obligations to make Eurodollar Advances  or to continue to fund or maintain Eurodollar Advances and would not, in the judgment  of such Lender, be otherwise disadvantageous to such Lender. In the event any  Lender shall exercise its rights under clause (i) or (ii) of this paragraph, all  payments and prepayments of principal that would otherwise have been applied to  repay the Eurodollar Advances that would have been made by such Lender or the  converted Eurodollar Loans of such Lender shall instead be applied to repay the  ABR Advances made by such Lender in lieu of, or resulting from the conversion  of, such Eurodollar Advances, as applicable.  For purposes of this paragraph,  a notice to the Borrower by any Lender shall be effective as to each Eurodollar  Advances made by such Lender, if lawful, on the last day of the Interest Period  currently applicable to such Eurodollar Advances; in all other cases such notice  shall be effective on the date of receipt by the Borrower.

## Section 2.13       Break Funding Payments

                         In the event of (a) the payment or prepayment (voluntary  or otherwise) of any principal of any Eurodollar Loan or Competitive Bid Loan  other than on the last day of an Interest Period applicable thereto (including  as a result of an Event of Default), (b) the conversion of any Eurodollar Loan  other than on the last day of the Interest Period applicable thereto, (c) the  failure to borrow, convert, continue or prepay any Eurodollar Loan on the date  specified in any notice delivered pursuant hereto (regardless of whether such  notice may be revoked under Section 2.5(c) and is revoked in accordance therewith),  (d) the failure to borrow any Competitive Loan after accepting the Competitive  Bid to make such Loan, or (e) the assignment of any Eurodollar Loan or Competitive  Bid Loan other than on the last day of the Interest Period or maturity date applicable  thereto as a result of a request by any Borrower pursuant to Section 2.16, then,  in any such event, the Borrower shall compensate each Lender for the loss, cost  and expense attributable to such event. In the case of a Eurodollar Loan, such  loss, cost or expense to any Lender shall be deemed to include an amount determined  by such Lender to be the excess, if any, of (i) the amount of interest that would  have accrued on the principal amount of such Loan had such event not occurred,  at the Eurodollar Rate that would have been applicable to such Loan, for the period  from the date of such event to the last day of the then current Interest Period  therefor (or, in the case of a failure to borrow, convert or continue, for the  period that would have been the Interest Period for such Loan), over (ii) the  amount of interest that would accrue on such principal amount for such period  at the interest rate that such Lender would bid were it to bid, at the commencement  of such period, for dollar deposits of a comparable amount and period from other  banks in the eurodollar market.  A certificate of any Lender setting forth  any amount or amounts that such Lender is entitled to receive pursuant to this  Section shall be delivered to the Borrower and shall be conclusive absent manifest  error.  The Borrower shall pay such Lender the amount shown as due on any  such certificate within ten days after receipt thereof.

## Section 2.14       Lenders' Records

                         Each Lender's records regarding the amount of each  Loan, each payment by the Borrower of principal and interest on the Loans and  other information relating to the Loans shall be presumptively correct absent  manifest error.

##   Section 2.15       Extension of Commitment Period and Maturity Date

                         (a)              Extension of Commitment Period

                                   (i)                Provided that no Default or Event of Default shall exist, the Borrower may request  that the Commitment Period be extended for up to 364 days by giving written notice  thereof (each an "Extension Request") to the Administrative Agent at any  time during the period which is not more than 45 days nor less than 30 days prior  to the then current Commitment Termination Date and, 

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  upon receipt of each such  notice, the Administrative Agent shall promptly notify each Lender thereof.   No Lender shall be required to consent to any Extension Request. Each Lender shall  endeavor to respond to each Extension Request by no later than 15 days prior to  the then current Commitment Termination Date, provided that each Lender  which shall have failed so to respond by such time shall be deemed not to have  consented thereto. The Administrative Agent shall promptly notify the Borrower  as to the name of each Lender that, in accordance with this clause (i), consented  to such extension. In the event that Lenders having Commitments greater than 50%  of the Aggregate Commitments shall not have consented in accordance with this  clause (i) to such extension, the then current Commitment Termination Date shall  not be extended and shall remain in full force and effect.  In the event  that all Lenders shall have consented in accordance with this clause (i), then  on the date upon which the last such consent shall have been received by the Administrative  Agent, the then existing Commitment Termination Date shall be extended to the  day which is 364 days after the then existing Commitment Termination Date (or,  if such date is not a Business Day, the Business Day immediately preceding such  day).

                                   (ii)               Notwithstanding any provision in Section 2.15(a)(i) to the contrary, in the event  Lenders having Commitments greater than 50% of the Aggregate Commitments consent  to an extension of the Commitment Termination Date pursuant to Section 2.15(a)(i)  (the "Continuing Lenders"), the Borrower shall have the right, provided  that no Default or Event of Default shall have occurred and be continuing, to  replace or remove each Lender that did not so consent (each a "Non Extending  Lender") by giving the Administrative Agent notice no later than five days  prior to the then current Commitment Termination Date of its intent to extend  such Commitment Termination Date.  On or prior to the then current Commitment  Termination Date, the Borrower shall replace each Non Extending Lender with either  an existing Lender willing to assume such Non Extending Lender's Commitment or  with another Eligible Assignee willing to assume such Non Extending Lender's Commitment.   Each Non Extending Lender agrees, subject to and in accordance with Section 11.6,  to assign its rights and obligations under the Loan Documents to an Eligible Assignee  selected by the Borrower upon payment by or on behalf of such Eligible Assignee  to such Non Extending Lender of such Non Extending Lender's Commitment Percentage  or other applicable percentage of all outstanding Loans and accrued interest,  fees and other sums payable under the Loan Documents.  Effective upon such  assignment such Non‐Extending Lender shall cease to be a "Lender" for purposes  of this Agreement (except with respect to its rights hereunder to be reimbursed  for costs and expenses and to indemnification with respect to, matters attributable  to events, acts or conditions occurring prior to such assignment). In the event  that the Borrower shall have elected to replace or remove each Non Extending Lender  pursuant to this clause (ii), then on the date, if any, upon which all of the  Borrower's obligations under this clause (ii) shall have been satisfied, if any,  the then existing Commitment Termination Date shall be extended to the day which  is 364 days after the then existing Commitment Termination Date (or, if such date  is not a Business Day, the Business Day immediately preceding such day), provided,  however, that if the Borrower shall not have satisfied such obligations  on or prior to the then existing Commitment Termination Date, such Commitment  Termination Date shall not be extended.

                         (b)             Extension of Maturity Date. Unless a Default shall have occurred and is  continuing, effective upon the delivery by the Borrower to the Administrative  Agent by no later than the seventh day prior to the then effective Commitment  Termination Date of an express written notice (the "Term‐Out Notice") that  the Borrower intends to extend the Maturity Date to the date certain (the "Repayment  Extension Date") set forth in such Term‐Out Notice that is not later than  nine months after the Commitment Termination Date with respect to Revolving Credit  Loans outstanding on the Commitment Termination , the Maturity Date with respect  to such Revolving Credit Loans shall be extended to such Repayment Extension Date,  provided that on or before the Commitment Termination Date, the Borrower  has paid the Term‐Out Fee as provided in Section 3.1(b).  The delivery by  the Borrower to the Administrative Agent of a Term‐Out Notice shall constitute  a representation and warranty by the Borrower that no Default then exists.

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## Section 2.16        Substitution of Lender

                         In the event that the Borrower becomes obligated  to pay additional amounts to any Lender pursuant to Section 2.11, 2.12 or 2.13,  or if any Lender defaults in its obligation to fund Loans hereunder on three or  more occasions, the Borrower may, within 60 days of the demand by such Lender  for such additional amounts or the relevant default by such Lender, as the case  may be, and subject to and in accordance with the provisions of Section 11.6,  designate an Eligible Assignee (acceptable to the Administrative Agent and the  Issuing Bank) to purchase and assume all its interests, rights and obligations  under the Loan Documents, without recourse to or warranty by or expense to, such  Lender, for a purchase price equal to the outstanding principal amount of such  Lender's Loans plus any accrued but unpaid interest thereon and accrued but unpaid  Facility Fees, Term‐Out Fees and LC Fees in respect of such Lender's Commitment  and any other amounts payable to such Lender hereunder, and to assume all the  obligations of such Lender hereunder, and, upon such purchase, such Lender shall  no longer be a party hereto or have any rights hereunder (except those that survive  full repayment hereunder) and shall be relieved from all obligations to the Borrower  hereunder, and the Eligible Assignee shall succeed to the rights and obligations  of such Lender hereunder.  The Borrower shall execute and deliver to such  Eligible Assignee a Note.  Notwithstanding anything herein to the contrary,  in the event that a Lender is replaced pursuant to this Section 2.16 as a result  of the Borrower becoming obligated to pay additional amounts to such Lender pursuant  to Section 2.11, 2.12 or 2.13, such Lender shall be entitled to receive such additional  amounts as if it had not been so replaced. 

# ARTICLE 3.    FEES;  PAYMENTS

##   Section 3.1           Fees

                         (a)              Facility Fee. The Borrower agrees to pay to the Administrative Agent, for  the account of the Lenders in accordance with each Lender's Commitment Percentage,  during the period from and including the Closing Date through but excluding the  Maturity Date, a fee (the "Facility Fee") equal to the Applicable Facility  Fee Percentage per annum of the average daily sum of the Aggregate Commitments,  regardless of usage, during such period. The Facility Fee shall be payable (i)  quarterly in arrears on the last day of each March, June, September and December  during such period, (ii) on the date of any reduction in the Aggregate Commitments  (to the extent of such reduction) and (iii) on the Maturity Date. The Facility  Fee shall be calculated on the basis of a 360 day year for the actual number of  days elapsed.

                         (b)             Term‐Out Fee. In the event that the Borrower delivers a Term‐Out Notice  in accordance with Section 2.15(b), as a condition to the extension of the Maturity  Date as provided in such Section, the Borrower agrees to pay to the Administrative  Agent, for the account of the Lenders in accordance with each Lender's Commitment  Percentage, a non‐refundable fee (the "Term‐Out Fee") equal to 0.375% of  the aggregate outstanding principal balance of Revolving Credit Loans on the Commitment  Termination Date.  The Term‐Out Fee shall be earned and payable on the Commitment  Termination Date. 

                         (c)              LC Fee. The Borrower agrees to pay (i) to the Administrative Agent for  the account of each Lender a participation fee (the "LC Fee") with respect  to its participations in Letters of Credit, which shall accrue at a rate per annum  equal to the Applicable Margin on the average daily amount of such Lender's LC  Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements)  during the period from and including the Closing Date to but excluding the later  of the date on which such Lender's Commitment terminates and the date on which  such Lender ceases to have any LC Exposure and (ii) to the Issuing Bank for its  own account a fronting fee, which shall accrue at the rate or rates per annum  separately agreed upon between the Borrower and the Issuing Bank on the

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  average  daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Closing  Date to but excluding the later of the date of termination of the Commitments  and the date on which there ceases to be any LC Exposure, as well as the Issuing  Bank's standard fees with respect to the issuance, amendment, renewal or extension  of any Letter of Credit or processing of drawings thereunder.  Accrued participation  fees and fronting fees shall be payable in arrears on the last day of March, June,  September and December of each year, commencing on the first such date to occur  after the date hereof; provided that all such fees shall be payable on  the date on which the Aggregate Commitments terminate and any such fees accruing  after the date on which the Aggregate Commitments terminate shall be payable on  demand.  Any other fees payable to the Issuing Bank pursuant to this paragraph  shall be payable within ten days after demand.  All participation fees and  fronting fees shall be computed on the basis of a year of 360 days and shall be  payable for the actual number of days elapsed (including the first day but excluding  the last day). 

                         (d)             Other Fees. The Borrower agrees to pay to each of the Credit Parties, for  its own account, such fees as have been agreed to in writing by it and the Borrower.

## Section 3.2            Pro Rata Treatment and Application of Principal  Payments

                         (a)              The Borrower shall make each payment required to be made by it hereunder or under  any other Loan Document (whether of principal of Loans, reimbursements of LC Disbursements,  interest or fees, or of amounts payable under Sections 2.11, 2.12, 2.13 or 11.4  or otherwise) prior to 1:00 p.m., on the date when due, in immediately available  funds, without setoff or counterclaim. Any amounts received after such time on  any date may, in the discretion of the Administrative Agent, be deemed to have  been received on the next succeeding Business Day for purposes of calculating  interest thereon. All such payments shall be made to the Administrative Agent  at its office at One Wall Street, New York, New York, or such other office as  to which the Administrative Agent may notify the other parties hereto, except  payments to be made to the Issuing Bank as expressly provided herein and except  that payments pursuant to Sections 2.11, 2.12, 2.13 or 11.4 shall be made directly  to the Persons entitled thereto. The Administrative Agent shall distribute any  such payments received by it for the account of any other Person to the appropriate  recipient promptly following receipt thereof. If any payment hereunder shall be  due on a day that is not a Business Day, the date for payment shall be extended  to the next succeeding Business Day, and, in the case of any payment accruing  interest, interest thereon shall be payable for the period of such extension.   All payments hereunder shall be made in Dollars. 

