Exhibit 10.106

CREDIT AGREEMENT

dated as of December
23, 2002

among

PUGET SOUND ENERGY,
INC.,

VARIOUS FINANCIAL
INSTITUTIONS,

BANK ONE, NA,as Administrative Agent,

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

and

KEYBANK NATIONAL
ASSOCIATION, as Documentation Agent

UNION BANK OF
CALIFORNIA, INC. CO-LEAD ARRANGER

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

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CREDIT AGREEMENT

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

ARTICLE I

DEFINITIONS

As used in this
Agreement:

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

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

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

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

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

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

Aggregate
Outstanding Credit Exposure means, at any time, the aggregate of the Outstanding
Credit Exposure of all the Lenders.

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

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

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

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

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

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

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

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

Article
means an article of this Agreement unless another document is specifically referenced.

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

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

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

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

Borrowing
Date means a date on which an Advance is made hereunder.

Borrowing Notice
is defined in Section 2.2.3.

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

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

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

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

Change is
defined in Section 3.2.

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

Closing
Date means the date first above written.

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

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

Commitment
Fee is defined in Section 2.4.

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

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

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

Conversion/Continuation
Notice is defined in Section 2.2.4.

Credit
Extension means the making of an Advance or the issuance of a Facility LC hereunder.

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

Default
means an event described in Article VII.

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

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

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

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

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

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

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

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

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

Exhibit
refers to an exhibit to this Agreement, unless another document is specifically
referenced.

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

Extension
Request is defined in Section 2.17.

Facility
LC is defined in Section 2.16.1.

Facility LC
Application is defined in Section 2.16.3.

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

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

FERC
means the Federal Energy Regulatory Commission.

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

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

FRB
means the Board of Governors of the Federal Reserve System.

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

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

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

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

LC
Fee is defined in Section 2.16.4.

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

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

LC
Payment Date is defined in Section 2.16.5.

Lender
Assignment is defined in Section 12.3.1.

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

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

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

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

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

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

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

Material
Indebtedness is defined in Section 7.5.

Modify
and Modification are defined in Section 2.16.1.

Moodysmeans
Moodys Investors Service, Inc.

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

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

Net
Worth means the Borrowers consolidated stockholders equity.

Non-U.S.                 Lender is
defined in Section 3.5(iv).

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

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

Other
Taxes is defined in Section 3.5(ii).

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

Participantsis
defined in Section 12.2.1.

Payment
Date means the last day of each calendar quarter.

PBGC
means the Pension Benefit Guaranty Corporation, or any successor thereto.

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

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

Pricing
Schedule means Schedule 1 attached hereto.

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

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

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

Pro
Rata Share means, with respect to a Lender, a percentage equal to such Lenders
Commitment divided by the Aggregate Commitment.

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

Purchasersis
defined in Section 12.3.1.

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

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

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

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

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

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

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

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

Response
Date is defined in Section 2.17.

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Risk-Based
Capital Guidelines is defined in Section 3.2.

S&P
means Standard and Poors Ratings Services, a division of The McGraw Hill Companies,
Inc.

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

SEC
means the Securities and Exchange Commission.

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

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

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

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

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

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

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

---

| | (i)                        Net
Worth; plus
| | ------------------------------------------

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

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

Transfereeis
defined in Section 12.4.

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

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

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

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

ARTICLE II

THE CREDITS

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

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

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

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

---

| | 2.2.        
Advances.
| | ----------------------

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

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

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

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

| |  |  |  | (ii) | the aggregate amount of such Advance;
| |  |  |  | ---- | -------------------------------------

| |  |  |  | (iii) | the Type of Advance selected; and
| |  |  |  | ----- | ---------------------------------

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

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

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

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

---

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

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

| | 2.4.        Fees;
Reductions in Aggregate Commitment.
| | -----------------------------------------------------

