CLECO CORP 2003 CREDIT AGREEMENT





  EXHIBIT 10(a)




EXECUTION COPY






 


364-DAY CREDIT AGREEMENT

  

  dated as of May 7, 2003

  

  among

  

  

  CLECO CORPORATION,

  as Borrower

  

  The Lenders Party Hereto

  

  BANK ONE, NA,

  as Syndication Agent

  

  WESTLB AG, NEW YORK BRANCH

  as Documentation Agent

  

  and

  

  THE BANK OF NEW YORK, 

  as Administrative Agent

  
                                                                                         

  BNY
  CAPITAL MARKETS, INC.,

  as Lead Arranger and Book Runner




  Bryan
  Cave LLP

  245 Park Avenue

  New York, New York 10167







  	
      TABLE OF CONTENTS
	 
	 	Page
	 	 
	Article 1. DEFINITIONS. 
      	1
	 	 
	Section 1.1     
      Defined Terms. 	1
	Section 1.2     
      Terms Generally.	18
	Section 1.3     
      Accounting Terms.	19
	 	 
	Article 2. AMOUNT AND TERMS OF
      LOANS. 	19
	 	 
	Section 2.1     
      Revolving Credit Loans.	 19
	Section 2.2     
      Notes. 	19
	Section 2.3     
      Revolving Credit Loans; Procedure. 	19
	Section 2.4     
      Competitive Bid Loans; Procedure. 	21
	Section 2.5     
      Termination, Reduction and Increase of Aggregate Commitments.	 23
	Section 2.6     
      Prepayments of the Loans. 	23
	Section 2.7     
      Conversions and Continuations.	 25
	Section 2.8     
      Letters of Credit 	26
	Section 2.9     
      Interest Rate and Payment Dates. 	29
	Section 2.10       
      Substituted Interest Rate. 	30
	Section 2.11       
      Taxes. 	31
	Section 2.12       
      Increased Costs; Illegality. 	32
	Section 2.13       
      Break Funding Payments. 	34
	Section 2.14       
      Lenders' Records. 	34
	Section 2.15       
      Extension of Commitment Period and Maturity Date. 	34
	Section 2.16       
      Substitution of Lender 	36
	 	 
	Article 3. FEES; PAYMENTS. 
      
      	36
	 	 
	Section 3.1     
      Fees. 	36
	Section 3.2     
      Pro Rata Treatment and Application of Principal Payments. 	37
	 	 
	Article 4. REPRESENTATIONS AND
      WARRANTIES. 	38
	 	 
	Section 4.1     
      Subsidiaries; Capitalization. 	38
	Section 4.2     
      Existence and Power 	39
	Section 4.3     
      Authority. 	39
	Section 4.4     
      Binding Agreement 	39
	Section 4.5     
      Litigation and Regulatory Proceedings. 	39
	Section 4.6     
      Required Consents. 	39
	Section 4.7     
      No Conflicting Agreements, Compliance with Laws. 	40
	Section 4.8     
      Governmental Regulations. 	40
	Section 4.9     
      Federal Reserve Regulations; Use of Loan Proceeds. 	40
	Section 4.10       
      Plans. 	40
	Section 4.11       
      Financial Statements. 	41
	Section 4.12       
      Property. 	41
	Section 4.13       
      Environmental Matters. 	41
	 	 
	Article 5. CONDITIONS TO
      EFFECTIVENESS. 	42
	 	 
	Section 5.1     
      Evidence of Action. 	42
	Section 5.2     
      This Agreement 	42
	Section 5.3     
      Notes. 	43
	Section 5.4     
      Approvals. 	43
	Section 5.5     
      Certain Agreements. 	43
	Section 5.6     
      Opinion of Counsel to the Borrower 	43
	Section 5.7     
      Terminating Indebtedness. 	43
	Section 5.8     
      2003 Senior Notes. 	43
	Section 5.9     
      Compliance; Officer's Certificate. 	44
	Section 5.10       
      Fees and Expenses. 	44
	 	 
	Article 6. CONDITIONS OF LENDING
      -
      ALL LOANS. 	44
	 	 
	Section 6.1     
      Compliance. 	44
	Section 6.2     
      Credit Request; Competitive Bid Request 	44
	Section 6.3     
      Law. 	44
	Section 6.4     
      Other Documents. 	44
	 	 
	

Article 7. AFFIRMATIVE COVENANTS. 


      	45
	 	 
	Section 7.1     
      Financial Statements. 	45
	Section 7.2     
      Certificates; Other Information. 	46
	Section 7.3     
      Legal Existence. 	46
	Section 7.4     
      Taxes. 	47
	Section 7.5     
      Insurance. 	47
	Section 7.6     
      Payment of Indebtedness and Performance of Obligations. 	47
	Section 7.7     
      Condition of Property. 	47
	Section 7.8     
      Observance of Legal Requirements. 	47
	Section 7.9     
      Inspection of Property; Books and Records; Discussions. 	48
	Section 7.10       
      Licenses, Intellectual Property. 	48
	Section 7.11       
      Financial Covenants. 	48
	Section 7.12       
      Material/Immaterial Designation of Subsidiaries. 	48
	Section 7.13       
      Use of Proceeds. 	49
	 	 
	Article 8. NEGATIVE COVENANTS. 
      
      	49
	 	 
	Section 8.1     
      Indebtedness. 	49
	Section 8.2     
      Liens. 	50
	Section 8.3     
      Merger, Consolidation, Purchase or Sale of Assets, Etc. 	52
	Section 8.4     
      Loans, Advances, Investments, etc. 	53
	Section 8.5     
      Amendments, etc. of Employee Stock Ownership Plan. 	54
	Section 8.6     
      Restricted Payments. 	54
	Section 8.7     
      Transactions with Affiliates. 	54
	Section 8.8     
      Restrictive Agreements. 	55
	Section 8.9     
      Permitted Hedge Agreements. 	55
	 	 
	Article 9. EVENTS OF DEFAULT. 
      
      	55
	 	 
	Article 10. THE ADMINISTRATIVE
      AGENT. 	58
	 	 
	Section 10.1       
      Appointment 	58
	Section 10.2       
      Delegation of Duties. 	59
	Section 10.3       
      Exculpatory Provisions. 	59
	Section 10.4       
      Reliance by Administrative Agent 	59
	Section 10.5       
      Notice of Default 	60
	Section 10.6       
      Non Reliance on Administrative Agent and Other Lenders. 	60
	Section 10.7       
      Administrative Agent in Its Individual Capacity. 	60
	Section 10.8       
      Successor Administrative Agent 	60
	 	 
	Article 11. OTHER PROVISIONS. 
      
      	61


  (ii)







  	
      TABLE OF CONTENTS

      (Continued)
	 
	 	 
	Section 11.1       
      Amendments and Waivers. 	61
	Section 11.2       
      Notices. 	62
	Section 11.3       
      Survival 	62
	Section 11.4       
      Expenses; Indemnity; Damage Waiver 	63
	Section 11.5       
      Lending Offices. 	64
	Section 11.6       
      Assignments and Participations. 	64
	Section 11.7       
      Counterparts; Integration; Effectiveness. 	66
	Section 11.8       
      Severability. 	66
	Section 11.9       
      Right of Set off 	66
	Section 11.10      
      Governing Law; Jurisdiction; Consent to Service of Process. 	67
	Section 11.11      
      WAIVER OF JURY TRIAL..  	67
	Section 11.12      
      Headings. 	68



                                                                                                                    
 


SCHEDULES:




	
  Schedule 1.1

  	
  List of Existing Letters of Credit

  
	
  Schedule 1.1A

  	
  Adjustments to Net Cash Receipts

  
	
  Schedule 4.1

  	
  List of Subsidiaries

  
	
  Schedule 4.5

  	
  List of Litigation and Regulatory Proceedings

  
	
  Schedule 4.13

  	
  List of Environmental Matters

  
	
  Schedule 8.2

  	
  List of Existing Liens

  
	
  Schedule 8.8

  	
  List of Existing Restrictions

  



 


EXHIBITS:




	
  Exhibit A

  	
  List of Commitments

  
	
  Exhibit B

  	
  Form of Note

  
	
  Exhibit C

  	
  Form of Credit Request

  
	
  Exhibit D

  	
  Form of Competitive Bid Request

  
	
  Exhibit E

  	
  Form of Invitation to Bid

  
	
  Exhibit F

  	
  Form of Competitive Bid

  
	
  Exhibit G

  	
  Form of Competitive Bid Accept/Reject Letter

  
	
  Exhibit H

  	
  Form of Competitive Bid Loan Confirmation

  
	
  Exhibit I

  	
  Form of Notice of Conversion/Continuation

  
	
  Exhibit J

  	
  Form of Assignment and Acceptance Agreement

  
	
  Exhibit K

  	
  Form of Opinion of Counsel
  to the Borrower

  
	
  Exhibit L

  	
  Approved Subordination
  Terms

  
	
  Exhibit M

  	
  Form of Compliance
  Certificate

  
	
  Exhibit N

  	
  Form of Increase Supplement

  






(iii)






 



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


Article 1.    
DEFINITIONS



Section 1.1             

Defined Terms


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


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


"Acadia": Acadia Power Holdings LLC, a
Louisiana limited liability company and an indirect wholly owned Subsidiary.


