Exhibit 10.1 Amended and Restated Credit Agreement


    Exhibit
      10.1


    


    


    $500,000,000

    


    AMENDED
      AND RESTATED CREDIT AGREEMENT

    


    


    Dated
      as
      of March 29, 2007

    


    


    among

    


    


    PUGET
      SOUND ENERGY, INC.,

    


    


    VARIOUS
      FINANCIAL INSTITUTIONS,

    


    and
      

    


    WACHOVIA
      BANK, NATIONAL ASSOCIATION,

    as
      Administrative Agent, Swingline Lender
      and an
      LC Issuer,

    


    


    CITIBANK,
      N.A., as Syndication Agent,

    


    


    JP
      MORGAN
      CHASE BANK,
      KEYBANK
      NATIONAL ASSOCIATION

    and
      UNION
      BANK OF CALIFORNIA,
      N.A.,

    as
      Co-Documentation Agents

    


    


    


    
       



    


    


    


    


    WACHOVIA
      CAPITAL MARKETS, LLC, 

    as
      Co-Lead Arranger and Joint Book Runner

    


    and
      

    


    CITIGROUP
      GLOBAL MARKETS INC.,

    as
      Co-Lead Arranger and Joint Book Runner

    


    


    


    
      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

    



    
      	
              Table
                of Contents

            	 
	 	
              Page

            
	
              AMENDED
                AND RESTATED CREDIT AGREEMENT 

            	
              1

            
	
              ARTICLE
                1 DEFINITIONS 

            	
              1

            
	
              1.1 Defined
                Terms

            	
              1

            
	
              1.2 Terms
                Generally 

            	
              14

            
	
              1.3 Accounting
                Terms 

            	
              14

            
	
              ARTICLE
                2 THE CREDITS 

            	
              15

            
	
              2.1 Facility 

            	
              15

            
	
              2.2 Revolving
                Loans. 

            	
              16

            
	
              2.3 Method
                of Borrowing 

            	
              17

            
	
              2.4 Fees;
                Reductions in Aggregate Commitment. 

            	
              17

            
	
              2.5 Minimum
                Amount of Each Revolving Loan; Limitation on Eurodollar Loans   

            	
              18

            
	
              2.6 Optional
                Principal Payments 

            	
              18

            
	
              2.7 Changes
                in Interest Rate, etc. 

            	
              18

            
	
              2.8 Rates
                Applicable After Default 

            	
              19

            
	
              2.9 Method
                of Payment 

            	
              19

            
	
              2.10 Noteless
                Agreement; Evidence of Indebtedness. 

            	
              19

            
	
              2.11 Telephonic
                Notices 

            	
              20

            
	
              2.12 Interest
                Payment Dates; Interest and Fee Basis 

            	
              20

            
	
              2.13 Notification
                of Revolving Loans, Interest Rates, Prepayments and Commitment
                Reductions 

            	
              21

            
	
              2.14 Lending
                Installations 

            	
              21

            
	
              2.15 Non-Receipt
                of Funds by Administrative Agent 

            	
              22

            
	
              2.16 Facility
                LCs. 

            	
              22

            
	
              2.17 Extension
                of Facility Termination Date 

            	
              26

            
	
              2.18 Swingline
                Loan Subfacility 

            	
              26

            
	
              ARTICLE
                3 YIELD PROTECTION; TAXES 

            	
              28

            
	
              3.1 Yield
                Protection 

            	
              28

            
	
              3.2 Changes
                in Capital Adequacy Regulations 

            	
              29

            
	
              3.3 Availability
                of Types of Revolving Loans 

            	
              29

            
	
              3.4 Funding
                Indemnification 

            	
              30

            
	
              3.5 Taxes. 

            	
              30

            
	
              3.6 Statements;
                Survival of Indemnity 

            	
              32

            
	
              3.7 Replacement
                of Affected Lender 

            	
              33

            
	
              ARTICLE
                4 CONDITIONS PRECEDENT 

            	
              33

            
	
              4.1 Effectiveness 

            	
              33

            
	
              4.2 Each
                Credit Extension 

            	
              34

            
	
              ARTICLE
                5 REPRESENTATIONS AND WARRANTIES 

            	
              35

            
	
              5.1 Corporate
                Existence, etc 

            	
              35

            
	
              5.2 Litigation
                and Contingent Obligations 

            	
              35

            
	
              5.3 No
                Breach 

            	
              35

            
	
              5.4 Corporate
                Action 

            	
              35

            
	
              5.5 Approvals 

            	
              36

            
	
              5.6 Use
                of Proceeds 

            	
              36

            
	
              5.7 ERISA 

            	
              36

            
	
              5.8 Taxes 

            	
              36

            
	
              5.9 Material
                Adverse Change 

            	
              36

            
	
              5.10 Financial
                Statements 

            	
              37

            
	
              5.11 Environmental
                Matters 

            	
              37

            
	
              5.12 Investment
                Company Act 

            	
              37

            
	
              5.13 Subsidiaries 

            	
              37

            
	
              5.14 Accuracy
                of Information 

            	
              37

            
	
              5.15 Compliance
                with Laws, Etc 

            	
              37

            
	
              5.16 Insurance 

            	
              38

            
	
              5.17 Properties 

            	
              38

            
	
              5.18 Anti-Terrorism
                Laws 

            	
              38

            
	
              5.19 Compliance
                with OFAC Rules and Regulations 

            	
              38

            
	
              5.20 Compliance
                with FCPA 

            	
              38

            
	
              ARTICLE
                6 COVENANTS 

            	
              39

            
	
              6.1 Preservation
                of Existence and Business 

            	
              39

            
	
              6.2 Preservation
                of Property 

            	
              39

            
	
              6.3 Payment
                of Obligations 

            	
              39

            
	
              6.4 Compliance
                with Applicable Laws and Contracts 

            	
              39

            
	
              6.5 Preservation
                of Loan Document Enforceability 

            	
              39

            
	
              6.6 Insurance 

            	
              39

            
	
              6.7 Use
                of Proceeds 

            	
              40

            
	
              6.8 Visits,
                Inspections and Discussions 

            	
              40

            
	
              6.9 Information
                to Be Furnished 

            	
              40

            
	
              6.10 Liens 

            	
              41

            
	
              6.11 Debt
                to Capitalization Ratio 

            	
              42

            
	
              6.12 Merger
                and Consolidation 

            	
              42

            
	
              6.13 Disposition
                of Assets 

            	
              42

            
	
              6.14 Transactions
                with Affiliates 

            	
              43

            
	
              6.15 Investments 

            	
              43

            
	
              ARTICLE
                7 DEFAULTS 

            	
              44

            
	
              ARTICLE
                8 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES 

            	
              46

            
	
              8.1 Acceleration. 

            	
              46

            
	
              8.2 Amendments 

            	
              47

            
	
              8.3 Preservation
                of Rights 

            	
              47

            
	
              ARTICLE
                9 GENERAL PROVISIONS 

            	
              48

            
	
              9.1 Survival
                of Representations 

            	
              48

            
	
              9.2 Governmental
                Regulation 

            	
              48

            
	
              9.3 Headings 

            	
              48

            
	
              9.4 Entire
                Agreement 

            	
              48

            
	
              9.5 Several
                Obligations; Benefits of this Agreement 

            	
              48

            
	
              9.6 Expenses;
                Indemnification. 

            	
              48

            
	
              9.7 Numbers
                of Documents 

            	
              49

            
	
              9.8 Severability
                of Provisions 

            	
              49

            
	
              9.9 Nonliability
                of Lenders 

            	
              49

            
	
              9.10 Confidentiality

            	
              50

            
	
              9.11 Non-Reliance 

            	
              51

            
	
              9.12 Disclosure

            	
              51

            
	
              9.13 Counterparts 

            	
              51

            
	
              9.14 Amendment
                and Restatement of Original Agreement

            	
              51

            
	
              ARTICLE
                10 THE ADMINISTRATIVE AGENT 

            	
              52

            
	
              10.1 Appointment;
                Nature of Relationship 

            	
              52

            
	
              10.2 Powers 

            	
              52

            
	
              10.3 General
                Immunity 

            	
              53

            
	
              10.4 No
                Responsibility for Loans, Recitals, etc. 

            	
              53

            
	
              10.5 Action
                on Instructions of Lenders 

            	
              53

            
	
              10.6 Employment
                of Agents and Counsel 

            	
              53

            
	
              10.7 Reliance
                on Documents; Counsel 

            	
              54

            
	
              10.8 Administrative
                Agent’s Reimbursement and Indemnification

            	
              54

            
	
              10.9 Notice
                of Default 

            	
              54

            
	
              10.10 Rights
                as Lender 

            	
              54

            
	
              10.11 Lender
                Credit Decision 

            	
              55

            
	
              10.12 Successor
                Administrative Agent 

            	
              55

            
	
              10.13 Administrative
                Agent’s Fee 

            	
              56

            
	
              10.14 Delegation
                to Affiliates 

            	
              56

            
	
              10.15 Other
                Agents 

            	
              56

            
	
              ARTICLE
                11 SETOFF; PAYMENTS 

            	
              56

            
	
              11.1 Setoff 

            	
              56

            
	
              11.2 Ratable
                Payments 

            	
              56

            
	
              ARTICLE
                12 BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 

            	
              57

            
	
              12.1 Successors
                and Assigns 

            	
              57

            
	
              12.2 Participations. 

            	
              57

            
	
              12.3 Assignments. 

            	
              58

            
	
              12.4 Tax
                Treatment 

            	
              59

            
	
              ARTICLE
                13 NOTICES

            	
              60

            
	
              13.1 Notices 

            	
              60

            
	
              13.2 Change
                of Address 

            	
              60

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

            	
              60

            
	
              14.1 CHOICE
                OF LAW 

            	
              60

            
	
              14.2 CONSENT
                TO JURISDICTION 

            	
              60

            
	
              14.3 WAIVER
                OF JURY TRIAL 

            	
              61

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    Schedule
      1: Pricing
      Schedule

    Schedule
      2: Commitments

    Schedule
      5.10: Financial
      Statements

    Schedule
      5.13: Subsidiaries

    Schedule
      6.10: Existing
      Liens

    Schedule
      6.15: Existing
      Investments

    


    Exhibit
      A:  Revolving
      Note

    Exhibit
      B:  Borrowing
      Notice

    Exhibit
      C:  Conversion/Continuation
      Notice

    Exhibit
      D:  Compliance
      Certificate

    Exhibit
      E:  Assignment
      and Assumption

    Exhibit
      F:  Account
      Designation Letter

    Exhibit
      G:  Swingline
      Note

    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    AMENDED
      AND RESTATED CREDIT AGREEMENT

    


    


    This
      Amended and Restated Credit Agreement dated as of March 29, 2007 is by and
      among
      Puget Sound Energy, Inc., a Washington corporation, the Lenders, and Wachovia
      Bank, National Association, a national banking association having its principal
      office in Charlotte, North Carolina, as Swingline Lender, as an LC Issuer and
      as
      Administrative Agent. The parties hereto agree as follows:

    


    RECITALS

    


    A. The
      Borrower, the Lenders and Wachovia Bank, National Association, as Administrative
      Agent and LC Issuer, entered into that certain Credit Agreement dated as of
      March 24, 2005, pursuant to which the Lenders agreed to extend certain credit
      facilities to the Borrower (“Original
      Agreement”).
      