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

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

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

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

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

---

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

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

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

---

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

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

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

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

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

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

---

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

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

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

---

| | 2.16.        Facility
LCs.
| | --------------------------

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

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

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

---

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

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

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

---

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

| | 2.16.8.        Actions
of LC Issuer. The LC Issuer shall be entitled to rely, and shall be fully protected
in relying, upon any Facility LC, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document reasonably believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts selected by
the LC Issuer. The LC Issuer shall be fully justified in failing or refusing to take any
action under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or it shall first
be indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or continuing to
take any such action. Notwithstanding any other provision of this Section 2.16, the
LC Issuer shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement in accordance with a request of the Required Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding upon the
Lenders and any future holders of a participation in any Facility LC.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.16.9.        Indemnification.
The Borrower hereby agrees to indemnify and hold harmless each Lender, the LC Issuer and
the Administrative Agent, and their respective directors, officers, agents and employees
from and against any and all claims and damages, losses, liabilities, costs or expenses
which such Lender, the LC Issuer or the Administrative Agent may incur (or which may be
claimed against such Lender, the LC Issuer or the Administrative Agent by any Person
whatsoever) by reason of or in connection with the issuance, execution and delivery or
transfer of or payment or failure to pay under any Facility LC or any actual or proposed
use of any Facility LC, including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the LC Issuer may incur by reason of or in
connection with the failure of any other Lender to fulfill or comply with its obligations
to the LC Issuer hereunder (but nothing herein contained shall affect any rights the
Borrower may have against any defaulting Lender); provided that the Borrower shall not be
required to indemnify any Lender, the LC Issuer or the Administrative Agent for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, caused by (x) the willful misconduct or gross negligence of the LC Issuer in
determining whether a request presented under any Facility LC complied with the terms of
such Facility LC, (y) the LC Issuers failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and conditions of such
Facility LC or (z) disputes, not involving the Borrower, among the Lenders, LC Issuer or
Administrative Agent relating to a Facility LC. Nothing in this Section 2.16.9 is
intended to limit the obligations of the Borrower under any other provision of this
Agreement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.16.10.        Lenders Indemnification.
Each Lender shall, ratably in accordance with its Pro Rata Share, indemnify the LC
Issuer, its Affiliates and their respective directors, officers, agents and employees (to
the extent not reimbursed by the Borrower) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees gross negligence or willful misconduct
or the LC Issuers failure to pay under any Facility LC after the presentation to it
of a request strictly complying with the terms and conditions of the Facility LC) that
such indemnitees may suffer or incur in connection with this Section 2.16 or any
action taken or omitted by such indemnitees hereunder.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

---

ARTICLE III

YIELD PROTECTION; TAXES

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

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

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

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

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

---

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

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

---

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

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

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

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

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

---

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

| | (vi)                     Any
Lender that is entitled to an exemption from or reduction of withholding tax
          with respect to payments under this Agreement or any Note pursuant to the law
of           any relevant jurisdiction or any treaty shall deliver to the Borrower (with
a           copy to the Administrative Agent), at the time or times prescribed by
applicable           law, such properly completed and executed documentation prescribed
by applicable           law as will permit such payments to be made without withholding
or at a reduced           rate.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

---

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

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

ARTICLE IV

CONDITIONS PRECEDENT

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

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

---

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

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

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

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

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

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

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

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

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

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

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

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

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

---

# ARTICLE V

# REPRESENTATIONS AND
WARRANTIES

| | The Borrower
represents and warrants to the Lenders that:
| | ---------------------------------------------------------

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

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

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

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

---

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

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

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

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

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

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

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

---

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

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

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

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

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

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

---

# ARTICLE VI

# COVENANTS

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

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

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

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

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

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

---

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

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

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

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

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

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

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

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

---

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

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

| | (a)                        any
Default or Unmatured Default, and
| | ----------------------------------------------------------------

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

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

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

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

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

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

| | (v)                     Liens
under the Mortgages;
| | --------------------------------------------------

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

---

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

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

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

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

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

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

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

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

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

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

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

---

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

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

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

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

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

---

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

| | (i)        Cash
Equivalent Investments;
| | ---------------------------------------

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

| | (iii)                        Investments
made to consummate Permitted Acquisitions;
| | -----------------------------------------------------------------------------------

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

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

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

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

# ARTICLE VII

# DEFAULTS

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

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

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

---

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

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

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

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

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

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

---

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

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

| | 7.11.                     Any
Change in Control shall occur.
| | ------------------------------------------------------------

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

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

# ARTICLE VIII

# ACCELERATION,WAIVERS,AMENDMENTS AND REMEDIES

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

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

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

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

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

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

| | (iv)                     Amend
this Section 8.2.
| | ------------------------------------------------

