Document:

exv4w02

 

EXHIBIT 4.02

EXECUTION

COUNTERPART

CREDIT AGREEMENT

among

PUBLIC SERVICE COMPANY OF COLORADO;

BANK ONE, NA,

as Administrative Agent;

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Syndication Agent;

and

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

Closing Date: May 16, 2003

$350,000,000 Revolving Credit Facility

BANC ONE CAPITAL MARKETS, INC.

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

Co-Lead Arrangers

 

 

CREDIT AGREEMENT

Dated as of May 16, 2003

Public Service Company of Colorado, a Colorado corporation; the Banks, as
defined below; and Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, as administrative agent for the Banks;
agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions.

For all purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires, the terms defined in this Article have
the meanings assigned to them in this Article, and include the plural as well
as the singular.

     “Accounting Practices Change” means any change in the Borrower’s
accounting practices that is permitted or required under the standards of the
Financial Accounting Standards Board.

     “Acquisition Target” means any Person becoming a Subsidiary of the
Borrower after the date hereof; any Person that is merged into or consolidated
with the Borrower or any Subsidiary of the Borrower after the date hereof; or
any Person with respect to whom all or a substantial part of that Person’s
assets are acquired by the Borrower or any Subsidiary of the Borrower after the
date hereof.

     “Act” means the Securities Act of 1933, as amended.

     “Additional Bank” means a financial institution that becomes a Bank
pursuant to the procedures set forth in Section 9.1.

     “Advance” means an advance by the Banks to the Borrower pursuant to
Article II.

     “Affiliate” means, with respect to any Person, 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 25% or more of the 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.

     “Agent” means Bank One acting in its capacity as administrative agent for
itself and the other Banks hereunder.

     “Agreement” means this Credit Agreement, as it may be amended, modified or
restated from time to time in accordance with Section 9.2.

 

 

     “Alternate Base Rate” means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.

     “Assignment Agreement” has the meaning set forth in Section 9.1.

     “Authorizing Order” means any order of the Public Utilities Commission of
the State of Colorado or any other regulatory body having jurisdiction over the
Borrower or the Parent authorizing and/or restricting the indebtedness that may
be created from time to time hereunder (whether on account of Advances, Letters
of Credit or otherwise) or under the Pledged Securities.

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

     “Banks” means Bank One, acting on its own behalf and not as Agent, each of
the undersigned banks and any financial institution that becomes a Bank
pursuant to the procedures set forth in Section 9.1, collectively.

     “Borrower” means Public Service Company of Colorado, a Colorado
corporation and a party to this Agreement.

     “Borrowing” means a borrowing under Article II consisting of Advances made
to the Borrower at the same time by each of the Banks severally.

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

     “Capitalized Lease” means any lease that in accordance with GAAP should be
capitalized on the balance sheet of the lessee thereunder.

     “Cash Collateral Account” means an interest-bearing account maintained
with the Agent in which funds are deposited pursuant to Section 2.7(g) or
Section 7.2(c).

     “Change of Control” means, with respect to any corporation, either (i) the
acquisition by any “person” or “group” (as those terms are used in Sections
13(d) and 14(d) of the Exchange Act) of beneficial ownership (as defined in
Rules 13d-3 and 13d-5 of the SEC, except that a Person shall be deemed to have
beneficial ownership of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of 25% or more of the
then-outstanding voting capital stock of such corporation; or (ii) a change in
the composition of the board of directors of such corporation or any corporate parent of such corporation such that continuing directors
cease to constitute more

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than 50% of such board of directors. As used in this
definition, “continuing directors” means, as of any date, (i) those members of
the board of directors of the applicable corporation who assumed office prior
to such date, and (ii) those members of the board of directors of the
applicable corporation who assumed office after such date and whose appointment
or nomination for election by that corporation’s shareholders was approved by a
vote of at least 50% of the directors of such corporation in office immediately
prior to such appointment or nomination.

     “Commitment” means, with respect to each Bank, that Bank’s commitment to
make Advances and participate in Letters of Credit pursuant to Article II.

     “Commitment Amount” means, with respect to each Bank, the amount set forth
opposite that Bank’s name in Exhibit A or on any Assignment Agreement, unless
said amount is reduced pursuant to Section 2.10, in which event it means the
amount to which said amount is reduced.

     “Commitment Termination Date” means May 14, 2004, or the earlier date of
termination in whole of the Commitments pursuant to Section 2.10 or 7.2.

     “Compliance Certificate” means a certificate in substantially the form of
Exhibit C, or such other form as the Borrower and the Banks may from time to
time agree upon in writing, executed by the chief financial officer or
treasurer of the Borrower, (i) setting forth relevant facts in reasonable
detail the computations as to whether or not the Borrower is in compliance with
the requirements set forth in Sections 6.8 and 6.9 (ii) stating that the
financial statements delivered therewith have been prepared in accordance with
GAAP, subject, in the case of interim financial statements, to year-end audit
adjustments, and (iii) stating whether or not such officer has knowledge of the
occurrence of any Default or Event of Default hereunder not theretofore
reported or remedied and, if so, stating in reasonable detail the facts with
respect thereto.

     “Default” means an event that, with the giving of notice, the passage of
time or both, would constitute an Event of Default.

     “EBIT” means, with respect to any period:

	 	(i)	 	(A) the after-tax net income of the Borrower and its
Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP, excluding (B) non-operating gains and losses
(including extraordinary or unusual gains and losses, gains and
losses from discontinuance of operations, gains and losses arising
from the sale of assets other than inventory, and other
non-recurring gains and losses)

     plus

	 	(ii)	 	the sum of the following to the extent deducted in arriving
at the after-tax net income determined in clause (i)(A) of this
definition (but without duplication for any item):

	 	 	 	 

	 	(A)	 	Interest Expense, and
	 
	 	(B)	 	income tax expense of the Borrower and its Subsidiaries.

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     “Effective Date” means the first date on or after the date hereof on which
all conditions set forth in Section 3.1 have been satisfied.

     “Eligible Lender” means (a) a financial institution organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $250,000,000; (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country,
and having a combined capital and surplus of at least $250,000,000, provided
that such bank is acting through a branch or agency located in the United
States; or (c) a person controlled by, controlling, or under common control
with any entity identified in clause (a) or (b) above.

     “Environmental Law” means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. § 1802 et seq., the Toxic Substances
Control Act, 15 U.S.C. § 2601 et seq., the Federal Water Pollution Control Act,
33 U.S.C. § 1252 et seq., the Clean Water Act, 33 U.S.C. § 1321 et seq., the
Clean Air Act, 42 U.S.C. § 7401 et seq., and any other federal, state, county,
municipal, local or other statute, law, ordinance or regulation which may
relate to or deal with human health or the environment, all as may be from time
to time amended.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

     “ERISA Affiliate” means any trade or business (whether or not
incorporated) that is, along with the Borrower, a member of a controlled group
of corporations or a controlled group of trades or businesses, as described in
sections 414(b) and 414(c), respectively, of the Internal Revenue Code of 1986,
as amended.

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

     “Eurodollar Rate” means, with respect to a Eurodollar Rate Funding for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar
Base Rate applicable to such

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Interest Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Interest
Period, plus (ii) the Eurodollar Rate Margin.

     “Eurodollar Rate Funding” means any Borrowing, or any portion of the
principal balance of the Advances, bearing interest at a Eurodollar Rate.

     “Eurodollar Rate Margin” means a percentage, determined as set forth in
Section 2.6.

     “Event of Default” has the meaning specified in Section 7.1.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Excluded Taxes” has the meaning specified in Section 2.17.

     “Facility Fee Rate” means a percentage, determined as set forth in Section
2.6.

     “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. on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.

     “Fee Letters” means one or more separate agreements between the Borrower
and the Agent, setting forth the terms of certain fees to be paid by the
Borrower to the Agent for the Agent’s own behalf or for the benefit of the
Banks, as more fully set forth therein.

     “First Collateral Trust Securities” means securities issued pursuant to
the terms of the First Collateral Trust Securities Indenture.

     “First Collateral Trust Securities Indenture” means the Indenture dated as
of October 1, 1993 as amended from time to time, from the Borrower to U.S. Bank
Trust National Association (formerly, First Trust of New York, National
Association), as successor trustee to Morgan Guaranty Trust Company of New
York.

     “First Mortgage Bond Indenture” means the Indenture dated as of December
1, 1939 from the Borrower to U.S. Bank Trust National Association, as successor
trustee thereunder, as amended from time to time.

     “First Mortgage Bonds” means bonds issued pursuant to the terms of the
First Mortgage Bond Indenture.

     “Floating Rate” means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Floating Rate Margin, in each
case changing when and as the Alternate Base Rate changes.

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     “Floating Rate Funding” means any Borrowing, or any portion of the
principal balance of the Advances, bearing interest at the Floating Rate.

     “Floating Rate Margin” means a percentage, determined as set forth in
Section 2.6.

     “Funded Debt” of any Person means (without duplication) (i) all
indebtedness of such Person for borrowed money; (ii) the deferred and unpaid
balance of the purchase price owing by such Person on account of any assets or
services purchased (other than trade payables and other accrued liabilities
incurred in the ordinary course of business that are not overdue by more than
180 days unless being contested in good faith) if such purchase price is (A)
due more than nine months from the date of incurrence of the obligation in
respect thereof or (B) evidenced by a note or a similar written instrument;
(iii) all Capitalized Lease obligations; (iv) all indebtedness secured by a
Lien on any property owned by such Person, whether or not such indebtedness has
been assumed by such Person or is nonrecourse to such Person; (v) notes payable
and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money (other than such notes or drafts
for the deferred purchase price of assets or services to the extent such
purchase price is excluded from clause (ii) above); (vi) indebtedness evidenced
by bonds, notes or similar written instrument; (vii) the face amount of all
letters of credit and bankers’ acceptances issued for the account of such
Person, and without duplication, all drafts drawn thereunder (other than such
letters of credit, bankers’ acceptances and drafts for the deferred purchase
price of assets or services to the extent such purchase price is excluded from
clause (ii) above); (viii) net obligations of such Person under Swap Contracts
which constitute interest rate agreements or currency agreements; (ix) guaranty
obligations of such Person with respect to indebtedness for borrowed money of
another Person (including Affiliates); (x) all Off-Balance Sheet Liabilities of
such Person; and (xi) in the case of the Borrower, any amounts due under the
Trust Preferred Securities; provided, however, that in no event shall any
calculation of Funded Debt of the Borrower include (y) deferred taxes, or (z)
so long as the Pledged Securities are held by the Agent pursuant to this
Agreement and have not been sold or otherwise disposed of by foreclosure, any
obligation of the Borrower under the Pledged Securities.

     “GAAP” means generally accepted accounting principles as in effect from
time to time applied on a basis consistent with the accounting practices
applied in the financial statements of the Borrower referred to in Section 4.5,
except for changes concurred in by Borrower’s independent public accountants
and disclosed in Borrower’s financial statements or notes thereto.

     “Hazardous Substance” means any asbestos, urea-formaldehyde,
polychlorinated biphenyls (“PCBs”), nuclear fuel or material, chemical waste,
radioactive material, explosives, known carcinogens, petroleum products and
by-products and other dangerous, toxic or hazardous pollutants, contaminants, chemicals, materials or substances listed or
identified in, or regulated by, any Environmental Law.

     “Indentures” means the First Collateral Trust Securities Indenture and the
First Mortgage Bond Indenture.

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     “Interest Coverage Ratio” means, as of the end of any fiscal quarter of
the Borrower, the ratio of (i) EBIT during the 4-quarter period ending on that
quarter-end, to (ii) Interest Expense during such period.

     “Interest Expense” means, with respect to any period, the aggregate
interest expense (including capitalized interest) of the Borrower and its
Subsidiaries (determined on a consolidated basis) for such period, including
but not limited to the interest portion of any Capitalized Lease and interest
expenses associated with Trust Preferred Securities; provided, however, that
the foregoing shall be adjusted to reflect only the net effect of any interest
rate swap, interest hedging transaction or other similar arrangement entered
into by the Borrower or any Subsidiary to reduce or eliminate variations in its
interest expenses.

     “Interest Period” means, with respect to any Advance bearing interest at a
Eurodollar Rate, a period of one, two, three or six months beginning on a
Business Day, as elected by the Borrower.

     “Investment Company Act” means the Investment Company Act of 1940, as
amended.

     “Issuing Bank” means Bank One, acting as the Bank issuing Letters of
Credit.

     “L/C Amount” means the sum of (i) the aggregate face amount of any issued
and outstanding Letters of Credit, plus (ii) amounts drawn under Letters of
Credit for which the Banks have neither been reimbursed nor made any Advance.

     “L/C Application” has the meaning set forth in Section 2.7.

     “L/C Sublimit” means $50,000,000.

     “Letter of Credit” has the meaning set forth in Section 2.7.

     “Level Status” means Level I, Level II, Level III, Level IV or Level V,
each as determined pursuant to Section 2.6.

     “Lien” means any mortgage, deed of trust, lien, pledge, security interest
or other charge or encumbrance, of any kind whatsoever, including but not
limited to the interest of the lessor or titleholder under any Capitalized
Lease, title retention contract or similar agreement.

     “Loan Documents” means this Agreement, the Notes, the L/C Applications,
the Fee Letters and the Pledged Securities.

     “Material Adverse Change” means a material adverse change in the business,
condition (financial or otherwise), or operations of the Borrower and its
Subsidiaries taken as a whole.

     “Material Part of the Assets” means assets with a net book value in excess
of 10% of the total assets of the Borrower and its Subsidiaries on a
consolidated basis as determined in accordance with GAAP, as shown on the most
recent balance sheet of the Borrower and its Subsidiaries available as of the
date of the determination.

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     “Moody’s” means Moody’s Investors Service, Inc.

     “Multiemployer Plan” means a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA.

     “Note” has the meaning set forth in Section 2.1.

     “Obligations” means each and every debt, liability and obligation of every
type and description arising under any of the Loan Documents which the Borrower
may now or at any time hereafter owe to any Bank or the Agent, whether such
debt, liability or obligation now exists or is hereafter created or incurred,
whether it is direct or indirect, due or to become due, absolute or contingent,
primary or secondary, liquidated or unliquidated, or sole, joint, several or
joint and several, including but not limited to principal of and interest on
the Notes and all fees due under this Agreement, any Fee Letter or any other
Loan Documents and the obligation to fully fund the Cash Collateral Account
pursuant to Section 2.7(g) or 7.2(c).

     “Off-Balance Sheet Liability” of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease and (iii) all Synthetic Lease
Obligations of such Person.

     “Operating Lease” of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee.

     “Organizational Documents” means, (i) with respect to any corporation, the
articles of incorporation and bylaws of such corporation, (ii) with respect to
any partnership, the partnership agreement of such partnership, (iii) with
respect to any limited liability company, the articles of organization and
operating agreement of such company, and (iv) with respect to any entity, any
and all other shareholder, partner or member control agreements and similar
organizational documents relating to such entity.

     “Outstandings” means, at any time, an amount equal to the sum of (i) the
aggregate principal balance of the Advances then outstanding, and (ii) the L/C
Amount then outstanding.

     “Outstandings Percentage” means, at any time, the ratio (expressed as a
percentage) of the aggregate Outstandings to the aggregate Commitment Amounts.

     “Parent” means Xcel Energy Inc., a Minnesota corporation.

     “Participating Affiliate” means, (a) with respect to any Bank, (i) an
Affiliate of such Bank or (ii) any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Bank or an Affiliate of
such Bank and (b) with respect to any Bank that is a fund which invests in bank
loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Bank or by an Affiliate of such investment advisor.

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     “Payment Demand” means a written notice given by the Agent to the Trustee
stating that the principal of the Pledged Securities has become due and payable
and specifying the amount of funds required to make such payment.

     “Percentage” means, with respect to each Bank, the ratio of (i) that
Bank’s Commitment Amount, to (ii) the aggregate Commitment Amounts of all of
the Banks. For purposes of this definition only, following the Commitment
Termination Date, each Bank’s Commitment Amount shall be deemed to be the
principal balance outstanding of that Bank’s Note.

     “Permitted Swap Obligations” means all obligations (contingent or
otherwise) of the Borrower or any Subsidiary thereof existing or arising under
Swap Contracts, provided that each of the following criteria is satisfied: (a)
such obligations are (or were) entered into by such Person in the ordinary
course of business for the purpose of directly mitigating risks associated with
liabilities, commitments or assets held or to be held by such Person or its
Subsidiaries, changes in the value of securities issued by such Person or its
Subsidiaries in conjunction with a securities repurchase program not otherwise
prohibited hereunder, and not for purposes of speculation or taking a “market
view;” and (b) such Swap Contracts do not contain any provision (“walk-away”
provision) exonerating the non-defaulting party from its obligations to make
payments on outstanding transactions to the defaulting party.

     “Person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

     “Plan” means an employee benefit plan established or maintained by the
Borrower or any Subsidiary or ERISA Affiliate and covered by Title IV of ERISA.

     “Pledged Securities” means the First Collateral Trust Bonds, Series No. 13
due 2004, issued under the First Collateral Trust Securities Indenture.

     “Prime Rate” means a rate per annum equal to the prime rate of interest
announced by Bank One or by its parent, BANK ONE CORPORATION (which is not
necessarily the lowest rate charged to any customer), from time to time,
changing when and as said prime rate changes.

     “Prior Credit Agreement” means the Second Amended and Restated Credit
Agreement dated June 28, 2002 among the Borrower; Bank of America, N.A., as
agent, and the other “Lenders” named therein, together with all amendments,
modifications and restatements thereof.

     “PUHCA” has the meaning set forth in Section 4.16.

     “Related First Mortgage Bonds” means the First Mortgage Bonds on the basis
of which the Pledged Securities are issued.

     “Reportable Event” means (i) a “reportable event”, described in Section
4043 of ERISA and the regulations issued thereunder, in respect of any Plan,
(ii) a withdrawal from any Plan, as described in Section 4063 of ERISA, (iii)
an action to terminate a Plan for which a notice is required to be filed under
Section 4041 of ERISA, (iv) any other event or condition that could reasonably
be expected to constitute grounds for termination by the Pension Benefit
Guaranty

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Corporation of, or the appointment by the appropriate United States
District Court of a trustee to administer, any Plan, or (v) a complete or
partial withdrawal from a Multiemployer Plan as described in Sections 4203 and
4205 of ERISA.

     “Required Banks” means one or more Banks (including, where relevant,
Additional Banks) having an aggregate Percentage greater than 50%.

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

     “Restricted Subsidiary” means a Subsidiary any of whose debts, liabilities
or obligations (i) have been guarantied by the Borrower, (ii) with respect to
which the Borrower is in any other manner obligated for the payment of money or
otherwise to provide financial support, or (iii) are secured in whole or in
part by any property of the Borrower.

     “S&P” means Standard & Poors Ratings Group, a division of McGraw-Hill
Corporation.

     “SEC” means the Securities and Exchange Commission.

     “Sale and Leaseback Transaction” means any arrangement, directly or
indirectly, with any Person whereby a seller or transferor shall sell or
otherwise transfer any real or personal property and concurrently therewith
lease, or repurchase under an extended purchase contract, conditional sales or
other title retention agreement, the same or substantially similar property.

