EXHIBIT 10.1

CREDIT AGREEMENT

dated as of May 27, 2004

among

PUGET SOUND ENERGY,
INC.,

VARIOUS FINANCIAL
INSTITUTIONS,

UNION BANK OF
CALIFORNIA, N.A., 
as Administrative Agent, Co-Lead Arranger, LC Issuer and Sole Book Runner,

CITIGROUP GLOBAL
MARKETS INC., 
as Co-Lead Arranger and
Syndication Agent,

and

JP MORGAN CHASE BANK,
KEYBANK NATIONAL ASSOCIATION 
and WACHOVIA BANK,
NATIONAL ASSOCIATION, 
as Co-Documentation Agents

Table of Contents

|ARTICLE 1 DEFINITIONS                                                   |   
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|ARTICLE 2 THE CREDITS                                                   |   
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|ARTICLE 3 YIELD PROTECTION; TAXES                                       |   
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|ARTICLE 4 CONDITIONS PRECEDENT                                          |   
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|ARTICLE 5 REPRESENTATIONS AND WARRANTIES                                |   
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|ARTICLE 6 COVENANTS                                                     |   
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|ARTICLE 7 DEFAULTS                                                      |   
|ARTICLE 8 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES                |   
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|ARTICLE 9 GENERAL PROVISIONS                                            |   
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|ARTICLE 10 THE ADMINISTRATIVE AGENT                                     |   
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|ARTICLE 11 SETOFF; PAYMENTS                                             |   
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|ARTICLE 12 BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS            |   
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|ARTICLE 13 NOTICES                                                      |   
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|ARTICLE 14 CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL |   
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| |                |                                      
| | -------------- | -------------------------------------
| | Schedule 1:    | Pricing Schedule                     
| | Schedule 2:    | Commitments                          
| | Schedule 5.2:  | Litigation and Contingent Obligations
| | Schedule 5.11: | Financial Statements                 
| | Schedule 5.14: | Subsidiaries                         
| | Schedule 6.10: | Existing Liens                       
| | Schedule 6.16: | Existing Investments                 
| |                |                                      
| |                |                                      
| | Exhibit A:     | Promissory Note                      
| | Exhibit B:     | Borrowing Notice                     
| | Exhibit C:     | Conversion/Continuation Notice       
| | Exhibit D:     | Compliance Certificate               
| | Exhibit E:     | Assignment and Assumption            

CREDIT AGREEMENT

This
Credit Agreement dated as of May 27, 2004 is among Puget Sound Energy, Inc., a Washington
corporation, the Lenders, and Union Bank of California, N.A., a national banking
association having its principal office in San Francisco, California, as LC Issuer and as
Administrative Agent. The parties hereto agree as follows:

ARTICLE 1 DEFINITIONS

1.1
   Defined Terms.  As used in this Agreement:

Acquisition
means any transaction, or series of related transactions, consummated on or after the date
hereof by which the Borrower and/or any of its Subsidiaries directly or indirectly (i)
acquires any ongoing business or all or substantially all of the assets of any Person (or
a division thereof) engaged in any ongoing business, whether through a purchase of assets,
a merger or otherwise, (ii) acquires control of securities of a Person engaged in an
ongoing business representing more than 50% of the ordinary voting power for the election
of directors or other governing position if the business affairs of such Person are
managed by a board of directors or other governing body or (iii) acquires control of more
than 50% of the ownership interest in any partnership, joint venture, limited liability
company, business trust or other Person engaged in an ongoing business that is not managed
by a board of directors or other governing body.

Administrative
Agent means UBOC in its capacity as contractual representative of the Lenders
pursuant to Article 10, and not in its individual capacity as a Lender, and any
successor Administrative Agent appointed pursuant to Article 10.

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

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

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

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

"Agreement"
means this Credit Agreement.

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

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

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

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

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

Arrangers
means, collectively, (i) UBOC, in its capacity as Co-Lead Arranger and Sole Book
Runner, and (ii) Citigroup Global Markets Inc., a New York corporation, in its
capacity as Co-Lead Arranger.

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

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

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

Borrower
means Puget Sound Energy, Inc., a Washington corporation.

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

Borrowing Notice is defined in Section 2.2.3.

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

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

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

Change
is defined in Section 3.2.

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

Closing
Date means the date on which this Agreement becomes effective pursuant to
Section 4.1.

Code
means the Internal Revenue Code of 1986.

Commitment
means, for each Lender, the obligation of such Lender to make Loans to, and to participate
in Facility LCs issued upon the application of, the Borrower in an aggregate amount not
exceeding the amount set forth opposite such Lenders name on Schedule 2 or as set
forth in any Lender Assignment relating to any assignment that has become effective
pursuant to Section 12.3.3, as such amount may be modified from time to time pursuant
to the terms hereof.

"Commitment Fee" is defined in Section 2.4.1.

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

Contingent
Obligation of a Person means any agreement, undertaking or arrangement by which such
Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for
the payment of, or otherwise becomes or is contingently liable upon, the obligation or
liability of any other Person, or agrees to maintain the net worth or working capital or
other financial condition of any other Person, or otherwise assures any creditor of such
other Person against loss, including any comfort letter, operating agreement, application
for a Letter of Credit or the obligations of any such Person as general partner of a
partnership with respect to the liabilities of the partnership.

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

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

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

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

Default
means an event described in Article 7.

EBITDA
means, for the Borrower and its Subsidiaries on a consolidated basis for any period, the
total of: (i) Income before Interest Charges as reported in the
Borrowers financial statements, plus (ii) federal income taxes for such period
to the extent included in the determination of such Income before Interest Charges, plus
(iii) depreciation, depletion and amortization expense, plus (iv) non-cash
losses included in the determination of such Income before Interest Charges, minus
(v) non-cash gains included in the determination of such Income before Interest
Charges.

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

ERISA
means the Employee Retirement Income Security Act of 1974 and any rule or regulation
issued thereunder.

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

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

Eurodollar
Base Rate means, with respect to a Eurodollar Loan for the relevant Interest Period,
the applicable British Bankers Association Libor Rate for deposits in U.S. dollars
appearing on page 3750 of the Moneyline Telerate screen as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, and having a maturity equal
to such Interest Period; provided that (i) if page 3750 of the Moneyline Telerate
screen is not available to the Administrative Agent for any reason, the applicable
Eurodollar Base Rate for the relevant Interest Period shall instead be the applicable
British Bankers Association Libor Rate for deposits in U.S. dollars as reported by any
other generally recognized financial information service as of 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, and having a maturity
equal to such Interest Period, and (ii) if no such British Bankers Association Libor
Rate is available to the Administrative Agent, the applicable Eurodollar Base Rate for the
relevant Interest Period shall instead be the rate determined by the Administrative Agent
to be the rate at which UBOC or one of its Affiliate banks offers to place deposits in
U.S. dollars with first-class banks in the London interbank market at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest Period, in
the approximate amount of UBOCs relevant Eurodollar Loan and having a maturity equal
to such Interest Period.

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

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

Excluded
Taxes means, in the case of each Lender or applicable Lending Installation and the
Administrative Agent, taxes imposed on its overall pre-tax net or gross income, and
franchise taxes imposed on it by (i) the jurisdiction under the laws of which such
Lender or the Administrative Agent is incorporated or organized or (ii) the
jurisdiction in which the Administrative Agents or such Lenders principal
executive office or such Lenders applicable Lending Installation is located;
provided that any withholding taxes imposed by the United States of America on amounts
payable by the Borrower under this Agreement or any other Loan Document shall not in any
case be considered Excluded Taxes.

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

Extension Request  is defined in Section 2.17.

Facility
LC is defined in Section 2.16.1.

Facility LC
Application is defined in Section 2.16.3.

Facility
Termination Date means June 15, 2007, any later date as may be specified as the
Facility Termination Date in accordance with Section 2.17 or any earlier date on
which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the
terms hereof.

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

Fee
Lettermeans the letter agreement dated May 27, 2004 between the Borrower and the
Administrative Agent concerning up-front fees payable to the Lenders.

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

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

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

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

Indebtedness
of a Person means such Persons (i) obligations for borrowed money,
(ii) obligations representing the deferred purchase price of Property or services
(other than accounts payable arising in the ordinary course of such Persons business
payable on terms customary in the trade), (iii) obligations, whether or not assumed,
secured by Liens or payable out of the proceeds or production from Property now or
hereafter owned or acquired by such Person, (iv) obligations which are evidenced by
notes, bankers acceptances, or other instruments, (v) obligations to purchase
accounts, securities or other Property arising out of or in connection with the sale of
the same or substantially similar accounts, securities or Property, (vi) Capitalized
Lease Obligations, (vii) other obligations for borrowed money or other financial
accommodation which in accordance with Agreement Accounting Principles would be shown as a
liability on the consolidated balance sheet of such Person, (viii) net liabilities
under interest-rate swap, exchange, cap and other such agreements, (ix) Synthetic
Lease Obligations (excluding any such obligations existing on the date hereof pursuant to
the Borrowers lease of two combustion turbines for its Fredonia 3 and 4
electric generating facility), (x) obligations in connection with other transactions
(excluding any lease that is treated as an operating lease under Agreement Accounting
Principles) which are the functional equivalent, or take the place, of borrowing but which
do not constitute a liability on the consolidated balance sheet of such Person and
(xi) Contingent Obligations; provided that, except for purposes of Section 7.5,
the following shall not constitute Indebtedness: (a) obligations with
respect to Trust Preferred Securities that are Subordinated; (b) obligations arising
under Qualified Receivables Transactions; (c) obligations with respect to preferred
stock of the Borrower outstanding on the date hereof; and (d) obligations with
respect to preferred stock of the Borrower issued after the date hereof that is
Subordinated.

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

Investment
means (i) any loan, advance (other than any commission, travel or similar advance to an
officer or employee made in the ordinary course of business), extension of credit (other
than accounts receivable arising in the ordinary course of business on terms customary in
the trade) or contribution of capital; (ii) any stock, bond, mutual fund, partnership
interest, note, debenture or other such interest; (iii) any deposit account or certificate
of deposit; and (iv) any structured note, derivative financial instrument or other such
instrument or contract.

LC
Fee is defined in Section 2.16.4.

LC Fronting
Fee is defined in Section 2.16.4.

LC
Issuer means either UBOC or another Lender selected by the Borrower to be a second
issuer of Facility LCs (or any Affiliate of either such Person designated thereby), in
each case in its capacity as issuer of one or more Facility LCs hereunder, as selected by
the Borrower in its sole discretion with respect to each Facility LC requested by the
Borrower.

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

LC
Payment Date is defined in Section 2.16.5.

Lender Assignment  is defined in Section 12.3.1.

Lenders
means the lending institutions listed on the signature pages of this Agreement, including
UBOC and a second Person, if any, in their capacities as LC Issuers.

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

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

Lien
means any lien (statutory or other), mortgage, security interest, pledge, hypothecation,
assignment for security, deposit arrangement, encumbrance, preference, priority or other
preferential arrangement of any kind or nature whatsoever (including the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other title-retention
agreement).

Loan
means, with respect to a Lender, any loan made by such Lender pursuant to Section 2.2
(or in the case of a loan made pursuant to Section 2.2.4, any conversion or continuation
thereof ).

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

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

Material Indebtedness is defined in Section 7.5.

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

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

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

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

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

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

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

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

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

Participants
is defined in Section 12.2.1.

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

PBGC
means the Pension Benefit Guaranty Corporation.

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

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

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

Pricing Schedule means Schedule 1.

Property
of a Person means any and all property, whether real, personal, tangible, intangible or
mixed, of such Person (including equity interests in other Persons), and any and all other
assets owned, leased or operated by such Person, including any interest in any of the
foregoing.

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

PUHCA
means the Public Utility Holding Company Act of 1935 and any rule or regulation issued
thereunder.

Purchasers
is defined in Section 12.3.1.

Qualified
Receivables Transaction means any transaction or series of transactions that may be
entered into by the Borrower or any Subsidiary pursuant to which the Borrower or any
Subsidiary may sell, convey, pledge or otherwise transfer to a newly-formed Subsidiary or
other special purpose entity, or any other Person, any accounts receivable (including
chattel paper, instruments and general intangibles) or notes receivable and the rights and
certain other property related thereto; provided that the Receivables Transaction
Attributed Indebtedness incurred in all such transactions or series of transactions does
not exceed $200,000,000 at any time outstanding. For the avoidance of doubt, the
transactions contemplated by the Receivables Purchase Agreement dated as of
December 23, 2002 by and among Rainier Receivables, Inc., the Borrower, as servicer,
the purchasers party thereto from time to time and Bank One, NA, as agent, shall
constitute a Qualified Receivables Transaction.

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

Reference
Rate means the variable rate of interest per annum established by UBOC from time to
time as its reference rate. Such reference rate is set by UBOC as
a general reference rate of interest, taking into account such factors as UBOC may deem
appropriate, it being understood that many of UBOCs commercial or other loans are
priced in relation to such rate, that it is not necessarily the lowest or best rate
actually charged to any customer and that UBOC may make various commercial or other loans
at rates of interest having no relationship to such rate. For purposes of this Agreement,
each change in the Reference Rate shall be effective as of the opening of business on the
date announced as the effective date of any change in such reference rate.

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

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

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

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

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

Reserve
Requirementmeans the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves), expressed as a decimal,
established by the FRB to which the Administrative Agent is subject for eurocurrency
funding (currently referred to as Eurocurrency liabilities in Regulation D).
Such reserve percentages shall include those imposed pursuant to Regulation D. Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under Regulation D. The Reserve Requirement
shall be adjusted automatically on and as of the effective date of any change in any such
reserve percentage.

Response Date is defined in Section 2.17.

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

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

SEC
means the Securities and Exchange Commission.

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

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

Subordinated
means, with respect to any debt or equity securities or other instruments of any sort,
that the principal or equivalent thereof is not required to be paid in whole or in part,
and after the occurrence of any event of any type described in Section 7.6
or 7.7 cannot be paid in whole or in part, unless and until the Obligations
(including the obligation to provide cash collateral pursuant to the last sentence of
Section 2.16.1) have been paid in full and the Commitments have terminated.

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

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

Synthetic
Lease Obligation means the monetary obligation of a Person under (i) a
so-called synthetic, off-balance-sheet or tax-retention lease or (ii) any other
agreement (excluding any lease that is treated as an operating lease under Agreement
Accounting Principles) for the use or possession of property creating obligations that do
not appear on the balance sheet of such Person but that, upon the insolvency or bankruptcy
of such Person, would be characterized as the indebtedness of such Person (without regard
to accounting treatment).

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

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

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

(i)    
          Net Worth; plus

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

(iii)    
          the aggregate obligations of the Borrower with respect to any preferred stock of
          the Borrower, including any preferred stock subject to mandatory redemption;
          plus

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

Trust
Preferred Securities means (a) the outstanding principal amount of 8.4% Trust
Preferred Securities due June 30, 2041 issued by the Borrower on May 24, 2001,
(b) the outstanding principal amount of 8.231% Trust Preferred Securities due
June 1, 2027 issued by the Borrower on June 6, 1997, and (c) the
outstanding principal amount of other trust preferred securities of the Borrower that are
similar in structure to those described in clauses (a) and (b).

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

UBOC
means Union Bank of California, N.A., a national banking association.