    


    B. The
      parties desire to amend and restate the Original Agreement in its entirety
      on
      the terms and subject to the conditions set forth in this
      Agreement.

    


    


    ARTICLE
      1

    DEFINITIONS

    


    1.1 Defined
      Terms.
      As used
      in this Agreement:

    


    “Account
      Designation Letter”
      means
      the Notice of Account Designation Letter dated the Closing Date from the
      Borrower to the Administrative Agent in substantially the form attached hereto
      as Exhibit F.

    


    “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
      Wachovia 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.

    


    “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 Amended and Restated 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
      Utilization 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 Loans, 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, Wachovia Capital Markets, LLC and Citigroup Global Markets Inc.,
      a
      New York corporation in their capacity as Co-Lead Arrangers and Joint Book
      Runners.

    


    “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.

    


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

     

    “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 a Loan 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 Loans, a day (other than a Saturday or Sunday) on which banks
      generally are open in North Carolina 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
      North Carolina and New York 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 Revolving Loans to,
      and
      to participate in Swingline Loans made to the Borrower and 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 a Revolving Loan, Swingline Loan or the issuance of a Facility
      LC
      hereunder.

    


    “Credit
      Extension Date”
means
      the Borrowing Date for a Loan or the issuance date for a Facility
      LC.

    


    “Default”
means
      an event described in Article 7.

    


    “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
      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 Wachovia 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 Wachovia’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 Loan 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
      April 4, 2012, 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. (New York 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 March 9, 2007 between the Borrower and the
      Administrative Agent concerning up-front fees payable to the
      Lenders.

    


    “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.

    


    “Hybrid
      Securities”
means
      (a) the outstanding principal amount of 8.231% subordinated debentures due
      June
      1, 2027 issued by the Borrower on June 6, 1997 and purchased with the proceeds
      of trust preferred securities, (b) the outstanding principal amount of other
      subordinated debentures issued by the Borrower and purchased with the proceeds
      of trust preferred securities that are similar in structure to this described
      in
      clause (a), and (c) any trust preferred securities, or deferrable interest
      subordinated debt with a maturity of at least 20 years at the time issued by
      the
      Borrower, or any business trusts, limited liability companies, limited
      partnerships (or similar entities) (i) all of the common equity, general partner
      or similar interests of which are owned (either directly or indirectly through
      one or more wholly owned Subsidiaries) at all times by the Borrower or any
      of
      its Subsidiaries, (ii) that have been formed for the purpose of issuing hybrid
      securities and (iii) substantially all the assets of which consist of (A)
      subordinated debt of the Borrower or a Subsidiary of the Borrower, as the case
      may be, and (B) payments made form time to time on subordinated
      debt.

     

    “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 Hybrid Securities;
      (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 Loan, 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 Wachovia or another Lender selected by the Borrower to be another 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 Wachovia and any other Lender selected by the Borrower to issue
      Facility LCs, if any, in their capacities as LC Issuers.

    


    “Lending
      Installation”
means,
      with respect to a Lender, the Swingline Lender, an LC Issuer or the
      Administrative Agent, the office, branch or Affiliate of such Lender, Swingline
      Lender or LC Issuer or the Administrative Agent listed on the signature pages
      hereof or on a Schedule or otherwise selected by such Lender, Swingline 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.

    


    “LIBOR
      Market Index Rate Loan”
      means a
      Loan which, except as otherwise provided in Section 2.8, bears interest by
      reference to the LIBOR Market Index Rate.

     

    “LIBOR
      Market Index Rate”
      means,
      for any day, the 30-day rate of interest per annum appearing on Telerate
      Page 3750 (or any successor page) as the London interbank offered rate for
      deposits in Dollars at approximately 11:00 A.M. (London time) on such day,
      or if such day is not a London business day, then the immediately preceding
      London business day (or if not so reported, then as determined by the
      Administrative Agent from another recognized source or interbank quotation),
      or
      another rate as agreed to by the Administrative Agent and the
      Borrower.

     

    “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
      any Revolving Loan or Swingline Loan.

    


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

    


    “Mandatory
      Borrowing”
is
      defined in Section 2.18.2.

    


    “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).

    


    “Notes”
      means,
      collectively, the Revolving Notes and the Swingline Note. 

    


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

    


    “OFAC”
      means
      the U.S. Department of the Treasury’s Office of Foreign Assets
      Control.

    


    “Original
      Agreement”
      is
      defined in Recital A.

     

    “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 Revolving Loans outstanding at such time plus (ii) an amount equal
      to its Pro Rata Share of the LC Obligations and Swingline Loans at such
      time.

    


    “Participants”
is
      defined in Section 12.2.1.

    


    “Patriot
      Act”
is
      defined in Section 9.16.

    


    “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 covenant set forth in Section 6.11 (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.

    


    “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
      Loan and Servicing Agreement dated as of December 20, 2005 by and among PSE
      Funding, Inc., the Borrower, as servicer, the purchasers party thereto from
      time
      to time and JPMorgan Chase Bank, N.A., as program 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 Wachovia from time to time as its “reference rate.” Such
“reference rate” is set by Wachovia as a general reference rate of interest,
      taking into account such factors as Wachovia may deem appropriate, it being
      understood that many of Wachovia’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 Wachovia 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.

    


    “Revolving
      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).

    


    “Revolving
      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 Revolving
      Loans.

    


    “Risk-Based
      Capital Guidelines”
is
      defined in Section 3.2.

    


    “Sanctioned
      Country”
      means a
      country subject to a sanctions program identified on the list maintained by
      OFAC
      and available at http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html,
      or as
      otherwise published from time to time.

    


    “Sanctioned
      Person”
      means
      (i) a Person named on the list of “Specially Designated Nationals and Blocked
      Persons” maintained by OFAC available at http://www.treas.gov/offices/eotffc/ofac/sdn/index.html,
      or as
      otherwise published from time to time, or (ii) (a) an agency of the government
      of a Sanctioned Country, (b) an organization controlled by a Sanctioned Country,
      or (c) a person resident in a Sanctioned Country, to the extent subject to
      a
      sanctions program administered by OFAC.

    


    “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.

    


    “Swingline
      Committed Amount”
      is
      defined in Section 2.10.

     

    “Swingline
      Lender”
      means
      Wachovia Bank, National Association.

     

    “Swingline
      Loan”
      means,
      with respect to the Swingline Lender, any loan made by the Swingline Lender
      pursuant to Section 2.18.

    


    “Swingline
      Note”
means
      a
      promissory note, substantially in the form of Exhibit G, issued to the Swingline
      Lender pursuant to Section 2.10 to evidence its Swingline
      Loans.

    


    “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.

    


    “Term
      Out Maturity Date”
is
      defined in Section 2.1.3.

    


    “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 Hybrid 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.

    


    “Type”
means
      with respect to any Loan, its nature as a Floating Rate Loan, a Eurodollar
      Loan
      or a LIBOR Market Index Rate Loan.

    


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

    


    “Utilization
      Fee”
is
      defined in Section 2.4.1.

     

    “Wachovia”
      means
      Wachovia Bank, National Association, a national banking
      association.

     

    


    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
      2

    THE
      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 Revolving Loans to the Borrower,
      (ii) participate in Facility LCs issued upon the request of the Borrower
      and (iii) participate in Swingline Loans made upon the request of the Borrower;
      (b) each LC Issuer severally agrees to issue Facility LCs on the terms and
      conditions set forth in this Agreement; and (c) the Swingline Lender agrees
      to
      make Swingline Loans to the Borrower 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.
      

    


    (i) Subject
      to clause (ii) below, 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.

    


    (ii) On
      or
      before ten Business Days prior to the Facility Termination Date, the Borrower
      may, as long as no Default or Unmatured Default exists and is continuing, notify
      the Administrative Agent in writing (and the Administrative Agent shall promptly
      forward such notice to the Lenders) that, as of the Facility Termination Date,
      it is converting the outstanding Loans (including all Swingline Loans) to a
      term
      loan which shall be due and payable in full on the date one year subsequent
      to
      the Facility Termination Date (the “Term
      Out Maturity Date”).
      It is
      understood and agreed that subsequent to the Facility Termination Date,
      (a) the Borrower may no longer request, and the Lenders, LC Issuers and
      Swingline Lender are no longer obligated or empowered to make or issue, new
      Loans or Letters of Credit, (b) any amounts repaid may not be reborrowed,
      (c) interest shall accrue on the outstanding Loans, at the option of the
      Borrower, as Floating Rate Loans or Eurodollar Loans in accordance with the
      terms of Sections 2.2.4, 2.7 and 2.8; provided,
      that
      during the period from the Facility Termination Date through the Term Out
      Maturity Date, the outstanding Loans shall bear interest at the rate otherwise
      applicable to such Loans plus a premium of 0.25% per
      annum
      and (d)
      the Borrower shall have the right to prepay all or a portion of the outstanding
      Loans in accordance with Section 2.6. 