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

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

---

# ARTICLE IX

# GENERAL PROVISIONS

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

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

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

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

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

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

---

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

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

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

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

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

---

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

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

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

# ARTICLE X

# THE ADMINISTRATIVE
AGENT

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

---

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

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

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

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

---

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

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

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

| | 10.9.           Notice
of Default. The Administrative Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Unmatured Default hereunder unless the Administrative
Agent has received written notice from a Lender or the Borrower referring to this
Agreement describing such Default or Unmatured Default and stating that such notice is a
notice of default. In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give prompt notice thereof to the Lenders.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

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

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

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

---

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

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

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

# ARTICLE XI

# SETOFF; PAYMENTS

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

---

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

# ARTICLE XII

# BENEFIT OF AGREEMENT;ASSIGNMENTS; PARTICIPATIONS

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

| | 12.2.           Participations.
| | -------------------------------

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

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

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

| | 12.3.           Assignments.
| | ----------------------------

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

---

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

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

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

# ARTICLE XIII

# NOTICES

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

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

# ARTICLE XIV

# COUNTERPARTS

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

# ARTICLE XV

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

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

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

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

---

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

| |                         
| | ------------------------
| | PUGET SOUND ENERGY, INC.

| |        | 
| | ------ | 
| | By:    | 
| | Name:  | 
| | Title: | 

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

S-1

---

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

| |        | 
| | ------ | 
| | By:    | 
| | Name:  | 
| | Title: | 

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

S-2

---

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

| |        | 
| | ------ | 
| | By:    | 
| | Name:  | 
| | Title: | 

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

S-3

---

| |                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------
| | KEYBANK NATIONAL ASSOCIATION,
                                                    Individually and as Documentation Agent

| |        | 
| | ------ | 
| | By:    | 
| | Name:  | 
| | Title: | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Operations Contact:
                                              KeyBank National Association
                                              127 Public Square
                                              Cleveland, OH 44114
                                              Attention:  Kathy Koenig
                                              Telephone:  216-689-4228
                                              FAX:  216-689-4981
                                              Email:  Kathy_A_Koenig@key.com
                                              Credit Contact:
                                              Attention:  Sherrie Manson
                                              Telephone:  216-689-3443
                                              FAX:  216-689-4981
                                              Email:  Sherrie_Manson@key.com

S-4

---

| |                    
| | -------------------
| | JPMORGAN CHASE BANK

| |        | 
| | ------ | 
| | By:    | 
| | Name:  | 
| | Title: | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Operations Contact:
                                              JPMorgan Chase Bank
                                              1111 Fanin, 10th Floor
                                              Houston, TX 77002
                                              Attention:  Jamie Kurtz
                                              Telephone:  713-750-23787
                                              FAX:  713-427-6307
                                              Email:  jamie.kurtz@jpmorgan.com
                                              Credit Contact:
                                              JPMorgan Chase Bank
                                              270 Park Avenue
                                              New York, NY 10017
                                              Attention:  Michael DeForge
                                              Telephone:  212-270-1656
                                              FAX:  212-270-1603
                                              Email:  Michael.J.Deforge@jpmorgan.com

S-5

---

| |                       
| | ----------------------
| | WASHINGTON MUTUAL BANK

| |        | 
| | ------ | 
| | By:    | 
| | Name:  | 
| | Title: | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Operations Contact:
                                              Washington Mutual Bank
                                              1201 3rd Avenue, WMT 1445
                                              Suite 1445
                                              Seattle, WA 98101
                                              Attention:  Toni Dale
                                              Telephone:  206-377-5214
                                              FAX:  206-377-3812
                                              Email:  Toni.dale@wamu.net
                                              Credit Contact:
                                              Attention:  Bruce Kendrex
                                              Telephone:  206-377-3888
                                              FAX:  206-377-3812
                                              Email:  Bruce.kendrex@wamu.net

S-6

---

| |                               
| | ------------------------------
| | U.S. BANK NATIONAL ASSOCIATION

| |        | 
| | ------ | 
| | By:    | 
| | Name:  | 
| | Title: | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Operations Contact:
                                              U.S. Bank National Association
                                              1420 Fifth Avenue, 11th Floor
                                              Seattle, WA 98101
                                              Attention:  Gail Fortun
                                              Telephone:  206-587-5212
                                              FAX:  206-344-3741
                                              Email:  Gail.Fortun@usbank.com
                                              Credit Contact:
                                              Attention:  Wilfred Jack
                                              Telephone:  206-344-3643
                                              FAX:  206-344-3654
                                              Email:  Wilfred.Jack@usbank.com