                         (b)             If at any time insufficient funds are received by and available to the Administrative  Agent to pay fully all amounts of principal of Loans, unreimbursed LC Disbursements,  interest, fees and commissions then due hereunder, such funds shall be applied  (i) first, towards payment of interest and fees then due hereunder, ratably among  the parties entitled thereto in accordance with the amounts of interest, fees  and commissions then due to such parties and (ii) second, towards payment of principal  of Loans and unreimbursed LC Disbursements then due hereunder, ratably among the  parties entitled thereto in accordance with the amounts of principal of Loans  and unreimbursed LC Disbursements then due to such parties.

                         (c)              If any Lender shall, by exercising any right of setoff or counterclaim or otherwise,  obtain payment in respect of any principal of, or interest on, any of its Loans  or participations in LC Disbursements resulting in such Lender receiving payment  of a greater proportion of the aggregate amount of its Loans and participations  in LC Disbursements and accrued interest thereon than the proportion received  by any other Lender, then the Lender receiving such greater proportion shall purchase  (for cash at face value) participations in the Loans and participations in LC  Disbursements of other Lenders to the extent necessary so that the benefit of  all such payments shall be shared by the Lenders ratably in accordance with the  aggregate amount of principal of, and accrued interest on, their respective  

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  Loans  and participations in LC Disbursements, provided that (i) if any such participations  are purchased and all or any portion of the payment giving rise thereto is recovered,  such participations shall be rescinded and the purchase price restored to the  extent of such recovery, without interest, and (ii) the provisions of this paragraph  shall not be construed to apply to any payment made by the Borrower pursuant to  and in accordance with the express terms of this Agreement or any payment obtained  by a Lender as consideration for the assignment of or sale of a participation  in any of its Loans or participations in LC Disbursements to any assignee or participant,  other than to the Borrower or any Subsidiary or Affiliate thereof (as to which  the provisions of this paragraph shall apply). The Borrower consents to the foregoing  and agrees, to the extent it may effectively do so under applicable law, that  any Lender acquiring a participation pursuant to the foregoing arrangements may  exercise against the Borrower rights of setoff and counterclaim with respect to  such participation as fully as if such Lender were a direct creditor of the Borrower  in the amount of such participation.

                         (d)             Unless the Administrative Agent shall have received notice from the Borrower prior  to the date on which any payment is due to the Administrative Agent for the account  of the applicable Credit Parties hereunder that the Borrower will not make such  payment, the Administrative Agent may assume that the Borrower has made such payment  on such date in accordance herewith and may, in reliance upon such assumption,  distribute to such Credit Parties the amount due. In such event, if the Borrower  has not in fact made such payment, then each such Credit Party severally agrees  to repay to the Administrative Agent forthwith on demand the amount so distributed  to such Credit Party with interest thereon, for each day from and including the  date such amount is distributed to it to but excluding the date of payment to  the Administrative Agent, at the greater of the Federal Funds Rate and a rate  determined by the Administrative Agent in accordance with banking industry rules  on interbank compensation.

                         (e)              If any Credit Party shall fail to make any payment required to be made by it pursuant  to Section 2.3(c) or 2.8(d), then the Administrative Agent may, in its discretion  (notwithstanding any contrary provision hereof), apply any amounts thereafter  received by the Administrative Agent for the account of such Credit Party to satisfy  such Credit Party's obligations under such Sections until all such unsatisfied  obligations are fully paid.

# ARTICLE 4.     REPRESENTATIONS AND WARRANTIES

In order to induce the  Credit Parties to enter into this Agreement, the Lenders to make the Loans, the  Issuing Bank to issue Letters of Credit and the Lenders to acquire participations  therein, the Borrower makes the following representations and warranties to the  Administrative Agent and each Lender:

##   Section 4.1           Subsidiaries; Capitalization

                         As of the Agreement Date, the Borrower has only the Subsidiaries  set forth on Schedule 4.1, and such Schedule accurately designates as of  the Agreement Date whether each such Subsidiary is a Material Subsidiary or an  Immaterial Subsidiary for purposes of this Agreement.  The shares of each  corporate Material Subsidiary are duly authorized, validly issued, fully paid  and non‐assessable and are owned free and clear of any Liens, other than Liens  permitted pursuant to Section 8.1(o).  The interest of the Borrower in each  non‐corporate Material Subsidiary is owned free and clear of any Liens, other  than Liens permitted pursuant to Section 8.1(o). 

##   Section 4.2           Existence and Power

Each of the Borrower and the  Material Subsidiaries is duly organized or formed and validly existing in good  standing under the laws of the jurisdiction of its incorporation or formation,  has 

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  all requisite power and authority to own its Property and to carry on its  business as now conducted, and is in good standing and authorized to do  business as a foreign corporation or other applicable entity in each  jurisdiction in which the nature of the business conducted therein or the  Property owned therein makes such qualification necessary, except where such  failure to qualify could not, individually or in the aggregate, reasonably be  expected to have a Material Adverse Effect. 

##   Section 4.3           Authority

                         The Borrower has full legal power and authority  to enter into, execute, deliver and perform the terms of the Loan Documents and  to make the borrowings contemplated hereby and by the Notes, and to execute, deliver  and carry out the terms of the Notes and to incur the obligations provided for  herein and therein, all of which have been duly authorized by all proper and necessary  corporate or other applicable action and are in full compliance with its charter  or by laws or its other organization documents. 

## Section 4.4            Binding Agreement

                         The Loan Documents (other than the Notes) constitute,  and the Notes, when issued and delivered pursuant hereto for value received, will  constitute, the valid and legally binding obligations of the Borrower, enforceable  in accordance with their respective terms, except as such enforceability may be  limited by applicable bankruptcy, insolvency, reorganization or other similar  laws affecting the enforcement of creditors' rights generally and general principles  of equity.

##   Section 4.5           Litigation and Regulatory Proceedings

                         (a)              Except as disclosed in Schedule 4.5, there are no actions, suits or proceedings  at law or in equity or by or before any Governmental Authority (whether or not  purportedly on behalf of the Borrower or any of the Material Subsidiaries) pending  or, to the knowledge of the Borrower, threatened against the Borrower or any of  the Material Subsidiaries, which (i) if adversely determined, could individually  or in the aggregate reasonably be expected to have a Material Adverse Effect,  except that the commencement by the Borrower, any of the Material Subsidiaries  or any Governmental Authority of a rate proceeding or earnings review before such  Governmental Authority shall not constitute such a pending or threatened action,  suit or proceeding unless and until such Governmental Authority has made a final  determination thereunder that could reasonably be expected to have a Material  Adverse Effect, (ii) call into question the validity or enforceability of any  of the Loan Documents, or (iii) could reasonably be expected to result in the  rescission, termination or cancellation of any material franchise, right, license,  permit or similar authorization held by the Borrower or any of the Material Subsidiaries.  

                         (b)             Since the Agreement Date, there has been no change in the status of the matters  disclosed on Schedule 4.5 that, individually or in the aggregate, has resulted  in, or materially increased the likelihood of, a Material Adverse Effect.  

##   Section 4.6           Required Consents

                         Except for information filings required to be made in the  ordinary course of business which are not a condition to the Borrower's performance  under the Loan Documents, no consent, authorization or approval of, filing with,  notice to, or exemption by, equityholders, any Governmental Authority or any other  Person is required to authorize, or is required in connection with the execution,  delivery and performance of the Loan Documents or is required as a condition to  the validity or enforceability of the Loan Documents, except such as have been  obtained or made and are in full force

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and effect and not subject to any appeals  period (including the FERC Order).  As of the Closing Date, the FERC Order  then in effect expires August 11, 2004.

##   Section 4.7           No  Conflicting Agreements, Compliance with Laws

                           (a)              Neither the Borrower nor any of the Material Subsidiaries is in default (i) under  any mortgage, indenture, contract or agreement to which it is a party or by which  it or any of its Property is bound or (ii) except as disclosed on Schedule  4.5, with respect to any judgment, order, writ, injunction, decree or decision  of any Governmental Authority, the effect of which default could reasonably be  expected to have a Material Adverse Effect.  The execution, delivery or carrying  out of the terms of the Loan Documents will not constitute a default under, or  require the mandatory repayment of, or result in the creation or imposition of,  or obligation to create, any Lien upon any Property of the Borrower or any of  the Material Subsidiaries pursuant to the terms of, any such mortgage, indenture,  contract or agreement. 

                         (b)             Each of the Borrower and the Material Subsidiaries (i) except as disclosed on  Schedule 4.5, is complying in all material respects with all statutes,  regulations, rules and orders applicable to the Borrower or such Material Subsidiary  of all Governmental Authorities, including Environmental Laws and ERISA, a violation  of which could individually or in the aggregate reasonably be expected to have  a Material Adverse Effect and (ii) has filed or caused to be filed all tax returns  required to be filed and has paid, or has made adequate provision for the payment  of, all taxes shown to be due and payable on said returns or in any assessments  made against it (other than those being contested as permitted under Section 7.4)  which would be material to the Borrower or any of the Material Subsidiaries, and  no tax Liens have been filed with respect thereto.

## Section 4.8            Governmental Regulations

                         Neither the Borrower nor any of the Material Subsidiaries  is (i) an "investment company" or a company "controlled" by an "investment company"  as defined in, or is otherwise subject to regulation under, the Investment Company  Act of 1940, as amended, or (ii) a "holding company", or an "affiliate" or "subsidiary  company" of a "holding company", as those terms are defined in the Public Utility  Holding Company Act of 1935, as amended, in each case which is subject to registration  thereunder.  

## Section 4.9           Federal Reserve Regulations; Use of Loan Proceeds

                         Neither the Borrower nor any  of the Material Subsidiaries is engaged principally, or as one of its important  activities, in the business of extending credit for the purpose of purchasing  or carrying any Margin Stock.  No part of the proceeds of the Loans will  be used, directly or indirectly, (i) for a purpose which violates any law,  rule or regulation of any Governmental Authority, including the provisions of  Regulations T, U or X of the Board of Governors of the Federal Reserve System,  as amended, (ii) to purchase or carry Margin Stock or to extend credit to others  for the purpose of purchasing or carrying Margin Stock or (iii) to fund a personal  loan to or for the benefit of a director or executive officer of a Borrower or  any Subsidiary.

## Section 4.10        Plans

                         No ERISA Event has occurred or is reasonably expected  to occur that, when taken together with all other such ERISA Events for which  liability is reasonably expected to occur, could reasonably be expected to result  in a Material Adverse Effect. The present value of all accumulated benefit obligations  under each Plan (based on the assumptions used for purposes of Statement of

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  Financial  Accounting Standards No. 87) did not, as of the date of the most recent audited  financial statements reflecting such amounts, exceed by more than $10,000,000  the fair market value of the assets of such Plan, and the present value of all  accumulated benefit obligations of all underfunded Plans (based on the assumptions  used for purposes of Statement of Financial Accounting Standards No. 87) did not,  as of the date of the most recent audited financial statements reflecting such  amounts, exceed by more than $10,000,000 the fair market value of the assets of  all such underfunded Plans.  

## Section 4.11       Financial  Statements

                         The Borrower has heretofore delivered to the Credit  Parties copies of its****consolidated balance sheet and the related consolidated  statements of income, stockholder's equity and cash flows as of and for the fiscal  year ended December 31, 2002 and December 31, 2001, reported on by the Accountants  (with the applicable related notes and schedules, the "Financial Statements").  The Financial Statements have been prepared in accordance with GAAP and fairly  present the consolidated financial condition and results of the operations of  the Borrower and the Subsidiaries as of the dates and for the periods indicated  therein.  Since December 31, 2002, each of the Borrower and the Material  Subsidiaries has conducted its business only in the ordinary course and there  has been no Material Adverse Change.

## Section 4.12       Property

                         Each of the Borrower and the Material Subsidiaries  has good and marketable title to all of its Property, title to which is material  to the Borrower or such Material Subsidiary, as the case may be, subject to no  Liens, except Permitted Liens.

