Exhibit 10.1


 EXECUTION COPY

 


FIVE YEAR

CREDIT AGREEMENT


among


WPS RESOURCES CORPORATION,

as Borrower


THE LENDERS IDENTIFIED HEREIN,

CITIBANK, N.A.,

as Syndication Agent


 

WELLS FARGO BANK NATIONAL ASSOCIATION,

as Co-Documentation Agent

 


JPMORGAN CHASE BANK, N.A.,

as Co-Documentation Agent

 


UBS SECURITIES LLC,

as Co-Documentation Agent

 


U.S. BANK NATIONAL ASSOCIATION,


as Agent



and



U.S. BANK NATIONAL ASSOCIATION and CITIGROUP GLOBAL
MARKETS INC.,


as Co-Lead Arrangers and Book Managers

DATED AS OF JUNE 2, 2005

<PAGE>

	
      

TABLE OF CONTENTS

    

			
	Section 1.	DEFINITIONS AND ACCOUNTING TERMS	
      1

	
      1.1
	Definitions 	1
	1.2	 Computation of Time Periods	12
	1.3	 Accounting Terms	12
			
	
      Section 2.
	 LOANS	13
	2.1	 Revolving Loan Commitment	13
	2.2	 Method of Borrowing for Revolving Loans	13
	2.3	 Funding of Revolving Loans	13
	2.4	 Continuations and Conversions	14
	2.5	 Minimum Amounts	15
	2.6	 Reductions and Increases of Revolving Loan Commitment	15
	2.7	 Notes	16
	2.8	 Swing Line Loans	16
	2.9	 Letters of Credit	18
			
	
      Section 3.
	 PAYMENTS	24
	3.1	 Interest	24
	3.2	 Prepayments	24
	3.3	 Payment in Full at Maturity	25
	3.4	 Fees	25
	3.5	 Place and Manner of Payments	25
	3.6	 Pro Rata Treatment 	25
	3.7	 Computations of Interest and Fees	26
	3.8	 Sharing of Payments	27
	3.9	 Evidence of Debt	27


     


    i



    <PAGE>

			
	Section 4.	 ADDITIONAL PROVISIONS REGARDING LOANS	
      28

	
      4.1
	 Eurodollar Loan Provisions 	28
	4.2	 Capital Adequacy	29
	4.3	 Compensation	30
	4.4	 Taxes	30
	4.5	 Replacement of Lenders	32
			
	
      Section 5.
	 CONDITIONS PRECEDENT	33
	5.1	 Closing Conditions	33
	5.2	 Conditions to Each Extension of Credit	35
			
	
      Section 6. 
	 REPRESENTATIONS AND WARRANTIES	36
	6.1	 Organization and Good Standing; Assets	36
	6.2	 Due Authorization	36
	6.3	 No Conflicts	36
	6.4	Consents	37
	6.5	 Enforceable Obligations	37
	6.6	 Financial Condition	37
	6.7	 No Material Change	37
	6.8	 No Default	38
	6.9	 Indebtedness	38
	6.10	 Litigation	38
	6.11	 Taxes	38
	6.12	 Compliance with Law	38
	6.13	 ERISA	38
	6.14	 Use of Proceeds; Margin Stock	40
	6.15	 Government Regulation	40



  
    
      
         

        ii

      

    

  



        <PAGE>

	6.16	 Disclosure	40
			
	
      Section 7.
	 AFFIRMATIVE COVENANTS	40
	7.1	 Information Covenants	40
	7.2	 Financial Covenant	42
	7.3	 Preservation of Existence and Franchises.	42
	7.4	 Books and Records 	42
	7.5	 Compliance with Law	43
	7.6	 Payment of Taxes and Other Indebtedness	43
	7.7	 Insurance	43
	7.8	 Use of Proceeds	43
	7.9	 Audits/Inspections	43
	7.10	 Restrictive Agreements	44
			
	
      Section 8.
	 NEGATIVE COVENANTS	44
	8.1	 Nature of Business	44
	8.2	 Consolidation and Merger	44
	8.3	 Sale or Lease of Assets	45
	8.4	 Arm's-Length Transactions 	45
	8.5	 Fiscal Year	45
	8.6	 Liens	45
			
	
      Section 9. 
	 EVENTS OF DEFAULT	47
	9.1	 Events of Default	47
	9.2	 Acceleration; Remedies 	49
	9.3	 Allocation of Payments After Event of Default	50
			
	
      Section 10.
	 AGENCY PROVISIONS	51
	10.1	 Appointment 	51


     


  
    
      
        iii

      

    

  



        <PAGE>

	10.2	 Delegation of Duties	51
	10.3	 Exculpatory Provisions	51
	10.4	 Reliance on Communications	52
	105	 Notice of Default	52
	10.6	 Non-Reliance on Agent and Other Lenders	53
	10.7	 Indemnification	53
	10.8	 Agent in Its Individual Capacity	54
	10.9	 Successor Agent	54
			
	Section 11. 	 MISCELLANEOUS 	54
	11.1	 Notices	54
	11.2	 Right of Set-Off 	54
	11.3	 Benefit of Agreement	55
	11.4	 No Waiver; Remedies Cumulative	58
	11.5	 Payment of Expenses, etc.	58
	11.6	 Amendments, Waivers and Consents	59
	11.7	 Counterparts/Telecopy.	60
	11.8	 Headings	60
	11.9	 Defaulting Lender	60
	11.10	 Survival of Indemnification and Representations and Warranties. 	60
	11.11	 Confidentiality.	60
	11.12	 Governing Law; Venue	61
	11.13	 Waiver of Jury Trial; Waiver of Consequential Damages	61
	11.14	 Time	61
	11.15	 Severability	62
	11.16	 Assurances 	62



  
    
      
         

        iv

      

    

  



        <PAGE>

	11.17	 USA Patriot Act Notification	62
	11.18	 Entirety	62




	
      SCHEDULES

    

		
	Schedule 1.1	 Commitment Percentages
	
Schedule 6.1(c) 	 Subsidiaries
	
Schedule 8.3	 Asset Sales
	
Schedule 8.6	 Existing Liens
	
Schedule 11.1 	 Notices


  

 

	
      

EXHIBITS

    

		
	Exhibit 2.2	 Form of Notice of Borrowing
	
Exhibit 2.4	 Form of Notice of Continuation/Conversion
	
Exhibit 2.7	 Form of Revolving Loan Note
	
Exhibit 7.1(c)	 Form of Officer's Certificate
	
Exhibit 11.3	 Form of Assignment Agreement






v

<PAGE>




FIVE YEAR

CREDIT AGREEMENT


        THIS FIVE YEAR CREDIT AGREEMENT (this "Credit
Agreement"), dated as of June 2, 2005, is entered into among WPS RESOURCES
CORPORATION, a Wisconsin corporation (the "Borrower"), the Lenders (as
defined herein), U.S. BANK NATIONAL ASSOCIATION and CITIGROUP GLOBAL MARKETS
INC., as Co-Lead Arrangers and Book Managers, CITIBANK, N.A., as Syndication
Agent, WELLS FARGO BANK NATIONAL ASSOCIATION, JPMORGAN CHASE BANK, N.A. and UBS
SECURITIES LLC, as Co-Documentation Agents, and U.S. BANK NATIONAL ASSOCIATION,
as administrative agent for the Lenders (in such capacity, the
"Agent").


RECITALS

           
WHEREAS, the Borrower has requested that the Lenders
provide a $500 million five year revolving credit facility to the Borrower for
the purposes set forth herein; and.


           
WHEREAS, the Lenders have agreed to provide such five
year revolving credit facility on the terms and conditions hereinafter set
forth.


           
NOW, THEREFORE, IN CONSIDERATION of the premises and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:


        Section 1. DEFINITIONS AND ACCOUNTING TERMS

            1.1 Definitions.

           
As used herein, the following terms shall have the meanings
herein specified unless the context otherwise requires. Defined terms herein
shall include in the singular number the plural and in the plural the singular:

           
"2004 Credit Agreement" means the 364-Day
Credit Agreement dated as of August 6, 2004, among the Borrower, the financial
institutions identified as lenders therein, Wells Fargo Bank, N.A., as
Syndication Agent, Citibank, N.A., J.P.Morgan Chase Bank and UBS AG, Stamford
Branch, as co-documentation agents, and U.S. Bank National Association, as lead
arranger, book manager and as agent for the lenders thereunder.

           
"Adjusted Eurodollar Rate" means the
Eurodollar Rate plus the Applicable Percentage.    

           
"Affiliate" means, with respect to any
Person, any other Person directly or indirectly controlling (including but not
limited to all directors and officers of such Person), controlled by or under
direct or indirect common control with such Person. A Person shall be deemed to
control a corporation if such Person possesses, directly or indirectly, the
power (a) to vote 10% or more of the securities having ordinary voting power for
the election of directors of such corporation or (b) to direct or cause
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.

<PAGE>

           "Agent" means U.S. Bank National Association
and any successors and assigns in such capacity.

           "Aggregate Commitments" means, collectively,
the Revolving Loan Commitment of each Lender.

           "Applicable Percentage" means, at any time, the appropriate
applicable percentages corresponding to the Borrower's Public Debt Ratings in
effect as of the most recent Calculation Date, as shown below:

	
      

      

      Pricing

      Level

    	
       

      Borrower's Public

      Debt Rating

    	
      Applicable

      Percentage for

      Eurodollar

      Loans

    	
      

      Applicable

      Percentage for

      
      Revolving Fees

    	
      pplicable

      Percentage for

      Letter of Credit

      Fees

    
	 	 	 	 	 
	
      I.
	
      AA- from S&P or

      Aa3 from Moody's

    	
      0.135%
	
      0.065%
	
      0.135%

	 	 	 	 	 
	
      II.
	
      A+ from S&P or

      A1 from Moody's

    	
      0.175%
	
      0.075%
	
      0.175%

	 	 	 	 	 
	
      III.
	
      A from S&P or

      A2 from Moody's

    	
      0.210%
	
      0.090%
	
      0.210%

	 	 	 	 	 
	
      IV.
	
      A- from S&P or

      A3 from Moody's

    	
      0.300%
	
      0.100%
	
      0.300%

	 	 	 	 	 
	
      V.
	
      BBB+ from S&P or

      Baa1 from Moody's

    	
      0.350%
	
      0.125%
	
      0.350%

	 	 	 	 	 
	
      VI.
	
      <BBB from S&P or

      Baa2 from Moody's

    	
      0.475%
	
      0.150%
	
      0.475%

	 	
      or
	 	 	 
	 	
      Unrated by S&P

      or Moody's

    	 	 	 


            The Applicable Percentage for Eurodollar Loans, the Revolving Fees and the
Letter of Credit Fees shall, in each case, be determined and adjusted on the
date (each a "Calculation Date") five Business Days after the
date there is a change in the Borrower's Public Debt Rating. Each determination
of the Applicable Percentage shall be effective from one Calculation Date until
the next Calculation Date. Any adjustment in the Applicable Percentage shall be
applicable to all existing Eurodollar Loans as well as any new Eurodollar Loans
made.

             In the event that the Public Debt Ratings of S&P and Moody's do not
correspond to the same Pricing Level, then the higher of the two ratings shall
determine the Pricing Level, 

2

<PAGE>

 except that if the Public Debt Ratings differ by
more than one Pricing Level, the Pricing Level that is one Pricing Level higher
than the Pricing Level corresponding to the lower of such ratings shall
determine the Pricing Level.

            The Borrower shall promptly deliver to the Agent, at the address set forth on
Schedule 11.1, information regarding any change in the Borrower's Public Debt
Rating, as determined by S&P and Moody's, that would change the existing
Pricing Level pursuant to the preceding paragraph.

           
"Bankruptcy Code" means the Bankruptcy Code
in Title 11 of the United States Code, as amended, modified, succeeded or
replaced from time to time.

           
"Base Rate" means, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of
1%) equal to the greater of (a) the Federal Funds Rate in effect on such day plus
1/2 of 1% or (b) the Prime Rate in effect on such day. If for any reason the
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable after due inquiry to ascertain the Federal
Funds Rate for any reason, including the inability or failure of the Agent to
obtain sufficient quotations in accordance with the terms hereof, the Base Rate
shall be determined without regard to clause (a) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such change in
the Prime Rate or the Federal Funds Rate, respectively.

           
"Base Rate Loan" means a Revolving Loan
which bears interest based on the Base Rate.

           
"Borrower" means WPS Resources Corporation,
a Wisconsin corporation.

           
"Borrower Obligations" means, without
duplication, all of the obligations of the Borrower to the Lenders and the
Agent, whenever arising, under this Credit Agreement, the Notes or any of the
other Credit Documents.

           
"Business Day" means any day other than a
Saturday, a Sunday, a legal holiday or a day on which banking institutions are
authorized or required by law or other governmental action to close in
Milwaukee, Wisconsin and New York, New York; provided that in the case of
Eurodollar Loans, such day is also a day on which dealings between banks are
carried on in U.S. dollar deposits in the London interbank market.

           
"Capitalization" means the sum of (a) Total
Funded Debt plus (b) Net Worth.

            "Change of Control" means any of the following events: (a)
any "person" or "group" (within the meaning of Section 13(d)
or 14(d) of the Exchange Act) has become, directly or indirectly, the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all shares that any such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), by way of merger, consolidation or otherwise, of 30% or more of the
voting power of the Voting Stock of the Borrower on a fully-diluted basis, after
giving effect to the 

3

<PAGE>

 conversion and exercise of all outstanding warrants,
options and other securities of the Borrower (whether or not such securities are
then currently convertible or exercisable), (b) during any period of two
consecutive calendar years, individuals who at the beginning of such period
constituted the board of directors of the Borrower cease for any reason to
constitute a majority of the directors of the Borrower then in office unless (i)
such new directors were elected or nominated by a majority of the directors of
the Borrower who constituted the board of directors of the Borrower at the
beginning of such period or (ii) the reason for such directors failing to
constitute a majority is a result of retirement by directors due to age, death
or disability or (c) the failure of the Borrower to own 100% of the common stock
of Wisconsin Public Service Corporation.

        "Closing Date" means the date hereof.

        "Code" means the Internal Revenue Code of
1986, as amended from time to time.

        "Commitment Percentage" means, for each
Lender, the percentage identified as its Commitment Percentage opposite such
Lender's name on Schedule 1.1 attached hereto, as such percentage may be
modified by assignment in accordance with the terms of this Credit Agreement or
by reductions or increases in the Revolving Loan Commitment pursuant to Section
2.6 hereof.

        "Confidential Information" means information
furnished by or on behalf of the Borrower to the Agent or any Lender in
connection with this Agreement, but does not include any such information that
(a) is or becomes generally available to the public, (b) was available to the
Agent or any Lender on a nonconfidential basis prior to its disclosure to the
Agent or such Lender by the Borrower or any of its Subsidiaries or (c) is or
becomes available to the Agent or such Lender on a nonconfidential basis from a
source other than the Borrower or any of its Subsidiaries.

        "Credit Documents" means this Credit
Agreement, the Notes, the LOC Documents and all other related agreements and
documents issued or delivered hereunder or thereunder or pursuant hereto or
thereto.

        "Default" means any event, act or condition
which with notice or lapse of time, or both, would constitute an Event of
Default.

        "Defaulting Lender" means, at any time, any
Lender that, at such time (a) has failed to make a Loan required pursuant to the
term of this Credit Agreement, (b) has failed to pay to the Agent or any Lender
an amount owed by such Lender pursuant to the terms of this Credit Agreement or
(c) has been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or to a receiver, trustee or similar official.

        "Dollars" and "$" means
dollars in lawful currency of the United States of America.

        "Effective Date" means the date on which the
conditions set forth in Section 5.1 shall have been fulfilled (or waived in the
sole discretion of the Lenders) and on which the initial Extension of Credit
shall have been made.

 

4

<PAGE>

 

        "Eligible Assignee" means (a) a Lender; (b)
an Affiliate of a Lender; and (c) any other Person approved by the Agent and the
Borrower (such approval not to be unreasonably withheld or delayed); provided
that (i) the Borrower's consent is not required during the existence and
continuation of an Event of Default, and (ii) neither the Borrower nor an
Affiliate of the Borrower shall qualify as an Eligible Assignee.

        "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and any successor statute thereto, as
interpreted by the rules and regulations thereunder, all as the same may be in
effect from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.

        "ERISA Affiliate" means an entity, whether
or not incorporated, which is under common control with the Borrower or any of
its Subsidiaries within the meaning of Section 4001(a)(14) of ERISA, or is a
member of a group which includes the Borrower or any of its Subsidiaries and
which is treated as a single employer under Sections 414(b), (c), (m), or (o) of
the Code.

        "Eurodollar Loan" means a Revolving Loan
bearing interest at the Adjusted Eurodollar Rate.

        "Eurodollar Rate" means with respect to any
Eurodollar Loan, for the Interest Period applicable thereto, a rate per annum
determined pursuant to the following formula:


  
                    "Eurodollar Rate" = London Interbank Offered
                    Rate

                                                 
                    1 - Eurodollar Reserve Percentage

  



        "Eurodollar Reserve Percentage" means, for
any day, that percentage (expressed as a decimal) which is in effect from time
to time under Regulation D of the Board of Governors of the Federal Reserve
System (or any successor), as such regulation may be amended from time to time
or any successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or marginal
reserves) applicable with respect to Eurocurrency liabilities, as that term is
defined in Regulation D (or against any other category of liabilities that
includes deposits by reference to which the interest rate of Eurodollar Loans is
determined), whether or not a Lender has any Eurocurrency liabilities subject to
such reserve requirement at that time. Eurodollar Loans shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefit of credits or proration, exceptions or
offsets that may be available from time to time to a Lender. The Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any change in
the Eurodollar Reserve Percentage.

        "Event of Default" has the meaning specified
in Section 9.1.

        "Extension of Credit" means, as to any
Lender, (i) the making of a Loan by such Lender (or a participation therein by a
Lender) and (ii) the issuance of a Letter of Credit by the Agent (and the
participation therein by the Lenders).

 

5

<PAGE>

 

        "Fee Letter" means that certain letter
agreement, dated as of __________, 2005 between the Agent and the Borrower, as
amended, modified, supplemented or replaced from time to time.

        "Federal Funds Rate" means for any day the
rate per annum (rounded upward to the nearest 1/100th 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 (a) if such day 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 and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day shall be
the average rate quoted to the Agent on such day on such transactions as
determined by the Agent.

        "First Mortgage Indentures" means (a) that
certain First Mortgage and Deed of Trust dated as of January 1, 1941, from
Wisconsin Public Service Corporation to U.S. Bank National Association
(successor to First Wisconsin Trust Company), as trustee, as heretofore or
hereafter amended, modified and supplemented and any substitute or replacement
mortgage indenture, (b) that certain Indenture dated as of December 1, 1998,
between Wisconsin Public Service Corporation and U.S. Bank National Association
(successor to Firstar Bank Milwaukee, N.A.), as trustee, as heretofore or
hereafter amended, modified and supplemented and any substitute or replacement
mortgage indenture, and (c) that certain Indenture of Mortgage dated May 1,
1947, from Upper Peninsula Power Company to U.S. Bank National Association
(successor to City National Bank and Trust Company of Chicago), as trustee, as
heretofore or hereafter amended, modified and supplemented and any substitute or
replacement mortgage indenture.

        "Funded Debt" of any Person means, without
duplication, the sum of (a) all Indebtedness of such Person for borrowed money,
except to the extent such Indebtedness is "non-recourse" to such
Person or recourse for payment of such Indebtedness is limited to specific
assets of such Person (whether or not included on a consolidated balance sheet
of such Person), (b) the principal portion of all obligations of such Person
under capital lease obligations, (c) all obligations, contingent or otherwise,
relative to the face amount of all letters of credit issued to support
Indebtedness of the kinds referred to in clauses (a) and (b) above, (d) all
Guaranty Obligations of such Person with respect to Indebtedness and obligations
of the type described in clauses (a) through (c) hereof of another Person;
provided that such Guaranty Obligations are required to be reported as
liabilities on a balance sheet of such Person prepared in accordance with GAAP
(and without duplication of any liability already appearing as a liability on
such balance sheet); and further provided that, in the event a Guaranty
Obligation is limited as to dollar amount, such Guaranty Obligation shall not
exceed such limitation, and (e) all Indebtedness and obligations of the type
described in clauses (a), (b), and (c) hereof of another Person, secured by a
Lien on any property of such Person whether or not such Indebtedness or
obligations has been assumed by such Person. Notwithstanding the foregoing,
Funded Debt shall not include trust preferred securities, if any, shall not
include interest on Indebtedness that is accrued in the ordinary course of
business and shall not include intercompany Indebtedness.

 

6

<PAGE>

 

        "GAAP" means generally accepted accounting
principles in the United States applied on a consistent basis and subject to
Section 1.3.

        "Governmental Authority" means any Federal,
state, local or foreign court or governmental agency, authority, instrumentality
or regulatory body.

        "Guaranty Obligations" means, with respect
to any Person, without duplication, any obligations (other than endorsements in
the ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing any Funded Debt of any other Person in any manner,
whether direct or indirect, and including without limitation any obligation,
whether or not contingent, (a) to purchase any such Funded Debt, or (b) to
advance or provide funds or other support for the payment or purchase of such
Funded Debt or to maintain working capital, solvency or other balance sheet
condition of such other Person. The amount of any Guaranty Obligation hereunder
shall (subject to any limitations set forth therein) be deemed to be an amount
equal to the outstanding principal amount (or maximum principal amount, if
larger) of the Indebtedness in respect of which such Guaranty Obligation is
made; provided that, in the event a Guaranty Obligation is limited as to dollar
amount, such Guaranty Obligation shall not exceed such limitation.

        "Indebtedness" of any Person means, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person to the extent of the
value of such property (other than customary reservations or retentions of title
under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations, other than intercompany items, of such Person
issued or assumed as the deferred purchase price of property or services
purchased by such Person which would appear as liabilities on a balance sheet of
such Person (other than trade payables), (e) all Indebtedness of others secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, (f) all Guaranty Obligations of such Person, (g) the principal
portion of all obligations of such Person under (i) capital lease obligations
and (ii) any synthetic lease, tax retention operating lease, off-balance sheet
loan or similar off-balance sheet financing product of such Person where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP, (h) all obligations of
such Person to repurchase any securities which repurchase obligation is related
to the issuance thereof, including, without limitation, obligations commonly
known as residual equity appreciation potential shares, (i) the net obligations
of such Person in respect of interest rate protection agreements, foreign
currency exchange agreements, Permitted Energy Transactions or other interest or
exchange rate hedging arrangements, and (j) the maximum amount of all
outstanding performance and standby letters of credit issued or bankers'
acceptance facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed). The
Indebtedness of any Person shall include the recourse Indebtedness of any
partnership or unincorporated joint venture and for which such Person is legally
obligated.

 

7

<PAGE>

 

        "Interest Payment Date" means (a) as to Base
Rate Loans, monthly in arrears on the first day of each fiscal month of the
Borrower and the Maturity Date and (b) as to Eurodollar Loans, the last day of
each applicable Interest Period and the Maturity Date and, in addition, where
the applicable Interest Period for a Eurodollar Loan is greater than three
months, then also on the last day of each fiscal quarter of the Borrower during
such Interest Period. If an Interest Payment Date falls on a date which is not a
Business Day, such Interest Payment Date shall be deemed to be the next
succeeding Business Day, except that in the case of Eurodollar Loans where the
next succeeding Business Day falls in the next succeeding calendar month, then
on the next preceding day.