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

1.2
   Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the context
requires, any pronoun shall include the corresponding masculine, feminine and neuter
forms. The words include, includes and including shall
be deemed to be followed by the phrase without limitation. The word will shall
be construed to have the same meaning and effect as the word shall. Unless
the context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, restated, supplemented or
otherwise modified (subject to any restriction on such amendments, restatements,
supplements or modifications set forth in any Loan Document), (ii) any reference
herein to any Person shall be construed to include such Persons successors and
assigns (subject to any restrictions on assignment set forth in any Loan Document), (iii) the
words herein,hereof and hereunder, and words of
similar import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (iv) any reference herein to any law or regulation
shall, unless otherwise specified, refer to such law or regulation as amended, restated,
replaced or otherwise modified from time to time, and (v) the words asset and
property shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

1.3
   Accounting Terms. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with
Agreement Accounting Principles; provided that, if the Borrower notifies the
Administrative Agent that the Borrower requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the date hereof in Agreement
Accounting Principles or in the application thereof on the operation of such provision
(or if the Administrative Agent notifies the Borrower that the Required Lenders request
an amendment to any provision hereof for such purpose), regardless of whether any such
notice is given before or after such change in Agreement Accounting Principles or the
application thereof, then such provision shall be interpreted on the basis of Agreement
Accounting Principles as in effect and applied immediately before the effective date of
such change, until such notice is withdrawn or such provision is amended in accordance
herewith.

ARTICLE 2THE CREDITS

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

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

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

| | 2.1.3
   Repayment of Facility. The Aggregate Outstanding Credit Exposure and all other unpaid
Obligations shall be paid in full by the Borrower on the Facility Termination Date,
except that the Borrowers contingent reimbursement obligations in respect of any
Facility LCs outstanding on the Facility Termination Date shall be secured in accordance
with the last sentence of Section 2.16.1.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2.2
        Advances.

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

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

| | 2.2.3
   Method of Selecting Types and Interest Periods for Advances. The Borrower shall select
the Type of Advance and, in the case of each Eurodollar Advance, the Interest Period
applicable thereto, from time to time. The Borrower shall give the Administrative Agent
irrevocable notice in the form of Exhibit B (a Borrowing Notice) not later
than 10:00 a.m. (Los Angeles time) (a) on the Borrowing Date of each Floating Rate
Advance and (b) at least three Business Days before the Borrowing Date of each
Eurodollar Advance. A Borrowing Notice shall specify:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

(ii)    
          the aggregate amount of such Advance;

(iii)    
          the Type of Advance selected; and

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

| | 2.2.4
   Conversion and Continuation of Outstanding Advances. Floating Rate Advances shall
continue as Floating Rate Advances unless and until such Floating Rate Advances are
either converted into Eurodollar Advances in accordance with this Section 2.2.4 or
are repaid in accordance with Section 2.6. Each Eurodollar Advance shall continue as
a Eurodollar Advance until the end of the then applicable Interest Period therefor, at
which time such Eurodollar Advance shall be automatically converted into a Floating Rate
Advance unless (x) such Eurodollar Advance is or was repaid in accordance with
Section 2.6 or (y) the Borrower shall have given the Administrative Agent a
Conversion/Continuation Notice requesting that, at the end of such Interest Period, such
Eurodollar Advance continue as a Eurodollar Advance for the same or another Interest
Period. Subject to Section 2.5, the Borrower may elect from time to time to convert
all or any part of a Floating Rate Advance into a Eurodollar Advance. The Borrower shall
give the Administrative Agent irrevocable notice in the form of Exhibit C (a Conversion/Continuation
Notice) with respect to each conversion of a Floating Rate Advance into a
Eurodollar Advance, or continuation of a Eurodollar Advance, not later than 10:00 a.m.
(Los Angeles time) at least three Business Days prior to the date of the requested
conversion or continuation, specifying:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

2.3
   Method of Borrowing. Not later than 11:00 a.m. (Los Angeles time) on each Borrowing Date,
each Lender shall make available its Loan or Loans in funds immediately available in Los
Angeles to the Administrative Agent at its address specified pursuant to Article 13.
The Administrative Agent will make the funds so received from the Lenders available to
the Borrower at the Administrative Agents aforesaid address.

2.4
   Fees; Reductions in Aggregate Commitment.

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

| | 2.4.2
   The Borrower agrees to pay to the Administrative Agent on the Closing Date, for the
account of each Lender, an upfront fee as provided for in the Fee Letter.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.4.3
   The Borrower may permanently reduce the Aggregate Commitment in whole, or in part ratably
among the Lenders in a minimum amount of $10,000,000 and higher integral multiples of
$1,000,000, upon at least three Business Days prior written notice to the
Administrative Agent, which notice shall specify the amount of any such reduction;
provided that the amount of the Aggregate Commitment may not be reduced below the
Aggregate Outstanding Credit Exposure. All accrued Commitment Fees shall be payable on
the effective date of any termination of the Commitments in full.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2.5
   Minimum Amount of Each Advance; Limitation on Eurodollar Advances. Each Advance shall at
all times (including after giving effect to any prepayment, conversion or continuation of
all or part of an Advance) be in the amount of $1,000,000 or a higher integral multiple
of $500,000. The Borrower shall not request a Eurodollar Advance if, after giving effect
to the requested Eurodollar Advance, more than seven separate Eurodollar Advances would
be outstanding.

2.6
   Optional Principal Payments.The Borrower may from time to time pay, without penalty or
premium, all outstanding Floating Rate Advances or, in an aggregate amount of $1,000,000
or a higher integral multiple of $500,000, any portion of the outstanding Floating Rate
Advances upon one Business Days prior notice to the Administrative Agent. The
Borrower may from time to time pay, subject to the payment of any funding indemnification
amounts required by Section 3.4 but without penalty or premium, all outstanding
Eurodollar Advances or, in an aggregate amount of $1,000,000 or a higher integral
multiple of $500,000, any portion of the outstanding Eurodollar Advances upon three
Business Days prior notice to the Administrative Agent.

2.7
   Changes in Interest Rate, etc. Each Floating Rate Advance shall bear interest on the
outstanding principal amount thereof, for each day from and including the date such
Floating Rate Advance is made or is converted from a Eurodollar Advance pursuant to
Section 2.2.4 to but excluding the date it becomes due or is converted into a
Eurodollar Advance pursuant to Section 2.2.4, at the Alternate Base Rate for such
day. Changes in the rate of interest applicable to each Floating Rate Advance will take
effect simultaneously with each change in the Alternate Base Rate. Each Eurodollar
Advance shall bear interest on the outstanding principal amount thereof, from and
including the first day of each Interest Period applicable thereto to but excluding the
last day of such Interest Period, at a rate per annum equal to the sum of the Eurodollar
Rate for each day during such Interest Period plus the Applicable Eurodollar Margin.

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

2.9
   Method of Payment. All payments of the Obligations hereunder shall be made, without
setoff, deduction or counterclaim, in immediately available funds to the Administrative
Agent at the Administrative Agents address specified pursuant to Article 13,
or at any other Lending Installation of the Administrative Agent specified in writing by
the Administrative Agent to the Borrower, by 10:00 a.m. (Los Angeles time) on the date
when due and shall (except in the case of Reimbursement Obligations for which either LC
Issuer has not been fully indemnified by the Lenders, or as specifically required
hereunder) be applied ratably by the Administrative Agent among the Lenders. Each payment
delivered to the Administrative Agent for the account of any Lender shall be delivered
promptly by the Administrative Agent to such Lender in the same type of funds as the
Administrative Agent received at such Lenders address specified pursuant to Article 13
or at any Lending Installation specified in a notice received by the Administrative Agent
from such Lender. Each reference to the Administrative Agent in this Section 2.9
shall also be deemed to refer, and shall apply equally, to each LC Issuer, in the case of
payments required to be made by the Borrower to such LC Issuer pursuant to 2.16.6.

2.10
   Noteless Agreement; Evidence of Indebtedness.

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

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

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

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

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

2.12
   Interest Payment Dates; Interest and Fee Basis. Interest accrued on each Floating Rate
Advance shall be payable on each Payment Date, on any date on which such Floating Rate
Advance is paid, whether due to acceleration or otherwise, and at maturity. Interest
accrued on that portion of the outstanding principal amount of any Floating Rate Advance
converted into a Eurodollar Advance on a day other than a Payment Date shall be payable
on the date of conversion. Interest accrued on each Eurodollar Advance shall be payable
on the last day of its applicable Interest Period, on any date on which such Eurodollar
Advance is paid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurodollar Advance having an Interest Period longer than three months shall also
be payable on the last day of each three-month interval during such Interest Period.
Interest, Commitment Fees, LC Fees and LC Fronting Fees shall be calculated for actual
days elapsed on the basis of a 360-day year, except that interest on Floating Rate
Advances accruing at a rate based on the Reference Rate shall be computed on the basis of
a 365- or 366-day year, as applicable. Interest shall be payable for the day an Advance
is made but not for the day of any payment on the amount paid if payment is received
prior to 10:00 a.m. (Los Angeles time). If any payment of principal of or interest on an
Advance or any payment of fees in connection herewith shall become due on a day which is
not a Business Day, such payment shall be made on the next succeeding Business Day, and
such extension of time shall be reflected in computing interest or fees, as the case may
be.

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

2.14
   Lending Installations. Each Lender may book its Loans and its participations in any LC
Obligations, and each LC Issuer may book the Facility LCs issued thereby, at any Lending
Installation selected by such Lender or LC Issuer, as the case may be, and may change its
Lending Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation, and the Loans, Facility LCs, participations in LC Obligations
and any Notes issued hereunder shall be deemed held by each Lender or LC Issuer, as the
case may be, for the benefit of any such Lending Installation. Each Lender and LC Issuer
may, by written notice to the Administrative Agent and the Borrower in accordance with
Article 13, designate replacement or additional Lending Installations through which
Loans will be made by it or Facility LCs will be issued by it and for whose account
payments under this Agreement are to be made.

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

2.16
   Facility LCs.

| | 2.16.1
   Issuance. Each LC Issuer hereby agrees, on the terms and conditions set forth in this
Agreement, to issue standby letters of credit (each, a Facility LC) and to
renew, extend, increase, decrease or otherwise modify each Facility LC issued thereby (Modify, and
each such action a Modification), from time to time from and including the
date of this Agreement and prior to the Facility Termination Date upon the request of the
Borrower; provided that, immediately after each such Facility LC is issued or Modified,
the Aggregate Outstanding Credit Exposure shall not exceed the Aggregate Commitment. No
Facility LC shall have an expiry date later than one year after the Facility Termination
Date. If one or more Facility LCs are outstanding on the Facility Termination Date, the
Borrower shall cause to be deposited with the Administrative Agent on or before such date
cash collateral in the amount equal to the maximum aggregate amount then available to be
drawn under such Facility LCs (or cash equivalents of such types and in such amounts as
are reasonably satisfactory to the Administrative Agent), pursuant to documentation in
form and substance reasonably satisfactory to the Administrative Agent, to secure the
Borrowers contingent reimbursement obligations in respect of such Facility LCs.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | 2.16.3
   Notice. Subject to Section 2.16.1, the Borrower shall give each LC Issuer notice
prior to 12:00 noon (local time of such LC Issuer) at least three Business Days prior to
the proposed date of issuance or Modification of each Facility LC by such LC Issuer,
specifying the beneficiary, the proposed date of issuance or Modification and the expiry
date of such Facility LC, and describing the proposed terms of such Facility LC and the
nature of the transactions proposed to be supported thereby. Upon receipt of such notice,
the applicable LC Issuer shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify each Lender, of the contents thereof and of
the amount of such Lenders participation in such proposed Facility LC. The issuance
or Modification by an LC Issuer of any Facility LC shall, in addition to the conditions
precedent set forth in Article 4 (the satisfaction of which such LC Issuer shall
have no duty to ascertain), be subject to the conditions precedent that such Facility LC
shall be satisfactory to such LC Issuer and that the Borrower shall have executed and
delivered such application agreement and/or other instruments and agreements relating to
such Facility LC as such LC Issuer shall have reasonably requested (each, a Facility
LC Application). In the event of any conflict between the terms of this Agreement
and the terms of any Facility LC Application, the terms of this Agreement shall control.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.16.4
   LC Fees and LC Fronting Fees. The Borrower shall pay to the Administrative Agent, for the
account of the Lenders ratably in accordance with their respective Pro Rata Shares, with
respect to each Facility LC, a letter of credit fee at a per annum rate equal to the
Applicable LC Fee Rate in effect from time to time on the maximum undrawn amount
available under such Facility LC from time to time, such fee to be payable in arrears on
each Payment Date (each such fee, an LC Fee). In addition to the LC Fee, with
respect to each Facility LC issued by a particular LC Issuer, the Borrower shall pay to
such LC Issuer for its own account (x) a fronting fee at the rate of 0.125% per
annum on the maximum undrawn amount available under each such Facility LC from time to
time, such fee to be payable in arrears on each Payment Date (each such fee, an LC
Fronting Fee), and (y) documentary and processing charges in connection with
the issuance or Modification of, and draws under, each such Facility LC in accordance
with such LC Issuers standard schedule for such charges as in effect from time to
time.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.16.5
   Administration; Reimbursement by Lenders. Upon receipt from the beneficiary of any
Facility LC of any demand for payment under such Facility LC, the LC Issuer of such
Facility LC shall notify the Administrative Agent, and the Administrative Agent shall
promptly notify the Borrower and each Lender, as to the amount to be paid by such LC
Issuer as a result of such demand and the proposed payment date (the LC Payment Date).
The responsibility of each LC Issuer to the Borrower and each Lender shall be only to
determine that the documents (including each demand for payment) delivered under each
Facility LC issued by such LC Issuer in connection with each presentment thereunder shall
be in conformity in all material respects with such Facility LC. Each LC Issuer shall
endeavor to exercise the same care in the issuance and administration of Facility LCs
thereby as it does with respect to letters of credit in which no participations are
granted, it being understood that, in the absence of any gross negligence or willful
misconduct by such LC Issuer, each Lender shall be unconditionally and irrevocably
liable, without regard to the occurrence of any Default or Unmatured Default or any
condition precedent whatsoever, to reimburse such LC Issuer on demand for (i) such
Lenders Pro Rata Share of the amount of each payment made by such LC Issuer under
each Facility LC issued thereby to the extent such amount is not reimbursed by the
Borrower pursuant to Section 2.16.6, plus (ii) interest on the foregoing amount
to be reimbursed by such Lender, for each day from the date of such LC Issuers
demand for such reimbursement (or, if such demand is made after 12:00 noon (local time of
such LC Issuer) on such date, from the next succeeding Business Day) to the date on which
such Lender pays the amount to be reimbursed by it, at a rate of interest per annum equal
to the Federal Funds Effective Rate for the first three days and, thereafter, to the rate
applicable to Floating Rate Advances.
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| | 2.16.6
   Reimbursement by Borrower. The Borrower shall be irrevocably and unconditionally
obligated to reimburse each LC Issuer on or before the applicable LC Payment Date for any
amounts paid or to be paid by such LC Issuer upon any drawing under any Facility LC
issued thereby, without presentment, demand, protest or other formalities of any kind;
provided that neither the Borrower nor any Lender shall hereby be precluded from
asserting any claim for direct (but not consequential) damages suffered by the Borrower
or such Lender to the extent, but only to the extent, caused by (i) the willful
misconduct or gross negligence of such LC Issuer in determining whether a request
presented under any Facility LC issued by it complied with the terms of such Facility LC
or (ii) such LC Issuers failure to pay under any Facility LC issued by it
after the presentation to it of a request for payment strictly complying with the terms
and conditions of such Facility LC. All such amounts paid by either LC Issuer and
remaining unpaid by the Borrower shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to (x) the rate applicable to Floating Rate
Advances for such day if such day falls on or before the applicable LC Payment Date and
(y) the sum of 2% plus the rate applicable to Floating Rate Advances for such day if
such day falls after such LC Payment Date. Each LC Issuer will pay to each Lender ratably
in accordance with its Pro Rata Share all amounts received by such LC Issuer from the
Borrower for application in payment, in whole or in part, of any Reimbursement Obligation
in respect of any Facility LC issued by such LC Issuer, but only to the extent such
Lender has made payment to such LC Issuer in respect of such Facility LC pursuant to
Section 2.16.5.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.16.7
   Obligations Absolute. The Borrowers obligations under this Section 2.16 shall
be absolute and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which the Borrower may have or have had
against either LC Issuer, any Lender or any beneficiary of a Facility LC. The Borrower
further agrees with the LC Issuers and the Lenders that none of the LC Issuers or Lenders
shall be responsible for, and no Reimbursement Obligation in respect of any Facility LC
shall be affected by, among other things, (i) the validity or genuineness of
documents or of any endorsements thereon, even if such documents should in fact prove to
be in any or all respects invalid, fraudulent or forged, (ii) any dispute between or
among the Borrower, any of its Affiliates, the beneficiary of any Facility LC or any
financing institution or other party to which any Facility LC may be transferred or (iii)
any claims or defenses whatsoever of the Borrower or any of its Affiliates against the
beneficiary of any Facility LC or any such transferee. Neither LC Issuer shall be liable
for any error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Facility LC. The
Borrower agrees that any action taken or omitted by any LC Issuer or Lender under or in
connection with any Facility LC and the related drafts and documents, if done without
gross negligence or willful misconduct, shall be binding upon the Borrower and shall not
put any LC Issuer or Lender under any liability to the Borrower. Nothing in this Section 2.16.7
is intended to limit the right of the Borrower to make a claim against either LC Issuer
for damages as contemplated by the proviso to the first sentence of Section 2.16.6.
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| | 2.16.8
   Actions of LC Issuer. Each LC Issuer shall be entitled to rely, and shall be fully
protected in relying, upon any Facility LC, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex, teletype or
electronic message, statement, order or other document reasonably believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel, independent accountants and
other experts selected by such LC Issuer. Each LC Issuer shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall first have
received such advice or concurrence of the Required Lenders as it reasonably deems
appropriate or it shall first be indemnified to its reasonable satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Notwithstanding any other provision of
this Section 2.16, each LC Issuer shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Lenders and any future holders of a participation in
any Facility LC.
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| | 2.16.9
   Indemnification. The Borrower hereby agrees to indemnify and hold harmless each Lender,
each LC Issuer and the Administrative Agent, and their respective directors, officers,
agents and employees from and against any and all claims, damages, losses, liabilities,
costs and expenses which such Lender or LC Issuer or the Administrative Agent may incur
(or which may be claimed against such Lender or LC Issuer or the Administrative Agent by
any Person whatsoever) by reason of or in connection with the issuance, execution and
delivery or transfer of, or payment or failure to pay under, any Facility LC or any
actual or proposed use of any Facility LC, including any claims, damages, losses,
liabilities, costs and expenses which either LC Issuer may incur by reason of or in
connection with the failure of any other Lender to fulfill or comply with its obligations
to such LC Issuer hereunder (but nothing herein contained shall affect any rights the
Borrower may have against any defaulting Lender); provided that the Borrower shall not be
required to indemnify any Lender or LC Issuer or the Administrative Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the extent,
caused by (x) the willful misconduct or gross negligence of such LC Issuer in
determining whether a request for payment presented under any Facility LC issued thereby
complied with the terms of such Facility LC, (y) such LC Issuers failure to
pay under any such Facility LC after the presentation to it of such a request strictly
complying with the terms and conditions of such Facility LC or (z) disputes, not
involving the Borrower or any beneficiary of any Facility LC, solely among the Lenders,
either LC Issuer and/or the Administrative Agent relating to a Facility LC. Nothing in
this Section 2.16.9 is intended to limit the obligations of the Borrower under any
other provision of this Agreement.
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| | 2.16.10
   LendersIndemnification. Each Lender shall, ratably in accordance with its Pro Rata
Share, indemnify each LC Issuer, its Affiliates and their respective directors, officers,
agents and employees (to the extent not reimbursed by the Borrower) against any costs,
expenses (including reasonable counsel fees and disbursements), claims, demands, actions,
losses and liabilities (except such as result from such indemnitees gross
negligence or willful misconduct or such LC Issuers failure to pay under any
Facility LC issued thereby after the presentation to it of a request for payment strictly
complying with the terms and conditions of such Facility LC) that such indemnitees may
suffer or incur in connection with this Section 2.16 or any action taken or omitted
by such indemnitees hereunder.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