"Acadia Entities": collectively, (i) Acadia,
(ii) each subsidiary of Acadia, (iii) Acadia Power Partners LLC, (iv) Acadia
Partners Pipeline LLC, (v) each other corporation in which any of the foregoing
owns or controls at least 50% of the outstanding Stock having ordinary voting
power to elect a majority of the board of directors or similar managing body,
irrespective of whether a class or classes shall or might have voting power by
reason of the happening of any contingency, and (vi) each other association,
partnership, joint venture or other business entity, in which any of the
foregoing is entitled to share in at least 50% of the profits and losses,
however determined. 


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


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


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


"Adjusted Total Indebtedness": at any time, Total
Indebtedness minus the amount of any Indebtedness of the Borrower or any
Subsidiary (other than the Utility) included therein to the extent that it is
non-recourse to the Borrower or the Utility.


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


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


"Affected Advance": as defined in Section
2.10.







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


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


"Aggregate Commitments": on any date, the
sum of all Commitments on such date.  The initial amount of the Aggregate
Commitments on the Agreement Date is $105,000,000.


"Agreement": this 364-Day Credit
Agreement.


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


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


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




	
  Pricing Level

  

  

  	
  Applicable

  Facility Fee

  Percentage

  

  

  
	
  Pricing Level I

  	
  0.150%

  
	
  Pricing Level II

  	
  0.200%

  
	
  Pricing Level III

  	
  0.250%

  
	
  Pricing Level IV

  	
  0.300%

  
	
  Pricing Level V

  	
  0.500%

  
	
  Pricing Level VI

  	
  0.625%

  








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


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


"Applicable Margin": 


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


-2-








	
  Pricing Level

  

  

  	
  Applicable

  Margin

  

  

  
	
  Pricing Level I

  	
  0.725%

  
	
  Pricing Level II

  	
  0.800%

  
	
  Pricing Level III

  	
  1.000%

  
	
  Pricing Level IV

  	
  1.325%

  
	
  Pricing Level V

  	
  1.500%

  
	
  Pricing Level VI

  	
  2.375%

  








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


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


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


"Approved Subordination Terms": terms of
subordination substantially as set forth on Exhibit L.


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


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


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


"BNY": The Bank of New York.


"BNY Rate": the rate of interest per annum
publicly announced from time to time by BNY as its prime commercial lending
rate at its principal office in New York City; each change in the BNY Rate
being effective from and including the date such change is publicly announced
as being  


-3-







effective. The BNY Rate is not intended to be lowest rate of interest
charged by BNY in connection with extensions of credit to borrowers.


"Borrower": Cleco Corporation, a Louisiana
corporation.


"Borrower Financial Statements": as defined
in Section 4.11(a).


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


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


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


"Change in Law": (i) the adoption of any
law, rule or regulation after the Agreement Date, (ii) any change in any law,
rule or regulation or in the interpretation or application thereof by any
Governmental Authority after the Agreement Date or (iii) compliance by any
Credit Party (or, for purposes of Section 2.12(b), by any lending office of
such Credit Party or by such Credit Party's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the Agreement Date.


"Change in Control": the occurrence of any
of the following: (i) the consummation of any transaction the result of which
is that any "person" or "group" (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934) becomes the "beneficial owner" (as such term
is defined in Rule 13d-3 under the Securities Exchange Act of 1934) of
more than 50% of the total voting power in the aggregate of all classes of the
Voting Securities of the Borrower then outstanding, (ii) the occupation of a majority of the seats (other than vacant seats) on the board of directors of the
Borrower by Persons who were neither nominated by the board of directors of the
Borrower nor appointed by directors so nominated, (iii) the failure of the Borrower to (x) own directly, beneficially and of record, 100% of the aggregate
ordinary voting power and economic interests represented by the issued and
outstanding equity interests of the Utility on a fully diluted basis or (y) be
the sole member of the Utility, or (iv) the failure of the Borrower to (x) own
directly or indirectly, 100% of the aggregate ordinary voting power and
economic interests represented by the issued and outstanding equity interests
of Evangeline on a fully diluted basis.


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


"Code": the Internal Revenue Code of 1986.


-4-







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


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


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


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


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


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


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


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


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


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


-5-







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


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


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


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


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


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


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


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


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


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


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


-6-







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


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


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


"Environmental Laws": any and all federal,
state and local laws relating to the use, storage, transporting, manufacturing,
handling, discharge, disposal or recycling of Hazardous Substances or
pollutants and including (i) the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 USCA §9601 et seq., (ii) the
Resource Conservation and Recovery Act of 1976, as amended, 42 USCA §6901 et
seq., (iii) the Toxic Substance Control Act, as amended, 15 USCA §2601 et.
seq., (iv) the Water Pollution Control Act, as amended, 33 USCA §1251 et. seq.,
(v) the Clean Air Act, as amended, 42 USCA §7401 et seq., (vi) the Hazardous
Materials Transportation Authorization Act of 1994, as amended, 49 USCA §5101
et seq., and (viii) all rules and regulations under any of the foregoing and
under any analogous state laws, judgments, decrees and injunctions and any
analogous state laws applicable to the Borrower or any of the Material
Subsidiaries. 


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


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


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


-7-







concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.


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


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


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


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


"Evangeline": Cleco Evangeline LLC, a
Louisiana limited liability company and an indirect wholly owned Subsidiary.


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


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



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


-8-







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


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


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


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


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


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


"Hazardous Substance": (i) any hazardous or
toxic substance, material or waste listed in the United States Department of
Transportation Hazardous Materials Table (49 CFR §172.101) or by the
Environmental Protection Agency as hazardous substances (40 CFR Part 302), and
amendments thereto and replacements therefor, and (ii) any substance, pollutant
or material defined as, or designated in, any Environmental Law as a "hazardous
substance," "toxic substance," "hazardous material," "hazardous waste,"
"restricted hazardous waste," "pollutant," "toxic pollutant" or words of
similar import.


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


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




-9-







terms hereof, provided that at no time shall the Utility, Acadia,
Evangeline or Perryville be deemed to be an Immaterial Subsidiary for any
purpose.


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


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


"Indebtedness": as to any Person, at a
particular time, all items which constitute, without duplication, (i)
indebtedness for borrowed money or the deferred purchase price of Property
(other than trade payables incurred in the ordinary course of business), (ii)
indebtedness evidenced by notes, bonds, debentures or similar instruments,
(iii) obligations with respect to any conditional sale or title retention
agreement, (iv) indebtedness arising under acceptance facilities and the amount
available to be drawn under all letters of credit issued for the account of
such Person and, without duplication, all drafts drawn thereunder to the extent
such Person shall not have reimbursed the issuer in respect of the issuer's
payment of such drafts, (v) all liabilities secured by any Lien on any Property
owned by such Person even though such Person has not assumed or otherwise
become liable for the payment thereof (other than carriers', warehousemen's,
mechanics', repairmen's or other like non consensual statutory Liens arising in
the ordinary course of business), (vi) liabilities in respect of any obligation
(contingent or otherwise) to purchase, redeem, retire, acquire or make any
other payment in respect of any shares of equity securities or any option,
warrant or other right to acquire any shares of equity securities, (vii)
obligations under Capital Lease Obligations, (viii) Contingent Obligations of
such Person in respect of Indebtedness of others and (ix) to the extent not
otherwise included, all net obligations of such Person under Permitted Hedge
Agreements.


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


"Indenture": the Indenture, dated as of May 1, 2000, between the Borrower and Bank One, NA, as trustee.


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


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


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


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


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


-10-







Competitive Interest Period of more than 90 days, the day which is
90 days after the first day of such Competitive Interest Period and the last
day of each subsequent 90 day period thereafter or, if sooner, the last day of
such Competitive Interest Period.


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


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


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


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


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


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


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


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


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


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


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


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


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


-11-







Documents or (iii) the ability of the Credit Parties
to enforce their rights and remedies under the Loan Documents.


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


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


"Material Subsidiary": each Subsidiary of
the Borrower designated as such on Schedule 4.1 and any other Subsidiary
of the Borrower that has been designated as such in accordance with Section
7.12, in each case unless and until such Subsidiary or other Subsidiary, as the
case may be, is designated as an Immaterial Subsidiary pursuant to such
Section, provided that each of the Utility, Acadia, Evangeline and
Perryville shall at all times and for all purposes be deemed to be a Material
Subsidiary.


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


"Material Unregulated Subsidiary": each
Material Subsidiary other than the Utility and each Utility Material Subsidiary.


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


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


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


"Midstream": Cleco Midstream Resources, LLC,
a Louisiana limited liability company.


"Midstream Credit Facility": the Credit
Agreement, dated as of August 30, 2002, by and among Midstream, the lenders party
thereto and BNY, as administrative agent. 