        "Interest Period" means, as to Eurodollar
Loans, a period of one, two, three or, subject to availability, six months
duration, as the Borrower may elect, commencing, in each case, on the date of
the borrowing (including continuations and conversions of Eurodollar Loans); provided,
however, (a) if any Interest Period would end on a day which is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day (except that where the next succeeding Business Day falls in the
next succeeding calendar month, then on the next preceding Business Day), (b) no
Interest Period shall extend beyond the Maturity Date and (c) with respect to
Eurodollar Loans, where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the Interest Period
is to end, such Interest Period shall end on the last Business Day of such
calendar month.

        "Lender" means any of the Persons identified
as a "Lender" on the signature pages hereto, and any Eligible Assignee
which may become a Lender by way of assignment in accordance with the terms
hereof, together with their successors and permitted assigns.

        "Letter of Credit Obligations" means the
stated amount of all outstanding Letters of Credit plus, without duplication,
any unpaid reimbursement obligations of the Borrower under the Letters of
Credit.

        "Letters of Credit" is defined in Section
2.9.

        "Leverage Ratio" means, with respect to the
Borrower and its Subsidiaries at any date of determination, the ratio of (a)
Total Funded Debt to, (b) Capitalization, in each case calculated in accordance
with GAAP.

        "Lien" means any mortgage, pledge,
hypothecation, assignment for security, deposit arrangement, security interest,
encumbrance, lien (statutory or otherwise), priority or charge of any kind
(including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any unterminated financing or similar statement
or notice filed under the Uniform Commercial Code as adopted and in effect in
the relevant jurisdiction or other similar recording or notice statute, and any
lease in the nature thereof). The term "Lien" shall not include
statutory priorities or financing statements filed in connection with operating
leases or sales of accounts owed by customers for energy provided or to be
provided outside the normal franchise service area of Wisconsin Public Service
Corporation and Upper Peninsula Power Company.

        "Loans" means the Revolving Loans and the
Swing Line Loans.

 

8

<PAGE>

 

        "LOC Documents" means, with respect to any
Letter of Credit, such Letter of Credit, any amendments thereto, any documents
delivered in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (a) the
rights and obligations of the parties concerned or at risk or (b) any collateral
security for such obligations.

        "London Interbank Offered Rate" means, with
respect to any Eurodollar Loan for the Interest Period applicable thereto, (a)
the rate per annum equal to the rate determined by the Agent to be the offered
rate that appears on the page of the Telerate screen (or any successor thereto)
that displays an average British Bankers Association Interest Settlement Rate
for deposits in Dollars (for delivery on the first day of such Interest Period)
with a term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, or

        (b) if the rate referenced in the preceding subsection (a)
does not appear on such page or service or such page or service is not
available, the rate per annum equal to the rate determined by the Agent to be
the offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or

        (c) if the rates referenced in the preceding subsections
(a) and (b) are not available, the rate of interest per annum
determined by the Agent as the rate of interest at which deposits in Dollars, in
the approximate amount of the Loan to be made or continued as, or converted
into, a Eurodollar loan by U.S. Bank National Association and having a maturity
comparable to such Interest Period, would be offered to major banks in the
London interbank market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest Period
rounded upwards to the next 1/100th of 1%.

        "Material Adverse Effect" means a material
adverse effect on (a) the operations, financial condition or business of the
Borrower and its Subsidiaries, taken as a whole, (b) the ability of the Borrower
to perform its obligations under this Credit Agreement or (c) the validity or
enforceability of this Credit Agreement, any of the other Credit Documents, or
the rights and remedies of the Lenders hereunder or thereunder; provided that
matters disclosed in writing to the Lenders prior to the Closing Date shall not
be deemed to cause a Material Adverse Effect.

        "Maturity Date" means June 2, 2010.

        "Moody's" means Moody's Investors Service,
Inc., or any successor or assignee of the business of such company in the
business of rating securities.

        "Multiemployer Plan" means a Plan covered by
Title IV of ERISA which is a multiemployer plan as defined in Section 3(37) or
4001(a)(3) of ERISA.

 

9

<PAGE>

 

        "Multiple Employer Plan" means a Plan
covered by Title IV of ERISA, other than a Multiemployer Plan, which the
Borrower or any ERISA Affiliate and at least one employer other than the
Borrower or any ERISA Affiliate are contributing sponsors.

        "Net Worth" means, as of any date, the
shareholders' equity or net worth of the Borrower and its Subsidiaries, on a
consolidated basis, as determined in accordance with GAAP.

        "Notes" means the Revolving Loan Notes.

        "Notice of Borrowing" means a request by the
Borrower for a Revolving Loan in the form of Exhibit 2.2.

        "Notice of Continuation/Conversion" means a
request by the Borrower for the continuation or conversion of a Revolving Loan
in the form of Exhibit 2.4.

        "Participation Interest" means the Extension
of Credit by a Lender by way of a purchase of a participation in any Loans as
provided in Section 3.8.

        "PBGC" means the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA and any
successor thereto.

        "Permitted Energy Transactions" means
commodity sale, purchase or option agreements or other commodity transactions or
purchase or sale of weather derivatives entered into by the Borrower or any
Principal Subsidiary in the ordinary course of the energy or energy related
industry for non-speculative purposes relating to the purchase or sale of
electric power, electric power transmission capacity, natural gas, natural gas
transportation capacity, natural gas storage, generation spark spreads, heating
oil, crude oil, propane, coal or currency.

        "Person" means any individual, partnership,
joint venture, firm, corporation, association, trust, limited liability company
or other enterprise (whether or not incorporated), or any government or
political subdivision or any agency, department or instrumentality thereof.

        "Plan" means any employee benefit plan (as
defined in Section 3(3) of ERISA) which is covered by ERISA and with respect to
which the Borrower or any ERISA Affiliate is (or, if such plan were terminated
at such time, would under Section 4069 of ERISA be deemed to be) an
"employer" within the meaning of Section 3(5) of ERISA.

        "Prime Rate" means the per annum rate of
interest established from time to time by the Agent at its principal office in
Milwaukee, Wisconsin (or such other principal office as communicated by the
Agent to the Borrower and the Lenders) as its Prime Rate. Any change in the
interest rate resulting from a change in the Prime Rate shall become effective
as of 12:01 a.m. (Milwaukee time) of the Business Day on which each change in
the Prime Rate is announced by the Agent. The Prime Rate is a reference rate
used by the Agent in determining interest rates on certain loans and is not
intended to be the lowest rate of interest charged on any extension of credit to
any debtor.

        "Principal Subsidiary" means (a) any of
Wisconsin Public Service Corporation, Upper Peninsula Power Company, WPS
Resources Capital Corporation, WPS Energy Services, 

 

10

<PAGE>

 

 Inc. and their respective
successors and (b) any other Subsidiary, whether owned directly or indirectly by
the Borrower, which, with respect to the Borrower and its Subsidiaries taken as
a whole, represents at least twenty percent (20%) of the Borrower's consolidated
assets or the Borrower's consolidated net income (or loss), as shown on the most
recent financial statements delivered to the Agent pursuant to Section 7.1
below.

        "Public Debt Rating" means, as of any date,
the rating that has been most recently announced by either S&P or Moody's,
as the case may be, for any class of non-credit enhanced long-term senior
unsecured debt issued by the Borrower.

        "Reportable Event" means a "reportable
event" as defined in Section 4043 of ERISA with respect to which the notice
requirements to the PBGC have not been waived.

        "Required Lenders" means Lenders whose
aggregate Credit Exposure (as hereinafter defined) constitutes more than 51% of
the aggregate Credit Exposure of all Lenders at such time; provided, however,
that if any Lender shall be a Defaulting Lender at such time then there shall be
excluded from the determination of Required Lenders the aggregate principal
amount of Credit Exposure of such Lender at such time. For purposes of the
preceding sentence, the term "Credit Exposure" as applied to
each Lender shall mean (a) at any time prior to the termination of the Revolving
Loan Commitment, the Commitment Percentage of such Lender multiplied by the
Revolving Loan Commitment and (b) at any time after the termination of the
Revolving Loan Commitment, the principal balance of the outstanding Loans of
such Lender plus the Commitment Percentage of such Lender multiplied by the
Letter of Credit Obligations.

        "Revolving Loan Commitment" means,
collectively, FIVE HUNDRED MILLION DOLLARS ($500,000,000), subject to amendment
pursuant to Section 2.6, and with respect to each Lender, shall mean such amount
multiplied by such Lender's Commitment Percentage.

        "Revolving Loan Notes" means the promissory
notes of the Borrower in favor of each Lender evidencing the Revolving Loans and
substantially in the form of Exhibit 2.7, as such promissory notes may be
amended, modified, supplemented or replaced from time to time.

        "Revolving Loans" means the loans made by
the Lenders to the Borrower pursuant to Section 2.1.

        "S&P" means Standard & Poor's, a
division of The McGraw Hill Companies, Inc., or any successor or assignee of the
business of such division in the business of rating securities.

        "Single Employer Plan" means any Plan which
is covered by Title IV of ERISA, but which is not a Multiemployer Plan.

        "Subsidiary" means, as to any Person, (a)
any corporation more than 50% of whose stock of any class or classes having by
the terms thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through 

 

11

<PAGE>

 

 Subsidiaries and (b) any partnership, association, joint
venture, limited liability company or other entity in which such person directly
or indirectly through Subsidiaries has more than 50% equity interest at any
time.

        "Swing Line Lender" means U.S. Bank National
Association.

        "Swing Line Loan" means a loan made by the
Swing Line Lender to the Borrower under Section 2.8.

        "Swing Line Sublimit" means an amount equal
to the lesser of (a) $20,000,000 and (b) the aggregate Revolving Loan
Commitment. The Swing Line Sublimit is part of, and not in addition to, the
aggregate Revolving Loan Commitment.

        "Termination Event" means (a) with respect
to any Single Employer Plan, the occurrence of a Reportable Event or the
substantial cessation of operations (within the meaning of Section 4062(e) of
ERISA), (b) the withdrawal of the Borrower or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a substantial employer
(as such term is defined in Section 4001(a)(2) of ERISA), or the termination of
a Multiple Employer Plan, (c) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section 4041(a)(2) or
4041A of ERISA, (d) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA, (e) any event or
condition which might reasonably constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan,
or (f) the complete or partial withdrawal of the Borrower or any ERISA Affiliate
from a Multiemployer Plan.

        "Total Assets" means all assets of the
Borrower and its Subsidiaries as shown on its most recent quarterly or annual
audited consolidated balance sheet, as determined in accordance with GAAP.

        "Total Funded Debt" means all Funded Debt of
the Borrower and its Subsidiaries, without duplication, on a consolidated basis,
as determined in accordance with GAAP.

        "Voting Stock" means all classes of the
capital stock (or other voting interests) of a Person then outstanding and
normally entitled to vote in the election of directors.

        1.2 Computation of Time Periods.

        For purposes of computation of periods of time hereunder, the
word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."
References in this Credit Agreement to "Articles",
"Sections", "Schedules" or "Exhibits" shall be to
Articles, Sections, Schedules or Exhibits of or to this Credit Agreement unless
otherwise specifically provided.

        1.3 Accounting Terms.

        Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall be prepared, in accordance with 

 

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<PAGE>

 

 GAAP applied in a manner
consistent with those used in preparing the financial statements referred to in
Section 5.1(d). In the event that any changes occur in GAAP after the date of
this Agreement and such changes result in a material variation in the method of
calculation of financial covenants or other terms of this Agreement, then the
Borrower, the Agent and the Lenders agree to amend such provisions of this
Agreement so as to equitably reflect such changes in order that the criteria for
evaluating the Borrower's financial condition will be the same after such
changes as if such changes had not occurred.


    Section 2. LOANS

        2.1 Revolving Loan Commitment.

        Subject to the terms and conditions set forth herein, each
Lender severally agrees to make revolving loans to the Borrower in Dollars, at
any time and from time to time, during the period from the Effective Date to the
Maturity Date (each a "Revolving Loan" and collectively the
"Revolving Loans"); provided, however, that (i)
the sum of the aggregate amount of Revolving Loans outstanding plus the
aggregate amount of Swing Line Loans outstanding shall not exceed the amount of
the Revolving Loan Commitment minus the Letter of Credit Obligations and (ii)
with respect to each individual Lender, the Lender's pro rata share of
outstanding Revolving Loans plus such Lender's Commitment Percentage of
outstanding Swing Line Loans shall not exceed such Lender's Commitment
Percentage of the amount of the Revolving Loan Commitment minus the Letter of
Credit Obligations. Subject to the terms of this Credit Agreement, the Borrower
may borrow, repay and reborrow Revolving Loans.

        2.2 Method of Borrowing for Revolving Loans.

        By no later than noon (Milwaukee time) (a) on the date of the
requested borrowing of Revolving Loans that will be Base Rate Loans or (b) two
Business Days prior to the date of the requested borrowing of Revolving Loans
that will be Eurodollar Loans, the Borrower shall submit a written Notice of
Borrowing in the form of Exhibit 2.2 to the Agent setting forth (i) the
amount requested, (ii) whether such Revolving Loans shall accrue interest at the
Base Rate or the Adjusted Eurodollar Rate, (iii) with respect to Revolving Loans
that will be Eurodollar Loans, the Interest Period applicable thereto and (iv)
certification that the Borrower has complied in all respects with Section 5.2.


        2.3 Funding of Revolving Loans.

        Upon receipt of a Notice of Borrowing, the Agent shall
promptly inform the Lenders as to the terms thereof. Each such Lender shall make
its Commitment Percentage of the requested Revolving Loans available to the
Agent by 2:00 p.m. (Milwaukee time) on the date specified in the Notice of
Borrowing by deposit, in Dollars, of immediately available funds at the
principal offices of the Agent in Milwaukee, Wisconsin or at such other address
as the Agent may designate in writing. The amount of the requested Revolving
Loans will then be made available to the Borrower by the Agent by crediting the
account of the Borrower on the books of such office of the Agent, to the extent
the amount of such Revolving Loans are made available to the Agent.

 

13

<PAGE>

 

        No Lender shall be responsible for the failure or delay by
any other Lender in its obligation to make Revolving Loans hereunder; provided,
however, that the failure of any Lender to fulfill its obligations
hereunder shall not relieve any other Lender of its obligations hereunder.
Unless the Agent shall have been notified by any Lender prior to the date of any
such Revolving Loan that such Lender does not intend to make available to the
Agent its portion of the Revolving Loans to be made on such date, the Agent may
assume that such Lender has made such amount available to the Agent on the date
of such Revolving Loans, and the Agent in reliance upon such assumption, may (in
its sole discretion but without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Agent, the Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent will
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled to recover
from the Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent at a per annum rate equal to (i)
from the Borrower at the applicable rate for such Revolving Loan pursuant to the
Notice of Borrowing and (ii) from a Lender at the Federal Funds Rate.

        2.4 Continuations and Conversions.

        The Borrower shall have the option, on any Business Day, to
continue existing Eurodollar Loans for a subsequent Interest Period, to convert
Base Rate Loans into Eurodollar Loans or to convert Eurodollar Loans into Base
Rate Loans; provided, however, that (a) each such continuation or
conversion must be requested by the Borrower pursuant to a Notice of
Continuation/Conversion, in the form of Exhibit 2.4, in compliance with
the terms set forth below, (b) except as provided in Section 4.1, Eurodollar
Loans may only be continued or converted into Base Rate Loans on the last day of
the Interest Period applicable hereto, (c) Eurodollar Loans may not be continued
nor may Base Rate Loans be converted into Eurodollar Loans during the existence
and continuation of a Default or Event of Default and (d) any request to extend
a Eurodollar Loan that fails to comply with the terms hereof or any failure to
request an extension of a Eurodollar Loan that fails to comply with the terms
hereof or any failure to request an extension of a Eurodollar Loan at the end of
an Interest Period shall constitute a conversion to a Base Rate Loan on the last
day of the applicable Interest Period. Each continuation or conversion must be
requested by the Borrower no later than noon (Milwaukee time) (i) on the date
for a requested conversion of a Eurodollar Loan to a Base Rate Loan or (ii) two
Business Days prior to the date for a requested continuation of a Eurodollar
Loan or conversion of a Base Rate Loan to a Eurodollar Loan, in each case
pursuant to a written Notice of Continuation/Conversion submitted to the Agent
which shall set forth (A) whether the Borrower wishes to continue or convert
such Loans and (B) if the request is to continue a Eurodollar Loan or convert a
Base Rate Loan to a Eurodollar Loan, the Interest Period applicable thereto.

        The Borrower hereby authorizes the Lenders and the Agent to
extend, convert or continue Eurodollar Loans or Base Rate Loans, effect
selection of Eurodollar Loans or Base Rate Loans and to transfer funds based in
each case on telephonic notices made by any person or persons the Agent or any
Lender in good faith believes to be acting on behalf of the Borrower. 

 

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<PAGE>

 

 The
Borrower agrees to deliver promptly to the Agent a written confirmation, if such
confirmation is requested by the Agent or any Lender, of each telephonic notice
signed by the chief financial officer, treasurer, secretary or assistant
treasurer of the Borrower. If the written confirmation differs in any material
respect from the action taken by the Agent and the Lenders, the records of the
Agent and the Lenders shall govern absent manifest error.

        2.5 Minimum Amounts.

        Each request for a Revolving Loan or a conversion or
continuation hereunder shall be subject to the following requirements: (a) each
Eurodollar Loan shall be in a minimum of $5,000,000 (and in integral multiples
of $1,000,000 in excess thereof), (b) each Base Rate Loan shall be in a minimum
amount of the lesser of $1,000,000 (and in integral multiples of $250,000 in
excess thereof) or the remaining amount available to be borrowed and (c) no more
than twelve Eurodollar Loans shall be outstanding hereunder at any one time. For
the purposes of this Section, all Eurodollar Loans with the same Interest
Periods that begin and end on the same date shall be considered as one
Eurodollar Loan, but Eurodollar Loans with different Interest Periods, even if
they begin on the same date, shall be considered separate Eurodollar Loans.

        2.6 Reductions and Increases of Revolving
Loan Commitment.

        (a) Upon at least five Business Days' notice, the Borrower
shall have the right to permanently terminate or reduce the aggregate unused
amount of the Revolving Loan Commitment at any time and from time to time; provided
that (i) each partial reduction shall be in an aggregate amount at least equal
to $10,000,000 and in integral multiples of $1,000,000 above such amount and
(ii) no reduction shall be made which would reduce the Revolving Loan Commitment
to an amount less than the then outstanding Loans plus the Letter of Credit
Obligations. Any reduction in (or termination of) the Revolving Loan Commitment
shall be permanent and may not be reinstated.

        (b) The Borrower may request at any time and from time to
time that the aggregate amount of the Revolving Loan Commitment be increased up
to a maximum amount of $650,000,000; provided that (i) no increase in the
Revolving Loan Commitment shall be made at a time when a Default or Event of
Default shall have occurred and be continuing or would result from the requested
increase, (ii) no increase in the Revolving Loan Commitment shall be made at any
time after the Revolving Loan Commitment has been terminated or reduced, (iii)
each partial increase shall be made in an aggregate amount at least equal to
$10,000,000 and in integral multiples of $5,000,000 above such amount, (iv) no
more than two such increases shall be made between the Effective Date and the
Maturity Date, and (v) the Borrower shall have delivered to the Agent certified
resolutions of the Board of Directors of the Borrower approving such increase
and borrowings in connection therewith. In the event of such a requested
increase in the Revolving Loan Commitment, (i) each of the Lenders shall be
given the opportunity to participate in the increased Revolving Loan Commitment
(x) initially to the extent of such Lender's existing Commitment Percentage and
(y) to the extent that the requested increase of the Revolving Loan Commitment
is not fulfilled pursuant to the preceding clause (x), ratably in the proportion
that the respective Commitment Percentages of the Lenders desiring to
participate in the requested increase bear to the total of the Commitment
Percentages of the increasing 

 

15

<PAGE>

 

 Lenders, and (ii) to the extent that the Lenders
do not elect so to participate in such increased Revolving Loan Commitment after
an opportunity to do so, then the Borrower shall consult with the Agent as to
the number, identity and requested Revolving Loan Commitments of additional
financial institutions that the Agent may invite to participate in the aggregate
Revolving Loan Commitment. The Agent will not unreasonably refuse to so invite a
commercial bank organized under the laws of the United States or of any State
thereof, identified and requested by the Borrower, that has capital and surplus
reasonably satisfactory to the Agent in light of the Revolving Loan Commitment
which such commercial bank would assume hereunder. The Agent shall promptly
notify the Borrower and the Lenders of any increase in the amount of the
aggregate Revolving Loan Commitment pursuant to this Section and of the
respective adjusted Revolving Loan Commitment and Commitment Percentage of each
Lender after giving effect thereto. The Borrower acknowledges that, in order to
maintain Loans in accordance with the Commitment Percentage of each Lender, a
non-pro-rata increase in the aggregate Revolving Loan Commitment may require
prepayment or funding of all or portions of certain Loans on the date of such
increase (and any such prepayment or funding shall be subject to the other
provisions of this Credit Agreement).

        2.7 Notes.

        The Revolving Loans made by the Lenders shall be evidenced by
a duly executed promissory note of the Borrower payable to each Lender in
substantially the form of Exhibit 2.7 (the "Revolving Loan Notes")
and in a principal amount equal to the amount of such Lender's Commitment
Percentage of the Revolving Loan Commitment as originally in effect.

        2.8 Swing Line Loans.

        (a) Subject to the terms and conditions set forth herein,
during the period from the Effective Date to the Maturity Date, Swing Line
Lender agrees to make Swing Line Loans to the Borrower as the Borrower may from
time to time request for the purposes permitted hereby; provided, however, that
(i) the aggregate amount of Swing Line Loans outstanding shall not exceed the
Swing Line Sublimit, (ii) Swing Line Lender's pro rata share of the aggregate
amount of Revolving Loans outstanding plus the aggregate amount of Swing Line
Loans outstanding shall not exceed such Lender's Commitment Percentage of the
amount of the Revolving Loan Commitment minus the Letter of Credit Obligations,
and (iii) the sum of all Loans outstanding shall not exceed the amount of the
Revolving Loan Commitment minus the Letter of Credit Obligations. This is a
revolving credit and, subject to the foregoing and the other terms and
conditions hereof, the Borrower may borrow, prepay and reborrow Swing Line Loans
as set forth herein without premium or penalty; provided, however, that Swing
Line Lender may terminate or suspend the Swing Line at any time in its sole
discretion upon notice to the Borrower. Each Swing Line Loan shall bear interest
at a rate equal to the rate applicable to Base Rate Loans or at a rate quoted by
the Agent and agreed to by the Borrower.