ARTICLE 3YIELD PROTECTION; TAXES

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

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

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

(iii)    
          imposes any other condition the result of which is to increase the cost to any
          Lender, LC Issuer or applicable Lending Installation of making, funding or
          maintaining its Eurodollar Loans or of issuing or participating in Facility LCs,
          or reduces any amount receivable by any Lender, LC Issuer or applicable Lending
          Installation in connection with its Eurodollar Loans, Facility LCs or
          participations therein, or requires any Lender, LC Issuer or applicable Lending
          Installation to make any payment calculated by reference to the amount of
          Eurodollar Loans, Facility LCs or participations therein held or interest
          received by it, by an amount deemed material by such Lender or LC Issuer, as the
          case may be, and the result of any of the
foregoing is to increase the cost to such Lender, LC Issuer or applicable Lending
Installation, as the case may be, of making or maintaining its Eurodollar Loans or
Commitment or of issuing or participating in Facility LCs or to reduce the return received
by such Lender, LC Issuer or applicable Lending Installation in connection with such
Eurodollar Loans, Commitment, Facility LCs or participations therein then, within 15 days
of demand by such Lender or LC Issuer, as the case may be, the Borrower shall pay such
Lender or LC Issuer such additional amount or amounts as will compensate such Lender, LC
Issuer or Lending Installation, as the case may be, for such increased cost or reduction
in amount received.

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

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

3.4
   Funding Indemnification. If any payment of a Eurodollar Advance occurs on a date which is
not the last day of the applicable Interest Period, whether because of acceleration,
prepayment or otherwise, or if a Eurodollar Advance is not made on the date specified by
the Borrower (including in the case of any continuation of or conversion into a
Eurodollar Advance) for any reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting therefrom, including
any loss or cost in liquidating or employing deposits acquired to fund or maintain such
Eurodollar Advance.

3.5
        Taxes.

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

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

(iii)    
          The Borrower hereby agrees to indemnify the Administrative Agent and each LC
          Issuer and Lender for the full amount of Taxes or Other Taxes (including any
          Taxes or Other Taxes imposed on amounts payable under this Section 3.5)
          paid by the Administrative Agent or such LC Issuer or Lender and any liability
          (including penalties, interest and expenses) arising therefrom or with respect
          thereto relating to this Agreement. Payments due under this indemnification
          shall be made within 30 days of the date the Administrative Agent or such LC
          Issuer or Lender makes demand therefor pursuant to Section 3.6.

(iv)    
          Each Lender that is not incorporated under the laws of the United States of
          America or a state thereof (each a Non-U.S. Lender) agrees that it
          will, within 10 Business Days after the date of this Agreement, deliver to each
          of the Borrower and the Administrative Agent two duly completed copies of
          whichever of the following is applicable: (a) Internal Revenue Service Form
          W-8BEN claiming eligibility for benefits of an income-tax treaty to which the
          United States of America is a party; (b) Internal Revenue Service Form W-8ECI;
          (c) in the case of a Non-U.S. Lender claiming the benefits of the exemption for
          portfolio interest under section 881(c) of the Code, (x) a certificate to the
          effect that such Non-U.S. Lender is not a bank within the meaning of
          section 881(c)(3)(A) of the Code, a 10 percent shareholder of the
          Borrower within the meaning of section 881(c)(3)(B) of the Code or a
          controlled foreign corporation as described in section 881(c)(3)(C)
          of the Code and (y) Internal Revenue Service Form W-8BEN; or (d) any other form
          prescribed by applicable law as a basis for claiming exemption from or a
          reduction in United States federal withholding tax, together with such
          supplementary documentation as may be prescribed by applicable law to permit the
          Borrower to determine the withholding or deduction required to be made. Each
          Non-U.S. Lender further undertakes to deliver to each of the Borrower and the
          Administrative Agent (x) renewals or additional copies of such form (or any
          successor form) on or before the date that such form expires or becomes
          obsolete, and (y) after the occurrence of any event requiring a change in
          the most recent forms so delivered by it, such additional forms or amendments
          thereto as may be reasonably requested by the Borrower or the Administrative
          Agent. All forms or amendments described in the preceding sentence shall certify
          that such Lender is entitled to receive payments under this Agreement without
          deduction or withholding of any United States federal income taxes, unless an
          event (including any change in a treaty, law or regulation) has occurred prior
          to the date on which any such delivery would otherwise be required which renders
          all such forms inapplicable or which would prevent such Lender from duly
          completing and delivering any such form or amendment with respect to it and such
          Lender advises the Borrower and the Administrative Agent that it is not capable
          of receiving payments without any deduction or withholding of United States
          federal income tax.

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

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

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

3.6
   Statements; Survival of Indemnity. To the extent reasonably possible, each Lender shall
designate an alternate Lending Installation with respect to its Eurodollar Loans to
reduce any liability of the Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to
avoid the unavailability of Eurodollar Advances under Section 3.3, so long as such
designation is not, in the judgment of such Lender, disadvantageous to such Lender. Each
Lender or LC Issuer, as applicable, shall deliver a written statement thereof to the
Borrower (with a copy to the Administrative Agent) as to the amount due, if any, under
Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable
detail the calculations upon which such Lender or LC Issuer determined such amount and
shall be final, conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a Eurodollar Loan
shall be calculated as though each Lender funded its Eurodollar Loan through the purchase
of a deposit of the type and maturity corresponding to the deposits described in clause
(ii) of the proviso contained in the definition of Eurodollar Base Rate in
Section 1.1, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement of any Lender or LC Issuer shall be
payable on demand after receipt by the Borrower of such written statement. The
obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of
the Obligations and termination of this Agreement.

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

ARTICLE 4CONDITIONS PRECEDENT

4.1
   Effectiveness. This Agreement shall not become effective until the Borrower has paid, or
made arrangements satisfactory to the Administrative Agent for payment of, all fees and
other amounts payable by the Borrower to the Administrative Agent, the Arrangers and the
Lenders on or before the Closing Date in connection with this Agreement (including, to
the extent invoiced, out-of-pocket expenses of the Administrative Agent and the
Arrangers) and furnished the Administrative Agent (with sufficient copies for the
Lenders) each of the following, in form and substance satisfactory to the Administrative
Agent:

(i)    
          the bylaws of the Borrower, certified by the Secretary or an Assistant Secretary
          of the Borrower to be correct and complete and in full force and effect; the
          charter documents of the Borrower, certified by the Secretary of State of
          Washington; and a certificate of good standing for the Borrower from the
          Secretary of State of Washington;

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

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

(iv)    
          a certificate, signed by the Chief Financial Officer of the Borrower, stating
          that on the date of the effectiveness hereof no Default or Unmatured Default has
          occurred and is continuing and that the representations and warranties contained
          in Article 5 are true and correct on such date except to the extent any
          such representation or warranty is stated to relate solely to an earlier date,
          in which case as of such earlier date;

(v)    
          a written opinion of Perkins Coie LLP, counsel for the Borrower, as to such
          matters as the Administrative Agent may reasonably request;

(vi)    
          the Fee Letter and any Notes requested by Lenders pursuant to Section 2.10,
          payable to the order of such requesting Lender, in each case duly executed by
          the Borrower;

(vii)    
          such funds-transfer agreements, authorizations, instructions and related
          documents as the Administrative Agent may have reasonably requested, duly
          executed by the Borrower and/or other appropriate Persons;

(viii)    
          evidence that the Credit Agreement dated as of December 23, 2002 among the
          Borrower, various financial institutions and Bank One, NA, as administrative
          agent, has been, or concurrently with the Closing Date is being, terminated; and

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

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

(i)    
          no Default or Unmatured Default exists or will result from such Credit
          Extension;

(ii)    
          the representations and warranties contained in Article 5 are true and
          correct as of such Credit Extension Date except to the extent any such
          representation or warranty is stated to relate solely to an earlier date, in
          which case such representation or warranty shall have been true and correct on
          and as of such earlier date; and

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

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

ARTICLE 5REPRESENTATIONS AND
WARRANTIES

The
Borrower represents and warrants to the Lenders that:

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

5.2
   Litigation and Contingent Obligations. There are not, in any court or before any referee
or arbitrator of any kind or before or by any governmental body, any actions, suits or
proceedings pending or, to the Borrowers knowledge, threatened (i) against or
affecting the Borrower or any Subsidiary or any of their respective businesses or
properties except for actions, suits or proceedings (a) that exist as of the date of
this Agreement and are disclosed in the Borrowers Annual Report on Form 10-K for
the year ended December 31, 2003, in the Borrowers Quarterly Report on Form
10-Q for the quarter ended March 31, 2004 or on Schedule 5.2 or (b) which,
singly or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect, (ii) which seeks to prevent, enjoin or delay the making of any Credit
Extension or (iii) affecting in an adverse manner the binding nature, validity or
enforceability of any Loan Document. Other than any liability incident to any action,
suit or proceeding described in subclause (i)(a) or (i)(b) of the foregoing sentence,
neither the Borrower nor any Subsidiary has any contingent obligations (including
Contingent Obligations) that, singly or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, except as disclosed in the reports or Schedule referred
to in subclause (i)(a) of the preceding sentence. Since the date of this Agreement, there
has been no change in the status of any action, suit, proceeding or contingent obligation
disclosed in the reports or Schedule referred to in subclause (i)(a) of the first
sentence of this Section that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.

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

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

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

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

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

5.8
   Taxes. United States Federal income tax returns of the Borrower and its Subsidiaries have
been examined and closed through the period ended December 31, 2000. The Borrower
and its Subsidiaries have filed all United States Federal and state income tax returns
which are required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Borrower or any of its
Subsidiaries, except such taxes, if any, as are being contested in good faith and by
proper proceedings. The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries in respect of taxes and other governmental charges are, in the opinion
of the Borrower, adequate.

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

5.10
   Material Adverse Change. Since March 31, 2004, there has been no change in the
business, Property, condition (financial or otherwise), operations or prospects of the
Borrower and its Subsidiaries taken as whole, as reflected in the financial statements
referred to in Schedule 5.11, that could reasonably be expected to have a Material
Adverse Effect.