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


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


"Net Cash Receipts": for any consecutive
twelve month period, an amount equal to the sum, without duplication of (i) $40
million, (ii) ordinary cash payments actually received during such period by
the Borrower from Subsidiaries and Unconsolidated Persons, (iii) interest
income of the Borrower, and (iv) the net change (if positive) in receivables
due the Borrower from Affiliates, minus the sum of (x) amount of any capital investments or capital expenditures made by the Borrower in any
Subsidiary or Unconsolidated Person during such period (but not
subtracting capital investments or expenditures made by the Borrower in Acadia
or Perryville prior to commercial operation of its respective project and the
investments incurred after commencement of commercial operation that were
related to the initial start-up of its respective project as described on and
in the amounts set forth on Schedule 1.1A) and (y) the net change (if negative) in receivables due the Borrower from Affiliates.  Notwithstanding the
forgoing, in the event of a Tolling Agreement Counterparty Default, the
termination of the relevant  


-12-







Tolling Agreement, any restructuring of such
Tolling Agreement or the sale or other disposition of the relevant Subsidiary
or relevant Unconsolidated Person, in each case during such period, all cash
and other cash distributions received during such period under the relevant
Tolling Agreement shall be excluded from Net Cash Receipts from the beginning
of such period, provided, however, that Net Cash Receipts for
such period shall include, without duplication, (i) cash collateral collections
and drawings under letters of credit under which the Borrower, the relevant
Subsidiary or the relevant Unconsolidated Person is the beneficiary which are
actually received by the Borrower during such period as a result of such
Tolling Agreement Counterparty Default and (ii) other cash collections actually
received by the Borrower during such period as the result of the termination or
restructuring of such Tolling Agreement or the sale of such Subsidiary or Unconsolidated
Person.  In addition, in the event that a new Tolling Agreement is entered into
by a subsidiary or Unconsolidated Person with a new Tolling Agreement Counterparty
to replace a Tolling Agreement which has been terminated as a result of a restructuring
or a Tolling Agreement Counterparty Default, Net Cash Receipts shall be
adjusted on a consistent basis to give pro forma effect to such replacement
Tolling Agreement and any changes in the sharing of payments from the related
project under the joint venture agreement related thereto or other applicable related
project contracts (or amendments thereto) as if it was entered into on the
first day of such period.


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


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


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


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


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


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


"Permitted Hedge Agreement": a transaction
in futures, forwards, swaps, options or other similar contracts (including both
physical and financial settlement transactions), engaged in by a Person as part
of its normal business operation with the purpose and effect of fixing prices
as a risk management strategy or hedge against adverse changes in the prices of
electricity, gas or fuel or interest rates (including commodity price hedges,
swaps, caps, floors, collars and similar agreements designed to protect such
Person against fluctuation in commodity prices or any option with respect to
any such transaction), and not for purposes of speculation and not intended
primarily as a borrowing of funds.


"Permitted Investments":


(a)        direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States (or by any agency thereof to
the extent that such obligations are backed by the full faith and credit of the
United States), in each case maturing within one year from the date of
acquisition thereof;


-13-







(b)        investments in
commercial paper maturing within 270 days from the date of acquisition thereof
and having, at such date of acquisition, the highest credit rating obtainable
either from S&P or from Moody's;


(c)        investments in
certificates of deposit, banker's acceptances and time deposits maturing within
180 days from the date of acquisition thereof issued or guaranteed by or placed
with, and money market deposit accounts issued or offered by, any Lender or any
domestic office of any commercial bank organized under the laws of the United
States or any State thereof that has a combined capital and surplus and
undivided profits of not less than $500,000,000; 


(d)        fully collateralized
repurchase agreements with a term of not more than 30 days for securities
described in clause (a) of this definition and entered into with a financial
institution satisfying the criteria described in clause (c) of this definition;
and


(e)        money market
mutual funds, 90% of the investments of which are in cash or investments
contemplated by clauses (a), (b) and (c) of this definition.


"Permitted Liens": Liens permitted to exist
under Section 8.2.


"Perryville": Perryville Energy Holdings
LLC, a Louisiana limited liability company and an indirect wholly owned
Subsidiary.


"Perryville Entities": collectively, (i)
Perryville, (ii) each subsidiary of Perryville, (iii) Perryville Energy
Partners LLC, (iv) each other corporation in which any of the foregoing owns or
controls at least 50% of the outstanding Stock having ordinary voting power to
elect a majority of the board of directors or similar managing body,
irrespective of whether a class or classes shall or might have voting power by
reason of the happening of any contingency, and (v) each other association,
partnership, joint venture or other business entity, in which any of the
foregoing is entitled to share in at least 50% of the profits and losses,
however determined.


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


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


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


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


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


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


-14-







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


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


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


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


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


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


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


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


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


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


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


"Restricted Payment": as to any Person, (i)
any dividend or other distribution by such Person (whether in cash, securities
or other property) with respect to shares of any class of any equity securities
of such Person, (ii) any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such equity securities, and (iii) any payment of principal or interest or
any purchase, redemption, retirement, acquisition or defeasance with respect to
any Indebtedness of such Person which is subordinated to the payment of the
obligations under the Loan Documents. 


-15-







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


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


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


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


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


"Significant Subsidiary": each Material
Subsidiary other than the Acadia Entities and the Perryville Entities. 


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


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


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


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


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


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


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


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


"Terminating Indebtedness": collectively,
the Indebtedness (together with all unpaid and accrued interest and fees and
other unpaid sums) of the Borrower under the 364-Day Credit Agreement,
dated as of June 5, 2002, by and among the Borrower, the lenders party thereto,
Bank One, NA, as syndication agent, WestLB AG, New York Branch (formerly, Westdeutsche
Landesbank Girozentrale, New York Branch), as documentation agent, The Bank of
Tokyo-Mitsubishi Ltd., as managing agent, Credit Suisse First Boston and Societe Generale, as co-agents, and BNY, as administrative agent,
together with all agreements, instruments and other documents executed or
delivered in connection therewith.


"Tolling Agreement": an agreement pursuant
to which the Borrower, a Subsidiary or an Unconsolidated Person sells all or a
significant portion of the electric generating capacity of a power plant to a
Tolling Agreement Counterparty, such Subsidiary or Unconsolidated Person
operates such power plant and such Tolling Agreement Counterparty purchases the
fuel necessary to operate such power plant.


"Tolling Agreement Counterparty": in respect
of any Tolling Agreement, the Person or Persons (other than the Borrower, a
Subsidiary or an Unconsolidated Person) party to such Tolling Agreement who,
pursuant to such Tolling Agreement, purchases all or a significant portion of
the electric generating capacity of a power plant and is obligated to purchase
the fuel necessary to operate such power plant.


"Tolling Agreement Counterparty Default":
with respect to a Tolling Agreement, (i) the failure by a Tolling Agreement Counterparty to make payments under such Tolling Agreement (regardless of
the cause of such failure (including the breach by the Borrower, any Subsidiary
or Unconsolidated Person of its obligations under such Tolling Agreement))
after the expiration of any grace or cure period, (ii) the breach by the Tolling Agreement Counterparty of any other covenant or agreement under such Tolling
Agreement (after the expiration of any grace or cure period) which gives the
Borrower, such Subsidiary or such Unconsolidated Person the right to terminate
such Tolling Agreement or (iii) the voluntary or involuntary liquidation,
dissolution, insolvency, bankruptcy, receivership or reorganization of the
Tolling Agreement Counterparty.


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


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


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


"2003 Senior Notes": the 7.000% Senior Notes
due 2008 issued by the Borrower pursuant to the 2003 Indenture.


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"Unconsolidated Person": any Subsidiary, joint
venture or other Person that operates a power plant or similar project in which
the Borrower or any Subsidiary invests or has invested and which, pursuant to
GAAP as in effect on such date, would not be consolidated with the Borrower for
financial reporting purposes immediately after giving effect to such
investment.


"United States": the United States of
America.


"Utility": Cleco Power LLC, a Louisiana
limited liability company, successor by merger to Cleco Utility Group Inc., a
Louisiana corporation.


"Utility Credit Agreement": the 364-Day
Credit Agreement, dated as of May 7, 2003, by and among the Utility, the
lenders party thereto and BNY, as administrative agent thereunder.


"Utility Financial Statements": as defined
in Section 4.11(b).


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


"Utility Material Subsidiary": each of the
Subsidiaries of the Utility designated as such pursuant to the Utility Credit
Agreement, unless and until such Subsidiary is designated as an immaterial
Subsidiary pursuant to the Utility Credit Agreement.


"Utility Mortgage": the Indenture of
Mortgage, dated as of July 1, 1950, made by the Utility to Bank One Trust
Company, NA, as Trustee.


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


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



Section 1.2             

Terms Generally


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


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assets and properties, including cash, securities,
accounts and contract rights and (vii) unless specifically provided in a Loan
Document to the contrary, references to a time shall refer to New York City
time.



Section 1.3             

Accounting Terms


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


Article 2.    
AMOUNT
AND TERMS OF LOANS



Section 2.1             

Revolving Credit Loans


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



Section 2.2             

Notes


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



Section 2.3             

Revolving Credit Loans; Procedure


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


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Eurodollar Advance, the Borrower shall be
deemed to have elected that such Advance shall be made as an ABR Advance.  Each
such notice shall be irrevocable and confirmed promptly by delivery to the
Administrative Agent of a Credit Request.  Each ABR Advance shall be in an
aggregate principal amount equal to $5,000,000 or an integral multiple of
$1,000,000 in excess thereof, provided that an ABR Advance may be in an
aggregate amount that is equal to the entire unused balance of the Aggregate
Commitments or in an aggregate amount that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.8(e).  Each
Eurodollar Advance shall be in an aggregate principal amount equal to
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.