        (b) Unless notified to the contrary by Swing Line Lender, the
Borrower may irrevocably request a Swing Line Loan upon notice to Swing Line
Lender. There is no minimum borrowing amount for a Swing Line Loan. Each such
request for a Swing Line Loan shall constitute a representation and warranty by
the Borrower that the conditions set forth in Section 5.2 are satisfied.
Promptly after receipt of such request, Swing Line Lender shall obtain 

 

16

<PAGE>

 


telephonic verification from the Agent that such Swing Line Loan is permitted
hereunder. Upon receiving such verification, Swing Line Lender shall make such
Swing Line Loan available to the Borrower. Without the consent of the Required
Lenders and Swing Line Lender, no Swing Line Loan shall be made during the
continuation of a Default or Event of Default. Upon the making of each Swing
Line Loan, each Lender shall be deemed to have purchased from Swing Line Lender
a risk participation therein in an amount equal to that Lender's Commitment
Percentage times the amount of the Swing Line Loan.

        (c) Each Swing Line Loan shall bear interest at a fluctuating
rate per annum equal to the rate of interest payable on Base Rate Loans or at
the rate quoted by the Agent and agreed to by the Borrower and interest shall be
payable upon demand of Swing Line Lender, on the last day of each month and on
the Revolving Termination Date. Swing Line Lender shall be responsible for
invoicing the Borrower (or notifying the Agent to so invoice the Borrower) for
such interest. The interest payable on Swing Line Loans is solely for the
account of Swing Line Lender, except following any funding of a risk
participation under clause (f) below.

        (d) The Borrower shall repay each Swing Line Loan on the
earliest of (i) upon demand made by Swing Line Lender and (ii) the Revolving
Termination Date. The Borrower shall repay the principal amount of each Swing
Line Loan by payment directly to Swing Line Lender or by Swing Line Lender
debiting the Borrower's deposit account at Swing Line Lender not later than
10:00 a.m. (Milwaukee, Wisconsin time) for payments hereunder. If the conditions
precedent set forth in Section 5.2 can be satisfied, the Borrower may request a
Revolving Loan to repay Swing Line Lender, or, failing to make such request, the
Borrower shall be deemed to have requested a Revolving Loan of Base Rate Loans
on such payment date pursuant to subsection (f) below. Swing Line Lender shall
promptly notify the Agent of each Swing Line Loan and each payment thereof.

        (e) If the Borrower fails to timely make any principal or
interest payment on any Swing Line Loan, Swing Line Lender shall notify the
Agent of such fact and the unpaid amount. The Agent shall promptly notify each
Lender of its pro rata share of such amount by 11:00 a.m. (Milwaukee, Wisconsin
time). Each Lender shall make funds in an amount equal to its pro rata share of
such amount available to the Agent at the Agent's payment office not later than
the 2:00 p.m. (Milwaukee, Wisconsin time) for payments hereunder on the same
Business Day. The obligation of each Lender to make such payment shall be
absolute and unconditional and shall not be affected by the occurrence of an
Event of Default or any other occurrence or event. Any such payment shall not
relieve or otherwise impair the obligation of the Borrower to repay the Swing
Line Lender for any amount of Swing Line Loans, together with interest as
provided herein.

        (f) If the conditions precedent set forth in Section 5.2 can
be satisfied on any date the Borrower is obligated to, but fails to, repay a
Swing Line Loan, the funding by Lenders pursuant to the previous subsection
shall be deemed to be a borrowing of Base Rate Loans (without regard to the
minimum amount therefor) deemed requested by the Borrower. If the conditions
precedent set forth in Section 5.2 cannot be satisfied on the date the Borrower
is obligated to make, but fails to make, such payment, the funding by Lenders
pursuant to the previous subsection shall be deemed to be a funding by each
Lender of its participation in such Swing Line Loan, and each Lender making such
funding shall thereupon acquire a pro rata 

 

17

<PAGE>

 

 participation, to the extent of its
payment, in the claim of Swing Line Lender against the Borrower in respect of
such payment and shall share, in accordance with that pro rata participation, in
any payment made by the Borrower with respect to such claim. Any amounts made
available by a Lender under its risk participation shall be payable by the
Borrower upon demand of the Agent, and shall bear interest at a rate per annum
equal to the Base Rate plus 2% per annum.

        2.9 Letters of Credit.

        (a) Issuance. Subject to the terms and conditions
hereof and of the LOC Documents, if any, and any other terms and conditions
which the Agent may reasonably require, the Agent shall from time to time upon
request issue, and the Lenders shall participate in, letters of credit (the
"Letters of Credit") for the account of the Borrower; provided,
however, that (i) the aggregate amount of Letter of Credit Obligations
shall not at any time exceed $300,000,000 (provided that the foregoing sublimit
shall be increased automatically by the amount of any increase in the aggregate
Revolving Loan Commitment made pursuant to Section 2.6(b), effective as of the
date thereof), (ii) the sum of the aggregate amount of Letter of Credit
Obligations outstanding plus the aggregate amount of Loans outstanding shall not
exceed the Aggregate Commitment and (iii) with respect to each individual
Lender, the Lender's pro rata share of outstanding Loans plus its pro rata share
of outstanding Letter of Credit Obligations shall not exceed such Lender's
Revolving Loan Commitment. The Agent may require the issuance and expiry date of
each Letter of Credit to be a day other than (x) a Saturday or a Sunday or (y)
any other day on which the letter of credit issuing office of the Agent is
authorized or required by law or executive order to close. Each Letter of Credit
shall be a standby or documentary letter of credit issued to support the
obligations (including pension or insurance obligations), contingent or
otherwise, of the Borrower or any of its Subsidiaries. Each Letter of Credit
shall have a stated term not to exceed one year, but may by its terms be
renewable annually upon notice (a "Notice of Renewal") given to
the Agent on or prior to any date for notice of renewal set forth in such Letter
of Credit but in any event at least three Business Days prior to the date of the
proposed renewal of such Letter of Credit and upon fulfillment of the applicable
conditions set forth in Section 5.2 unless the Agent has notified the Borrower
on or prior to the date for notice of termination set forth in such Letter of
Credit but in any event at least 30 Business Days prior to the date of automatic
renewal of its election not to renew such Letter of Credit (a "Notice of
Termination") and (y) 10 Business Days prior to the Maturity Date; provided
that the terms of each Letter of Credit that is automatically renewable annually
shall (x) require the Agent to give the beneficiary named in such Letter of
Credit notice of any Notice of Termination, (y) permit such beneficiary,
upon receipt of such notice, to draw under such Letter of Credit prior to the
date such Letter of Credit otherwise would have been automatically renewed and
(z) not permit the expiration date (after giving effect to any renewal) of
such Letter of Credit in any event to be extended to a date later than 10
Business Days before the Maturity Date. If either a Notice of Renewal is not
given by the Borrower or a Notice of Termination is given by the Agent pursuant
to the immediately preceding sentence, such Letter of Credit shall expire on the
date on which it otherwise would have been automatically renewed; provided,
however, that even in the absence of receipt of a Notice of Renewal the
Agent may in its discretion, unless instructed to the contrary by the Borrower,
deem that a Notice of Renewal had been timely delivered and in such case, a
Notice of Renewal shall be deemed to have been so 

 

18

<PAGE>

 

 delivered for all purposes
under this Agreement. Each Letter of Credit shall comply with the related LOC
Documents.

        (b) Cash Collateral. In the event that any Letter of
Credit remains outstanding beyond the fifteenth day prior to the Maturity Date,
the Borrower shall upon demand of the Required Lenders (or the Agent acting with
the consent of the Required Lenders) either (i) pay to the Agent the sum of the
largest draft which could then or thereafter be drawn under such Letter of
Credit, which sum the Agent may hold for the account of the Borrower, with
interest, for the purpose of paying any draft presented, with the excess, if
any, to be returned to the Borrower upon termination or expiration of such
Letter of Credit or (ii) deliver a back-up letter of credit to the Agent
securing the Borrower's reimbursement obligations with respect to such Letter of
Credit in form and substance acceptable to the Required Lenders and from a
creditworthy financial institution acceptable to the Required Lenders.

        (c) Letter of Credit Fees.


                (1) Letter of Credit Fees. In consideration of
        the issuance of Letters of Credit hereunder, the Borrower agrees to pay
        to the Agent for the pro rata benefit of the Lenders (based on each
        Lender's Commitment Percentage), a per annum fee (the "Letter of
        Credit Fees") equal to the Applicable Percentage on the average
        daily maximum amount available to be drawn under all Letters of Credit.
        The Letter of Credit Fees will be payable in arrears on the first
        Business Day after the end of each fiscal quarter of the Borrower (as
        well as on the Maturity Date) for the immediately preceding fiscal
        quarter (or portion thereof), beginning with the first of such dates to
        occur after the date of this Agreement.

                (2) Agent Letter of Credit Fees. In addition
        to the Letter of Credit Fees payable pursuant to subsection (1) above,
        the Borrower shall pay to the Agent for its own account, without sharing
        by the other Lenders, a fronting fee in an amount agreed by the Borrower
        and the Issuing Bank as a percentage of the outstanding face amount of
        each Letter of Credit payable quarterly in arrears at the same time the
        Letter of Credit Fees are payable plus the customary incidental and/or
        out of pocket charges from time to time for its services in connection
        with the issuance, amendment, payment, transfer, administration,
        cancellation and conversion of, and drawings under, Letters of Credit
        (collectively, the "Agent Letter of Credit Fees").



        (d) Notice and Reports. The request for the issuance
of a Letter of Credit shall be submitted to the Agent at least two Business Days
prior to the requested date of issuance unless otherwise agreed to between the
Borrower and the Agent. The Agent will, at least monthly and more frequently
upon request, provide to the Lenders a detailed report specifying the Letters of
Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of the prior report, and
including therein, among other things, the account party, the beneficiary, the
face amount, and the expiry date as well as any payments or expirations which
may have occurred.

 

19

<PAGE>

 

        (e) Participations. Each Lender, upon issuance of a
Letter of Credit, shall be deemed to have purchased without recourse a risk
participation from the Agent in such Letter of Credit and each LOC Document
related thereto and the rights and obligations arising thereunder and any
collateral relating thereto, in each case in an amount equal to its Commitment
Percentage of the obligations under such Letter of Credit, and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and be obligated to pay to the Agent therefor and discharge when due, its
Commitment Percentage of the obligations arising under such Letter of Credit.
Without limiting the scope and nature of each Lender's participation in any
Letter of Credit, to the extent that the Agent has not been reimbursed as
required hereunder or under any such Letter of Credit, each such Lender shall
pay to the Agent its Commitment Percentage of such unreimbursed drawing in same
day funds on the day of notification by the Agent of an unreimbursed drawing
pursuant to the provisions of subsection (f) hereof. The obligation of each
Lender to so reimburse the Agent shall be absolute and unconditional and shall
not be affected by the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Borrower to reimburse the Agent under any Letter of
Credit, together with interest as hereinafter provided.

        (f) Reimbursement. In the event of any drawing under
any Letter of Credit, the Agent will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Agent of its intent to otherwise reimburse
the Agent, the Borrower shall be deemed to have requested a Revolving Loan at
the Base Rate in the amount of the drawing as provided in subsection (g) hereof,
the proceeds of which will be used to satisfy the reimbursement obligations. The
Borrower shall reimburse the Agent on the day any drawing under any Letter of
Credit is paid either with the proceeds of a Revolving Loan obtained hereunder
or otherwise in same day funds as provided herein or in the LOC Documents. If
the Borrower shall fail to reimburse the Agent as provided hereinabove, the
unreimbursed amount of such drawing shall bear interest at a per annum rate
equal to the Base Rate plus two percent (2%). The Borrower's reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances (except as expressly set forth below) irrespective of any rights
of set-off, counterclaim or defense to payment the applicable account party or
the Borrower may claim or have against the Agent, the Lenders, the beneficiary
of the Letter of Credit drawn upon or any other Person, including without
limitation, any defense based on any failure of the applicable account party or
the Borrower to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Agent will promptly notify the
Lenders of the amount of any unreimbursed drawing and each Lender shall promptly
pay to the Agent, in immediately available funds, the amount of such Lender's
Commitment Percentage of such unreimbursed drawing. Such payment shall be made
on the day such notice is received by such Lender from the Agent if such notice
is received at or before 2:00 p.m., otherwise such payment shall be made at or
before 12:00 noon on the Business Day next succeeding the day such notice is
received. If such Lender does not pay such amount to the Agent in full upon such
request, such Lender shall, on demand, pay to the Agent interest on the unpaid
amount during the period from the date the Lender received the notice regarding
the unreimbursed drawing until the Lender pays such amount to the Agent in full
at a rate per annum equal to, if paid within two Business Days of the date of
drawing, the Federal Funds Rate and thereafter at a rate equal to the Base Rate.
Each Lender's obligation to make such payment to the Agent, and the right of the
Agent to receive the same, shall be absolute and unconditional, shall not be
affected by any circumstance whatsoever and 

 

20

<PAGE>

 

 without regard to the termination of
this Credit Agreement or the Revolving Loan Commitments hereunder, the existence
of a Default or Event of Default or the acceleration of the obligations
hereunder and shall be made without any offset, abatement, withholding or
reduction whatsoever. Simultaneously with the making of each such payment by a
Lender to the Agent, such Lender shall, automatically and without any further
action on the part of the Agent or such Lender, acquire a participation in an
amount equal to such payment (excluding the portion of such payment constituting
interest owing to the Agent) in the related unreimbursed drawing portion of the
Letter of Credit Obligation and in the interest thereon and in the related LOC
Documents, and shall have a claim against the Borrower with respect thereto.

        (g) Repayment with Revolving Loans. On any day on
which the Borrower shall have requested, or been deemed to have requested, a
Revolving Loan to reimburse a drawing under a Letter of Credit, the Agent shall
give notice to the Lenders that a Revolving Loan has been requested or deemed
requested in connection with a drawing under a Letter of Credit, in which case a
Revolving Loan comprised solely of Base Rate Loans (each such borrowing, a
"Mandatory Borrowing") shall be immediately made from all
Lenders (without giving effect to any termination of the Revolving Loan
Commitments pursuant to Section 9.1) pro rata based on each Lender's respective
Commitment Percentage and the proceeds thereof shall be paid directly to the
Agent for application to the respective Letter of Credit Obligations. Each
Lender hereby irrevocably agrees to make such Revolving Loans upon any such
request or deemed request on account of each such Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the same
such date notwithstanding (i) the amount of Mandatory Borrowing may not
comply with the minimum amount for borrowings of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Article III are
then satisfied, (iii) whether a Default or Event of Default then exists, (iv)
failure of any such request or deemed request for Revolving Loans to be made by
the time otherwise required hereunder, (v) the date of such Mandatory Borrowing,
or (vi) any reduction in or any termination of the Revolving Loan Commitments.
Such funding of Revolving Loans shall be made on the day notice of such
Mandatory Borrowing is received by each Lender from the Agent if such notice is
received at or before 2:00 p.m., otherwise such payment shall be made at or
before 12:00 noon on the Business Day next succeeding the day such notice is
received. In the event that any Mandatory Borrowing cannot for any reason be
made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under any applicable bankruptcy law
with respect to the Borrower), then each Lender hereby agrees that it shall
forthwith fund (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrower on or after
such date and prior to such purchase) its Commitment Percentage in the
outstanding Letter of Credit Obligations; provided, further, that
in the event any Lender shall fail to fund its Commitment Percentage on the day
the Mandatory Borrowing would otherwise have occurred, then the amount of such
Lender's unfunded Commitment Percentage therein shall bear interest payable to
the Agent upon demand, at the rate equal to, if paid within two Business Days of
such date, the Federal Funds Rate, and thereafter at a rate equal to the Base
Rate.

        (h) Modification and Extension. The issuance of any
supplement, modification, amendment, or extension to any Letter of Credit shall,
for purposes hereof, be treated in all respects the same as the issuance of a
new Letter of Credit.

 

21

<PAGE>

 

        (i) International Standby Practices. The Agent may
have the Letters of Credit be subject to International Standby Practices, as
published as of the date of issue by the International Chamber of Commerce
(Publication No. 590 or the most recent publication, the "ISP 98"),
in which case the ISP 98 may be incorporated therein and deemed in all respects
to be a part thereof.

        (j) Responsibility of Agent. It is expressly
understood and agreed as between the Lenders that the obligations of the Agent
hereunder to the Lenders are only those expressly set forth in this Credit
Agreement and that the Agent shall be entitled to assume that the conditions
precedent set forth in Section 5 have been satisfied unless it shall have
acquired actual knowledge that any such condition precedent has not been
satisfied; provided, however, that nothing set forth in this Section 2.9 shall
be deemed to prejudice the right of any Lender to recover from the Agent any
amounts made available by such Lender to the Agent pursuant to this Section 2.9
in the event that it is determined by a court of competent jurisdiction that the
issuance of or payment with respect to a Letter of Credit constituted gross
negligence or willful misconduct on the part of the Agent.

        (k) Conflict with LOC Documents. In the event of any
conflict between this Credit Agreement and any LOC Document, this Credit
Agreement shall govern.

        (l) Indemnification of Agent.


                (1) In addition to its other obligations under this
        Credit Agreement, the Borrower hereby agrees to protect, indemnify, pay
        and save the Agent harmless from and against any and all claims,
        demands, liabilities, damages, losses, costs, charges and expenses
        (including reasonable, documented attorneys' fees) that the Agent may
        incur or be subject to as a consequence, direct or indirect, of (A) the
        issuance of any Letter of Credit or (B) the failure of the Agent to
        honor a drawing under a Letter of Credit as a result of any act or
        omission, whether rightful or wrongful, of any present or future de jure
        or de facto government or governmental authority (all such acts or
        omissions, herein called "Government Acts").

                (2) As between the Borrower and the Agent and the
        Lenders, the Borrower shall assume all risks of the acts, omissions or
        misuse of any Letter of Credit by the beneficiary thereof. The Agent and
        the Lenders shall not be responsible for (except in the case of (A), (B)
        and (C) below if the Agent has actual knowledge to the contrary): (A)
        the form, validity, sufficiency, accuracy, genuineness or legal effect
        of any document submitted by any party in connection with the
        application for and issuance of any Letter of Credit, even if it should
        in fact prove to be in any or all respects invalid, insufficient,
        inaccurate, fraudulent or forged; provided that such document(s)
        reasonably appear to conform on their face to the terms of the Letter of
        Credit, (B) the validity or sufficiency of any instrument transferring
        or assigning or purporting to transfer or assign any Letter of Credit or
        the rights or benefits thereunder or proceeds thereof, in whole or in
        part, that may prove to be invalid or ineffective for any reason; (C)
        failure of the beneficiary of a Letter of Credit to comply fully with
        conditions required in order 

 

22



<PAGE>


 

         to draw upon a Letter of Credit; provided
        that such document(s) reasonably appear to conform on their face to the
        terms of the Letter of Credit, (D) errors, omissions, interruptions or
        delays in transmission or delivery of any messages, by mail, cable,
        telegraph, telex or otherwise, whether or not they be in cipher; (E)
        errors in interpretation of technical terms; (F) any loss or delay in
        the transmission or otherwise of any document required in order to make
        a drawing under a Letter of Credit or of the proceeds thereof; and (G)
        any consequences arising from causes beyond the control of the Agent,
        including, without limitation, any Government Acts. None of the above
        shall affect, impair, or prevent the vesting of the Agent's rights or
        powers hereunder.

                (3) In furtherance and extension and not in
        limitation of the specific provisions hereinabove set forth, any action
        taken or omitted by the Agent, under or in connection with any Letter of
        Credit or the related certificates, if taken or omitted in good faith
        and not deemed to constitute gross negligence or willful misconduct,
        shall not put the Agent under any resulting liability to the Borrower.
        It is the intention of the parties that this Credit Agreement shall be
        construed and applied to protect and indemnify the Agent against any and
        all risks involved in the issuance of the Letters of Credit, all of
        which risks are hereby assumed by the Borrower, including, without
        limitation, any and all risks of the acts or omissions, whether rightful
        or wrongful, of any present or future Government Acts. The Agent shall
        not, in any way, be liable for any failure by the Agent or anyone else
        to pay any drawing under any Letter of credit as a result of any
        Government Acts or any other cause beyond the control of the Agent.

                (4) Nothing in this subsection (l) is intended to
        limit the reimbursement obligation of the Borrower contained in this
        Section 2.9. The obligations of the Borrower under this subsection (l)
        shall survive the termination of this Credit Agreement. No act or
        omission of any current or prior beneficiary of a Letter of Credit shall
        in any way affect or impair the rights of the Agent to enforce any
        right, power or benefit under this Credit Agreement.

                (5) Notwithstanding anything to the contrary
        contained in this subsection (l) or in any LOC Document, neither the
        Borrower nor any Lender shall have any obligation to indemnify the Agent
        in respect of any liability incurred by the Agent arising out of the
        gross negligence or willful misconduct of the Agent, as determined by a
        court of competent jurisdiction. Nothing in this Credit Agreement shall
        relieve the Agent of any liability to the Borrower or any Lender in
        respect of any action taken by the Agent which action constitutes gross
        negligence or willful misconduct of the Agent or a violation of the UCP
        or Uniform Commercial Code (as applicable), as determined by a court of
        competent jurisdiction.



        (m) Letters of Credit Under the 2004 Credit Agreement.
Upon the Effective Date, all letters of credit issued or deemed issued by U.S.
Bank National Association under the 2004 Credit Agreement shall automatically be
deemed Letters of Credit issued by the Agent under this Agreement subject to all
of the terms and conditions hereof including, among other things, that 

 

23

<PAGE>

 

 the
Lenders will automatically be deemed to have purchased a participation in such
letters of credit as of the Effective Date and the Borrower shall have the
reimbursement obligations with respect thereto set forth in Section 2.9(f)
above.


    Section 3. PAYMENTS

        3.1 Interest.

        (a) Interest Rate.


                (i) All Base Rate Loans shall accrue interest at the
        Base Rate.

                (ii) All Eurodollar Loans shall accrue interest at
        the Adjusted Eurodollar Rate applicable to such Eurodollar Loan.



        (b) Default Rate of Interest. Upon the occurrence, and
during the continuance, of an Event of Default, the principal of and, to the
extent permitted by law, interest on the Loans and any other amounts owing
hereunder or under the other Credit Documents shall bear interest, payable on
demand, at a per annum rate equal to two percent (2%) plus the rate which would
otherwise be applicable (or if no rate is applicable, then the rate for
Revolving Loans that are Base Rate Loans plus two percent (2%) per annum).

        (c) Interest Payments. Interest on Loans shall be due
and payable in arrears on each Interest Payment Date.

        3.2 Prepayments.

        (a) Voluntary Prepayments. The Borrower shall have the
right to prepay Loans in whole or in part from time to time without premium or
penalty; provided, however, that (i) Eurodollar Loans may only be
prepaid on three Business Days' prior written notice to the Agent and any
prepayment of Eurodollar Loans will be subject to Section 4.3; and (ii) each
such partial prepayment of Loans shall be in the minimum principal amount of
$1,000,000; provided that if less than $1,000,000 would remain
outstanding after such prepayment, such prepayment shall be in the amount of the
entire outstanding principal amount of the Loans. Amounts prepaid hereunder
shall be applied as the Borrower may elect; provided that if the Borrower
fails to specify a voluntary prepayment then such prepayment shall be applied as
the Agent may direct. All voluntary prepayments shall be applied first to Swing
Line Loans, then to Revolving Loans that are Base Rate Loans, and then to
Revolving Loans that are Eurodollar Loans in direct order of Interest Period
maturities.