    


    2.2 Revolving
      Loans.

    


    2.2.1 Revolving
      Loans.
      Each
      Revolving Loan borrowing hereunder shall consist of Revolving 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 Revolving Loans.
      Revolving Loans may be Floating Rate Loans or Eurodollar Loans, 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 Revolving
      Loans.
      The
      Borrower shall select the Type of Revolving Loan and, in the case of each
      Eurodollar Loan, 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 (a) 1:30 p.m. (New York time) on the Borrowing Date of each Floating
      Rate Loan and (b) 2:00 p.m. (New York time) at least three Business Days
      before the Borrowing Date of each Eurodollar Loan. A Borrowing Notice shall
      specify:

    


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

    


    (ii) the
      aggregate amount of such Revolving Loan;

    


    (iii) the
      Type
      of Revolving Loan selected; and

    


    (iv) in
      the
      case of each Eurodollar Loan, the Interest Period applicable thereto (which
      may
      not end after the scheduled Facility Termination Date or the Term Out Maturity
      Date, as applicable).

    


    2.2.4 Conversion
      and Continuation of Outstanding Loans.
      Floating Rate Loans shall continue as Floating Rate Loans unless and until
      such
      Floating Rate Loans are either converted into Eurodollar Loans or LIBOR Market
      Index Rate Loans in accordance with this Section 2.2.4 or are repaid in
      accordance with Section 2.6. Each Eurodollar Loan shall continue as a
      Eurodollar Loan until the end of the then applicable Interest Period therefor,
      at which time such Eurodollar Loan shall be automatically converted into a
      Floating Rate Loan unless (x) such Eurodollar Loan 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 Loan continue as a Eurodollar
      Loan
      for the same or another Interest Period. LIBOR Market Index Rate Loans shall
      continue as LIBOR Market Index Rate Loans until they are either converted to
      Floating Rate Loans in accordance with this Section 2.2.4 or are repaid in
      accordance with Section 2.6 or 2.18. Subject to Section 2.5, the Borrower
      may elect from time to time to convert (i) all or any part of a Floating Rate
      Loan (other than Swingline Loans) into a Eurodollar Loan, (ii) convert any
      Swingline Loan that is a Floating Rate Loan into a LIBOR Market Index Rate
      Loan
      or (iii) convert any LIBOR Market Index Rate Loan into a Floating Rate Loan.
      For
      the avoidance of doubt, only Swingline Loans may be comprised of LIBOR Market
      Index Rate Loans. The Borrower shall give the Administrative Agent irrevocable
      notice in the form of Exhibit C (a “Conversion/Continuation
      Notice”)
      with
      respect to each (A) conversion of a Floating Rate Loan into a Eurodollar Loan
      or
      LIBOR Market Index Rate Loan, (B) conversion of a LIBOR Market Index Rate Loan
      into a Floating Rate Loan or (C) continuation of a Eurodollar Loan, not later
      than 2:00 p.m. (New York 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 Revolving Loan or Swingline Loan which is
      to be
      converted or continued and, if applicable, the Type of Loan to which such
      Revolving Loan or Swingline Loan is to be converted; and

    


    (iii) if
      any
      Loan is to be converted to a Eurodollar Loan or continued as a Eurodollar Loan,
      the duration of the Interest Period applicable thereto.

    


    2.3 Method
      of Borrowing.
      Not
      later than (a) 2:30 p.m. (New York time) on the Borrowing Date of each Floating
      Rate Loan and (b) 2:00 p.m. (New York time) on the Borrowing Date of each
      Eurodollar Loan, each Lender shall make available its Revolving Loan or
      Revolving Loans in funds immediately available in Charlotte, North Carolina
      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) 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
      and
      (b) a utilization fee at a per
      annum
      rate
      equal to the Applicable Utilization Fee Rate on the aggregate principal amount
      of the outstanding Revolving Loans for each day on which the aggregate principal
      amount of the outstanding Revolving Loans equals or exceeds 50% of the Aggregate
      Commitment (the “Utilization
      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.
      For purposes of calculating the Commitment Fee, Swingline Loans shall not be
      deemed a utilization of the Aggregate Commitment. For purposes of calculating
      the Utilization Fee, Swingline Loans shall be deemed a utilization of the
      Aggregate Commitment.

    


    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 and Utilization Fees
      shall be payable on the effective date of any termination of the Commitments
      in
      full.

    


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

    


    2.6 Optional
      Principal Payments.
      With
      respect to Revolving Loans, the Borrower may from time to time pay, without
      penalty or premium, all outstanding Floating Rate Loans or, in an aggregate
      amount of $1,000,000 or a higher integral multiple of $500,000, any portion
      of
      the outstanding Floating Rate Loans upon one Business Day’s prior notice to the
      Administrative Agent. With respect to Revolving Loans, 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 Loans or, in an aggregate amount of $1,000,000 or a higher integral
      multiple of $500,000, any portion of the outstanding Eurodollar Loans upon
      three
      Business Days’ prior notice to the Administrative Agent. The Borrower may from
      time to time pay, without penalty or premium, all outstanding Swingline Loans
      or, in an aggregate amount of $100,000 or a higher integral multiple of
      $100,000, any portion of the outstanding Swingline Loans upon one Business
      Day’s
      prior notice to the Administrative Agent.

    


    2.7 Changes
      in Interest Rate, etc.

     

    (i) Each
      Floating Rate Loan shall bear interest on the outstanding principal amount
      thereof, for each day from and including the date such Floating Rate Loan is
      made or is converted from a Eurodollar Loan pursuant to Section 2.2.4 to
      but excluding the date it becomes due or is converted into a Eurodollar Loan
      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 Loan will take effect
      simultaneously with each change in the Alternate Base Rate. 

    


    (ii) Each
      Eurodollar Loan 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.

    


    (iii) Each
      LIBOR Market Index Rate Loan shall bear interest on the outstanding principal
      amount thereof, for each day from and including the date such LIBOR Market
      Index
      Rate Loan is made or is converted from a Floating Rate Loan pursuant to Section
      2.2.4 to but excluding the date it becomes due or is converted into a Floating
      Rate Loan pursuant to Section 2.2.4, at the LIBOR Market Index Rate for such
      day
      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 Revolving Loan may be made as,
      converted into or continued as a Eurodollar Loan. 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
      Loan 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 Loan shall bear interest at a rate per
      annum
      equal to
      the Alternate Base Rate in effect from time to time plus 2% per
      annum,
      (iii)
      each LIBOR Market Index Rate Loan 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
      (iv) 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), (ii) and (iii) above and the increase in
      the LC Fee set forth in clause (iv) 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 1:00 p.m. (New York time) on
      the
      date when due and shall (except in the case of (i) Reimbursement Obligations
      for
      which any LC Issuer has not been fully indemnified by the Lenders, or as
      specifically required hereunder or (ii) Swingline Loans for which the Swingline
      Lender has not been reimbursed as provided herein) 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 (a) each LC Issuer, in the case of payments required to be made
      by
      the Borrower to such LC Issuer pursuant to 2.16.6 and (b) the Swingline Lender,
      in the case of payments required to be made by the Borrower to the Swingline
      Lender pursuant to Section 2.18.

    


    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 Revolving Loans be evidenced by a Revolving Note.
      In
      such event, the Borrower shall prepare, execute and deliver to such Lender
      a
      Revolving Note payable to the order of such Lender. Thereafter, the Revolving
      Loans evidenced by such Revolving Note and interest thereon shall at all times
      (including after any assignment pursuant to Section 12.3) be represented by
      a Revolving 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 Revolving Note for cancellation and
      requests that such Revolving Loans once again be evidenced as described in
      paragraphs (i) and (ii) above.

    


    (v) The
      Swingline Loans shall be evidenced by a Swingline Note executed by the Borrower
      to the order of the Swingline Lender. 

    


    2.11 Telephonic
      Notices.
      The
      Borrower hereby authorizes the Lenders and the Administrative Agent to extend,
      convert or continue Loans, to effect selections of Types of Loans 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 Loan and each LIBOR Market Index Rate
      Loan shall be payable on each Payment Date, on any date on which such Floating
      Rate Loan or LIBOR Market Index Rate Loan 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 Loan converted into a
      Eurodollar Loan or LIBOR Market Index Rate Loan on a day other than a Payment
      Date shall be payable on the date of conversion. Interest accrued on that
      portion of the outstanding principal amount of any LIBOR Market Index Rate
      Loan
      converted into a Floating Rate Loan on a day other than a Payment Date shall
      be
      payable on the date of conversion. Interest accrued on each Eurodollar Loan
      shall be payable on the last day of its applicable Interest Period, on any
      date
      on which such Eurodollar Loan is paid, whether by acceleration or otherwise,
      and
      at maturity. Interest accrued on each Eurodollar Loan 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,
      Utilization 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 Loans 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 a Loan is made but not for the day of any payment on the amount
      paid
      if payment is received prior to 1:00 p.m. (New York time). If any payment of
      principal of or interest on a Loan 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 Revolving Loans, 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
      any LC Issuer, the Administrative Agent will notify each Lender of the contents
      of each request for issuance of a Facility LC hereunder. Promptly after receipt
      of notice thereof from the Swingline Lender, the Administrative Agent will
      notify each Lender of the contents of each request for a Mandatory Borrowing.
      The Administrative Agent will notify each Lender and the Borrower of the
      interest rate applicable to each Eurodollar Loan 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 Revolving Loans and its participations in any LC Obligations
      and Swingline Loans, each LC Issuer may book the Facility LCs issued thereby,
      and the Swingline Lender may book its Swingline Loans, at any Lending
      Installation selected by such Lender, Swingline 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 Revolving
      Loans, Swingline Loans, Facility LCs, participations in LC Obligations and
      Swingline Loans and any Notes issued hereunder shall be deemed held by each
      Lender, Swingline Lender or LC Issuer, as the case may be, for the benefit
      of
      any such Lending Installation. Each Lender, Swingline 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 Revolving 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 Revolving Loan or (y) in the case of repayment
      by the Borrower, the interest rate applicable to the relevant Revolving
      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 any 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
      2:00 p.m. (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 Loans.