     “Solvent” means, with respect to any Person, that as of the date of
determination (i) the fair market value of the property of such Person is (A)
greater than the total liabilities (including contingent liabilities) of such
Person, and (B) not less than the amount that will be required to pay the
probable liabilities on such Person’s debts as they come due, considering all
financing alternatives and potential asset sales reasonably available to such
Person; (ii) such Person’s capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction; (iii) such Person does
not intend to incur, or believe (nor should it reasonably believe) that it will
incur, debts beyond its ability to pay such debts as they become due; and (iv)
such Person is “solvent” within the meaning given that term and similar terms
under applicable laws relating to fraudulent transfers and conveyances. For
purposes of this definition, the amount of any contingent liability at any time
shall be computed as the amount that, in light of
all of the facts and circumstances existing at such time, represents the
amount that would reasonably be expected to become an actual or matured
liability.

     “Subsidiary” means (i) any corporation of which more than 50% of the
outstanding shares of capital stock having general voting power under ordinary
circumstances to elect a majority of the board of directors of such
corporation, irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency, is at the time directly or indirectly owned by
the Borrower, by the Borrower and one or more other Subsidiaries, or by one or
more other Subsidiaries, (ii) any partnership of which more than 50% of the
partnership interest therein are directly or indirectly owned by the Borrower,
by the Borrower and one or more other Subsidiaries, or by one or more other
Subsidiaries, and (iii) any limited liability company or other form of business
organization

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the effective control of which is held by the Borrower, the
Borrower and one or more other Subsidiaries, or by one or more other
Subsidiaries.

     “Swap Contracts” means any agreement, whether or not in writing, relating
to any transaction that is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap or option, bond,
note or bill option, interest rate option, forward foreign exchange
transaction, cap, collar or floor transaction, currency swap, cross-currency
rate swap, swaption, currency option or any other similar transaction
(including any option to enter into any of the foregoing) or any combination of
the foregoing, and, unless the context otherwise clearly requires, any master
agreement relating to or governing any or all of the foregoing.

     “Synthetic Lease Obligation” means the monetary obligation of a Person
under (i) a so-called synthetic or off-balance sheet or tax retention lease or
(ii) an agreement for the use or possession of property creating obligations
that do not appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person, would be characterized as indebtedness
of such Person (without regard to accounting treatment). The amount of
Synthetic Lease Obligations of any Person under any such lease or agreement
shall be the amount which would be shown as a liability on a balance sheet of
such Person prepared in accordance with GAAP if such lease or agreement were
accounted for as a Capitalized Lease.

     “Tangible Net Worth” means shareholders’ equity (including preferred
stock), less intangible assets included in calculating such shareholders’
equity, all determined in accordance with GAAP. For purposes of the foregoing
calculation, intangible assets shall include but not be limited to the value of
patents, trademarks, trade names, copyrights, licenses, premiums paid on
indebtedness, good will, prepaid expenses, deferred charges and treasury stock.
Tangible Net Worth with respect to the Borrower shall at all times be
determined with respect to the Borrower and its Subsidiaries on a consolidated
basis.

     “Total Capital” means the sum of (A) stockholders’ equity (which is the
sum of common stock, premium on common stock and retained earnings and which
excludes the Trust Preferred Securities to the extent included in Funded Debt),
and (B) Funded Debt, all determined with respect to the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP.

     “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

     “Trust Preferred Securities” means any preferred securities issued by a
Trust Preferred Securities Subsidiary, where such preferred securities have the
following characteristics:

		
	 	     (i) such Trust Preferred Securities Subsidiary lends substantially
all of the proceeds from the issuance of such preferred securities to the
Borrower or a wholly-owned direct or indirect Subsidiary of the Borrower
in exchange for subordinated debt issued by the Borrower or such
wholly-owned direct or indirect Subsidiary, respectively;

		
	 	     (ii) such preferred securities contain terms providing for the
deferral of interest payments corresponding to provisions providing for
the deferral of interest payments on the subordinated debt; and

11

 

		
	 	     (iii) the Borrower or a wholly-owned direct or indirect Subsidiary
of the Borrower (as the case may be) makes periodic interest payments on
the subordinated debt, which interest payments are in turn used by the
Trust Preferred Securities Subsidiary to make corresponding payments to
the holders of such preferred securities.

     “Trust Preferred Securities Subsidiary” means any Delaware business trust
(or similar entity) (i) all of the common equity interest of which is owned
(either directly or indirectly through one or more wholly-owned Subsidiaries of
the Borrower) at all times by the Borrower, (ii) that has been formed for the
purpose of issuing Trust Preferred Securities and (iii) substantially all of
the assets of which consist at all times solely of subordinated debt issued by
the Borrower or a wholly-owned direct or indirect Subsidiary of the Borrower
(as the case may be) and payments made from time to time on such subordinated
debt.

     “Trustee” means U.S. Bank Trust National Association, as successor trustee
under the First Collateral Trust Securities Indenture, or any successor trustee
thereunder.

     “Utilization Fee Rate” means a percentage, determined as set forth in
Section 2.8.

     “Welfare Plan” means a “welfare plan” as defined in Section 3(1) of ERISA.

Section 1.2 Times.

All references to times of day in this Agreement shall be references to
Chicago, Illinois time unless otherwise specifically provided.

Section 1.3 Accounting Terms and Determinations.

Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP; provided that in the event of any Accounting Practices
Change, then the Borrower’s compliance with the covenants set forth in Section
6.7 and 6.8 shall be determined on the basis of generally accepted accounting
principles in effect immediately before giving effect to the Accounting
Practices Change, until
such covenants are amended in a manner satisfactory to the Borrower and the
Required Banks in accordance with Section 10.13 hereof.

ARTICLE II

AMOUNT AND TERMS OF THE LOANS AND LETTERS OF CREDIT

Section 2.1 Committed Advances.

Each Bank agrees, severally but not jointly, on the terms and subject to the
conditions hereinafter set forth, to make Advances to the Borrower from time to
time during the period from the date hereof to and including the Commitment
Termination Date in an aggregate amount not to exceed at any time outstanding
that Bank’s Commitment Amount, less that Bank’s Percentage of the sum of the
then-outstanding L/C Amount. Within the limits of each Bank’s Commitment

12

 

Amount, the Borrower may borrow, prepay pursuant to Section 2.11 and reborrow
under this Section 2.1. The Advances made by each Bank under this Section 2.1
shall be evidenced by and repayable with interest in accordance with a single
promissory note of the Borrower (each, a “Note”) payable to the order of that
Bank, substantially in the form of Exhibit B hereto, dated the date hereof.
Each Advance shall bear interest on the unpaid principal amount thereof from
the date thereof until paid as set forth in Section 2.3.

Section 2.2 Procedure for Making Advances.

Each Borrowing under Section 2.1 shall occur following written notice from the
Borrower to the Agent or telephonic request from any person purporting to be
authorized to request Advances on behalf of the Borrower. Each such notice or
request shall specify (i) the date of the requested Borrowing, (ii) the amount
thereof, and (iii) if any portion of such Borrowing will bear interest at a
Eurodollar Rate, the Interest Period selected by the Borrower with respect
thereto. Such notice or request must be received by the Agent not later than
10:00 a.m. on the day on which such Borrowing is to occur or, if all or any
portion of the Borrowing will bear interest at a Eurodollar Rate, not later
than three Business Days prior to the date on which such Borrowing is to occur.
Concurrent with any such notice or request, the Borrower shall deliver to the
Agent in writing (which may be by facsimile transmission) the certificate
required by Section 3.3(b). Upon receiving a request for a Borrowing under
Section 2.1, and in any event not later than 1:30 p.m. on the date that the
requested Borrowing is to occur, or, if the requested Borrowing is to bear
interest at a Eurodollar Rate, the close of business on the day that the
request is received, the Agent will notify the Banks of the amount of the
requested Borrowing, the amount of each Bank’s Advance with respect thereto,
and, if applicable, the fact that the Borrower has elected a Eurodollar Rate
and the Interest Period selected by the Borrower. Upon fulfillment of the
applicable conditions set forth in Article III, each Bank shall remit its
Percentage of the requested Borrowing to the Agent in immediately available
funds. So long as a Bank receives notice of the requested Borrowing prior to
1:30 p.m. on the date that the requested Borrowing is to occur, or, if the
requested Borrowing is to bear interest at a Eurodollar Rate, the close of
business on the day that the request is received, that Bank will make its
Advance with respect to that Borrowing available to the Agent by wire transfer
of immediately available funds to the
Agent not later than 4:00 p.m. on the date called for in such notice. Prior to
the close of business on the day of the requested Borrowing, the Agent shall
disburse such funds by crediting the same to the Borrower’s demand deposit
account maintained with the Agent or in such other manner as the Agent and the
Borrower may from time to time agree. The Agent shall have no obligation to
disburse the requested Borrowing if any condition set forth in Article III has
not been satisfied on the day of the requested Borrowing. Each Borrowing shall
be in the amount of $1,000,000 or an integral multiple thereof; provided,
however, that any portion of such Borrowing bearing interest at a Eurodollar
Rate must be in the amount of $5,000,000 or an integral multiple of $1,000,000
greater than $5,000,000. The Borrower shall promptly confirm each telephonic
request for an Advance by executing and delivering an appropriate confirmation
certificate to the Agent. However, the Borrower shall be obligated to repay
all Advances for which it actually received the moneys (including but not
limited to all Advances the proceeds of which were deposited in any account of
the Borrower) or in respect of which the Agent reasonably believed the person
requesting the same to be authorized to do so, notwithstanding the fact that
the person requesting the same was not in fact authorized so to do. Any
request for an Advance shall be deemed to be a representation that the
statements set forth in Section 3.3 are correct.

13

 

Section 2.3 Interest.

		
	 	     (a) Each Advance shall bear interest on the unpaid principal amount
thereof from the date thereof until paid as set forth in this
Section 2.3.

		
	 	     (b) Unless the Borrower elects a Eurodollar Rate pursuant to this Section,
the principal balance of each Advance shall bear interest at the
Floating Rate.

		
	 	     (c) At the election of the Borrower, which may be exercised from
time to time, the Borrower may request in writing or by telephone
that a Eurodollar Rate be applicable for the portion of the
outstanding principal balance of the Advances (including any Advance
requested or to be requested) and for the Interest Period indicated
by the Borrower in its request. The portion of the outstanding
balance of the Advances for which a Eurodollar Rate is requested (i)
must be in the amount (as to all Advances combined) of $5,000,000 or
an integral multiple of $1,000,000 greater than $5,000,000, and (ii)
if such request relates to Advances already outstanding, must, on
the first day of the applicable Interest Period, either (1) bear
interest at the Floating Rate, or (2) bear interest at a Eurodollar
Rate with respect to which the Interest Period expires on such first
day. In no event may the Borrower select an Interest Period
extending beyond the Commitment Termination Date. A request for a
Eurodollar Rate (i) must be received by the Agent before 10:00 a.m.
on the day three Business Days before the first day of the proposed
Interest Period (and the Agent shall give the Banks prompt notice
thereof), and (ii) may not be rescinded by the Borrower after such
request has been made. Subject to the terms and conditions set forth
herein, the applicable Eurodollar Rate shall (subject to
fluctuations in the applicable Eurodollar Rate Margin) be the
interest rate applicable for the proposed Interest Period to the
portion of the outstanding principal balance of the Advances to
which the Eurodollar Rate request related. At the termination of
such Interest Period, the interest rate applicable to the portion of
the principal balance of the Advances to which the Eurodollar Rate
request was applicable shall revert to the Floating Rate unless a new
Eurodollar Rate request is made by the Borrower in accordance with
this Agreement. Notwithstanding anything to the contrary in this
Section, (i) the Agent shall have no obligation to permit the
application of a Eurodollar Rate for any Interest Period if any Bank,
in its sole discretion, determines that deposits in amounts equal to
the requested amount and maturing at the end of the proposed Interest
Period are not readily available to such Bank from major banks in the
London interbank market, and (ii) without the consent of the Required
Banks, the Agent will not permit the application of a Eurodollar Rate
for any Interest Period if a Default or Event of Default has occurred
and is continuing when the request for the Eurodollar Rate is made.
Absent manifest error, the records of the Agent shall be conclusive
evidence as to the amount of the Advances bearing interest at a
Eurodollar Rate, the applicable Eurodollar Rate and the date on which
the Interest Period applicable to such Eurodollar Rate expires.

Section 2.4 Limitation of Outstandings.

In no event shall the aggregate Outstandings at any time exceed the aggregate
amount of the Commitments.

14

 

Section 2.5 Principal and Interest Payment Dates.

		
	 	     (a) Interest. Interest accruing on the principal balance of the
Floating Rate Advances shall be due and payable on the last day of each
March, June, September and December and on the Commitment Termination
Date. Interest accruing at a Eurodollar Rate shall be due and payable on
the last day of the applicable Interest Period or, if an Interest Period
is in excess of three months, on the date that is three months after the
beginning of the Interest Period and after each such interest payment
date thereafter, and on the last day of the Interest Period and on the
Commitment Termination Date.
	 
	 	     (b) Principal. The principal balance of the Advances shall be due
and payable in full on the Commitment Termination Date.

Section 2.6 Level Status and Margins.

		
	 	     (a) The Borrower’s Level Status shall be determined on the basis of
the rating accorded the Borrower’s First Collateral Trust Securities by
S&P and Moody’s, in accordance with the following table:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Level I	 	Level II	 	Level III	 	Level IV	 	Level V	 
	 	 	
	 	
	 	
	 	
	 	

	S&P	 	
A- or better
	 	BBB+ or 
better, but

less than A-
	 	BBB or
better, but

less than BBB+
	 	BBB- or 
better, but

less than BBB
	 	Less than
 BBB-
	 	 	 	 	 	 	 	 	 	 	 
	Moody’s	 	
A3 or better
	 	Baa1 or
better, but

less than A3
	 	Baa2 or 
better, but

less than Baa1
	 	Baa3 or
 better, but

less than Baa2
	 	Less than 
Baa3

		
	 	If the ratings applied by S&P and Moody’s differ such that they do not
fall within a single column in the table set forth above, (i) if the
applicable columns are adjacent to each other, the Level Status in effect
shall be based on the rightmost of the applicable columns, (ii) if the
applicable columns are separated by a single column, the Level Status in
effect shall be based on the column between those two columns, and (iii)
if the applicable columns are separated by two or more columns, the Level
Status in effect shall be based on the column to the immediate left of
the rightmost applicable column.

		
	 	     (b) In making the determinations under paragraph (a):

	 	(i)	 	If either S&P or Moody’s changes the meaning or
designation for its ratings referenced in paragraph (a), the
criteria for Level Status in the table in paragraph (a) shall
be adjusted in such manner as the Required Banks may
reasonably determine to correspond with the applicable rating

15

 

	 	 	 	designations used by S&P or Moody’s, as the case may be, in
effect on the date hereof.
	 
	 	(ii)	 	If either S&P or Moody’s, but not both of them,
ceases to rate the Borrower’s First Collateral Trust
Securities, the determination in paragraph (a) shall be made
on the basis of the rating accorded by whichever one
continues to rate such debt.
	 
	 	(iii)	 	If neither S&P nor Moody’s rates the Borrower’s
First Collateral Trust Securities, the Borrower shall be
deemed to be at Level Status V.

		
	 	     (c) The Floating Rate Margin, Eurodollar Rate Margin and Facility
Fee Rate at any time shall be determined from time to time on the basis
of the Borrower’s Level Status, in accordance with the following table:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Level I	 	Level II	 	Level III	 	Level IV	 	Level V
	 	 	
	 	
	 	
	 	
	 	

	Floating Rate Margin
	 	 	0	%	 	 	0	%	 	 	0	%	 	 	0.125	%	 	 	0.650	%
	Eurodollar Rate
Margin
	 	 	0.750	%	 	 	0.850	%	 	 	0.950	%	 	 	1.125	%	 	 	1.650	%
	Facility Fee Rate
	 	 	0.125	%	 	 	0.150	%	 	 	0.175	%	 	 	0.250	%	 	 	0.350	%

		
	 	     (d) Upon the occurrence of any Event of Default, and so long as such
Event of Default continues without written waiver thereof by the Banks, a
default increment equal to 200 basis points (2.00%) shall be added to the
Floating Rate Margin, Eurodollar Rate Margin and Facility Fee Rate.
Inclusion of such default increment in calculating the Floating Rate
Margin, Eurodollar Rate Margin and Facility Fee Rate shall not be deemed
a waiver or excuse of any such Event of Default.

Section 2.7 Letters of Credit.

		
	 	     (a) The Borrower may from time to time request that the Issuing Bank
issue one or more irrevocable standby letters of credit (each, a “Letter
of Credit”) for the account of the Borrower. No Letter of Credit shall
be issued if (i) the face amount of that Letter of Credit, together with
the sum of the then-applicable L/C Amount and the aggregate principal
balance of the Advances then outstanding, would exceed the aggregate
Commitment Amounts, or (ii) the face amount of that Letter of Credit,
together with the then-applicable L/C Amount, would exceed the L/C
Sublimit.

		
	 	     (b) At least three days prior to the issuance of each Letter of
Credit, the Borrower shall execute a letter of credit application and
reimbursement agreement (an “L/C Application”) in the Issuing Bank’s
standard form, as required by the Issuing Bank.

16

 

		
	 	     (c) Each Letter of Credit shall be issued in a form acceptable to
the Issuing Bank. Unless otherwise approved by all of the Banks, no
Letter of Credit shall have an initial or any renewal term ending more
than one year after the date of issuance.
	 
	 	     (d) A fee shall be due and payable to the Agent for the benefit of
the Banks upon issuance of each Letter of Credit, computed at an annual
rate equal to the Eurodollar Rate Margin applied to the face amount of
that Letter of Credit outstanding from time to time, from and including
the date of issuance of that Letter of Credit until the expiration
thereof, payable in arrears on the last day of each calendar quarter and
on the Commitment Termination Date and, if later, the expiry date of such
Letter of Credit. The Borrower shall also pay to the Issuing Bank for
its own account a fronting fee at a rate per annum of [.125]% on each
other Bank’s Percentage of the face amount of each Letter of Credit,
payable in arrears on the last day of each calendar quarter and on the
Commitment Termination Date and, if later, the expiry date of such Letter
of Credit. In addition, the Borrower shall pay or reimburse the Issuing
Bank for such additional fees as are specified in the Fee Letters and for
such normal and customary costs and expenses as are incurred or charged
by the Issuing Bank in issuing, effecting payment under, amending or
otherwise administering any Letter of Credit.
	 
	 	     (e) The Borrower shall be irrevocably and unconditionally obligated
to reimburse the Issuing Bank on demand (or, if demand is not earlier
made, on the Commitment Termination Date) for any amount to be paid by
the Issuing Bank upon any drawing under any Letter of Credit issued by
the Issuing Bank, without presentment, protest or other formalities of
any kind; provided that the Borrower shall not hereby be precluded from
asserting any claim for direct (but not consequential) damages suffered
by the Borrower to the extent, but only to the extent, caused by (i) the
willful misconduct or gross negligence of the Issuing Bank in determining
whether a request presented under any Letter of Credit issued by it
complied with the terms of such Letter of Credit or (ii) the Issuing
Bank’s failure to pay under any Letter of Credit issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit. All such amounts paid by the
Issuing Bank and remaining unpaid by the Borrower after demand for
payment thereof shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 2% plus the rate
applicable to Floating Rate Advances. The Issuing Bank shall provide
notice to the Borrower of payment made by the Issuing Bank on any drawing
under any Letter of Credit within one Business Day of such payment.
	 