        (b) Mandatory Prepayments. If at any time the amount
of Loans outstanding plus the Letter of Credit Obligations outstanding exceeds
the Aggregate Commitment, the Borrower shall immediately make a principal
payment to the Agent in the manner and in an amount such that the sum of Loans
outstanding plus the Letter of Credit Obligations outstanding is less than or
equal to the Aggregate Commitment. Any payments made under this Section 3.2(b)
shall be subject to Section 4.3 and shall be applied first to Swing Line Loans,
then to Revolving Loans that are Base Rate Loans, and then to Revolving Loans
that are Eurodollar Loans in direct order of Interest Period maturities.

 

24

<PAGE>

 

        3.3 Payment in Full at Maturity.

        On the Maturity Date, the entire outstanding principal
balance of all Loans and the Letter of Credit Obligations (to the extent that
the Borrower has not provided cash collateral or provided a back-up letter of
credit pursuant to Section 2.9(b) above), together with accrued but unpaid
interest and all other sums owing under this Credit Agreement, shall be due and
payable in full, unless accelerated sooner pursuant to Section 9.2.

        3.4 Fees.

        (a) Revolving Fees. In consideration of the Revolving
Loan Commitment being made available by the Lenders hereunder, the Borrower
agrees to pay to the Agent, for the pro rata benefit of each Lender, a fee equal
to the Applicable Percentage for Revolving Fees multiplied by the Revolving Loan
Commitment (the "Revolving Fees"). The accrued Revolving Fees
shall be due and payable in arrears on the first Business Day after the end of
each fiscal quarter of the Borrower (as well as on the Maturity Date and on any
date that the Revolving Loan Commitment is reduced) for the immediately
preceding fiscal quarter (or portion thereof), beginning with the first of such
dates to occur after the Closing Date.

        (b) Utilization Fees. At any time the principal amount
of outstanding Loans and outstanding Letter of Credit Obligations hereunder
shall exceed an amount equal to fifty percent (50%) of the Aggregate
Commitment, the Borrower shall pay to the Agent hereunder, for the pro rata
benefit of the Lenders, fees ("Utilization Fees") equal
to .10% per annum on the principal amount of outstanding Loans and Letter
of Credit Obligations. The Utilization Fees, if any, shall be due and payable in
arrears on the first Business Day after the end of each fiscal quarter of the
Borrower (as well as the Maturity Date) and any date of reduction in the
Revolving Loan Commitments.

        (c) Administrative Fees. The Borrower agrees to pay to
the Agent, for its own account, an annual fee as agreed to between the Borrower
and the Agent in the Fee Letter.

        3.5 Place and Manner of Payments.

        All payments of principal, interest, fees, expenses and other
amounts to be made by the Borrower under this Credit Agreement shall be received
without setoff, deduction or counterclaim not later than 2:00 p.m.(Milwaukee
time) on the date when due in Dollars and in immediately available funds by the
Agent at its offices in Milwaukee, Wisconsin. The Agent may charge account no.
121641146 of the Borrower for principal, interest and fees due hereunder and
under the Notes. Unless the application of a payment is specifically directed by
the Borrower (or if such application would be inconsistent with the terms
hereof), the Agent shall distribute payments received from the Borrower to the
Lenders in such manner as it reasonably determines in its sole discretion.

        3.6 Pro Rata Treatment.

        Except to the extent otherwise provided herein, all Revolving
Loans, each payment or prepayment of principal of any Revolving Loan, each
payment of interest on the Revolving Loans, each payment of Revolving Fees, each
reduction of the Revolving Loan 

 

25

<PAGE>

 

 Commitment, and each conversion or continuation
of any Revolving Loans, shall be allocated pro rata among the Lenders in
accordance with the respective Commitment Percentages; provided that, if any
Lender shall have failed to pay its applicable pro rata share of any Revolving
Loan, then any amount to which such Lender would otherwise be entitled pursuant
to this Section 3.6 shall instead be payable to the Agent until the share of
such Revolving Loan not funded by such Lender has been repaid; and provided,
further, that in the event any amount paid to any Lender pursuant to this
Section 3.6 is rescinded or must otherwise be returned by the Agent, each Lender
shall, upon the request of the Agent, repay to the Agent the amount so paid to
such Lender, with interest for the period commencing on the date such payment is
returned by the Agent until the date the Agent receives such repayment at a rate
per annum equal to, during the period to but excluding the date two Business
Days after such request, the Federal Funds Rate, and thereafter, the Base Rate
plus two percent (2%) per annum.

        3.7 Computations of Interest and Fees.

        (a) Except for Base Rate Loans, on which interest shall be
computed on the basis of a 365 or 366 day year as the case may be, all
computations of interest and fees hereunder shall be made on the basis of the
actual number of days elapsed over a year of 360 days.

        (b) It is the intent of the Lenders and the Borrower to
conform to and contract in strict compliance with applicable usury law from time
to time in effect. All agreements between the Lenders and the Borrower are
hereby limited by the provisions of this paragraph which shall override and
control all such agreements, whether now existing or hereafter arising and
whether written or oral. In no way, nor in any event or contingency (including
but not limited to prepayment or acceleration of the maturity of any
obligation), shall the interest taken, reserved, contracted for, charged, or
received under this Credit Agreement, under the Notes or otherwise, exceed the
maximum nonusurious amount permissible under applicable law. If, from any
possible construction of any of the Credit Documents or any other document,
interest would otherwise be payable in excess of the maximum nonusurious amount,
any such construction shall be subject to the provisions of this paragraph and
such documents shall be automatically reduced to the maximum nonusurious amount
permitted under applicable law, without the necessity of execution of any
amendment or new document. If any Lender shall ever receive anything of value
which is characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum lawful amount, an
amount equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount owing on
the Loans and not to the payment of interest, or refunded to the Borrower or the
other payor thereof if and to the extent such amount which would have been
excessive exceeds such unpaid principal amount of the Loans. The right to demand
payment of the Loans or any other indebtedness evidenced by any of the Credit
Documents does not include the right to receive any interest which has not
otherwise accrued on the date of such demand, and the Lenders do not intend to
charge or receive any unearned interest in the event of such demand. All
interest paid or agreed to be paid to the Lenders with respect to the Loans
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any renewal or
extension) of the Loans so that the amount of interest on account of such
indebtedness does not exceed the maximum nonusurious amount permitted by
applicable law.

 

26

<PAGE>

 

        3.8 Sharing of Payments.

        Each Lender agrees that, in the event that any Lender shall
obtain payment in respect of any Loan or any other obligation owing to such
Lender under this Credit Agreement through the exercise of a right of set-off,
banker's lien, counterclaim or otherwise (including, but not limited to,
pursuant to the Bankruptcy Code) in excess of its pro rata share as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a participation in such Loans and other obligations, in such amounts and
with such other adjustments from time to time, as shall be equitable in order
that all Lenders share such payment in accordance with their respective ratable
shares as provided for in this Credit Agreement. Each Lender further agrees that
if a payment to a Lender (which is obtained by such Lender through the exercise
of a right of set-off, banker's lien, counterclaim or otherwise) shall be
rescinded or must otherwise be restored, each Lender which shall have shared the
benefit of such payment shall, by repurchase of a participation theretofore
sold, return its share of that benefit to each Lender whose payment shall have
been rescinded or otherwise restored. The Borrower agrees that any Lender so
purchasing such a participation may, to the fullest extent permitted by law,
exercise all rights of payment, including set-off, banker's lien or
counterclaim, with respect to such participation as fully as if such Lender were
a holder of such Loan or other obligation in the amount of such participation.
Except as otherwise expressly provided in this Credit Agreement, if any Lender
shall fail to remit to the Agent or any other Lender an amount payable by such
Lender to the Agent or such other Lender pursuant to this Credit Agreement on
the date when such amount is due, such payments shall accrue interest thereon,
for each day from the date such amount is due until the day such amount is paid
to the Agent or such other Lender, at a rate per annum equal to the Federal
Funds Rate. If under any applicable bankruptcy, insolvency or other similar law,
any Lender receives a secured claim in lieu of a setoff to which this Section
3.8 applies, such Lender shall, to the extent practicable, exercise its rights
in respect of such secured claim in a manner consistent with the rights of the
Lenders under this Section 3.8 to share in the benefits of any recovery on such
secured claim.

        3.9 Evidence of Debt.

        (a) Each Lender shall maintain an account or accounts
evidencing each Loan made by such Lender to the Borrower from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time under this Credit Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.

        (b) The Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and subaccounts
(taken together) shall be recorded (i) the amount, type and Interest Period of
each such Loan hereunder, (ii) the amount of any principal or interest due and
payable or to become due and payable to each Lender hereunder and (iii) the
amount of any sum received by the Agent hereunder from or for the account of the
Borrower and each Lender's share thereof. The Agent will make reasonable efforts
to maintain the accuracy of the subaccounts referred to in the preceding
sentence and to promptly update such subaccounts from time to time, as
necessary.

 

27

<PAGE>

 

        (c) The entries made in the accounts, Register and
subaccounts maintained pursuant to subsection (b) of this Section 3.9 (and, if
consistent with the entries of the Agent, subsection (a)) shall be prima facie
evidence of the existence and amounts of the obligations of the Borrower therein
recorded; provided, however, that the failure of any Lender or the
Agent to maintain any such account, such Register or such subaccount, as
applicable, or any error therein, shall not in any manner affect the obligation
of the Borrower to repay the Loans made by such Lender in accordance with the
terms hereof.


    Section 4. ADDITIONAL PROVISIONS REGARDING LOANS

        4.1 Eurodollar Loan Provisions.

        (a) Unavailability. In the event that the Agent shall
have determined in good faith (i) that U.S. dollar deposits in the principal
amounts requested with respect to a Eurodollar Loan are not generally available
in the London interbank Eurodollar market or (ii) that reasonable means do not
exist for ascertaining the Eurodollar Rate, the Agent shall, as soon as
practicable thereafter, give notice of such determination to the Borrower and
the Lenders. In the event of any such determination under clauses (i) or (ii)
above, until the Agent shall have advised the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (A) any request by the
Borrower for Eurodollar Loans shall be deemed to be a request for Base Rate
Loans, (B) any request by the Borrower for conversion into or continuation of
Eurodollar Loans shall be deemed to be a request for conversion into or
continuation of Base Rate Loans and (C) any Loans that were to be converted or
continued as Eurodollar Loans on the first day of an Interest Period shall be
converted to or continued as Base Rate Loans.

        (b) Change in Legality. Notwithstanding any other
provision herein, if any change, after the date hereof, in any law or regulation
(including the introduction of any new law or regulation) or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof 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 Agent, such Lender may:


            (A) declare that Eurodollar Loans, and conversions to or
    continuations of Eurodollar Loans, will not thereafter be made by such
    Lender hereunder, whereupon any request by the Borrower for, or for
    conversion into or continuation of, Eurodollar Loans shall, as to such
    Lender only, be deemed a request for, or for conversion into or continuation
    of, Base Rate Loans, unless such declaration shall be subsequently
    withdrawn; and

            (B) require that all outstanding Eurodollar Loans made by
    it be converted to Base Rate Loans in which event all such Eurodollar Loans
    shall be automatically converted to Base Rate Loans.



        In the event any Lender shall exercise its rights under
clause (A) or (B) above, all payments and prepayments of principal which would
otherwise have been applied to repay the Eurodollar Loans that would have been
made by such Lender or the converted Eurodollar Loans 

 

28

<PAGE>

 

 of such Lender shall
instead be applied to repay the Base Rate Loans made by such Lenders in lieu of,
or resulting from the conversion of, such Eurodollar Loans.

        (c) Requirements of Law. If at any time a Lender shall
incur increased costs or reductions in the amounts received or receivable
hereunder with respect to the making, the commitment to make or the maintaining
of any Eurodollar Loan because of (i) any change, after the date hereof, in any
applicable law, governmental rule, regulation, guideline or order (or in the
interpretation or administration thereof and including the introduction of any
new law or governmental rule, regulation, guideline or such order) including,
without limitation, the imposition, modification or deemed applicability of any
reserves, deposits or similar requirements (such as, for example, but not
limited to, a change in official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the extent included in the
computation of the Adjusted Eurodollar Rate) or (ii) other circumstances
affecting the London interbank Eurodollar market; then the Borrower shall pay to
such Lender promptly upon written demand therefore, accompanied by a statement
in reasonable detail showing the calculation of the amount demanded, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender may determine in its
reasonable discretion) as may be required to compensate such Lender for such
increased costs or reductions in amounts receivable hereunder. Each
determination and calculation made by a Lender under this Section 4.1 shall,
absent manifest error, be binding and conclusive on the parties hereto. Any
conversions of Eurodollar Loans made pursuant to this Section 4.1 shall subject
the Borrower to the payments required by Section 4.3. This Section shall survive
termination of this Credit Agreement and the other Credit Documents and payment
of the Loans and all other amounts payable hereunder.

        Failure or delay on the part of any Lender to demand
compensation pursuant to this Section 4.1 shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Borrower
shall not be required to compensate such Lender pursuant to this Section for any
increased costs or reductions incurred more than 90 days prior to the date that
such Lender notifies the Borrower of the change in or in the interpretation of
law or regulation giving rise to such increased costs or reductions and of such
Lender's intention to claim compensation therefor; provided further
that, if the change in or in the interpretation of law or regulation giving rise
to such increased costs or reductions is retroactive, then the 90-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

        4.2 Capital Adequacy.

        If any Lender has determined that the adoption or
effectiveness, after the date hereof, of any applicable law, rule or regulation
regarding capital adequacy, or any change therein (after the date hereof), or
any change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Lender (or its parent corporation)
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Lender's (or
parent corporation's) capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender (or its parent
corporation) could have achieved but for such adoption, effectiveness, change or
compliance 

 

29

<PAGE>

 

 (taking into consideration such Lender's (or parent corporation's)
policies with respect to capital adequacy), then, upon notice from such Lender,
accompanied by a statement in reasonable detail showing the calculation of the
amount demanded, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction. Each determination by
any such Lender of amounts owing under this Section 4.2 shall, absent manifest
error, be conclusive and binding on the parties hereto. This Section shall
survive termination of this Credit Agreement and the other Credit Documents and
payment of the Loans and all other amounts payable hereunder.

        Failure or delay on the part of any Lender to demand
compensation pursuant to this Section 4.2 shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Borrower
shall not be required to compensate such Lender pursuant to this Section for any
increased costs or reductions incurred more than 90 days prior to the date that
such Lender notifies the Borrower of the change in or in the interpretation of
law or regulation giving rise to such increased costs or reductions and of such
Lender's intention to claim compensation therefor; provided further
that, if the change in or in the interpretation of law or regulation giving rise
to such increased costs or reductions is retroactive, then the 90-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

        4.3 Compensation.

        The Borrower promises to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this Credit
Agreement, (b) default by the Borrower in making any prepayment of a Eurodollar
Loan after the Borrower has given a notice thereof in accordance with the
provisions of this Credit Agreement, (c) the making of a prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto and (d) the payment, continuation or conversion of a Eurodollar
Loan on a day which is not the last day of the Interest Period applicable
thereto or the failure to repay a Eurodollar Loan when required by the terms of
this Credit Agreement. Such indemnification may include an amount equal to (i)
an amount of interest calculated at the Eurodollar Rate which would have accrued
on the amount in question, for the period from the date of such prepayment or of
such failure to borrow, convert, continue or repay to the last day of the
applicable Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein minus (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurocurrency market. The agreements in this Section shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.

        4.4 Taxes.

        (a) Except as provided below in this Section 4.4, all
payments made by the Borrower under this Credit Agreement and any Notes shall be
made free and clear of, and 

 

30

<PAGE>

 

 without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any court, or governmental body, agency or
other official, excluding taxes measured by or imposed upon the net income of
any Lender or its applicable lending office, or any branch or affiliate thereof,
and all franchise taxes, branch taxes, taxes on doing business or taxes on the
capital or net worth of any Lender or its applicable lending office, or any
branch or affiliate thereof, in each case imposed in lieu of net income taxes: (i)
by the jurisdiction under the laws of which such Lender, applicable lending
office, branch or affiliate is organized or is located, or in which its
principal executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof or (ii) by reason
of any connection between the jurisdiction imposing such tax and such Lender,
applicable lending office, branch or affiliate other than a connection arising
solely from such Lender having executed, delivered or performed its obligations,
or received payment under or enforced, this Credit Agreement or any Notes. If
any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to an Agent or any Lender hereunder or under
any Notes, (A) the amounts so payable to the Agent or such Lender shall be
increased to the extent necessary to yield to the Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Credit Agreement and
any Notes, provided, however, that the Borrower shall be entitled
to deduct and withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this Section 4.4 whenever any
Non-Excluded Taxes are payable by the Borrower, and (B) as promptly as possible
after requested, the Borrower shall send to the Agent for its own account or for
the account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes of which it has notice when due to
the appropriate taxing authority or fails to remit to the Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Agent and any Lender for any incremental Non Excluded Taxes, interest or
penalties that may become payable by the Agent or any Lender as a result of any
such failure. The agreements in this Section 4.4 shall survive the termination
of this Credit Agreement and the payment of the Loans and all other amounts
payable hereunder.

        (b) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof shall:


  
    (A) on or before the date of any payment by the Borrower
    under this Credit Agreement or the Notes to such Lender, deliver to the
    Borrower and the Agent (x) two duly completed copies of United States
    Internal Revenue Service Form W-8ECI or W-8BEN, or successor applicable
    form, as the case may be, certifying that it is entitled to receive payments
    under this Credit Agreement and any Notes without deduction or withholding
    of any United States federal income taxes and (y) an Internal Revenue
    Service Form W-8 or W-9, or successor applicable form, as the case may be,
    certifying that it is entitled to an exemption from United States backup
    withholding tax;

  



 

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<PAGE>

 

     


  
    (B) deliver to the Borrower and the Agent two further
    copies of any such form or certification on or before the date that any such
    form or certification expires or becomes obsolete and after the occurrence
    of any event requiring a change in the most recent form previously delivered
    by it to the Borrower; and

    (C) obtain such extensions of time for filing and
    complete such forms or certifications as may reasonably be requested by the
    Borrower or the Agent; or

    
        (ii) in the case of any such Lender that is not a
        "bank" within the meaning of Section 881(c)(3)(A) of the
        Internal Revenue Code, (A) represent to the Borrower (for the benefit of
        the Borrower and the Agent) that it is not a bank within the meaning of
        Section 88l(c)(3)(A) of the Internal Revenue Code, (B) agree to furnish
        to the Borrower, on or before the date of any payment by the Borrower,
        with a copy to the Agent, two accurate and complete original signed
        copies of Internal Revenue Service Form W-8, or successor applicable
        form certifying to such Lender's legal entitlement at the date of such
        certificate to an exemption from U.S. withholding tax under the
        provisions of Section 881(c) of the Internal Revenue Code with respect
        to payments to be made under this Credit Agreement and any Notes (and to
        deliver to the Borrower and the Agent two further copies of such form on
        or before the date it expires or becomes obsolete and after the
        occurrence of any event requiring a change in the most recently provided
        form and, if necessary, obtain any extensions of time reasonably
        requested by the Borrower or the Agent for filing and completing such
        forms), and (C) agree, to the extent legally entitled to do so, upon
        reasonable request by the Borrower, to provide to the Borrower (for the
        benefit of the Borrower and the Agent) such other forms as may be
        reasonably required in order to establish the legal entitlement of such
        Lender to an exemption from withholding with respect to payments under
        this Credit Agreement and any Notes.

    

  



        Notwithstanding the above, if any change in treaty, law or
regulation has occurred after the date such Person becomes a Lender hereunder
which renders all such forms inapplicable or which would prevent such Lender
from duly completing and delivering any such form with respect to it and such
Lender so advises the Borrower and the Agent, then such Lender shall be exempt
from such requirements. Each Person that shall become a Lender or a participant
of a Lender pursuant to Section 11.3 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms, certifications and
statements required pursuant to this subsection (b); provided that in the case
of a participant of a Lender, the obligations of such participant of a Lender
pursuant to this subsection (b) shall be determined as if the participant of a
Lender were a Lender except that such participant of a Lender shall furnish all
such required forms, certifications and statements to the Lender from which the
related participation shall have been purchased.

        4.5 Replacement of Lenders.

        The Agent and each Lender shall use reasonable efforts to
avoid or mitigate any increased cost or suspension of the availability of an
interest rate under Sections 4.1 through 4.4 above to the greatest extent
practicable (including transferring the Loans to another lending 

 

32

<PAGE>

 

 office of
Affiliate of a Lender) unless, in the opinion of the Agent or such Lender, such
efforts would be likely to have an adverse effect upon it. In the event a Lender
makes a request to the Borrower for additional payments in accordance with
Section 4.1, 4.2 or 4.4, then, provided that no Default or Event of Default has
occurred and is continuing at such time, the Borrower may, at its own expense
(such expense to include any transfer fee payable to the Agent under Section
11.3(b) and any expense pursuant to Section 4) and in its sole discretion,
require such Lender to transfer and assign in whole (but not in part), without
recourse (in accordance with and subject to the terms and conditions of Section
11.3(b)), all of its interests, rights and obligations under this Credit
Agreement to an Eligible Assignee which shall assume such assigned obligations
(which assignee may be another Lender, if a Lender accepts such assignment);
provided that (a) such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority and (b) the
Borrower or such assignee shall have paid to the assigning Lender in immediately
available funds the principal of and interest accrued to the date of such
payment on the portion of the Loans hereunder held by such assigning Lender and
all other amounts owed to such assigning Lender hereunder, including amounts
owed pursuant to Sections 4.1 through 4.4.


    Section 5. CONDITIONS PRECEDENT

        5.1 Closing Conditions.

        The obligation of the Lenders to enter into this Credit
Agreement and make the initial Extension of Credit is subject to satisfaction
(or waiver) of the following conditions:

        (a) Executed Credit Documents. Receipt by the Agent of
duly executed copies of (i) this Credit Agreement, (ii) the Notes and (iii) all
other Credit Documents, each in form and substance acceptable to the Lenders.

        (b) Corporate Documents. Receipt by the Agent of the
following:


  
        (i) Charter Documents. Copies of the articles
        of incorporation or other charter documents of the Borrower certified to
        be true and complete as of a recent date by the appropriate Governmental
        Authority of the state or other jurisdiction of its incorporation and
        certified by a secretary or assistant secretary of the Borrower to be
        true and correct as of the Closing Date, together with any other
        information required by Section 326 of the USA Patriot Act of 2001, 31
        U.S.C. Section 5318, or necessary for the Agent or any Lender to verify
        the identity of Borrower as required by Section 326 of such Act.

        (ii) Bylaws. A copy of the bylaws of the
        Borrower certified by a secretary or assistant secretary of the Borrower
        to be true and correct as of the Closing Date.

        (iii) Resolutions. Copies of resolutions of
        the Board of Directors of the Borrower approving and adopting the Credit
        Documents to which it is a party, the transactions contemplated therein
        and authorizing execution and delivery thereof, certified by a secretary
        or assistant secretary of the Borrower to be true and correct and in
        force and effect as of the Closing Date.

 

  

  33



<PAGE>


  
 

        (iv) Good Standing. Copies of (A) certificates
        of good standing, existence or its equivalent with respect to the
        Borrower certified as of a recent date by the appropriate Governmental
        Authorities of the state or other jurisdiction of incorporation and each
        other jurisdiction in which the failure to so qualify and be in good
        standing would have a Material Adverse Effect and (B) to the extent
        available, a certificate indicating payment of all corporate franchise
        taxes certified as of a recent date by the appropriate Governmental
        Authorities of the state or other jurisdiction of incorporation and each
        other jurisdiction in which the failure to pay such franchise taxes
        would have a Material Adverse Effect.