    


    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 any 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 Loans 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 Loans 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 any 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.
      No
      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 any LC Issuer for damages as contemplated by the proviso to
      the
      first sentence of Section 2.16.6.

    


    2.16.8 Actions
      of LC Issuer.
      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.

    


    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 any 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, any 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.

    


    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.

    


    2.16.12
      Existing
      Letters of Credit.
      The
      Borrower, the Lenders and the Administrative Agent acknowledge and agree that
      the following letters of credit issued by Wachovia
      pursuant to the terms of the
      Original Agreement constitute Facility LC’s: (i)
      letter of credit #SM224440, dated February 21, 2007 in the stated amount of
      $7,910,000 for the benefit of Public Utility District #1 of Klickitat County,
      Washington; and (ii) letter of credit #SM224476, dated March 15, 2007 in the
      stated amount of $364,000 for the benefit of Public Utility District #1 of
      Klickitat County, Washington.

    


    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.

    


    2.18 Swingline
      Loan Subfacility.

    


    2.18.1 Swingline
      Loans.
      From
      and including the Closing Date to but excluding the Facility Termination Date,
      the Swingline Lender, in its individual capacity, agrees to make loans to the
      Borrower (each
      a
“Swingline
      Loan”
      and,
      collectively, the “Swingline
      Loans”)
      for the
      purposes hereinafter set forth; provided, however,
      (i) the aggregate amount of Swingline Loans outstanding at any time shall
      not exceed FIFTY
      MILLION DOLLARS
      ($50,000,000) (the “Swingline
      Committed Amount”),
      and
      (ii) the Aggregate Outstanding Credit Exposure shall not exceed the
      Aggregate Commitment.
      Swingline Loans hereunder may be repaid and reborrowed in accordance with the
      provisions hereof.

    


    2.18.2 Swingline
      Loan Borrowing.

    


    (i) Notice
      of Borrowing and Disbursement.
      Upon
      receiving a Borrowing Notice not later than 2:00 p.m. (New York time) on any
      Business Day requesting that a Swingline Loan be made, the Swingline Lender
      will
      make Swingline Loans available to the Borrower on the same Business Day such
      request is received by the Administrative Agent. The Borrower shall specify
      in
      the applicable Borrowing Notice with respect to such Swingline Loan (a) the
      amount of the requested Swingline Loan and (b) whether such Swingline Loan
      shall
      be a Floating Rate Loan or a LIBOR Market Index Rate Loan. Swingline Loan
      borrowings hereunder shall be made in minimum amounts of $100,000 and in higher
      integral multiples of $100,000. 

    


    (ii) Repayment
      of Swingline Loans.
      Each
      Swingline Loan borrowing that is a Floating Rate Loan shall be due and payable
      on the Facility Termination Date. Each Swingline Loan borrowing that is a LIBOR
      Market Index Rate Loan shall be due and payable on the earlier of (A) the
      Facility Termination Date and (B) fourteen days after the date such Swingline
      Loan is made. Swingline Loans that are LIBOR Market Index Rate Loans may not
      be
      refinanced with the proceeds of Swingline Loans that are LIBOR Market Index
      Rate
      Loans. The Swingline Lender may, at any time, in its sole discretion, by written
      notice to the Borrower and the Administrative Agent, demand repayment of its
      Swingline Loans by way of a Revolving Loan borrowing, in which case the Borrower
      shall be deemed to have requested a Revolving Loan borrowing comprised entirely
      of Floating Rate Loans in the amount of such Swingline Loans; provided,
      however,
      that,
      in the following circumstances, any such demand shall also be deemed to have
      been given one Business Day prior to each of (i) the Facility Termination
      Date,
      (ii) the
      occurrence of any Default under Section 7.6 or 7.7,
      (iii) upon
      acceleration of the Obligations hereunder, whether on account of a Default
      described in Section 7.6 or 7.7 or any other Default, (iv) the
      exercise of remedies in accordance with the provisions of Article 8 hereof
      and
      (v) with respect to any LIBOR Market Index Rate Loan, the fourteenth day after
      the making of such Loan to the extent such Loan is not repaid sooner (each
      such
      Revolving Loan borrowing made on account of any such deemed request therefor
      as
      provided herein being hereinafter referred to as “Mandatory
      Borrowing”). Each
      Lender hereby irrevocably agrees to make such Revolving Loans promptly upon
      any
      such request or deemed request on account of each Mandatory Borrowing in the
      amount and in the manner specified in the preceding sentence and on the same
      such date notwithstanding
      (I) the
      amount of Mandatory Borrowing may not comply with the minimum amount for
      borrowings of Revolving Loans otherwise required hereunder, (II) whether any
      conditions specified in Section 4.2 are then satisfied, (III) whether a
      Default or Unmatured Default then exists, (IV) failure of any such request
      or
      deemed request for Revolving Loans to be made by the time otherwise required
      hereunder, (V) the date of such Mandatory Borrowing or (VI) any reduction in
      the
      Aggregate Commitment. In the event that any Mandatory Borrowing cannot for
      any
      reason be made on the date otherwise required above (including, without
      limitation, as a result of the commencement of a proceeding under the Bankruptcy
      Code), then each Lender hereby agrees that it shall forthwith purchase (as
      of
      the date the Mandatory Borrowing would otherwise have occurred, but adjusted
      for
      any payments received from the Borrower on or after such date and prior to
      such
      purchase) from the Swingline Lender such participations in the outstanding
      Swingline Loans as shall be necessary to cause each such Lender to share in
      such
      Swingline Loans ratably based upon its Pro Rata Share (determined before giving
      effect to any termination of the Commitments pursuant to Article 8);
provided
      that (A)
      all interest payable on the Swingline Loans shall be for the account of the
      Swingline Lender until the date as of which the respective participation is
      purchased, and (B) at the time any purchase of participations pursuant to this
      sentence is actually made, the purchasing Lender shall be required to pay to
      the
      Swingline Lender interest on the principal amount of such participation
      purchased for each day from and including the day upon which the Mandatory
      Borrowing would otherwise have occurred to but excluding the date of payment
      for
      such participation, at the rate equal to, if paid within two (2) Business
      Days of the date of the Mandatory Borrowing, the Federal Funds Effective Rate,
      and thereafter at a rate equal to the Alternate Base Rate.

    


    2.18.3 Interest
      on Swingline Loans.
      Swingline Loans shall at all times be Floating Rate Loans or LIBOR Market Index
      Rate Loans, as selected by the Borrower in accordance with Section 2.18.1.
      Swingline Loans shall bear interest as provided in Section 2.7.

    


    


    ARTICLE
      3

    YIELD
      PROTECTION; TAXES

    


    3.1 Yield
      Protection.
      If, on
      or after the date of this Agreement, the adoption of any law or any governmental
      or quasi-governmental rule, regulation, policy, guideline or directive (whether
      or not having the force of law), or any change in the interpretation or
      administration thereof by any governmental or quasi-governmental authority,
      central bank or comparable agency charged with the interpretation or
      administration thereof, or compliance by the Swingline Lender or 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, Swingline 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, Swingline Lender, LC Issuer or applicable
      Lending Installation in respect of its Eurodollar Loans, Swingline 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, Swingline Lender, LC Issuer
      or
      applicable Lending Installation (other than reserves and assessments taken
      into
      account in determining the interest rate applicable to Eurodollar Loans),
      or

    


    (iii) imposes
      any other condition the result of which is to increase the cost to any Lender,
      Swingline Lender, LC Issuer or applicable Lending Installation of making,
      funding or maintaining its Eurodollar Loans, or making, funding, maintaining
      or
      participating in Swingline Loans or of issuing or participating in Facility
      LCs,
      or reduces any amount receivable by any Lender, Swingline Lender, LC Issuer
      or
      applicable Lending Installation in connection with its Eurodollar Loans,
      Swingline Loans or participations therein, Facility LCs or participations
      therein, or requires any Lender, Swingline Lender, LC Issuer or applicable
      Lending Installation to make any payment calculated by reference to the amount
      of Eurodollar Loans, Swingline Loans or participations therein or Facility
      LCs
      or participations therein held or interest received by it, by an amount deemed
      material by such Lender, Swingline 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, Swingline
      Lender, LC Issuer or applicable Lending Installation, as the case may be, of
      (a)
      making or maintaining its Eurodollar Loans, (b) making, maintaining or
      participating in Swingline Loans, (c) making or maintaining its Commitment
      or
      (d) issuing or participating in Facility LCs or to reduce the return received
      by
      such Lender, Swingline Lender, LC Issuer or applicable Lending Installation
      in
      connection with such Eurodollar Loans, Commitment, Swingline Loans or
      participations therein, or Facility LCs or participations therein then, within
      15 days of demand by such Lender, Swingline Lender or LC Issuer, as the case
      may
      be, the Borrower shall pay such Lender, Swingline Lender or LC Issuer such
      additional amount or amounts as will compensate such Lender, Swingline 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, Swingline Lender or LC Issuer determines that the amount of capital
      required or expected to be maintained by such Lender, Swingline Lender or LC
      Issuer, the Lending Installation of such Lender, Swingline Lender or LC Issuer
      or any corporation controlling such Lender, Swingline Lender or LC Issuer is
      increased as a result of a Change, then, within 15 days of demand by such
      Lender, Swingline Lender or LC Issuer, the Borrower shall pay such Lender,
      Swingline 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, Swingline Lender or LC Issuer reasonably determines is attributable
      to this Agreement, its Outstanding Credit Exposure, its commitment to make
      Swingline Loans or its Commitment to make Loans and issue or participate in
      Facility LCs or Swingline Loans, as the case may be, hereunder (after taking
      into account such Lender’s, Swingline 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, Swingline Lender LC Issuer or Lending Installation
      or
      any corporation controlling any Lender, Swingline 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 Revolving Loans.
      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 Loans and any requested borrowing of, conversion into
      or
      continuation of a Eurodollar Loan shall instead be made as, remain or be
      converted into a Floating Rate Loan. Each Floating Rate Loan made pursuant
      to
      clause (a) above shall remain outstanding for the same period as the
      Eurodollar Loan 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 Loan 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 Loan is not made on the date specified by the
      Borrower (including in the case of any continuation of or conversion into a
      Eurodollar Loan) 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 Loan.