## Section 4.13         Environmental Matters

                         (a)              To the best knowledge of the Borrower, the Borrower and each of the Material Subsidiaries  is in compliance in all material respects with the requirements of all applicable  Environmental Laws.

                         (b)             To the best knowledge of the Borrower, except as described in Schedule 4.13,  (i) no Hazardous Substances have been generated or manufactured on, transported  to or from, treated at, stored at or discharged from any Real Property in violation  of any Environmental Laws, (ii) no Hazardous Substances have been discharged into  subsurface waters under any Real Property in violation of any Environmental Laws,  (iii) no Hazardous Substances have been discharged from any Real Property on or  into Property or waters (including subsurface waters) adjacent to any Real Property  in violation of any Environmental Laws, and (iv) there are not now, nor ever have  been, on any Real Property any underground or above ground storage tanks of the  Borrower or any of the Material Subsidiaries regulated under any Environmental  Laws, which, as to any of the foregoing actions, events or conditions, individually  or collectively, could reasonably be expected to have a Material Adverse Effect.

                         (c)              Except as described in Schedule 4.13, neither the Borrower nor any of the  Material Subsidiaries (i) has received notice directly or otherwise learned  indirectly (through a Corporate Officer) of any claim, demand, suit, action,  proceeding, event, condition, report, directive, Lien, violation, non  compliance or investigation indicating or concerning any potential or actual  material liability (including potential liability for enforcement,  investigatory costs, cleanup costs, government response costs, removal costs,  remediation costs, natural resources damages, Property damages, personal  injuries or penalties) arising in connection with: (A) any material non  compliance with or violation of the requirements of any applicable  Environmental Laws or (B) the presence of any Hazardous Substance on any Real  Property (or any Real Property previously owned by the Borrower or any of the  Material Subsidiaries) or the release or threatened release of any Hazardous  Substance into the environment which 

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individually or collectively could reasonably be expected to  have a Material Adverse Effect or (ii) has any overtly threatened or actual  material liability in connection with the presence of any Hazardous Substance  on any Real Property (or any Real Property previously owned by the Borrower or  any of the Material Subsidiaries) or the release or threatened release of any  Hazardous Substance into the environment. 

                         (d)             Since the Agreement Date, there has been no change in the status of the matters  disclosed on Schedule 4.13 that, individually or in the aggregate, has  resulted in, or materially increased the likelihood of, a Material Adverse Effect.

# ARTICLE 5.     CONDITIONS TO EFFECTIVENESS

The obligations of the  Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder  shall not become effective until the date on which each of the following conditions  is satisfied (or waived in accordance with Section 11.1):

##   Section 5.1           Evidence of Action

                         The Administrative Agent shall have received a certificate,  dated the Closing Date, of the Secretary or Assistant Secretary of the Borrower  (i) attaching a true and complete copy of the resolutions of its Board of Directors  and of all documents evidencing other necessary corporate action (in form and  substance satisfactory to the Administrative Agent) taken by it to authorize the  Loan Documents and the transactions contemplated thereby, (ii) attaching a true  and complete copy of its charter and by laws, (iii) setting forth the incumbency  of its officer or officers who may sign the Loan Documents, including therein  a signature specimen of such officer or officers, and (iv) attaching a certificate  of good standing of the Secretary of State of the jurisdiction of its incorporation  and each other jurisdiction in which the failure to be in good standing could  reasonably be expected to have a Material Adverse Effect.

##   Section 5.2           This Agreement

                         The Administrative Agent (or its counsel) shall  have received, in respect of each Person listed on the signature pages of this  Agreement, either (i) a counterpart signature page hereof signed on behalf of  such Person or (ii) written evidence satisfactory to the Administrative Agent  (which may include a facsimile transmission of a signed signature page of this  Agreement) that a counterpart signature page hereof has been signed on behalf  of such Person. 

##   Section 5.3           Notes

                         The Administrative Agent (or its counsel) shall  have received a Note for each Lender, dated the Closing Date, duly executed by  a duly authorized officer of the Borrower.

##   Section 5.4           Approvals

                         The Administrative Agent shall have received a certificate  of a duly authorized officer of the Borrower, in form and substance satisfactory  to the Administrative Agent, certifying that all approvals and consents of all  Persons required to be obtained in connection with the consummation of the transactions  contemplated by the Loan Documents have been duly obtained and are in full force  and effect and that all required notices have been given and all required waiting  periods have expired, attaching thereto true and complete copies of all such required  governmental and regulatory authorizations and approvals, including approval of  the FERC.

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## Section 5.5            Certain Agreements

                         The Administrative Agent shall have received a certificate  of a duly authorized officer of the Borrower, in form and substance satisfactory  to the Administrative Agent, (i) certifying that there have been no amendments  or other modifications to either the CLECO Mortgage or the Employee Stock Ownership  Plan since June 5, 2002, or, if so, setting forth the same, in which case any  such amendment or modification shall be in form and substance satisfactory to  the Administrative Agent, and (ii) attaching a true, complete and correct copy  of each of (x) the Inter‐Affiliate Policies Agreement, which shall be in form  and substance satisfactory to the Administrative Agent and (y) Sections 1.04 and  5.05 of the CLECO Mortgage together with copies of any defined terms used therein.

##   Section 5.6             Opinion of Counsel to the Borrower

                         The Administrative Agent shall have received an  opinion of Phelps Dunbar, L.L.P., counsel to the Borrower, addressed to the Credit  Parties and dated the Closing Date, substantially in the form of Exhibit K,  and covering such additional matters as the Required Lenders may reasonably request.   It is understood that such opinion is being delivered to the Credit Parties upon  the direction of the Borrower and that the Credit Parties may and will rely upon  such opinion.

##   Section 5.7           Terminating Indebtedness

                         The Terminating Indebtedness shall have been fully  repaid and all agreements and other documents with respect thereto shall have  been canceled or terminated, and the Administrative Agent shall have received  reasonably satisfactory evidence thereof or arrangements satisfactory to the Administrative  Agent shall have been made by the Borrower and the Subsidiaries to accomplish  the foregoing concurrently with the first Loans made hereunder.

## Section 5.8            2003 Senior Notes

                         (a)              The Borrower shall have (i) issued the 2003 Senior Notes and (ii) received gross  proceeds thereof in an amount not less than $75,000,000.

                         (b)             The Administrative Agent shall have received a certificate of the Chief Financial  Officer of the Borrower (or other officer acceptable to the Administrative Agent),  dated the Closing Date, in all respects satisfactory to the Administrative Agent  (i) as to the matters set forth in subsection (a) above and (ii) attaching a true,  complete and correct copy of each of the 2003 Indenture, a specimen of the 2003  Senior Notes and a copy of the Offering Memorandum in respect thereof, each of  which shall be in form and substance satisfactory to the Administrative Agent.

## Section 5.9            Compliance; Officer's Certificate

                         The Administrative Agent shall have received a certificate,  dated the Closing Date and signed by the chief executive officer or the chief  financial officer of the Borrower, confirming compliance with the conditions set  forth in Section 6.1.

##   Section 5.10       Fees and Expenses

                         All fees payable to the Credit Parties on the Closing  Date, and the reasonable fees and expenses of counsel to the Administrative Agent  incurred and recorded to date in connection with the preparation, negotiation  and closing of the Loan Documents, shall have been paid.

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# ARTICLE 6.     CONDITIONS OF LENDING ‐ ALL LOANS

The obligation of each  Lender to make any Loan (which shall not include a continuation or conversion  of a Loan pursuant to and in accordance with Section 2.7) and of the Issuing Bank  to issue, amend, renew or extend a Letter of Credit, is subject to the satisfaction  of the following conditions:

##   Section 6.1           Compliance

                         On each Borrowing Date and after giving effect to  the Loans to be made thereon or the Letters of Credit to be issued, amended, renewed  or extended, as applicable, thereon, (i) there shall exist no Default or Event  of Default, (ii) the representations and warranties contained in the Loan Documents  shall be true and correct with the same effect as though such representations  and warranties had been made on such Borrowing Date, except to the extent such  representations and warranties specifically relate to an earlier date, in which  case such representations and warranties shall have been true and correct on and  as of such earlier date, and (iii) since December 31, 2002, there has been no  Material Adverse Change.  Each request by the Borrower for a Loan or for  the issuance, amendment, renewal or extension of a Letter of Credit shall constitute  a certification by the Borrower as of such Borrowing Date that each of the foregoing  matters is true and correct in all respects.

##   Section 6.2             Credit Request; Competitive Bid Request

                         In the case of the borrowing of Revolving Credit  Loans or the issuance, amendment, renewal or extension, as applicable, of a Letter  of Credit, the Administrative Agent shall have received a Credit Request, or in  the case of a borrowing of a Competitive Bid Loan, the Administrative Agent shall  have received a Competitive Bid Request and such other documents required to be  provided by the Borrower pursuant to Section 2.4, in each case duly executed by  a duly authorized officer of the Borrower.

##   Section 6.3           Law

                         Such Loan shall not be prohibited by any applicable  law, rule or regulation.

##   Section 6.4           Other Documents

                         The Administrative Agent shall have received such  other documents as the Administrative Agent or the Lenders shall reasonably request.

# ARTICLE 7.    AFFIRMATIVE  COVENANTS

Until the Commitments have  expired or been terminated and the principal of and interest on each Loan and  all fees and other amounts payable under the Loan Documents shall have been paid  in full and all Letters of Credit have expired and all LC Disbursements have been  reimbursed, the Borrower covenants and agrees with the Credit Parties that:

##   Section 7.1           Financial Statements

                         The Borrower shall maintain a standard system of  accounting in accordance with GAAP, and furnish or cause to be furnished to the  Administrative Agent and each Lender:

                         (a)              As soon as available, but in any event within 120 days after the end of each fiscal  year, (i) a copy of the Borrower's Annual Report on Form 10‐K in respect of such  fiscal year required to  

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be filed by the Borrower with the SEC, together with the  financial statements attached thereto, and (ii) the Borrower's audited consolidated  balance sheet and related consolidated statements of income, stockholder's equity  and cash flows as of the end of and for such fiscal year, setting forth in each  case in comparative form the figures for the previous fiscal year, all reported  on by the Accountants (without a "going concern" or like qualification or exception  and without any qualification or exception as to the scope of such audit) to the  effect that such consolidated financial statements present fairly in all material  respects the financial conditions and results of operations of the Borrower and  the Subsidiaries on a consolidated basis in accordance with GAAP consistently  applied, together with a listing of all Material Subsidiaries designated as Immaterial  Subsidiaries, and vice versa, during such fiscal year;

                         (b)             As soon as available, but in any event within 60 days after the end of each of  the first three fiscal quarters, (i) a copy of the Borrower's Quarterly Report  on Form 10‐Q in respect of such fiscal quarter required to be filed by the Borrower  with the SEC, together with the financial statements attached thereto, and (ii)  the Borrower's unaudited consolidated balance sheet and related consolidated statements  of income, stockholder's equity and cash flows as of the end of and for such fiscal  quarter and the then elapsed portion of the fiscal year, setting forth in each  case in comparative form the figures for the corresponding period or periods of  (or, in the case of the balance sheet, as of the end of) the previous fiscal year,  all certified by a duly authorized financial officer of the Borrower as presenting  fairly in all material respects the financial conditions and results of operations  of the Borrower on a consolidated basis in accordance with GAAP consistently applied,  subject to normal year end audit adjustments and the absence of footnotes;

                         (c)              Within 60 days after the end of each of the first three fiscal quarters (120 days  after the end of the last fiscal quarter), a Compliance Certificate, signed by  the chief financial officer of the Borrower (or such other officer as shall be  acceptable to the Administrative Agent) as to the Borrower's compliance, as of  such fiscal quarter ending date, with Section 7.11, and as to the occurrence or  continuance of no Default or Event of Default as of such fiscal quarter ending  date and the date of such certificate; and

                         (d)             Such other information as the Administrative Agent or any Lender may reasonably  request from time to time.