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


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


(d)              
If a Lender makes a new Revolving Credit Loan on a Borrowing Date
on which the Borrower is to repay a Revolving Credit Loan from such Lender, such
Lender shall apply the proceeds 


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of such new Revolving Credit Loan to make such
repayment, and only the excess of the proceeds of such new Revolving Credit
Loan over the Revolving Credit Loan being repaid need be made available to the
Administrative Agent, for the Borrower's account.


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



Section 2.4             

Competitive Bid Loans; Procedure


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


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


-21-







by facsimile not later than the Submission Deadline
therefor, provided, however, that the failure by any Lender to
give any such notice shall not obligate such Lender to make any Competitive Bid
Loan.


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


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


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


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


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



Section 2.5             

Termination, Reduction and Increase of Aggregate Commitments


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


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


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


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


(i)                 
immediately after giving effect thereto, the sum of the Aggregate
Commitments after all increases shall not exceed $125,000,000;


-23-







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


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


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


Section 2.6             

Prepayments of the Loans


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


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


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


-24-








Section 2.7             

Conversions and Continuations


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


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


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


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


(e)               
Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of borrowing given to the
Administrative Agent, the Administrative Agent may act without liability upon
the basis of telephonic notice of such borrowing believed by the Administrative
Agent in good faith to be from an authorized officer of the Borrower prior to
receipt of written 


-25-







confirmation.  In each such case, the Administrative Agent's
records with regard to any such telephone notice shall be presumptively
correct, absent manifest error.



Section 2.8             

Letters of Credit


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


(b)              
Notice of Issuance; Amendment; Renewal; Extension; Certain
Conditions. To request the issuance of a New Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit), the
Borrower shall hand deliver or facsimile (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent (not later than three
Business Days before the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a New Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall
be a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit, provided that no such notice shall be required in
connection with the automatic extension of an Evergreen Letter of Credit.  If
requested by the Issuing Bank, the Borrower also shall submit a letter of
credit application on the Issuing Bank's standard form in connection with any
request for a Letter of Credit.  A Letter of Credit shall be issued, amended,
renewed or extended only if (and, upon issuance, amendment, renewal or
extension of each Letter of Credit, the Borrower shall be deemed to represent
and warrant that), after giving effect to such issuance, amendment, renewal or
extension, (i) the LC Exposure shall not exceed $60,000,000 and (ii) the sum of
the total Revolving Credit Exposures of all Lenders plus the outstanding
principal balance of all Competitive Bid Loans shall not exceed the Aggregate
Commitments.


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


(d)              
Participations. By the issuance of a New Letter of Credit
(or an amendment to a New Letter of Credit increasing the amount thereof) or,
in the case of an Existing Letter of Credit, the execution and delivery of this
Agreement, and without any further action on the part of the Issuing Bank or
the Lenders, the Issuing Bank hereby grants to each Lender, and each such
Lender hereby acquires from the Issuing Bank, a participation in each Letter of
Credit equal to such Lender's Commitment Percentage of the aggregate amount
available to be drawn under such Letter of Credit.  In consideration and in
furtherance of the foregoing, each such Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Bank, such Lender's Commitment Percentage 


-26-







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


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


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


-27-







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


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


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


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


-28-







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



Section 2.9             

Interest Rate and Payment Dates


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




	
  ADVANCES

  	
  RATE

  
	
  Each ABR Advance

  	
  Alternate Base
  Rate.


  
	
  Each Eurodollar
  Advance

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


  
	
  Each Competitive Bid
  Loan

  	
  Bid Rate applicable
  thereto for the applicable Competitive Interest Period.

  








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


-29-









nonpayment to, but not
including, the date such balance or such amount, as the case may be, is paid in
full.  All such interest shall be payable on demand.


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



Section 2.10         

Substituted Interest Rate


In the event that (i) the Administrative Agent
shall have determined in the exercise of its reasonable discretion (which
determination shall be conclusive and binding upon the Borrower) that by reason
of circumstances affecting the interbank eurodollar market either reasonable
means do not exist for ascertaining the Eurodollar Rate or (ii) the Required
Lenders shall have notified the Administrative Agent that they have determined
(which determination shall be conclusive and binding on the Borrower) that the
applicable Eurodollar Rate will not adequately and fairly reflect the cost to
such Lenders of maintaining or funding loans bearing interest based on such
Eurodollar Rate, with respect to any portion of the Revolving Credit Loans that
the Borrower has requested be made as Eurodollar Advances or Eurodollar
Advances that will result from the requested conversion or continuation of any
portion of the Advances into or as Eurodollar Advances (each an "Affected
Advance"), the Administrative Agent shall promptly notify the Borrower and
the Lenders (by telephone or otherwise, to be promptly confirmed in writing) of
such determination on or, to the extent practicable, prior to the requested
Borrowing Date or Conversion/Continuation Date for such Affected Advances.  If
the Administrative Agent shall give such notice, (a) any Affected Advances
shall be made as ABR Advances, (b) the Advances (or any portion thereof) that
were to have been converted to or continued as Affected Advances shall be
converted to or continued as ABR Advances and (c) any outstanding Affected
Advances shall be converted, on the last day of the then current Interest
Period with respect thereto, to ABR Advances.  Until any notice under clause
(i) or (ii), as the case may be, of this Section has been withdrawn by the
Administrative Agent (by 


-30-







notice to the Borrower promptly upon either (1) the
Administrative Agent's having determined that such circumstances affecting the
interbank eurodollar market no longer exist and that adequate and reasonable
means do exist for determining the Eurodollar Rate pursuant to Section 2.9 or
(2) the Administrative Agent having been notified by such Required Lenders that
circumstances no longer render the Advances (or any portion thereof) to be
Affected Advances), no further Eurodollar Advances shall be required to be made
by the Lenders, nor shall the Borrower have the right to convert or continue
all or any portion of the Loans to Eurodollar Advances. 



Section 2.11         

Taxes


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


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


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


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


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


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


(c)               
provided that no additional amount shall be required to be paid
to any Lender under clause (iii) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature pages
hereof) or after the date of the Assignment and Acceptance Agreement pursuant
to which such Lender became a Lender (in the case of each other Lender) if any
such 


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requirement for a deduction, withholding or payment as is mentioned
therein shall result in an increase in the rate of such deduction, withholding
or payment from that in effect at the date of this Agreement or at the date of
such Assignment and Acceptance Agreement, as the case may be, in respect of
payments to such Lender, and provided further that any Lender claiming
any additional amounts payable pursuant to this Section 2.11 shall use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable Lending Office or
take other appropriate action if the making of such a change or the taking of
such action, as the case may be, would avoid the need for, or reduce the amount
of, any such additional amounts that may thereafter accrue and would not, in
the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.


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



Section 2.12         

Increased Costs; Illegality


(a)               
If any Change in Law shall:


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


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


and the result of any of
the foregoing shall be to increase the cost to such Credit Party of making or
maintaining any Eurodollar Loan or the cost to such Credit Party of issuing,
participating in or maintaining any Letter of Credit hereunder or to increase
the cost to such Credit Party or to reduce the  


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amount of any sum received or
receivable by such Credit Party hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Credit Party such additional
amount or amounts as will compensate such Credit Party for such additional
costs incurred or reduction suffered.


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


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


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


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


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


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


-33-







provided, that such
Lender agrees to use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different Eurodollar
Lending Office or take other appropriate action if the making of such
designation or the taking of such action, as the case may be, would allow such
Lender or its Eurodollar Lending Office to continue to perform its obligations
to make Eurodollar Advances or to continue to fund or maintain Eurodollar
Advances and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender. In the event any Lender shall exercise its
rights under clause (i) or (ii) of this paragraph, all payments and prepayments
of principal that would otherwise have been applied to repay the Eurodollar
Advances that would have been made by such Lender or the converted Eurodollar
Loans of such Lender shall instead be applied to repay the ABR Advances made by
such Lender in lieu of, or resulting from the conversion of, such Eurodollar
Advances, as applicable.  For purposes of this paragraph, a notice to the
Borrower by any Lender shall be effective as to each Eurodollar Advances made
by such Lender, if lawful, on the last day of the Interest Period currently
applicable to such Eurodollar Advances; in all other cases such notice shall be
effective on the date of receipt by the Borrower.