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

5.12
   Environmental Matters. In the ordinary course of its business, the officers of the
Borrower consider the effect of Environmental Laws on the business of the Borrower and
its Subsidiaries, in the course of which they identify and evaluate potential risks and
liabilities accruing to the Borrower and its Subsidiaries due to Environmental Laws. On
the basis of this consideration, the Borrower has concluded that the application of
Environmental Laws to it and its Subsidiaries could not reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has received any notice
to the effect that its operations are not in material compliance with any of the
requirements of applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a release of
any toxic or hazardous waste or substance into the environment, which noncompliance or
remedial action could reasonably be expected to have a Material Adverse Effect.

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

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

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

5.16
   Compliance with Laws, Etc. The Borrower and its Subsidiaries are in compliance in all
material respects with (i) all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or agency
thereof having jurisdiction over the conduct of their respective businesses or the
ownership of their respective Property and (ii) all indentures, agreements and other
instruments binding upon them or upon their respective Property, except for any failure
to comply with any of the foregoing which could not reasonably be expected to have a
Material Adverse Effect.

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

5.18
   Properties.Each of the Borrower and its Subsidiaries has good title to, or valid
leasehold interests in, all of its real and personal properties material to its business,
except for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended
purposes.

ARTICLE 6COVENANTS

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

6.1
   Preservation of Existence and Business. Preserve and maintain, and cause each Significant
Subsidiary to preserve and maintain, its corporate existence and all of its material
rights, privileges, licenses and franchises, except as permitted by Sections 6.13
and 6.14, and carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted.

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

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

6.4
   Compliance with Applicable Laws and Contracts. Comply, and cause each Subsidiary to
comply, with the requirements of all applicable laws, rules, regulations and Governmental
Approvals, and all orders, writs, injunctions or decrees of any court or governmental
authority or agency, including Environmental Laws, if failure to comply with such
requirements could reasonably be expected to have a Material Adverse Effect.

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

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

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

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

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

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

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

(iii)    
          at the time that financial statements are furnished pursuant to
          Section 6.9(i) or (ii), a certificate of the Chief Financial Officer, the
          Treasurer, an Assistant Treasurer or any other financial officer of the Borrower
          substantially in the form of Exhibit D;

(iv)    
          promptly upon the filing thereof, copies of all registration statements, monthly
          or other regular reports, including reports on Form 8-K (or any successor form),
          filed by the Borrower with the SEC;

(v)    
          promptly upon request from time to time, such other information regarding the
          business, affairs, insurance or financial condition of the Borrower or any of
          its Subsidiaries (including any Benefit Plan and any reports of other
          information required to be filed under ERISA) as any Lender or the
          Administrative Agent may reasonably request; and

(vi)    
          within 5 days after the occurrence thereof, notice of (a) any Default or
          Unmatured Default and (b) any circumstance that could reasonably be
          expected to have a Material Adverse Effect or an adverse effect on the binding
          nature, validity or enforceability of any Loan Document as an obligation of the
          Borrower.

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

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

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

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

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

(v)    
          Liens existing on the date hereof and described in Schedule 6.10;

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

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

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

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

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

(xi)    
          Liens with respect to which cash in the amount secured by such Liens has been
          deposited with the Administrative Agent;

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

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

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

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

(xvi)    
          other Liens securing Indebtedness in an aggregate amount not exceeding
          $150,000,000.

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

6.12
   Minimum Interest Coverage Ratio. Not permit the ratio of (i) EBITDA for any period
of four consecutive fiscal quarters of the Borrower ending on the last day of a fiscal
quarter to (ii) consolidated interest expense of the Borrower for such period to be
less than 2.0 to 1.0. For purposes of the foregoing, dividends on any preferred stock of
the Borrower subject to mandatory redemption shall, to the extent included in computing
interest expense under clause (ii), be deducted from interest expense.

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

6.14
   Disposition of Assets. Not sell, lease, assign, transfer or otherwise dispose of any
asset or interest therein, except that this Section 6.14 shall not apply to (i) any
disposition of any asset or any interest therein in the ordinary course of business, (ii) any
disposition of obsolete or retired property not used or useful in its business, (iii) any
disposition of any asset or interest therein (a) for cash or cash equivalents or (b) in
exchange for utility plant, equipment or other utility assets, other than notes or other
obligations, in each case equal to the fair-market value (as determined in good faith by
the Board of Directors of the Borrower) of such asset or interest therein, and provided
that such disposition does not constitute a disposition of all or substantially all of
the assets of the Borrower, (iv) any disposition of an asset or any interest therein
(exclusive of any disposition permitted by clause (v)) in exchange for notes or other
obligations substantially equal to the fair-market value (as determined in good faith by
the management of the Borrower or, if the consideration for such disposition exceeds
$100,000,000, by the Board of Directors of the Borrower) of such asset or interest
therein, provided that the aggregate amount of notes or other obligations received after
the date hereof from any one obligor in one transaction or a series of transactions shall
not exceed 15% of the net book value of the assets of the Borrower, (v) any
disposition of accounts receivable, notes receivable or unbilled revenue, the rights
related to any of the foregoing and property related to any of the foregoing in
connection with Qualified Receivables Transactions and (vi) any disposition of an
asset or interest therein (exclusive of any disposition permitted under any of the
foregoing clauses (i) through (v)) to an Affiliate of the Borrower in exchange for
notes or other obligations substantially equal to the fair-market value (as determined in
good faith by the Board of Directors of the Borrower) of such asset or interest therein,
provided that the aggregate amount of notes or other obligations received by the Borrower
from Affiliates of the Borrower in exchange for any asset or interest therein after the
date hereof shall not exceed 7.5% of the net book value of the assets of the Borrower.

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

6.16
   Investments. Not, and not permit any Subsidiary to, make or suffer to exist any
Investments (including loans and advances to, and other Investments in, Subsidiaries), or
commitments therefor, create any Subsidiary, become or remain a partner in any
partnership or joint venture or make any Acquisition, except:

(i)              Investments
made in the ordinary course of business in connection with customary
          cash-management operations;

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

(iii)              Permitted
Acquisitions;

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

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

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

(vii)              other
Investments not exceeding $50,000,000 at any time outstanding.

ARTICLE 7DEFAULTS

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

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

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

7.3
   The breach by the Borrower of any of the terms or provisions of Section 6.1, 6.6,
6.7, 6.11, 6.12, 6.13, 6.14 or 6.16.

7.4
   The breach by the Borrower (other than a breach which constitutes a Default under another
Section of this Article 7) of any of the terms or provisions of this Agreement
or any other Loan Document which is not remedied within thirty days after written notice
from the Administrative Agent or any Lender.

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

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

7.7
   Without the application, approval or consent of the Borrower or any Significant
Subsidiary, a receiver, trustee, examiner, liquidator or similar official shall be
appointed for the Borrower or such Significant Subsidiary or any of its Property that,
when combined with the Property of any of such Persons Subsidiaries that is also
the subject of any such appointment, constitutes a Substantial Portion of the Property of
such Person and its Subsidiaries, or a proceeding described in Section 7.6(iv) shall
be instituted against the Borrower or any Significant Subsidiary, and such appointment
continues undischarged, or such proceeding continues undismissed or unstayed, for a
period of 60 consecutive days.

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

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

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

7.11
   Any Change in Control shall occur.

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

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

ARTICLE 8ACCELERATION, WAIVERS,
AMENDMENTS AND REMEDIES

8.1
   Acceleration.

(i)    
          If any Default described in Section 7.6 or 7.7 occurs with respect to the
          Borrower, the obligations of the Lenders to make Loans hereunder and the
          obligation and power of the LC Issuers to issue Facility LCs shall automatically
          terminate, and the Obligations (including the obligation to provide cash
          collateral pursuant to the last sentence of Section 2.16.1) shall
          immediately become due and payable without any election or action on the part of
          the Administrative Agent, either LC Issuer or any Lender. If any other Default
          occurs and is continuing, the Required Lenders (or the Administrative Agent with
          the consent of the Required Lenders) may terminate or suspend the obligations of
          the Lenders to make Loans hereunder and the obligation and power of the LC
          Issuers to issue Facility LCs, or declare the Obligations to be due and payable,
          or both, whereupon such obligations of the Lenders and such obligation and power
          of the LC Issuers shall be terminated or suspended and/or the Obligations shall
          become immediately due and payable, without presentment, demand, protest or
          notice of any kind, all of which the Borrower hereby expressly waives.

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

8.2
   Amendments. Neither this Agreement nor any provision hereof may be waived, amended or
otherwise modified except pursuant to an agreement or agreements in writing entered into
by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent
with the consent of the Required Lenders; provided that no such agreement shall (i) increase
the Commitment of any Lender without the written consent of such Lender, (ii) reduce
the principal amount of any Loan or Reimbursement Obligation or the rate of interest
thereon, or reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the scheduled date of payment of the principal
amount of any Loan or Reimbursement Obligation, any interest thereon or any fees payable
hereunder, reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of each
Lender affected thereby, (iv) change Section 11.2 in a manner that would alter
the pro rata sharing of payments required thereby, without the written consent of each
Lender, or (v) change any of the provisions of this Section, the definition of Required
Lenders or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any determination
or grant any consent hereunder, without the written consent of each Lender; further
provided that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent or any LC Issuer or Arranger hereunder without the
prior written consent of the Administrative Agent or such Issuing Bank or Arranger, as
the case may be.

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

ARTICLE 9GENERAL PROVISIONS

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

9.2
      Governmental  Regulation.  Anything  contained  in this  Agreement  to the  contrary
 notwithstanding,  no LC Issuer or Lender  shall be  obligated to extend  credit to the
 Borrower in  violation  of any  applicable  statute or regulation.

9.3
      Headings.  Section headings  in this  Agreement are for  convenience  of reference
 only and shall not govern the interpretation of any of the provisions hereof.

9.4
   Entire Agreement. This Agreement embodies the entire agreement and understanding among
the Borrower, the Administrative Agent, the LC Issuers and the Lenders with respect to
the subject matter hereof and supersedes all prior agreements and understandings among
the Borrower, the Administrative Agent, the LC Issuers and the Lenders relating to the
subject matter hereof, except as specifically contemplated hereby. The Borrower
acknowledges that no oral agreement or oral commitment to lend money, extend credit or
forbear from enforcing repayment of a debt is enforceable under the law of the State of
Washington.

9.5
   Several Obligations; Benefits of this Agreement. The respective obligations of the
Lenders hereunder are several and not joint, and no Lender shall be the partner or agent
of any other (except to the extent to which the Administrative Agent is authorized to act
as such). The failure of any Lender to perform any of its obligations hereunder shall not
relieve any other Lender from any of its obligations hereunder. This Agreement shall not
be construed so as to confer any right or benefit upon any Person other than the parties
to this Agreement and their respective successors and assigns; provided that the parties
hereto expressly agree that the Arrangers shall enjoy the provisions of Sections 9.6, 9.9
and 10.11 to the extent specifically set forth therein and shall have the right to
enforce such provisions on their own behalf and in their own names to the same extent as
if they were parties to this Agreement.

9.6
   Expenses; Indemnification.

(i)    
          The Borrower shall reimburse the Administrative Agent and each Arranger for
          their reasonable costs, internal charges and reasonable out-of-pocket expenses
          (including, in the case of the Administrative Agent, reasonable fees, time
          charges and expenses of attorneys for the Administrative Agent, including
          attorneys that are employees of the Administrative Agent) paid or incurred by
          the Administrative Agent or either Arranger in connection with the preparation,
          negotiation, execution, delivery, syndication, distribution (including via the
          Internet), amendment and modification of the Loan Documents and the review and
          administration of the Loan Documents in connection with any request made by the
          Borrower; provided that the Borrower shall only be required to reimburse the
          Administrative Agent for the fees and expenses of one law firm, subject to the
          limitations agreed to by the Borrower and the Administrative Agent. The Borrower
          also agrees to reimburse the Administrative Agent, the LC Issuers, the Arrangers
          and the Lenders for their reasonable costs, internal charges and reasonable
          out-of-pocket expenses (including reasonable fees, time charges and expenses of
          attorneys for the Administrative Agent, the LC Issuers, the Arrangers and the
          Lenders, including attorneys that are employees of the Administrative Agent, the
          LC Issuers, the Arrangers or the Lenders) paid or incurred by the Administrative
          Agent, either LC Issuer, either Arranger or any Lender in connection with the
          collection and enforcement of the Loan Documents during the existence of any
          Default, including in connection with any proceeding described in
          Section 7.6 or 7.7.

(ii)    
          The Borrower hereby further agrees to indemnify the Administrative Agent, each
          LC Issuer, each Arranger, each Lender, their respective Affiliates, and each of
          their directors, officers, agents and employees against all losses, claims,
          damages, penalties, judgments, liabilities and expenses (including all expenses
          of litigation or preparation therefor, whether or not the Administrative Agent,
          either LC Issuer, either Arranger, any Lender or any such Affiliate is a party
          thereto) which any of them may pay or incur arising out of or relating to this
          Agreement, the other Loan Documents, the transactions contemplated hereby or
          thereby or the direct or indirect application or proposed application of the
          proceeds of any Credit Extension hereunder, except to the extent that any such
          losses, claims, damages, penalties, judgments, liabilities or expenses are
          determined in a final, non-appealable judgment by a court of competent
          jurisdiction to have resulted from the gross negligence or willful misconduct of
          the party seeking indemnification. The obligations of the Borrower under this
          Section 9.6 shall survive the termination of this Agreement.

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

9.8
   Severability of Provisions. Any provision of this Agreement or any Note that is held to
be inoperative, unenforceable or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable or invalid without affecting the remaining
provisions in that jurisdiction or the operation, enforceability or validity of that
provision in any other jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable.

9.9
   Nonliability of Lenders.The relationship between the Borrower on the one hand and the
Lenders, the LC Issuers, the Arrangers and the Administrative Agent on the other hand
shall be solely that of borrower and lender. Neither the Administrative Agent nor any LC
Issuer, Lender or Arranger shall have any fiduciary responsibilities to the Borrower.
Neither the Administrative Agent nor any LC Issuer, Lender or Arranger undertakes any
responsibility to the Borrower to review or inform the Borrower of any matter in
connection with any phase of the Borrowers business or operations. The Borrower
agrees that neither the Administrative Agent nor any LC Issuer, Lender or Arranger shall
have any liability to the Borrower (whether sounding in tort, contract or otherwise) for
losses suffered by the Borrower in connection with, arising out of, or in any way related
to, the transactions contemplated and the relationship established by the Loan Documents,
or any act, omission or event occurring in connection therewith, unless it is determined
in a final, non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which recovery
is sought. Neither the Administrative Agent nor any LC Issuer, Lender or Arranger shall
have any liability with respect to, and the Borrower hereby waives, releases and agrees
not to sue for, any special, indirect or consequential damages suffered by the Borrower
in connection with, arising out of, or in any way related to the Loan Documents or the
transactions contemplated thereby.