##   Section 7.2           Certificates; Other Information

                         The Borrower shall furnish or cause to be furnished  to the Administrative Agent and each Lender:

                         (a)              Prompt written notice if: (i) there shall occur and be continuing a Default or  an Event of Default or (ii) a Material Adverse Change shall have occurred;

                         (b)             Prompt written notice of: (i) any material citation, summons, subpoena, order  to show cause or other document naming the Borrower or any of the Material Subsidiaries  a party to any proceeding before any Governmental Authority, and include with  such notice a copy of such citation, summons, subpoena, order to show cause or  other document, or (ii) any lapse or other termination of, or refusal to renew  or extend, any material Intellectual Property, license, permit, franchise or other  authorization issued to the Borrower or any of the Material Subsidiaries by any  Person or Governmental Authority, provided that any of the foregoing set forth  in this subsection (b) could, individually or in the aggregate, reasonably be  expected to have a Material Adverse Effect or call into question the validity  or enforceability of any of the Loan Documents; 

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                           (c)              Promptly upon becoming available, copies of all (i) regular, periodic or special  reports, schedules and other material which the Borrower or any of the Material  Subsidiaries may be required to file with or deliver to any securities exchange  or the SEC, or any other Governmental Authority succeeding to the functions thereof,  (ii) material news releases and annual reports relating to the Borrower or any  of the Material Subsidiaries, and (iii) upon the written request of the Administrative  Agent, reports that the Borrower or any of the Material Subsidiaries sends to  or files with FERC, the LPSC or any similar state or local Governmental Authority;

                         (d)             Prompt written notice of any order, notice, claim or proceeding received by, or  brought against, the Borrower or any of the Material Subsidiaries, or with respect  to any of the Real Property, under any Environmental Law, that could reasonably  be expected to have a Material Adverse Effect; 

                         (e)              Prompt written notice of any change by either Moody's or S&P in the Senior Debt  Rating; and

                         (f)               Such other information as the Administrative Agent or any Lender shall reasonably  request from time to time.

##   Section 7.3           Legal Existence

                         Except as permitted under Section 8.2, the Borrower  shall maintain its legal existence in good standing in the jurisdiction of its  incorporation or formation and in each other jurisdiction in which the failure  so to do could reasonably be expected to have a Material Adverse Effect, and cause  each of the Material Subsidiaries to maintain its legal existence in good standing  in each jurisdiction in which the failure so to do could reasonably be expected  to have a Material Adverse Effect.

##   Section 7.4           Taxes

                         The Borrower shall pay and discharge when due, and  cause each of the Material Subsidiaries so to do, all Taxes, assessments and governmental  charges, license fees and levies upon or with respect to the Borrower or such  Material Subsidiary, as the case may be, and all Taxes upon the income, profits  and Property of the Borrower and the Material Subsidiaries, which if unpaid, could  individually or collectively reasonably be expected to have a Material Adverse  Effect or become a Lien on the Property of the Borrower or such Material Subsidiary,  as the case may be (other than a Lien described in Section 8.1(a)), unless and  to the extent only that such Taxes, assessments, charges, license fees and levies  shall be contested in good faith and by appropriate proceedings diligently conducted  by the Borrower or such Material Subsidiary, as the case may be, provided  that the Borrower shall give the Administrative Agent prompt notice of such contest  and that such reserve or other appropriate provision as shall be required by the  Accountants in accordance with GAAP shall have been made therefor.

##   Section 7.5           Insurance

                         The Borrower shall maintain, and cause each of the  Material Subsidiaries to maintain, with financially sound and reputable insurance  companies insurance on all its Property in at least such amounts and against at  least such risks (but including in any event public liability and business interruption  coverage) as are usually insured against in the same general area by companies  engaged in the same or a similar business; and furnish to the Administrative Agent,  upon written request of the Administrative Agent or any Lender, full information  as to the insurance carried.

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## Section 7.6            Payment of Indebtedness and Performance of Obligations

                         The Borrower shall pay and discharge when due, and  cause each of the Material Subsidiaries to pay and discharge when due, all lawful  Indebtedness, obligations and claims for labor, materials and supplies or otherwise  which, if unpaid, could, individually or collectively reasonably be expected to  (i) have a Material Adverse Effect or (ii) become a Lien upon Property of the  Borrower or any of the Material Subsidiaries (other than a Permitted Lien), unless  and to the extent only that the validity of such Indebtedness, obligation or claim  shall be contested in good faith and by appropriate proceedings diligently conducted,  provided that the Borrower shall give the Administrative Agent prompt notice  of any such contest and that such reserve or other appropriate provision as shall  be required by the Accountants in accordance with GAAP shall have been made therefor.  

##   Section 7.7           Condition of Property

                         The Borrower shall at all times, maintain, protect  and keep in good repair, working order and condition (ordinary wear and tear excepted),  and cause each of the Material Subsidiaries so to do, all Property necessary to  the operation of the Borrower's or such Material Subsidiary's, as the case may  be, material businesses.

##   Section 7.8           Observance of Legal Requirements

                         The Borrower shall observe and comply in all respects,  and cause each of the Material Subsidiaries so to do, with all laws, ordinances,  orders, judgments, rules, regulations, certifications, franchises, permits, licenses,  directions and requirements of all Governmental Authorities, which now or at any  time hereafter may be applicable to it, including ERISA and all Environmental  Laws, a violation of which could individually or collectively reasonably be expected  to have a Material Adverse Effect, except such thereof as shall be contested in  good faith and by appropriate proceedings diligently conducted by it, provided  that the Borrower shall give the Administrative Agent prompt notice of such contest  and that such reserve or other appropriate provision as shall be required by the  Accountants in accordance with GAAP shall have been made therefor.

## Section 7.9            Inspection of Property; Books and Records; Discussions

                         The Borrower shall keep proper books of record and  account in which full, true and correct entries in conformity with GAAP and all  requirements of law shall be made of all dealings and transactions in relation  to its business and activities and permit representatives of the Administrative  Agent and any Lender to visit its offices, to inspect any of its Property and  examine and make copies or abstracts from any of its books and records at any  reasonable time and as often as may reasonably be desired, and to discuss the  business, operations, prospects, licenses, Property and financial condition of  the Borrower and the Material Subsidiaries with the officers thereof and the Accountants;  provided that, so long as no Default or Event of Default exists, none of  the Administrative Agent, its agents, its representatives or the Lenders shall  be entitled to examine or make copies or abstracts of, or otherwise obtain information  with respect to, the Borrower's records relating to pending or threatened litigation  if any such disclosure by the Borrower could reasonably be expected (i) to give  rise to a waiver of any attorney/client privilege of the Borrower or any of the  Material Subsidiaries relating to such information or (ii) to be otherwise materially  disadvantageous to the Borrower or any of the Material Subsidiaries in the defense  of such litigation.

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##   Section 7.10       Licenses, Intellectual Property

                         The Borrower shall obtain or maintain, as applicable,  and cause each of the Material Subsidiaries to obtain or maintain, as applicable,  in full force and effect, all licenses, franchises, Intellectual Property, permits,  authorizations and other rights as are necessary for the conduct of its business  and the failure of which to obtain or maintain could, individually or collectively,  reasonably be expected to have a Material Adverse Effect.

##   Section 7.11       Financial Covenants

                         (a)              The Borrower shall maintain at all times Total Indebtedness equal to or less than  65% of Total Capitalization.

                         (b)             The Borrower will not permit the Interest****Coverage Ratio as of the end  of any fiscal quarter to be less than 2.50:1.00.

## Section 7.12         Material/Immaterial Designation of Subsidiaries

                         The Borrower shall be permitted to designate a Material  Subsidiary as an Immaterial Subsidiary and an Immaterial Subsidiary as a Material  Subsidiary by giving the Credit Parties written notice thereof not later than  10 Business Days after such designation, specifying the effective date of such  designation and certifying that all of the conditions set forth in this Section  shall have been satisfied as of such effective date, provided that: (i)  immediately before and after giving effect to such designation, no Default or  Event of Default shall exist and (ii) in the case of the designation of an Immaterial  Subsidiary as a Material Subsidiary, such notice shall also serve as the certification  of the Borrower immediately after giving effect to such designation that, with  respect to such Material Subsidiary, the representations and warranties contained  in the Loan Documents shall be true and correct. In connection with any such designation  of a Subsidiary as Material or Immaterial the Borrower may submit such revised  Schedules to the Loan Documents to make revisions to the existing Schedules thereto  with respect to such Material Subsidiary or Immaterial Subsidiary as may be necessary  for the representations and warranties to be true and correct with respect to  the applicable Material Subsidiaries.  Notwithstanding anything herein to  the contrary, the Borrower may not designate a Material Subsidiary as an Immaterial  Subsidiary if at the time of such designation (i) the total assets of all Persons  that were designated as Immaterial Subsidiaries pursuant to this Section during  the immediately preceding twelve month period, determined on a combined basis  in accordance with GAAP (the total assets of a Person designated as Immaterial  Subsidiary being determined as of the date of such designation, and shall exclude  any assets acquired by such Person pursuant to Section 8.2 or 8.3) exceeds (ii)  an amount equal to 5% of the total assets of the Borrower and the Subsidiaries,  determined on a consolidated basis in accordance with GAAP as of the first day  of such immediately preceding twelve month period.

##   Section 7.13       Use of Proceeds

                         The proceeds of the Loans and the Letters of Credit  will be used only as follows: (a) to refinance the Terminating Indebtedness and  (b) for general corporate purposes not inconsistent with the terms hereof.   No part of the proceeds of any Loan or any Letter of Credit will be used, whether  directly or indirectly, and whether immediately, incidentally or ultimately, (i)  to purchase, acquire or carry any Margin Stock or for any purpose that entails  a violation of any of the regulations of the Board, including Regulations T, U  and X or (ii) to fund a personal loan to or for the benefit of a director or executive  offices of the Borrower or any Subsidiary.

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ARTICLE 8.    NEGATIVE  COVENANTS

Until the Commitments have  expired or been terminated and the principal of and interest on each Loan and  all fees and other amounts payable under the Loan Documents shall have been paid  in full and all Letters of Credit have expired and all LC Disbursements have been  reimbursed, the Borrower covenants and agrees with the Credit Parties that:

##   Section 8.1           Liens

                         The Borrower shall not create, incur, assume or  suffer to exist any Lien upon any of its Property, whether now owned or hereafter  acquired, or permit any of the Material Subsidiaries so to do, except:

                         (a)              Liens for Taxes, assessments or similar charges incurred in the ordinary course  of business which are not delinquent or which are being contested in accordance  with Section 7.4, provided that enforcement of such Liens is stayed pending  such contest; 

                         (b)             Liens (i) in connection with workers' compensation, unemployment insurance or  other social security obligations (but not ERISA), (ii) in connection with deposits  or pledges to secure bids, tenders, contracts (other than contracts for the payment  of money), leases, statutory obligations, surety and appeal bonds and other obligations  of like nature arising in the ordinary course of business, (iii) in connection  with, or otherwise constituting, zoning ordinances, easements, rights of way,  minor defects, irregularities, and other similar restrictions affecting real Property  which do not materially and adversely affect the value of such real Property or  the financial condition of the Borrower or such Material Subsidiary, as the case  may be, or materially impair its use for the operation of the business of the  Borrower or such Material Subsidiary, as the case may be, (iv) arising by operation  of law such as mechanics', materialmen's, carriers', warehousemen's, lessors'  and bankers' liens and rights of set‐off incurred in the ordinary course of business  which are not delinquent or which are being contested in accordance with Section  7.6, provided that enforcement of such Liens is stayed pending such contest,  and (v) arising out of judgments or decrees which are being contested in accordance  with Section 7.6, provided that enforcement of such Liens is stayed pending  such contest;

                         (c)              Liens now existing or hereafter arising in favor of the Administrative Agent or  the Lenders under the Loan Documents;

                         (d)             purchase money Liens on Property of the Borrower or any of the Material Subsidiaries  acquired after the date hereof to secure Indebtedness of the Borrower or such  Material Subsidiary incurred in connection with the acquisition of such Property,  provided that each such Lien is limited to such Property so acquired;

                         (e)              Liens on Property of the Borrower and the Material Subsidiaries existing on the  Agreement Date as set forth on Schedule 8.1 as renewed from time to time, but  not any increases in the amounts secured thereby or the Property subjected to  such Lien thereon (except under the CLECO Mortgage);

                         (f)               Liens existing on Property of the Borrower or any of the Material Subsidiaries  acquired after the Agreement Date provided that such Liens are at all times  thereafter limited to the Property so acquired and were not created in contemplation  of such acquisition;

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                           (g)              the Lien evidenced by the CLECO Mortgage as renewed from time to time; provided,  however, that such Lien shall not extend to or over any Property of a character  not subject on the date hereof to the Lien granted under the CLECO Mortgage;  

                         (h)              "permitted liens" as defined under Section 1.04 of the CLECO Mortgage,  as in effect on the date hereof, other than "funded liens" described in  clause (ix) of said Section 1.04, other Liens not otherwise prohibited by Section  5.05 of the CLECO Mortgage as in effect on the date hereof, and, in the event  the CLECO Mortgage is terminated, Liens of the same type and nature as the foregoing  Liens referred to in this clause (h), provided that the amounts secured  by such Liens shall not exceed the amounts that may be secured by such foregoing  Liens as the last day on which the CLECO Mortgage was in effect;