        (v) Incumbency. An incumbency certificate of
        the Borrower certified by a secretary or assistant secretary of the
        Borrower to be true and correct as of the Closing Date.

  



        (c) Opinion of Counsel. Receipt by the Agent of an
opinion, or opinions, from legal counsel to the Borrower addressed to the Agent
and the Lenders and dated as of the Effective Date, in each case satisfactory in
form and substance to the Agent.

        (d) Financial Statements. Receipt by the Lenders of
the audited financial statements of the Borrower and its consolidated
subsidiaries, for the fiscal years ended December 31, 2003 and 2004, including
balance sheets and income and cash flow statements, in each case audited by
Deloitte & Touche and prepared in accordance with GAAP.

        (e) Fees and Expenses. Payment by the Borrower of all
fees and expenses owed by it to the Lenders and the Agent, including, without
limitation, payment to the Agent of the fees set forth in the Fee Letter.

        (f) Litigation. Except as disclosed in the Borrower's
Annual Report on its Form 10-K for the year ended December 31, 2004 and in
subsequent filings under the Securities Exchange Act of 1934 made prior to the
Closing Date, there shall not exist any action, suit or investigation, nor shall
any action, suit or investigation be pending or threatened before any arbitrator
or Governmental Authority that materially adversely affects the Borrower or any
transaction contemplated hereby or on the ability of the Borrower to perform its
obligations under the Credit Documents.

        (g) Material Adverse Effect. No event or condition
shall have occurred since the date of the financial statements delivered
pursuant to Section 5.1(d) above that has had or would have a Material Adverse
Effect.

        (h) Officer's Certificates. The Agent shall have
received a certificate or certificates executed by the chief financial officer,
treasurer, secretary or assistant treasurer of the Borrower as of the Closing
Date stating that (i) the Borrower is in compliance with all existing material
financial obligations, (ii) no action, suit, investigation or proceeding is
pending or, to his knowledge, threatened in any court or before any arbitrator
or governmental instrumentality that purports to affect the Borrower or any
transaction contemplated by the Credit Documents, if such action, suit,
investigation or proceeding would have or would be reasonably likely to have a
Material Adverse Effect and (iii) immediately after giving effect to this Credit
Agreement, the 

 

34

<PAGE>

 

 other Credit Documents and all the transactions contemplated
therein to occur on such date, (A) no Default or Event of Default exists, (B)
all representations and warranties contained herein and in the other Credit
Documents, are true and correct in all material respects on and as of the date
made and (C) the Borrower is in compliance with the financial covenant set forth
in Section 7.2.

        (i) 2004 Credit Agreement. The 2004 Credit Agreement
shall be terminated prior to or contemporaneously with the making of the initial
Loans under this Credit Agreement and all loans and other obligations
outstanding under the 2004 Credit Agreement shall be paid in full prior to or
contemporaneously with the making of the initial Loans under this Credit
Agreement. Each of the Lenders that is a party to the above described credit
agreement, by execution hereof, hereby waives the requirement of five business
days' notice to the termination of the commitments thereunder.

        (j) Bilateral Credit Agreement. The 364-Day Credit
Agreement dated as of December 10, 2004 between the Borrower and Citibank, N.A.
shall be terminated prior to or contemporaneously with the making of the initial
Loans under this Credit Agreement and all loans and other obligations
outstanding under the said credit agreement shall be paid in full prior to or
contemporaneously with the making of the initial Loans under this Credit
Agreement. By execution hereof, Citibank, N.A. hereby waives the requirement of
any prior notice to the termination of the commitments under such 364-Day Credit
Agreement.

        (k) Other. Receipt by the Lenders of such other
documents, instruments, agreements or information as reasonably requested by any
Lender.

        5.2 Conditions to Each Extension of Credit.

        In addition to the conditions precedent stated elsewhere
herein, (excluding after the Closing Date those contained in Sections 5.1(f) and
5.1(g) hereof), the Lenders shall not be obligated to make any new Extension of
Credit unless:

        (a) Request. The Borrower shall have timely delivered,
(i) in the case of any new Revolving Loan, a duly executed and completed Notice
of Borrowing in conformance with all the terms and conditions of this Credit
Agreement and (ii) in the case of any Letter of Credit, the necessary
application and any other LOC Documents required by the Agent.

        (b) Representations and Warranties. The
representations and warranties made by the Borrower herein (excluding after the
Closing Date those contained in Sections 6.7 and 6.10) are true and correct in
all material respects at and as if made as of the date of the making of the
Extension of Credit.

        (c) No Default. No Default or Event of Default shall
exist or be continuing either prior to or after giving effect thereto.

        (d) Availability. Immediately after giving effect to
the making of an Extension of Credit (and the application of the proceeds
thereof), the sum of the Loans and Letter of Credit Obligations outstanding
shall not exceed the Aggregate Commitment.

 

35

<PAGE>

 

The delivery of each Notice of Borrowing and each application
for a Letter of Credit shall constitute a representation and warranty by the
Borrower of the correctness of the matters specified in subsections (b), (c) and
(d) above.


    Section 6. REPRESENTATIONS AND WARRANTIES


        The Borrower hereby represents and warrants to each Lender
that:
        6.1 Organization and Good Standing; Assets.

        (a) The Borrower and each of its Principal Subsidiaries (i)
is a corporation or limited liability company validly existing and in good
standing (or equivalent status) under its jurisdiction of organization, (ii) is
duly qualified and in good standing as a foreign corporation or limited
liability company authorized to do business in every jurisdiction where the
failure to so qualify would have a Material Adverse Effect and (iii) has the
requisite corporate or limited liability company power and authority to own its
properties and to carry on its business as now conducted and as proposed to be
conducted.

        (b) The Borrower and each of its Principal Subsidiaries has
good and marketable title (or, in the case of personal property, valid title) or
valid leasehold interests in its assets, except for (i) minor defects in title
that do not materially interfere with the ability of the Borrower or the
relevant Principal Subsidiary to conduct its business as now conducted and (ii)
other defects that, either individually or in the aggregate, do not materially
adversely affect the financial condition, properties or operations of the
Borrower or the relevant Principal Subsidiary. All such assets and properties
are free and clear of any Lien, other than Liens permitted under Section 8.6
hereof.

        (c) The Borrower's Principal Subsidiaries and other
Subsidiaries as of the Closing Date are set forth on Schedule 6.1(c)
hereto. All outstanding shares of capital stock having ordinary voting power for
the election of directors of each of the Borrower's Principal Subsidiaries have
been validly issued, are fully paid and nonassessable (except as provided by
Wisconsin Statutes section 180.0622, as judicially interpreted) and, in the case
of each of the Principal Subsidiaries, are owned beneficially by the Borrower or
another Subsidiary, free and clear of any Lien.

        6.2 Due Authorization.

        The Borrower (a) has the requisite corporate power and
authority to execute, deliver and perform this Credit Agreement and the other
Credit Documents and to incur the obligations herein and therein provided for
and (b) is duly authorized to, and has been authorized by all necessary
corporate action to, execute, deliver and perform this Credit Agreement and the
other Credit Documents.

        6.3 No Conflicts.

        Neither the execution and delivery of the Credit Documents,
nor the consummation of the transactions contemplated therein, nor performance
of and compliance with the terms and provisions thereof by the Borrower will (a)
violate or conflict with any provision 

 

36

<PAGE>

 

 of its organizational documents or
bylaws, (b) violate, contravene or materially conflict with any law (including
without limitation, the Public Utility Holding Company Act of 1935, as amended),
regulation (including without limitation, Regulation U, Regulation X and any
regulation promulgated by the Federal Energy Regulatory Commission), order,
writ, judgment, injunction, decree or permit applicable to it, (c) violate,
contravene or materially conflict with contractual provisions of, or cause an
event of default under, any indenture, loan agreement, mortgage, deed of trust,
contract or other agreement or instrument to which it is a party or by which it
may be bound, the violation of which would have a Material Adverse Effect or (d)
result in or require the creation of any Lien upon or with respect to its
properties.

        6.4 Consents.

        No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority
(including, without limitation, the Public Service Commission of Wisconsin
pursuant to Chapter 201 of the Wisconsin Statutes) or third party is required in
connection with the execution, delivery or performance of this Credit Agreement
or any of the other Credit Documents that has not been obtained.

        6.5 Enforceable Obligations.

        This Credit Agreement and the other Credit Documents have
been duly executed and delivered and constitute legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their respective terms, except as may be limited by bankruptcy or insolvency
laws or similar laws affecting creditors' rights generally or by general
equitable principles.

        6.6 Financial Condition.

        (a) The financial statements delivered to the Lenders
pursuant to Section 5.1(d) and pursuant to Sections 7.1(a) and (b): (i) have
been prepared in accordance with GAAP (subject to the provisions of Section 1.3
and subject to, in the case of the interim financial statements, year end
adjustments and the absence of footnotes) and (ii) present fairly the financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries as of such date and for such periods.

        (b) Since December 31, 2004, there has been no sale, transfer
or other disposition by the Borrower or any of its Principal Subsidiaries of any
material part of the business or property of the Borrower and its Principal
Subsidiaries, other than sales of inventory during the course of business, and
no purchase or other acquisition by the Borrower and its Principal Subsidiaries
of any business or property (including any capital stock of any other Person)
material in relation to the financial condition of the Borrower and its
Principal Subsidiaries, in each case, which, is not (i) reflected in the most
recent financial statements delivered to the Lenders pursuant to Section 7.1 or
in the notes thereto, (ii) permitted by the terms of this Credit Agreement or
(iii) disclosed to the Lenders prior to the date hereof.

        6.7 No Material Change.

 

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        Since December 31, 2004, there has been no development or
event relating to or affecting the Borrower and its Principal Subsidiaries which
has had or would be reasonably likely to have a Material Adverse Effect.

        6.8 No Default.

        Neither the Borrower nor any Principal Subsidiary is in
default in any respect under any contract, lease, loan agreement, indenture,
mortgage, security agreement or other agreement or obligation to which it is a
party or by which any of its properties is bound which default would have or
would be reasonably likely to have a Material Adverse Effect. No Default or
Event of Default presently exists and is continuing.

        6.9 Indebtedness.

        As of December 31, 2004, the Borrower and its Subsidiaries
have no Indebtedness except as disclosed in the financial statements referenced
in Section 5.1(d) and to the extent required to be disclosed by GAAP.

        6.10 Litigation.

        Except as disclosed to the Lenders in writing prior to the
Closing Date, there are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of the Borrower,
overtly threatened against the Borrower which has had or would be reasonably
likely to have a Material Adverse Effect.

        6.11 Taxes.

        The Borrower and each of its Principal Subsidiaries has
filed, or caused to be filed, all material tax returns (federal, state, local
and foreign) required to be filed and paid all amounts of taxes shown thereon to
be due (including interest and penalties) and has paid all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes which are not yet delinquent or that are being contested in good faith and
by proper proceedings, and against which adequate reserves are being maintained
in accordance with GAAP. As of the date of this Agreement, the Borrower is not
aware of any proposed tax assessments against it which have had or would be
reasonably likely to have a Material Adverse Effect.

        6.12 Compliance with Law.

        The Borrower and each of its Principal Subsidiaries is in
compliance with all laws, rules, regulations, orders and decrees applicable to
it or to its properties, the failure to comply with which has had or would be
reasonably likely to have a Material Adverse Effect.

        6.13 ERISA.

        Except as would not result or be reasonably likely to result
in a Material Adverse Effect:

 

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        (a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no Termination Event has
occurred, and, to the best knowledge of the Borrower, no event or condition has
occurred or exists as a result of which any Termination Event would be
reasonably likely to occur, with respect to any Plan; (ii) no "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and
Section 412 of the Code, whether or not waived, has occurred with respect to any
Plan; (iii) each Plan has been maintained, operated, and funded in compliance
with its own terms and in material compliance with the provisions of ERISA, the
Code, and any other applicable federal or state laws; and (iv) no Lien in favor
or the PBGC or a Plan has arisen or is reasonably likely to arise on account of
any Plan.

        (b) No liability has been or is reasonably expected by the
Borrower to be incurred under Sections 4062, 4063 or 4064 of ERISA with respect
to any Single Employer Plan by the Borrower or any of its Subsidiaries.

        (c) Except as disclosed in the Borrower's financial
statements in accordance with FASB 87, the accumulated benefit obligation under
each Single Employer Plan (determined utilizing the actuarial assumptions used
for purposes of FASB 87), did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the current
value of the assets of such Plan allocable to such obligation.

        (d) Neither the Borrower nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Borrower, is reasonably likely to
incur, any withdrawal liability under ERISA to any Multiemployer Plan or
Multiple Employer Plan. Neither the Borrower nor any ERISA Affiliate has
received any notification that any Multiemployer Plan is in reorganization
(within the meaning of Section 4241 of ERISA), is insolvent (within the meaning
of Section 4245 of ERISA), or has been terminated (within the meaning of Title
IV of ERISA), and no Multiemployer Plan is, to the best knowledge of the
Borrower, reasonably likely to be in reorganization, insolvent, or terminated.

        (e) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or would be reasonably
likely to subject the Borrower or any ERISA Affiliate to any liability under
Sections 406, 409, 502(i), or 502(1) of ERISA or Section 4975 of the Code, or
under any agreement or other instrument pursuant to which the Borrower or any
ERISA Affiliate has agreed or is required to indemnify any person against any
such liability.

        (f) The present value (determined using actuarial and other
assumptions which are reasonable with respect to the benefits provided and the
employees participating) of the liability of the Borrower and each ERISA
Affiliate for post-retirement welfare benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA), net of all assets under all such Plans allocable to such
benefits, are reflected on the financial statements referenced in Section 7.1 in
accordance with FASB 106.

 

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<PAGE>

 

        (g) Each Plan which is a welfare plan (as defined in Section
3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code
apply has been administered in compliance in all material respects with such
sections.

        6.14 Use of Proceeds; Margin Stock.

        The proceeds of the Loans hereunder will be used solely for
the purposes specified in Section 7.9. None of such proceeds will be used (a) in
violation of Regulation U or Regulation X (i) for the purpose of purchasing or
carrying any "margin stock" as defined in Regulation U or Regulation X
or (ii) for the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry "margin stock" or (b) for the
acquisition of another Person unless the board of directors (or other comparable
governing body) or stockholders, as appropriate, of such Person has approved
such acquisition.

        6.15 Government Regulation.

        (a) As of the Closing Date, the Borrower is not required to
register as a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

        (b) The Borrower is not an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, or controlled by such a company.

        6.16 Disclosure.

        Neither this Credit Agreement nor any financial statements
delivered to the Lenders nor any other document, certificate or statement
furnished to the Lenders by or on behalf of the Borrower in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein, taken as a whole, not misleading on the date when
made.


    Section 7. AFFIRMATIVE COVENANTS


        The Borrower hereby covenants and agrees that so long as this
Credit Agreement is in effect and until all Borrower Obligations have been paid
in full and the Revolving Loan Commitments hereunder shall have terminated:

        7.1 Information Covenants.

        The Borrower will furnish, or cause to be furnished, to the
Agent:

        (a) Annual Financial Statements. As soon as available,
and in any event within 120 days after the close of each fiscal year of the
Borrower, a consolidated balance sheet and income statement of the Borrower and
its Subsidiaries, as of the end of such fiscal year, together with a common
stock equity statement which includes retained earnings and a consolidated
statement of cash flows for such fiscal year, setting forth in comparative form
figures for the preceding fiscal year, all such financial information described
above to be in reasonable form and detail and audited by independent certified
public accountants of recognized national 

 

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 standing reasonably acceptable to the
Agent and whose opinion shall be to the effect that such financial statements
have been prepared in accordance with GAAP (except for changes with which such
accountants concur) and shall not be limited as to the scope of the audit or
qualified in any respect. The Lenders agree that delivery of the Borrower's Form
10 K will meet the financial information requirements of this Section 7.1(a).

        (b) Quarterly Financial Statements. As soon as
available, and in any event within 60 days after the close of each fiscal
quarter of the Borrower (other than the fourth fiscal quarter) a consolidated
balance sheet and income statement of the Borrower and its Subsidiaries, as of
the end of such fiscal quarter, together with a related consolidated statement
of cash flows for such fiscal quarter in each case setting forth in comparative
form figures for the corresponding period of the preceding fiscal year, all such
financial information described above to be in reasonable form and detail and
reasonably acceptable to the Agent, and accompanied by the review letter
required to be filed with the Borrower's quarterly reports on Form 10-Q pursuant
to Section 10-01(d) of Regulation S-X, if any, and a certificate of the chief
financial officer, treasurer, secretary or assistant treasurer of the Borrower
to the effect that such quarterly financial statements fairly present in all
material respects the financial condition of the Borrower and its Subsidiaries
and have been prepared in accordance with GAAP, subject to changes resulting
from audit and normal year-end audit adjustments and the absence of footnotes.
The Lenders agree that the delivery of the Borrower's Form 10-Q will meet the
financial information requirements of this Section 7.1(b).

        (c) Officer's Certificate. At the time of delivery of
the financial statements provided for in Sections 7.1(a) and 7.1(b) above, a
certificate of the chief financial officer, treasurer, secretary or assistant
treasurer of the Borrower, substantially in the form of Exhibit 7.1(c), (i)
demonstrating compliance with the financial covenant contained in Section 7.2 by
calculation thereof as of the end of each such fiscal period, (ii) stating that
no Default or Event of Default exists, or if any Default or Event of Default
does exist, specifying the nature and extent thereof and what action the
Borrower proposes to take with respect thereto and (iii) confirming the then
existing Public Debt Ratings of the Borrower.

        (d) Notices. Upon the Borrower obtaining knowledge
thereof, the Borrower will give written notice to the Agent immediately of (i)
the occurrence of an event or condition consisting of a Default or Event of
Default, specifying the nature and existence thereof and what action the
Borrower proposes to take with respect thereto, and (ii) the occurrence of any
of the following with respect to the Borrower or any of its Principal
Subsidiaries: (A) the pendency or commencement of any litigation, arbitral or
governmental proceeding against the Borrower or any of its Principal
Subsidiaries, the claim of which is in excess of $35,000,000 or which, if
adversely determined, would have or be reasonably likely to have a Material
Adverse Effect or (B) the institution of any proceedings against the Borrower or
any of its Principal Subsidiaries with respect to, or the receipt of notice by
such Person of potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation, the violation
of which would be reasonably likely have a Material Adverse Effect.

        (e) ERISA. Upon the Borrower, its Subsidiaries or any
ERISA Affiliate obtaining knowledge thereof, the Borrower will give written
notice to the Agent and each of the Lenders promptly (and in any event within
five Business Days) of: (i) any event or condition, 

 

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 including, but not limited
to, any Reportable Event, that constitutes, or would be reasonably likely to
lead to, a Termination Event that would be reasonably likely to have a Material
Adverse Effect; (ii) with respect to any Multiemployer Plan, the receipt of
notice as prescribed in ERISA or otherwise of any material withdrawal liability
assessed against the Borrower, its Subsidiaries or any of their ERISA
Affiliates, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of ERISA) that
would be reasonably likely to lead to a withdrawal liability that would be
reasonably likely to have a Material Adverse Effect; (iii) the failure to make
full payment on or before the due date (including extensions) thereof of all
amounts which the Borrower or any of its Subsidiaries or ERISA Affiliates is
required to contribute to each Plan pursuant to its terms to meet the minimum
funding standard set forth in ERISA and the Code with respect thereto if such
failure would be reasonably likely to have a Material Adverse Effect; or (iv)
any change in the funding status of any Plan that would be reasonably likely to
have a Material Adverse Effect; together, with a description of any such event
or condition or a copy of any such notice and a statement by an officer of the
Borrower briefly setting forth the details regarding such event, condition, or
notice, and the action, if any, which has been or is being taken or is proposed
to be taken by the Borrower with respect thereto. Promptly upon request, the
Borrower shall furnish the Agent and each of the Lenders with such additional
information concerning any Plan as may be reasonably requested, including, but
not limited to, copies of each annual report/return (Form 5500 series), as well
as all schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to ERISA and
the Code, respectively, for each "plan-year" (within the meaning of
Section 3(39) of ERISA).

        (f) Other Information. With reasonable promptness upon
any such request, such other information regarding the business, properties or
financial condition of the Borrower or any of its Subsidiaries as the Agent or
the Required Lenders may reasonably request.

        Financial reports required to be delivered pursuant to
clauses (a) and (b) above shall be deemed to have been delivered on the date on
which such report is posted on the SEC's website at www.sec.gov, and such
posting shall be deemed to satisfy the financial reporting requirements of
clauses (a) and (b) above, provided that, in each instance the Company shall
provide all other reports and certificates required to be delivered under this
Section 7.1 in the manner set forth in Section 11.1.

        7.2 Financial Covenant.

        The Borrower will maintain a Leverage Ratio as of the last
day of each of its fiscal quarters of not greater than .65 to 1.00.


        7.3 Preservation of Existence and Franchises.


        Except as expressly permitted by Section 8.2 or Section 8.3
below, the Borrower will, and will cause each of its Principal Subsidiaries to,
do all things necessary to preserve and keep in full force and effect its
existence, and material rights, franchises and authority.

        7.4 Books and Records.

 

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<PAGE>

 

        Subject to Section 1.3, the Borrower will, and will cause its
Principal Subsidiaries to, keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of GAAP
(including the establishment and maintenance of appropriate reserves).

        7.5 Compliance with Law.

        The Borrower will, and will cause each of its Principal
Subsidiaries to, comply with all laws, rules, regulations and orders, and all
applicable restrictions imposed by all Governmental Authorities, applicable to
it and its property, if the failure to comply would have or be reasonably likely
to have a Material Adverse Effect.

        7.6 Payment of Taxes and Other Indebtedness.

        The Borrower will, and will cause each of its Principal
Subsidiaries to, pay, settle or discharge (a) all material taxes, assessments
and governmental charges or levies imposed upon it, or upon its income or
profits, or upon any of its properties, before they shall become delinquent and
(b) all lawful claims (including claims for labor, materials and supplies)
which, if unpaid, might give rise to a Lien which is not permitted by Section
8.6 upon any of its properties; provided, however, that neither
the Borrower nor any Principal Subsidiary shall be required to pay any such tax,
assessment, charge, levy, claim or Indebtedness which is being contested in good
faith by appropriate proceedings and as to which adequate reserves therefor have
been established in accordance with GAAP, unless the failure to make any such
payment (i) would give rise to an immediate right to foreclose or collect on a
Lien securing such amounts or (ii) would have or reasonably be likely to have a
Material Adverse Effect.

        7.7 Insurance.

        The Borrower will, and will cause each of its Principal
Subsidiaries to, at all times maintain in full force and effect insurance
(including worker's compensation insurance, liability insurance, casualty
insurance and business interruption insurance) in such amounts, covering such
risks and liabilities and with such deductibles or self-insurance retentions as
are in accordance with normal industry practice; provided, however,
that the Borrower and its Principal Subsidiaries may self-insure to the same
extent as other companies engaged in similar businesses and to the extent
consistent with prudent business practice.