Section 2.13         

Break Funding Payments


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



Section 2.14         

Lenders' Records


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



Section 2.15         

Extension of Commitment Period and Maturity Date


(a)               

Extension of Commitment Period


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(i)                 
Provided that no Default or Event of Default shall exist, the Borrower
may request that the Commitment Period be extended for up to 364 days by giving
written notice thereof (each an "Extension Request") to the
Administrative Agent at any time during the period which is not more than 45
days nor less than 30 days prior to the then current Commitment Termination
Date and, upon receipt of each such notice, the Administrative Agent shall
promptly notify each Lender thereof.  No Lender shall be required to consent to
any Extension Request. Each Lender shall endeavor to respond to each Extension
Request by no later than 15 days prior to the then current Commitment
Termination Date, provided that each Lender which shall have failed so
to respond by such time shall be deemed not to have consented thereto. The
Administrative Agent shall promptly notify the Borrower as to the name of each
Lender that, in accordance with this clause (i), consented to such extension.
In the event that Lenders having Commitments greater than 50% of the Aggregate
Commitments shall not have consented in accordance with this clause (i) to such
extension, the then current Commitment Termination Date shall not be extended
and shall remain in full force and effect.  In the event that all Lenders shall
have consented in accordance with this clause (i), then on the date upon which
the last such consent shall have been received by the Administrative Agent, the
then existing Commitment Termination Date shall be extended to the day which is
364 days after the then existing Commitment Termination Date (or, if such date
is not a Business Day, the Business Day immediately preceding such day).


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


(b)              
Extension of Maturity Date. Unless a Default shall have occurred
and is continuing, effective upon the delivery by the Borrower to the
Administrative Agent by no later than the seventh day prior to the then
effective Commitment Termination Date of an express written notice (the "Term-Out
Notice") that the Borrower intends to extend the Maturity Date to the date
certain (the "Repayment Extension Date") set forth in such Term-Out
Notice that is not later than nine months after the Commitment Termination Date
with respect to Revolving Credit Loans outstanding on the Commitment
Termination , the Maturity Date with respect to such Revolving Credit Loans shall
be 


-35-







extended to such Repayment Extension Date, provided that on or before
the Commitment Termination Date, the Borrower has paid the Term-Out Fee
as provided in Section 3.1(b).  The delivery by the Borrower to the
Administrative Agent of a Term-Out Notice shall constitute a
representation and warranty by the Borrower that no Default then exists.



Section 2.16         

Substitution of Lender


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



Article 3.    
FEES;
PAYMENTS



Section 3.1             

Fees


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


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


(c)               
LC Fee. The Borrower agrees to pay (i) to the
Administrative Agent for the account of each Lender a participation fee (the "LC
Fee") with respect to its participations in Letters of Credit, which shall
accrue at a rate per annum equal to the Applicable Margin on the average daily
 


-36-







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


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



Section 3.2             

Pro Rata Treatment and Application of Principal Payments


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


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


(c)               
If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of, or
interest on, any of its Loans or participations in LC Disbursements resulting
in such Lender receiving payment of a greater proportion of the aggregate



-37-







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


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


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


Article 4.    
REPRESENTATIONS
AND WARRANTIES


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



Section 4.1             

Subsidiaries; Capitalization


As of the Agreement Date, the Borrower has only the
Subsidiaries set forth on Schedule 4.1, and such Schedule accurately
designates as of the Agreement Date whether each such Subsidiary is a Material
Subsidiary or an Immaterial Subsidiary for purposes of this Agreement.  The
shares of each corporate Material Subsidiary are duly authorized, validly
issued, fully paid and non assessable and are owned free and clear of any
Liens, other than Liens permitted pursuant to Section 8.2(j).  The interest of
the Borrower in each non corporate Material Subsidiary is owned free and clear
of any Liens, other than Liens permitted pursuant to Section 8.2(j). 


-38-








Section 4.2             

Existence and Power


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



Section 4.3             

Authority


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



Section 4.4             

Binding Agreement


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



Section 4.5             

Litigation and Regulatory Proceedings


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


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



Section 4.6             

Required Consents


Except for information filings required to be made
in the ordinary course of business which are not a condition to the Borrower's
performance under the Loan Documents, no consent, authorization or approval of,
filing with, notice to, or exemption by, equityholders, any Governmental




-39-







Authority or any other Person is required to authorize, or is required in
connection with the execution, delivery and performance of the Loan Documents
or is required as a condition to the validity or enforceability of the Loan
Documents.



Section 4.7             

No Conflicting Agreements, Compliance with Laws



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



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



Section 4.8             

Governmental Regulations


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



Section 4.9             

Federal Reserve Regulations; Use of Loan Proceeds


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



Section 4.10         

Plans


No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events
for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated 


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



Section 4.11         

Financial Statements


(a)               
The Borrower has heretofore delivered to the Credit Partners
copies of its Form 10-K for the fiscal year ended December 31, 2002,
containing the audited consolidated balance sheet of the Borrower and the
related consolidated statements of income, stockholder's equity and cash flows
for the period then ended (with the applicable related notes and schedules, the
"Borrower Financial Statements").  The Borrower Financial Statements
have been prepared in accordance with GAAP and fairly present the consolidated
financial condition and results of the operations of the Borrower as of the
dates and for the periods indicated therein.  


(b)              
The Borrower has heretofore delivered to the Credit Parties
copies of the Utility's consolidated balance sheet and the related consolidated
statements of income, stockholder's equity and cash flows as of and for the
fiscal year ended December 31, 2002 and December 31, 2001, reported on by the
Accountants (with the applicable related notes and schedules, the "Utility
Financial Statements"). The Utility Financial Statements have been prepared
in accordance with GAAP and fairly present the consolidated financial condition
and results of the operations of the Utility as of the dates and for the
periods indicated therein.


(c)               
Since December 31, 2002, each of the Borrower and the Material
Subsidiaries and the Utility and its Subsidiaries has conducted its business
only in the ordinary course and there has been no Material Adverse Change.



Section 4.12         

Property


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



Section 4.13         

Environmental Matters


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


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


-41-







under any Environmental Laws, which, as
to any of the foregoing actions, events or conditions, individually or collectively,
could reasonably be expected to have a Material Adverse Effect.


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


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


Article 5.    
CONDITIONS
TO EFFECTIVENESS


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



Section 5.1             

Evidence of Action


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



Section 5.2             

This Agreement


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


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Section 5.3             

Notes


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



Section 5.4             

Approvals


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



Section 5.5             

Certain Agreements


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



Section 5.6             

Opinion of Counsel to the Borrower


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



Section 5.7             

Terminating Indebtedness


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


Section
5.8             

2003 Senior Notes


(a)               
The Borrower shall have (i) issued the 2003 Senior Notes and (ii)
received gross proceeds thereof in an amount not less than $100,000,000.


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


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Section 5.9             

Compliance; Officer's Certificate


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



Section 5.10         

Fees and Expenses


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


Article 6.    
CONDITIONS
OF LENDING - ALL LOANS


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



Section 6.1             

Compliance


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



Section 6.2             

Credit Request; Competitive Bid Request


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



Section 6.3             

Law


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



Section 6.4             

Other Documents


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


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Article 7.    
AFFIRMATIVE
COVENANTS


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



Section 7.1             

Financial Statements


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


(a)               
As soon as available, but in any event within 120 days after the
end of each fiscal year, (i) a copy of the Borrower's Annual Report on Form 10-K
in respect of such fiscal year required to be filed by the Borrower with the
SEC, together with the financial statements attached thereto, and (ii) the
Borrower's audited consolidated and unaudited consolidating balance sheet and
related statements of income, stockholder's equity and cash flows as of the end
of and for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by the Accountants
(without a "going concern" or like qualification or exception and without any qualification
or exception as to the scope of such audit) to the effect that such
consolidated or consolidating, as the case may be, financial statements present
fairly in all material respects the financial conditions and results of
operations of the Borrower on a consolidated or consolidating, as the case may
be, basis in accordance with GAAP consistently applied, together with (A) a
listing of all Material Subsidiaries designated as Immaterial Subsidiaries, and
vice versa, during such fiscal year and (B) in the case of the statements
referred to in clause (ii) above, a schedule of other audited financial
information consisting of consolidating or combining details in columnar form
with the Subsidiaries of the Borrower separately identified, in accordance with
GAAP consistently applied;


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


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


-45-







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



Section 7.2             

Certificates; Other Information


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


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


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


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


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


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


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



Section 7.3             

Legal Existence


Except as permitted under Section 8.3, the Borrower
shall maintain its legal existence in good standing in the jurisdiction of its
incorporation or formation and in each other jurisdiction in which the failure
so to do could reasonably be expected to have a Material Adverse Effect, and
cause each of the Material Subsidiaries to maintain its legal existence in good
standing in each jurisdiction in which the failure so to do could reasonably be
expected to have a Material Adverse Effect.


-46-








Section 7.4             

Taxes


The Borrower shall pay and discharge when due, and
cause each of the Material Subsidiaries so to do, all Taxes, assessments and
governmental charges, license fees and levies upon or with respect to the
Borrower or such Material Subsidiary, as the case may be, and all Taxes upon
the income, profits and Property of the Borrower and the Material Subsidiaries,
which if unpaid, could individually or collectively reasonably be expected to
have a Material Adverse Effect or become a Lien on the Property of the Borrower
or such Material Subsidiary, as the case may be (other than a Lien described in
Section 8.2(a)), unless and to the extent only that such Taxes, assessments,
charges, license fees and levies shall be contested in good faith and by
appropriate proceedings diligently conducted by the Borrower or such Material
Subsidiary, as the case may be, provided that the Borrower shall give
the Administrative Agent prompt notice of such contest and that such reserve or
other appropriate provision as shall be required by the Accountants in
accordance with GAAP shall have been made therefor.