	 	     (f) Each Bank shall be deemed to hold a participation interest in
each Letter of Credit equal to that Bank’s Percentage of the face amount
of that Letter of Credit. If the Issuing Bank makes any payment pursuant
to the terms of any Letter of Credit and is not promptly reimbursed, the
Issuing Bank may request that each other Bank pay such Bank’s Percentage
of the unreimbursed amount. Upon receipt of any such request prior to
1:30 p.m. on a Business Day, the recipient shall be unconditionally and
irrevocably obligated to pay its Percentage of the unreimbursed amount to
the Issuing Bank in immediately available funds prior to 3:00 p.m. on
such date. Notices received after 1:30 p.m. shall be deemed to have been
received on the following Business Day. If payment is not made by a Bank
when due hereunder, interest on the unpaid amount shall accrue

17

 

		
	 	from and including the date of the Issuing Bank’s request to the
date of payment at the Federal Funds Effective Rate. After making any
payment to the Issuing Bank under this subsection in connection with a
particular Letter of Credit, a Bank shall be entitled to participate to
the extent of its Percentage in the related reimbursements received by
the Issuing Bank from the Borrower or otherwise. Upon receiving any such
reimbursement, the Issuing Bank will distribute to each Bank its
Percentage of such reimbursement. At the option of the Agent, any
payment by a Bank hereunder may be deemed an Advance in accordance with
Section 2.1 and payable under the Notes.
	 
	 	     (g) Unless otherwise agreed by each Bank in writing, the Borrower
shall deposit in the Cash Collateral Account, on the fifth Business Day
preceding the Commitment Termination Date, an amount equal to the
then-applicable L/C Amount, less the balance (if any) then outstanding in
the Cash Collateral Account.
	 
	 	     (h) The Borrower’s obligations under this Section 2.7 shall be
absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Bank, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the
Issuing Bank and the Banks that neither the Issuing Bank nor any Bank
shall be responsible for, and the Borrower’s reimbursement obligation in
respect of any Letter of Credit shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, any of its Affiliates, the beneficiary of any Letter of
Credit or any financing institution or other party to whom any Letter of
Credit may be transferred or any claims or defenses whatsoever of the
Borrower or of any of its Affiliates against the beneficiary of any
Letter of Credit or any such transferee. The Issuing Bank shall not be
liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit. The Borrower agrees that any
action taken or omitted by the Issuing Bank or any Bank under or in
connection with any Letter of Credit and the related drafts and
documents, if done without gross negligence or willful misconduct, shall
be binding upon the Borrower and shall not put the Issuing Bank or any
Bank under any liability to the Borrower. Nothing in this Section 2.7(h)
or Section 2.7(i) is intended to limit the right of the Borrower to make
a claim against the Issuing Bank for damages as contemplated by the
proviso to the first sentence of Section 2.7(e).
	 
	 	     (i) The Issuing Bank shall be entitled to rely, and shall be fully
protected in relying, upon any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile, telex or teletype message, statement, order or other
document believed in good faith by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the Issuing Bank. The Issuing Bank 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 Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks against any and
all liability and expense which

18

 

		
	 	may be incurred by it by reason of taking or continuing to take any
such action. Notwithstanding any other provision of this Section 2.7, the
Issuing Bank 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 Banks, and such request and any action taken or failure
to act pursuant thereto shall be binding upon the Banks and any future
holders of a participation in any Letter of Credit.
	 
	 	     (j) The Borrower hereby agrees to indemnify and hold harmless each
Bank, the Issuing Bank and the Agent, and their respective directors,
officers, agents and employees, from and against any and all claims and
damages, losses, liabilities, costs or expenses which such Bank, the
Issuing Bank or the Agent may incur (or which may be claimed against such
Bank, the Issuing Bank or the 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 Letter of Credit or any actual
or proposed use of any Letter of Credit, including, without limitation,
any claims, damages, losses, liabilities, costs or expenses which the
Issuing Bank may incur by reason of or in connection with (i) the failure
of any other Bank to fulfill or comply with its obligations to the
Issuing Bank hereunder (but nothing herein contained shall affect any
rights the Borrower may have against any defaulting Bank) or (ii) by
reason of or on account of the Issuing Bank issuing any Letter of Credit
which specifies that the term “Beneficiary” included therein includes any
successor by operation of law of the named Beneficiary, but which Letter
of Credit does not require that any drawing by any such successor
Beneficiary be accompanied by a copy of a legal document, satisfactory to
the Issuing Bank, evidencing the appointment of such successor
Beneficiary; provided that the Borrower shall not be required to
indemnify any Bank, the Issuing Bank or the Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (x) the willful misconduct or gross negligence
of the Issuing Bank in determining whether a request presented under any
Letter of Credit issued by the Issuing Bank complied with the terms of
such Letter of Credit or (y) the Issuing Bank’s failure to pay under any
Letter of Credit after the presentation to it of a request strictly
complying with the terms and conditions of such Letter of Credit. Nothing
in this Section 2.7(j) is intended to limit the obligations of the
Borrower under any other provision of this Agreement.
	 
	 	     (k) Each Bank shall, ratably in accordance with its Percentage,
indemnify the Issuing Bank, its affiliates and its directors, officers,
agents and employees (to the extent not reimbursed by the Borrower)
against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees’ gross negligence or willful misconduct or
the Issuing Bank’s failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms and
conditions of the Letter of Credit) that such indemnitees may suffer or
incur in connection with this Section 2.7 or any action taken or omitted
by such indemnitees hereunder.

     Section 2.8 Facility and Utilization Fees.

		
	 	     (a) The Borrower shall pay to the Agent, for the benefit of the
Banks, a facility fee at an annual rate equal to the then-applicable
Facility Fee Rate applied to the

19

 

		
	 	     aggregate amount of the Commitments outstanding hereunder from the
Effective Date through the Commitment Termination Date.
	 
	 	     (b) The Borrower shall pay to the Agent, for the benefit of the
Banks, a utilization fee at an annual rate equal to the then-applicable
Utilization Fee Rate applied to the average daily Outstandings. The
Utilization Fee Rate in effect on any day shall be an annual rate
determined on the basis of the Outstandings Percentage and Level Status
on that day, in accordance with the following table:

	 	 	 	 	 	 	 	 	 
	Outstandings Percentage/ Level Status	 	33% or less	 	More than 33%
	
	 	
	 	

	Level I
	 	 	0	%	 	 	0.125	%
	Level II
	 	 	0	%	 	 	0.125	%
	Level III
	 	 	0	%	 	 	0.125	%
	Level IV
	 	 	0	%	 	 	0.250	%
	Level V
	 	 	0	%	 	 	0.500	%

		
	 	     (c) The facility fee and utilization fee set forth in this Section
shall be due and payable quarterly in arrears on the last day of each
March, June, September and December during the term of the Commitments.
Any facility and utilization fees remaining unpaid on the Commitment
Termination Date shall be due and payable on that date.

Section 2.9 Other Fees.

The Borrower shall pay to the Agent (i) for the benefit of the Banks, the
upfront fee set forth in one of the Fee Letters, and (ii) for the Agent’s own
account and not for the benefit of the Banks, certain additional fees in the
amounts set forth in the Fee Letters.

Section 2.10 Termination or Reduction of the Commitment.

The Borrower shall have the right at any time and from time to time upon three
Business Days’ prior notice to the Agent (which shall promptly notify the
Banks) permanently to terminate the Commitments in whole or permanently to
reduce the Commitment Amounts in part, without penalty or premium, provided
that (i) the Commitments may not be terminated while any Advance or L/C Amount
remains outstanding, (ii) each partial reduction shall be in the aggregate
amount of $5,000,000 or a multiple thereof, (iii) any partial reduction of the
Commitment Amounts shall be pro rata as to each Bank in accordance with that
Bank’s Percentage, and (iv) no reduction shall reduce the Commitment Amounts to
an amount less than the sum of the

20

 

aggregate Advances and the L/C Amount outstanding (after giving effect to any
prepayments of Advances to be made on or prior to the effective date of such
reduction) at the time.

Section 2.11 Voluntary Prepayments.

The Borrower may prepay the Advances in whole or in part, without penalty or
premium, at any time and from time to time; provided that (i) any prepayment by
the Borrower hereunder shall be applied pro rata to the prepayment of each
Bank’s Advances, (ii) any prepayment of the full amount of the Advances shall
include accrued interest thereon, (iii) any prepayment of any portion of the
principal balance of any Advances which, at the time of such prepayment, bears
interest at a Eurodollar Rate shall be accompanied by compensation as specified
in Section 2.16(b), and (iv) each prepayment of the Advances (other than
prepayment of the Advances in full) shall be in the principal amount of
$1,000,000 or higher integral multiples of $1,000,000, provided that any
prepayment of any portion of the Advances bearing interest at a Eurodollar Rate
shall be made in a principal amount of $5,000,000 or higher integral multiple
of $1,000,000. Each partial prepayment of principal on the Advances shall be
applied, first, to that portion of such Advances bearing interest at the
Floating Rate, and, second, to that portion of such Advances bearing interest
at a Eurodollar Rate.

Section 2.12 Computation of Interest and Fees.

All interest on Floating Rate Fundings accruing based on the Prime Rate will be
calculated based on the actual days elapsed in a year of 365 or 366 days, as
the case may be. All other interest and all fees hereunder shall be computed on
the basis of actual number of days elapsed in a year of 360 days.

Section 2.13 Payments.

All payments of principal and interest under the Advances and L/C Amounts and
of the fees hereunder shall be made to the Agent in immediately available
funds, without setoff or counterclaim. Payments received after noon on any day
shall be deemed received on the next succeeding Business Day. The Borrower
agrees that the amount shown on the books and records of each Bank as being the
principal balance of that Bank’s Obligations, if any, shall be prima facie
evidence of such principal balance. The Borrower hereby authorizes the Agent
to charge against the Borrower’s account with the Agent an amount equal to the
accrued interest and fees from time to time due and payable to the Agent and
the Banks under this Agreement, or (at the Banks’ option) to effect a Borrowing
in such amount, all without receipt of any request for such charge or
Borrowing.

Section 2.14 Payment on Nonbusiness Days.

Whenever any payment to be made under this Agreement shall be stated to be due
on a day other than a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in each case be
included in the computation of payment of interest on such Obligations or the
fees hereunder, as the case may be.

21

 

Section 2.15 Use of Advances and Letters of Credit.

The proceeds of each Borrowing, and each Letter of Credit, shall be used by the
Borrower for its general corporate purposes (including commercial paper
backup). Notwithstanding the foregoing, in no event shall the proceeds of any
Borrowing or any Letter of Credit be used by the Borrower to finance the
acquisition of 5% or more of any class of the capital stock of any corporation
unless, prior to making such acquisition, the Borrower has obtained written
approval for such acquisition from the board of directors of such corporation.
The limitation set forth in the preceding sentence is in addition to, and not
in lieu of, the restriction set forth in Section 4.9.

Section 2.16 Increased Costs or Reduction of Yield.

In addition to any interest payable on Advances made hereunder and any fees or
other amounts payable hereunder, the Borrower agrees:

		
	 	     (a) If at any time after the date hereof any adoption of or change
in any applicable law, rule or regulation or the interpretation or
administration thereof by any governmental authority (including, without
limitation, Regulation D of the Federal Reserve Board):

	 	(i)	 	shall subject any Bank to any tax, duty or other
charges with respect to this Agreement, or shall materially
change the basis of taxation of payments to any Bank of the
principal of or interest on any portion of the principal
balance of that Bank’s Advances bearing interest at a
Eurodollar Rate (except for the imposition of or changes in
the rate of Excluded Taxes); or
	 
	 	(ii)	 	shall impose or deem applicable or increase any
reserve, special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by
any Bank (other than reserves and assessments described in the
definition of “Reserve Requirement” and taken into account in
determining the applicable Eurodollar Rate) because of any
portion of the principal balance of that Bank’s Advances
bearing interest at a Eurodollar Rate and the result of any of
the foregoing would be to increase the cost to that Bank of
making or maintaining any such portion or to reduce any sum
received or receivable by that Bank with respect to such
portion;

		
	 	then, within 30 days after demand by any Bank the Borrower shall pay that
Bank such additional amount or amounts as will compensate that Bank for
such increased cost or reduction. A Bank shall not make demand hereunder
unless that Bank is generally imposing such increased costs on its
similarly situated customers. No Bank may demand such compensation more
than 90 days following the end of the Interest Period with respect to
which such demand is made; provided, however, that the foregoing shall in
no way limit the right of any Bank to demand compensation to the extent
that such compensation relates to the retroactive application of any law,
rule or regulation if such demand is made within 90 days after the
adoption of or change in such law, rule or

22

 

		
	 	regulation. A certificate in reasonable detail of that Bank setting
forth the basis for the determination of such additional amount or
amounts shall be promptly submitted by that Bank to the Borrower and
shall, in the absence of manifest error, be conclusive and binding as to
such amount or amounts.

		
	 	     (b) The Borrower shall also compensate any Bank, upon written
request by that Bank (which request shall set forth the basis for
requesting such amounts), for all losses and expenses in respect of any
interest or other consideration paid by that Bank to lenders of funds
borrowed by it or deposited with it to maintain any portion of the
principal balance of the Advances at a Eurodollar Rate which that Bank
may sustain to the extent not otherwise compensated for hereunder and not
mitigated by the reemployment of such funds if any prepayment of any such
portion occurs on a date that is not the expiration date of the relevant
Interest Period or if a Borrowing or prepayment in whole or in part of an
Advance bearing interest at a Eurodollar Rate fails to occur. A
certificate as to any such loss or expense (including calculations, in
reasonable detail, showing how that Bank computed such loss or expense)
shall be promptly submitted by that Bank to the Borrower and shall, in
the absence of manifest error, be conclusive and binding as to the amount
thereof. Such loss or expense may be computed as though that Bank
acquired deposits in the London interbank market to fund that portion of
the principal balance whether or not that Bank actually did so.

Section 2.17 Taxes.

		
	 	     (a) All payments made by the Borrower to the Agent or any Bank
(herein any “Payee”) under or in connection with this Agreement or the
Notes shall be made without any setoff or other counterclaim, and free
and clear of and without deduction for or on account of any present or
future taxes now or hereafter imposed by any governmental or other
authority, except to the extent that such deduction or withholding is
compelled by law. As used herein, the term “Taxes” shall include all
income, excise and other taxes of whatever nature (other than taxes based
on or measured by the net income of the Payee (or franchise taxes in lieu
thereof) and imposed by the government or other authority of the country,
state or political subdivision in which such Payee is incorporated or in
which its principal executive office or the office through which the
Payee is acting is located (“Excluded Taxes”)) as well as all levies,
imposts, duties, charges, or fees of whatever nature. If the Borrower is
compelled by law to make any such deductions or withholdings it will:

	 	(i)	 	pay to the relevant authorities the full amount
required to be so withheld or deducted;
	 
	 	(ii)	 	except to the extent that such deduction or
withholding results from a breach by any Payee of the
representations and covenants contained in Section 2.17(b) or
the relevant Assignment Agreement pay such additional amounts
(including, without limitation, any penalties, interest or
expenses) as may be necessary in order that the net amount
received by each Payee after such deductions or withholdings
(including any required deduction or withholding on such
additional amounts) shall equal the amount such

23

 

	 	 	 	Payee would have received had no such deductions or
withholdings been made; and
	 
	 	(iii)	 	promptly forward to the Agent (for delivery to
such Payee) an official receipt or other documentation
reasonably satisfactory to the Agent evidencing such payment
to such authorities.

		
	 	     (b) If any Taxes otherwise payable by the Borrower pursuant to
Section 2.17(a) are directly asserted against any Payee, such Payee may
pay such Taxes and the Borrower promptly shall reimburse such Payee to
the full extent otherwise required by such paragraph. The obligations of
the Borrower under this Section 2.17 shall survive any termination of
this Agreement. Each Bank by its execution of this Agreement represents
(and each additional Bank by its execution of any Assignment Agreement
pursuant to Section 9.1 shall be deemed to represent) to each other Bank,
the Agent and the Borrower that if such Bank is organized under the laws
of any jurisdiction other than the United States or any state thereof,
such Bank has furnished to the Agent and the Borrower either U.S.
Internal Revenue Service Form W-8BEN, or U.S. Internal Revenue Service
Form W-8ECI, as applicable (wherein such Bank claims entitlement to
complete exemption from U.S. Federal withholding tax on all interest
payments hereunder).

		
	 	     (c) The amount that the Borrower shall be required to pay to any
Bank pursuant to Sections 2.17(a) or 2.17(b) shall be reduced by the
amount of any offsetting tax benefit which such Bank receives as a result
of the Borrower’s payment to the relevant authorities as reasonably
determined by such Bank; provided, however, that (i) such Bank shall be
the sole judge of the amount of such tax benefit and the date on which it
is received, (ii) no Bank shall be obliged to disclose information
regarding its tax affairs or tax computations, (iii) nothing herein shall
interfere with a Bank’s right to manage its tax affairs in whatever
manner it sees fit, and (iv) if such Bank shall subsequently determine
that it has lost the benefit of all or a portion of such tax benefit, the
Borrower shall promptly remit to such Bank the amount certified by such
Bank to be the amount necessary to restore such Bank to the position it
would have been in if no payment had been made pursuant to this Section
2.17(c).

		
	 	     (d) 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 Agent or the Borrower did
not properly withhold tax from amounts paid to or for the account of any
Bank (because the appropriate form was not delivered or properly
completed, because such Bank failed to notify the Agent or the Borrower
of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Bank shall
indemnify the Agent or the Borrower, as applicable, fully for all amounts
paid, directly or indirectly, by the Agent or the Borrower, as
applicable, as tax, withholding therefor, or otherwise, including
penalties and interest, and including taxes imposed by any jurisdiction
on amounts payable to the Agent or the Borrower, as applicable, under
this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent or
the Borrower, as applicable, which attorneys may be employees of the
Agent or

24

 

		
	 	the Borrower, as applicable). The obligations of the Bank under
this Section 2.17(d) shall survive the payment of the Obligations and
termination of this Agreement.

Section 2.18 Capital Adequacy.

If any Bank determines at any time that its Return has been reduced as a result
of any Capital Adequacy Rule Change, that Bank may require the Borrower to pay
it the amount necessary to restore its Return to what it would have been had
there been no Capital Adequacy Rule Change. For purposes of this Section:

		
	 	     (a) “Return”, for any period, means the percentage determined by
dividing (i) the sum of interest and ongoing fees earned by a Bank under
this Agreement during such period, by (ii) the average capital that Bank
is required to maintain during such period as a result of its being a
party to this Agreement, as determined by that Bank based upon its total
capital requirements and a reasonable attribution formula that takes
account of the Capital Adequacy Rules then in effect. Return may be
calculated for each calendar quarter and for the shorter period between
the end of a calendar quarter and the date of termination in whole of
this Agreement.
	 
	 	     (b) “Capital Adequacy Rule” means any law, rule, regulation or
guideline regarding capital adequacy that applies to any Bank, or the
interpretation thereof by any governmental or regulatory authority.
Capital Adequacy Rules include rules requiring financial institutions to
maintain total capital in amounts based upon percentages of outstanding
loans, binding loan commitments and letters of credit.
	 