    


    3.5 Taxes.

    


    (i) All
      payments by the Borrower to or for the account of any Lender, Swingline 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, Swingline 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,
      Swingline 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,
      Swingline Lender 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, Swingline
      Lender 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, Swingline Lender 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 Loans under Section 3.3, so long as such
      designation is not, in the judgment of such Lender, disadvantageous to such
      Lender. The Swingline Lender and 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 the Swingline
      Lender or 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 Revolving 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 Revolving 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
      4

    CONDITIONS
      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 or the Vice President Finance
      and Treasurer 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, the Swingline Note and any Revolving 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) an
      executed counterpart of the Account Designation Letter; 

    


    (ix) a
      certificate, for the benefit of itself and the Lenders, provided by the Borrower
      that sets forth information required by the Patriot Act (as defined in Section
      9.16) including, without limitation, the identity of the Borrower, the name
      and
      address of the Borrower and other information that will allow the Administrative
      Agent or any Lender, as applicable, to identify the Borrower in accordance
      with
      the Patriot Act; and

    


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

    


    4.2 Each
      Credit Extension.
      The
      Lenders, Swingline Lender 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 a Loan 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
      5

    REPRESENTATIONS
      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, 2006 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 report referred to in subclause (i)(a) of the
      preceding sentence. 

    


    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
      (a) examined and closed through the period ended December 31, 2000 and (b)
      examined through the period ended December 31, 2003, provided that the
      Borrower is appealing certain determinations made for the Borrower’s fiscal
      years 2001, 2002 and 2003. 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 Material
      Adverse Change.
      As of
      the date of this Agreement and since December  31, 2006, 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 5.10, that could reasonably
      be expected to have a Material Adverse Effect.

    


    5.10 Financial
      Statements.
      Schedule 5.10 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 5.10 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.

    


    5.11 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.

    


    5.12 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.

    


    5.13 Subsidiaries.
      Schedule 5.13 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.

    


    5.14 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.

    


    5.15 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.

    


    5.16 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.

    


    5.17 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.

    


    5.18 Anti-Terrorism
      Laws.
      Neither
      the Borrower nor any of its Subsidiaries is an “enemy” or an “ally of the enemy”
within the meaning of Section 2 of the Trading with the Enemy Act of the United
      States of America (50 U.S.C. App. §§ 1 et
      seq.),
      as
      amended. Neither the Borrower nor any of its Subsidiaries is in violation of
      (i)
      the Trading with the Enemy Act, as amended, (ii) any of the foreign assets
      control regulations of the United States Treasury Department (31 CFR, Subtitle
      B, Chapter V, as amended) or any enabling legislation or executive order
      relating thereto or (iii) the Patriot Act (as defined in Section 9.16). Neither
      the Borrower nor any of its Subsidiaries (a) is a blocked person described
      in
      section 1 of the Anti-Terrorism Order or (b) to its knowledge, engages in any
      dealings or transactions, or is otherwise associated, with any such blocked
      person.

    


    5.19 Compliance
      with OFAC Rules and Regulations.
      Neither
      the Borrower nor any of its Subsidiaries or Affiliates (i) is a Sanctioned
      Person, (ii) has more than 15% of its assets in Sanctioned Countries, or (iii)
      derives more than 15% of its operating income from investments in, or
      transactions with Sanctioned Persons or Sanctioned Countries. No part of the
      proceeds of any Loan or Facility LC will be used directly or indirectly to
      fund
      any operations in, finance any investments or activities in or make any payments
      to, a Sanctioned Person or a Sanctioned Country.

     

    5.20 Compliance
      with FCPA.
      Each of
      the Borrower and its Subsidiaries is in compliance with the Foreign Corrupt
      Practices Act, 15 U.S.C. §§ 78dd-1, et
      seq.,
      and any
      foreign counterpart thereto. None of the Borrower or its Subsidiaries has made
      a
      payment, offering, or promise to pay, or authorized the payment of, money or
      anything of value (i) in order to assist in obtaining or retaining business
      for or with, or directing business to, any foreign official, foreign political
      party, party official or candidate for foreign political office, (ii) to a
      foreign official, foreign political party or party official or any candidate
      for
      foreign political office, and (iii) with the intent to induce the recipient
      to misuse his or her official position to direct business wrongfully to such
      Person or to any other Person, in violation of the Foreign Corrupt Practices
      Act, 15 U.S.C. §§ 78dd-1, et
      seq.

    


    ARTICLE
      6

    COVENANTS

    


    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 6.12 and 6.13, and
      carry on and conduct its business in substantially the same manner and in
      substantially the same fields of enterprise as it is presently
      conducted.

    


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

    


    6.3 Payment
      of 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), including commercial paper backup and
      working capital.

    


    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 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.

    


    6.13 Disposition
      of Assets.
      Not
      sell, lease, assign, transfer or otherwise dispose of any asset or interest
      therein, except that this Section 6.13 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.

    


    6.14 Transactions
      with Affiliates.
      Without
      limiting Section 6.13(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.

    


    6.15 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 6.15;

    


    (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 6.13(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
      7

    DEFAULTS

    


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

     

    7.1 Any
      representation or warranty made or deemed made by the Borrower or any of its
      Subsidiaries to the Lenders or the Administrative Agent under or in connection
      with this Agreement, any 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 (provided
      that 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 or 6.15.

     

    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
      8

    ACCELERATION,
      WAIVERS, AMENDMENTS AND REMEDIES

    


    8.1 Acceleration.

    


    (i) If
      any
      Default described in Section 7.6 or 7.7 occurs with respect to the
      Borrower, the obligations of the Lenders to make Revolving Loans hereunder,
      the
      obligation of the Swingline Lender to make Swingline 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, any LC Issuer,
      the
      Swingline Lender
      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 Revolving Loans hereunder,
      the
      obligation and the power of the Swingline Lender to make Swingline 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, such obligation and power of the Swingline Lender
      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 Revolving Loans hereunder,
      the obligation and the power of the Swingline Lender to make Swingline 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 (and the Swingline Lender, if 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 (and the Swingline Lender, if 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, the Swingline Lender or any LC Issuer or Arranger
      hereunder without the prior written consent of the Administrative Agent,
      Swingline Lender or such LC Issuer or Arranger, as the case may be.

    


    8.3 Preservation
      of Rights.
      No
      delay or omission of any Lender, the Swingline Lender, any 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 Swingline Lender, the LC Issuers and the Lenders until the Obligations
      have
      been paid in full and the Commitments have terminated.

    


    


    ARTICLE
      9

    GENERAL
      PROVISIONS

    


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

    


    9.2 Governmental
      Regulation.
      Anything contained in this Agreement to the contrary notwithstanding, no LC
      Issuer, Swingline Lender 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, the Swingline Lender 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,
      the Swingline Lender 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 Swingline Lender, 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 Swingline Lender,
      the Arrangers and the Lenders, including attorneys that are employees of the
      Administrative Agent, the LC Issuers, the Swingline Lender, the Arrangers or
      the
      Lenders) paid or incurred by the Administrative Agent, the Swingline Lender,
      any
      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, the Swingline Lender, 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, the Swingline Lender, any 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 Swingline
      Lender, 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, Swingline Lender or Arranger shall have any
      fiduciary responsibilities to the Borrower. Neither the Administrative Agent
      nor
      any LC Issuer, Lender, Swingline 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,
      Swingline 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, Swingline 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, the Swingline Lender 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, the Swingline Lender, any 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, the Swingline
      Lender, any Lender or any 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 Wachovia
      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 Wachovia 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 Wachovia 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. 

    


    9.14 Amendment
      and Restatement of Original Agreement.
      This
Agreement
      amends and restates in its entirety the Original Agreement, reflects the
      addition of Lenders and reflects an increase in the Aggregate Commitment. Within
      five Business Days of the date of this Agreement, each Lender to which a
      promissory note under the Original Agreement was executed and delivered by
      the
      Borrower shall deliver such promissory note to the Administrative Agent for
      cancellation by the Administrative Agent and prompt delivery to the Borrower.
      Notwithstanding the foregoing, any such Lender that has requested that its
      Revolving Loans be evidenced by a Revolving Note pursuant to the provisions
      of
      Section 2.10(iv) shall not be required to deliver any promissory note
      issued pursuant to the Original Agreement prior its receipt of such Revolving
      Note.

    


    9.15 Acknowledgments.
      In
      connection with all aspects of each transaction contemplated hereby, the
      Borrower acknowledges and agrees and
      acknowledges its Affiliates’ understanding, that: (i) the credit facilities
      provided for hereunder and any related arranging or other services in connection
      therewith (including in connection with any amendment, waiver or other
      modification hereof or of any other Loan Document) are an arm’s-length
      commercial transaction between the Borrower and its Affiliates, on the one
      hand,
      and the Administrative Agent and the Arrangers,
      on the
      other hand, and the Borrower is capable of evaluating and understanding and
      understands and accepts the terms, risks and conditions of the transactions
      contemplated hereby and by the other Loan Documents (including any amendment,
      waiver or other modification hereof or thereof); (ii) in connection with the
      process leading to such transaction, the Administrative Agent and each of the
      Arrangers is and has been acting solely as a principal and is not the financial
      advisor, agent or fiduciary, for the Borrower or any of its Affiliates,
      stockholders, creditors or employees or any other Person; (iii) neither the
      Administrative Agent nor either Arranger has assumed or will assume an advisory,
      agency or fiduciary responsibility in favor of the Borrower with respect to
      any
      of the transactions contemplated hereby or the process leading thereto,
      including with respect to any amendment, waiver or other modification hereof
      or
      of any other Loan Document (irrespective of whether the Administrative Agent
      or
      either Arranger has advised or is currently advising the Borrower or any of
      its
      Affiliates on other matters) and neither the Administrative Agent nor either
      Arranger has any obligation to the Borrower or any of its Affiliates with
      respect to the transactions contemplated hereby except those obligations
      expressly set forth herein and in the other Loan Documents; (iv) the
      Administrative Agent and the Arrangers and their respective Affiliates may
      be
      engaged in a broad range of transactions that involve interests that differ
      from
      those of the Borrower and its Affiliates, and neither the Administrative Agent
      nor either Arranger has any obligation to disclose any of such interests by
      virtue of any advisory, agency or fiduciary relationship; and (iv) the
      Administrative Agent and the Arrangers have not provided and will not provide
      any legal, accounting, regulatory or tax advice with respect to any of the
      transactions contemplated hereby (including any amendment, waiver or other
      modification hereof or of any other Loan Document) and the Borrower has
      consulted its own legal, accounting, regulatory and tax advisors to the extent
      it has deemed appropriate. The Borrower hereby waives and releases, to the
      fullest extent permitted by law, any claims that it may have against the
      Administrative Agent and the Arrangers with respect to any breach or alleged
      breach of agency or fiduciary duty.