S-7

---

| |                      
| | ---------------------
| | BANK OF AMERICA, N.A.

| |        | 
| | ------ | 
| | By:    | 
| | Name:  | 
| | Title: | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Operations Contact:
                                              Bank of America, N.A.
                                              800 5th Avenue, 35th Floor
                                              Seattle, WA 98104
                                              Attention:  Shari Abbott
                                              Telephone:  206-358-8549
                                              FAX:  206-585-5641
                                              Email:  sharolynn.k.abbott@bankofamerica.com
                                              Credit Contact:
                                              Attention:  Mary Knell
                                              Telephone:  206-358-3588
                                              FAX:  206-585-5641
                                              Email:  mary.knell@bankofamerica.com

S-8

---

| |                                       
| | --------------------------------------
| | WELLS FARGO BANK, NATIONAL ASSOCIATION

| |        | 
| | ------ | 
| | By:    | 
| | Name:  | 
| | Title: | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Operations Contact:
                                              Wells Fargo Bank, National Association
                                              201 Third Street, MAC A0187-081
                                              San Francisco, CA 94103
                                              Attention:  Ginnie Padgett
                                              Telephone:  415-477-5374
                                              FAX:  415-512-1943 or 415-979-0675
                                              Credit Contact:
                                              Wells Fargo Bank, National Association
                                              999 Third Avenue, 11th Floor
                                              MAC P6540-11E
                                              Seattle, WA 98104
                                              Attention:  Deb Watson
                                              Telephone:  206-292-3668
                                              FAX:  206-292-3595
                                              Email:  watsonds@wellsfargo.com

S-9

---

| |                       
| | ----------------------
| | PACIFIC NORTHWEST BANK

| |        | 
| | ------ | 
| | By:    | 
| | Name:  | 
| | Title: | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Operations Contact:
                                              Pacific Northwest Bank
                                              1111 Third Avenue, Suite 250
                                              Seattle, WA 98101
                                              Attention:  Carmen Moore
                                              Telephone: 206-774-7976
                                              FAX:  206-442-5042
                                              Email:  moorec@pnwbank.com
                                              Credit Contact:
                                              Attention:  Carlos Guangorena
                                              Telephone: 206-224-8784
                                              FAX:  206-587-2632
                                              Email: guangc@pnwbank.com

S-10

---

EXHIBIT AFORM OF OPINION OF
PERKINS COIE LLP

A-1

---

EXHIBIT BCOMPLIANCE CERTIFICATE

|    |                                                            
|--- | -----------------------------------------------------------
|To: | The Lenders parties to the
Credit Agreement Described Below

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

THE
UNDERSIGNED HEREBY CERTIFIES THAT:

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

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

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

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

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

The
foregoing are made and delivered this_____________day of____________,______.

B-1

---

Attachment 16.11 Debt to
Capitalization Ratio

|   |  |                                           |   |                 
|-- |  | ----------------------------------------- | - | ----------------
|1. |  | Consolidated Indebtedness                 | $ |                 
|2. |  | Net Worth                                 | $ |                 
|3. |  | Capitalization (sum of item 1 and item 2) | $ |                 
|   |  |                                           |   |                 
|4. |  | Ratio of item 1 to item 3                 |   | _________ to 1.0

|                |            
|--------------- | -----------
|Maximum allowed | 0.65 to 1.0

B-2

---

Attachment 26.12 Minimum Interest
Coverage Ratio

|   |                                                                                                                                                                                                           |  |                 
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------
|1. | Consolidated net income of the Borrower
and its Subsidiaries for the four fiscal quarters ended
______________(the "Computation Period") before dudecting nterest expense and
Federal income tax expense. |  | $__________     
|2. | Consolidated interest expense of the
Borrower and its Subsidiearies for the Computation Period                                                                                                            |  | $ ___________   
|3. | Ratio of item 1 to item 2                                                                                                                                                                                 |  | _________ to 1.0

|                 |                  |  | 
|---------------- | ---------------- |  | 
|Minimum Required | _________ to 1.0