Section 7.5             

Insurance


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



Section 7.6             
Payment of Indebtedness and Performance of Obligations
 


The Borrower shall pay and discharge when due, and
cause each of the Material Subsidiaries to pay and discharge when due, all
lawful Indebtedness, obligations and claims for labor, materials and supplies
or otherwise which, if unpaid, could individually or collectively reasonably be
expected to (i) have a Material Adverse Effect (provided that this
clause (i) shall not apply to any Indebtedness, obligations or claims of
Evangeline, any Perryville Entity or any Acadia Entity) or (ii) become a Lien
upon Property of the Borrower or any of the Material Subsidiaries (other than a
Permitted Lien, and provided that this clause (ii) shall not apply to
any judgment Lien against Evangeline, any Perryville Entity or any Acadia
Entity if such judgment Lien cannot cause an Event of Default under clause (j)
of Article 9), unless and to the extent only that the validity of such
Indebtedness, obligation or claim shall be contested in good faith and by
appropriate proceedings diligently conducted, provided that the Borrower
shall give the Administrative Agent prompt notice of any such contest and that
such reserve or other appropriate provision as shall be required by the
Accountants in accordance with GAAP shall have been made therefor. 


Section 7.7             

Condition of Property


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



Section 7.8             

Observance of Legal Requirements


The Borrower shall observe and comply in all
respects, and cause each of the Material Subsidiaries so to do, with all laws,
ordinances, orders, judgments, rules, regulations, certifications, franchises,
permits, licenses, directions and requirements of all Governmental Authorities,
which now or  


-47-







at any time hereafter may be applicable to it, including ERISA and
all Environmental Laws, a violation of which could individually or collectively
reasonably be expected to have a Material Adverse Effect, except such thereof
as shall be contested in good faith and by appropriate proceedings diligently
conducted by it, provided that the Borrower shall give the
Administrative Agent prompt notice of such contest and that such reserve or
other appropriate provision as shall be required by the Accountants in
accordance with GAAP shall have been made therefor.



Section 7.9             

Inspection of Property; Books and Records; Discussions


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



Section 7.10         

Licenses, Intellectual Property


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


Section
7.11          
Financial Covenants


(a)               
The Borrower shall maintain at all times Total Indebtedness equal
to or less than 75% of Total Capitalization.


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


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



Section 7.12         

Material/Immaterial Designation of Subsidiaries


The Borrower shall be permitted to designate a
Material Subsidiary as an Immaterial Subsidiary and an Immaterial Subsidiary as
a Material Subsidiary by giving the Credit Parties written notice thereof not
later than 10 Business Days after such designation, specifying the effective
date of such designation and certifying that all of the conditions set forth in
this Section shall have been satisfied as of such effective date, provided
that: (i) immediately before and after giving effect to such designation, no
Default or Event of Default shall exist and (ii) in the case of the designation
of an Immaterial Subsidiary  


-48-







as a Material Subsidiary, such notice shall also
serve as the certification of the Borrower immediately after giving effect to
such designation that, with respect to such Material Subsidiary, the
representations and warranties contained in the Loan Documents shall be true
and correct. In connection with any such designation of a Subsidiary as
Material or Immaterial, the Borrower may submit such revised Schedules to the
Loan Documents to make revisions to the existing Schedules thereto with respect
to such Material Subsidiary or Immaterial Subsidiary as may be necessary for
the representations and warranties to be true and correct with respect to the
applicable Material Subsidiaries. Notwithstanding anything herein to the
contrary, the Borrower may not designate a Material Subsidiary as an Immaterial
Subsidiary if at the time of such designation (i) the total assets of all
Persons that were designated as Immaterial Subsidiaries pursuant to this
Section during the immediately preceding twelve month period, determined on a
combined basis in accordance with GAAP (the total assets of a Person designated
as an Immaterial Subsidiary being determined as of the date of such
designation, and shall exclude any assets acquired by such Person pursuant to
Section 8.3 or 8.4) exceeds (ii) an amount equal to 5% of the total assets of
the Borrower and the Subsidiaries, determined on a consolidated basis in
accordance with GAAP as of the first day of such immediately preceding twelve
month period.



Section 7.13         

Use of Proceeds


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


Article 8.    
NEGATIVE
COVENANTS


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



Section 8.1             

Indebtedness


The Borrower shall not create, incur, assume or
suffer to exist any Indebtedness or any other Contingent Obligation, except:


(a)               
Indebtedness under the Loan Documents;


(b)              
the Terminating Indebtedness, provided that the
Terminating Indebtedness is repaid in full on or before the Closing Date;


(c)               
Contingent Obligations in respect of obligations and liabilities
under leases for coal cars supplied in connection with Rodemacher Unit No. 2, provided
that the aggregate amount thereof shall not exceed $13,000,000 at any time;  


(d)              
Contingent Obligations in respect of obligations and liabilities
of the Utility;


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(e)               
other Contingent Obligations in respect of Permitted Hedge
Agreements, provided that the aggregate amount of such Contingent
Obligations under this clause (e) shall not exceed $20,000,000 at any time; and


(f)                
other Indebtedness (including Indebtedness of the Borrower to any
Subsidiary) and other Contingent Obligations, in an amount which when
aggregated with the Indebtedness under the Loan Documents shall not exceed
$425,000,000 at any time, provided that (i) not more than $325,000,000
thereof shall constitute Indebtedness or Contingent Obligations which is pari
passu with the Indebtedness under the Loan Documents, (ii) any such
Indebtedness or Contingent Obligations which is not pari passu with the
Indebtedness under the Loan Documents (including Contingent Obligations in
respect of the Midstream Credit Facility) shall be unsecured and subordinated
to the Indebtedness of the Borrower under the Loan Documents in a manner
consistent with the Approved Subordination Terms and otherwise satisfactory to
the Administrative Agent and (iii) the aggregate amount of Indebtedness and
Contingent Obligations under clause (f)(i) that is secured shall not exceed
$25,000,000 at any time.



Section 8.2             

Liens


The Borrower shall not permit the Utility or any
Utility Material Subsidiary to create, incur, assume or suffer to exist any
Lien upon any of its Property, whether now owned or hereafter acquired, except
for Liens permitted by the Utility Credit Agreement as in effect on the
Agreement Date (with no amendment, supplement or other modification to any term
or provision contained therein without the prior written consent of Required
Lenders). In addition, the Borrower shall not create, incur, assume or suffer
to exist any Lien upon any of its Property, whether now owned or hereafter
acquired, or permit any of the Material Unregulated Subsidiaries so to do,
except


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


(b)              
Liens (i) in connection with workers' compensation, unemployment
insurance or other social security obligations (but not ERISA), (ii) in
connection with deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds and other obligations of like nature arising in the ordinary
course of business, (iii) in connection with, or otherwise constituting, zoning
ordinances, easements, rights of way, minor defects, irregularities, and other
similar restrictions affecting real Property which do not materially and
adversely affect the value of such real Property or the financial condition of
the Borrower or such Material Unregulated Subsidiary, as the case may be, or
materially impair its use for the operation of the business of the Borrower or
such Material Unregulated Subsidiary, as the case may be, (iv) arising by
operation of law such as mechanics', materialmen's, carriers', warehousemen's,
lessors' and bankers' liens and rights of set off incurred in the ordinary
course of business which are not delinquent or which are being contested in
accordance with Section 7.6, provided that enforcement of such Liens is
stayed pending such contest, and (v) arising out of judgments or decrees which
are being contested in accordance with Section 7.6, provided that either
enforcement of such Liens is stayed pending such contest or such Lien is
against Evangeline, any Perryville Entity or any Acadia Entity and the related
judgment or decree does not constitute an Event of Default under clause (j) of
Article 9;


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


(d)              
any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any of the Material Unregulated Subsidiaries
or existing on any property or asset of any


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Person that becomes a Material Unregulated
Subsidiary of the Borrower after the date hereof prior to the time such Person
becomes a Material Unregulated Subsidiary of the Borrower, provided that
(i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Material Unregulated Subsidiary of the
Borrower, as the case may be, (ii) such Lien shall not apply to any other property
or assets of the Borrower or any of the Material Unregulated Subsidiaries, and
(iii) such Lien shall secure only those obligations and liabilities that it
secures on the date of such acquisition or the date such Person becomes a
Material Unregulated Subsidiary of the Borrower, as the case may be, and any
extensions, renewals, refinancings and replacements thereof that do not
increase the outstanding amount thereof;