    


    9.16 Patriot
      Act.
      Each
      Lender hereby notifies the Borrower that pursuant to the requirements of the
      USA
      PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
      (the “Patriot
      Act”),
      it is
      required to obtain, verify and record information that identifies the Borrower,
      which information includes the name and address of the Borrower and other
      information that will allow such Lender to identify the Borrower in accordance
      with the Patriot Act.

     

    


    ARTICLE
      10

    THE
      ADMINISTRATIVE AGENT

    


    10.1 Appointment;
      Nature of Relationship.
      Wachovia 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 New York 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
      11

    SETOFF;
      PAYMENTS

    


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

    


    11.2 Ratable
      Payments.
      If any
      Lender, whether by setoff or otherwise, has payment made to it upon its
      Outstanding Credit Exposure (other than payments received pursuant to
      Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by
      any other Lender, such Lender agrees, promptly upon demand, to purchase a
      portion of the Aggregate Outstanding Credit Exposure held by the other Lenders
      so that after such purchase each Lender will hold its Pro Rata Share of the
      Aggregate Outstanding Credit Exposure. If any Lender, whether in connection
      with
      setoff or amounts which might be subject to setoff or otherwise, receives
      collateral or other protection for 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
      12

    BENEFIT
      OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

    


    12.1 Successors
      and Assigns.
      The
      terms and provisions of the Loan Documents shall be binding upon and inure
      to
      the benefit of the Borrower and the Lenders and their respective successors
      and
      assigns, except that (i) the Borrower shall not have the right to assign
      its rights or obligations under the Loan Documents and (ii) any assignment
      by any Lender of its rights and obligations under the Loan Documents must be
      made in compliance with Section 12.3. The parties to this Agreement
      acknowledge that clause (ii) of this Section 12.1 relates only to
      absolute assignments and does not prohibit assignments creating security
      interests, including 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
      Revolving 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 North Carolina 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 Revolving 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
      Revolving Loans be evidenced by a Revolving Note, make appropriate arrangements
      so that a new Revolving Note or, as appropriate, a replacement Revolving Note
      is
      issued to such transferor Lender and a new Revolving Note or, as appropriate,
      a
      replacement Revolving 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
      13

    NOTICES

    


    13.1 Notices.
      Except
      as otherwise permitted by Section 2.11 with respect to borrowing notices,
      all notices, requests and other communications to any party hereunder shall
      be
      in writing (including electronic transmission, facsimile transmission or similar
      writing) and shall be given to such party: (x) in the case of the Borrower
      or the Administrative Agent, at its address or facsimile number set forth on
      the
      signature pages hereof, (y) in the case of any Lender, at its address or
      facsimile number set forth below its signature hereto (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
      14

    CHOICE
      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 NEW YORK,
      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 NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK
      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, THE SWINGLINE LENDER, ANY LC ISSUER OR ANY LENDER TO
      BRING
      PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
      JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE ADMINISTRATIVE AGENT, THE
      SWINGLINE LENDER, ANY LC ISSUER, ANY LENDER OR ANY AFFILIATE OF THE
      ADMINISTRATIVE AGENT, THE SWINGLINE LENDER, ANY 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 NEW YORK, NEW YORK.

    


    14.3 WAIVER
      OF JURY TRIAL.
      THE
      BORROWER, THE ADMINISTRATIVE AGENT, THE SWINGLINE LENDER, ANY 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 Swingline Lender, the LC Issuers
      and the Administrative Agent have executed this Agreement as of the date first
      above written.

    


    


    
      	
              PUGET
                SOUND ENERGY, INC.

            
	
               

               

              By:
                /s/Donald
                E. Gaines 

            
	
              Name:
                Donald E. Gaines

            
	
              Title:
                Vice President Finance &
                Treasurer

            
	
               

              Puget
                Sound Energy, Inc.

              P.O.
                Box 97034 PSE-08N

              Bellevue,
                WA 98009-9734

              Attention:
                Assistant
                Treasurer

              Telephone:
                425-462-3451

              FAX:
                425-462-3490

               

              For
                Courier Deliveries:

              10885
                NE 4th
                Street PSE-08N

              Bellevue,
                WA 98004-5591

            


    

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              WACHOVIA
                BANK, NATIONAL ASSOCIATION, Individually, as Administrative Agent,
                Swingline Lender and as LC Issuer

            
	 
	
              By:
                /s/Frederick
                W. Price  

            
	
              Name:
                 Frederick
                W. Price  

            
	
              Title:
                Managing
                Director  

            
	
               

              Operations
                Contact:

              Wachovia
                Bank, National Association

              201
                S. College St., CP-8

              Charlotte,
                NC 28288-0680

              Attention:
                Syndication Agency Services

              Telephone:
                704-383-1366

              FAX:
                704-383-0288

               

              Credit
                Contact:

              Wachovia
                Bank, National Association

              301
                South College St., 6th
                Floor

              Charlotte,
                NC 28288

              Attention:
                Rick Price, Managing Director

              Telephone:
                704-374-4062

              FAX:
                704-374-4793

              E-mail:
                rick.price@wachovia.com

            
	 


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              CITIBANK,
                N.A.

            
	 
	
              By:
                /s/Scott
                Hancock  

            
	
              Name:
                 Scott
                Hancock   

            
	
              Title:
                Vice
                President   

            
	
               

              Operations
                Contact:

              Citbank,
                N.A.

              2
                Penns Way, Suite 110

              New
                Castle, DE 19720

              Attention:
                Diane Stewart

              Telephone:
                302-894-6035

              FAX:
                212-994-0847

              E-mail:
                patricia.d.stewart@citigroup.com

               

              Credit
                Contact:

              Citibank,
                N.A. 

              388
                Greenwich Street

              21st
                Floor - Global Power

              New
                York, NY 10013

              Attention:
                Todd Davis, Director

              Telephone:
                212-816-8553

              FAX:
                646-291-5184

              E-mail:
                todd.c.davis@citigroup.com

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              JPMORGAN
                CHASE BANK

            
	 
	
              By:
                 /s/Michael
                J. DeForge  

            
	
              Name:
                 Michael
                J. DeForge  

            
	
              Title:
                Executive
                Director  

            
	
               

              Primary
                Operations Contact:

              JPMorgan
                Chase Bank

              1111
                Fannin Street, 10th
                Floor

              Houston,
                TX 77002

              Attention:
                Claudette Reid

              Telephone:
                713-750-2355

              FAX:
                713-427-6307

              E-mail:
                claudette.a.reid@jpmchase.com

               

              Alternate
                Operations Contact:

              JPMorgan
                Chase Bank

              1111
                Fannin Street, 10th
                Floor

              Houston,
                TX 77002

              Attention:
                Jaime Garcia

              Telephone:
                713-750-2377

              FAX:
                713-427-6307

              E-mail:
                jaime.e.garcia@jpmchase.com

               

              Credit
                Contact:

              JPMorgan
                Chase Bank

              270
                Park Ave., 4th
                Floor

              New
                York, NY 10017

              Attention:
                Michael J. DeForge, Vice President

              Telephone:
                212-270-1656

              FAX:
                212-270-3089

              E-mail:
                michael.j.deforge@jpmorgan.com

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              UNION
                BANK OF CALIFORNIA, N.A.

            
	 
	
              By:
                /s/Efrain
                Soto   

            
	
              Name:
                 Efrain
                Soto   

            
	
              Title:
                Vice
                President   

            
	
               

              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:
                323-720-2679

              FAX:
                323-724-6198

              E-mail:
                maria.suncin@uboc.com

               

              Credit
                Contact:

              Union
                Bank of California, N.A.

              445
                South Figueroa Street, 15th
                Floor

              Los
                Angeles, CA 90071

              Attention:
                Kevin Zitar, Senior Vice President

              Telephone:
                213-236-5503

              FAX:
                213-236-4096

              E-mail:
                kevin.zitar@uboc.com

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              KEYBANK
                NATIONAL ASSOCIATION

            
	 
	
              By:
                /s/Keven
                D. Smith  

            
	
              Name:
                 Keven
                D. Smith  

            
	
              Title:
                Senior
                Vice President  

            
	
               

              Operations
                Contact:

              KeyBank
                National Association

              127
                Public Square

              Cleveland,
                OH 44114

              Attention:
                Teresa K. Hockey, Deal Administrator

              Telephone:
                216-689-4605

              FAX:
                216-689-5962

              E-mail:
                teresa_k_hockey@Keybank.com

               

              Credit
                Contact:

              KeyBank
                National Association

              601
                108th
                Avenue, NE

              Bellevue,
                WA 98004

              Attention:
                Keven D. Smith, Senior Vice President

              Telephone:
                425-709-4579

              FAX:
                425-709-4565

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              LEHMAN
                BROTHERS BANK, FSB

            
	 
	
              By:
                /s/Janine
                M. Shugan  

            
	
              Name:
                 Janine
                M. Shugan  

            
	
              Title:
                Authorized
                Signatory  

            
	
               

              Operations
                Contact:

              Lehman
                Brothers Bank, FSB

              745
                7th
                Avenue, 16th
                Floor

              New
                York, NY 10019

              Attention:
                Winnie Chin

              Telephone:
                212-526-6560

              FAX:
                212-520-0450

              E-mail:
                loaniqservicing@lehman.com

               

              Credit
                Contact:

              Lehman
                Brothers Bank, FSB

              745
                7th
                Avenue, 5th
                Floor

              New
                York, NY 10019

              Attention:
                Janine Shugan

              Telephone:
                212-526-8625

              FAX:
                917-552-0139

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              MORGAN
                STANLEY BANK

            
	 
	
              By:
                /s/Daniel
                Twenge  

            
	
              Name:
                 Daniel
                Twenge  

            
	
              Title:
                Authorized
                Signatory   

            
	
               

              Operations
                Contact:

              Morgan
                Stanley Bank

              1633
                Broadway, 25th
                Floor

              New
                York, NY 10019

              Attention:
                Larry Benison

              Telephone:
                212-537-1312

              FAX:
                212-537-1867

              E-mail:
                larry.benison@morganstanley.com

               

              Credit
                Contact:

              Morgan
                Stanley Bank

              1633
                Broadway, 25th
                Floor

              New
                York, NY 10019

              Attention:
                Erma Dell’Aquila

              Telephone:
                212-816-8553

              FAX:
                212-537-1867

              E-mail:
                erma.dell’Aquila@morganstanley.com

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              UBS
                LOAN FINANCE LLC

            
	 
	
              By:
                /s/Richard
                L. Tavrow  

            
	
              Name:
                 Richard
                L Tavrow  

            
	
              Title:
                Director,
                Banking Products Services, US

            
	 
	
              By:
                /s/Mary
                E. Evans  

            
	
              Name:
                 Mary
                E. Evans  

            
	
              Title:
                Associate Director, Banking Products Services, US

            
	
               

              Operations
                Contact:

              UBS
                Loan Finance LLC

              677
                Washington Boulevard, 6th
                Floor

              Stamford,
                CT 06901

              Attention:
                David Vitti

              Telephone:
                203-719-5968

              FAX:
                203-719-3888

              E-mail:
                david.vitti@ubs.com 

               

              Credit
                Contact:

              UBS
                Loan Finance LLC

              677
                Washington Boulevard, 6th
                Floor

              Stamford,
                CT 06901

              Attention:
                David Vitti

              Telephone:
                203-719-5968

              FAX:
                203-719-3888

              E-mail:
                david.vitti@ubs.com

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              THE
                BANK OF NEW YORK

            
	 
	
              By:
                /s/Jesus
                Williams  

            
	
              Name:
                 Jesus
                Williams  

            
	
              Title:
                Vice
                President   

            
	
               

              Operations
                Contact:

              The
                Bank of New York

              One
                Wall Street, 19th
                Floor

              New
                York, NY 10286

              Attention:
                Lisa Williams

              Telephone:
                212-635-7535

              FAX:
                212-635-7552

              E-mail:
                lwilliams@bankofny.com

               

              Credit
                Contact:

              The
                Bank of New York

              One
                Wall Street, 19th
                Floor

              New
                York, NY 10286

              Attention:
                Jesus M. Williams

              Telephone:
                212-635-7609

              FAX:
                212-635-7923

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              THE
                BANK OF NOVA SCOTIA

            
	 
	
              By:
                /s/Jim
                Trimble  

            
	
              Name:
                Jim
                Trimble   

            
	
              Title:
                Managing
                Director  

            
	
               

              Operations
                Contact:

              The
                Bank of Nova Scotia

              720
                King Street 2nd
                Floor

              Toronto,
                Ontario M5V 2T3

              Attention:
                Vesna Vukelich

              Telephone:
                212-225-5705

              FAX:
                212-225-5709

              E-mail:
                Vesna_Vukelich@scotiacapital.com

               

              Credit
                Contact:

              The
                Bank of Nova Scotia

              One
                Liberty Plaza

              New
                York, NY 10006

              Attention:
                Polina Gerasimova

              Telephone:
                212-225-5395

              FAX:
                212-225-5480

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              U.S.
                BANK NATIONAL ASSOCIATION

            
	 
	
              By:
                /s/David
                M. Purcell  

            
	
              Name:
                 David
                M. Purcell  

            
	
              Title:
                Vice
                President   

            
	
               

              Operations
                Contact:

              U.S.
                Bank National Association

              1420
                Fifth Avenue, 10th
                Floor, PD-WA-T10C

              Seattle,
                WA 98101

              Attention:
                Gail Fortun

              Telephone:
                206-587-5212

              FAX:
                206-344-3741

              E-mail:
                gail.fortun@usbank.com

               

              Credit
                Contact:

              U.S.
                Bank National Association

              1420
                Fifth Avenue, 10th
                Floor, PD-WA-T10M

              Seattle,
                WA 98101

              Attention:
                Kurban H. Merchant, Vice President

              Telephone:
                206-344-3769

              FAX:
                206-344-3654

              E-mail:
                kurbanali@usbank.com

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              WELLS
                FARGO BANK, N.A.

            
	 
	
              By:
                /s/Lisa
                Larpenteur  

            
	
              Name:
                 Lisa
                Larpenteur  

            
	
              Title:
                Vice
                President, Relationship Manager

            
	
               

              Operations
                Contact:

              Wells
                Fargo Bank, N.A.

              201
                Third Street, 8th
                Floor

              San
                Francisco, CA 94103

              Attention:
                Tessie Melgar

              Telephone:
                415-477-5260

              FAX:
                415-975-6770

              E-mail:
                zmelgar@wellsfargo.com

               

              Credit
                Contact:

              Wells
                Fargo Bank, N.A.

              1300
                SW Fifth Avenue, 7th
                Floor

              Portland,
                OR 97201

              Attention:
                Lisa Larpenteur

              Telephone:
                503-886-2216

              FAX:
                503-886-2211

              E-mail:
                larpenlm@wellsfargo.com

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      1

    


    


    PRICING
      SCHEDULE

    


    
      	
               

              S&P
                RATING / MOODY’S RATING

               

            	
               

              >A-/A3

               

            	
               

              BBB+/Baa1

               

            	
               

              BBB/Baa2

               

            	
               

              BBB-/Baa3

               

            	
               

              <BBB-/Baa3

               

            
	
               

              Applicable
                Eurodollar Margin

               

            	
               

              0.250%

               

            	
               

              0.350%

               

            	
               

              0.450%

               

            	
               

              0.525%

               

            	
               

              0.700%

               

            
	
               

              Applicable
                Commitment Fee Rate

               

            	
               

              0.060%

               

            	
               

              0.080%

               

            	
               

              0.100%

               

            	
               

              0.125%

               

            	
               

              0.175%

               

            
	
               

              Applicable
                Utilization Fee Rate

               

            	
               

              0.050%

               

            	
               

              0.050%

               

            	
               

              0.050%

               

            	
               

              0.100%

               

            	
               

              0.100%

               

            
	
               

              Applicable
                LC Fee Rate

               

            	
               

              0.250%

               

            	
               

              0.350%

               

            	
               

              0.450%

               

            	
               

              0.525%

               

            	
               

              0.700%

               

            


    

    


     

    The
      Applicable Eurodollar Margin, the Applicable Commitment Fee Rate, the Applicable
      Utilization Fee Rate and the Applicable
      LC Fee Rate
      shall be
      determined in accordance with the foregoing table based on the Borrower’s
      then-current Moody’s and S&P Ratings. The credit rating in effect on any
      date for the 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 with respect to the Borrower’s Issuer Rating.

    


    “S&P
      Rating”
      means,
      at any time, the rating issued by Standard and Poor's Rating Services, a
      division of The McGraw Hill Companies, Inc., and then in effect with respect
      to
      the Borrower’s Corporate Credit 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

            
	 	 
	
              Wachovia
                Bank, National Association

            	
                    $60,000,000

            
	
              Citibank,
                N.A.

            	
                    $60,000,000

            
	
              JPMorgan
                Chase Bank

            	
                    $45,000,000

            
	
              Union
                Bank of California, N.A.

            	
                    $45,000,000

            
	
              KeyBank
                National Association

            	
                    $45,000,000

            
	
              Lehman
                Brothers Bank, FSB

            	
                    $35,000,000

            
	
              Morgan
                Stanley Bank

            	
                    $35,000,000

            
	
              UBS
                Loan Finance LLC

            	
                    $35,000,000

            
	
              The
                Bank of New York

            	
                    $35,000,000

            
	
              The
                Bank of Nova Scotia

            	
                    $35,000,000

            
	
              U.S.
                Bank National Association

            	
                    $35,000,000

            
	
              Wells
                Fargo Bank, N.A.

            	
                    $35,000,000

            
	 	 
	
              Total

            	
                    $500,000,000

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      5.10

    


    


    FINANCIAL
      STATEMENTS

     

    The
      financial statements included in the Borrower’s Annual Report on Form 10-K for
      the year ended December 31, 2006, as filed with the Securities and Exchange
      Commission.

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      5.13

    


    


    SUBSIDIARIES

    


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

    


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

            


    

    


    
      	2.  	
              Hydro
                Energy Development Corp., a Washington corporation, is the holding
                company
                for a small non-utility wholesale generator, 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.  	
              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.

            


    

    


    
      	4.  	
              PSE
                Funding, 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

              
	 	 
	
                Vestas-American
                  

              	 
	
                Wind
                  Technology, Inc. 

              	
                Turbine
                  Equipment

              


      

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      6.15

    


     

    

      
        	
                EXISTING
                  INVESTMENTS

              	 	 	 
	 	 	 	 
	
                Investments
                  by Borrower (excluding investments in Subsidiaries)

              	 	 	 
	 	 	 	 
	 	 	 	 
	
                Non-Utility
                  Property

              	 	
                $

              	
                2,500,000

              	 
	
                Company
                  Owned Life Insurance

              	 	 	
                54,500,000

              	 
	
                Miscellaneous
                  Notes Receivable

              	 	 	
                2,400,000

              	 
	
                Total

              	 	
                $

              	
                59,400,000

              	 
	 	 	 	 	 
	 	 	 	 	 
	
                Investments
                  by Subsidiaries

              	 	 	 	 
	 	 	 	 	 
	
                Puget
                  Western Inc.