        7.8 Use of Proceeds.

        The proceeds of the Loans may be used solely (a) to repay on
the Closing Date the entire amount of all loans and other obligations
outstanding under the 2004 Credit Agreement, (b) to provide working capital and
(c) for other general corporate purposes; provided that proceeds of the Loans
may not be used to acquire another Person unless the board of directors (or
other comparable body) or shareholders, as appropriate, of such Person has
approved such acquisition.

        7.9 Audits/Inspections.

 

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<PAGE>

 

        Upon reasonable notice and during normal business hours, the
Borrower will, and will cause each of its Principal Subsidiaries to, permit
representatives appointed by the Agent, including, without limitation,
independent accountants, agents, attorneys, and appraisers to visit and inspect
the Borrower's and its Principal Subsidiaries' property, including its books and
records, its accounts receivable and inventory, the Borrower's and its Principal
Subsidiaries' facilities and their other business assets, and to make
photocopies or photographs thereof and to write down and record any information
such representative obtains and shall permit the Agent or its representatives to
investigate and verify the accuracy of information provided to the Lenders and
to discuss all such matters with the officers, employees and representatives of
the Borrower and its Principal Subsidiaries. All information so obtained shall
be subject to the provisions of Section 11.11 below.

        7.10 Restrictive Agreements.

        The Borrower will not, and will not permit any Principal
Subsidiary to, enter into any agreement that restricts the ability of any
Principal Subsidiary to pay dividends or other distributions with respect to any
shares of its capital stock; provided that it is understood and agreed that (a)
the foregoing covenant does not prohibit the Borrower or a Principal Subsidiary
from entering into agreements that contain financial covenants which require the
maintenance of a minimum net worth or compliance with financial ratios without
explicitly addressing the ability to pay dividends or make other distributions
with respect to shares of its capital stock and (b) the foregoing covenant does
not apply to limitations or restrictions imposed by law or in regulatory
proceedings or in the articles of incorporation of Wisconsin Pubic Service
Corporation as in effect on the date hereof or restrictions which arise only if
dividends on preferred stock issued by such Principal Subsidiary have not been
paid.


    Section 8. NEGATIVE COVENANTS


        The Borrower hereby covenants and agrees that so long as this
Credit Agreement is in effect and until all Borrower Obligations have been paid
in full and the Revolving Loan Commitments shall have terminated:

        8.1 Nature of Business.

        The Borrower will not, and will not permit any of its
Principal Subsidiaries to, alter in any material respect the character of the
business of the Borrower and its Principal Subsidiaries, taken as a whole, from
that conducted as of the Closing Date; provided that the foregoing shall
not prevent the disposition of assets, business or operations permitted by
Section 8.3 below so long as the Borrower shall have complied with all other
terms and conditions of this Agreement.

        8.2 Consolidation and Merger.

        The Borrower will not, and will not permit any of its
Principal Subsidiaries to, enter into any transaction of merger or consolidation
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); provided that, a Person may be merged or consolidated with or into
the Borrower or a wholly-owned Subsidiary of the Borrower, so long as (a) if the
Borrower is involved in the transaction, the Borrower shall be the continuing or
surviving 

 

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 corporation, (b) if a Principal Subsidiary is involved, such Principal
Subsidiary or a wholly owned Subsidiary of the Borrower shall be the continuing
or surviving entity; provided that the foregoing shall not prohibit mergers,
consolidations or liquidations of a Principal Subsidiary into the Borrower, and
(c) immediately before and after such merger or consolidation there does not
exist a Default or an Event of Default.

        8.3 Sale or Lease of Assets.

        Other than (a) sales of inventory or other assets acquired
for resale in the ordinary course of business, (b) sales of accounts owed by
customers for energy provided or to be provided outside the normal franchise
service area of Wisconsin Public Service Company and Upper Peninsula Power
Company, (c) sales, transfers or other dispositions of assets between or among
the Borrower and its wholly owned Subsidiaries, (d) sales, transfers or other
dispositions of obsolete or worn-out tools, equipment or other property no
longer used or useful in business and sales of intellectual property determined
to be uneconomical, negligible or obsolete, (e) sales, transfers or other
dispositions of the assets listed on Schedule 8.3, (f) non-exclusive licenses of
intellectual property, and (g) sales, transfers or other dispositions of assets
the proceeds of which are invested in other energy related assets, within any
twelve month period, the Borrower will not, and will not permit its Subsidiaries
to, convey, sell, lease, transfer or otherwise dispose of assets, business or
operations with a book value (net of assumed liabilities associated with the
assets that are the subject of such transaction) in excess of twenty-five
percent (25%) of Total Assets, as calculated as of the end of the most recent
fiscal quarter.

        8.4 Arm's-Length Transactions.

        The Borrower will not, and will not permit any of its
Principal Subsidiaries to, enter into any transaction or series of transactions,
whether or not in the ordinary course of business, with any Affiliate other than
on terms and conditions substantially as favorable to the Borrower or the
Principal Subsidiary as would be obtainable in a comparable arm's-length
transaction with a Person other than an Affiliate, other than (a) transactions
between or among the Borrower and its wholly owned Subsidiaries, (b) customary
fees to non-officer directors of the Borrower and its Subsidiaries and (c)
employment and severance arrangements with officers and employees of the
Borrower in the ordinary course of business.

        8.5 Fiscal Year.

        The Borrower will not, and will not permit any of its
Principal Subsidiaries to, change its fiscal year (a) without prior written
notification to the Lenders and (b) if such change would materially affect the
Lenders' ability to read and interpret the financial statements delivered
pursuant to Section 7.1 or calculate the financial covenant in Section 7.2.

        8.6 Liens.

        The Borrower will not, and will not permit any of its
Principal Subsidiaries to, contract, create, incur, assume or permit to exist
any Lien with respect to any of its property or assets of any kind (whether real
or personal, tangible or intangible), whether now owned or hereafter acquired,
except for (a) Liens securing Borrower Obligations, (b) the Lien of
First Mortgage Indentures or any Liens attaching to the property to which the
Lien of the First 

 

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<PAGE>

 

 Mortgage Indentures attach; provided that such Liens do not
secure Funded Debt (other than Funded Debt secured by the First Mortgage
Indentures), (c) Liens for taxes not yet due or Liens for taxes being
contested in good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which the
property subject to any such Lien is not yet subject to foreclosure, sale or
loss on account thereof), (d) Liens in respect of property imposed by law
arising in the ordinary course of business such as materialmen's, mechanics',
warehousemen's, carrier's, landlords' and other nonconsensual statutory Liens
which are not yet due and payable, which have been in existence less than 90
days or which are being contested in good faith by appropriate proceedings and
for which adequate reserves determined in accordance with GAAP have been
established (and as to which the property subject to any such Lien is not yet
subject to foreclosure, sale or loss on account thereof), (e) pledges or
deposits made in the ordinary course of business to secure payment of worker's
compensation insurance, unemployment insurance, pensions or social security
programs, (f) Liens arising from good faith deposits in connection with or
to secure performance of tenders, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations incurred in
the ordinary course of business (other than obligations in respect of the
payment of borrowed money), (g) Liens arising from good faith deposits in
connection with or to secure performance of statutory obligations and surety and
appeal bonds, (h) easements, rights-of-way (and liens on easements or
rights-of-way or the underlying real estate), restrictions (included zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of the
encumbered property for its intended purposes, (i) judgment Liens that
would not constitute an Event of Default, (j) Liens arising by virtue of
any statutory or common law provision relating to banker's liens, rights of
setoff or similar rights as to deposit accounts or other funds maintained with a
creditor depository institution, (k) any Lien created or arising over any
property which is acquired, constructed or created by the Borrower or any
Principal Subsidiary, but only if (i) such Lien secures only principal amounts
(not exceeding the cost of such acquisition, construction or creation) raised
for the purposes of such acquisition, construction or creation together with any
costs, expenses, interest and fees incurred in relation thereto or a guarantee
given in respect thereof, (ii) such Lien is created or arises on or before 180
days after the completion of such acquisition, construction or creation and
(iii) such Lien is confined solely to the property so acquired, constructed or
created and any improvements thereto and proceeds and products thereof,
(l) any Lien on any property or assets acquired from a Person which is
merged with or into the Borrower or any Principal Subsidiary in accordance with
Section 8.2, and is not created in anticipation of any such transaction,
(m) any Lien on any property or assets existing at the time of acquisition
of such property or assets by the Borrower or any Principal Subsidiary and which
is not created in anticipation of such acquisition, (n) Liens existing on the
Closing Date and described on Schedule 8.6 attached hereto, (o) pledges
or deposits made in the ordinary course of business to secure obligations of the
Borrower or any Principal Subsidiary under interest rate protection agreements,
foreign currency exchange agreements, Permitted Energy Transactions or other
interest or exchange rate hedging arrangements, (p) Liens on cash, cash
collateral, cash deposits or deposit accounts furnished to or for the benefit of
Midwest Independent Transmission System Operator, Inc. ("MISO") or
other transmission providers or energy market administrators to secure the
payment and performance of obligations (i) in connection with the purchase of
electric transmission service from MISO or such other transmission providers or
(ii) related to energy, capacity or ancillary service transactions entered 

 

46

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 into
through markets administered by MISO or such other transmission providers or
energy market administrators, (q) Liens, if any, arising in connection with the
securitization of environmental retrofit receivables, (r) any extension, renewal
or replacement (or successive extensions, renewals or replacements), as a whole
or in part, of any Liens referred to in the foregoing clauses (a) through (q),
for amounts not exceeding the maximum principal amount of the Indebtedness
secured by the Lien so extended, renewed or replaced; provided that such
extension, renewal or replacement Lien is limited to all or a part of the same
property or assets that were covered by the Lien extended, renewed or replaced
(plus improvements on such property or assets), and (s) any other Lien or Liens
which in the aggregate secure Indebtedness or other obligations at any one time
not in excess of an amount equal to 7.5% of Total Assets.


    Section 9. EVENTS OF DEFAULT

        9.1 Events of Default.

        An Event of Default shall exist upon the occurrence of any of
the following specified events (each an "Event of Default"):

        (a) Payment. The Borrower shall: (i) default in the
payment when due of any principal of any of the Loans or Letter of Credit
Obligations; or (ii) default, and such default shall continue for three or more
Business Days, in the payment when due of any interest on the Loans or Letter of
Credit Obligations or of any fees or other amounts owing hereunder, under any of
the other Credit Documents or in connection herewith.

        (b) Representations. Any representation, warranty or
statement made or deemed to be made by the Borrower (or any of its officers or
agents) herein, in any of the other Credit Documents, or in any statement or
certificate delivered or required to be delivered pursuant hereto or thereto
shall prove untrue in any material respect on the date as of which it was deemed
to have been made.

        (c) Covenants. The Borrower shall:


  
        (i) default in the due performance or observance of
        any term, covenant or agreement contained in Sections 7.1(a), 7.1(b),
        7.1(c), 7.1(d), 7.2, 7.3, 7.9, 8.2, 8.3 or 8.6; or

        (ii) default in the due performance or observance by
        it of any term, covenant or agreement (other than those referred to in
        subsections (a), (b) or (c)(i) of this Section 9.1) contained in this
        Credit Agreement or any other Credit Document and such default shall
        continue unremedied for a period of at least 30 days after the earlier
        of the Borrower becoming aware of such default or notice thereof given
        by the Agent.

  



        (d) Credit Documents. Any Credit Document shall fail
to be in full force and effect or the Borrower shall so assert or any Credit
Document shall fail to give the Agent and/or the Lenders the rights, powers and
privileges purported to be created thereby.

 

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<PAGE>

 

        (e) Bankruptcy, etc. The occurrence of any of the
following with respect to the Borrower or any of its Principal Subsidiaries: (i)
a court or governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Borrower or any of its Principal
Subsidiaries in an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or appoint a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Borrower or any of its Principal Subsidiaries or for any substantial part of
its property or ordering the winding up or liquidation of its affairs; or (ii)
an involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect is commenced against the Borrower or any of its
Principal Subsidiaries and such petition remains unstayed and in effect for a
period of 60 consecutive days; or (iii) the Borrower or any of its Principal
Subsidiaries shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent to the
entry of an order for relief in an involuntary case under any such law, or
consent to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of such Person or
any substantial part of its property or make any general assignment for the
benefit of creditors; or (iv) the Borrower or any of its Principal Subsidiaries
shall admit in writing its inability to pay its debts generally as they become
due or any action shall be taken by such Person in furtherance of any of the
aforesaid purposes.

        (f) Defaults Under Other Agreements. With respect to
any Indebtedness in excess of $35,000,000 (other than Indebtedness outstanding
under this Credit Agreement) of the Borrower or any of its Principal
Subsidiaries (i) the Borrower or any of its Principal Subsidiaries shall (A)
default in any payment (beyond the applicable grace period with respect thereto,
if any) with respect to any such Indebtedness, or (B) default (after giving
effect to any applicable grace period) in the observance or performance relating
to such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event or condition shall occur or
condition exist other than non-material defaults under any First Mortgage
Indenture, the effect of which default or other event or condition is to cause,
or permit, the holder of the holders of such Indebtedness (or trustee or agent
on behalf of such holders) to cause (determined without regard to whether any
notice or lapse of time is required) any such Indebtedness to become due prior
to its stated maturity; or (ii) any such Indebtedness shall be declared due and
payable, or required to be prepaid other than by a regularly scheduled required
prepayment prior to the stated maturity thereof; or (iii) any such Indebtedness
shall mature and remain unpaid. The foregoing cross default provision shall not
apply to Indebtedness to the extent recourse to the Borrower is limited to
specific assets in a project financing; i.e., defaults under agreements
governing non-recourse project financing indebtedness are excluded.

        (g) Judgments. One or more judgments, orders, or
decrees shall be entered against the Borrower or any of its Principal
Subsidiaries involving a liability of $35,000,000 or more, in the aggregate (to
the extent not paid or covered by insurance provided by a carrier who has been
notified of, and has not disputed the claim made for payment of, the amount of
such judgment or order), and such judgments, orders or decrees shall continue
unsatisfied, undischarged and unstayed for a period ending on the first to occur
of (i) the last day on which such judgment, order or decree becomes final and
unappealable and, where applicable, with the status of a judicial lien or (ii)
60 days; provided that if such judgment, order or decree provides 

 

48

<PAGE>

 

 for
periodic payments over time then the Borrower shall have a grace period of 30
days with respect to each such periodic payment.

        (h) ERISA. The occurrence of any of the following
events or conditions if any of the same would be reasonably likely to have a
Material Adverse Effect: (A) any "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the Code,
whether or not waived, shall exist with respect to any Plan, or any lien shall
arise on the assets of the Borrower, any of its Subsidiaries or any ERISA
Affiliate in favor of the PBGC or a Plan; (B) a Termination Event shall occur
with respect to a Single Employer Plan, which is, in the reasonable opinion of
the Agent, likely to result in the termination of such Plan for purposes of
Title IV of ERISA; (C) a Termination Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which is, in the reasonable
opinion of the Agent, likely to result in (i) the termination of such Plan for
purposes of Title IV of ERISA, or (ii) the Borrower, any of its Subsidiaries or
any ERISA Affiliate incurring liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or insolvency
(within the meaning of Section 4245 of ERISA) of such Plan; or (D) any
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) or breach of fiduciary responsibility shall occur which would
be reasonably likely to subject the Borrower, any of Subsidiaries or any ERISA
Affiliate to liability under Sections 406, 409, 502(i), or 502(1) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument pursuant to
which the Borrower, any of Subsidiaries or any ERISA Affiliate has agreed or is
required to indemnify any person against any such liability.

        (i) Change of Control. The occurrence of any Change of
Control.

        9.2 Acceleration; Remedies.

        Upon the occurrence and during the continuance of an Event of
Default, the Agent may, and shall, upon the request and direction of the
Required Lenders, by written notice to the Borrower take any of the following
actions without prejudice to the rights of the Agent or any Lender to enforce
its claims against the Borrower, except as otherwise specifically provided for
herein:


  
        (i) Termination of Revolving Loan Commitments.
        Declare the Revolving Loan Commitments terminated whereupon the
        Revolving Loan Commitments shall be immediately terminated.

        (ii) Acceleration of Borrower Obligations.
        Declare the unpaid amount of all Borrower Obligations to be due
        whereupon the same shall be immediately due and payable without
        presentment, demand, protest or other notice of any kind, all of which
        are hereby waived by the Borrower.

        (iii) Cash Collateral. Direct the Borrower to
        pay (and the Borrower agrees that upon receipt of such notice, or upon
        the occurrence of an Event of Default under Section 9.1(e), it will
        immediately pay) to the Agent additional cash, to be held, without
        interest, by the Agent, for the benefit of the Lenders, in a cash
        collateral account as additional security for the Letter of Credit
        Obligations 

 

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<PAGE>


  
 

         in respect of subsequent drawings under all then outstanding
        Letters of Credit in an amount equal to the maximum aggregate amount
        which may be drawn under all Letters of Credits then outstanding.

        (iv) Enforcement of Rights. Enforce any and
        all rights and interests created and existing under the Credit
        Documents, including, without limitation, all rights of set-off.

  



Notwithstanding the foregoing, if an Event of Default
specified in Section 9.1(e) shall occur, then the Revolving Loan Commitments
shall automatically terminate and all Borrower Obligations, all accrued interest
in respect thereof, all accrued and unpaid fees and other indebtedness or
obligations owing to the Lenders and the Agent hereunder shall immediately
become due and payable without the giving of any notice or other action by the
Agent or the Lenders.

        Notwithstanding the fact that enforcement powers reside
primarily with the Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate
"creditor" holding a separate "claim" within the meaning of
Section 101(5) of the Bankruptcy Code or any other insolvency statute.

        9.3 Allocation of Payments After Event of
Default.

        Notwithstanding any other provisions of this Credit
Agreement, after the occurrence and during the continuance of an Event of
Default, all amounts collected or received by the Agent or any Lender on account
of amounts outstanding under any of the Credit Documents shall be paid over or
delivered as follows:


  
        FIRST, to the payment of all reasonable out-of-pocket
        costs and expenses (including without limitation reasonable attorneys'
        fees) of the Agent or-any of the Lenders in connection with enforcing
        the rights of the Lenders under the Credit Documents, pro rata as set
        forth below;

        SECOND, to payment of any fees owed to the Agent or
        any Lender, pro rata as set forth below;

        THIRD, to the payment of all accrued interest payable
        to the Lenders hereunder, pro rata as set forth below;

        FOURTH, to the payment of the outstanding principal
        amount of the Loans and unreimbursed drawings under Letters of Credit,
        and to the payment or cash collateralization of the outstanding Letters
        of Credit Obligations, pro rata as set forth below;

        FIFTH, to all other obligations which shall have
        become due and payable under the Credit Documents and not repaid
        pursuant to clauses "FIRST" through "FOURTH" above;
        and

 

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<PAGE>


  
 

        SIXTH, to the payment of the surplus, if any, to
        whoever may be lawfully entitled to receive such surplus.

  



In carrying out the foregoing, (a) amounts received shall be
applied in the numerical order provided until exhausted prior to application to
the next succeeding category; (b) each of the Lenders shall receive an amount
equal to its pro rata share (based on the proportion that the then outstanding
Loans, and Letter of Credit Obligations held by such Lender bears to the
aggregate then outstanding Loans and Letter of Credit Obligations), of amounts
available to be applied; and (c) to the extent that any amounts available for
distribution pursuant to clause "FOURTH" above are attributable to the
issued but undrawn amount of outstanding Letters of Credit, such amounts shall
be held by the Agent in a cash collateral account and applied (x) first, to
reimburse the Lenders from time to time for any drawings under such Letters of
Credit and (y) then, following the expiration of all Letters of Credit, to all
other obligations of the types described in clauses "FOURTH," and
"FIFTH" above in the manner provided in this Section 9.3.


    Section 10. AGENCY PROVISIONS

        10.1 Appointment.

        Each Lender hereby designates and appoints U.S. Bank National
Association as agent of such Lender to act as specified herein and the other
Credit Documents, and each such Lender hereby authorizes the Agent, as the agent
for such Lender, to take such action on its behalf under the provisions of this
Credit Agreement and the other Credit Documents and to exercise such powers and
perform such duties as are expressly delegated by the terms hereof and of the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere
herein and in the other Credit Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Agent. The provisions of this Section are solely for the benefit of
the Agent and the Lenders and the Borrower shall not have any rights as a third
party beneficiary of the provisions hereof. In performing its functions and
duties under this Credit Agreement and the other Credit Documents, the Agent
shall act solely as agent of the Lenders and does not assume and shall not be
deemed to have assumed any obligation or relationship of agency or trust with or
for the Borrower.

        10.2 Delegation of Duties.

        The Agent may execute any of its duties hereunder or under
the other Credit Documents by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.

        10.3 Exculpatory Provisions.

        Neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit 


  
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 Documents
(except for its or such Person's own gross negligence or willful misconduct), or
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower contained herein or in any of
the other Credit Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection herewith or in connection with the other Credit Documents, or
enforceability or sufficiency therefor of any of the other Credit Documents, or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Credit Agreement, or any of the other Credit Documents or
for any representations, warranties, recitals or statements made herein or
therein or made by the Borrower in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by the Agent to
the Lenders or by or on behalf of the Borrower to the Agent or any Lender or be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained herein or
therein or as to the use of the proceeds of the Loans or of the existence or
possible existence of any Default or Event of Default or to inspect the
properties, books or records of the Borrower. The Agent is not a trustee for the
Lenders and owes no fiduciary duty to the Lenders.

        10.4 Reliance on Communications.

        The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower, independent accountants
and other experts selected by the Agent with reasonable care). The Agent may
deem and treat the Lenders as the owner of its interests hereunder for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Agent in accordance with Section 11.3(b). The
Agent shall be fully justified in failing or refusing to take any action under
this Credit Agreement or under any of the other Credit Documents unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder or under any
of the other Credit Documents in accordance with a request of the Required
Lenders (or to the extent specifically provided in Section 11.6, all the
Lenders) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders (including their successors and
assigns).

        10.5 Notice of Default.

        The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or the Borrower referring to the Credit Document,
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such

 


  
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<PAGE>

 

action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders.

        10.6 Non-Reliance on Agent and Other
Lenders.

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

        10.7 Indemnification.

        Each Lender agrees to indemnify the Agent in its capacity as
such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to its Commitment
Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following the payment in full of the Borrower Obligations) be imposed
on, incurred by or asserted against the Agent in its capacity as such in any way
relating to or arising out of this Credit Agreement or the other Credit
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Agent or from any losses suffered by the Agent solely as a
result of the Borrower's failure to make payments as required pursuant to
Section 3.4(c). If any indemnity furnished to the Agent for any purpose shall,
in the opinion of the Agent, be insufficient or become impaired, the Agent may
call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished. The 

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<PAGE>

 

agreements
in this Section 10.7 shall survive the payment of the Borrower Obligations and
all other amounts payable hereunder and under the other Credit Documents.

        10.8 Agent in Its Individual Capacity.

        The Agent in its individual capacity and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower and its Subsidiaries as though the Agent were not Agent
hereunder. With respect to the Loans made and all Borrower Obligations owing to
it, the Agent in its individual capacity shall have the same rights and powers
under this Credit Agreement as any Lender and may exercise the same as though
they were not Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity.