B-3

---

EXHIBIT CASSIGNMENT
AGREEMENT

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

The
parties hereto agree as follows:

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

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

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

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

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

C-1

---

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

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

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

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

C-2

---

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

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

C-3

---

SCHEDULE 1to
Assignment Agreement

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

|2. | Date
of Assignment Agreement: ___________, ______
|-- | -------------------------------------------------

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

| |          |          |          |         
| | -------- | -------- | -------- | --------
| | Facility | Facility | Facility | Facility
| | 1*       | 2*       | 3*       | 4*      

| |    |                                                                                                                    |                                                                                                                                                                                                                                                                                                        
| | -- | ------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. | Assignee's percentage
           of each Facility purchased
           under the Assignment
           Agreement** | ___________% __________% __________% _________%                                                                                                                                                                                                                                                        
| | b. | Amount of each Facility purchased under the Assignment Agreement                                                   | $___________ $__________  $__________  $___________                                                                                                                                                                                                                                                    
| | 4. | Assignee's Commitment (or Outstanding Credit Exposure with respect to terminated Commitments) purchased hereunder: | $___________________________                                                                                                                                                                                                                                                                           
| | 5. | Proposed Effective Date:                                                                                           | _______________________________                                                                                                                                                                                                                                                                        
| | 6. | Non-standard Rcordation Fee Arrangement                                                                            | N/A***
                                                                      [Assignor/Assignee  
                                                                       to pay 100% of fee]
                                                                      [Fee waived by Administrative Agent]

|                    
|--------------------
|Accepted and Agreed:

S-1-1

---

|                   |                   
|------------------ | ------------------
|[NAME OF ASSIGNOR] | [NAME OF ASSIGNEE]
|                   |                   

|       |  |  |        | 
|------ |  |  | ------ | 
|By:    |  |  | By:    | 
|Title: |  |  | Title: | 

|                                                   |                                                              
|-------------------------------------------------- | -------------------------------------------------------------
|ACCEPTED AND CONSENTED TO*****BY[NAME OF BORROWER] | ACCEPTED AND CONSENTED TO****BY[NAME OF ADMINISTRATIVE AGENT]

|       |  |  |        | 
|------ |  |  | ------ | 
|By:    |  |  | By:    | 
|Title: |  |  | Title: | 

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

S-1-2

---

Attachment to SCHEDULE
1 to ASSIGNMENT AGREEMENT

# ADMINISTRATIVE
INFORMATION SHEET

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

# ASSIGNOR INFORMATION

|                |  |  |  | 
|--------------- |  |  |  | 
|Credit Contact: |  |  |  | 

|         |  |  |                | 
|-------- |  |  | -------------- | 
|         |  |  |                | 
|Name:    |  |  | Telephone No.: | 
|Fax No.: |  |  | Telex No.:     | 
|         |  |  | Answerback:    | 
|         |  |  |                | 

|                                         | 
|---------------------------------------- | 
|Payment Information:                     | 
|                                         | 
|Name & ABA # of Destination Bank:        | 
|                                         | 
|Account Name & Number for Wire Transfer: | 
|                                         | 
|Other Instructions:                      | 
|                                         | 
|Address for Notices for Assignee:        | 

# ASSIGNEE INFORMATION

|                |  |  |  | 
|--------------- |  |  |  | 
|Credit Contact: |  |  |  | 

|         |  |  |                | 
|-------- |  |  | -------------- | 
|         |  |  |                | 
|Name:    |  |  | Telephone No.: | 
|Fax No.: |  |  | Telex No.:     | 
|         |  |  | Answerback:    | 
|         |  |  |                | 

|                         |  |  |  | 
|------------------------ |  |  |  | 
|Key Operations Contacts: |  |  |  | 

|                      |  |  |                       | 
|--------------------- |  |  | --------------------- | 
|                      |  |  |                       | 
|Booking Installation: |  |  | Booking Installation: | 
|Name:                 |  |  | Name:                 | 
|Telephone No.:        |  |  | Telephone No.:        | 
|Fax No.:              |  |  | Fax No.:              | 
|Telex No.:            |  |  | Telex No.:            | 
|Answerback:           |  |  | Answerback:           | 