9.10
   Confidentiality. Each of the Administrative Agent, the Lenders and the LC Issuers agrees
to maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (i) to its Affiliates and to its and its Affiliates respective
partners, directors, officers, employees, agents, advisors and other representatives (it
being understood that the Persons to whom such disclosure is made will be informed of the
confidential nature of the Information and instructed to keep the Information
confidential), (ii) to the extent requested by any regulatory authority purporting
to have jurisdiction over it (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (iii) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (iv) to
any other party hereto, (v) in connection with the exercise of any remedies
hereunder or under any other Loan Document, any action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (vi) subject to an agreement containing provisions substantially the
same as those of this Section, to (a) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations under this
Agreement or (b) any actual or prospective counterparty (or its advisors) to any
swap or derivative transaction relating to the Borrower and its obligations, (vii) with
the consent of the Borrower or (viii) to the extent such Information (a) becomes
publicly available other than as a result of a breach of this Section or (b) becomes
available to the Administrative Agent, any Lender, either LC Issuer or any of their
respective Affiliates on a nonconfidential basis from a source other than the Borrower.

For purposes of this Section,
Information means all information received from the Borrower or any Subsidiary
relating to the Borrower or any Subsidiary or any of their respective businesses, other
than any such information that is available to the Administrative Agent, any Lender or
either LC Issuer on a nonconfidential basis before disclosure by the Borrower or any
Subsidiary; provided that, in the case of information received from the Borrower or any
Subsidiary after the date hereof, such information either is financial information or is
clearly identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person exercises the same
degree of care to maintain the confidentiality of the Information as a Person acting in
the capacity of such Person in connection with this Agreement (i.e., as administrative
agent, a lender, a letter of credit issuer or as described in clause (i) above) would
customarily accord to its own confidential information.

9.11
   Non-Reliance. Each Lender hereby represents that it is not relying on or looking to any
margin stock (as defined in Regulation U) for the repayment of the Credit Extensions
provided for herein.

9.12
   Disclosure. The Borrower and each Lender hereby (i) acknowledge and agree that UBOC
and/or its Affiliates from time to time may hold investments in, make other loans to or
have other relationships with the Borrower and its Affiliates, and (ii) waive any
liability of UBOC and/or its Affiliates to the Borrower or any Lender, respectively,
arising out of or resulting from such investments, loans or relationships, other than
liabilities arising out of the gross negligence or willful misconduct of UBOC and/or its
Affiliates.

9.13
   Counterparts. This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may execute
this Agreement by signing any such counterpart.

ARTICLE 10THE ADMINISTRATIVE AGENT

10.1
   Appointment; Nature of Relationship. UBOC is hereby appointed by each of the Lenders as
its contractual representative (herein referred to as the Administrative Agent)
hereunder and under each other Loan Document, and each of the Lenders irrevocably
authorizes the Administrative Agent to act as the contractual representative of such
Lender with the rights and duties expressly set forth herein and in the other Loan
Documents. The Administrative Agent agrees to act as such contractual representative upon
the express conditions contained in this Article 10. Notwithstanding the use of the
defined term Administrative Agent, it is expressly understood and agreed that
the Administrative Agent shall not have any fiduciary responsibilities to any Lender by
reason of this Agreement or any other Loan Document and that the Administrative Agent is
merely acting as the contractual representative of the Lenders with only those duties as
are expressly set forth in this Agreement and the other Loan Documents. In its capacity
as the Lenders contractual representative, the Administrative Agent (i) does
not hereby assume any fiduciary duties to any of the Lenders, (ii) is a representative of
the Lenders within the meaning of the term secured party as defined in the
California Uniform Commercial Code and (iii) is acting as an independent contractor,
the rights and duties of which are limited to those expressly set forth in this Agreement
and the other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Administrative Agent on any agency theory or any other theory of liability
for breach of fiduciary duty, all of which claims each Lender hereby waives.

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

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

10.4
   No Responsibility for Loans, Recitals, etc. Neither the Administrative Agent nor any of
its directors, officers, agents or employees shall be responsible for, or have any duty
to ascertain, inquire into or verify, (i) any statement, warranty or representation
made in connection with any Loan Document or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of any obligor under any
Loan Document, including any agreement by an obligor to furnish information directly to
each Lender; (iii) the satisfaction of any condition specified in Article 4,
except receipt of items required to be delivered solely to the Administrative Agent; (iv) the
existence or possible existence of any Default or Unmatured Default; (v) the
validity, enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; or (vi) the
financial condition of the Borrower or any guarantor of any of the Obligations or of any
of the Borrowers or any such guarantors respective Subsidiaries. The
Administrative Agent shall have no duty to disclose to the Lenders information that is
not required to be furnished by the Borrower to the Administrative Agent at such time,
but is voluntarily furnished by the Borrower to the Administrative Agent (either in its
capacity as Administrative Agent or in its individual capacity).

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

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

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

10.8
   Administrative Agents Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Administrative Agent ratably in proportion to their
respective Commitments (or, if the Commitments have been terminated, in proportion to
their Commitments immediately prior to such termination), to the extent not reimbursed or
indemnified by the Borrower, (i) for any amounts for which the Administrative Agent
is entitled to reimbursement by the Borrower under the Loan Documents, (ii) for any
other expenses incurred by the Administrative Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and enforcement of
the Loan Documents (including for any expenses incurred by the Administrative Agent in
connection with any dispute between the Administrative Agent and any Lender or between
two or more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of the Loan Documents or any
other document delivered in connection therewith or the transactions contemplated thereby
(including for any such amounts incurred by or asserted against the Administrative Agent
in connection with any dispute between the Administrative Agent and any Lender or between
two or more of the Lenders), or the enforcement of any of the terms of the Loan Documents
or of any such other documents; provided that (a) no Lender shall be liable for any
of the foregoing to the extent any of the foregoing is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Administrative Agent and (b) any indemnification
required pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this
Section 10.8, be paid by the relevant Lender in accordance with the provisions
thereof. The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.

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

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

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

10.12
   Successor Administrative Agent. The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be effective
upon the appointment of a successor Administrative Agent or, if no successor
Administrative Agent has been appointed, 45 days after the retiring Administrative Agent
gives notice of its intention to resign. The Administrative Agent may be removed at any
time with or without cause by written notice received by the Administrative Agent from
the Required Lenders, such removal to be effective on the date specified by the Required
Lenders. Upon any such resignation or removal, the Required Lenders with the consent of
the Borrower (so long as no Default or Unmatured Default exists), which consent shall not
be unreasonably withheld or delayed, shall have the right to appoint, on behalf of the
Borrower and the Lenders, a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Lenders within thirty
days after the resigning Administrative Agents giving notice of its intention to
resign, then the resigning Administrative Agent may appoint, on behalf of the Borrower
and the Lenders, a successor Administrative Agent. Notwithstanding the previous sentence,
the Administrative Agent may at any time, without the consent of the Borrower or any
Lender, appoint any of its Affiliates which is a commercial bank as a successor
Administrative Agent hereunder. If the Administrative Agent has resigned or been removed
and no successor Administrative Agent has been appointed, the Lenders may perform all the
duties of the Administrative Agent hereunder, and the Borrower shall make all payments in
respect of the Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Administrative Agent shall be deemed to be
appointed hereunder until such successor Administrative Agent has accepted the
appointment. Any such successor Administrative Agent shall be a commercial bank having
capital and retained earnings of at least $100,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Administrative Agent.
Upon the effectiveness of the resignation or removal of the Administrative Agent, the
resigning or removed Administrative Agent shall be discharged from its duties and
obligations hereunder and under the Loan Documents. After the effectiveness of the
resignation or removal of an Administrative Agent, the provisions of this Article 10
shall continue in effect for the benefit of such Administrative Agent in respect of any
actions taken or omitted to be taken by it while it was acting as the Administrative
Agent hereunder and under the other Loan Documents. In the event that there is a
successor to the Administrative Agent by merger, or the Administrative Agent assigns its
duties and obligations to an Affiliate pursuant to this Section 10.12, then the term
Reference Rate as used in this Agreement shall mean the reference rate, prime
rate, corporate base rate or other analogous rate of the new Administrative Agent.

10.13
   Administrative Agents Fee. The Borrower agrees to pay to the Administrative Agent,
for its own account, (i) an annual administrative agents fee in the amount of
$12,500, payable on the Closing Date and on each anniversary thereof, and (ii) such other
fees as may be agreed to by the Borrower and the Administrative Agent from time to time.

10.14
   Delegation to Affiliates.The Borrower and the Lenders agree that the Administrative
Agent may delegate any of its duties under this Agreement to any of its Affiliates. Any
such Affiliate (and such Affiliates directors, officers, agents and employees)
which performs duties in connection with this Agreement shall be entitled to the same
benefits of the indemnification, waiver and other protective provisions to which the
Administrative Agent is entitled under Articles 9 and 10.

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

ARTICLE 11SETOFF; PAYMENTS

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

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

ARTICLE 12BENEFIT OF AGREEMENT;
ASSIGNMENTS; PARTICIPATIONS

12.1
   Successors and Assigns. The terms and provisions of the Loan Documents shall be binding
upon and inure to the benefit of the Borrower and the Lenders and their respective
successors and assigns, except that (i) the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents and (ii) any assignment by
any Lender of its rights and obligations under the Loan Documents must be made in
compliance with Section 12.3. The parties to this Agreement acknowledge that clause
(ii) of this Section 12.1 relates only to absolute assignments and does not
prohibit assignments creating security interests, including any pledge or assignment by
any Lender of all or any portion of its rights under this Agreement and any Note to a
Federal Reserve Bank; provided that no such pledge or assignment creating a security
interest shall release the transferor Lender from its obligations hereunder unless and
until the parties thereto have complied with the provisions of Section 12.3. The
Administrative Agent may treat the Person which made any Loan or which holds any Note as
the owner thereof for all purposes hereof unless and until such Person complies with
Section 12.3; provided that the Administrative Agent may in its discretion (but
shall not be required to) follow instructions from the Person which made any Loan or
which holds any Note to direct payments relating to such Loan or Note to another Person.
Any assignee of the rights to any Loan or any Note agrees by acceptance of such
assignment to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person that, at the time of making such request or
giving such authority or consent, is the owner of the rights to any Loan (whether or not
a Note has been issued in evidence thereof) shall be conclusive and binding on any
subsequent holder or assignee of the rights to such Loan.

12.2
   Participations.

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

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

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

12.3
   Assignments.

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

| | 12.3.2
   Register. The Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at one of its offices in California a copy of each Lender
Assignment delivered to it and a register for the recording of the names and addresses of
the Lenders and their Commitments and Outstanding Credit Exposures pursuant to the terms
hereof from time to time (theRegister). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 12.3.3
   Effect; Effective Date. Upon (i) delivery to the Administrative Agent of an
assignment, together with any consent(s) required by Section 12.3.1, and (ii) payment
of a $3,500 fee to the Administrative Agent by the Purchaser or transferor Lender for
processing such assignment (unless such fee is waived by the Administrative Agent), such
assignment shall become effective on the effective date specified in such assignment. The
assignment shall contain a representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Commitment and Outstanding Credit Exposure
under the applicable assignment agreement constitutes plan assets as defined
under ERISA and that the rights and interests of the Purchaser in and under the Loan
Documents will not be plan assets under ERISA. On and after the effective
date of such assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by or on behalf of the Lenders and shall
have all the rights and obligations of a Lender under the Loan Documents, to the same
extent as if it were an original party hereto, and no further consent or action by the
Borrower, the Lenders or the Administrative Agent shall be required to release the
transferor Lender with respect to the percentage of the Aggregate Commitment and Loans
assigned to such Purchaser. Upon the consummation of any assignment to a Purchaser
pursuant to this Section 12.3.3, the transferor Lender, the Administrative Agent and
the Borrower shall, if the transferor Lender or the Purchaser desires that its Loans be
evidenced by a Note, make appropriate arrangements so that a new Note or, as appropriate,
a replacement Note is issued to such transferor Lender and a new Note or, as appropriate,
a replacement Note is issued to such Purchaser, in each case in principal amounts
reflecting their respective Commitments, as adjusted pursuant to such assignment.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12.4
   Tax Treatment. If any interest in any Loan Document is transferred to any Purchaser or
Participant which is organized under the laws of any jurisdiction other than the United
States or any State thereof, the transferor Lender shall cause such Purchaser or
Participant, concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5(iv).

ARTICLE 13NOTICES

13.1
   Notices. Except as otherwise permitted by Section 2.11 with respect to borrowing
notices, all notices, requests and other communications to any party hereunder shall be
in writing (including electronic transmission, facsimile transmission or similar writing)
and shall be given to such party: (x) in the case of the Borrower or the
Administrative Agent, at its address or facsimile number set forth on the signature pages
hereof, (y) in the case of any Lender, at its address or facsimile number set forth
below its signature hereto (including, as applicable, on a Lender Assignment) or (z) in
the case of any party, at such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Administrative Agent and the Borrower
in accordance with the provisions of this Section 13.1. Each such notice, request or
other communication shall be effective (i) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section and confirmation of
receipt is received, (ii) if given by mail, four Business Days after such
communication is deposited in the mails with first-class postage prepaid, addressed as
aforesaid, or (iii) if given by any other means, when delivered (or, in the case of
electronic transmission, received) at the address specified in this Section;provided
that notices to the Administrative Agent under Article 2 shall not be effective
until received.

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

ARTICLE 14CHOICE OF LAW; CONSENT
TO JURISDICTION; WAIVER OF JURY TRIAL

14.1
   CHOICE OF LAW. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS (BUT WITHOUT REGARD TO THE
CONFLICT-OF-LAWS PROVISIONS) OF THE STATE OF CALIFORNIA, BUT GIVING EFFECT TO FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS.

14.2
   CONSENT TO JURISDICTION.THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR CALIFORNIA STATE COURT SITTING IN LOS
ANGELES, CALIFORNIA IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY NOTE, AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE
OF ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT,
EITHER LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF
ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
ADMINISTRATIVE AGENT, EITHER LC ISSUER, ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE
AGENT, EITHER LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY NOTE SHALL BE
BROUGHT ONLY IN A COURT IN LOS ANGELES, CALIFORNIA.

14.3
   WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, EACH LC ISSUER AND EACH
LENDER HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY NOTE, ANY OTHER
LOAN DOCUMENT OR ANY RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.

[THE
REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]

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

| |                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------
| | PUGET SOUND ENERGY, INC.                                                                                                                            
| |                                                                                                                                                     
| |                                                                                                                                                     
| | By:________________________                                                                                                                         
| | Donald E. Gaines

Vice President Finance

& Treasurer                                                                                               
| |                                                                                                                                                     
| | Puget Sound Energy, Inc.

P.O. Box 97034 PSE-08N

Bellevue, WA  98009-9734

Attention: Elizabeth J. Rice

Telephone: 425-462-3752

FAX: 425-462-3490
| |                                                                                                                                                     
| | For Courier Deliveries:                                                                                                                             
| |                                                                                                                                                     
| | 10885 NE 4th Street PSE-08N

Bellevue, WA  98004-5591                                                                                               

| |                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | UNION BANK OF CALIFORNIA, N.A.,Individually, as Administrative Agent and as LC Issuer                                                                                                                                             
| |                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                   
| | By:________________________
Name:______________________Title:_______________________                                                                                                                                              
| |                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                   
| | Operations Contact:                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                   
| | Union Bank of California, N.A.