                         (i)               Liens created to secure Indebtedness representing, or incurred to finance, the  cost of Property acquired, constructed or improved by the Borrower in the ordinary  course of business after the date hereof and not subject to (i) the Lien referred  to in clause (g) above or (ii) Liens securing Indebtedness existing on such Property  at the time of acquisition thereof, provided, in all cases, such Liens are limited  to such Property acquired, constructed or improved;

                         (j)               Liens existing on property of any Person at the time that such Person becomes  a Subsidiary of the Borrower provided that such Liens were not created  to secure the acquisition of such Person;

                         (k)              Liens to secure Indebtedness of any Subsidiary of the Borrower to the Borrower  or to any of its other Subsidiaries;

                         (l)               Liens on Property (including any natural gas, oil or other mineral Property) to  secure all or a part of the cost of exploration, drilling or development thereof  or to secure Indebtedness incurred to provide funds for any such purpose;

                         (m)            Liens and security interests created, incurred or assumed in connection with the  purchase, lease, financing or refinancing of pollution control facilities (and  which Liens and security interest are limited to such pollution control facilities);

                         (n)              Liens (i) created to secure sales or factoring of accounts receivable and other  receivables, and (ii) to the extent not covered by clause (i) of this subsection,  Liens on accounts receivables and other receivables, to secure Indebtedness of  the Borrower or any of the Material Subsidiaries in an aggregate amount not to  exceed $40,000,000; 

                         (o)             Liens on any equity interest owned or otherwise held by or on behalf of the Borrower  or any Material Subsidiary created in connection with any project financing;  

                         (p)             Liens to secure obligations of the Borrower in respect of agreements to purchase  or sell electricity, gas or fuel from counterparties, provided that the  aggregate amount secured under this clause (p) shall not exceed $15,000,000; and

                         (q)             Liens created for the sole purpose of extending, renewing or replacing in whole  or in part Indebtedness secured by any lien, mortgage or security interest referred  to in the foregoing clauses (a) through (p); provided, however,  that the principal amount of Indebtedness secured thereby shall not exceed the  principal amount of Indebtedness so secured at the time of such extension,  renewal or replacement and that such extension, renewal or replacement, as the  case may be, shall be limited to all or 

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a part of the property or indebtedness that secured the lien or  mortgage so extended, renewed or replaced (and any improvements on such  property).

## Section  8.2           Merger, Consolidation, Purchase or Sale of Assets, Etc.

                         The Borrower shall not consolidate with, be acquired  by, or merge into or with any Person, or convey, sell, lease or otherwise dispose  of all or any part of its Property, or enter into any sale-leaseback transaction,  or purchase or otherwise acquire (in one or a series of related transactions)  any part of the Property (other than purchases or other acquisitions of inventory,  materials, equipment and similar Property in the ordinary course of business)  of any Person, including acquisitions of the Stock of any Person, or permit any  of the Material Subsidiaries so to do, except:

                         (a)              sales or other dispositions of inventory and short‐term government securities,  commercial paper, money market mutual funds and other similar short‐term cash  equivalent investments, in each case in the ordinary course of business;

                         (b)             sales of accounts receivables and other receivables;

                         (c)              Asset Sales by any of the Material Subsidiaries to any of the other Material Subsidiaries;  

                         (d)             (i) other Asset Sales, provided that (A) no Default or Event of Default  shall exist immediately before or after giving effect thereto and (B) the amount  of such Asset Sale, when added to the total amount of all Asset Sales made by  the Borrower and the Material Subsidiaries during the immediately preceding twelve  month period pursuant to this subsection (d) (excluding amounts from Asset Sales  made by a Material Subsidiary when such Subsidiary was designated as an Immaterial  Subsidiary if made during the relevant twelve month period), shall not exceed  15% or more of Material Total Assets as of the first day of such twelve month  period and (ii) sales of transmission assets pursuant to the order of any Governmental  Authority, provided that fair market value shall have been received for  such transmission assets; 

                         (e)              any of the Material Subsidiaries may merge or consolidate with or into, or acquire  control of, or acquire all or any portion of the assets of any Person, provided  that immediately after giving effect thereto, the total consideration to be paid  by the Material Subsidiaries to or for the account of any Person (other than the  Borrower and the Material Subsidiaries) in connection therewith, when added to  the total consideration paid by the Borrower and the Material Subsidiaries to  or for the account of any Person (other than the Borrower and the Material Subsidiaries)  in connection with all other mergers, consolidations and acquisitions permitted  under Sections 8.2(e) and 8.2(f) during the period from the Agreement Date through  and including the date thereof, and all loans, advances and other arrangements  outstanding at such time and permitted under Section 8.3, shall not exceed 15%  of Material Total Assets as of the most recently completed fiscal quarter; and

                         (f)               mergers, consolidations or acquisitions of or by the Borrower with, into or of  another Person (including acquisitions by the Borrower of all or any portion of  the assets of any Person), in each case as to which the following conditions have  been satisfied:

                                   (i)                immediately before and after giving effect thereto, no Default or Event of Default  shall exist;

                                   (ii)               immediately before and after giving effect thereto, all of the representations  and warranties contained in the Loan Documents shall be true and correct  except as the 

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  context thereof otherwise requires and except for those representations and  warranties which by their terms or by necessary implication are expressly  limited to a state of facts existing at a time prior to such merger,  consolidation or acquisition, as the case may  be, or such other matters  relating thereto as are identified in a writing to the Administrative Agent  and the Lenders and are satisfactory to the Administrative Agent and the  Lenders;

                                   (iii)             the Borrower shall be the surviving entity thereof or, in the event the Borrower  shall not be the surviving entity thereof, (1) such surviving entity shall be  organized in a State of the United States with substantially all of its assets  and businesses located and conducted in the United States and (2) the Administrative  Agent shall have received (A) a certificate, in form and substance satisfactory  to the Administrative Agent, (x) attaching a true and complete copy of each agreement,  instrument or other document effecting such merger, consolidation or acquisition,  together with an agreement signed on behalf of such surviving entity pursuant  to which such surviving entity shall have expressly assumed all of the indebtedness,  liabilities and other obligations of the Borrower under the Loan Documents, each  of which shall be in form and substance satisfactory to the Administrative Agent,  and (y) certifying that such merger, consolidation or acquisition has been consummated  in accordance with such agreements, instruments or other documents referred to  in the immediately preceding clause (x), and (B) such documents, legal opinions  and certificates as the Administrative Agent shall reasonably request relating  to the organization, existence and, if applicable, good standing of such surviving  entity, the authorization of such merger, consolidation or acquisition and any  other legal matters relating to such surviving entity, the assumption agreement  referred to in the immediately preceding clause (x) or such merger, consolidation  or acquisition.

                                   (iv)             immediately after giving effect thereto, the total consideration to be paid by  the Borrower to or for the account of any Person (other than the Material Subsidiaries  of the Borrower) in connection therewith, when added to the total consideration  paid by the Borrower and the Material Subsidiaries to or for the account of any  Person (other than the Borrower and the Material Subsidiaries) in connection with  all mergers, consolidations and acquisitions permitted under Sections 8.2(e) and  8.2(f) during the period from the Agreement Date through and including the date  thereof, and all loans, advances, investments and other arrangements outstanding  at such time and permitted under Section 8.3, shall not exceed 15% of Material  Total Assets as of the most recently completed fiscal quarter, and

                                   (v)              the Administrative Agent and the Lenders shall have received a certificate duly  signed by a duly authorized officer of the Borrower identifying the Person to  be merged with or into, consolidated with, or acquired by, the Borrower, and certifying  as to each of the matters set forth in subclauses (i) through (iv) of this clause  (f).

## Section  8.3           Loans, Advances, etc.

                         The Borrower shall not, at any time, make any loan  or advance to, or enter into any arrangement for the purpose of providing funds  or credit to, any Person, or permit any of the Material Subsidiaries so to do,  other than (i) provided that immediately before and after giving effect  thereto, no Default or Event of Default shall exist, loans or advances to Cleco  Corporation and to any of the Material Subsidiaries and (ii) other loans, advances  or arrangements the total outstanding amount of which, when added to the total  consideration paid by the Borrower and the Material Subsidiaries in connection  with all mergers, consolidations and acquisitions of or by the Borrower and the  Material Subsidiaries during the period from the Agreement Date through and including  the date thereof, shall not exceed 15% of Material Total Assets as of the most  recently completed fiscal quarter.

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## Section 8.4            Amendments, etc. of Certain Agreements

                         The Borrower shall not enter into or agree to any  amendment, modification or waiver, or permit any of the Material Subsidiaries  so to do, of any term or condition of the CLECO Mortgage or the Employee Stock  Ownership Plan (other than amendments and modifications described in the certificate  delivered pursuant to Section 5.5 or required by tax laws to maintain the Employee  Stock Ownership Plan's qualified status under Section 401(a) of the Code and any  adoptive instruments or other agreements providing for the participation in the  Employee Stock Ownership Plan by the Borrower's affiliates), which amendment,  modification or waiver could, in the reasonable opinion of the Administrative  Agent, adversely affect the interests of the Lenders under the Loan Documents.

# ARTICLE 9.     EVENTS OF DEFAULT

The following shall each  constitute an "Event of Default" hereunder:

                         (a)              the Borrower shall fail to pay any principal of any Loan or any reimbursement  obligation in respect of any LC Disbursement when and as the same shall become  due and payable, whether at the due date thereof or at a date fixed for prepayment  thereof or otherwise; or

                         (b)             the Borrower shall fail to pay any interest on any Loan or on any reimbursement  obligation in respect of any LC Disbursement or any fee, commission or any other  amount (other than an amount referred to in clause (a) of this Article) payable  under any Loan Document, when and as the same shall become due and payable, and  such failure shall continue unremedied for a period of three Business Days; or

                         (c)              the Borrower shall fail to observe or perform any covenant or agreement contained  in Sections 7.3, 7.11, 7.12, 7.13 or Article 8; or

                         (d)             the Borrower shall fail to observe or perform any other term, covenant, or agreement  contained in any Loan Document and such failure or event shall have continued  unremedied for a period of 30 days after the Borrower shall have obtained knowledge  of such failure or event; or

                         (e)              any representation or warranty made in any Loan Document or deemed made by the  Borrower pursuant to Section 6.1, or in any certificate, report (other than an  auditor's report), opinion (other than an opinion of counsel), or other document  delivered or to be delivered pursuant thereto, shall prove to have been incorrect  or misleading (whether because of misstatement or omission) in any material respect  when made; or

                         (f)               the Borrower or any Material Subsidiary shall fail to make any payment (whether  of principal, interest or otherwise and regardless of amount) in respect of any  Material Obligations, when and as the same shall become due and payable****  (after giving effect to any applicable grace period); 

                         (g)              any event or condition occurs that results in any Material Obligations of the  Borrower or any Material Subsidiary becoming due prior to their scheduled maturity  or payment date, or that enables or permits (with or without the giving of notice,  the lapse of time or both) the holder or holders of any such Material Obligations  or any trustee or agent on its or their behalf to cause any Material Obligations  to become due prior to their scheduled maturity or payment date or to require  the prepayment, repurchase, redemption or defeasance thereof, prior to their scheduled  maturity or payment date (in each case after giving effect to any applicable cure  period), provided that this clause (g) shall not apply to secured Indebtedness  that becomes due solely as a result of the voluntary sale or transfer of the property  or assets securing such Indebtedness or any intercompany Indebtedness;

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                           (h)              the Borrower or any of the Material Subsidiaries shall (i) suspend or discontinue  its business, (ii) make an assignment for the benefit of creditors, (iii) generally  not pay its debts as such debts become due, (iv) admit in writing its inability  to pay its debts as they become due, (v) file a voluntary petition in bankruptcy,  (vi) become insolvent (however such insolvency shall be evidenced), (vii) file  any petition or answer seeking for itself any reorganization, arrangement, composition,  readjustment of debt, liquidation or dissolution or similar relief under any present  or future statute, law or regulation of any jurisdiction, (viii) petition or apply  to any tribunal for any receiver, custodian or any trustee for any substantial  part of its Property, (ix) be the subject of any such proceeding filed against  it which remains undismissed for a period of 45 days, (x) file any answer admitting  or not contesting the material allegations of any such petition filed against  it or any order, judgment or decree approving such petition in any such proceeding,  (xi) seek, approve, consent to, or acquiesce in any such proceeding, or in the  appointment of any trustee, receiver, sequestrator, custodian, liquidator, or  fiscal agent for it, or any substantial part of its Property, or an order is entered  appointing any such trustee, receiver, custodian, liquidator or fiscal agent and  such order remains in effect for 45 days, or (xii) take any formal action for  the purpose of effecting any of the foregoing or looking to the liquidation or  dissolution of the Borrower or such Material Subsidiary, as the case may be; or

                         (i)               an order for relief is entered under the United States bankruptcy laws or any  other decree or order is entered by a court having jurisdiction (i) adjudging  the Borrower or any of the Material Subsidiaries bankrupt or insolvent, (ii) approving  as properly filed a petition seeking reorganization, liquidation, arrangement,  adjustment or composition of or in respect of the Borrower or any of the Material  Subsidiaries under the United States bankruptcy laws or any other applicable Federal  or state law, (iii) appointing a receiver, liquidator, assignee, trustee, custodian,  sequestrator (or other similar official) of the Borrower or any of the Material  Subsidiaries or of any substantial part of the Property thereof, or (iv) ordering  the winding up or liquidation of the affairs of the Borrower or any of the Material  Subsidiaries, and any such decree or order continues unstayed and in effect for  a period of 45 days; or

                         (j)               judgments or decrees against the Borrower or any of the Material Subsidiaries  aggregating in excess of $10,000,000 (which shall not be fully covered by insurance  after taking into account any applicable deductibles) shall remain unpaid, unstayed  on appeal, undischarged, unbonded or undismissed for a period of at least 30 days;  or

                         (k)              any Loan Document shall cease, for any reason, to be in full force and effect  or the Borrower shall so assert in writing or shall disavow any of its obligations  thereunder; or

                         (l)               an ERISA Event shall have occurred that, in the opinion of the Required Lenders,  when taken together with all other ERISA Events that have occurred, could reasonably  be expected to result in a Material Adverse Effect.