        10.9 Successor Agent.

        The Agent may, and at the request of the Required Lenders
shall, resign as the Agent upon 30 days notice to the Lenders. If the Agent
resigns under this Credit Agreement, the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders which successor agent shall
be approved by the Borrower. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Lenders and the Borrower, a successor agent from among the
Lenders. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent
and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 10 and Section 11.5 shall inure to its benefit as to
any actions taken or omitted to be taken, by it while it was the Agent under
this Credit Agreement. If no successor agent has accepted appointment as the
Agent by the date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of the Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent with the Borrower's approval, as provided for above; provided that the
Borrower's approval shall not be required after and during the continuance of an
Event of Default.


    Section 11. MISCELLANEOUS

        11.1 Notices.

        Except as otherwise expressly provided herein, all notices
and other communications shall have been duly given and shall be effective (a)
when delivered, (b) when transmitted via telecopy (or other facsimile device) or
(c) the Business Day following the day on which the same has been delivered
prepaid to a reputable national overnight air courier service, in each case to
the respective parties at the address or telecopy numbers set forth on Schedule
11.1, or at such other address as such party may specify by written notice
to the other parties hereto.

        11.2 Right of Set-Off.

 

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<PAGE>

 

        In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such rights,
upon the occurrence and during the continuance of an Event of Default and the
commencement of remedies described in Section 9.2, each Lender is authorized at
any time and from time to time, without presentment, demand, protest or other
notice of any kind (all of which rights being hereby expressly waived), to set
off and to appropriate and apply any and all deposits (general or special) and
any other indebtedness at any time held or owing by such Lender (including,
without limitation branches, agencies or Affiliates of such Lender wherever
located) to or for the credit or the account of the Borrower against obligations
and liabilities of the Borrower to the Lenders hereunder, under the Notes, the
other Credit Documents or otherwise, irrespective of whether the Agent or the
Lenders shall have made any demand hereunder and although such obligations,
liabilities or claims, or any of them, may be contingent or unmatured. The
Borrower hereby agrees that any Person purchasing a participation in the Loans
and Revolving Loan Commitments hereunder pursuant to Section 11.3(c) may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a Lender hereunder.

        11.3 Benefit of Agreement.

        (a) Generally. This Credit Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided the Borrower may not assign and
transfer any of its interests without the prior written consent of the Lenders;
and provided, further, that the rights of each Lender to transfer, assign or
grant participations in its rights and/or obligations hereunder shall be limited
as set forth below in this Section 11.3.

        (b) Assignments. Each Lender may assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Credit Agreement (including, without limitation, all or a portion of its Loans,
its Notes, and its Revolving Loan Commitment); provided, however,
that:


        (i) each such assignment shall be to an Eligible
        Assignee;

        (ii) except in the case of an assignment to another
        Lender or an assignment of all of a Lender's rights and obligations
        under this Credit Agreement, any such partial assignment shall be in an
        amount at least equal to $5,000,000 (or, if less, the remaining amount
        of the Revolving Loan Commitment being assigned by such Lender) and an
        integral multiple of $1,000,000 in excess thereof;

        (iii) each such assignment by a Lender shall be of a
        constant and not varying, percentage of all of its rights and
        obligations under this Credit Agreement and the Notes; and

        (iv) the parties to such assignment shall execute and
        deliver to the Agent for its acceptance an Assignment Agreement in
        substantially the form of Exhibit 11 .3(b), together with a processing
        fee (other than in connection with any assignment to an Affiliate of
        such Lender) from the assignor of $3,500.



 

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<PAGE>

 

Upon execution, delivery, and acceptance of such Assignment
Agreement, the assignee thereunder shall be a party hereto and, to the extent of
such assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this Credit
Agreement. Upon the consummation of any assignment pursuant to this Section
11.3(b), the assignor, the Agent and the Borrower shall make appropriate
arrangements so that, if required, new Notes are issued to the assignor and the
assignee. If the assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall deliver to the Borrower and the
Agent certification as to exemption from deduction or withholding of taxes in
accordance with Section 4.4.

        By executing and delivering an assignment agreement in
accordance with this Section 11.3(b), the assigning Lender thereunder and the
assignee thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (A) such assigning Lender represents and
warrants that it is legally authorized to enter into such assignment agreement
and it is the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim created by such assigning Lender and the
assignee warrants that it is an Eligible Assignee; (B) except as set forth in
clause (A) above, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement, any of the
other Credit Documents or any other instrument or document furnished pursuant
hereto or thereto, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, any of the other
Credit Documents or any other instrument or document furnished pursuant hereto
or thereto or the financial condition of the Borrower or its Subsidiaries or the
performance or observance by the Borrower of any of its obligations under this
Credit Agreement, any of the other Credit Documents or any other instrument or
document furnished pursuant hereto or thereto; (C) such assignee represents and
warrants that it is legally authorized to enter into such assignment agreement;
(D) such assignee confirms that it has received a copy of this Credit Agreement,
the other Credit Documents and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such assignment agreement; (E) such assignee will independently and without
reliance upon the Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Credit Agreement and the other Credit Documents; (F) such assignee appoints
and authorizes the Agent to take such action on its behalf and to exercise such
powers under this Credit Agreement or any other Credit Document as are delegated
to the Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (G) such assignee agrees that it will perform
in accordance with their terms all the obligations which by the terms of this
Credit Agreement and the other Credit Documents are required to be performed by
it as a Lender.

        (c) Register. The Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the Revolving Loan
Commitment of, and principal amount of the Loans owing to, each Lender from time
to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder 

 

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<PAGE>

 

 for all purposes of this Credit Agreement.
The Register shall be available for inspection by the Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior notice.

        (d) Acceptance. Upon its receipt of an Assignment
Agreement executed by the parties thereto, together with any Note subject to
such assignment and payment of the processing fee, the Agent shall, if such
Assignment Agreement has been completed and is in substantially the form of Exhibit
11.3(b) hereto, (i) accept such Assignment Agreement, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.

        (e) Participations. Each Lender may sell
participations to one or more Persons in all or a portion of its rights,
obligations or rights and obligations under this Credit Agreement (including all
or a portion of its Revolving Loan Commitment, its Notes and its Loans); provided,
however, that (i) such Lender's obligations under this Credit Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the
participant shall be entitled to the benefit of the yield protection provisions
contained in Sections 4.1 through 4.4, inclusive, but only to the extent that
such Lender is entitled to payment or reimbursement under such Sections, and the
right of set-off contained in Section 11.2 and (iv) the Borrower shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Credit Agreement, and such Lender shall retain
the sole right to enforce the obligations of the Borrower relating to its Loans
and its Notes and to approve any amendment, modification, or waiver of any
provision of this Credit Agreement (other than amendments, modifications, or
waivers decreasing the amount of principal of or the rate at which interest is
payable on such Loans or Notes, extending any scheduled principal payment date
or date fixed for the payment of interest on such Loans or Notes, or extending
its Revolving Loan Commitment).

        (f) Nonrestricted Assignments. Notwithstanding any
other provision set forth in this Credit Agreement, any Lender may at any time
assign and pledge all or any portion of its Loans and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.

        (g) Information. Any Lender may furnish any
information concerning the Borrower and its Subsidiaries in the possession of
such Lender from time to time to assignees and participants (including
prospective assignees and participants); provided that the furnishing of such
information shall be subject to the provisions of Section 11.11 below.

        (h) SPC's. Notwithstanding anything to the contrary
contained herein, any Lender (a "Granting Lender") may grant to
a special purpose funding vehicle (an "SPC") the option to fund all or
any part of any Loan that such Granting Lender would otherwise be obligated to
fund pursuant to this Credit Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to fund any Loan, (ii) if an SPC
elects not to exercise such option or otherwise fails to fund all or any part of
such Loan, the Granting Lender shall be obligated to fund such Loan pursuant to
the terms hereof, (iii) no SPC shall have any voting rights pursuant to Section
11.6 (all such voting rights shall be retained by the Granting Lenders), 

 

57

<PAGE>

 

 (iv)
with respect to notices, payments and other matters hereunder, the Borrower, the
Agent and the Lenders shall not be obligated to deal with an SPC, but may limit
their communications and other dealings relevant to such SPC to the applicable
Granting Lender, and (v) with respect to the funding of any Loan by an SPC, the
Borrower shall not have to pay any greater cost, or incur any greater expense,
under the provisions of Section 4 of this Credit Agreement or otherwise, than if
all Loans were funded by the applicable Granting Lender without the involvement
of an SPC. The funding of a Loan by an SPC hereunder shall utilize the Revolving
Loan Commitment of the Granting Lender to the same extent that, and as if, such
Loan were funded by such Granting Lender. Each party hereto hereby agrees that
no SPC shall be liable for any indemnity or payment under this Credit Agreement
for which a Lender would otherwise be liable for so long as, and to the extent,
the Granting Lender provides such indemnity or makes such payment. In
furtherance of the foregoing, each party hereto hereby agrees (which agreements
shall survive termination of this Credit Agreement) that, prior to the date that
is one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against, or
join any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof. Notwithstanding anything to the
contrary contained in this Credit Agreement, any SPC may disclose on a
confidential basis any non-public information relating to its funding of Loans
to any rating agency, commercial paper dealer or provider of any surety or
guarantee to such SPC. This clause (h) may not be amended without the prior
written consent of each Granting Lender, all or any part of whose Loan is being
funded by an SPC at the time of such amendment.

        11.4 No Waiver; Remedies Cumulative.

        No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower and the Agent or any
Lender shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Lender would otherwise have. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of the Agent or the Lenders to any other or further action in any circumstances
without notice or demand.


        11.5 Payment of Expenses, etc.

        The Borrower agrees to: (i) pay all reasonable out-of-pocket
costs and expenses of the Agent and the Lead Arranger in connection with (A) the
negotiation, preparation, execution and delivery and administration of this
Credit Agreement and the other Credit Documents and the documents and
instruments referred to therein (including, without limitation, legal fees of
one counsel for the Agent) and (B) any amendment, waiver or consent relating
hereto and thereto including, but not limited to, any such amendments, waivers
or consents resulting from or related to any work-out, renegotiation or
restructure relating to the performance by the Borrower under this Credit
Agreement, (ii) pay all reasonable out-of-pocket costs and expenses of the Agent
and 

 

58

<PAGE>

 

 the Lenders in connection with (A) enforcement of the Credit Documents and
the documents and instruments referred to therein (including, without
limitation, in connection with any such enforcement, the reasonable fees and
disbursements of counsel for the Agent and each of the Lenders) and (B) any
bankruptcy or insolvency proceeding of the Borrower and (iii) indemnify the
Agent, the Lead Arranger and each Lender, its officers, directors, employees,
representatives, affiliates and agents from and hold each of them harmless
against any and all losses, liabilities, claims, damages or expenses incurred by
any of them as a result of, or arising out of, or in any way related to, or by
reason of, any investigation, litigation or other proceeding (whether or not the
Agent, the Lead Arranger or any Lender is a party thereto) related to the
entering into and/or performance of any Credit Document or the use of proceeds
of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of gross negligence or willful
misconduct on the part of the Person to be indemnified or such Person's
employer, employee or co-employee); provided that the foregoing indemnity by the
Borrower shall not extend to disputes solely among the Lenders or litigation
commenced by the Borrower which (a) seeks enforcement of any of the Borrower's
rights hereunder and (b) is determined in a final judgment adverse to the Agent
and the Lenders.

        11.6 Amendments, Waivers and Consents.

        Neither this Credit Agreement, nor any other Credit Document
nor any of the terms hereof or thereof may be amended, changed, waived,
discharged or terminated unless such amendment, change, waiver, discharge or
termination is in writing and signed by the Required Lenders and the Borrower;
provided that no such amendment, change, waiver, discharge or termination shall
without the consent of each Lender:

        (a) extend the Maturity Date, or postpone or extend the time
for any payment or prepayment of principal;

        (b) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any post-default
increase in interest rates) thereon or fees or other amounts payable hereunder;

        (c) reduce or waive the principal amount of any Loan;

        (d) increase or extend the Revolving Loan Commitment of a
Lender (it being understood and agreed that a waiver of any Default or Event of
Default shall not constitute a change in the terms of any Revolving Loan
Commitment of any Lender);

        (e) release the Borrower from its obligations under the
Credit Documents;

        (f) amend, modify or waive any provision of this Section 11.6
or Section 3.6, 3.8, 4.1, 4.2, 4.3, 4.4, 9.1(a), 11.2, 11.3 or 11.5;

        (g) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders; or

 

59

<PAGE>

 

        (h) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under (or in respect of) the Credit Documents.

        No provision of Section 2.9 or Section 10 may be amended or
modified without the consent of the Agent.

        Notwithstanding the fact that the consent of all the Lenders
is required in certain circumstances as set forth above, each Lender is entitled
to vote as such Lender sees fit on any reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth
herein.


        11.7 Counterparts/Telecopy.


        This Credit Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
Delivery of executed counterparts by telecopy shall be as effective as an
original and shall constitute a representation that an original will be
delivered.

        11.8 Headings.

        The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Credit Agreement.

        11.9 Defaulting Lender.

        Each Lender understands and agrees that if such Lender is a
Defaulting Lender then it shall not be entitled to vote on any matter requiring
the consent of the Required Lenders or to object to any matter requiring the
consent of all the Lenders; provided, however, that all other
benefits and obligations under the Loan Documents shall apply to such Defaulting
Lender.


        11.10 Survival of Indemnification and
Representations and Warranties.


        All indemnities set forth herein and all representations and
warranties made herein shall survive the execution and delivery of this Credit
Agreement, the making of the Loans and the repayment of the Loans and other
obligations and the termination of the Revolving Loan Commitments hereunder.


        11.11 Confidentiality.


        Neither the Agent nor any Lender shall disclose any
Confidential Information to any Person, without the prior written consent of the
Borrower, other than (a) to the Agent's or such Lender's Affiliates and their
officers, directors, employees, agents, attorneys, accountants and advisors (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Confidential Information and such
person shall have agreed to keep such Confidential Information confidential on
substantially the same terms as provided herein) and, as contemplated by Section
11.3, to actual or prospective assignees and 

 

60

<PAGE>

 

 participants, and, in each such
case, then only on a confidential basis, (b) as required by any law, rule or
regulation or by judicial process, (c) to any rating agency when required by it
to do so; provided that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Confidential Information
relating to the Borrower received by it from such Lender, (d) as requested or
required by any state, federal or foreign authority or examiner regulating banks
or banking, (e) to protect, preserve, exercise or enforce the Agent's or such
Lender's rights under or pursuant to this Agreement or any Note, and (f) to
perform any of the Agent's or such Lender's obligations under or pursuant to
this Agreement or any Note.

        11.12 Governing Law; Venue.

        (a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. Any legal action or proceeding with respect to this Credit
Agreement or any other Credit Document may be brought in the courts of the State
of New York, or of the United States for the Southern District of New York, and,
by execution and delivery of this Credit Agreement, the Borrower hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. Nothing herein shall affect
the right of a Lender to commence legal proceedings or to otherwise proceed
against the Borrower in any other jurisdiction.

        (b) The Borrower hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.

        11.13 Waiver of Jury Trial; Waiver of
Consequential Damages.

        EACH OF THE PARTIES TO THIS CREDIT AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE BORROWER
AGREES NOT TO ASSERT ANY CLAIM AGAINST THE AGENT, ANY LENDER, ANY OF THEIR
AFFILIATES, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS
OR AGENTS, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE RELATING TO ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN.

        11.14 Time.

        All references to time herein shall be references to Central
Standard Time or Central Daylight Time, as the case may be, unless specified
otherwise.

 

61

<PAGE>

 

        11.15 Severability.

        If any provision of any of the Credit Documents is determined
to be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

        11.16 Assurances.

        The Borrower agrees, upon the request of the Agent, to
promptly take such actions, as reasonably requested, as are consistent with and
necessary to carry out the intent of this Credit Agreement and the other Credit
Documents.

        11.17 USA Patriot Act Notification.

        The following notification is provided to the Borrower
pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318:

        IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW
ACCOUNT. To help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person or entity
that opens an account, including any deposit account, treasury management
account, loan, other extension of credit, or other financial services product.
What this means for the Borrower: When the Borrower opens an account, if the
Borrower is an individual, the Agent and the Lenders will ask for the Borrower's
name, residential address, tax identification number, date of birth, and other
information that will allow the Agent and the Lenders to identify the Borrower,
and, if the Borrower is not an individual, the Agent and the Lenders will ask
for the Borrower's name, tax identification number, business address, and other
information that will allow the Agent and the Lenders to identify the Borrower.
The Agent and the Lenders may also ask, if the Borrower is an individual, to see
the Borrower's driver's license or other identifying documents, and, if the
Borrower is not an individual, to see the Borrower's legal organizational
documents or other identifying documents.

        11.18 Entirety.

        This Credit Agreement together with the other Credit
Documents represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.


[Remainder of Page Intentionally Left Blank, Signature Pages
Follow]


 

62

<PAGE>

 

        Each of the parties hereto has caused a counterpart of this Credit Agreement
to be duly executed and delivered as of the date first above written.

	

Borrower:
                      
    	 WPS RESOURCES CORPORATION
                      
    
		
		By: /s/ Bradley A. Johnson

      Name:  Bradley A. Johnson

      Title:  Vice President & Treasurer
		
	Lenders: 	 U.S. BANK NATIONAL ASSOCIATION


      individually in its capacity as a Lender and as

      Agent
		
		
                        By: /s/ Sandra J. Hartay

                        Name: Sandra J. Hartay

                        Title: Vice President

    
		



                      
 

<PAGE>


 

                      
Signature Page to WPS Resources Corporation Five Year Credit Agreement.


  
    
      
                        
                        CITIBANK, N.A.

                         

                        
                        By: /s/ J. Nicholas McKee

                        Name: J. Nicholas McKee

                        Title: Managing Director

      

    

  



 

<PAGE>

 

Signature Page to WPS Resources Corporation Five Year Credit Agreement.


  
    
      
                        
                        JPMORGAN CHASE BANK, N.A.

                        
                         

                        By:

                        /s/ Michael J. DeForge
                        


                        Name: Michael J. DeForge

                        Title: Vice President

                        
                         

      

    

  



                         


                        <PAGE>

                         

Signature Page to WPS Resources Corporation Five Year Credit Agreement.


  
    
                        
                        
                        WELLS FARGO BANK NATIONAL ASSOCIATION

                         

                        
      

    

  




  
    
      
        
                        By:
        
                        /s/ Thomas J. Fameree
        
                        

                        Name:
        
                        Thomas J. Fameree
        
                        

                        Title:
        
                        Vice President

      

    

  



                         

                        <PAGE>

                         

Signature Page to WPS Resources Corporation Five Year Credit Agreement.


                        
                        
                          
                            
                        UBS LOAN FINANCE LLC

                         

                              
                        
                        
                        By:
                            
                        /s/ Wilfred V. Saint
                        

                        Name:
                            
                        Wilfred V. Saint
                        

                        Title:
                            
                        Director, Banking Products Services, US

                        
                              
                        
                        
                        By:
                            
                        /s/ Joselin Fernandes
                        

                        Name:
                            
                        Joselin Fernandes
                        

                        Title: Associate Director, Banking Products
                        Services, US

                          

                         

                        

  



                        <PAGE>


  
    
      
                        
                         

                        
        
          
            
              
                
                  
                    
                      
                      

                    

                  

                

              

            

          

        

      

    

  



Signature Page to WPS Resources Corporation Five Year Credit Agreement.


  
    
      
                        
                        BANK OF AMERICA, N.A.

                         

                        
                        
                        
                        By: 
                        /s/ Kevin P. Betelsen
                        

                        Name: 
                        Kevin P. Betelsen
                        

                        Title: 
                        Vice President

                        

  
    
                        
                        
                         

  

                        



      

    

  



                        
                        <PAGE>

                        
                         

                        
Signature Page to WPS Resources Corporation Five Year Credit Agreement.


  
    
      
                        
                        ASSOCIATED BANK, NATIONAL ASSOCIATION

                        
                         

                        
                        
                        By: /s/ Stephen E. Pasowicz
                        

                        Name:

                        Stephen E. Pasowicz
                        

                        Title:

                        Vice President

                        

  
    
      
                        

  
    
                         

    

  



      

    

  



                        
      

    

  




                        <PAGE>


  
    
      
        
                        
                        
        
          
            
              
                
                  
                    
                      
                      
                         

                      

                    

                  

                

              

            

          

        

      

    

  



Signature Page to WPS Resources Corporation Five Year Credit Agreement.


                        
                        
                          
                            
                        BAYERISCHE LANDESBANK

                           Cayman Islands Branch

                        
                          

                          
                         

                        
                        
                        
                        By:

                        /s/ Donna Quilty
                          
                        

                          Name:

                        Donna Quilty
                          
                        

                          Title:

                        Vice President

                          
                        
                        
                        By:

                        /s/ Catherine Schilling
                          
                        

                          Name:

                        Catherine Schilling
                          
                        

                          Title:

                        Vice President

                        
                         

                          
                        

                          

                        




                        <PAGE>


  
    
                         

    

  



Signature Page to WPS Resources Corporation Five Year Credit Agreement.


                        
                        
                          
                            
                        HARRIS NESBITT FINANCING, INC.

        
          
            
              
                
                  
                    
                      
                        
                         

                      

                    

                  

                

              

            

          

        

                        
                        
                        By: /s/ Cahal B. Carmody
                        

                        Name:
                            
                        Cahal B. Carmody
                        

                        Title:
                            
                        Vice President

                            

  
    
      
  
    
      

  
    
      
                        

  
    
                         

    

  



      

    

  



                        
      

    

  

      

    

  



                            
                          

                        

  



                        <PAGE>


  
    
      
        
        
        
          
            
              
                
                  
                    
                      
                         

                      

                    

                  

                

              

            

          

        

      

    

  



Signature Page to WPS Resources Corporation Five Year Credit Agreement.


  
    
      
                        
                        MIZUHO CORPORATE BANK, LTD.

        
          
            
              
                
                  
                    
                      
                        
                         

                      
                      

                    

                  

                

              

            

          

        

        
                        
                        
                        By:
        
                        /s/ Mark Gronich
        
                        

                        Name:
        
                        Mark Gronich
        
                        

                        Title:
        
                        Senior Vice President

        

  
    
      
  
    
      

  
    
      
                        

  
    
                         

    

  



      

    

  



                        
      

    

  

      

    

  



        
      

    

  



                        <PAGE>


  
    
      
                         

      

    

  



Signature Page to WPS Resources Corporation Five Year Credit Agreement.


  
    
      
                        
                        WACHOVIA BANK, NATIONAL 

 ASSOCIATION

        
          
            
              
                
                  
                    
                      
                        
                         

                      
                      

                    

                  

                

              

            

          

        

        
                        
                        
                        By:
        
                        /s/ Lawrence N. Gross
        
                        

                        Name:
        
                        Lawrence N. Gross
        
                        

                        Title:
        
                        Assistant Vice President

        

  
    
      
  
    
      

  
    
      
                        

  
    
                         

    

  



      

    

  



                        
      

    

  

      

    

  



        
      

    

  



                        <PAGE>


  
    
      
                         

      

    

  



Signature Page to WPS Resources Corporation Five Year Credit Agreement.