CLSO, Commercial Loan Operations

601 Potrero Grande, 2nd Floor

Monterey Park, CA  91754

Attention: Maria Suncin

Telephone: 323-720-2870

FAX: 323-720-2252/2251

E-mail: maria.suncin@uboc.com
| |                                                                                                                                                                                                                                   
| | Credit Contact:                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                   
| | Union Bank of California, N.A.

445 South Figueroa Street

Los Angeles, CA  90071

Attention: Sonja I. Sevcik

FAX: 213-236-4096                                                                                                  

| |                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | CITIBANK, N.A.                                                                                                                                                                       
| |                                                                                                                                                                                      
| |                                                                                                                                                                                      
| | By:________________________
Name:______________________Title:_______________________                                                                                                 
| |                                                                                                                                                                                      
| |                                                                                                                                                                                      
| | Operations Contact:                                                                                                                                                                  
| |                                                                                                                                                                                      
| | Karen Riley

2 Penns Way, Suite 110

New Castle, DE 19720

Telephone: 302-894-6084

FAX: 212-994-0847

E-mail: karen.riley@citigroup.com                                             
| |                                                                                                                                                                                      
| | Credit Contact:                                                                                                                                                                      
| |                                                                                                                                                                                      
| | Stuart Glen

Vice President

388 Greenwich Street

21st Floor  Global Power

New York, NY 10013

Telephone: 212-816-8553

FAX: 212-816-8098

   E-mail:  stuart.j.glen@citigroup.com

| |                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | JPMORGAN CHASE BANK                                                                                                                                                               
| |                                                                                                                                                                                   
| |                                                                                                                                                                                   
| | By:________________________
Name:______________________Title:_______________________                                                                                              
| |                                                                                                                                                                                   
| |                                                                                                                                                                                   
| | Primary Operations Contact:                                                                                                                                                       
| |                                                                                                                                                                                   
| | Claudette Reid 1111 Fannin Street, 10th Floor Houston, TX 77002 Telephone: 713-750-2355 
FAX:
713-427-6307 E-mail: claudette.a.reid@jpmchase.com                                  
| |                                                                                                                                                                                   
| | Alternate Operations Contact:                                                                                                                                                     
| |                                                                                                                                                                                   
| | Jaime Garcia 1111 Fannin Street, 10th Floor Houston, TX 77002 Telephone: 713-750-2377
FAX:
713-427-6307E-mail: jaime.e.garcia@jpmchase.com                                        
| |                                                                                                                                                                                   
| | Credit Contact:                                                                                                                                                                   
| |                                                                                                                                                                                   
| | Michael J. DeForge 
Vice President JPMorgan Chase Bank 270 Park Ave., 4th Floor New York, NY 10017
Telephone: 212-270-1656 FAX: 212-270-3089E-mail:
michael.j.deforge@jpmorgan.com

| |                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------
| | KEYBANK NATINAL ASSOCIATION                                                                                                                          
| |                                                                                                                                                      
| |                                                                                                                                                      
| | By:________________________
Name:______________________Title:_______________________                                                                 
| |                                                                                                                                                      
| |                                                                                                                                                      
| | Operations Contact:                                                                                                                                  
| |                                                                                                                                                      
| | Madhu Pandya Deal Administrator 127 Public Square Cleveland, OH 44114 Telephone: 216-689-5277
FAX: 216-689-5962 E-mail: madhu_pandya@keybank.com     
| |                                                                                                                                                      
| | Credit Contact:                                                                                                                                      
| |                                                                                                                                                      
| | Keven D. Smith Portfolio Manager 601 108th Avenue N.E. Bellevue, WA 98004 Telephone:
425-709-4579 FAX: 425-709-4587 E-mail: keven_d_smith@keybank.com

| |                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | WACHOVIA BANK, N.A.                                                                                                                                           
| |                                                                                                                                                               
| |                                                                                                                                                               
| | By:________________________
Name:______________________Title:_______________________                                                                          
| |                                                                                                                                                               
| |                                                                                                                                                               
| | Operations Contact:                                                                                                                                           
| |                                                                                                                                                               
| | Cynthia Rawson 201 S. College St., CP-9 Charlotte, NC 28288-1183 Telephone: 704-374-4425 FAX:
704-715-0097 E-mail: cynthia.rawson@wachovia.com                
| |                                                                                                                                                               
| | Credit Contact:                                                                                                                                               
| |                                                                                                                                                               
| | Rotcher Watkins Managing Director 191 Peachtree St., NE Atlanta, GA 30303-1740 Telephone:
404-332-6211 FAX: 404-332-4058 E-mail:  rotcher.watkins@wachovia.com

| |                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | WELLS FARGO BANK, N.A.                                                                                                                                                             
| |                                                                                                                                                                                    
| |                                                                                                                                                                                    
| | By:________________________
Name:______________________Title:_______________________                                                                                               
| |                                                                                                                                                                                    
| |                                                                                                                                                                                    
| | Operations Contact:                                                                                                                                                                
| |                                                                                                                                                                                    
| | Ginnie Padgett
201
Third Street, 8th Floor, MAC A0187-081 San Francisco, CA 94103 Telephone: 415-477-5374 

FAX:
415-512-1943 E-mail: padgetgm@wellsfargo.com                      
| |                                                                                                                                                                                    
| | Primary Credit Contact:                                                                                                                                                            
| |                                                                                                                                                                                    
| | Deborah Watson

Vice President
& Senior Relationship Manager 999 Third Ave., 11th Floor Seattle, WA 98104 Telephone:
206-292-3668 FAX: 206-292-3595 E-mail: watsonds@wellsfargo.com
| |                                                                                                                                                                                    
| | Alternate Credit Contact:                                                                                                                                                          
| |                                                                                                                                                                                    
| | Marilyn
Converse Vice President & Associate 999 Third Ave., 11th Floor Seattle, WA 98104
Telephone: 206-292-3671 FAX: 206-292-3595 E-mail: convermn@wellsfargo.com                 

| |                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | THE BANK OF NOVA SCOTIA                                                                                                                                            
| |                                                                                                                                                                    
| |                                                                                                                                                                    
| | By:________________________
Name:______________________Title:_______________________                                                                               
| |                                                                                                                                                                    
| |                                                                                                                                                                    
| | Primary Operations Contact:                                                                                                                                        
| |                                                                                                                                                                    
| | Adriene
Mays One Liberty Plaza, 24th Floor New York, NY 10006 Telephone: 212-225-5047 FAX:
212-225-5145/5271 E-mail: adriene_mays@scotiacapital.com                
| |                                                                                                                                                                    
| | Alternate Operations Contact:                                                                                                                                      
| |                                                                                                                                                                    
| | Cheryl
Williams One Liberty Plaza, 24th Floor New York, NY 10006 Telephone: 212-225-5441 FAX:
212-225-5145/5271 E-mail: cheryl_williams@scotiacapital.com          
| |                                                                                                                                                                    
| | Primary Credit Contact:                                                                                                                                            
| |                                                                                                                                                                    
| | Isabel
Abella, Associate Director One Liberty Plaza, 26th Floor New York, NY 10006Telephone:
212-225-5305 FAX: 212-225-5480 E-mail: isabel_abella@scotiacapital.com
| |                                                                                                                                                                    
| | Alternate Credit Contact:                                                                                                                                          
| |                                                                                                                                                                    
| | Denis
OMeara, Managing Director One Liberty Plaza, 26th Floor New York, NY 10006
Telephone: 212-225-5493 FAX: 212-225-5480 E-mail: denis_omeara@scotiacapital.com 

| |                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | STERLING SAVINGS BANK                                                                                                                                                       
| |                                                                                                                                                                             
| |                                                                                                                                                                             
| | By:________________________
Name:______________________Title:_______________________                                                                                        
| |                                                                                                                                                                             
| | Primary Operations Contact:                                                                                                                                                 
| |                                                                                                                                                                             
| | Melody DeLorme, Corporate Banking 
601 Union Street, Suite 1717 
Seattle, WA 98101
Telephone: 206-223-8326 
FAX: 206-625-9099 
E-mail: melody.delorme@sterlingsavings.com   
| |                                                                                                                                                                             
| | Alternate Operations Contact:                                                                                                                                               
| |                                                                                                                                                                             
| | Tracy Fisher, Commercial Loan Support 
502 W. Riverside Avenue 
Spokane, WA 99201
Telephone: 800-633-9855 x4021 
FAX: 509-363-6845 
E-mail: tracy.fisher@sterlingsavings.com
| |                                                                                                                                                                             
| | Primary Credit Contact:                                                                                                                                                     
| |                                                                                                                                                                             
| | Sean W. Morreale, Corporate Banking 
601 Union Street, Suite 1717 
Seattle, WA 98101
Telephone: 206-223-8322 
FAX: 206-625-9099 
E-mail: sean.morreale@sterlingsavings.com  
| |                                                                                                                                                                             
| | Alternate Credit Contact:                                                                                                                                                   
| |                                                                                                                                                                             
| | Colin Duffy, Corporate Banking
601 Union Street, Suite 1717 
Seattle, WA 98101 
Telephone: 206-223-8322
FAX:  206-625-9099
E-mail: colin.duffy@sterlingsavings.com          

| |                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | UBS LOAN FINANCE LLC                                                                                                                                                           
| |                                                                                                                                                                                
| |                                                                                                                                                                                
| | By:________________________
Name:______________________Title:_______________________                                                                                           
| |                                                                                                                                                                                
| | By:________________________
Name:______________________Title:_______________________                                                                                           
| |                                                                                                                                                                                
| | Primary Operations & Credit Contact:                                                                                                                                           
| |                                                                                                                                                                                
| | Winslowe F. Ogbourne Associate Director 
677 Washington Blvd., 6thFloor 
South Stamford, CT 06901
Telephone: 203-719-3587 
FAX: 203-719-3888 
E-mail: winslowe.ogbourne@ubs.com
| |                                                                                                                                                                                
| | Alternate Operations & Credit Contact:                                                                                                                                         
| |                                                                                                                                                                                
| | Denise Conzo
677 Washington Blvd., 6thFloor South 
Stamford, CT 06901 
Telephone: 203-719-3853 
FAX: 203-719-3888 
E-mail: denise.conzo@ubs.com                                

| |                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | U.S. BANK NATIONAL ASSOCIATION                                                                                                                                                        
| |                                                                                                                                                                                       
| |                                                                                                                                                                                       
| | By:________________________
Name:______________________Title:_______________________                                                                                                  
| |                                                                                                                                                                                       
| | Primary Operations Contact:                                                                                                                                                           
| |                                                                                                                                                                                       
| | Gail Fortun
1420 Fifth Avenue, 10thFloor, PD-WA-T10C
Seattle, WA 98101
Telephone: 206-344-3741
FAX: 206-344-3741
E-mail: gail.fortun@usbank.com                                       
| |                                                                                                                                                                                       
| | Alternate Operations Contact:                                                                                                                                                         
| |                                                                                                                                                                                       
| | Patty Abel
555 SW Oak, Suite 780, PD-OR-P7LN
Portland, OR 97214
Telephone: 503-275-8189 
FAX:  503-275-8181                                                                           
| |                                                                                                                                                                                       
| | Primary Credit Contact:                                                                                                                                                               
| |                                                                                                                                                                                       
| | Wilfred Jack, Vice President 
1420 Fifth Avenue, 11thFloor, PD-WA-T10M 
Seattle, WA 98101
Telephone: 206-344-3643 
FAX: 206-344-3654 
E-mail: wilfred.jack@usbank.com                 
| |                                                                                                                                                                                       
| | Alternate Credit Contact:                                                                                                                                                             
| |                                                                                                                                                                                       
| | Eric Trimble, Assistant Relationship Manager 
1420 Fifth Avenue, 10thFloor, PD-WA-T10M 
Seattle, WA 98101 
Telephone: 206-344-3769 
FAX: 206-344-3654 
E-mail: eric.trimble@usbank.com

| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | THE BANK OF NEW YORK                                                                                                                                                    
| |                                                                                                                                                                         
| |                                                                                                                                                                         
| | By:________________________
Name:______________________Title:_______________________                                                                                    
| |                                                                                                                                                                         
| | Primary Operations Contact:                                                                                                                                             
| |                                                                                                                                                                         
| | Lisa Williams 
One Wall Street, 19th Floor 
New York, NY 10286 
Telephone: 212-635-7535 
FAX: 212-635-7552 
E-mail: liwilliams@bankofny.com                             
| |                                                                                                                                                                         
| | Alternate Operations Contact:                                                                                                                                           
| |                                                                                                                                                                         
| | Scan Pan 
One Wall Street, 19th Floor 
New York, NY 10286 
Telephone: 212-635-7532 
FAX: 212-635-7552 
E-mail: span@bankofny.com                                        
| |                                                                                                                                                                         
| | Primary Credit Contact:                                                                                                                                                 
| |                                                                                                                                                                         
| | Jesus M. Williams, Assistant Vice President 
One Wall Street, 19th Floor 
New York, NY 10286
Telephone: 212-635-7609 
FAX: 212-635-7923 
E-mail: jmwilliams@bankofny.com
| |                                                                                                                                                                         
| | Alternate Credit Contact:                                                                                                                                               
| |                                                                                                                                                                         
| | John Yancey, Senior Vice President 
One Wall Street, 19th Floor 
New York, NY 10286 
Telephone: 212-635-6890 
FAX: 212-635-6436 
E-mail: jyancey@bankofny.com           

| |                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------
| | LEHMAN BROTHERS BANK, FSB                                                                                                            
| |                                                                                                                                      
| |                                                                                                                                      
| | By:________________________
Name:______________________Title:_______________________                                                 
| |                                                                                                                                      
| | Operations Contact:                                                                                                                  
| |                                                                                                                                      
| | Priyanka Mathew 
745 7th Ave., 16th Floor 
New York, NY 10019 
Telephone: 212-526-6560 
FAX: 212-520-0450 
E-mail: pmathew@lehman.com
| |                                                                                                                                      
| | Credit Contact:                                                                                                                      
| |                                                                                                                                      
| | Janine Shugan 
745 7th Ave., 19th Floor 
New York, NY 10019 
Telephone: 212-526-8625 
FAX: 201-508-4654                              

| |                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | MERRILL LYNCH BANK USA                                                                                                                                        
| |                                                                                                                                                               
| |                                                                                                                                                               
| | By:________________________
Name:______________________Title:_______________________                                                                          
| |                                                                                                                                                               
| | Operations Contact:                                                                                                                                           
| |                                                                                                                                                               
| | Julie Young, Manager Operations 
W. South Temple, Suite 300 
Salt Lake City, UT 84101 
Telephone: 801-526-8331 
FAX:  801-359-4667
E-mail: julie_young@ml.com 
| |                                                                                                                                                               
| | Credit Contact:                                                                                                                                               
| |                                                                                                                                                               
| | Derek Befus, Portfolio Manager 
15 W. South Temple, Suite 300
Salt Lake City, UT 84101 
Telephone: 801-526-6814 
FAX:  801-531-7470
E-mail: derek_befus@ml.com

| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | WASHINGTON MUTUAL BANK                                                                                                                                                  
| |                                                                                                                                                                         
| |                                                                                                                                                                         
| | By:________________________
Name:______________________Title:_______________________                                                                                    
| |                                                                                                                                                                         
| | Operations Contact:                                                                                                                                                     
| |                                                                                                                                                                         
| | Toni Dale, Loan Coordinator
1201 3rd Avenue, WMT 1445 Suite 1445 
Seattle, WA 98101 
Telephone: 206-377-5214 
FAX: 206-377-3812 
E-mail: toni.dale@wamu.net             
| |                                                                                                                                                                         
| | Primary Credit Contact:                                                                                                                                                 
| |                                                                                                                                                                         
| | Richard J. Ameny, Jr., Vice President
1201 3rd Avenue, WMT 1445 Suite 1445 
Seattle, WA 98101 
Telephone: 206-377-3889 FAX: 206-377-3812 
E-mail: richard.ameny@wamu.net
| |                                                                                                                                                                         
| | Alternate Credit Contact:                                                                                                                                               
| |                                                                                                                                                                         
| | Bruce Kendrex., Vice President 
1201 3rd Avenue, WMT 1445 Suite 1445 
Seattle, WA 98101 
Telephone: 206-377-4822 
FAX: 206-377-3812 
E-mail: bruce.kendrex@wamu.net     

| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | BANCA DI ROMA SPA                                                                                                                                                       
| |                                                                                                                                                                         
| |                                                                                                                                                                         
| | By:________________________
Name:______________________Title:_______________________                                                                                    
| |                                                                                                                                                                         
| | By:________________________
Name:______________________Title:_______________________                                                                                    
| |                                                                                                                                                                         
| | Operations Contact:                                                                                                                                                     
| |                                                                                                                                                                         
| | Salvatore Rappa Assistant Vice President 
34 East 51st Street 
New York, NY 10022 
Telephone: 212-407-1812 
FAX: 212-407-1684                                           
| |                                                                                                                                                                         
| | Credit Contact:                                                                                                                                                         
| |                                                                                                                                                                         
| | Thomas C. Woodruff
Vice President
One Market, Steuart Tower, Suite 1000
San Francisco, CA 94105
Telephone:  415-977-7308
FAX:  415-357-9869
E-mail:  bdrsf@sbcglobal.net

| |                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------
| | BANK HAPOALIM B.M.                                                                                                                              
| |                                                                                                                                                 
| |                                                                                                                                                 
| | By:________________________
Name:______________________Title:_______________________                                                            
| |                                                                                                                                                 
| | Operations Contact:                                                                                                                             
| |                                                                                                                                                 
| | Dwight Ghans 
1177 Avenue of the Americas 
New York, NY 10036 
Telephone: 212-782-2226 
FAX: 212-782-2187 
E-mail: dghans@hapoalimusa.com       
| |                                                                                                                                                 
| | Credit Contact:                                                                                                                                 
| |                                                                                                                                                 
| | Shaun Breidbart 
1177 Avenue of the Americas 
New York, NY 10036 
Telephone: 212-782-2186 
FAX: 212-782-2382 
E-mail: sbreidbart@hapoalimusa.com

SCHEDULE 1

PRICING SCHEDULE

|                                   |             |            |             |           |              
|---------------------------------- | ----------- | ---------- | ----------- | --------- | -------------
|S&P Rating/ 
Moody's Rating        | BBB+ / Baa1 | BBB / Baa2 | BBB- / Baa3 | BB+ / Ba1 | <or= BB / Ba2
|                                  
|Applicable Euro-
dollar Margin     | 1.125%      | 1.25%      | 1.375%      | 2.00%     | 2.50%        
|                                  
|Applicable Com-  
mitment Fee Rate | 0.15%       | 0.20%      | 0.25%       | 0.375%    | 0.50%        
|                                  
|Applicable LC Fee Rate             | 1.125%      | 1.25%      | 1.375%      | 2.00%     | 2.50%        

The
Applicable Eurodollar Margin, Applicable Commitment Fee Rate and Applicable LC Fee Rate
shall be determined in accordance with the foregoing table based on the Borrowers
then current Moodys Rating and S&P Rating. The credit rating in effect on any
date for purposes of this Schedule is that in effect at the close of business on such
date.

Moodys
Ratingmeans, at any time, the rating issued by Moodys Investors Service,
Inc., and then in effect as the Borrowers issuer rating.

S&P
Ratingmeans, at any time, the rating issued by Standard & Poors Ratings
Services, a division of The McGraw-Hill Companies, Inc., and then in effect as the
Borrowers issuer rating.

If
the Borrower is split-rated and the ratings differential is one level, the better rating
will apply. If the Borrower is split-rated and the ratings differential is two levels or
more, the intermediate rating at the midpoint will apply. If there is no midpoint, the
higher of the intermediate ratings will apply.

SCHEDULE 2

COMMITMENTS

|Lender                         | Commitment    
|------------------------------ | --------------
|Union Bank of California, N.A, | $  42,800,000 
|Citibank, N.A                  | $  42,800,000 
|JPMorgan Chase Bank            | $  35,000,000 
|KeyBank National Association   | $  35,000,000 
|Wachovia Bank, N.A             | $  35,000,000 
|Wells Fargo Bank, N.A          | $  19,000,000 
|The Bank of Nova Scotia        | $  18,200,000 
|Sterling Savings Bank          | $  18,200,000 
|UBS Loan Finance LLC           | $  18,200,000 
|U.S. Bank National Association | $  15,400,000 
|The Bank of New York           | $  13,300,000 
|Lehman Brothers Bank, FSB      | $  13,300,000 
|Merrill Lynch Bank USA         | $  13,300,000 
|Washington Mutual Bank         | $  13,000,000 
|Banca di Roma SpA              | $  10,500,000 
|Bank Hapoalim B.M              | $    7,000,000
|                               |               
|Total                          | $350,000,000  

SCHEDULE 5.2

LITIGATION AND
CONTINGENT OBLIGATIONS

On
May 13, 2004, the Washington Utilities and Transportation Commission (the
WUTC) issued an order in the Borrowers power cost only rate case denying
the inclusion of certain power costs related to the Tenaska electric generation plant. The
Borrower is currently unable to determine the accounting ramifications of the WUTCs
actions. For further information, including a copy of the WUTCs order of May 13,
2004, see the Current Report filed on Form 8-K by Puget Energy, Inc. and the Borrower with
the SEC on May 18, 2004. On May 24, 2004, the Borrower filed with the WUTC a Petition for
Reconsideration and Clarification of its order of May 13, 2004. The Borrower anticipates
that the WUTC will respond to such petition within a month.

SCHEDULE 5.11

FINANCIAL STATEMENTS

The
financial statements included in the Borrowers Annual Report on Form 10-K for the
year ended December 31, 2003 and the Borrowers Quarterly Report on Form 10-Q for the
quarter ended March 31, 2004, both as filed with the Securities and Exchange Commission.

SCHEDULE 5.14

SUBSIDIARIES

| |  | All listed
subsidiaries are 100% owned, directly or indirectly, by the Borrower.
| |  | --------------------------------------------------------------------------------

|1. |  | Puget Western, Inc., a Washington corporation, is primarily involved in real
                    estate investment and development. Address: 19515 North Creek Parkway, Suite
                    310, Bothell, Washington 98011.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. |  | Hydro Energy Development Corp., a Washington corporation, is the parent of Black
                    Creek Hydro, Inc. Black Creek Hydro, Inc.s only asset is a small
                    hydroelectric power plant licensed by the Federal Energy Regulatory Commission
                    in the Pacific Northwest. Address: 10885 NE 4th Street, Suite 800, Bellevue,
                    Washington 98004.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | GP Acquisition Corp., a Washington corporation, is a 1% General Partner in
                    Encogen Northwest, L.P. Address: 10885 NE 4th Street, Suite 1200, Bellevue,
                    Washington 98004. Encogen Northwest, L.P. owns and operates a 170,000-kW
                    gas-fired cogeneration electric generation project near Bellingham, Washington.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. |  | LP Acquisition Corp., a Washington corporation, is a 99% limited partner in
                    Encogen Northwest, L.P. Address: 10885 NE 4th Street, Suite 1200, Bellevue,
                    Washington 98004.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. |  | Washington Energy Gas Marketing Company, a Washington corporation, is inactive
                    and in the process of being administratively dissolved. Address: 10885 NE 4th
                    Street, Suite 1200, Bellevue, Washington 98004.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. |  | WNG Cap I, Inc., a Washington corporation, markets surplus pipeline capacity on
                    behalf of the Borrower. Address: 10885 NE 4th Street, Suite 1200, Bellevue,
                    Washington 98004.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7. |  | Rainier Receivables, Inc., a Washington corporation, was formed for the purpose
                    of purchasing accounts receivable, both billed and unbilled, of customers of the
                    Borrower. Address: 10885 NE 4th Street, Suite 1200, Bellevue, Washington 98004.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SCHEDULE 6.10

EXISTING LIENS

| | Secured Party             | Description of Lien                                                        
| | ------------------------- | ---------------------------------------------------------------------------
| |                           |                                                                            
| | BLC Corporation           | All property agreed to under Master Lease Agreement dated September 1, 1988
| |                           |                                                                            
| | Cascade A & E Supplies Co | Xerox Digital Plotter                                                      
| |                           |                                                                            
| | Fleet Business Credit     | 3830-36 Symmetrix and related equipment                                    
| |                           |                                                                            
| | IOS Capital LLC           | Equipment under Master Lease Agreement                                     

SCHEDULE 6.16

EXISTING INVESTMENTS

Investments by Borrower (excluding
investments in Subsidiaries)

| | Non-Utility Property           |  | $    2,200,000
| | ------------------------------ |  | --------------
| | Company Owned Life Insurance   |  | 40,900,000    
| | Miscellaneous Notes Receivable |  | 3,900,000     
| | Total                          |  | $  47,000,000 
| |                                |  |               

Investments by Subsidiaries

|Puget Western Inc. |                               
|------------------ | ------------------------------
|                   | Miscellaneous Notes Receivable
|                   | Investment in Kinetic Ventures
|                   | Other Investments             
|                   | Total                         

|Hydro Energy Development |                                
|------------------------ | -------------------------------
|                         | Investment in Black Creek Hydro
|                         |                                
|                         | Total Investments              

EXHIBIT A

PROMISSORY NOTE

|                |               
|--------------- | --------------
|U.S.$__________ | ________, 200_

For
value received, PUGET SOUND ENERGY, INC., a Washington corporation (the
Borrower), hereby promises to pay to the order of
______________________________ (the Lender), on or before the Facility
Termination Date (as defined in the Credit Agreement referred to below), the principal
amount of ______________________________ United States dollars (U.S.$__________) or, if
less, the aggregate principal amount of all Loans (as defined below) made by the Lender to
the Borrower pursuant to the Credit Agreement. Unless otherwise defined herein, terms
defined in the Credit Agreement, when used herein, have the respective meanings assigned
to them in the Credit Agreement.

The
Borrower promises to pay interest on the unpaid principal amount of each Loan, from the
date of such Loan until such principal amount is paid in full, at such interest rates and
at such times as specified in the Credit Agreement.

Both
principal and interest are payable in lawful money of the United States of America, in
immediately available funds, to Union Bank of California, N.A., a national banking
association, as administrative agent (the Administrative Agent), at its office
located at 445 South Figueroa Street, Los Angeles, California 90071 or as otherwise
directed by the Administrative Agent. Each Loan and all payments made on account of the
principal thereof shall be recorded by the Lender and, before any transfer hereof,
endorsed on the schedule attached hereto, which is part of this Note.

This
Note is one of the Notes referred to in, and is entitled to the benefits
of, the Credit Agreement dated as of May 27, 2004 (as it may hereafter be amended,
restated, supplemented or otherwise modified from time to time, the Credit
Agreement) among the Borrower, the Lender and the other financial institutions party
thereto and Union Bank of California, N.A., as Administrative Agent and as LC Issuer. The
Credit Agreement, among other things, (a) provides for the making of loans (the
Loans) by the Lender to the Borrower from time to time in an aggregate amount
not to exceed the U.S.-dollar amount first set forth above, the indebtedness of the
Borrower resulting from each Loan being evidenced by this Note, and (b) contains
provisions for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof before the maturity hereof
upon the terms and conditions specified therein.

To
the extent permitted by law, the Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of any such rights.

The
Borrower has caused this Note to be executed by its duly authorized representative as of
the date first written above.

| | PUGET SOUND ENERGY, INC.    
| | ----------------------------
| |                             
| |                             
| | By:_______________________  
| | Name:_____________________  
| | Title:______________________

SCHEDULE TO PROMISSORY NOTE

| | Date |  | Amountof Loan |  | Amount ofPrincipal Paidor Prepaid |  | UnpaidPrincipalBalance |  | NotationMade By | 
| | ---- |  | ------------- |  | --------------------------------- |  | ---------------------- |  | --------------- | 

EXHIBIT B

BORROWING NOTICE

__________, 200_

Union Bank of California,
N.A., as Administrative Agent 445 South Figueroa Street Los Angeles, California
90071

Attention: Power &
Utilities

Ladies and Gentlemen:

The
undersigned, Puget Sound Energy, Inc., a Washington corporation, refers to the Credit
Agreement dated as of May 27, 2004 (as it may hereafter be amended, restated, supplemented
or otherwise modified from time to time, the Credit Agreement) among the
undersigned, the lenders referred to therein and Union Bank of California, N.A., a
national banking association, as Administrative Agent and as LC Issuer. Terms defined in
the Credit Agreement and not otherwise defined herein have the same respective meanings
when used herein. Pursuant to Section 2.2.3 of the Credit Agreement, the undersigned
hereby requests an Advance under the Credit Agreement and in that connection sets forth
below the information relating to such Advance (the Proposed Advance), as
required by Section 2.2.3 of the Credit Agreement.

1.          The
date of the Proposed Advance is __________, 200_.

2.            The
aggregate amount of the Proposed Advance is $_______________.

3.             The
Proposed Advance will be composed of [Floating Rate Loans] [Eurodollar           Loans].

[4.               The
initial Interest Period for the Eurodollar Loans composing the Proposed           Advance
is __________ month[s].]

The
undersigned hereby certifies that the following statements are true on the date hereof and
will be true on the date of the Proposed Advance:

(a)
                 no event has occurred and is
continuing, or would result from the Proposed                Advance or from the
application of the proceeds thereof, that constitutes a                Default or an
Unmatured Default; and

(b)
     the representations and warranties contained in
Article 5 of the Credit           Agreement are true and correct as of the date hereof
and will be true and           correct on the date of the Proposed Advance, except to the
extent any such           representation or warranty is stated to relate solely to an
earlier date, in           which case such representation or warranty was true and
correct on and as of           such earlier date.

| | Very truly yours,           
| | ----------------------------
| |                             
| | PUGET SOUND ENERGY, INC.    
| |                             
| |                             
| | By:_______________________  
| | Name:_____________________  
| | Title:______________________

EXHIBIT C

CONVERSION/CONTINUATION
NOTICE

Union Bank of California,
N.A., as Administrative Agent 445 South Figueroa Street Los Angeles, California
90071

Attention: Power &
Utilities

Ladies and Gentlemen:

The
undersigned, Puget Sound Energy, Inc., a Washington corporation, refers to the Credit
Agreement dated as of May 27, 2004 (as it may hereafter be amended, restated, supplemented
or otherwise modified from time to time, the Credit Agreement) among the
undersigned, the lenders referred to therein and Union Bank of California, N.A., a
national banking association, as Administrative Agent (in such capacity, the
Administrative Agent) and as LC Issuer. Terms defined in the Credit Agreement
and not otherwise defined herein have the same respective meanings when used herein.