	 	     (c) “Capital Adequacy Rule Change” means any change in any Capital
Adequacy Rule occurring after the date of this Agreement, but the term
does not include any changes in applicable requirements that at the date
hereof are scheduled to take place under the existing Capital Adequacy
Rules or any increases in the capital that any Bank is required to
maintain to the extent that the increases are required due to a
regulatory authority’s assessment of the financial condition of that
Bank.
	 
	 	     (d) “Bank” includes (but is not limited to) the Banks, as defined
elsewhere in this Agreement; any Bank hereunder; any participant in the
loans made hereunder (to the extent provided in Section 9.2 only); and
any bank holding company with respect to any of the foregoing.

The initial notice sent by a Bank shall be sent as promptly as practicable
after that Bank learns that its Return has been reduced, shall include a demand
for payment of the amount necessary to restore that Bank’s Return for the
quarter in which the notice is sent and, if applicable, the preceding quarter,
and shall state in reasonable detail the cause for the reduction in its Return
and its calculation of the amount of such reduction. Thereafter, that Bank may
send a new notice with respect to each calendar quarter setting forth the
calculation of the reduced Return for that quarter and including a demand for
payment of the amount necessary to restore its Return for that quarter. In
such event, the Borrower shall pay the Bank such amount within 30 days after
demand by such Bank. A Bank’s calculation in any such notice shall be
conclusive and binding absent demonstrable error. A Bank shall not make demand
hereunder unless that Bank is

25

 

generally imposing such increased costs on its similarly situated customers. No
Bank may demand any compensation hereunder more than 45 days following the end
of the quarter for which compensation is sought.

Section 2.19 Mandatory Assignment of Bank’s Interest.

If any Bank delivers to the Borrower a demand for compensation pursuant to
Section 2.16(a) or a demand for payment pursuant to Section 2.17 or 2.18 or if
at any time the long-term unenhanced credit rating of any Bank falls below Baa2
from Moody’s or below BBB from S&P or if such Bank is no longer rated by S&P or
Moody’s, the Borrower may (so long as no Default or Event of Default has
occurred and is continuing) at its expense require such Bank to assign, in
whole and in accordance with Section 9.1 (including the execution of an
Assignment Agreement and all other applicable documents, and the payment of any
fees required under Section 9.1), all of its rights and obligations hereunder
and under such Bank’s Note, including but not limited to such Bank’s
Commitment, to an Eligible Bank identified by the Borrower and willing to
become a Bank hereunder. Such Bank may be an existing Bank hereunder.
Notwithstanding the foregoing, the Borrower may not compel the resignation of
any Bank as the Agent except as provided in Section 8.12.

ARTICLE III

CONDITIONS PRECEDENT

Section 3.1 Conditions to Effectiveness.

Sections 2.1 and 2.7 of this Agreement shall become effective only upon
delivery to the Agent, on or before May 22, 2003, of each of the following,
each in form and substance satisfactory to each Bank:

		
	 	     (a) This Agreement, duly executed by the Borrower, the Agent and
each of the Banks.
	 
	 	     (b) The Notes, dated the date hereof, properly executed on behalf of
the Borrower.
	 
	 	     (c) Evidence that concurrently with the making of the initial
Advance, all amounts payable under the Prior Credit Agreement will be
paid and the commitments thereunder will be terminated.

Section 3.2 Initial Conditions Precedent.

The obligation of the Banks to make any Advance or issue any Letter of Credit
is subject to the further condition precedent that the Agent shall have
received on or before the day of the first Advance or Letter of Credit (and, in
any event, not later than May 23, 2003) all of the following, in form and
substance satisfactory to each Bank:

		
	 	     (a) This Agreement, duly executed by the Borrower, the Agent and
each of the Banks.

26

 

		
	 	     (b) The Notes, dated the date hereof, properly executed on behalf of
the Borrower.

		
	 	     (c) The Pledged Securities, properly issued by the Borrower pursuant
to the First Collateral Trust Securities Indenture, in the principal
amount of $350,000,000, copies of the First Mortgage Bonds, properly
issued by the Borrower to the Trustee pursuant to the First Mortgage Bond
Indenture, in the principal amount of $350,000,000, as the basis for
issuance of the Pledged Securities, and the related supplemental
indentures to the First Collateral Trust Securities Indenture and the
First Mortgage Bond Indenture, company orders and bond applications.
	 
	 	     (d) The Fee Letters, properly executed on behalf of the Borrower.
	 
	 	     (e) A certificate of the secretary or an assistant secretary of the
Borrower (i) certifying that the execution, delivery and performance of
the Loan Documents and other documents contemplated hereunder have been
duly approved by all necessary action of the Board of Directors of the
Borrower, and attaching true and correct copies of the applicable
resolutions granting such approval, (ii) certifying that attached to such
certificate are true and correct copies of the Organizational Documents
of the Borrower, together with such copies, and (iii) certifying the
names of the officers of the Borrower that are authorized to sign the
Loan Documents and other documents contemplated hereunder, together with
the true signatures of such officers.
	 
	 	     (f) A certificate of good standing of the Borrower, dated not more
than twenty days before such date.
	 
	 	     (g) Copies of order(s) of the Public Utilities Commission of the
State of Colorado approving the execution, delivery and performance by
the Borrower of this Agreement and the other Loan Documents to which it
is a party and the transactions contemplated hereby and thereby.
	 
	 	     (h) Signed copies of opinions of counsel for the Borrower, addressed
to the Banks in substantially the forms of Exhibit D hereto.
	 
	 	     (i) All fees required to be paid as of the date hereof under this
Agreement or any Fee Letter.
	 
	 	     (j) Such other documents as the Agent or the Required Banks may deem
necessary or advisable in connection with the issuance of the Pledged
Securities.

Section 3.3 Conditions Precedent to All Advances and Letters of Credit.

The obligation of the Banks to make any Advance (including the initial Advance)
or to issue any Letter of Credit shall be subject to the further conditions
precedent that on the date of such Advance or Letter of Credit:

		
	 	     (a) The representations and warranties contained in Article IV are
correct on and as of the date of such Advance or Letter of Credit as
though made on and as of such

27

 

		
	 	date, except to the extent that such representations and warranties
relate solely to an earlier date.

		
	 	     (b) The Borrower has delivered to the Agent a certificate in the
form of Exhibit F hereto, duly executed by the chief financial officer,
treasurer, secretary, assistant secretary, general counsel or deputy
general counsel of the Borrower, specifically confirming the Borrower’s
legal authority to obtain such Advance or Letter of Credit.
	 
	 	     (c) No event has occurred and is continuing, or would result from
such Advance or Letter of Credit, which constitutes a Default or an Event
of Default.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Banks as follows:

Section 4.1 Corporate Existence and Power.

The Borrower and its Subsidiaries are each corporations duly incorporated,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation, and are each duly licensed or qualified to
transact business in all jurisdictions where the character of the property
owned or leased or the nature of the business transacted by them makes such
licensing or qualification necessary, except where the failure to be so
licensed or qualified (i) will not permanently preclude the Borrower or any
Subsidiary from maintaining any material action in any such jurisdiction even
though such action arose in whole or in part during the period of such failure,
and (ii) will not result in any other Material Adverse Change. The Borrower
has all requisite power and authority, corporate or otherwise, to conduct its
business, to own its properties and to execute, deliver, and perform all of its
obligations under, the Loan Documents, the Pledged Securities, the Related
First Mortgage Bonds and the Indentures.

Section 4.2 Authorization of Borrowing; No Conflict as to Law or Agreements.

		
	 	     (a) The execution, delivery and performance by the Borrower of the
Loan Documents, the Indentures and the Pledged Securities, the borrowings
from time to time hereunder, the issuance of the Pledged Securities, the
issuance of the Related First Mortgage Bonds and the consummation of the
transactions herein and therein contemplated, have been duly authorized
by all necessary corporate action and do not and will not (i) require any
consent or approval of the stockholders of the Borrower, or any
authorization, consent, approval, order, filing, registration or
qualification by or with any governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, other than those
consents described in Schedule 4.2, each of which has been obtained and
is in full force and effect, (ii) violate any provision of any law, rule
or regulation (including, without limitation, Regulation X of the Board
of Governors of the Federal Reserve System and Section 7 of the Exchange
Act or any regulation promulgated thereunder) or of any order, writ,
injunction or decree presently in effect having applicability to the
Borrower or of the Organizational Documents of the Borrower, (iii) result
in a breach of or constitute a default under any indenture or loan or

28

 

		
	 	credit agreement or any other material agreement, lease or
instrument to which the Borrower or any Subsidiary is a party or by which
it or its properties may be bound or affected, or (iv) result in, or
require, the creation or imposition of any Lien or other charge or
encumbrance of any nature (other than the Liens created under this
Agreement, the First Collateral Trust Securities Indenture and the First
Mortgage Bond Indenture) upon or with respect to any of the properties
now owned or hereafter acquired by the Borrower or any Subsidiary.

		
	 	     (b) The Public Utilities Commission of the State of Colorado has
issued its Authorizing Orders authorizing the issuance of the Pledged
Securities, the Related First Mortgage Bonds and the incurrence by the
Borrower of the Obligations under this Agreement.

Section 4.3 Legal Agreements.

This Agreement, the other Loan Documents, the Pledged Securities, the Related
first Mortgage Bonds and the Indentures constitute the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their respective terms, except to the extent that such enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors’ rights generally or by general equitable principles. Without
limiting the generality of the foregoing, the Pledged Securities have been duly
executed, issued and delivered by the Borrower and duly authenticated by the
Trustee, and the Pledged Securities will be entitled to the benefits provided
by the First Collateral Trust Securities Indenture and the Related First
Mortgage Bonds have been duly executed, issued and delivered by the Borrower
and duly authenticated by the trustee under the First Mortgage Bond Indenture,
and the Related First Mortgage Bonds will be entitled to the benefits provided
by the First Mortgage Bond Indenture.

Section 4.4 Subsidiaries.

Schedule 4.4 hereto is a complete and correct list of all Subsidiaries as of
the date of this Agreement and of the percentage of the ownership of the
Borrower or any other Subsidiary in each as of the date of this Agreement. The
Borrower has no Restricted Subsidiaries as of the date hereof except as
designated on Schedule 4.4. Except as otherwise indicated in that Schedule, all
shares of each Subsidiary owned by the Borrower or by any such other Subsidiary
are validly issued and fully paid and nonassessable.

Section 4.5 Financial Condition; Other Information.

The Borrower has heretofore furnished to the Banks the audited consolidated
financial statements of the Borrower and its Subsidiaries for the year ended
and as of December 31, 2002 and the unaudited consolidated financial statements
of the Borrower and its Subsidiaries for the quarter ended and as of March 31,
2003. Those financial statements fairly present in all material respects the
financial condition of the Borrower on the dates thereof and the results of its
operations and cash flows for the periods then ended, and were prepared in
accordance with GAAP as then in effect. The information, exhibits and reports
furnished by the Borrower to the Agent and the Banks, taken as a whole, in
connection with the negotiation of or compliance with

29

 

the Loan Documents did not contain any material misstatement of fact or omit to
state a material fact or any fact necessary to make the statements contained
therein not misleading.

Section 4.6 Adverse Change.

There has been no Material Adverse Change since December 31, 2002.

Section 4.7 Litigation.

Except as set forth in Schedule 4.7, there are no actions, suits or proceedings
pending or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any Subsidiary or the properties of the Borrower or any
Subsidiary before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which could reasonably
be expected to effect a Material Adverse Change. Other than any liability
incident to any litigation, arbitration or proceeding which could not
reasonably be expected to have a Material Adverse Effect, the Borrower has no
material contingent obligations not provided for or disclosed in the financial
statements referred to in Section 4.5.

Section 4.8 Hazardous Substances.

Except as set forth in Schedule 4.8, to the best of the Borrower’s knowledge
after reasonable inquiry, (i) neither the Borrower nor any Subsidiary or other
Person has ever caused or permitted any Hazardous Substance to be disposed of
on, under or at any real property which is operated by the Borrower or any
Subsidiary or in which the Borrower or any Subsidiary has any interest, except
to the extent that such disposal can not reasonably be expected to result in a
Material Adverse Change; and (ii) no such real property has ever been used
(either by the Borrower or by any Subsidiary or other Person) as a dump site or
permanent or temporary storage site for any Hazardous Substance in a manner
that could reasonably be expected to result in a Material Adverse Change.

Section 4.9 Regulation U.

Neither the Borrower nor any Subsidiary is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any Advance will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.

Section 4.10 Taxes.

The Borrower and its Subsidiaries have each paid or caused to be paid to the
proper authorities when due all federal, state and local taxes required to be
withheld and paid by them. The Borrower and its Subsidiaries have each filed
all federal, state and local tax returns which to the knowledge of the officers
of the Borrower or any Subsidiary are required to be filed, and the Borrower
and its Subsidiaries have each paid or caused to be paid to the respective
taxing authorities all taxes as shown on said returns or on any assessment
received by it to the extent such taxes have become due, other than taxes whose
amount, applicability or validity is being

30

 

contested in good faith by appropriate proceedings and for which the Borrower
or applicable Subsidiary has provided adequate reserves in accordance with
GAAP.

Section 4.11 Burdensome Restrictions.

Neither the Borrower nor any Subsidiary is a party to or bound by any
agreement, or subject to any restriction in any Organizational Document, or any
requirement of law, which would reasonably be expected to effect a Material
Adverse Change.

Section 4.12 Titles and Liens.

The Borrower or one of its Subsidiaries has good title to each of the
properties and assets material to the operations of the Borrower and its
Subsidiaries, taken as a whole, which it purports to own or which are reflected
as owned on its books and records, and the Borrower has good and valid title to
all real and fixed property and leasehold rights described or enumerated in the
First Collateral Trust Securities Indenture and in the First Mortgage Bond
Indenture (except, in each case, such properties as have been released from the
Lien thereof in accordance with the terms thereof), in each case free and clear
of all Liens and encumbrances, except for Liens and encumbrances permitted by
Section 6.1 and covenants, restrictions, rights, easements and minor
irregularities in title which do not materially interfere with the business or
operations of the Borrower and its Subsidiaries taken as a whole.

Section 4.13 ERISA.

No Plan will have an accumulated funding deficiency (as such term is defined in
Section 302 of ERISA) in excess of $50,000,000 as of the last day of the most
recent fiscal year of such Plan ended prior to the date hereof, and no
liability to the Pension Benefit Guaranty Corporation or the Internal Revenue
Service in excess of such amount has been, or is expected by the Borrower or
any Subsidiary or ERISA Affiliate to be, incurred with respect to any Plan that
could become a liability of the Borrower or any Subsidiary.

Section 4.14 Securities Law Matters.

		
	 	     (a) When the Pledged Securities are issued and delivered pursuant to
this Agreement and the First Collateral Trust Securities Indenture, the
Pledged Securities will not be of the same class (within the meaning of
Rule 144A under the Act) as securities which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system.
	 
	 	     (b) The Borrower is subject to Section 13 or 15(d) of the Exchange
Act.
	 
	 	     (c) Neither the Borrower, nor any person acting on its behalf, has
offered or sold (nor will offer or sell prior to the delivery of the
Pledged Securities to the Agent) the Pledged Securities by means of any
general solicitation or general advertising within the meaning of Rule
502(c) under the Act.
	 
	 	     (d) Within the six months preceding the date hereof, neither the
Borrower nor any other person acting on behalf of the Borrower has
offered or sold to any person any

31

 

		
	 	Pledged Securities, or any securities of the same or a similar class
as the Pledged Securities, other than the Pledged Securities delivered to
the Agent hereunder. The Borrower will take reasonable precautions
designed to insure that any offer or sale, direct or indirect, in the
United States or to any U.S. person (as defined in Rule 902 under the
Act) of any Pledged Securities or any substantially similar security
issued by the Borrower, within six months subsequent to the delivery of
the Pledged Securities to the Agent, is made under restrictions and other
circumstances reasonably designed not to affect the status of the offer
and sale of the Pledged Securities contemplated by this Agreement as a
transaction exempt from the registration provisions of the Act.

		
	 	     (e) No registration of the Pledged Securities under the Act is
required for the offer and sale of the Pledged Securities to the Agent in
the manner contemplated by this Agreement.

Section 4.15 Investment Company Act.

The Borrower is not, and after giving effect to the offer and sale of the
Pledged Securities, will not be an “investment company,” as such term is
defined in the Investment Company Act.

Section 4.16 Public Utility Holding Company Act.

The Borrower is subject to the Public Utility Holding Company Act of 1935, as
amended (“PUHCA”), as a “subsidiary” of a registered “holding company” within
the meaning of PUHCA. However, the transactions contemplated by this Agreement
are exempt from any requirement for SEC approval under PUHCA.

Section 4.17 Indenture.

		
	 	     (a) On the date hereof, the aggregate principal amount of securities
outstanding under the First Collateral Trust Securities Indenture
(excluding the Pledged Securities) is $1,973,250,000; and the aggregate
principal amount of the First Mortgage Bonds outstanding under the First
Mortgage Bond Indenture (excluding bonds issued to secure securities
under the First Collateral Trust Securities Indenture) is $374,340,000.
	 
	 	     (b) There has been no discharge of the First Collateral Trust
Securities Indenture or of the First Mortgage Bond Indenture with respect
to the Borrower.
	 
	 	     (c) Substantially all of the property, whether real, personal or
mixed, of the electric utility business of the Borrower is subject to the
Liens of the First Collateral Trust Securities Indenture. Substantially
all of the property, whether real, personal or mixed, of the Borrower is
subject to the Lien of the First Mortgage Bond Indenture.
	 
	 	     (d) True and complete copies of all amendments and supplements to
and restatements of the First Collateral Trust Securities Indenture and
First Mortgage Bond Indenture have been delivered to counsel for the
Agent.
	 
	 	     (e) The supplemental indentures to the First Collateral Trust
Securities Indenture and the First Mortgage Bond Indenture entered into
in connection with the

32

 

		
	 	Pledged Securities and the Related First Mortgage Bonds are not
required to be qualified under the Trust Indenture Act and, in connection
with the issuance and delivery of the Pledged Securities to the Agent as
contemplated by this Agreement, the First Collateral Trust Securities
Indenture and the First Mortgage Bond Indenture are not required to be
qualified under the Trust Indenture Act.

Section 4.18 Authentication of Pledged Securities and Related First Mortgage
Bonds.

All covenants and conditions precedent to the authentication and delivery of
the Pledged Securities have been complied with, and there has been no change in
the facts and circumstances set forth in the application to the Trustee for
authentication of the Pledged Securities (and the documents submitted
therewith) from the date of such application to the date hereof. All covenants
and conditions precedent to the authentication and delivery of the Related
First Mortgage Bonds have been complied with, and there has been no change in
the facts and circumstances set forth in the application to the trustee under
the First Mortgage Bond Indenture for authentication of the Related First
Mortgage Bonds (and the documents submitted therewith) from the date of such
application to the date hereof.

Section 4.19 Solvency.

The Borrower is and, upon the making of any Advance and the issuance of any
Letter of Credit will be, Solvent.

Section 4.20 Swap Obligations.

Neither the Borrower nor any of its Subsidiaries has incurred any outstanding
obligations under any Swap Contracts, other than Permitted Swap Obligations.

Section 4.21 Insurance.

The properties of the Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of the
Borrower, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower and such Subsidiaries
operate.

Section 4.22 Compliance With Laws.