(e)               
Liens (including precautionary Liens in connection with capital
lease financings) (i) in the case of a project financing by any of the Material
Unregulated Subsidiaries, on fixed or capital assets comprising such project
and other Property (including accounts, contracts and other general intangibles)
relating to the relevant project that is or becomes encumbered in connection
with the relevant project's financing by the relevant Material Unregulated Subsidiary
and (ii) in all other cases, on fixed or capital assets and other Property
(including any natural gas, oil or other mineral assets, pollution control
facilities, electrical generating plants, equipment and machinery) acquired,
constructed, explored, drilled, developed, improved, repaired or serviced (including
in connection with the financing of working capital and ongoing maintenance) by
the Borrower or any of the Material Unregulated Subsidiaries, provided
that (A) such security interests and the obligations and liabilities secured
thereby are incurred prior to or within 90 days after the acquisition of the
relevant asset or the completion of the relevant construction, exploration,
drilling, development, improvement, repair or servicing (including the relevant
financing of working capital and ongoing maintenance), or within 90 days after
the extension, renewal, refinancing or replacement of the obligations and
liabilities secured thereby, as the case may be, (B) the obligations and
liabilities secured thereby do not exceed the cost of acquiring, constructing,
exploring, drilling, developing, improving, repairing or servicing (including
the financing of working capital and ongoing maintenance in respect of) the
relevant assets, and (C) such security interests shall not apply to any other
Property beyond the relevant Property set forth in clause (i) or (ii) of this
subsection (e) and subsection (l), as applicable, of the Borrower or any of the
Material Unregulated Subsidiaries;  


(f)                
Liens on Property of the Borrower and the Material Unregulated
Subsidiaries existing on the Agreement Date as set forth on Schedule 8.2
as renewed from time to time, but not any increases in the amounts secured
thereby or the Property subjected to such Lien thereon;


(g)               
Liens created to secure Indebtedness of any Subsidiary of the
Borrower to the Borrower or to any of the Borrower's other Subsidiaries;


(h)               
Liens created to secure sales or factoring of accounts receivable
and other receivables;  


(i)                 
Liens created to secure Indebtedness and other Contingent
Obligations permitted under Section 8.1(f), provided that the aggregate
amount of such Indebtedness and other Contingent Obligations shall not exceed
$25,000,000;  


(j)                
Liens on any equity interest (other than an equity interest in
the Utility) owned or otherwise held by or on behalf of the Borrower or any
Material Unregulated Subsidiary created in connection with any project
financing; and


(k)              
Liens created for the sole purpose of extending, renewing or
replacing in whole or in part Indebtedness secured by any lien, mortgage or
security interest referred to in the foregoing clauses (a) through (j), provided,
however, that the principal amount of Indebtedness secured thereby 



-51-







shall
not exceed the principal amount of Indebtedness so secured at the time of such
extension, renewal or replacement and that such extension, renewal or
replacement, as the case may be, shall be limited to all or a part of the
property or indebtedness that secured the lien or mortgage so extended, renewed
or replaced (and any improvements on such property).



Section 8.3             

Merger, Consolidation, Purchase or Sale of Assets, Etc.


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


(a)               
sales, factoring or other dispositions of Permitted Investments,
inventory, receivables and similar Property in the ordinary course of business;


(b)              
Asset Sales by the Borrower to any of the Material Subsidiaries
and by any of the Material Subsidiaries to the Borrower or any of the other
Material Subsidiaries;


(c)               
(i) other Asset Sales, provided that (A) no Default
or Event of Default shall exist immediately before or after giving effect
thereto and (B) immediately after giving effect thereto, the amount thereof,
when added to the total amount of all Asset Sales made by the Borrower and the
Material Subsidiaries during the immediately preceding twelve month period pursuant
to this clause (c) (excluding amounts from Asset Sales made by a Material
Subsidiary when such Subsidiary was designated as an Immaterial Subsidiary if
made during the relevant twelve month period), shall not exceed 18% or more of
Material Total Assets as of the first day of such twelve month period and (ii)
sales of transmission assets pursuant to the order of any Governmental
Authority, provided that fair market value shall have been received for
such transmission assets;  


(d)              
any of the Material Subsidiaries may merge or consolidate with or
into, or acquire control of, or acquire all or any portion of the assets of any
Person, provided that (i) immediately after giving effect thereto, the
total consideration to be paid by the Material Subsidiaries to or for the
account of any Person (other than the Borrower and the Material Subsidiaries)
in connection therewith, when added to the total consideration paid by the
Borrower and the Material Subsidiaries to or for the account of any Person
(other than the Borrower and the Material Subsidiaries) in connection with all
other mergers, consolidations and acquisitions permitted under Sections 8.3(d)
and 8.3(e) during the period from the Agreement Date through and including the
date thereof, shall not exceed 15% of Material Total Assets as of the most
recently completed fiscal quarter, and (ii) in the case of a transaction
involving the Utility, the Utility shall be the survivor entity thereof or, in
the event the Utility shall not be the surviving entity thereof, (1) such
surviving entity shall be organized in a State of the United States with
substantially all of its assets and businesses located and conducted in the
United States and (2) the Administrative Agent shall have received (A) a
certificate, in form and substance satisfactory to the Administrative Agent,
(x) attaching a true and complete copy of each agreement, instrument or other
document effecting such merger, consolidation or acquisition, together with an
agreement signed on behalf of such surviving entity pursuant to which such
surviving entity shall have expressly assumed all of the indebtedness,
liabilities and other obligations of the Utility under and in accordance with
the Utility Credit Agreement and the other Loan Documents (as defined therein),
and (y) certifying that such merger, consolidation or acquisition has been
consummated in accordance with such agreements, instruments or other documents
referred to in the immediately preceding clause (x), and (B) such documents,
legal opinions and certificates as the Administrative Agent shall reasonably
request relating to the organization, 


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existence and, if applicable, good
standing of such surviving entity, the authorization of such merger,
consolidation or acquisition and any other legal matters relating to such
surviving entity, the assumption agreement referred to in the immediately
preceding clause (x) or such merger, consolidation or acquisition; and


(e)               
the Borrower may merge or consolidate with or into, or acquire
control of, or acquire all or any portion of the assets of any Person, provided
that:


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


(ii)               
immediately before and after giving effect thereto, all of the
representations and warranties contained in the Loan Documents shall be true
and correct except as the context thereof otherwise requires and except for
those representations and warranties which by their terms or by necessary
implication are expressly limited to a state of facts existing at a time prior
to such merger, consolidation or acquisition, as the case may be, or such other
matters relating thereto as are identified in a writing to the Administrative
Agent and the Lenders and are satisfactory to the Administrative Agent and the
Lenders;


(iii)              
the Borrower shall be the surviving entity thereof or each of the
following conditions shall have been satisfied: (i) such surviving entity shall
have been incorporated or otherwise formed in a State of the United States with
substantially all of its assets and business located and conducted in the
United States, (ii) such surviving entity shall, at the time of such merger,
have a senior unsecured long term debt rating of BBB- or higher from
S&P and Baa3 or higher from Moody's (provided that, if such
surviving entity shall be a public utility holding company and shall not have
at such time a senior unsecured long term debt rating from S&P and Moody's,
then its primary utility Subsidiary shall have at such time a senior unsecured
long term debt rating of BBB- or higher from S&P and Baa3 or higher
from Moody's), and (iii) such surviving entity shall have expressly assumed the
obligations of the Borrower under the Loan Documents pursuant to a writing in
form and substance satisfactory to the Administrative Agent;


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


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



Section 8.4             

Loans, Advances, Investments, etc.


The Borrower shall not, at any time, make any loan
or advance to, or make or permit to be made any investment or any other
interest in, or enter into any arrangement for the purpose of providing funds
or credit to, any Person, or permit any of the Material Subsidiaries so to do,
other than (i) Permitted Investments, (ii) loans and advances made by the
Borrower to any of the Material Subsidiaries and made by any of the Material
Subsidiaries to the Borrower or any of the other Material Subsidiaries, 


-53-







(iii)
investments made by the Borrower in the equity securities of any of the
Material Subsidiaries and made by any of the Material Subsidiaries in the
equity securities of any of the other Material Subsidiaries, (iv) arrangements
made by the Borrower for the purpose of providing funds or credit to any of the
Material Subsidiaries and made by any of the Material Subsidiaries for the
purpose of providing funds or credit to the Borrower or any of the other
Material Subsidiaries, and (v) provided that immediately before and
after giving effect thereto, no Default or Event of Default shall exist, other
loans and advances outstanding at any time, and other investments and
arrangements to, in or with any Person. 



Section 8.5             

Amendments, etc. of Employee Stock Ownership Plan


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



Section 8.6             

Restricted Payments


The Borrower shall not declare or make, or agree to
pay for or make, directly or indirectly, any Restricted Payment, or permit any
of the Material Subsidiaries so to do, except that (i) the Borrower or any of
the Material Subsidiaries may declare and pay dividends with respect to its
equity securities payable solely in additional shares of such equity
securities, (ii) any of the Material Subsidiaries may declare and pay dividends
with respect to its equity securities to the Borrower or any of the other Material
Subsidiaries, (iii) the Borrower may make, and agree to make, payments on
account of liabilities described in clause (vi) of the definition of
"Indebtedness" contained herein and permitted by Section 8.1, (iv) the Borrower
may declare and pay dividends with respect to its preferred equity securities,
(v) if at the time thereof and immediately after giving effect thereto no
Default or Event of Default shall have occurred and be continuing, the Borrower
may declare and pay, and agree to declare and  pay, directly or indirectly, Restricted
Payments in cash to its common shareholders in an amount not in excess of Net
Cash Receipts for the immediately preceding twelve consecutive month period minus
$25 million (tested for the period ending on the last day of the calendar month
preceding the date of the Board of Directors' dividend declaration), and the
Borrower may make and pay such cash dividends so declared within 30 days of
such declaration (without testing the amount of such cash dividends again under
the preceding formula as of the payment date), and (vi) the Borrower or any of
the Material Subsidiaries may make, and agree to make, payments on account of
subordinated Indebtedness described in clause (iii) of the definition of
"Restricted Payments" and permitted by the subordination terms applicable
thereto.