                         (m)            a Change in Control shall occur or a change in control or any similar circumstance  which, under the Indenture (including any supplemental indentures thereto) results  in an obligation of the Borrower to prepay, purchase, offer to purchase, redeem  or defease in excess of $5,000,000 of Indebtedness thereunder.

Upon the occurrence of  an Event of Default or at any time thereafter during the continuance thereof,  (a) if such event is an Event of Default specified in clause (h) or (i) of this  Article 9, the Aggregate Commitments shall immediately and automatically terminate  and the Loans, all accrued and unpaid interest thereon and all other amounts owing  under the Loan Documents shall immediately become due and payable, and the Administrative  Agent may, and, upon the direction of the Required Lenders shall, exercise any  and all remedies and other rights provided in the Loan Documents, and (b) if such  event is any other Event of Default, any or all of the following actions may be  taken: (i) with the 

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  consent of the Required Lenders, the Administrative Agent may, and upon the  direction of the Required Lenders shall, by notice to the Borrower, declare  the Aggregate Commitments to be terminated forthwith, whereupon the Aggregate  Commitments shall immediately terminate, and (ii) with the consent of the  Required Lenders, the Administrative Agent may, and upon the direction of the  Required Lenders shall, by notice of default to the Borrower, declare the  Loans, all accrued and unpaid interest thereon, and all other amounts owing  under the Loan Documents to be due and payable forthwith, whereupon the same  shall immediately become due and payable, and the Administrative Agent may,  and upon the direction of the Required Lenders shall, exercise any and all  remedies and other rights provided pursuant to the Loan Documents.   Except as otherwise provided in this Section, presentment, demand, protest and  all other notices of any kind are hereby expressly waived.  The Borrower  hereby further expressly waives and covenants not to assert any appraisement,  valuation, stay, extension, redemption or similar laws, now or at any time  hereafter in force which might delay, prevent or otherwise impede the  performance or enforcement of any Loan Document.

In the event that the Aggregate  Commitments shall have been terminated or the Loans, accrued and unpaid interest  thereon and all other amounts owing under the Loan Documents shall have been declared  due and payable pursuant to the provisions of this Section, any funds received  by the Administrative Agent and the Lenders from or on behalf of the Borrower  shall be applied by the Administrative Agent and the Lenders in liquidation of  the Loans and the obligations of the Borrower under the Loan Documents in the  following manner and order: (i) first, to the payment of interest on, and then  the principal portion of, any Loans which the Administrative Agent may have advanced  on behalf of any Lender for which the Administrative Agent has not then been reimbursed  by such Lender or the Borrower; (ii) second, to the payment of any fees or expenses  due to the Administrative Agent from the Borrower hereunder, (iii) third, to reimburse  the Administrative Agent and the Lenders for any expenses (to the extent not paid  pursuant to clause (ii) above) due from the Borrower pursuant to the provisions  of Section 11.4; (iv) fourth, to the payment of accrued Facility Fees, Term‐Out  Fees, LC Fees and all other fees, expenses and amounts due under the Loan Documents  (other than principal of, and interest on, the Loans); (v) fifth, to the payment  of interest due on the Loans; (vi) sixth, to the payment of principal outstanding  on the Loans, pro rata according to each Lender's aggregate outstanding Loans;  and (vii) seventh, to the payment of any other amounts owing to the Administrative  Agent and the Lenders under any Loan Document.

# ARTICLE 10.   THE ADMINISTRATIVE AGENT

##   Section 10.1       Appointment

                         Each Credit Party hereby irrevocably designates  and appoints BNY as the Administrative Agent of such Credit Party under the Loan  Documents and each such Credit Party hereby irrevocably authorizes BNY, as the  Administrative Agent for such Credit Party, to take such action on its behalf  under the provisions of the Loan Documents and to exercise such powers and perform  such duties as are expressly delegated to the Administrative Agent by the terms  of the Loan Documents, together with such other powers as are reasonably incidental  thereto.  Notwithstanding any provision to the contrary elsewhere in any  Loan Document, (i) the Administrative Agent shall not have any duties or responsibilities  other than those expressly set forth therein, or any fiduciary relationship with  any Lender, and no implied covenants, functions, responsibilities, duties, obligations  or liabilities shall be read into the Loan Documents or otherwise exist against  the Administrative Agent and (ii) none of the Syndication Agent, the Documentation  Agent, the Managing Agent or the Co‐Agents shall have any duty or obligation under  the Loan Documents.

 

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##   Section 10.2       Delegation of Duties

                         The Administrative Agent may execute any of its  duties under the Loan Documents by or through agents or attorneys‐in‐fact and  shall be entitled to rely upon the advice of counsel concerning all matters pertaining  to such duties.

##   Section 10.3       Exculpatory Provisions

                         Neither the Administrative Agent nor any of its  Related Parties shall be (i) liable for any action lawfully taken or omitted to  be taken by it or such Person under or in connection with the Loan Documents (except  the Administrative Agent for its own gross negligence or willful misconduct) or  (ii) responsible in any manner to any Credit Party for any recitals, statements,  representations or warranties made by the Borrower or any officer thereof contained  in the Loan Documents or in any certificate, report, statement or other document  referred to or provided for in, or received by the Administrative Agent under  or in connection with, the Loan Documents or for the value, validity, effectiveness,  genuineness, perfection, enforceability or sufficiency of any of the Loan Documents  or for any failure of the Borrower or any other Person to perform its obligations  thereunder.  The Administrative Agent shall not be under any obligation to  any Credit Party to ascertain or to inquire as to the observance or performance  of any of the agreements contained in, or conditions of, the Loan Documents, or  to inspect the properties, books or records of the Borrower.  The Administrative  Agent shall not be under any liability or responsibility whatsoever, as Administrative  Agent, to the Borrower or any other Person as a consequence of any failure or  delay in performance, or any breach, by any Lender of any of its obligations under  any of the Loan Documents.

##   Section 10.4       Reliance by Administrative Agent

                         The Administrative Agent shall be entitled to rely,  and shall be fully protected in relying, upon any writing, resolution, notice,  consent, certificate, affidavit, opinion, letter, cablegram, telegram, fax, telex  or teletype message, statement, order or other document or conversation believed  by it to be genuine and correct and to have been signed, sent or made by the proper  Person or Persons and upon advice and statements of legal counsel (including counsel  to the Borrower), independent accountants and other experts selected by the Administrative  Agent.  The Administrative Agent may treat each Credit Party, or the Person  designated in the last notice filed with it under this Section, as the holder  of all of the interests of such Credit Party in its Loans, participations in Letters  of Credit and in its Notes until written notice of transfer, signed by such Credit  Party (or the Person designated in the last notice filed with the Administrative  Agent) and by the Person designated in such written notice of transfer, in form  and substance satisfactory to the Administrative Agent, shall have been filed  with the Administrative Agent.  The Administrative Agent shall not be under  any duty to examine or pass upon the validity, effectiveness, enforceability,  perfection or genuineness of the Loan Documents or any instrument, document or  communication furnished pursuant thereto or in connection therewith, and the Administrative  Agent shall be entitled to assume that the same are valid, effective and genuine,  have been signed or sent by the proper parties and are what they purport to be.   The Administrative Agent shall be fully justified in failing or refusing to take  any action under the Loan Documents unless it shall first receive such advice  or concurrence of the Required Lenders as it deems appropriate.  The Administrative  Agent shall in all cases be fully protected in acting, or in refraining from acting,  under the Loan Documents in accordance with a request or direction of the Required  Lenders, and such request or direction and any action taken or failure to act  pursuant thereto shall be binding upon all the Credit Parties and all future holders  of the Notes.

 

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##   Section 10.5       Notice of Default

                         The Administrative Agent shall not be deemed to  have knowledge or notice of the occurrence of any Default or Event of Default  unless the Administrative Agent has received written notice thereof from a Credit  Party or the Borrower.  In the event that the Administrative Agent receives  such a notice, the Administrative Agent shall promptly give notice thereof to  the Credit Parties and the Borrower.  The Administrative Agent shall take  such action with respect to such Default or Event of Default as shall be directed  by the Required Lenders, provided, however, that unless and until  the Administrative Agent shall have received such directions, the Administrative  Agent may (but shall not be obligated to) take such action, or refrain from taking  such action, with respect to such Default or Event of Default as it shall deem  to be in the best interests of the Credit Parties.

##   Section 10.6       Non Reliance on Administrative Agent and Other Lenders

                         Each Credit Party expressly acknowledges that neither  the Administrative Agent nor any of its Related Parties has made any representations  or warranties to it and that no act by the Administrative Agent hereinafter, including  any review of the affairs of the Borrower, shall be deemed to constitute any representation  or warranty by the Administrative Agent to any Credit Party.  Each Credit  Party represents to the Administrative Agent that it has, independently and without  reliance upon the Administrative Agent or any other Credit Party, and based on  such documents and information as it has deemed appropriate, made its own evaluation  of and investigation into the business, operations, Property, financial and other  condition and creditworthiness of the Borrower and made its own decision to enter  into this Agreement.  Each Credit Party also represents that it will, independently  and without reliance upon the Administrative Agent or any other Credit Party,  and based on such documents and information as it shall deem appropriate at the  time, continue to make its own credit analysis, evaluations and decisions in taking  or not taking action under any Loan Document, and to make such investigation as  it deems necessary to inform itself as to the business, operations, Property,  financial and other condition and creditworthiness of the Borrower.  Except  for notices, reports and other documents expressly required to be furnished to  the Credit Parties by the Administrative Agent hereunder, the Administrative Agent  shall not have any duty or responsibility to provide any Credit Party with any  credit or other information concerning the business, operations, Property, financial  and other condition or creditworthiness of the Borrower which may come into the  possession of the Administrative Agent or any of its officers, directors, employees,  agents, attorneys in fact or affiliates.

## Section 10.7        Administrative Agent in Its Individual Capacity

                         BNY and its Related Parties may make loans to, accept  deposits from, issue letters of credit for the account of, and generally engage  in any kind of business with, the Borrower as though BNY were not Administrative  Agent hereunder.  With respect to the Commitment and Loans made or renewed  by BNY and the Note issued to BNY, BNY shall have the same rights and powers under  the Loan Documents as any Lender and may exercise the same as though it were not  the Administrative Agent, and the terms "Lender" and "Lenders" shall in each case  include BNY.