              	 	 	 	 
	
                Miscellaneous
                  Notes Receivable

              	 	
                $

              	
                14,200,000

              	 
	
                Investment
                  in Kinetic Ventures

              	 	 	
                2,000,000

              	 
	
                Other
                  Investments 

              	 	 	
                44,000,000

              	 
	
                Total

              	 	
                $

              	
                60,200,000

              	 
	 	 	 	 	 
	 	 	 	 	 
	
                Hydro
                  Energy Development Corp.

              	 	 	 	 
	
                Investment
                  in Black Creek Hydro

              	 	
                $

              	
                5,400,000

              	 
	 	 	 	 	 
	
                Total
                  Investments

              	 	
                $

              	
                125,000,000

              	 


      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    


    


    REVOLVING
      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 Revolving 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
      Revolving Loan, from the date of such Revolving 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 Wachovia Bank, National Association,
      a national banking association, as administrative agent (the “Administrative
      Agent”),
      at
      its office located at Charlotte Plaza, 201 South College Street, CP-8,
      Charlotte, North Carolina 28288-0680 or as otherwise directed by the
      Administrative Agent. Each Revolving 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
      Revolving Note.

    


    This
      Revolving Note is one of the “Revolving Notes” referred to in, and is entitled
      to the benefits of, the Amended and Restated Credit Agreement dated as of
      March 29, 2007 (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
      Wachovia Bank, National Association, as Administrative Agent and as Swingline
      Lender and LC Issuer. The Credit Agreement, among other things,
      (a) provides for the making of revolving loans (the “Revolving
      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 Revolving Loan being evidenced by this Revolving 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 Revolving 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 REVOLVING NOTE

              	 
	 	 	
                  

              	 	 
	 	
                 

                Amount

              	
                Amount
                  of

                Principal
                  Paid

              	
                Unpaid
                  

                Principal

              	
                 

                Notation

              
	
                Date

              	
                of
                  Loan

              	
                or
                  Prepaid

              	
                Balance

              	
                Made
                  By

              


      

    

    


     

    
      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

    


    EXHIBIT
      B

    


    


    BORROWING
      NOTICE

    


    


    


    __________,
      200_

    


    


    


    Wachovia
      Bank, National Association, as Administrative Agent

    under
      the
      Credit Agreement

    referred
      to below

    Charlotte
      Plaza

    201
      South
      College Street, CP-8

    Charlotte,
      North Carolina 28288-0680

    


    


    Ladies
      and Gentlemen:

    


    The
      undersigned, Puget Sound Energy, Inc., a Washington corporation, refers to
      the
      Amended and Restated Credit Agreement dated as of March 29, 2007 (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 Wachovia Bank, National
      Association, a national banking association, as Administrative Agent and as
      Swingline Lender and 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][2.18.2] of the Credit Agreement, the undersigned
      hereby requests a [Revolving Loan][Swingline Loan] under the Credit Agreement
      and in that connection sets forth below the information relating to such
      [Revolving Loan][Swingline Loan] (the “Proposed
      Loan”),
      as
      required by Section [2.2.3][2.18.2] of the Credit Agreement.

    


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

    


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

    


    3.
      The
      Proposed Loan will be composed of [Floating Rate Loans] [LIBOR Market Index
      Rate
      Loans] [Eurodollar Loans].

    


    [4.
      The
      initial Interest Period for the Eurodollar Loans composing the Proposed Loan
      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 Loan:

    


    (a) no
      event
      has occurred and is continuing, or would result from the Proposed Loan 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 Loan, 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

    


    


    


    Wachovia
      Bank, National Association, as Administrative Agent

    under
      the
      Credit Agreement

    referred
      to below

    Charlotte
      Plaza

    201
      South
      College Street, CP-8

    Charlotte,
      North Carolina 28288-0680

    


    


    Ladies
      and Gentlemen:

    


    The
      undersigned, Puget Sound Energy, Inc., a Washington corporation, refers to
      the
      Amended and Restated Credit Agreement dated as of March 29, 2007 (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 Wachovia Bank, National
      Association, a national banking association, as Administrative Agent (in such
      capacity, the “Administrative
      Agent”)
      and as
      Swingline Lender and 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] [convert Swingline Loans from Floating Rate Loans into LIBOR
      Market Index Rate Loans] [convert Swingline Loans from LIBOR Market Index Rate
      Loans into Floating Rate Loans] [continue all or a portion of an outstanding
      Eurodollar Loan as a Eurodollar Loan] 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.
       
      Revolving Loans that are Floating
      Rate Loans in the aggregate principal amount of $_______________ are to be
      converted into Eurodollar Loans.

    


    3. Swingline
      Loans in the aggregate principal amount of $  
      are to
      be converted from [Floating Rate Loans][LIBOR Market Index Rate Loans] into
      [Floating Rate Loans][LIBOR Market Index Rate Loans].

    


    4.
       The
      Interest Period for the new Eurodollar Loan is ______ month[s].]

    


    [Continuation:

    


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

    


    2.
      The
      Eurodollar Loan 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 Loan
      is
      to be continued as a Eurodollar Loan.

    


    4.
      The
      Interest Period for the Eurodollar Loan 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 Amended and Restated Credit Agreement dated as of March 29, 2007
      (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
      Wachovia Bank, National Association, as Administrative Agent for the Lenders
      (the “Administrative
      Agent”).
      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”).

     

    Debt
      to Capitalization Ratio

    


    (a) Consolidated
      Indebtedness $_______

    


    (b) Total
      Capitalization  $_______

    


    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.)

    


    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 Amended and Restated 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 Swingline Loans and 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. Administrative

    Agent:   Wachovia
      Bank, National Association (“Wachovia”),
      in
      such capacity

    


    5. Credit
      Agreement: Credit
      Agreement dated as of March 29, 2007 among the Borrower, the financial
      institutions party thereto as Lenders, and Wachovia, as Administrative Agent
      and
      as Swingline Lender and LC Issuer

    


    6. 
      Assigned
      Interest:

    


    
      	
              Aggregate
                Amount of Commitments of all Lenders

            	
              Amount
                of Commitment Assigned2   

            	
              Percentage
                Assigned of Commitments3   

            	
              CUSIP
                Number

            
	 	 	 	 
	
              $

            	
              $

            	
              %

            	 


    

    


    


    [7. Trade
      Date:  ______________]4   

    


    
       

    

    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:

    


    WACHOVIA
      BANK, NATIONAL ASSOCIATION,

    as
      Administrative Agent

    


    


    By:
      _____________________     

    Name:
      ___________________     

    Title:
      ____________________     

    


    


    


    [Consented
      to:]5   

    


    PUGET
      SOUND ENERGY, INC.

    


    


    By:
      _____________________     

    Name:
      ___________________     

    Title:
      ____________________     

     

      ______________

    
      	
              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.

            
	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 NEW YORK.

    


     

    
      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

     

    EXHIBIT
      F

    


    ACCOUNT
      DESIGNATION LETTER

    


    


    March
      __,
      2007

    


    


    


    Wachovia
      Bank, National Association, as Administrative Agent

    under
      the
      Credit Agreement

    referred
      to below

    Charlotte
      Plaza

    201
      South
      College Street, CP-8

    Charlotte,
      North Carolina 28288-0680

    


    Attn:
      Syndication Agency Services

    


    Ladies
      and Gentlemen:

    


    This
      Account Designation Letter is delivered to you by Puget Sound Energy, Inc.
      (the
“Borrower”),
      a
      Washington corporation, pursuant to Section 4.1 of the Amended and Restated
      Credit Agreement dated as of March 29, 2007 (as amended, restated or otherwise
      modified, the “Credit
      Agreement”)
      by and
      among the Borrower, the Lenders from time to time party thereto and Wachovia
      Bank, National Association, as Administrative Agent (the “Administrative
      Agent”).

    


    The
      Administrative Agent is hereby authorized to disburse all Loan proceeds into
      the
      following account, unless the Borrower shall designate, in writing to the
      Administrative Agent, one or more other accounts:

    


    [INSERT
      Name of Bank/

    ABA
      Routing Number/

    and
      Account Number]

    


    


    IN
      WITNESS WHEREOF, the undersigned has executed this Account Designation Letter
      this __ day of March, 2007.

    PUGET
      SOUND ENERGY, INC.

    


    


    By:
      ______________________     

    Name:
      ____________________     

    Title:
      _____________________     

    


    


    


    


    
      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

    
EXHIBIT
      G

    


    


    SWINGLINE
      NOTE

    


    


    


    U.S.$50,000,000March
      __,
      2007

    


    


    For
      value
      received, PUGET SOUND ENERGY, INC., a Washington corporation (the “Borrower”),
      hereby promises to pay to the order of WACHOVIA BANK, NATIONAL ASSOCIATION,
      as
      Swingline Lender under the Credit Agreement referred to below (the “Lender”),
      on or
      before the Facility Termination Date (as defined in the Credit Agreement
      referred to below), the principal amount of Fifty Million United States dollars
      (U.S.$50,000,000) or, if less, the aggregate principal amount of all Swingline
      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
      Swingline Loan, from the date of such Swingline 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 Wachovia Bank, National Association,
      a national banking association, as administrative agent (the “Administrative
      Agent”),
      at
      its office located at Charlotte Plaza, 201 South College Street, CP-8,
      Charlotte, North Carolina 28288-0680 or as otherwise directed by the
      Administrative Agent. Each Swingline 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
      Swingline Note.

    


    This
      Swingline Note is one of the “Swingline Notes” referred to in, and is entitled
      to the benefits of, the Amended and Restated Credit Agreement dated as of
      March 29, 2007 (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
      Wachovia Bank, National Association, as Administrative Agent and as Swingline
      Lender and LC Issuer. The Credit Agreement, among other things,
      (a) provides for the making of swingline loans (the “Swingline
      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 Swingline Loan being evidenced by this Swingline 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 Swingline 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 SWINGLINE NOTE

              	 
	 	 	
                  

              	 	 
	 	
                 

                Amount

              	
                Amount
                  of

                Principal
                  Paid

              	
                Unpaid
                  

                Principal

              	
                 

                Notation

              
	
                Date

              	
                of
                  Loan

              	
                or
                  Prepaid

              	
                Balance

              	
                Made
                  By