  
    
      
                        
                        LASALLE BANK, NATIONAL ASSOCIATION

        
          
            
              
                
                  
                    
                      
                        
                         

                      
                      

                    

                  

                

              

            

          

        

        
                        
                        
                        By:
        
                        /s/ Matthew D. Rodgers
        
                        

                        Name:
        
                        Matthew D. Rodgers
        
                        

                        Title:
        
                        Assistant Vice President

        

  
    
      
  
    
      

  
    
      
                        

  
    
                         

    

  



      

    

  



                        
      

    

  

      

    

  



        
      

    

  



                        <PAGE>


  
    
      
                         

      

    

  



Signature Page to WPS Resources Corporation Five Year Credit Agreement.

                        
                        
                          
                            
                              
                        NATIONAL CITY BANK OF THE 

 MIDWEST

        
          
            
              
                
                  
                    
                      
                        
                         

                      
                      

                    

                  

                

              

            

          
                        
          

        

                        
                        By:
                              
          /s/ Tiffany Cozzolino
          
                        

          Name:
                              
          Tiffany Cozzolino
          
                        

          Title:
                              
          Vice President

        
          
            

  
    
      
  
    
      

  
    
      
                        

  
    
                         

    

  



      

    

  



                        
      

    

  

      

    

  



            
          

        

                            

                          

                        



                        <PAGE>


  
    
      
        
          
                         

          

        

      

    

  



Signature Page to WPS Resources Corporation Five Year Credit Agreement.


  
    
      
                        
                        THE NORTHERN TRUST COMPANY

        
          
            
              
                
                  
                    
                      
                        
                         

                      
                      

                    

                  

                

              

            

          

        

        
                        
                        
                        By: /s/ Ashish Bhagwat
        
                        

                        Name:
        
                        Ashish Bhagwat
        
                        

                        Title:
        
                        Vice-President

        

  
    
      
  
    
      

  
    
      
                        

  
    
                         

    

  



      

    

  



                        
      

    

  

      

    

  



        
      

    

  



                        <PAGE>


  
    
      
                         

      

    

  



Signature Page to WPS Resources Corporation Five Year Credit Agreement.


  
    
      
                        
                        UNION BANK OF CALIFORNIA, N.A.

                         

                        
                        
                        By:
        
                        /s/ Efrain Soto
                        

                        Name:
        
                        Efrain Soto
                        

                        Title:
        
                        Vice President

                        

  
    
      
  
    
      

  
    
      

  
    
                         

    

  



      

    

  



      

    

  

      

    

  



        
      

    

  



                        <PAGE>


  
    
      
                        
                         

                        
        
          
            
              
                
                  
                    
                      
                        
                         

                        
                      

                    

                  

                

              

            

          

        

      

    

  



Schedule 1.1

to

Five Year Credit Agreement


Commitment Percentages


	
      Lender
	
      Commitment  Percentage
	
      Revolving Loan

      
      Commitment

	
      U.S. Bank National Association
	
      9.349593495935%
	
      $ 46,747,967.50

	
      Citibank, N.A.
	
      9.349593495935%
	
      $ 46,747,967.50

	
      JPMorgan Chase Bank, N.A.
	
      8.130081300813%
	
      $ 40,650,406.50

	
      Wells Fargo Bank National Association
	
      8.130081300813%
	
      $ 40,650,406.50

	
      UBS Loan Finance LLC
	
      8.130081300813%
	
      $ 40,650,406.50

	
      Bank of America, N.A.
	
      8.130081300813%
	
      $ 40,650,406.50

	
      Associated Bank
	
      6.504065040650%
	
      $ 32,520,325.20

	
      Bayerische Landesbank
	
      6.504065040650%
	
      $ 32,520,325.20

	
      Harris Nesbitt Financing, Inc.
	
      6.504065040650%
	
      $ 32,520,325.20

	
      Mizuho Corporate Bank, Ltd.
	
      6.504065040650%
	
      $ 32,520,325.20

	
      Wachovia Bank, National Association
	
      6.504065040650%
	
      $ 32,520,325.20

	
      LaSalle Bank, National Association
	
      4.065040650407%
	
      $ 20,325,203.25

	
      National City Bank of the Midwest
	
      4.065040650407%
	
      $ 20,325,203.25

	
      The Northern Trust Company
	
      4.065040650407%
	
      $ 20,325,203.25

	
      Union Bank of California, N.A.
	
      4.065040650407%
	
      $ 20,325,203.25

	 	
      100.00%
	
      $500,000,000.00



<PAGE> 

 

 

Schedule 6.1(c)

to

Five Year Credit Agreement


Subsidiaries


	
              Upper Peninsula Power Company
    

	
              Wisconsin Public Service Corporation
    

	
              WPS Visions, Inc.
    

	
              WPS Resources Capital Corporation
    

	
              Upper Peninsula Building Development Company
    

	
              Penvest, Inc.
    

	
              WPS Nuclear Corporation
    

	
              WPS Leasing, Inc.
    

	
              WPS Power Development, LLC.
    

	
              WPS Energy Services, Inc.
    

	
              ECO Coal Pelletization #12, LLC
    

	
              Sunbury Holdings, LLC
    

	
              Combined Locks Energy Center, LLC
    

	
              Wisconsin Woodgas, LLC
    

	
              WPS New England Generation, Inc.
    

	
              WPS Canada Generation, Inc.
    

	
              WPS Empire State, Inc.
    

	
              PDI Operations, Inc.
    

	
              PDI Stoneman, Inc.
    

	
              Sunbury Generation, LLC
    

	
              WPS Westwood Generation, LLC
    

	
              WPS-ESI Gas Storage, LLC
    

	
              WPS Investments, LLC
    

	
              Mid-American Power Ventures, LLC
    

	
              Mid-American Power, LLC
    

	
      WPS Energy Services of Canada Corp.
    
	
      WPS Beaver Falls Generation, LLC
    
	
      WPS Niagara Generation, LLC
    


 

<PAGE>

 

	WPS Syracuse Generation, LLC
	Advantage Energy, Inc.
	Quest Energy, LLC
	3096210 Nova Scotia Company (not currently active)


 

<PAGE>

 

 

Schedule 8.3

to

Five Year Credit Agreement


 


Asset Sales


 

	Sale of Kewaunee Nuclear Power Plant.
	Sale of Sunbury plant and emission allowances.
	Sale of accounts receivable in connection with the securitization of
    environmental retrofits.
	Sale of 30% of Weston 4 to Dairyland.


    

    <PAGE>

     

Schedule 8.6

to

Five Year Credit Agreement


Existing Liens




	
      Secured Party, Filing

      Date and Filing Number

    	
      Description

      
	
      

      Debtor: Wisconsin Public Service Corporation

	 	 
	
      Wells Fargo Bank Northwest, N.A.

      11/05/92

      01312991 (Wisconsin DFI)

    	
      Synthetic lease of railcars; probably not a Lien.

    
	
      First Security Bank of Utah

      11/11/93

      01391037 (Wisconsin DFI)

    	
      Synthetic lease of railcars; probably not a Lien.

    
	
      First Security Bank of Utah

      11/29/93

      01394204 (Wisconsin DFI)

    	
      Synthetic lease of railcars; probably not a Lien.

    
	
      

      Debtor: WPS Energy Services, Inc.

	
      PSEG Energy Resources & Trade LLC

      04/21/03

      030006474021 (Wisconsin DFI)

    	
      All property, rights and interest of the Debtor in a BGS-FP Master
      Agreement and all of Debtor's present and future rights to payment
      deriving from the sale of any Product created pursuant to the BGS-FP
      Master Agreement, together with all instruments and documents of title
      representing any of the aforementioned.




 

<PAGE>

 

Schedule 11.1

to

Five Year Credit Agreement


Borrower


WPS Resources Corporation

Attn: Bradley A. Johnson

700 North Adams Street

P.O. Box 19001

Green Bay, Wisconsin 54307

Phone: (920) 433-1662

Fax: (920) 433-1526




Agent


Steve Carlton

U.S. Bank National Association

777 East Wisconsin Avenue

Milwaukee, WI 53202

Phone: (414) 765-4244

Fax: (414) 765-4430

steve.carlton@usbank.com




Lenders


Sandra Hartay

U.S. Bank National Association

777 East Wisconsin Avenue

Milwaukee, WI 53202

Phone: (414) 765-6004

Fax: (414) 765-5367

sandra.hartay@usbank.com



Amit Vasani

Citibank, N.A.

388 Greenwich Street

21st Floor

New York, NY 10013

Phone: (212) 816-4166

Fax: (212) 816-8098

amit.vasani@citigroup.com



<PAGE>


 


JPMorgan Chase Bank, N.A.

Wells Fargo Bank National Association

UBS Loan Finance LLC

Jacqueline Archuleta

Bank of America, N.A.

901 Main Street

Dallas, TX 75202

Phone: (214) 209-2135

Fax: (214) 290-8372

jacqueline.archuleta@bankofamerica.com

Kathy Carter

Associated Bank National Association

2870 Holmgren Way

Green Bay, WI 54304

Phone: (920) 405-2847

Fax: (920) 405-2798

kathy.carter@associatedbank.com

Bayerische Landesbank

Harris Nesbitt Financing, Inc.

Mizuho Corporate Bank, Ltd.

Wachovia Bank, National Association

LaSalle Bank, National Association

Tiffany Cozzolino

National City Bank of the Midwest

2021 Spring Road, Suite 600

Oak Brook, IL 60523

Phone: (630) 954-3189

Fax: (630) 954-5570

tiffany.cozzolino@nationalcity.com

The Northern Trust Company

Union Bank of California, N.A.

 

<PAGE>

 

Exhibit 2.2


FORM OF NOTICE OF BORROWING


	TO:	 U.S. Bank National Association

      Attention: Stephen E. Carlton

      777 East Wisconsin Avenue

      Milwaukee, Wisconsin 53202
		
	RE: 	 Five Year Credit Agreement dated as of June 2, 2005 among

      WPS Resources Corporation (the "Borrower"),

      U.S. Bank National Association as Agent, the agents party thereto and the

      Lenders party thereto (as the same may be amended, modified,

      extended or restated from time to time, the "Credit Agreement")
		
	DATE:	               
      , ____


______________________________________________________________________________

    1. This Notice of Borrowing is made pursuant to the terms of the Credit
    Agreement. All capitalized terms used herein unless otherwise defined shall
    have the meanings set forth in the Credit Agreement.

    2. Please be advised that the Borrower is requesting a Revolving Loan in
    the amount of $_____________ to be funded on ___________, ____ at the
    interest rate option set forth in paragraph 3 below.

    3. The interest rate option applicable to the requested Revolving Loan
    shall be equal to:


A. the Base Rate

B. the Adjusted Eurodollar Rate for an Interest Period of:

__________ one month

__________ two months

__________ three months

__________ six months



    4. On the date of the requested Revolving Loan, immediately after giving
    effect to the funding and the application thereof, the aggregate amount of
    Revolving Loans plus Swing Line Loans plus all Letter of Credit Obligations
    outstanding will be $__________, which is less than or equal to the
    Revolving Loan Commitment.

    5. On and as of the date of the requested Revolving Loan, immediately
    after giving effect to the funding and the application thereof, the
    representations and warranties made by the Borrower in any Credit Document
    (excluding those contained in Sections 6.7 and 6.10 of the Credit Agreement)
    are true and correct in all material respects except to the extent they
    expressly relate to an earlier date.

     

    <PAGE>

     

    6. No Default or Event of Default exists or is continuing or will be
    caused by giving effect to this Notice of Borrowing.


  
    
      
        
                        WPS RESOURCES CORPORATION

                         

                         

                        By:______________________________________

                        Name:

                        Title:

        

      

    

  



                         

                        <PAGE>

Exhibit 2.4


FORM OF NOTICE OF CONTINUATION/CONVERSION


	TO:	 U.S. Bank National Association, as Agent

      Attention: Stephen E. Carlton

      777 East Wisconsin Avenue

      Milwaukee, Wisconsin 53202
		
	RE:	 Five Year Credit Agreement entered into as of June 2, 2005,

      among WPS Resources Corporation (the "Borrower"),

      U.S. Bank National Association, as Agent, the agents party thereto and the

      Lenders party thereto (as the same may be amended, modified,

      extended or restated from time to time, the "Credit Agreement")
		
	DATE:	 __________, ____


 

    1. This Notice of Continuation/Conversion is made pursuant to the terms
    of the Credit Agreement. All capitalized terms used herein unless otherwise
    defined shall have the meanings set forth in the Credit Agreement.

    2. Please be advised that the Borrower is requesting that a portion of
    the current outstanding Revolving Loans, in the amount of $___________, be
    continued or converted at the interest rate option set forth in paragraph 3
    below.

    3. The interest rate option applicable to the continuation or conversion
    of all or part of the existing Revolving Loans shall be equal to:


A. the Base Rate

B. the Adjusted Eurodollar Rate for an Interest Period of

______ one month

______ two months

______ three months

______ six months



    4. Subsequent to the continuation or conversion of the Revolving Loans,
    as requested herein, the aggregate amount of Revolving Loans plus Swing Line
    Loans plus all Letter of Credit Obligations outstanding will be $___, which
    is less than or equal to the Revolving Loan Commitment.

    5. No Default or Event of Default has occurred and is continuing or would
    be caused by giving effect to this Notice of Continuation Conversion.

     

    <PAGE>

     


  
    
      
        
                        WPS RESOURCES CORPORATION

                        By:_______________________________________

                        Name:

                        Title:

        

      

    

                         

                        <PAGE>

                         

  



Exhibit 2.7

to

Five Year Credit Agreement


FORM OF REVOLVING LOAN NOTE


June 2, 2005

        FOR VALUE RECEIVED, WPS RESOURCES CORPORATION, a Wisconsin corporation (the
"Borrower"), hereby promises to pay to the order of ___________ (the
"Lender"), at the office of U.S. Bank National Association (the
"Agent") as set forth in that certain Five Year Credit Agreement dated
as of June 2, 2005, among the Borrower, the Lenders named therein and U.S. Bank
National Association, as Agent (as the same may be amended, modified, extended
or restated from time to time, the "Credit Agreement"), or at such
other place or places as the holder of this Revolving Loan Note may designate,
the aggregate principal amount of all advances made by the Lender as Revolving
Loans (and not otherwise repaid), in Dollars and in immediately available funds,
on the dates and in the principal amounts provided in the Credit Agreement, and
to pay interest on the unpaid principal amount of each Revolving Loan made by
the Lender, at such office, in like money and funds, for the period commencing
on the date of each Revolving Loan until each Revolving Loan shall be paid in
full, at the rates per annum and on the dates provided in the Credit Agreement.

        This Note is one of the Revolving Loan Notes referred to in the Credit
Agreement and evidences Revolving Loans made by the Lender thereunder. The
Lender shall be entitled to the benefits of the Credit Agreement. Capitalized
terms used in this Revolving Loan Note have the respective meanings assigned to
them in the Credit Agreement and the terms and conditions of the Credit
Agreement are expressly incorporated herein and made a part hereof.

        The Credit Agreement provides for the acceleration of the maturity of the
Revolving Loans evidenced by this Revolving Loan Note upon the occurrence of
certain events (and for payment of collection costs in connection therewith) and
for prepayments of Revolving Loans upon the terms and conditions specified
therein. In the event this Revolving Loan Note is not paid when due at any
stated or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorney
fees.

        Except as permitted by Section 11.3(b) of the Credit Agreement, this
Revolving Loan Note may not be assigned by the Lender to any other Person.

        The date, amount, type, interest rate and duration of Interest Period (if
applicable) of each Revolving Loan made by the Lender to the Borrower, and each
payment made on account of the principal thereof, shall be recorded by the Agent
and the Lender on its books; provided that the failure of the Agent or the
Lender to make any such recordation shall not affect the obligations of the
Borrower to make a payment when due of any amount owing hereunder or under this
Revolving Loan Note in respect of the Revolving Loans to be evidenced by this
Revolving Loan Note, and each such recordation shall be prima facie evidence of
the obligations owing under this Revolving Loan Note absent manifest error.

 

<PAGE>

 


        THIS REVOLVING LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.


        IN WITNESS WHEREOF, the Borrower has caused this Revolving Loan Note to be
executed as of the date first above written.


  
    
      
        
                        WPS RESOURCES CORPORATION

                        By:______________________________________

                        Name:

                        Title:

        

      

    

  



                         

                        <PAGE>

                         

Exhibit 7.1(c)


FORM OF OFFICER'S CERTIFICATE


	TO:	 U.S. Bank National Association

      Attention: Stephen E. Carlton

      777 East Wisconsin Avenue

      Milwaukee, Wisconsin 53202
		
	RE:	 Five Year Credit Agreement dated as of June 2, 2005

      among WPS Resources Corporation (the "Borrower"),

      U.S. Bank National Association, as Agent, the agents party
thereto and the

      Lenders party thereto (as the same may be amended, modified,

      extended or restated from time to time, the "Credit
Agreement")
		
	DATE: 	 _________, ___




        Pursuant to the terms of the Credit Agreement, I, _________________________
[Chief Financial Officer/Treasurer/Secretary/Assistant Treasurer] of WPS
RESOURCES CORPORATION hereby certify that, as of the fiscal quarter ending
____________, ____, the statements below are accurate and complete in all
respects (all capitalized terms used below shall have the meanings set forth in
the Credit Agreement):

        A. Attached hereto as Schedule I are (x) calculations (calculated as of the
date of the financial statements referred to in paragraph C. below)
demonstrating compliance by the Borrower with the financial covenant contained
in Section 7.2 of the Credit Agreement and (y) Borrower's Public Debt Ratings as
of the date hereof.

        B. No Default or Event of Default exists under the Credit Agreement, except
as indicated on a separate page attached hereto, together with an explanation of
the action taken or proposed to be taken by the Borrower with respect thereto.

        C. The quarterly/annual financial statements for the fiscal quarter/year
ended ___________ which accompany this certificate fairly present in all
material respects the financial condition of the Borrower and its Subsidiaries
and have been prepared in accordance with GAAP, subject to changes resulting
from normal year-end audit adjustments.


  
    
      
        
                        WPS RESOURCES CORPORATION

                        By:_______________________________________

                        [Chief Financial Officer/Treasurer/Secretary

                        Assistant Treasurer]

        

      

    

  



                         

                        <PAGE>

                         

Schedule 1 to

Exhibit 7.1(c) to

Credit Agreement

Maximum Leverage Ratio

	
      1. Total Funded Debt
	
      $______________________

	
      2. Net Worth
	
      $______________________

	
      3. Capitalization (Line 1 + Line 2)
	
      $______________________

	
      4. Total Funded Debt to Capitalization Ratio:

      (Line 1/Line 3)
	
      ______: 1.00

	
      Maximum Permitted Total Funded

      Debt to Capitalization Ratio: .65: 1.0
	 


Borrower's Public Debt Ratings:

S&P_________________________________

Moody's______________________________

 

<PAGE>

 

Exhibit 11.3


FORM OF ASSIGNMENT AGREEMENT


        Reference is made to that certain Five Year Credit Agreement, dated as of
June 2, 2005, among WPS RESOURCES CORPORATION(the "Borrower"), the
agents party thereto, the Lenders party thereto and U.S. Bank National
Association, as Agent for the Lenders (as the same may be amended, modified,
extended or restated from time to time, the "Credit Agreement").
Capitalized terms used herein shall have the meanings ascribed thereto in the
Credit Agreement.

        1.    The Assignor hereby sells and assigns to the Assignee, without recourse and
without representation and warranty except as expressly set forth herein, and
the Assignee hereby purchases and assumes from the Assignor, without recourse
and without representation and warranty except as expressly set forth herein,
the interests set forth below (the "Assigned Interest") in the
Assignor's rights and obligations under the Credit Agreement, including, without
limitation, the interests set forth below in the Commitment Percentage of the
Assignor on the Effective Date (as defined below) and the Loans owing to the
Assignor in connection with the Assigned Interest which are outstanding on the
Effective Date. The purchase of the Assigned Interest shall be at par (unless
otherwise agreed to by the Assignor and the Assignee) and periodic payments made
with respect to the Assigned Interest which (a) accrued prior to the Effective
Date shall be remitted to the Assignor and (b) accrue from and after the
Effective Date shall be remitted to the Assignee.

    2.    The Assignor (a) represents and warrants to the Assignee that it is the legal
and beneficial owner of the Assigned Interest and that the Assigned Interest has
not previously been transferred or encumbered and is free and clear of any
adverse claim created by the Assignor; (b) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Documents or any other instrument or document furnished pursuant
thereto; (c) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the Credit Documents
or any other instrument or document furnished pursuant thereto; and (d) attaches
the Note held by the Assignor and requests that the Agent exchange such Note for
a new Note payable to the order of the Assignee in an amount equal to the
Revolving Loan Commitment assumed by the Assignee pursuant hereto and to the
Assignor in an amount equal to the Revolving Loan Commitment retained by the
Assignor, if any, as specified herein.

        3.    The Assignee (a) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 7.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment; (b) agrees that it will, independently and without reliance upon the
Agent, the Assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement; (c)
confirms that it is an 

 

<PAGE>

 

 Eligible Assignee; (d) appoints and authorizes the Agent
to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement as are delegated to the Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto; (e) agrees that it will perform in accordance with their terms all of
the obligations that by the terms of the Credit Agreement are required to be
performed by it as a Lender, and (f) attaches any U.S. Internal Revenue Service
or other forms required under Section 4.4.

        4.    Following the execution of this Assignment, it will be delivered to the
Agent, together with the transfer fee required pursuant to Section 11.3(b) of
the Credit Agreement, for acceptance and recording by the Agent. The effective
date for this Assignment (the "Effective Date") shall be the date of
acceptance hereof by the Agent and the Borrower, as applicable, unless otherwise
specified herein.

        5.    Upon the consent of the Borrower and the Agent, as applicable, as of the
Effective Date, (a) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment, have the rights and obligations of a
Lender thereunder and (b) the Assignor shall, to the extent provided in this
Assignment, relinquish its rights and be released from its obligations under the
Credit Agreement.

        6.    This Assignment shall be governed by, and construed in accordance with, the
laws of the State of New York.

        7.    This Assignment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

        8.    Terms of Assignment

	(a)	Legal Name of Assignor:	 ________________
	(b)	Legal Name of Assignee:	 ________________
	(c)	Effective Date of Assignment:	 ________________
	(d)	Commitment Percentage Assigned:	 ________________%
	(e)	Total Revolving Loans outstanding

                as of Effective Date	 $________________
	(f)	Principal Amount of Revolving

                Loans assigned on Effective Date

                (the amount set forth in (e)

                multiplied by the percentage set

                forth in (d))	 $________________
	(g)	Revolving Loan Commitment	 $________________


                2 

                <PAGE>

	(h)	Principal Amount of Revolving

                Loan Commitment assigned on

                Effective Date (the amount set

                forth in (g) multiplied by the

                percentage set forth in (d))	 $________________


                 

The terms set forth above

are hereby agreed to:

______________________, as Assignor

By:______________________________

Name:

Title:

_______________________, as Assignee

By:_______________________________

Name:

Title:


  
    
      
                  CONSENTED TO (if applicable):

                  WPS RESOURCES CORPORATION

                  By:__________________________________

                  Name:

                  Title:

                  U.S.  BANK NATIONAL ASSOCIATION,

                  as Agent

                  By:__________________________________

                  Name:

                  Title:

      

    

  




                  

                  3

                  <PAGE>