##   Section 10.8       Successor Administrative Agent

                         If at any time the Administrative Agent deems it  advisable, in its sole discretion, it may submit to each of the Lenders a written  notice of its resignation as Administrative Agent under the Loan Documents, such  resignation to be effective upon the earlier of (i) the written acceptance of  the duties of the Administrative Agent under the Loan Documents by a successor  Administrative Agent and (ii) on the 30th day after the date of such notice.   Upon any such resignation, the Required Lenders shall have the right to  appoint from among the Lenders a successor Administrative Agent.  If no  successor 

 

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  Administrative Agent shall have been so appointed by the Required Lenders and  accepted such appointment in writing within 30 days after the retiring  Administrative Agent's giving of notice of resignation, then the retiring  Administrative Agent may, on behalf of the Lenders and with the consent of the  Borrower, such consent not to be unreasonably withheld and not to be required  during the existence of an Event of Default, appoint a successor  Administrative Agent, which successor Administrative Agent shall be a  commercial bank organized under the laws of the United States or any State  thereof and having a combined capital, surplus, and undivided profits 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 retiring  Administrative Agent, and the retiring Administrative Agent's rights, powers,  privileges and duties as Administrative Agent under the Loan Documents shall  be terminated.  The Borrower and the Lenders shall execute such documents  as shall be necessary to effect such appointment.  After any retiring  Administrative Agent's resignation as Administrative Agent, the provisions of  the Loan Documents shall inure to its benefit as to any actions taken or  omitted to be taken by it while it was Administrative Agent under the Loan  Documents.  If at any time there shall not be a duly appointed and acting  Administrative Agent, the Borrower agrees to make each payment due under the  Loan Documents directly to the Lenders entitled thereto during such time.

# ARTICLE 11.   OTHER  PROVISIONS

##   Section 11.1       Amendments and Waivers

                         (a)              No failure or delay by any Credit Party in exercising any right or power under  any Loan Document shall operate as a waiver thereof, nor shall any single or partial  exercise of any such right or power, or any abandonment or discontinuance of steps  to enforce such a right or power, preclude any other or further exercise thereof  or the exercise of any other right or power. The rights and remedies of the Credit  Parties under the Loan Documents are cumulative and are not exclusive of any rights  or remedies that they would otherwise have. No waiver of any provision of any  Loan Document or consent to any departure by the Borrower therefrom shall in any  event be effective unless the same shall be permitted by paragraph (b) of this  Section, and then such waiver or consent shall be effective only in the specific  instance and for the purpose for which given. Without limiting the generality  of the foregoing, the making of a Loan and/or the issuance, amendment, extension  or renewal of a Letter of Credit shall not be construed as a waiver of any Default,  regardless of whether any Credit Party may have had notice or knowledge of such  Default at the time.

                         (b)             Neither any Loan Document nor any provision thereof may be waived, amended or  modified except pursuant to an agreement or agreements in writing entered into  by the Borrower and the Required Lenders or by the Borrower and the Administrative  Agent with the consent of the Required Lenders, provided that no such agreement  shall (i) increase any Commitment of any Lender without the written consent of  such Lender or increase the Aggregate Commitments (except as provided in  Section 2.5(d), (ii) reduce the principal amount of any Loan or any  reimbursement obligation with respect to a LC Disbursement, or reduce the rate  of any interest, or reduce any fees, payable under the Loan Documents, without  the written consent of each Credit Party affected thereby, (iii) postpone the  date of payment at stated maturity of any Loan or the date of payment of any  reimbursement obligation with respect to an LC Disbursement, any interest or  any fees payable under the Loan Documents, or reduce the amount of, waive or  excuse any such payment, or postpone the stated termination or expiration of  the Commitments without the written consent of each Credit Party affected  thereby, (iv) change any provision hereof in a manner that would alter the pro  rata sharing of payments required by Section 3.2(b) or the pro rata reduction  of Commitments required by Section 2.5(c) or the pro rata funding of Revolving  Credit Loans required by Section 2.3(b), without the written consent of each  Credit Party affected thereby, (v) change any of the provisions of this  Section or the definition of the term "Required Lenders" or any other 

 

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provision hereof specifying the number or percentage of Lenders  required to waive, amend or modify any rights hereunder or make any  determination or grant any consent hereunder, or change the currency in which  Loans are to be made, Letters of Credit are to be issued or payment under the  Loan Documents are to be made, or add additional borrowers without the written  consent of each Lender, and provided, further, that no such agreement shall  amend, modify or otherwise affect the rights or duties of the Administrative  Agent or the Issuing Bank hereunder without the prior written consent of the  Administrative Agent or the Issuing Bank, as applicable.

##   Section 11.2       Notices

                         Except in the case of notices and other communications  expressly permitted to be given by telephone, all notices and other communications  provided for herein shall be in writing and shall be delivered by hand or overnight  courier service, mailed by certified or registered mail or sent by facsimile,  as follows:

                         (a)              if to the Borrower, to it at 2030 Donahue Ferry Road, Pineville, LA 71360 5226;  Attention: Michael Sawrie (Telephone: (318) 484‐7589; Facsimile: (318) 484‐7697);  

                         (b)             if to the Administrative Agent, or BNY as Issuing Bank, to it at Agency Funding  Administration, One Wall Street, 18th Floor, New York, New York 10286, Attention  of: Sandra Morgan, Agency Function Administration, 18th Floor, (Telephone No.  (212) 635‐4692); Facsimile No. (212) 635‐6365 or 6366 or 6367, with a copy to  The Bank of New York, at Energy Industries Division, One Wall Street, 19th Floor,  New York, New York 10286, Attention of: Cynthia Howells (Telephone No. (212) 635‐7889;  Facsimile No. (212) 635‐7924); and

                         (c)              if to any other Credit Party, to it at its address (or facsimile number) set forth  in its Administrative Questionnaire;

provided that any  notice, request or demand by the Borrower to or upon the Administrative Agent  or the Lenders pursuant to Sections 2.3, 2.4, 2.5, 2.6 or 2.7 shall not be effective  until received.  Any party to a Loan Document may rely on signatures of the  parties thereto which are transmitted by facsimile or other electronic means as  fully as if originally signed.  Any party hereto may change its address or  facsimile number for notices and other communications hereunder by notice to the  other parties hereto. All notices and other communications given to any party  hereto in accordance with the provisions of this Agreement shall be deemed to  have been given on the date of receipt.

##   Section 11.3       Survival

                         All  covenants, agreements, representations and warranties made by the Borrower  herein and in the certificates or other instruments prepared or delivered in  connection with or pursuant to this Agreement or any other Loan Document shall  be considered to have been relied upon by the other parties hereto and shall  survive the execution and delivery of any Loan Document and the making of any  Loans and the issuance of any Letter of Credit, regardless of any  investigation made by any such other party or on its behalf and  notwithstanding that any Credit Party may have had notice or knowledge of any  Default or incorrect representation or warranty at the time any credit is  extended hereunder, and shall continue in full force and effect as long as the  principal of or any accrued interest on any Loan or any LC Disbursement or any  fee or any other amount payable under the Loan Documents is outstanding and  unpaid or any Letter of Credit is outstanding and so long as the Commitments  have not expired or terminated. The provisions of Sections 2.10, 2.11, 2.12,  2.13, 11.4, 11.10 and 11.11 and Article 10 shall survive and remain in full  force and effect regardless of the consummation of the transactions  contemplated hereby, the repayment of the Loans and the LC Disbursements, the  expiration or 

 

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  termination of the Letters of Credit and the termination of the Commitments or  the termination of this Agreement or any provision hereof.

##   Section 11.4       Expenses; Indemnity; Damage Waiver

                         (a)              The Borrower shall pay (i) all reasonable out‐of‐pocket costs and expenses incurred  by the Administrative Agent and its Affiliates, including the reasonable fees,  charges and disbursements of counsel for the Administrative Agent, in connection  with the syndication of the credit facilities provided for herein, the preparation  and administration of each Loan Document or any amendments, modifications or waivers  of the provisions thereof (whether or not the transactions contemplated thereby  shall be consummated), (ii) all reasonable out‐of‐pocket costs and expenses incurred  by the Issuing Bank in connection with the issuance, amendment, renewal or extension  of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable  out‐of‐pocket costs and expenses incurred by any Credit Party, including the reasonable  fees, charges and disbursements of any counsel for any Credit Party and any expert  witness fees, in connection with the enforcement or protection of its rights in  connection with the Loan Documents, including its rights under this Section, or  in connection with the Loans made or Letters of Credit issued hereunder, including  all such reasonable out‐of‐pocket costs and expenses incurred during any workout,  restructuring or negotiations in respect of such Loans or Letters of Credit.

                         (b)             The Borrower shall indemnify each Credit Party and each Related Party thereof  (each such Person being called an "Indemnified Party") against, and hold each  Indemnified Party harmless from, any and all losses, claims, damages, liabilities  and related expenses, including the fees, charges and disbursements of any counsel  for any Indemnified Party, incurred by or asserted against any Indemnified Party  arising out of, in connection with, or as a result of (i) the execution or delivery  of any Loan Document or any agreement or instrument contemplated thereby, the  performance by the parties to the Loan Documents of their respective obligations  thereunder or the consummation of the transactions contemplated by the Loan Documents,  (ii) any Loan or Letter of Credit or the use of the proceeds thereof including  any refusal of the Issuing Bank to honor a demand for payment under a Letter of  Credit if the documents presented in connection with such demand do not strictly  comply with the terms of such Letter of Credit, (iii) any actual or alleged presence  or release of Hazardous Materials on or from any property owned or operated by  the Borrower or any of the Subsidiaries, or any Environmental Liability related  in any way to the Borrower or any of the Subsidiaries or (iv) any actual or prospective  claim, litigation, investigation or proceeding relating to any of the foregoing,  whether based on contract, tort or any other theory and regardless of whether  any Indemnified Party is a party thereto, provided that such indemnity  shall not, as to any Indemnified Party, be available to the extent that such losses,  claims, damages, liabilities or related expenses are determined by a court of  competent jurisdiction by final and nonappealable judgment to have resulted from  the gross negligence or willful misconduct of such Indemnified Party or arising  solely from claims between one such Indemnified Party and another such Indemnified  Party. 

                         (c)              To the extent that the Borrower fails to pay any amount required to be paid by  it to the Administrative Agent or the Issuing Bank under paragraph (a) or (b)  of this Section, each Lender severally agrees to pay to the Administrative Agent  or the Issuing Bank, as applicable, an amount equal to the product of such unpaid  amount multiplied by a fraction, the numerator of which is the sum of such  Lender's unused Commitments plus the outstanding principal balance of such  Lender's Loans and the denominator of which is the sum of the unused Commitments  plus the outstanding principal balance of all Lenders Loans (in each case determined  as of the time that the applicable unreimbursed expense or indemnity payment is  sought or, in the event that no Lender shall have any unused Commitments or outstanding  Loans at such time, as of the last time at which any Lender had any unused Commitments  or outstanding Loans), provided that the unreimbursed expense or  indemnified loss, claim, damage, liability 

 

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or related expense, as applicable, was incurred by or asserted  against the Administrative Agent or the Issuing Bank, as applicable, in its  capacity as such.

                         (d)             To the extent permitted by applicable law, the Borrower shall not assert, and  hereby waives, any claim against any Indemnified Party, on any theory of liability,  for special, indirect, consequential or punitive damages (as opposed to direct  and actual damages) arising out of, in connection with, or as a result of, any  Loan Document or any agreement, instrument or other document contemplated thereby,  the transactions contemplated by the Loan Documents or any Loan or any Letter  of Credit or the use of the proceeds thereof.

                         (e)              All amounts due under this Section shall be payable promptly but in no event later  than ten days after written demand therefor.

##   Section 11.5       Lending Offices

                         Each Lender shall have the right at any time and  from time to time to transfer its Loans to a different office, provided  that such Lender shall promptly notify the Administrative Agent and the Borrower  of any such change of office.  Such office shall thereupon become such Lender's  Domestic Lending Office or Eurodollar Lending Office, as the case may be, provided,  however, that no such Lender shall be entitled to receive any greater amount  under Section 2.11, 2.12 or 2.13 as a result of a transfer of any such Loans to  a different office of such Lender than it would be entitled to immediately prior  thereto unless such claim would have arisen even if such transfer had not occurred.

##   Section 11.6       Assignments and Participations

                         (a)              The provisions of the Loan Documents shall be binding upon and inure to the benefit  of the parties hereto and their respective successors and assigns permitted hereby,  except that the Borrower may not assign or otherwise transfer any of its rights  or obligations hereunder without the prior written consent of each Credit Party  (and any attempted assignment or transfer by the Borrower without such consent  shall be null and void). Nothing in the Loan Documents, expressed or implied,  shall be construed to confer upon any Person (other than the parties hereto, their  respective successors and assigns permitted hereby and, to the extent expressly  contemplated hereby, the Related Parties of each Credit Party) any legal or equitable  right, remedy or claim under or by reason of any Loan Document.