Section 8.7             

Transactions with Affiliates


The Borrower shall not, and shall not permit any of
the Material Subsidiaries to, sell, transfer, lease or otherwise dispose of
(including pursuant to a merger) any property or assets to, or purchase, lease
or otherwise acquire (including pursuant to a merger) any property or assets
from, or otherwise engage in any other transactions with, any of its
affiliates, except in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower or such Material Subsidiary, as
the case may be, than could be obtained on an arms length basis from unrelated
third parties, provided that this Section shall not apply to (i) any
transaction that is permitted under Section 8.1, 8.3, 8.4 or 8.6 between or
among the Borrower and the Material Subsidiaries and not involving any other
affiliate and (ii) any transaction that is covered by the Inter-Affiliate
Policies Agreement as in effect on  


-54-







the date hereof and any amendments,
supplements or other modifications thereto that are required by applicable law
or by applicable Governmental Authorities.  For purposes of this Section, (i)
the term "affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified and (ii) the
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person through
the ability to exercise voting power (and the terms "controlling" and
"controlled" have meanings correlative thereto).



Section 8.8             

Restrictive Agreements


The Borrower shall not, directly or indirectly
enter into, incur or permit to exist, or permit the Utility or any of the
Utility's Subsidiaries so to do, any agreement or other arrangement that (i)
prohibits the ability of the Borrower, the Utility or any of the Utility's
Subsidiaries to create, incur or permit to exist any Lien upon any of its
property or assets or (ii) prohibits, restricts or imposes any condition upon
the ability of the Utility or any of the Utility's Subsidiaries to pay
dividends or other distributions with respect to any shares of its equity securities
or to make or repay loans or advances to the Borrower or any of the Material
Subsidiaries or to make investments in the Borrower or any of the Material
Subsidiaries or to enter into arrangements for the purpose of providing funds
or credit to the Borrower or any of the Material Subsidiaries, provided
that (a) the foregoing shall not apply to restrictions and conditions imposed
by corporate law or by this Agreement, (b) the foregoing shall not apply to
prohibitions, restrictions and conditions existing on the Agreement Date
identified on Schedule 8.8 (but shall apply to any extension, renewal,
amendment or modification expanding the scope of any such prohibition,
restriction or condition), (c) clause (i) of this Section shall not apply to
prohibitions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only to
the property or assets securing such Indebtedness, and (d) clause (i) of this
Section shall not apply to customary provisions in leases restricting the
assignment thereof and (e) clause (i) of this Section shall not apply to any
prohibition with respect to equity interests (other than equity interests in
the Utility or any of the Utility's Subsidiaries) owned or otherwise held by or
on behalf of the Borrower, the Utility or any of the Utility's Subsidiaries
imposed by any agreement entered into in connection with a project financing.



Section 8.9             

Permitted Hedge Agreements


The Borrower shall not enter into any hedge
agreements other than Permitted Hedge Agreements.


Article 9.    
EVENTS
OF DEFAULT


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


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


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


-55-







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


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


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


(f)                
(i) the Borrower or any Significant Subsidiary shall fail to make
any payment (whether of principal, interest or otherwise and regardless of
amount) in respect of any Material Obligations, when and as the same shall
become due and payable (after giving effect to any applicable grace period) or
(ii) any Perryville Entity and any Acadia Entity shall fail to make any payment
(whether of principal, interest or otherwise and regardless of amount) in
respect of any Material Obligations, when and as the same shall become due and
payable, provided that this clause (f) shall not apply to any Material
Obligations of Evangeline;  


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


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


-56-







order
remains in effect for 45 days, or (xii) take any formal action for the purpose
of effecting any of the foregoing or looking to the liquidation or dissolution
of the Borrower or any of the Significant Subsidiaries (other than Evangeline)
or any Perryville Entity and any Acadia Entity, as the case may be; or


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


(j)                
One or more judgments or decrees against (i) the Borrower or any
of the Significant Subsidiaries (other than Evangeline) or any combination
thereof aggregating in excess of $10,000,000 or (ii) any of the Perryville
Entities or any combination thereof aggregating in excess of $10,000,000 and
any of the Acadia Entities aggregating in excess of $10,000,000, in each case
under this clause (j), which judgment or decree (A) shall not be fully covered
by insurance after taking into account any applicable deductibles and (B) shall
remain unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a
period of at least 30 days.


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


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


(m)             
any authorization or approval or other action by any Governmental
Authority required for the execution, delivery or performance of any Loan
Document shall be terminated, revoked or rescinded or shall otherwise no longer
be in full force and effect; or


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


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


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


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


Article 10.  
THE
ADMINISTRATIVE AGENT



Section 10.1         

Appointment


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


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Section 10.2         

Delegation of Duties


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



Section 10.3         

Exculpatory Provisions


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



Section 10.4         

Reliance by Administrative Agent


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


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Section 10.5         

Notice of Default


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



Section 10.6         

Non Reliance on Administrative Agent and Other Lenders


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



Section 10.7         
Administrative Agent in Its Individual Capacity
 


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



Section 10.8         

Successor Administrative Agent


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


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Administrative Agent shall have been so appointed by
the Required Lenders and accepted such appointment in writing within 30 days
after the retiring Administrative Agent's giving of notice of resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and with the
consent of the Borrower, such consent not to be unreasonably withheld and not to
be required during the existence of an Event of Default, appoint a successor
Administrative Agent, which successor Administrative Agent shall be a commercial
bank organized under the laws of the United States or any State thereof and
having a combined capital, surplus, and undivided profits of at least
$100,000,000.  Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent's rights, powers, privileges and duties as
Administrative Agent under the Loan Documents shall be terminated.  The
Borrower and the Lenders shall execute such documents as shall be necessary to
effect such appointment.  After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of the Loan Documents shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under the Loan Documents.  If at any time there
shall not be a duly appointed and acting Administrative Agent, the Borrower
agrees to make each payment due under the Loan Documents directly to the Lenders
entitled thereto during such time.


Article 11.  OTHER
PROVISIONS  



Section 11.1         

Amendments and Waivers


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


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


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



Section 11.2         

Notices


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


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


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


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


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



Section 11.3         

Survival


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


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



Section 11.4         

Expenses; Indemnity; Damage Waiver


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


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


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


-63-







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


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


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



Section 11.5         

Lending Offices


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



Section 11.6         

Assignments and Participations


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


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


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


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


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


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


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


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



Section 11.7         

Counterparts; Integration; Effectiveness


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



Section 11.8         

Severability


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



Section 11.9         

Right of Set off


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


-66-







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



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


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


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


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


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



Section 11.11     
 WAIVER
OF JURY TRIAL


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


-67-







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



Section 11.12     
 Headings


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


68










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


CLECO CORPORATION 


By:
 /s/ Dilek Samil                                                             

Name:  Dilek Samil                                                             

Title:     Senior Vice President - Finance & CFO                 










THE BANK OF NEW YORK,
Individually

and as Administrative Agent


  By:  /s/ John N. Watt                                                             
  

  Name: John N. Watt                                                              
  

  Title:    Vice President                                                            
  










BANK ONE, NA, Individually

and as Syndication Agent


By:
 /s/ Nancy R. Barwig                                              

Name:  Nancy R. Barwig                                              

Title:     Director                                                            










WESTLB
AG, NEW YORK BRANCH


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


  By:  /s/ Salvatore
  Battinelli                                                
  

  Name:  Salvatore Battinelli                                                
  

  Title:     Managing Director Credit Department                  
  

  By:  /s/ Duncan M.
  Robertson                                           
  

  Name: Duncan M. Robertson                                            
  

  Title:    Director                                                                 
  












CREDIT SUISSE FIRST BOSTON


  By:   /s/ Brian
  T. Caldwell                                                  
  

  Name:  Brian T. Caldwell                                                   
  

  Title:     Director                                                                 
  

  By:   /s/ Peter
  A. Ryan                                                        
  

  Name:  Peter A. Ryan                                                         
  

  Title:     Vice President                                                        
  










REGIONS BANK


By:
  /s/ Mark Burr                                                               

Name:  Mark Burr                                                               

Title:     VP Corp Banking                                                    












WHITNEY NATIONAL BANK


  By:   /s/ Edgar
  W. Santa Cruz III                                          
  

  Name:  Edgar W. Santa Cruz III                                           
  

  Title:     Vice President                                                          
  












HIBERNIA NATIONAL BANK


By:
 /s/ Kermit W. Pharris, Jr.                                                 

Name:  Kermit W. Pharris, Jr.                                                 

Title:     Vice President                                                            












BANK HAPOALIM B.M.




  By:  /s/ Helen H.
  Gateson                                                      
  

  Name:  Helen H. Gateson                                                      
  

  Title:     Vice President                                                           
  

  By:  /s/ Laura Anne
  Raffa                                                       
  

  Name:  Laura Anne Raffa                                                       
  

  Title:     Senior Vice President & Corporate
  Manager