S-1-3

---

|                                         | 
|---------------------------------------- | 
|Payment Information:                     | 
|                                         | 
|Name & ABA # of Destination Bank:        | 
|                                         | 
|Account Name & Number for Wire Transfer: | 
|                                         | 
|Other Instructions:                      | 
|                                         | 
|Address for Notices for Assignee:        | 

S-1-4

---

BANK ONE INFORMATION

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

|                         |                               
|------------------------ | ------------------------------
|Initial Funding Contact: | Subsequent Operations Contact:
|                         |                               

|               |       |  |                     |      
|-------------- | ----- |  | ------------------- | -----
|Name:          |       |  | Name:               |      
|Telephone No.: | (312) |  | Telephone No.       | (312)
|Fax No.:       | (312) |  | Fax No.:            | (312)
|               |       |  | Bank One Telex No.: |      

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

S-1-5

---

EXHIBIT DLOAN/CREDIT RELATED
MONEY TRANSFER INSTRUCTION

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

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

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

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

|                                  | 
|--------------------------------- | 
|Facility Identification Number(s) | 
|                                  | 
|Customer/Account Name             | 
|                                  | 
|Transfer Funds To                 | 
|                                  | 
|For Account No.                   | 
|                                  | 
|Reference/Attention To            | 
|                                  | 

|                                             |                  
|-------------------------------------------- | -----------------
|Authorized Officer (Customer Representative) | Date     12/23/02
|                                             |                  
|                                             |                  
|(Please Print)                               | Signature        
|                                             |                  
|Bank Officer Name                            |                  
|                                             |                  
|                                             |                  
|(Please Print)                               | Signature        

D-1

---

EXHIBIT ENOTE

[Date]

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

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

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

| |                   
| | ------------------
| | PUGET SOUND ENERGY

| |             | 
| | ----------- | 
| | By:         | 
| | Print Name: | 
| | Title:      | 

E-1

---

SCHEDULE OF LOANS AND
PAYMENTS OF PRINCIPAL TO

NOTE
OF________________________, DATED ______________________,

|     |                        |                           |                     |              
|---- | ---------------------- | ------------------------- | ------------------- | -------------
|Date | Principalamount ofLoan | Maturityof InterestPeriod | PrinicpalAmountPaid | UnpaidBalance

E-2

---

EXHIBIT FTELEPHONIC NOTICES

G-1

---

# SCHEDULE 1

# PRICING SCHEDULE

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

# [PRICING GRID
REDACTED]

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

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

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

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

Level
I Status exists at any date if, on such date, the Borrowers Moodys
Rating is Baa1 or better andthe Borrowers S&P Rating is BBB+ or better.

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

S-3-1

---

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

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

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

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

S-3-2

---

# SCHEDULE 2

COMMITMENTS OF
THE LENDERS

|Lender                                 | Commitment |               | 
|-------------------------------------- | ---------- | ------------- | 
|Bank One, NA                           |            | $  50,000,000 | 
|Union Bank of California, N.A          |            | $  50,000,000 | 
|KeyBank National Association           |            | $  50,000,000 | 
|JPMorgan Chase Bank                    |            | $  35,000,000 | 
|Washington Mutual Bank                 |            | $  20,000,000 | 
|Pacific Northwest Bank                 |            | $  15,000,000 | 
|U.S. Bank National Association         |            | $  10,000,000 | 
|Wells Fargo Bank, National Association |            | $  10,000,000 | 
|Bank of America, N.A                   |            | $  10,000,000 | 
|                                       |            |               | 
|TOTAL                                  |            | $250,000,000  | 

S-2-1

---

# Schedule 5.11

FINANCIAL STATEMENTS

1

---

# SCHEDULE 5.14

SUBSIDIARIES

|           |                             |         |                 
|---------- | --------------------------- | ------- | ----------------
|Subsidiary | Jurisdiction ofOrganization | OwnedBy | PercentOwnership

1

---

# SCHEDULE 6.16

INVESTMENTS

S-5.5-1

---

Table of Contents

(continued)

Page

`Table of Contents

                                                                                                                Page


                                        -i-

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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







                                                SCHEDULES AND EXHIBITS

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

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

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

Schedule 5.11 Financial Statements

Schedule 5.14  Subsidiaries

Schedule 6.16.....Investments

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

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

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

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

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

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