                         (b)             Any Lender may assign to one or more Eligible Assignees all or a portion of its  rights and obligations under the Loan Documents (including all or a portion of  its Commitment or obligations in respect of its LC Exposure and the applicable  Loans at the time owing to it), provided that (i) except in the case of  an assignment to a Lender or an Affiliate or an Approved Fund of a Lender, each  of the Borrower, the Administrative Agent and the Issuing Bank must give its prior  written consent to such assignment (which consent shall not be unreasonably withheld  or delayed)), (ii) except in the case of an assignment to a Lender or an Affiliate  or an Approved Fund of a Lender or an assignment of the entire remaining amount  of the assigning Lender's Commitment, the amount of the Commitment of the assigning  Lender subject to each such assignment (determined as of the date the Assignment  and Acceptance Agreement with respect to such assignment is delivered to the Administrative  Agent) shall not be less than $5,000,000 unless the Borrower and the Administrative  Agent otherwise consent, (iii) no assignments to the Borrower or any of its Affiliates  shall be permitted, (iv) the parties to each assignment shall execute and deliver  to the Administrative Agent an Assignment and Acceptance Agreement together with,  unless otherwise agreed by the Administrative Agent, a processing and recordation  fee of $3,500, and (v) the assignee, if it shall not be a Lender, shall deliver  to the Administrative Agent an Administrative Questionnaire, and providedfurther, that any consent of the Borrower otherwise required under this  paragraph shall not be required if a Default has occurred and is continuing.   Subject to  

 

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acceptance and recording thereof pursuant to paragraph (d) of this  Section, from and after the effective date specified in each Assignment and Acceptance  Agreement, the assignee thereunder shall be a party hereto and, to the extent  of the interest assigned by such Assignment and Acceptance Agreement, have the  rights and obligations of a Lender under the Loan Documents, and the assigning  Lender thereunder shall, to the extent of the interest assigned by such Assignment  and Acceptance Agreement, be released from its obligations under the Loan Documents  (and, in the case of an Assignment and Acceptance Agreement covering all of the  assigning Lender's rights and obligations under the Loan Documents, such Lender  shall cease to be a party hereto but shall continue to be entitled to the benefits  of Sections 2.11, 2.12, 2.13 and 11.4). Any assignment or transfer by a Lender  of rights or obligations under the Loan Documents that does not comply with this  paragraph shall be treated for purposes of the Loan Documents as a sale by such  Lender of a participation in such rights and obligations in accordance with paragraph  (e) of this Section.

                         (c)              The Administrative Agent, acting for this purpose as an agent of the Borrower,  shall maintain at one of its offices in New York City a copy of each Assignment  and Acceptance Agreement delivered to it and a register for the recordation of  the names and addresses of the Lenders, and the Commitment of, and principal amount  of the Revolving Credit Loans owing to, each Lender pursuant to the terms hereof  from time to time (the "Register"). The entries in the Register shall be  conclusive absent clearly demonstrable error, and the Borrower and each Credit  Party may treat each Person whose name is recorded in the Register pursuant to  the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding  notice to the contrary. The Register shall be available for inspection by the  Borrower and any Credit Party, at any reasonable time and from time to time upon  reasonable prior notice.

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

                         (e)              Any Lender may, without the consent of the Borrower or any Credit Party, sell  participations to one or more banks or other entities other than the Borrower  or any of its Affiliates (each such bank or other entity being called a "Participant")  in all or a portion of such Lender's rights and obligations under the Loan Documents  (including all or a portion of its Commitment, LC Exposure, and outstanding Revolving  Credit Loans owing to it), provided that (i) such Lender's obligations  under the Loan Documents shall remain unchanged, (ii) such Lender shall remain  solely responsible to the other parties hereto for the performance of such obligations  and (iii) the Borrower and the Credit Parties shall continue to deal solely and  directly with such Lender in connection with such Lender's rights and obligations  under the Loan Documents. Any agreement or instrument pursuant to which a Lender  sells such a participation shall provide that such Lender shall retain the sole  right to enforce the Loan Documents and to approve any amendment, modification  or waiver of any provision of any Loan Documents, provided that such agreement  or instrument may provide that such Lender will not, without the consent of the  Participant, agree to any amendment, modification or waiver described in the first  proviso to Section 11.1(b) that affects such Participant. Subject to paragraph  (f) of this Section, the Borrower agrees that each Participant shall be entitled  to the benefits of Sections 2.11, 2.12 and 2.13 to the same extent as if it were  a Lender and had acquired its interest by assignment pursuant to paragraph (b)  of this Section. To the extent permitted by law, each Participant also shall be  entitled to the benefits of Section 11.9 as though it were a Lender, provided  that such Participant agrees to be subject to Section 3.2(c) as though it were  a Lender.

 

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                           (f)               A Participant shall not be entitled to receive any greater payment under Section  2.11 or 2.12 than the Lender would have been entitled to receive with respect  to the participation sold to such Participant, unless the sale of the participation  to such Participant is made with the Borrower's prior written consent. A Participant  that would be a Lender organized under the laws of a jurisdiction other than the  United States or any State thereof if it were a Lender shall not be entitled to  the benefits of Section 2.11 unless the Borrower is notified of the participation  sold to such Participant and such Participant agrees, for the benefit of the Borrower,  to comply with Section 2.11(d) as though it were a Lender.

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

##   Section 11.7       Counterparts; Integration; Effectiveness

                         This Agreement may be executed in counterparts (and  by different parties hereto on different counterparts), each of which shall constitute  an original, but all of which, when taken together, shall constitute but one contract.  This Agreement and any separate letter agreements with respect to fees payable  to any Credit Party or the syndication of the credit facilities established hereunder  constitute the entire contract among the parties relating to the subject matter  hereof and supersede any and all previous agreements and understandings, oral  or written, relating to the subject matter hereof. Except as provided in Article  5, this Agreement shall become effective when it shall have been executed by the  Administrative Agent and when the Administrative Agent shall have received counterparts  hereof which, when taken together, bear the signatures of each of the other parties  and thereafter shall be binding upon and inure to the benefit of the parties hereto  and their respective successors and assigns. Delivery of an executed counterpart  of this Agreement by facsimile transmission shall be effective as delivery of  a manually executed counterpart of this Agreement.

##   Section 11.8       Severability

                         In the event any one or more of the provisions contained  in this Agreement should be held invalid, illegal or unenforceable in any respect,  the validity, legality and enforceability of the remaining provisions contained  herein shall not in any way be affected or impaired thereby (it being understood  that the invalidity of a particular provision in a particular jurisdiction shall  not in and of itself affect the validity of such provision in any other jurisdiction).   The parties shall endeavor in good faith negotiations to replace the invalid,  illegal or unenforceable provisions with valid provisions the economic effect  of which comes as close as possible to that of the invalid, illegal or unenforceable  provisions.

##   Section 11.9       Right of Set off

                         In addition to any rights and remedies of the Lenders  provided by law, upon the occurrence of an Event of Default and the acceleration  of the obligations owing in connection with the Loan Documents, or at any time  upon the occurrence and during the continuance of an Event of Default under clause  (a) of Article 9, each Lender shall have the right, without prior notice to the  Borrower, any such notice being expressly waived by the Borrower to the extent  not prohibited by applicable law, to set off and apply against any indebtedness,  whether matured or unmatured, of the Borrower to such Lender, any amount owing  from such Lender to the Borrower, at, or at any time after, the happening of any  of the above mentioned events.  To the extent not prohibited by applicable  law, the aforesaid right of set off may be exercised by such Lender against the  Borrower or against any trustee in bankruptcy, custodian, debtor  

 

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  in possession,  assignee for the benefit of creditors, receiver, or execution, judgment or attachment  creditor of the Borrower, or against anyone else claiming through or against the  Borrower or such trustee in bankruptcy, custodian, debtor in possession, assignee  for the benefit of creditors, receiver, or execution, judgment or attachment creditor,  notwithstanding the fact that such right of set off shall not have been exercised  by such Lender prior to the making, filing or issuance, or service upon such Lender  of, or of notice of, any such petition, assignment for the benefit of creditors,  appointment or application for the appointment of a receiver, or issuance of execution,  subpoena, order or warrant.  Each Lender agrees promptly to notify the Borrower  and the Administrative Agent after any such set off and application made by such  Lender, provided that the failure to give such notice shall not affect  the validity of such set off and application.

##   Section 11.10    Governing  Law; Jurisdiction; Consent to Service of Process

                         (a)              This Agreement shall be governed by, and construed in accordance with, the laws  of the State of New York.

                         (b)             The Borrower hereby irrevocably and unconditionally submits, for itself and its  property, to the nonexclusive jurisdiction of any New York State court or Federal  court of the United States of America sitting in New York City, and any appellate  court from any thereof, in any action or proceeding arising out of or relating  to this Agreement or the other Loan Documents, or for recognition or enforcement  of any judgment, and each of the parties hereto hereby irrevocably and unconditionally  agrees that, to the extent permitted by applicable law, all claims in respect  of any such action or proceeding may be heard and determined in such New York  State court or, to the extent permitted by applicable law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or  proceeding shall be conclusive and may be enforced in other jurisdictions by suit  on the judgment or in any other manner provided by law. Nothing in this Agreement  shall affect any right that the Administrative Agent or any other Credit Party  may otherwise have to bring any action or proceeding relating to this Agreement  or the other Loan Documents against the Borrower, or any of its property, in the  courts of any jurisdiction.

                         (c)              The Borrower hereby irrevocably and unconditionally waives, to the fullest extent  it may legally and effectively do so, any objection that it may now or hereafter  have to the laying of venue of any suit, action or proceeding arising out of or  relating to this Agreement or the other Loan Documents in any court referred to  in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably  waives, to the fullest extent permitted by applicable law, the defense of an inconvenient  forum to the maintenance of such action or proceeding in any such court.

                         (d)             Each party to this Agreement irrevocably consents to service of process in the  manner provided for notices in Section 11.2. Nothing in this Agreement will affect  the right of any party to this Agreement to serve process in any other manner  permitted by law.

##   Section 11.11    WAIVER  OF JURY TRIAL

                         **EACH  PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,  ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY  OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS CREDIT  AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR  ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH  OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE  FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO  HAVE**

 

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**BEEN INDUCED TO ENTER INTO  THIS CREDIT AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND  CERTIFICATIONS IN THIS SECTION.**

##   Section 11.12    Headings

Article and Section headings and the Table of Contents  used herein are for convenience of reference only, are not part of this Agreement  and shall not affect the construction of, or be taken into consideration in interpreting,  this Agreement.

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IN WITNESS WHEREOF, the parties hereto have  caused this 364 Day Credit Agreement to be duly executed and delivered by their  proper and duly authorized officers as of the day and year first above written.

CLECO POWER LLC 

By: /s/ Dilek Samil                                                             Name:  Dilek Samil                                                             Title:     Senior Vice President - Finance & CFO                 

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THE BANK OF NEW YORK, Individually  and as Administrative Agent

By:  /s/ John N. Watt                                                                 Name: John N. Watt                                                                  Title:    Vice President                                                              

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BANK ONE, NA, Individually  and as Syndication Agent

By: /s/ Nancy R. Barwig                                              Name:  Nancy R. Barwig                                              Title:     Director                                                            

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WESTLB AG, NEW YORK BRANCH

(formerly known as Westdeutsche Landesbank Girozentrale, New  York Branch), Individually and as Documentation Agent

By:  /s/ Salvatore  Battinelli                                                    Name:  Salvatore Battinelli                                                    Title:     Managing Director Credit Department                    

By:  /s/ Duncan M.  Robertson                                               Name: Duncan M. Robertson                                                Title:    Director                                                                   

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CREDIT SUISSE FIRST BOSTON

By:   /s/ Brian  T. Caldwell                                                      Name:  Brian T. Caldwell                                                       Title:     Director                                                                   

By:   /s/ Peter  A. Ryan                                                            Name:  Peter A. Ryan                                                             Title:     Vice President                                                          

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REGIONS BANK

By:  /s/ Mark Burr                                                               Name:  Mark Burr                                                               Title:     VP Corp Banking                                                    

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WHITNEY NATIONAL BANK

By:   /s/ Edgar  W. Santa Cruz III                                              Name:  Edgar W. Santa Cruz III                                               Title:     Vice President                                                            

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HIBERNIA NATIONAL BANK

By: /s/ Kermit W. Pharris, Jr.                                                 Name:  Kermit W. Pharris, Jr.                                                 Title:     Vice President                                                            

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BANK HAPOALIM B.M.

By:  /s/ Helen H.  Gateson                                                          Name:  Helen H. Gateson                                                          Title:     Vice President                                                             

By:  /s/ Laura Anne  Raffa                                                           Name:  Laura Anne Raffa                                                         Title:     Senior Vice President & Corporate  Manager