The
undersigned hereby notifies the Administrative Agent pursuant to the Credit Agreement that
the undersigned elects to [convert Floating Rate Loans into Eurodollar Loans] [continue
all or a portion of an outstanding Eurodollar Advance as a Eurodollar Advance] and in that
connection sets forth below the information relating to such [conversion] [continuation],
as required by the Credit Agreement.

[Conversion:

1.             The
date of such conversion is __________, 200_.

2.              Floating
Rate Loans in the aggregate principal amount of $_______________ are to           be
converted into Eurodollar Loans.

3.              The
Interest Period for the new Eurodollar Advance is ______ month[s].]

[Continuation:

1.            The
date of such continuation is __________, 200_.

2.              The
Eurodollar Advance to be continued, in whole or in part, is in the aggregate
          principal amount of $__________ and was made on __________, 200_.

3.             [The
entire] [$__________ in aggregate] principal amount of such Eurodollar           Advance
is to be continued as a Eurodollar Advance.

4.              The
Interest Period for the Eurodollar Advance to be continued is _____           month[s].]

No
Default or Unmatured Default has occurred and is continuing or would result from giving
effect to the election to [convert] [continue] Loans made hereby.

| | Very truly yours,           
| | ----------------------------
| |                             
| | PUGET SOUND ENERGY, INC.    
| |                             
| |                             
| | By:_______________________  
| | Name:_____________________  
| | Title:______________________

EXHIBIT D

COMPLIANCE CERTIFICATE

The
undersigned ____________________, the ____________________ of Puget Sound Energy, Inc., a
Washington corporation (the Borrower), refers to the Credit Agreement dated as
of May 27, 2004 (as amended, restated, supplemented or otherwise modified from time to
time, the Credit Agreement) among the Borrower, the financial institutions
party thereto as lenders (the Lenders) and Union Bank of California, N.A., as
Administrative Agent for the Lenders (the Administrative Agent) and as LC
Issuer. Capitalized terms used herein and not otherwise defined shall have the respective
meanings assigned to them in the Credit Agreement. The undersigned hereby certifies as to
the accuracy of the information set forth below as of __________, 200_ (the
Compliance Date).

ARTICLE 15Debt to
Capitalization Ratio

| |      |                                             |            
| | ---- | ------------------------------------------- | -----------
| | 15.1 | Consolidated Indebtness (from 10-K or 10-Q) | $_______   
| |      |                                             |            
| | b.   | Total Capitalization (from 10-K or 10-Q)    | $_______   
| |      |                                             |            
| | 15.2 | Ratio of a. to b.:                          | _____ : 1.0
| |      |                                             |            

| | (Section
6.11 of the Credit Agreement requires that the Borrower not permit the principal amount of
Consolidated Indebtedness to exceed 65% of Total Capitalization as of the last day of any
fiscal quarter.)
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ARTICLE 16Minimum
Interest Coverage Ratio

| | 16.1 | EBITDA                                    |                                                                                                                                                  |         
| | ---- | ----------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | --------
| |      |                                           |                                                                                                                                                  |         
| |      | 16.1.1                                    | Income before Interest Charges                                                                                                                   | $_______
| |      |                                           |                                                                                                                                                  |         
| |      | 16.1.2                                    | federal income taxes to extent
                           included in determination of
                           Income before Interest Charges | $_______
| |      |                                           |                                                                                                                                                  |         
| |      | 16.1.3                                    | depreciation, depletion and amortization
                           expense                                                                      | $_______
| |      |                                           |                                                                                                                                                  |         
| |      | 16.1.4                                    | non-cash losses included in determina-
                           tion of Income before Interest Charges                                         | $_______
| |      |                                           |                                                                                                                                                  |         
| |      | 16.1.5                                    | non-cash gains included in determina-
                           tion of Income before Interest Charges                                          | $_______
| |      |                                           |                                                                                                                                                  |         
| |      | vi.      i. + ii. + iii. + iv. - v.       | $_______                                                                                                                                        
| |      |                                           |                                                                                                                                                  |         
| | 16.2 | consolidated interest expense of Borrower | $_______                                                                                                                                        
| |      |                                           |                                                                                                                                                  |         
| | 16.3 | Ratio of a. to b.:                        | _____ : 1.0                                                                                                                                     

| | (Section
6.12 of the Credit Agreement requires that the ratio of (i) EBITDA for any period of four
consecutive fiscal quarters of the Borrower ending on the last day of a fiscal quarter to
(ii) consolidated interest expense of the Borrower for such period not be less than 2.0 to
1.0. Dividends on mandatorily redeemable preferred stock of the Borrower are to be
excluded from interest expense.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As
of the Compliance Date, the undersigned represents and warrants to the Lenders and the
Administrative Agent that: (a) no event has occurred and is continuing that constitutes a
Default or an Unmatured Default; and (b) the representations and warranties contained in
Article 5 of the Credit Agreement are true and correct as of the Compliance Date and as of
the date hereof, except to the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such representation or warranty was true
and correct on and as of such earlier date.

The
undersigned has executed this Certificate as of __________, 200_.

| | ______________________
| | ----------------------
| | Name:                 
| | Title:                

EXHIBIT E

ASSIGNMENT AND
ASSUMPTION

This
Assignment and Assumption is dated as of the Effective Date set forth below and is entered
into by and between _________________________ (the Assignor) and _________________________ (the Assignee). Capitalized terms used but not otherwise
defined herein shall have the meanings given to them in the Credit Agreement identified
below (as amended, restated, supplemented or otherwise modified from time to time, the
Credit Agreement), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this Assignment
and Assumption as if set forth herein in full.

For
an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor,
subject to and in accordance with the Standard Terms and Conditions and the Credit
Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated
below, (i) all of the Assignors rights and obligations in its capacity as a Lender
under the Credit Agreement and any other documents or instruments delivered pursuant
thereto, to the extent related to the amount and percentage interest identified below of
all of such outstanding rights and obligations of the Assignor under its Commitment
(including, without limitation, any participations of the Assignor in Facility LCs), and
(ii) to the extent permitted to be assigned under applicable law, all claims, suits,
causes of action and other rights of the Assignor (in its capacity as a Lender) against
any Person, whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and assigned
pursuant to clauses (i) and (ii) above being referred to herein collectively as the
Assigned Interest). Such sale and assignment are without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption, without
representation or warranty by the Assignor.

|   |                      |                                                                                                                                                                                 
|-- | -------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Assignor:            | ___________________________                                                                                                                                                     
|   |                      |                                                                                                                                                                                 
|2. | Assignee:            | ___________________________[an Affiliate of [identify Lender]]1                                                                                                                 
|   |                      |                                                                                                                                                                                 
|3. | Borrower:            | Puget Sound Energy, Inc., a Washington corporation                                                                                                                              
|   |                      |                                                                                                                                                                                 
|4. | AdministrativeAgent: | Union Bank of California, N.A. ("UBOC"), in such capacity                                                                                                                       
|   |                      |                                                                                                                                                                                 
|5. | Credit Agreement:    | Credit  Agreement dated as of May 27, 2004 among the Borrower,  the financial  institutions
         party thereto as Lenders and UBOC, as Administrative Agent and as LC Issuer
|   |                      |                                                                                                                                                                                 
|6. | Assigned Interest:   |                                                                                                                                                                                 

|Aggregate Amount ofCommitments of allLenders | Amount ofCommitment Assigned2 | Percentage Assigned ofCommitments3 | CUSIP Number
|-------------------------------------------- | ----------------------------- | ---------------------------------- | ------------
|                                             |                               |                                    |             
|$                                            | $                             | %                                  |             

|    |             |                    
|--- | ----------- | -------------------
|[7. | Trade Date: | _________________]4

---

1   Select as
applicable.  2   Amount to
be adjusted by the counterparties to take into account any commitment reductions made
between the Trade Date and the     Effective Date.  3   Set
forth, to at least nine decimals, as a percentage of the Commitments of all Lenders.4  To be
completed if the Assignor and the Assignee intend that the minimum assignment amount is
to be determined as of the Trade Date.

Effective Date: __________, 200_ [To
be inserted by the Administrative Agent and to be the effective date of recordation of
transfer in the Register.]

The terms set forth in this
Assignment and Assumption are hereby agreed to:

| | [NAME OF ASSIGNOR]          
| | ----------------------------
| |                             
| |                             
| | By:_______________________  
| | Name:_____________________  
| | Title:______________________

| | [NAME OF ASSIGNEE]          
| | ----------------------------
| |                             
| |                             
| | By:_______________________  
| | Name:_____________________  
| | Title:______________________

Consented to and accepted:

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

By:_______________________
Name:_____________________ Title:______________________

[Consented to:]5

PUGET SOUND ENERGY, INC.

By:_______________________
Name:_____________________ Title:______________________

---

5   To
be added only if the consent of the Borrower is required by the terms of the Credit
Agreement.

ANNEX 1 
to Assignment and
Assumption

STANDARD TERMS AND
CONDITIONS FOR ASSIGNMENT AND ASSUMPTION

| | 1.          Representations
and Warranties.
| | -------------------------------------------

| | 1.1        Assignor. The
Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the
Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance
or other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to consummate
the transactions contemplated hereby and (b) assumes no responsibility with respect to
(i) any statements, representations or warranties made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any Loan Document or (iv) the
performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any
other Person of any of their respective obligations under any Loan Document.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.2.       Assignee. The
Assignee (a) represents and warrants that (i) it has full power           and authority,
and has taken all action necessary, to execute and deliver this           Assignment and
Assumption, to consummate the transactions contemplated hereby           and to become a
Lender under the Credit Agreement, (ii) none of the           consideration used to make
the purchase of the Assigned Interest under this           Assignment and Assumption
constitutes plan assets as defined under           ERISA, and the rights and
interests of the Assignee in and under the Loan           Documents will not be plan
assets under ERISA, (iii) from and after           the Effective Date, it shall be
bound by the provisions of the Credit Agreement           as a Lender thereunder and, to
the extent of the Assigned Interest, shall have           the obligations of a Lender
thereunder, (iv) it has received a copy of the           Credit Agreement, together with
copies of the most recent financial statements           delivered pursuant to Section
6.9 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 and Assumption and to purchase the           Assigned Interest, on the basis
of which it has made such analysis and decision           independently and without
reliance on the Administrative Agent or any other           Lender, and (v) if it is a
Non-U.S. Lender, attached to this Assignment and           Assumption is any
documentation required to be delivered by it pursuant to the           terms of the
Credit Agreement, duly completed and executed by the Assignee, and           (b) agrees
that (i) it will, independently and without reliance on the           Administrative
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 Loan           Documents, and
(ii) it will perform in accordance with their terms all of the           obligations that
by the terms of the Loan Documents are required to be performed           by it as a
Lender.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.          Payments. From
and after the Effective Date, the Administrative Agent shall make           all payments
in respect of the Assigned Interest (including, without limitation,           payments of
principal, interest and fees) to the Assignor for amounts that have           accrued to
but excluding the Effective Date and to the Assignee for amounts that           have
accrued from and after the Effective Date.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.          General
Provisions. This Assignment and Assumption shall be binding upon, and           shall
inure to the benefit of, the parties hereto and their respective           successors and
assigns. This Assignment and Assumption may be executed in any           number of
counterparts, which together shall constitute one instrument. Delivery           of an
executed counterpart of a signature page of this Assignment and Assumption           by
telecopier shall be effective as delivery of a manually executed counterpart           of
this Assignment and Assumption. THIS ASSIGNMENT AND ASSUMPTION SHALL BE
          GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE
STATE           OF CALIFORNIA.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

May 27, 2004

Puget Sound Energy, Inc.InfrastruX
Group, Inc.Bellevue, WA 98009-9734

Re:
     Up-Front Fees Payable to Lenders

Ladies and Gentlemen:

We
refer to (1) the Credit Agreement dated as of May 27, 2004 among Puget Sound Energy, Inc.,
a Washington corporation (PSE), the financial institutions party thereto as
lenders (the Lenders), and Union Bank of California, N.A., a national banking
association (UBOC), as administrative agent and as letter-of-credit issuer
(said Credit Agreement, as amended, restated, supplemented or otherwise modified from time
to time, herein called the PSE Credit Agreement), and (2) the Credit Agreement
dated as of May 27, 2004 among InfrastruX Group, Inc., a Washington corporation
(InfrastruX), Puget Energy, Inc., a Washington corporation, the Lenders, and
UBOC, as administrative agent and as letter-of-credit issuer (said Credit Agreement, as
amended, restated, supplemented or otherwise modified from time to time, herein called the
InfrastruX Credit Agreement). UBOC, in its capacities as administrative agent
under the PSE Credit Agreement and as administrative agent under the InfrastruX Credit
Agreement, is herein called the Administrative Agent.

In
connection with the PSE Credit Agreement and the InfrastruX Credit Agreement, PSE and
InfrastruX hereby agree to pay to the Administrative Agent, ratably in accordance with the
Aggregate Commitment to PSE under the PSE Credit Agreement and the
Aggregate Commitment to InfrastruX under the InfrastruX Credit Agreement, a
nonrefundable up-front fee in the aggregate amount equal to (a) 0.35% of each
Lenders Allocated Combined Commitment, if such Lenders Offered Combined
Commitment was $65,000,000, (b) 0.30% of each Lenders Allocated Combined
Commitment, if such Lenders Offered Combined Commitment was at least $35,000,000 but
less than $65,000,000, or (c) 0.25% of such Lenders Allocated Combined
Commitment, if such Lenders Offered Combined Commitment was less than $35,000,000.
The aforementioned up-front fee shall be payable to the Administrative Agent, in
immediately available funds for the account of each Lender, on the closing date for the
PSE Credit Agreement and the InfrastruX Credit Agreement.

As
used herein, (a) Allocated Combined Commitment means, for each Lender, the sum
of its Commitment under the PSE Credit Agreement and its
Commitment under the InfrastruX Credit Agreement, and (b) Offered
Combined Commitment means, for each Lender, the aggregate amount of
credit that it committed to make available under the PSE Credit Agreement and the
InfrastruX Credit Agreement, subject to and before the determination of final allocations
of commitments, pursuant to a commitment letter delivered to UBOC and Citigroup Global
Markets Inc., as co-lead arrangers under the PSE Credit Agreement and the InfrastruX
Credit Agreement.

If
the foregoing correctly describes the agreement between the Administrative Agent and each
of PSE and InfrastruX concerning the subject matter hereof, please so indicate by signing
this letter agreement in the space provided below.

THIS
LETTER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THE STATE OF
CALIFORNIA.

| | Very truly yours,                                        
| | ---------------------------------------------------------
| |                                                          
| | UNION BANK OF CALIFORNIA, N.A.,   as Administrative Agent
| |                                                          
| |                                                          
| | By:_______________________                               
| | Name:_____________________                               
| | Title:______________________                             

Agreed to as of May 27,
2004:

|                             |                             
|---------------------------- | ----------------------------
|                             |                             
|PUGET SOUND ENERGY, INC.     | INFRASTRUX GROUP, INC.      
|                             |                             
|By:_______________________   | By:_______________________  
|Name:_____________________   | Name:_____________________  
|Title:______________________ | Title:______________________