Except as disclosed in Schedule 4.22, the Borrower and its Subsidiaries have
complied in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof having jurisdiction over the conduct of
their respective businesses or the ownership of their respective properties,
assets and rights.

33

 

ARTICLE V

AFFIRMATIVE COVENANTS OF THE BORROWER

So long as any Note shall remain unpaid or any Commitment or L/C Amount shall
be outstanding, the Borrower will comply with the following requirements,
unless the Required Banks shall otherwise consent in writing:

Section 5.1 Financial Statements; Other Notices.

The Borrower will deliver to the Agent and each Bank:

		
	 	     (a) As soon as available, and in any event within 100 days after the
end of each fiscal year of the Borrower, a copy of the annual audit
report of the Borrower and its Subsidiaries prepared by nationally
recognized independent certified public accountants, which annual report
shall include the balance sheet of the Borrower and its Subsidiaries as
at the end of such fiscal year and the related statements of income,
shareholders’ equity and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, all presented on a consolidated basis in
reasonable detail and all prepared in accordance with GAAP.
	 
	 	     (b) As soon as available and in any event within 55 days after the
end of each of the first three quarters of each fiscal year of the
Borrower, a balance sheet of the Borrower and its Subsidiaries as at the
end of such quarter and related statements of earnings and cash flows of
the Borrower and its Subsidiaries for such quarter and for the year to
date, in reasonable detail and prepared on a consolidated basis in
accordance with GAAP, subject to year-end adjustments.
	 
	 	     (c) Concurrent with the delivery of any financial statements under
paragraph (a) or (b), a Compliance Certificate, duly executed by the
chief financial officer or treasurer of the Borrower.
	 
	 	     (d) Promptly following the issuance of any Authorizing Order, a
favorable opinion of counsel to the Borrower, in form and substance
reasonably acceptable to the Agent, addressed to the Agent and the Banks,
advising the Agent and the Banks of such issuance, stating the
restrictions, if any, that such Authorizing Order imposes on the
Borrower’s ability to obtain Borrowings or Letters of Credit hereunder,
and attaching a copy of such Authorizing Order.
	 
	 	     (e) Promptly after the sending or filing thereof, copies of all
regular and periodic financial reports which the Borrower or any
Subsidiary shall file with the SEC or any national securities exchange.
	 
	 	     (f) Immediately after the commencement thereof, notice in writing of
all litigation and of all proceedings before any governmental or
regulatory agency affecting the Borrower or any Restricted Subsidiary of
the type described in Section 4.7 or which seek a monetary recovery
against the Borrower or any Restricted Subsidiary combined in excess of
$50,000,000.

34

 

		
	 	     (g) As promptly as practicable (but in any event not later than five
Business Days) after an officer of the Borrower obtains knowledge of the
occurrence of any Default or Event of Default, notice of such occurrence,
together with a detailed statement by a responsible officer of the
Borrower of the steps being taken by the Borrower to cure the effect of
such event.
	 
	 	     (h) Promptly upon becoming aware of any Reportable Event or the
occurrence of any prohibited transaction (as defined in Section 4975 of
the Internal Revenue Code or Section 406 of ERISA) in connection with any
Plan or any trust created thereunder which could reasonably be expected
to result in a liability to the Borrower or any Subsidiary in excess of
$50,000,000, a written notice specifying the nature thereof, what action
the Borrower has taken, is taking or proposes to take with respect
thereto, and, when known, any action taken or threatened by the Internal
Revenue Service, the Pension Benefit Guaranty Corporation or the
Department of Labor with respect thereto.
	 
	 	     (i) Promptly upon their receipt, copies of (a) all notices received
by the Borrower, any Restricted Subsidiary or ERISA Affiliate of the
Pension Benefit Guaranty Corporation’s intent to terminate any Plan or to
have a trustee appointed to administer any Plan, and (b) all notices
received by the Borrower, any Restricted Subsidiary or any ERISA
Affiliate from a Multiemployer Plan concerning the imposition or amount
of withdrawal liability imposed pursuant to Section 4202 of ERISA, which
withdrawal liability individually or in the aggregate exceeds
$50,000,000.
	 
	 	     (j) All notices required to be delivered under Section 10.13.
	 
	 	     (k) Promptly after it obtains knowledge of any such change, notice
(by telephone, followed by written notice transmitted promptly thereafter
in accordance with Section 10.4) of any change in the rating by S&P or
Moody’s of the First Collateral Trust Securities, together with the
details thereof, and of any announcement by S&P or Moody’s that its
rating is “under review” or that any such rating has been placed on a
“CreditWatch List”® or “watch list” or that any similar action has been
taken by such rating agency.
	 
	 	     (l) Such other information respecting the financial condition and
results of operations of the Borrower or any Subsidiary as any Bank may
from time to time reasonably request.

Section 5.2 Books and Records; Inspection and Examination.

The Borrower will keep, and will cause each Subsidiary to keep, accurate books
of record and account for itself in which true and complete entries will be
made in accordance with GAAP. Upon request of any Applicable Party, as defined
below, the Borrower will, and will cause each Subsidiary to, give any
representative of such Applicable Party access to, and permit such
representative to examine, copy or make extracts from, any and all books,
records and documents in its possession (except to the extent that such access
is restricted by law or by a bona fide non-disclosure agreement not entered
into primarily for the purpose of evading the requirements of this Section), to
inspect any of its properties (subject to such physical security

35

 

requirements as the Borrower or the applicable Subsidiary may require) and to
discuss its affairs, finances and accounts with any of its principal officers,
all at such times during normal business hours, upon reasonable notice, and as
often as such Applicable Party may reasonably request. As used in this Section
5.2, “Applicable Party” means (i) so long as any Event of Default has occurred
and is continuing, the Agent or any Bank, and (ii) at all other times, the
Agent. The provisions of this Section 5.2 shall in no way preclude any Bank
from discussing the general affairs, finances and accounts of the Borrower with
any of its principal officers at such times during normal business hours and as
often as may be agreed to between the Borrower and such Bank.

Section 5.3 Compliance with Laws.

The Borrower will, and will cause each Subsidiary to, comply with the
requirements of applicable laws and regulations, the noncompliance with which
would effect a Material Adverse Change.

Section 5.4 Payment of Taxes and Other Claims.

The Borrower will, and will cause each Subsidiary to, pay or discharge, when
due, (a) all taxes, assessments and governmental charges levied or imposed upon
it or upon its income or profits, or upon any properties belonging to it, prior
to the date on which penalties attach thereto, (b) all federal, state and local
taxes required to be withheld by it, and (c) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien or charge
upon any properties of the Borrower or any Subsidiary; provided, that neither
the Borrower nor any Subsidiary shall be required to pay any such tax,
assessment, charge or claim (i) whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which the
Borrower or such Subsidiary has provided adequate reserves in accordance with
GAAP or (ii) where failure to pay such tax, assessment, charge or claim could
not reasonably be expected to result in a liability in excess of $10,000,000.

Section 5.5 Maintenance of Properties.

The Borrower will keep and maintain, and will cause each Subsidiary to keep and
maintain, all of its properties necessary or useful in its business in good
condition, repair and working order; provided, however, that nothing in this
Section shall prevent the Borrower or any Subsidiary from discontinuing the
operation and maintenance of, or disposing of, any of its properties if (i) (A)
such discontinuance or disposition is, in the reasonable judgment of the
Borrower or that Subsidiary, desirable in the conduct of its business, and (B)
no Default or Event of Default exists at the time of, or will be caused by,
such discontinuance or disposition, or (ii) such discontinuance or disposition
relates to obsolete or worn-out property.

Section 5.6 Insurance.

The Borrower will, and will cause each Restricted Subsidiary to, obtain and
maintain insurance with insurers reasonably believed by the Borrower or such
Restricted Subsidiary to be responsible and reputable, in such amounts and
against such risks as is usually carried by companies in similar circumstances
engaged in similar business and owning similar properties in the same general
areas in which the Borrower or that Restricted Subsidiary operates.

36

 

Section 5.7 Preservation of Corporate Existence.

The Borrower will, and will cause each Restricted Subsidiary to, preserve and
maintain its corporate existence and all of its rights, privileges and
franchises; provided, however, that neither the Borrower nor any Restricted
Subsidiary shall be required to preserve any of its rights, privileges and
franchises or to maintain its corporate existence if (i) its Board of Directors
shall reasonably determine that the preservation or maintenance thereof is no
longer desirable in the conduct of the business of the Borrower or that
Restricted Subsidiary, and (ii) no Default or Event of Default exists upon, or
will be caused by, the termination of such right, privilege, franchise or
existence; provided, further, that in no event shall the foregoing be construed
to permit the Borrower to terminate its corporate existence.

Section 5.8 Delivery of Information.

At any time when the Borrower is not subject to Section 13 or 15(d) of the
Exchange Act, for the benefit of holders from time to time of Pledged
Securities, the Borrower agrees to furnish at its expense, upon request, to
holders of Pledged Securities and prospective purchasers of securities
information satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Act.

Section 5.9 Use of Proceeds.

The Borrower will, and will cause each Subsidiary to, use the proceeds of the
Advances and L/C Amounts for general corporate purposes (including, without
limitation, support of commercial paper) and to repay outstanding Advances and
L/C Amounts. The Borrower will not, nor will it permit any Subsidiary to, use
any of the proceeds of the Advances and L/C Amounts to purchase or carry any
“margin stock” (as defined in Regulation U) or to make any acquisition of any
corporation, partnership, limited liability company or other business entity
unless, prior to making such acquisition, the Borrower or such Subsidiary shall
have obtained written approval from the board of directors or other governing
body of such entity.

ARTICLE VI

NEGATIVE COVENANTS

So long as any Note shall remain unpaid or any Commitment or L/C Amount shall
be outstanding, the Borrower agrees that, without the prior written consent of
the Required Banks:

Section 6.1 Liens.

The Borrower will not create, incur, assume or suffer to exist any Lien on any
of its assets, now owned or hereafter acquired, and will not permit any
Subsidiary to create, incur, assume or suffer to exist any Lien on any of such
Subsidiary’s assets, now owned or hereafter acquired, relating to any
indebtedness of such Subsidiary with respect to which the Borrower has any
obligation for the payment of money; excluding, however, from the operation of
the foregoing:

		
	 	     (a) Liens for taxes or assessments or other governmental charges to
the extent not required to be paid by Section 5.4.

37

 

		
	 	     (b) Materialmen’s, merchants’, carriers’ worker’s, repairer’s, or
other like liens arising in the ordinary course of business to the extent
not required to be paid by Section 5.4.

		
	 	     (c) Pledges or deposits to secure obligations under worker’s
compensation laws, unemployment insurance, social security and other
similar laws, or to secure the performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or leases or to secure
statutory obligations or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds in the ordinary course of business.
	 
	 	     (d) Zoning restrictions, easements, licenses, restrictions on the
use of real property or minor irregularities in title thereto, which do
not materially impair the use of such property in the operation of the
business of the Borrower and its Subsidiaries taken as a whole or the
value of such property for the purpose of such business.
	 
	 	     (e) Purchase money Liens upon or in property acquired after the date
hereof, provided that (i) such Lien is created not later than the 90th
day following the acquisition or completion of construction of such
property by the Borrower or its applicable Subsidiary, and (ii) no such
Lien extends or shall extend to or cover any property of the Borrower or
its Subsidiaries other than the property then being acquired, fixed
improvements then or thereafter erected thereon and improvements and
modifications thereto necessary to maintain such properties in working
order.
	 
	 	     (f) Liens granted by any Acquisition Target prior to the acquisition
by the Borrower or any Subsidiary of any interest in such Acquisition
Target or its assets, so long as (i) such Lien was granted by the
Acquisition Target prior to such acquisition and not in contemplation
thereof, and (ii) no such Lien extends to any assets of the Borrower or
any Subsidiary other than the assets of the Acquisition Target and
improvements and modifications thereto necessary to maintain such
properties in working order or, in the case of an asset transfer, the
assets so acquired by the Borrower or the applicable Subsidiary and
improvements and modifications thereto.
	 
	 	     (g) Liens (other than those described in subsection (e)) securing
any indebtedness for borrowed money in existence on the date hereof and
listed in Schedule 6.1 hereto.
	 
	 	     (h) Liens created under or in connection with this Agreement, the
First Collateral Trust Securities Indenture and the First Mortgage Bond
Indenture.
	 
	 	     (i) Liens permitted under the First Collateral Trust Securities
Indenture and the First Mortgage Bond Indenture as such indentures exist
on the date hereof, without regard to any waiver, amendment, modification
or restatement thereof.
	 
	 	     (j) Liens securing any refinancing of indebtedness secured by the
Liens described in paragraphs (e), (f) and (g), so long as the amount of
such indebtedness secured by any such Lien does not exceed the amount of
such refinanced indebtedness immediately prior to the refinancing and
Liens do not extend to assets other than those encumbered prior to such
refinancing and improvements and modifications thereto.

38

 

		
	 	     (k) Liens granted by any Subsidiary of the Borrower in favor of the
Borrower or any wholly-owned Subsidiary of the Borrower.
	 
	 	     (l) Liens not otherwise described in this Section 6.1, so long as
the aggregate amount of indebtedness secured by all such Liens does not
at any time exceed 10% of the Tangible Net Worth of the Borrower and its
Subsidiaries.

Section 6.2 Sale of Assets.

The Borrower will not, and will not permit any Subsidiary to, sell, lease,
assign, transfer or otherwise dispose of all or a Material Part of the Assets
of the Borrower and its Subsidiaries (whether in one transaction or in a series
of transactions) to any other Person other than (i) in the ordinary course of
business, (ii) dispositions of property no longer used or useful in the
business of the Borrower or any Subsidiary and (iii) dispositions of assets the
net proceeds of which are invested or re-invested, or held in cash or
cash-equivalents for reinvestment, in other energy-related assets; provided,
however, that a wholly-owned Subsidiary of the Borrower may sell, lease, or
transfer all or a substantial part of its assets to the Borrower or another
wholly-owned Subsidiary of the Borrower, and the Borrower or such other
wholly-owned Subsidiary, as the case may be, may acquire all or substantially
all of the assets of the Subsidiary so to be sold, leased or transferred to it
and any such sale, lease or transfer shall not be included in determining if
the Borrower and/or its Subsidiaries disposed of a Material Part of its Assets.
Notwithstanding the foregoing, the operating agreement between TRANSLink
Transmission Co., LLC and the Borrower shall not be treated as a disposition
for the purposes of this Section 6.2.

Section 6.3 Consolidation and Merger.

The Borrower will not consolidate with or merge into any Person, or permit any
other Person to merge into it, or acquire (in a transaction analogous in
purpose or effect to a consolidation or merger) all or substantially all of the
assets of any other Person; provided, however, that the restrictions contained
in this Section shall not apply to or prevent the consolidation or merger of
any Person with, or a conveyance or transfer of its assets to, the Borrower so
long as (i) no Default or Event of Default exists at the time of, or will be
caused by, such consolidation, merger, conveyance or transfer, and (ii) the
Borrower shall be the continuing or surviving corporation.

Section 6.4 Hazardous Substances.

The Borrower will not, and will not permit any Subsidiary to, cause or permit
any Hazardous Substance to be disposed of in any manner, or on, under or at any
real property which is operated by the Borrower or any Subsidiary or in which
the Borrower or any Subsidiary has any interest, if such disposition could
reasonably be expected to result in a Material Adverse Change.

Section 6.5 Restrictions on Nature of Business.

The Borrower will not engage in any line of business materially different from
that presently engaged in by the Borrower.

39

 

Section 6.6 Transactions with Affiliates.

The Borrower will not (i) make any loan or capital contribution to, or any
other investment in, any Affiliate or make any other cash transfer to any
Affiliate of the Borrower or (ii) enter into any transaction or series of
transactions, whether or not in the ordinary course of business, with any
officer, director, shareholder, Affiliate (other than a Subsidiary) of the
Borrower; provided, however, that the foregoing shall not prohibit any of the
following:

		
	 	     (a) Transactions made upon fair and reasonable terms no less
favorable to the Borrower than would obtain, taking into account all
facts and circumstances, in a comparable arm’s-length transaction with a
Person not an officer, director, shareholder or Affiliate of the
Borrower.
	 
	 	     (b) Dividends to the Parent.
	 
	 	     (c) Transactions with Affiliates which transactions are subject to
the jurisdiction of the Federal Energy Regulatory Commission (“FERC”),
the SEC or the Public Utilities Commission of the State of Colorado.
	 
	 	     (d) Allocation of taxes, tax benefits and tax credits in accordance
with the restrictions and requirements of PUHCA.
	 
	 	     (e) Contributions of capital to Subsidiaries.
	 
	 	     (f) Any investment in TRANSLink Transmission Co., LLC (“TRANSLink”)
or any operating agreement between TRANSLink and the Borrower and/or its
Subsidiaries, complying with the requirements of FERC Order No. 2000.

Section 6.7 Ratio of Funded Debt to Total Capital.

The Borrower will not at any time permit its ratio of total Funded Debt to
Total Capital, determined on a consolidated basis with respect to the Borrower
and its Subsidiaries as at the end of each fiscal quarter of the Borrower, to
be greater than 0.60 to 1.

Section 6.8 Interest Coverage Ratio.

The Borrower will not at any time permit its Interest Coverage Ratio,
determined as of the end of each fiscal quarter of the Borrower, to be less
than 2.75 to 1.

ARTICLE VII

EVENTS OF DEFAULT, RIGHTS AND REMEDIES

Section 7.1 Events of Default.

“Event of Default”, wherever used herein, means any one of the following
events:

		
	 	     (a) Default in the payment of any principal of any Advance or L/C
Amount when it becomes due and payable.

40

 

		
	 	     (b) Default in the payment of any interest on any Obligations or any
fees required under Section 2.8 or under Section 2.9 when the same become
due and payable and the continuance of such default for five Business
Days.
	 
	 	     (c) Default in the performance, or breach, of any covenant or
agreement on the part of the Borrower contained in Article VI hereof
(other than Section 6.4).
	 
	 	     (d) Default in the performance, or breach, of any covenant or
agreement of the Borrower in this Agreement or any other Loan Document
(including but not limited to Section 6.4, but excluding any other
covenant or agreement a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and the continuance
of such default or breach for a period of 30 days after the Agent, at the
request of any Bank, has given notice to the Borrower specifying such
default or breach and requiring it to be remedied.
	 
	 	     (e) Any representation or warranty made by the Borrower in this
Agreement or any other Loan Document or by the Borrower (or any of its
officers) in any certificate, instrument, or statement contemplated by or
made or delivered pursuant to or in connection with this Agreement, shall
prove to have been incorrect in any material respect when made.
	 
	 	     (f) The Borrower or the Parent shall assert that any Loan Documents
or any Pledged Securities are unenforceable in accordance with their
terms; or the principal amount outstanding under the Pledged Securities
shall at any time be less than the greater of the Outstandings or the
Commitment Amounts.
	 
	 	     (g) A default in the payment when due (after giving effect to any
applicable grace period) of principal or interest with respect to any
indebtedness or any Swap Contract of the Borrower or any Subsidiary
(other than the Obligations) if the aggregate amount of all such
indebtedness as to which such payment defaults exist is not less than
$50,000,000.
	 
	 	     (h) A default (other than a default described in paragraph (g))
under any bond, debenture, note or other evidence of indebtedness or any
Swap Contract of the Borrower or any Subsidiary (other than the
Obligations) or under any indenture or other instrument under which any
such evidence of indebtedness has been issued or by which it is governed
and the expiration of the applicable period of grace, if any, specified
in such evidence of indebtedness, indenture or other instrument if the
effect of such default is to cause or to permit the holder of such
indebtedness (or trustee or agent on behalf of such holder) to cause such
indebtedness to come due prior to its stated maturity or is to cause or
to permit the counterparty in respect of such Swap Contract to elect an
early termination date in respect of such Swap Contract; provided,
however, that no Event of Default shall be deemed to have occurred under
this paragraph if the aggregate amount owing as to all such indebtedness
and Swap Contracts as to which such defaults have occurred and are
continuing is less than $50,000,000; provided further that if such
default shall be cured by the Borrower or such Subsidiary, or waived by
the holders of such indebtedness or counterparties in respect of such
Swap Contracts, in each case prior to

41

 

		
	 	the commencement of any action under Section 7.2 and as may be
permitted by such evidence of indebtedness, indenture, other instrument
or Swap Contract, then the Event of Default hereunder by reason of such
default shall be deemed likewise to have been thereupon cured or waived.

		
	 	     (i) The Borrower or any Restricted Subsidiary shall be adjudicated a
bankrupt or insolvent, or admit in writing its inability to pay its debts
as they mature, or make an assignment for the benefit of creditors; or
the Borrower or any Restricted Subsidiary shall apply for or consent to
the appointment of any receiver, trustee, or similar officer for it or
for all or any substantial part of its property; or such receiver,
trustee or similar officer shall be appointed without the application or
consent of the Borrower or such Restricted Subsidiary, and such
appointment shall continue undischarged for a period of 60 days; or the
Borrower or any Restricted Subsidiary shall institute (by petition,
application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution,
liquidation or similar proceeding relating to it under the laws of any
jurisdiction; or any such proceeding shall be instituted (by petition,
application or otherwise) against the Borrower or any Restricted
Subsidiary and shall continue undischarged for 60 days; or any judgment,
writ, warrant of attachment or execution or similar process shall be
issued or levied against a substantial part of the property of the
Borrower or any Restricted Subsidiary and such judgment, writ, or similar
process shall not be released, vacated, stayed or fully bonded within 60
days after its issue or levy.
	 
	 	     (j) A petition shall be filed by the Borrower or any Restricted
Subsidiary under the United States Bankruptcy Code naming the Borrower or
that Restricted Subsidiary as debtor; or an involuntary petition shall be
filed against the Borrower or any Restricted Subsidiary under the United
States Bankruptcy Code, and such petition shall not have been dismissed
within 60 days after such filing; or an order for relief shall be entered
in any case under the United States Bankruptcy Code naming the Borrower
or any Restricted Subsidiary as debtor.
	 
	 	     (k) The Parent shall cease to own 100% of all classes of capital
stock of the Borrower; or a Change of Control shall occur with respect to
the Parent.
	 
	 	     (l) The rendering against the Borrower or any Subsidiary of a final
judgment, decree or order for the payment of money if the amount of such
judgment, decree or order, together with the amount of all other such
judgments, decrees and orders then outstanding, less (in each case) the
portion thereof covered by insurance proceeds, is greater than
$50,000,000 and if such judgment, decree or order remains unsatisfied and
in effect for any period of 30 consecutive days without a stay of
execution.
	 
	 	     (m) Any Plan shall have been terminated as a result of which the
Borrower or any Subsidiary or ERISA Affiliate has incurred an unfunded
liability in excess of $50,000,000; or a trustee shall have been
appointed by an appropriate United States District Court to administer
any Plan, or the Pension Benefit Guaranty Corporation shall have
instituted proceedings to terminate any Plan or to appoint a trustee to
administer any Plan and in either case such action could reasonably be
expected to result in liability to

42

 

		
	 	the Borrower or any Subsidiary in excess of $50,000,000, or
withdrawal liability in excess of $50,000,000 shall have been asserted
against the Borrower or any Subsidiary or ERISA Affiliate by a
Multiemployer Plan; or the Borrower or any Subsidiary or ERISA Affiliate
shall have incurred any joint and several liability to the Pension
Benefit Guaranty Corporation, the Internal Revenue Service or the
Department of Labor, or the Borrower or any Subsidiary shall have
incurred any other liability to the Pension Benefit Guaranty Corporation,
the Internal Revenue Service or the Department of Labor in excess of
$50,000,000 with respect to any Plan; or any Reportable Event that the
Required Banks may determine in good faith could reasonably be expected
to constitute grounds for the termination of any Plan by the Pension
Benefit Guaranty Corporation, for the appointment by the appropriate
United States District Court of a trustee to administer any Plan or for
the imposition of withdrawal liability with respect to a Multiemployer
Plan, and which, in any such case, could reasonably be expected to result
in liability to the Borrower or any Subsidiary or any ERISA Affiliate in
excess of $50,000,000 shall have occurred and be continuing 30 days after
written notice to such effect shall have been given to the Borrower by
the Banks.

		
	 	     (n) Any Authorizing Order or other governmental license or other
permission necessary for the maintenance of Obligations outstanding or
the conduct of the Borrower’s business substantially as presently
conducted shall be suspended or revoked or shall fail to be renewed upon
expiration.
	 
	 	     (o) Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
Material Part of the Assets of the Borrower and its Subsidiaries.
	 
	 	     (p) Failure of the Borrower to maintain on deposit in the Cash
Collateral Account on and after the fifth Business Day preceding the
Commitment Termination Date (or earlier, if required pursuant to Section
7.2(c)) an amount equal to the aggregate face amount of all outstanding
Letters of Credit.

Section 7.2 Rights and Remedies.

Upon the occurrence of an Event of Default or at any time thereafter until such
Event of Default is waived by the Required Banks or cured, the Agent may, with
the consent of the Required Banks, and shall, upon the request of the Required
Banks, exercise any or all of the following rights and remedies:

		
	 	     (a) The Agent may, by notice to the Borrower, declare the
Commitments to be terminated, whereupon the same shall forthwith
terminate.
	 
	 	     (b) The Agent may, by notice to the Borrower, declare the entire
unpaid principal amount of the Obligations then outstanding, all interest
accrued and unpaid thereon, and all other Obligations payable under this
Agreement to be forthwith due and payable, whereupon the Obligations, all
such accrued interest and all such amounts shall become and be forthwith
due and payable, without presentment, demand, protest or further notice
of any kind, all of which are hereby expressly waived by the Borrower.

43

 

		
	 	     (c) If any Letter of Credit remains outstanding, the Agent may, by
notice to the Borrower, require the Borrower to deposit in the Cash
Collateral Account an amount in immediately available funds that,
together with any other amounts then in the Cash Collateral Account,
equals the aggregate face amount of all such outstanding Letters of
Credit.
	 
	 	     (d) The Banks may, without notice to the Borrower and without
further action, apply any and all money owing by any Bank to the Borrower
to the payment of the Obligations then outstanding, including accrued
interest. For purposes of this paragraph (d), “Bank” means the Banks, as
defined elsewhere in this Agreement, and any participant in the loans
made hereunder; provided, however, that each such participant, by
exercising its rights under this paragraph (d), agrees that it shall be
obligated under Section 8.17 with respect to such payment as if it were a
Bank for purposes of that Section.
	 
	 	     (e) The Agent may exercise and enforce all rights and remedies
available to it in respect of the Pledged Securities and the Cash
Collateral Account.
	 
	 	     (f) The Agent and the Banks may exercise any other rights and
remedies available to them by law or agreement.

Notwithstanding the foregoing, upon the occurrence of an Event of Default
described in Section 7.1(j) hereof (whether or not such Event of Default also
arises under Section 7.1(i) hereof), the Commitments shall terminate and the
entire unpaid principal amount of the Notes then outstanding, all interest
accrued and unpaid thereon, and all other amounts payable under this Agreement
shall be immediately due and payable without presentment, demand, protest or
notice of any kind.

Section 7.3 Pledge of Cash Collateral Account.

The Borrower hereby pledges, and grants the Agent, as agent for the Banks,
including the Issuing Bank, a security interest in, all sums held in the Cash
Collateral Account from time to time and all proceeds thereof as security for
the payment of all amounts due and to become due from the Borrower to the
Issuing Bank, the Agent and/or the Banks pursuant to this Agreement, including
but not limited to both principal of and interest on the Notes and all
renewals, extensions and modifications thereof and any notes issued in
substitution therefor, and specifically including the Borrower’s obligation to
reimburse the Issuing Bank for any amount drawn under any Letter of Credit,
whether such reimbursement obligation arises directly under this Agreement or
under a separate reimbursement agreement. Upon request of the Borrower, the
Agent shall permit the Borrower to withdraw from the Cash Collateral Account,
so long as no Default or Event of Default then exists, the lesser of (i) the
Excess Balance (as defined below), or (ii) the balance of the Cash Collateral
Account. If a Default or Event of Default then exists, the Agent shall, upon
the request of the Borrower apply the Excess Balance to the payment of the
Obligations. As used herein, “Excess Balance” means (A) after the fifth
Business Day preceding the Commitment Termination Date, the amount by which the
balance of the Cash Collateral Account exceeds the L/C Amount, and (B) prior to
the fifth Business Day preceding the Commitment Termination Date, the balance
of the Cash Collateral Account. The Agent shall have full control

44

 

of the Cash Collateral Account, and, except as set forth above, the Borrower
shall have no right to withdraw the funds maintained in the Cash Collateral
Account.

Section 7.4 Provisions Regarding Pledged Securities.

     (a)  Pledged Securities. The Borrower covenants and agrees that, for the
purpose of providing security for the payment of the principal of the Advances
and L/C Amounts (including the obligation to fund the Cash Collateral Account),
it will execute and deliver on May 16, 2003, the non-interest bearing Pledged
Securities to the Agent in an aggregate principal amount equal to the aggregate
Commitment Amounts. The Pledged Securities shall mature on May 14, 2004,
unless payable prior thereto upon an Event of Default under Section 7.1(a),
(b), or (p) or upon another Event of Default that results in an acceleration of
the Obligations.

     Notwithstanding the foregoing, (x) without the prior written consent of
the Agent, the Borrower shall make no payment with respect to the Pledged
Securities at any time while any Commitment or Letter of Credit remains
outstanding, and (y) the Agent shall not demand payment of the Pledged
Securities from any obligor thereunder prior to the occurrence of an Event of
Default.

     On the date which is thirty (30) days after the maturity of the Pledged
Securities, the Trustee may conclusively presume that the obligation of the
Borrower to pay principal on the Pledged Securities as the same shall have come
due and payable shall have been fully satisfied and discharged unless and until
the Trustee shall have received a Payment Demand from the Agent stating that
the principal of Pledged Securities has become due and payable and specifying
the amount of funds required to make such payment. Notwithstanding anything to
the contrary contained herein, the aggregate amount actually due on the Pledged
Securities shall not exceed the aggregate principal amount of the Advances and
L/C Amounts including the obligation to fund the Cash Collateral Account.

     The Agent shall hold on deposit in the Cash Collateral Account and apply
in accordance with Section 7.3 any proceeds of Pledged Securities paid in
respect of the Borrower’s obligation to fund the Cash Collateral Account.

     (b)  Effect of Reduction on Termination of Commitment. Upon any reduction
or termination of the Commitments, the Pledged Securities shall be deemed
satisfied and discharged as to the reduced or terminated unutilized portion of
the Commitments, as and to the extent provided in the Pledged Securities.

     (c)  Voting Restrictions. The Agent’s rights to vote or consent under the
First Collateral Trust Securities Indenture in respect of the Pledged
Securities shall be restricted as and to the extent provided in the Pledged
Securities.

     (d)  Restrictions on Transfer of Bonds. The Pledged Securities are not
transferable except to a successor to the Agent under this Agreement.

     (e)  Securities Act Representation. Each of the Agent and the Banks
represents to the Borrower that it is an “accredited investor” within the
meanings of Rule 501(a) of Regulation D

45

 

 and is acquiring its interest in the Pledged Securities hereunder as
security for the Obligations and not with a view to any sale or distribution
thereof within the meaning of the Act.

ARTICLE VIII

THE AGENT

Section 8.1 Appointment; Nature of Relationship.

Bank One is hereby appointed by each of the Banks as its contractual
representative (herein referred to as the “Agent”) hereunder and under each
other Loan Document, and each of the Banks irrevocably authorizes the Agent to
act as the contractual representative of such Bank with the rights and duties
expressly set forth herein and in the other Loan Documents. The Agent agrees
to act as such contractual representative upon the express conditions contained
in this Article VIII. Notwithstanding the use of the defined term “Agent,” it
is expressly understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Bank by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Banks with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Banks’
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Banks, (ii) is a “representative” of the Banks within the
meaning of Section 9-105 of the 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 Banks hereby agrees to assert no claim against the Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Bank hereby waives.

Section 8.2 Powers.

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

Section 8.3 General Immunity.

Neither the Agent nor any of its directors, officers, agents or employees shall
be liable to the Borrower, the Banks or any Bank 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.

Section 8.4 No Responsibility for Loans, Recitals, etc.

Neither the Agent nor any of its directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into, or verify (a)
any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance

46

 

or observance of any of the covenants or agreements of any obligor under any
Loan Document, including, without limitation, any agreement by an obligor to
furnish information directly to each Bank; (c) the satisfaction of any
condition specified in Article III, except receipt of items required to be
delivered solely to the Agent; (d) the existence or possible existence of any
Default or Event of Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith, or (f) the financial condition of
the Borrower or of any of the Borrower’s Subsidiaries. The Agent shall have no
duty to disclose to the Banks information that is not required to be furnished
by the Borrower to the Agent at such time, but is voluntarily furnished by the
Borrower to the Agent (either in its capacity as Agent or in its individual
capacity).

Section 8.5 Action on Instructions of Banks.

The 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 Banks (or, when expressly required
hereunder, all of the Banks), and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all of the Banks. The
Banks hereby acknowledge that the 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 Banks. The 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 Banks
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.

Section 8.6 Employment of Agents and Counsel.

The Agent may execute any of its duties as Agent hereunder and under any other
Loan Document by or through employees, agents, and attorneys-in-fact and shall
not be answerable to the Banks, 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 Agent shall be
entitled to advice of counsel concerning the contractual arrangement between
the Agent and the Banks and all matters pertaining to the Agent’s duties
hereunder and under any other Loan Document.

Section 8.7 Reliance on Documents; Counsel.

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

Section 8.8 Agent’s Reimbursement and Indemnification.

The Banks agree to reimburse and indemnify the Agent ratably in proportion to
their respective Commitments (or, if the Commitments have been terminated, in
proportion to their Commitments immediately prior to such termination) (i) for
any amounts not reimbursed by the Borrower for which the Agent is entitled to
reimbursement by the Borrower under the Loan

47

 

Documents, (ii) for any other expenses incurred by the Agent on behalf of the
Banks, in connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents (including, without limitation, for any
expenses incurred by the Agent in connection with any dispute between the Agent
and any Bank or between two or more of the Banks) 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 Agent in any way
relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or asserted
against the Agent in connection with any dispute between the Agent and any Bank
or between two or more of the Banks), or the enforcement of any of the terms of
the Loan Documents or of any such other documents, provided that (i) no Bank
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 Agent
and (ii) any indemnification required pursuant to Section 2.17(d) shall,
notwithstanding the provisions of this Section 8.8, be paid by the relevant
Bank in accordance with the provisions thereof. The obligations of the Banks
under this Section 8.8 shall survive payment of the Obligations and termination
of this Agreement.

Section 8.9 Notice of Default.

The Agent shall not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the Agent has received written
notice from a Bank or the Borrower referring to this Agreement describing such
Default or Event of Default and stating that such notice is a “notice of
default”. In the event that the Agent receives such a notice, the Agent shall
give prompt notice thereof to the Banks.

Section 8.10 Rights as a Bank.

In the event the Agent is a Bank, the Agent shall have the same rights and
powers hereunder and under any other Loan Document with respect to its
Commitment and its Advances as any Bank and may exercise the same as though it
were not the Agent, and the term “Bank” or “Banks” shall, at any time when the
Agent is a Bank, unless the context otherwise indicates, include the Agent in
its individual capacity. The 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 of its Subsidiaries in which the
Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person. The Agent, in its individual capacity, is not obligated to
remain a Bank.

Section 8.11 Bank Credit Decision.

Each Bank acknowledges that it has, independently and without reliance upon the
Agent, the Arranger or any other Bank 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 Bank also acknowledges that
it will, independently and without reliance upon the Agent, the Arranger or

48

 

any other Bank 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.

Section 8.12 Successor Agent.

The Agent may resign at any time by giving written notice thereof to the Banks
and the Borrower, such resignation to be effective upon the appointment of a
successor Agent or, if no successor Agent has been appointed, forty-five days
after the retiring Agent gives notice of its intention to resign. The Agent
may be removed at any time with or without cause by written notice received by
the Agent from the Required Banks, such removal to be effective on the date
specified by the Required Banks; provided that the Agent may not be removed
unless the Agent (in its individual capacity) and any affiliate thereof acting
as Issuing Bank is relieved of all of its duties as Issuing Bank pursuant to
documentation reasonably satisfactory to such Person on or prior to the date of
such removal. Upon any such resignation or removal, the Required Banks shall
have the right to appoint, on behalf of the Borrower and the Banks, a Bank as a
successor Agent. If no successor Agent shall have been so appointed by the
Required Banks within thirty days after the resigning Agent’s giving notice of
its intention to resign, then the resigning Agent may appoint, on behalf of the
Borrower and the Banks, a successor Agent. Notwithstanding the foregoing, (i)
the Agent may at any time without the consent of any Bank and with the consent
of the Borrower, not to be unreasonably withheld or delayed, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder and (ii)
so long as no Event of Default exists, no successor Agent may be appointed
without the prior written consent of the Borrower, not to be unreasonably
withheld or delayed. If the Agent has resigned or been removed and no
successor Agent has been appointed, the Banks may perform all the duties of the
Agent hereunder and the Borrower shall make all payments in respect of the
Obligations to the applicable Bank and for all other purposes shall deal
directly with the Banks. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $100,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning or removed Agent. Upon the effectiveness of the resignation or
removal of the Agent, the resigning or removed 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 Agent, the provisions of this
Article VIII shall continue in effect for the benefit of such Agent in respect
of any actions taken or omitted to be taken by it while it was acting as the
Agent hereunder and under the other Loan Documents. In the event that there is
a successor to the Agent by merger, or the Agent assigns its duties and
obligations to an Affiliate pursuant to this Section 8.12, then the term “Prime
Rate” as used in this Agreement shall mean the prime rate, base rate or other
analogous rate of the new Agent.

Section 8.13 Delegation to Affiliates.

The Borrower and the Banks agree that the 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

49

 

to the same benefits of the indemnification, waiver and other protective
provisions to which the Agent is entitled under Articles VIII and X.

Section 8.14 Titles.

The Persons identified on the cover page, the signature pages or otherwise in
this Agreement, or in any document related hereto, as being the “Syndication
Agent” or “Co-Lead Arrangers” shall have no right, power, obligation,
liability, responsibility or duty under this Agreement or any other Loan
Document on account of such identification other than those applicable in their
capacity (if any) as Banks. Each Bank 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.

Section 8.15 Distribution of Payments and Proceeds.

		
	 	     (a) After deduction of any costs of collection as hereinafter
provided, the Agent shall remit to each Bank that Bank’s Percentage of
all payments of principal, interest, Letter of Credit fees payable under
Section 2.7(d) and facility and utilization fees payable under Section
2.8 that are received by the Agent under the Loan Documents. Each Bank’s
interest in the Loan Documents shall be payable solely from payments,
collections and proceeds actually received by the Agent under the Loan
Documents; and the Agent’s only liability to the Banks hereunder shall be
to account for each Bank’s Percentage of such payments, collections and
proceeds in accordance with this Agreement. If the Agent is ever
required for any reason to refund any such payments, collections or
proceeds, each Bank will refund to the Agent, upon demand, its Percentage
of such payments, collections or proceeds, together with its Percentage
of interest or penalties, if any, payable by the Agent in connection with
such refund. The Agent may, in its sole discretion, make payment to the
Banks in anticipation of receipt of payment from the Borrower. If the
Agent fails to receive any such anticipated payment from the Borrower,
each Bank shall promptly refund to the Agent, upon demand, any such
payment made to it in anticipation of payment from the Borrower, together
with interest for each day on such amount until so refunded at a rate
equal to the Federal Funds Effective Rate for each such day.
	 
	 	     (b) Notwithstanding the foregoing, if any Bank has wrongfully
refused to fund its Percentage of any Borrowing or other Advance as
required hereunder, or if the principal balance of any Bank’s Note is for
any other reason less than its Percentage of the aggregate principal
balances of the Notes then outstanding, the Agent may remit all payments
received by it to the other Banks until such payments have reduced the
aggregate amounts owed by the Borrower to the extent that the aggregate
amount owing to such Bank hereunder is equal to its Percentage of the
aggregate amount owing to all of the Banks hereunder. The provisions of
this paragraph are intended only to set forth certain rules for the
application of payments, proceeds and collections in the event that a
Bank has breached its obligations hereunder and shall not be deemed to
excuse any Bank from such obligations.

50

 

Section 8.16 Expenses.

All payments, collections and proceeds received or effected by the Agent may be
applied, first, to pay or reimburse the Agent for all costs, expenses, damages
and liabilities at any time incurred by or imposed upon the Agent in connection
with this Agreement or any other Loan Document (including but not limited to
all reasonable attorney’s fees, foreclosure expenses and advances made to
protect the security of collateral, if any, but excluding any costs, expenses,
damages or liabilities arising from the gross negligence or willful misconduct
of the Agent). If the Agent does not receive payments, collections or proceeds
from the Borrower or its properties sufficient to cover any such costs,
expenses, damages or liabilities within 30 days after their incurrence or
imposition, each Bank shall, upon demand, remit to the Agent its Percentage of
the difference between (i) such costs, expenses, damages and liabilities, and
(ii) such payments, collections and proceeds.

Section 8.17 Payments Received Directly by Banks.

If any Bank or other holder of a Note shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or
otherwise) on account of principal of or interest on any Note other than
through distributions made in accordance with Section 8.2, such Bank or holder
shall promptly give notice of such fact to the Agent and shall purchase from
the other Banks or holders such participations in the Notes held by them as
shall be necessary to cause the purchasing Bank or holder to share the excess
payment or other recovery ratably with each of them; provided, however, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Bank or holder, the purchase shall be rescinded
and the purchasing Bank restored to the extent of such recovery (but without
interest thereon).

Section 8.18 Agent not Offering Bonds.

Each Bank acknowledges that neither the Agent’s taking possession of the
Pledged Securities, nor its exercise of remedies with respect to the Pledged
Securities and subsequent distribution of proceeds thereunder, constitutes or
will constitute an offer of any security, a solicitation of an offer to buy any
security, or a placement of any security.

ARTICLE IX

ASSIGNMENTS AND PARTICIPATIONS

Section 9.1 Assignments.

		
	 	     (a) Any Bank may, at any time, assign a portion of its Obligations
and Commitment to an Eligible Lender (an “Applicant”) on any date (the
“Adjustment Date”) selected by such Bank subject to the terms and
provisions of this Section 9.1. The aggregate principal amount of the
Obligations and Commitment so assigned in any assignment shall be not
less than $5,000,000, and the assigning Bank shall retain at least
$5,000,000 of such Obligations and Commitment for its own account;
provided, however, that the foregoing restriction shall not apply to a
Bank assigning its entire Obligations and Commitment to the Applicant.
Any Bank proposing an assignment hereunder shall give notice of such
assignment to the Agent and the Borrower at least ten

51

 

		
	 	Business Days prior to such assignment (unless the Agent consents to
a shorter period of time). Such notice shall specify the identity of such
Applicant and the Percentage which it proposes that such Applicant
acquire (which Percentage shall be the same for the Commitment and the
Note held by the assigning Bank). Any assignment hereunder may be made
only with the prior written consent of the Agent, the Issuing Bank and
the Borrower; provided, however, that (i) in no event shall such consent
be unreasonably withheld, and (ii) the consent of the Borrower shall not
be required if a Default or Event of Default has occurred and is
continuing at the time of such assignment.

		
	 	     (b) Subject to the prior written consent of the Agent and the
Borrower (if applicable), to confirm the status of each Applicant as a
party to this Agreement and to evidence the assignment of the applicable
portion of the assigning Bank’s Commitment, Letter of Credit
participations and Advances in accordance herewith:

	 	(i)	 	the Borrower, such Bank, such Applicant, the
Issuing Bank and the Agent shall, on or before the Adjustment
Date, execute and deliver to the Agent an Assignment Agreement
(provided that, if a Default or Event of Default has occurred
and is continuing on the applicable Adjustment Date, the
assignment will be effective whether the Borrower signs it or
not), in substantially the form of Exhibit E (an “Assignment
Agreement”); and
	 
	 	(ii)	 	the Borrower will, at its own expense and in
exchange for the assigning Bank’s Note, execute and deliver to
the assigning Bank a new Note, payable to the order of the
Applicant in an amount corresponding to the applicable
interest in the assigning Bank’s rights and obligations
acquired by such Applicant pursuant to such assignment, and,
if the assigning Bank has retained interests in such rights
and obligations, a new Note, payable to the order of that Bank
in an amount corresponding to such retained interests. Such
new Notes shall be in an aggregate principal amount equal to
the principal amount of the Note to be replaced by such new
Notes (or, if less, the Commitment Amount of the assigning
Bank prior to giving effect to such assignment, unless such
assignment is made after the Commitment Termination Date, in
which case the aggregate principal amount of the new Notes
shall equal the outstanding principal balance of the Note to
be replaced by such new Notes), shall be dated the effective
date of such assignment and shall otherwise be in the form of
the Note to be replaced thereby. Such new Notes shall be
issued in substitution for, but not in satisfaction or payment
of, the Note being replaced thereby; and

Upon the execution and delivery of such Assignment Agreement and such Notes,
(a) this Agreement shall deemed to be amended to the extent, and only to the
extent, necessary to reflect the addition of such Additional Bank and the
resulting adjustment of Percentages arising therefrom, (b) the assigning Bank
shall be relieved of all obligations hereunder to the extent of the reduction
of all obligations hereunder and to the extent of the reduction of such Bank’s
Percentage, and (c) the Additional Bank shall become a party hereto and shall
be entitled to all rights, benefits and privileges accorded to a Bank herein
and in each other document or instrument executed pursuant hereto and subject
to all obligations of a Bank hereunder, including

52

 

the right to approve or disapprove actions which, in accordance with the terms
hereof, require the approval of the Required Banks or all Banks, and the
obligations to make Advances hereunder.

		
	 	     (c) In order to facilitate the addition of Additional Banks hereto,
the Borrower shall (subject to the written agreement of any prospective
Additional Bank to be subject to the confidentiality provisions of
Section 10.1) provide all reasonable assistance requested by each Bank
and the Agent relating thereto which shall not require undue effort or
expense on the part of the Borrower, including, without limitation, the
furnishing of such written materials and financial information regarding
the Borrower as any Bank or the Agent may reasonably request and the
participation by officers of the Borrower in a meeting or teleconference
call with any Applicant upon the reasonable request upon reasonable
notice of any Bank or the Agent.
	 
	 	     (d) Without limiting any other provision hereof:

	 	(i)	 	each Bank shall have the right at any time upon
written notice to the Borrower and the Agent (but without
requiring the consent of the Borrower or the Agent) to sell,
assign, transfer, or negotiate all or any part of its
Commitment, Advances, Notes, and other rights and obligations
under this Agreement and the Loan Documents to one or more
Affiliates of such Bank, provided that, unless consented to by
the Borrower and the Agent (which consent shall not be
unreasonably withheld), no such sale, assignment, transfer or
negotiation of Commitment shall relieve the transferring Bank
from its obligations (to the extent such Affiliate does not
fulfill its obligations) hereunder; and
	 
	 	(ii)	 	each Bank shall have the right at any time upon
written notice to the Borrower and the Agent (but without
requiring the consent of the Borrower or the Agent) to sell,
assign, transfer, or negotiate all or any part of its
Commitment, Advances, Notes, and other rights and obligations
under this Agreement and the Loan Documents to one or more
Banks, and any such sale, assignment, transfer or negotiation
shall relieve the transferring Bank from its obligations
hereunder to the extent of the obligations so transferred
(except, in any event, to the extent that the Borrower, any
other Bank or the Agent has rights against such transferring
Bank as a result of any default by such transferring Bank
under this Agreement);

provided, however, that any partial sale, assignment, transfer or negotiation
pursuant to this Section shall be pro rata as to all of the Commitment,
Obligations and Advances transferred.

		
	 	     (e) Simultaneous with any assignment under this Section, the Bank
making such assignment shall pay the Agent a transfer fee in the amount
of $3,500.
	 
	 	     (f) Notwithstanding anything to the contrary contained herein, any
Bank (a “Granting Bank”) may grant to a special purpose funding vehicle
(an “SPC”) of such Granting Bank, identified as such in writing from time
to time by the Granting Bank to

53

 

		
	 	the Agent and the Borrower, the option to provide to the Borrower
all or any part of any Advance that such Granting Bank would otherwise be
obligated to make to the applicable Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC
to make any Advance, (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Advance, the Granting
Bank shall be obligated to make such Advance pursuant to the terms
hereof, (iii) such Granting Bank’s other obligations under this Agreement
shall remain unchanged, (iv) such Granting Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations, and (v) the Borrower, the Agent and the other Banks shall
continue to deal solely and directly with such Granting Bank in
connection with such Granting Bank’s rights and obligations under this
Agreement (including any rights and obligations assigned to such SPC).
The making of an Advance by an SPC hereunder shall be deemed to utilize
the Commitment of the applicable Granting Bank to the same extent, and as
if, such Advance were made by such Granting Bank. Each party hereto
hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall
remain with the applicable Granting Bank). All notices hereunder to any
Granting Bank or the related SPC, and all payments in respect of the
Obligations due to such Granting Bank or the related SPC, shall be made
to such Granting Bank. In addition, each Granting Bank shall vote as a
Bank hereunder without giving effect to any assignment under this
paragraph (f), and no SPC shall have any vote as a Bank under this
Agreement for any purpose. In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of
this Agreement) that, prior to the date that is one year and one day
after the payment in full of all outstanding senior indebtedness of any
SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the
United States or any State thereof. In addition, notwithstanding anything
to the contrary contained in this Section 9.1, any SPC may (i) with
notice to, but without the prior written consent of, the Borrower or the
Agent and without paying any transfer fee therefor, assign all or a
portion of its interests in its right to repayment of any Advances to its
Granting Bank or to any financial institutions providing liquidity and/or
credit support to or for the account of such SPC to fund the Advances
made by such SPC or to support the securities (if any) issued by such SPC
to fund such Advances and (ii) disclose on a confidential basis, to the
extent such disclosure would be permitted under Section 10.1 as if such
SPC were a Bank, any non-public information relating to its Advances to
any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. No amendment
to this paragraph (f) that affects the rights of an S
PC that has made an
advance hereunder shall be effective without the consent of such SPC.

		
	 	     (g) Notwithstanding any other provision of this Agreement, any Bank
may at any time create a security interest in all or any portion of its
rights under this Agreement and that Bank’s Note in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of
the Federal Reserve System.

54

 

Section 9.2 Participations.

Each Bank may grant participations in a portion of its Advances, Letter of
Credit participations and Commitments to any Eligible Lender, upon prior
written notice to the Agent but without the consent of the Agent or the
Borrower, but only so long as the principal amount of the participation so
granted is no less than $5,000,000 (or, if the participant is a Participating
Affiliate, no less than $1,000,000). No holder of any such participation, other
than an Affiliate of such Bank, shall be entitled to require such Bank to take
or omit to take any action hereunder, except that such Bank may agree with such
participant that such Bank will not, without such participant’s consent, agree
to any action described in paragraph (a) of Section 10.3. No Bank shall, as
between the Borrower and such Bank, be relieved of any of its obligations
hereunder as a result of any such granting of a participation. The Borrower
hereby acknowledges and agrees that any participant described in this Section
will, for purposes of Sections 2.16, 2.17 and 2.18 only, be considered to be a
Bank hereunder (provided that such participant shall not be entitled to receive
any more than the Bank selling such participation would have received had such
sale not taken place).

Section 9.3 Limitation on Assignments and Participations.

Except as set forth in Sections 9.1 and 9.2, no Bank may assign any of its
rights or obligations under, or grant any participation in, any Loan Document
or Commitment.

ARTICLE X

MISCELLANEOUS

Section 10.1 Disclosure of Information.

The Agent and the Banks shall keep confidential (and cause their respective
officers, directors, employees, agents and representatives to keep
confidential) all information, materials and documents furnished by the
Borrower and its Subsidiaries to the Agent or the Banks (the “Disclosed
Information”). Notwithstanding the foregoing, the Agent and each Bank may
disclose Disclosed Information (i) to the Agent or any other Bank; (ii) to any
Affiliate of any Bank in connection with the transactions contemplated hereby,
provided that such Affiliate has been informed of the confidential nature of
such information; (iii) to legal counsel, accountants and other professional
advisors to the Agent or such Bank; (iv) to any regulatory body having
jurisdiction over any Bank or the Agent; (v) to the extent required by
applicable laws and regulations or by any subpoena or similar legal process, or
requested by any governmental agency or authority; (vi) to the extent such
Disclosed Information (A) becomes publicly available other than as a result of
a breach of this Agreement, (B) becomes available to the Agent or such Bank on
a non-confidential basis from a source other than the Borrower or a Subsidiary,
or (C) was available to the Agent or such Bank on a non-confidential basis
prior to its disclosure to the Agent or such Bank by the Borrower or a
Subsidiary; (vii) to the extent the Borrower or such Subsidiary shall have
consented to such disclosure in writing; (viii) to the extent reasonably deemed
necessary by the Agent or any Bank in the enforcement of the remedies of the
Agent and the Banks provided under the Loan Documents; or (ix) in connection
with any potential assignment or participation in the interest granted
hereunder, provided that any such potential assignee or participant shall have
executed a confidentiality agreement imposing on such

55

 

potential assignee or participant substantially the same obligations as are
imposed on the Agent and the Banks under this Section 10.1.

Notwithstanding anything herein to the contrary, information subject to this
Section 10.1 shall not include, and the Agent and each Bank may disclose
without limitation of any kind, any information with respect to the “tax
treatment” and “tax structure” (in each case, within the meaning of Treasury
Regulation Section 1.6011-4) of the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are
provided to the Agent or such Bank relating to such tax treatment and tax
structure; provided that with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the Advances, Letters of Credit and transactions
contemplated hereby. The Borrower and its Subsidiaries may also disclose
without limitation the “tax treatment” and “tax structure” of the transactions
contemplated hereby.

Section 10.2 No Waiver; Cumulative Remedies.

No failure or delay on the part of the Banks in exercising any right, power or
remedy under the Loan Documents shall operate as a waiver thereof; nor shall
any Bank’s acceptance of payments while any Default or Event of Default is
outstanding operate as a waiver of such Default or Event of Default, or any
right, power or remedy under the Loan Documents; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
under the Loan Documents. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided by law.

Section 10.3 Amendments, Etc.

No amendment or waiver of any provision of any Loan Document or consent to any
departure by the Borrower therefrom shall be effective unless the same shall be
in writing and signed by the Required Banks (or by the Agent with the consent
or at the request of the Required Banks), and any such waiver shall be
effective only in the specific instance and for the specific purpose for which
given. Notwithstanding the foregoing:

		
	 	     (a) No such amendment or waiver shall be effective to do any of the
following unless signed by each of the Banks (or by the Agent with the
consent or at the request of each of the Banks):

	 	(i)	 	Increase the Commitment Amount of any Bank or
extend the Commitment Termination Date.
	 
	 	(ii)	 	Permit the Borrower to assign its rights under
this Agreement.
	 
	 	(iii)	 	Amend this Section, the definition of “Required
Banks” in Section 1.1, or any provision herein providing for
consent or other action by all Banks.

56

 

	 	(iv)	 	Forgive any indebtedness of the Borrower arising
under this Agreement or the Notes, or reduce the rate of
interest or any fees charged under this Agreement or the
Notes.
	 
	 	(v)	 	Postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of
principal, interest, facility fees or other material amounts
due to the Banks (or any of them) hereunder or under any other
Loan Document.
	 
	 	(vi)	 	Release the Agent’s interest in any Pledged
Securities, the Cash Collateral Account or amend any terms of
any Pledged Securities or, except pursuant to the terms
hereof, release any collateral in the Cash Collateral Account.

		
	 	     (b) No amendment, waiver or consent shall affect the rights or
duties of the Agent under this Agreement or any other Loan Document
unless in writing and signed by the Agent.
	 
	 	     (c) No amendment, modification or (except as provided elsewhere
herein) termination of this Agreement or waiver of any rights of the
Borrower or obligations of any Bank or the Agent hereunder shall be
effective unless the Borrower shall have consented thereto in writing.

No notice to or demand on the Borrower in any case shall entitle the Borrower
to any other or further notice or demand in similar or other circumstances.

Section 10.4 Notice.

Except as otherwise expressly provided herein, all notices and other
communications hereunder shall be in writing and shall be (i) personally
delivered, (ii) transmitted by registered mail, postage prepaid, (iii) sent by
Federal Express or similar expedited delivery service, or (iv) transmitted by
telecopy, in each case addressed or transmitted by telecopy to the party to
whom notice is being given at its address or telecopier number (as the case may
be) as set forth in Exhibit A or in any applicable Assignment Agreement; or, as
to each party, at such other address or telecopier number as may hereafter be
designated in a notice by that party to the other party complying with the
terms of this Section. All such notices or other communications shall be
deemed to have been given on (i) the date received if delivered personally,
(ii) five business days after the date of posting, if delivered by mail, (iii)
the date of receipt, if delivered by Federal Express or similar expedited
delivery service, or (iv) the date of transmission if delivered by telecopy,
except that notices or requests to the Banks pursuant to any of the provisions
of Article II shall not be effective as to any Bank until received by that
Bank.

Section 10.5 Costs and Expenses.

The Borrower agrees to pay on demand (i) all costs and expenses incurred by the
Agent in connection with the negotiation, preparation, execution,
administration or amendment of the Loan Documents and the other instruments and
documents to be delivered hereunder and thereunder, and (ii) all costs and
expenses incurred by the Agent or any Bank in connection with the workout or
enforcement of the Loan Documents and the other instruments and documents to

57

 

be delivered hereunder and thereunder; including, in each case, reasonable fees
and out-of-pocket expenses of counsel with respect thereto, whether paid to
outside counsel or allocated to the Agent or such Bank by in-house counsel. The
Borrower also agrees to pay and reimburse the Agent for all of its
out-of-pocket and allocated costs incurred in connection with each audit or
examination conducted by the Agent, its employees or agents, which audits and
examinations shall be for the sole benefit of the Agent and the Banks.

Section 10.6 Indemnification by Borrower.

The Borrower hereby agrees to indemnify the Agent and the Banks and each
officer, director, employee and agent thereof (herein individually each called
an “Indemnitee” and collectively called the “Indemnitees”) from and against any
and all losses, claims, damages, reasonable expenses (including, without
limitation, reasonable attorneys’ fees) and liabilities (all of the foregoing
being herein called the “Indemnified Liabilities”) incurred by an Indemnitee in
connection with or arising out of the execution or delivery of this Agreement
or any agreement or instrument contemplated hereby, the performance by the
parties hereto of their respective obligations hereunder or the use of the
proceeds of any Advance or Letter of Credit hereunder (including but not
limited to any such loss, claim, damage, expense or liability arising out of
any claim that any Environmental Law has been breached with respect to any
activity or property of the Borrower), except for any portion of such losses,
claims, damages, expenses or liabilities incurred solely as a result of the
gross negligence or willful misconduct of the applicable Indemnitee. If and to
the extent that the foregoing indemnity may be unenforceable for any reason,
the Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. All obligations provided for in this Section shall survive any
termination of this Agreement. Notwithstanding the foregoing, the Borrower
shall not be obligated to indemnify any Indemnitee in respect of any
Indemnified Liabilities arising as a result of the Issuing Bank’s failure to
pay under any Letter of Credit after the presentation to it of a request
strictly complying with the terms and conditions of such Letter of Credit.

Section 10.7 Execution in Counterparts.

This Agreement and the other Loan Documents may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which counterparts of this Agreement or such other
Loan Document, as the case may be, taken together, shall constitute but one and
the same instrument.

Section 10.8 Binding Effect, Assignment.

The Loan Documents shall be binding upon and inure to the benefit of the
Borrower and the Banks and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights thereunder or any
interest therein without the prior written consent of each of the Banks.

Section 10.9 Governing Law.

THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF
LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE

58

 

WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1
ET SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.

Section 10.10 Severability of Provisions.

Any provision of this Agreement which is prohibited or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.

Section 10.11 Consent to Jurisdiction.

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

Section 10.12 Waiver of Jury Trial.

THE BORROWER, THE AGENT AND THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH THIS AGREEMENT AND THE NOTES OR THE RELATIONSHIPS ESTABLISHED
HEREUNDER.

Section 10.13 Recalculation of Covenants Following Accounting Practices Change.

The Borrower shall notify the Agent of any Accounting Practices Change promptly
upon becoming aware of the same. Promptly following such notice, the Borrower
and the Banks shall negotiate in good faith in order to effect any adjustments
to Sections 6.9 and 6.10 necessary to reflect the effects of such Accounting
Practices Change.

59

 

Section 10.14 Headings.

Article and Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.

Section 10.15 Nonliability of Banks.

The relationship between the Borrower on the one hand and the Banks, the
Issuing Bank and the Agent on the other hand shall be solely that of borrower
and lender. Neither the Agent, either Co-Lead Arranger, any Bank nor the
Issuing Bank shall have any fiduciary responsibilities to the Borrower.
Neither the Agent, either Co-Lead Arranger, any Bank nor the Issuing Bank
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 Agent, either Co-Lead
Arranger, any Bank nor the Issuing Bank shall have liability to the Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by the
Borrower in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from (i) the gross negligence
or willful misconduct of the party from which recovery is sought or (ii) the
Issuing Bank’s failure to pay any Letter of Credit after the presentation to it
of a request strictly complying with the terms and conditions of such Letter of
Credit. Neither the Agent, either Co-Lead Arranger, any Bank nor the Issuing
Bank 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.

[Signature Pages Follow]

60

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.

	 	 	 	 	 	 	 
	 	 	PUBLIC SERVICE COMPANY OF
	 	 	
COLORADO	 	 
	 	 	 	 	 	 	 
	 	 	
By	 	/s/ Ben G.S. Fowke III
	 	 	 	

	 
	 	 	 	
Its  	Vice President and Treasurer
	 	 	 	 	

	 

S-1 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	BANK ONE, NA
	 	 	
(Main Branch, Chicago), as Administrative	 
	 	 	
Agent and as a Bank	 
	 	 	 	 	 	 	 
	 	 	
By	 	/s/ Jane A. Bek
	 	 	 	

	 
	 	 	 	
Its  	Director
	 	 	 	 	

	 

S-2 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL
	 	 	
ASSOCIATION, as Syndication Agent and as a	 
	 	 	
Bank	 	 
	 	 	 	 	 	 	 
	 	 	
By	 	/s/ Scott D. Bjelde
	 	 	 	

	 
	 	 	 	
Its  	Vice President and Senior Banker
	 	 	 	 	

	 
	 	 	 	 	 	 	 
	 	 	
By	 	/s/ Christopher A. Cudak
	 	 	 	

	 
	 	 	 	
Its  	Senior Vice President
	 	 	 	 	

	 

S-3 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK, as
	 	 	
Co-Documentation Agent and a Bank	 
	 	 	 	 	 	 	 
	 	 	
By	 	/s/	 	 
	 	 	 	

	 
	 	 	 	
Its  	Managing Director
	 	 	 	 	

	 

S-4 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	KEYBANK NATIONAL ASSOCIATION, as
	 	 	
Co-Documentation Agent and a Bank	 
	 	 	 	 	 	 	 
	 	 	
By	 	/s/ 
	 	 	 	

	 
	 	 	 	
Its  	Vice President
	 	 	 	 	

	 

S-5 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	UBS AG, CAYMAN ISLANDS BRANCH, as
	 	 	
Co-Documentation Agent and a Bank	 
	 	 	 	 	 	 	 
	 	 	
By	 	/s/
	 	 	 	

	 
	 	 	 	
Its  	Director	 	 
	 	 	 	 	

	 
	 	 	 	 	 	 	 
	 	 	
By	 	/s/
	 	 	 	

	 
	 	 	 	
Its  	Associate Director	 	 
	 	 	 	 	

	 

S-6 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	
US BANK NATIONAL ASSOCIATION, as a
	 	 	
Bank	 
	 	 	 
	 	 	
By	 	/s/ Christine J. Geer
	 	 	 	

	 
	 	 	 	
Its  	Corporate Banking Officer	 
	 	 	 	 	

	 

S-7 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	
CITIBANK, N.A., as a Bank
	 	 	 
	 	 	
By	 	/s/ Dhaya Ranganathan	 
	 	 	 	

	 
	 	 	 	
Its  	Vice President
	 	 	 	 	

	 

S-8 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	
JPMORGAN CHASE BANK, as a Bank
	 	 	 
	 	 	
By	 	/s/ Peter M. Ling	 	 
	 	 	 	

	 
	 	 	 	
Its  	Managing Director
	 	 	 	 	

	 

S-9 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	
BARCLAYS BANK PLC, as a Bank
	 	 	 
	 	 	
By	 	/s/ Sydney G. Dennis	 	 
	 	 	 	

	 
	 	 	 	
Its  	Director
	 	 	 	 	

	 

S-10 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	
BANK OF TOKYO-MITSUBISHI, LTD.,
	 	 	
HOUSTON AGENCY, as a Bank
	 	 	 
	 	 	
By	 	/s/ D Barnell
	 	 	 	

	 
	 	 	 	
Its  	Vice President
	 	 	 	 	

	 
	 	 	 
	 	 	
By	 	/s/ John M Mearns
	 	 	 	

	 
	 	 	 	
Its  	VP and Manager
	 	 	 	 	

	 

S-11 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	
CREDIT SUISSE FIRST BOSTON CAYMAN
	 	 	
ISLAND BRANCH, as a Bank
	 	 	 
	 	 	
By	 	/s/ Sarah Wu
	 	 	 	

	 
	 	 	 	
Its  	Vice President
	 	 	 	 	

	 
	 	 	 
	 	 	
By	 	/s/ David J. Dodd
	 	 	 	

	 
	 	 	 	
Its  	Associate
	 	 	 	 	

	 

S-12 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	
GOLDMAN SACHS CREDIT PARTNERS L.P.,
	 	 	
as a Bank
	 	 	 
	 	 	
By	 	/s/ Stephen B. King
	 	 	 	

	 
	 	 	 	
Its  	Authorized Signatory
	 	 	 	 	

	 

S-13 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	
BMO NESBITT BURNS FINANCING, INC., as
	 	 	
a Bank
	 	 	 
	 	 	
By	 	/s/ Thomas H. Peer
	 	 	 	

	 
	 	 	 	
Its  	Vice President
	 	 	 	 	

	 

S-14 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	
COMMERZBANK AG, NEW YORK AND
	 	 	
GRAND CAYMAN BRANCHES, as a Bank
	 	 	 
	 	 	
By	 	Dempsey Gable
	 	 	 	

	 
	 	 	 	
Its  	Senior Vice President
	 	 	 	 	

	 
	 	 	 
	 	 	
By	 	/s/ Andrew Kjoller
	 	 	 	

	 
	 	 	 	
Its  	Vice President
	 	 	 	 	

	 

S-15 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

	 	 	 	 	 	 	 
	 	 	
BANK OF OKLAHOMA, N.A., as a Bank
	 	 	 
	 	 	
By	 	Thomas M. Foncannon
	 	 	 	

	 
	 	 	 	
Its  	Senior Vice President
	 	 	 	 	

	 

S-16 

[Signature Page to Public Service Company of Colorado Credit Agreement]

 

EXHIBIT A

COMMITMENT AMOUNTS AND ADDRESSES

	 	 	 	 	 	 	 
	Name	 	Commitment Amount	 	Notice Address
	
	 	
	 	

	Public Service Company
of Colorado
	 	
N/A
	 	 	 	Xcel Energy Inc.

800 Nicollet Mall, Suite 2900

Minneapolis, MN 55402

Attention: Mary Schell

Telecopier: 612-215-5370
	 	 	 	 	 	 	 
	Bank One, NA, as Agent	 	
N/A
	 	 	 	One Bank One Plaza,
Suite IL1-0363

Chicago, IL 60670-0363

Attention: Jane Bek

Telecopier: 312-732-5435
	 	 	 	 	 	 	 
	Bank One, NA (Main
Branch, Chicago), as
Co-Lead Arranger and a
Bank
	 	 	 	$37,600,000
	 	One Bank One Plaza,
Suite IL1-0363

Chicago, IL 60670-0363

Attention: Jane Bek

Telecopier: 312-732-5435

	 	 	 	 	 	 	 
	Wells Fargo Bank,
National Association, as
Syndication Agent and as
a Bank
	 	 	 	$37,600,000
	 	MAC N9305-031

Sixth and Marquette

Minneapolis, MN 55479

Attention: Scott Bjelde

Telecopier: 612-667-2276

	 	 	 	 	 	 	 
	The Bank of New York, as
Co-Documentation Agent
and a Bank
	 	 	 	$30,800,000
	 	One Wall Street,
19th Floor

New York, NY 10286

Attention: Cynthia Howells

Telecopier: 212-685-7552
	 	 	 	 	 	 	 
	KeyBank National
Association, as
Co-Documentation Agent
and a Bank
	 	 	 	$30,800,000
	 	127 Public Square,
6th Floor

Cleveland, OH 44114

Attention: Kathy A. Koenig

Telecopier: 216-689-4981
	 	 	 	 	 	 	 
	UBS AG, Cayman Islands
Branch, as
Co-Documentation Agent
and a Bank
	 	 	 	$30,800,000
	 	677 Washington Boulevard

Stamford, CT 06901

Attention: Marie Haddad

Telecopier: 203-719-3888

	 	 	 	 	 	 	 
	US Bank National

Association, as a Bank
	 	 	 	$22,400,000
	 	800 Nicollet Mall

Minneapolis, MN 55402

Attention: Christine Geer

Telecopier: 612-303-2265
	 	 	 	 	 	 	 
	Citibank, N.A., as a Bank	 	 	 	$22,400,000
	 	388 Greenwich Street, 21st Floor

New York, NY 10013

Attention: Amit Vasani

Telecopier: 212-816-8098

Exhibit A-1 

 

	 	 	 	 	 	 	 
	Name	 	Commitment Amount	 	Notice Address
	
	 	
	 	

	JPMorgan Chase Bank, as a Bank	 	 	
$22,400,000	 	 	270 Park Avenue,
3rd Floor

New York, NY 10017

Attention: Peter Ling

Telecopier: 212-270-     
	 	 	 	 	 	 	 
	Barclays Bank PLC, as a Bank
	 	 	
$22,400,000	 	 	200 Park Avenue,
4th Floor

New York, NY 10166

Attention: Sydney Dennis

Telecopier: 212-412-2441

	 	 	 	 	 	 	 
	Bank of Tokyo-Mitsubishi,
Ltd., Houston Agency as a
Bank
	 	 	
$22,400,000	 	 	601 Carlson Parkway,
Suite 370

Minnetonka, MN 55503

Attention: Patrick McCue

Telecopier: 952-473-5152

	 	 	 	 	 	 	 
	Credit Suisse First Boston
Cayman Island Branch, as a
Bank
	 	 	
$16,800,000	 	 	Eleven Madison
Avenue

New York, NY 10010

Attention: Sarah Wu

Telecopier: 212-325-8321

	 	 	 	 	 	 	 
	Goldman Sachs Credit Partners
L.P., as a Bank
	 	 	
$14,000,000	 	 	85 Broad Street, 6th Floor

New York, NY 10004

Attention: Philip F. Green

Telecopier: 212-428-1243

	 	 	 	 	 	 	 
	BMO Nesbitt Burns Financing,
Inc., as a Bank
	 	 	
$14,000,000	 	 	3 Times Square, 28th Floor

New York, NY 10036

Attention: Thomas Peer

Telecopier: 212-605-1451

	 	 	 	 	 	 	 
	Commerzbank AG, New York and
Grand Cayman Branches, as a
Bank
	 	 	
$20,000,000	 	 	20 South Clark
Street, Suite 2700

Chicago, IL 60603

Attention: Mr. J. Timothy Shortly

Telecopier: 312-236-2827

	 	 	 	 	 	 	 
	Bank of Oklahoma, N.A., as a
Bank
	 	 	
$5,600,000	 	 	1625 Broadway, Suite 1570

Denver, CO 80202

Attention: Tom Foncannon

Telecopier: 303-534-9499

Exhibit A-2 

 

EXHIBIT B

PROMISSORY NOTE

	 	 	 
	$     	 	
Chicago,
Illinois         

       ,
200          

     For value received, Public Service Company of Colorado, a Colorado
corporation (the “Borrower”), promises to pay to the order of
                  
                  
                       (the “Bank”), at such
place as the Agent under the Credit Agreement defined below may from time to
time designate in writing, the principal sum of      
                              Dollars
($                       ), or, if less, the aggregate unpaid principal amount of all
advances made by the Bank to the Borrower pursuant to Section 2.1 of the Credit
Agreement dated May 16, 2003 among the Borrower, Bank One, NA, as Agent (in
such capacity, the “Agent”), and various Banks, including the Bank (together
with all amendments, modifications and restatements thereof, the “Credit
Agreement”), and to pay interest on the principal balance of this Note
outstanding from time to time at the rate or rates determined pursuant to the
Credit Agreement.

     This Note is issued pursuant to, and is subject to, the Credit Agreement,
which provides (among other things) for the amount and date of payments of
principal and interest required hereunder, for the acceleration of this Note
upon an Event of Default and for the mandatory and voluntary prepayment of this
Note.

     The Borrower shall pay all costs of collection, including reasonable
attorneys’ fees and legal expenses, if this Note is not paid when due, whether
or not legal proceedings are commenced.

     Presentment or other demand for payment, notice of dishonor and protest
are expressly waived.

	 	PUBLIC SERVICE COMPANY OF COLORADO

	 	 	 	 	 
	 	 	
By

	 	 	 	 	 
	 	 	
Its

Exhibit B-1 

 

EXHIBIT C

COMPLIANCE CERTIFICATE

         ,                  

Bank One, NA,

          for itself and as Agent under the Credit

          Agreement described below

The Banks, as defined under the Credit

          Agreement described below

Compliance Certificate

     Ladies and Gentlemen:

          Reference is made to the Credit Agreement dated May           , 2003 among Public
Service Company of Colorado (the “Borrower”), Bank One, NA, as Agent, and the
Banks, as defined therein (the “Credit Agreement”).

          All terms defined in the Credit Agreement and not otherwise defined herein
shall have the meanings given them in the Credit Agreement.

          This is a Compliance Certificate submitted in connection with the
Borrower’s financial statements (the “Statements”) as of
                                         ,
              (the “Effective Date”).

          I hereby certify to you as follows:

		
	 	     (a) I am the
                  
                       [**chief financial
officer/treasurer] of the Borrower, and I am familiar with the
financial statements and financial affairs of the Borrower.

		
	 	     (b) The Statements have been prepared in accordance with GAAP,
**[subject to year-end audit adjustments].

		
	 	     (c) The computations on the Annexes hereto set forth the
Borrower’s compliance or non-compliance with the requirements set
forth in Section 6.7 and 6.8 as of the Effective Date.

I have no knowledge of the occurrence of any Default or Event of Default,
except as set forth in the attachments, if any, hereto.

Exhibit C-1 

 

	 	Very truly yours,

	 	PUBLIC SERVICE COMPANY OF COLORADO

	 	 

By

	 	         Its

Exhibit C-2 

 

ANNEX 1 TO COMPLIANCE CERTIFICATE

Funded Debt to Total Capital (Section 6.7)

	1.	 	Funded Debt

	 	 	 	 	 	 	 
	(a)	 	
Long-Term debt (including current maturities)
	 	 	$_____________	 
	(b)	 	
Commercial paper and other short term debt
	 	 	$_____________	 
	(c)	 	
Letters of Credit
	 	 	$_____________	 
	(d)	 	
Net liabilities under Swap Contracts
	 	 	$_____________	 
	(e)	 	
Capitalized Lease Obligations
	 	 	$_____________	 
	(f)	 	
Off-Balance Sheet Liabilities (including Sale
and Leaseback Transactions and Synthetic
Lease Obligations)
	 	 	$_____________	 
	(g)	 	
Trust Preferred Securities of the Borrower
	 	 	$_____________	 
	(h)	 	
Guaranties of indebtedness of others
	 	 	$_____________	 
	(i)	 	
Other Funded Debt
	 	 	$_____________	 
	(j)	 	
Total Funded Debt (sum of Items 1(a) through 1(i))
	 	 	$_____________	 

	2.	 	Total Capital

	 	 	 	 	 	 	 
	(a)	 	
Common Stock
	 	 	$_____________	 
	(b)	 	
Premium on Common Stock
	 	 	$_____________	 
	(c)	 	
Retained Earnings
	 	 	$_____________	 
	(d)	 	
Stockholder’s Equity
(sum of Items 2(a), 2(b) and 2(c)
	 	 	$_____________	 
	(e)	 	
Funded Debt (from Item 1(j) above)
	 	 	$_____________	 
	(f)	 	
Total Capital (sum of Items 2(d) and 2(e))
	 	 	$_____________	 

	3.	 	Funded Debt to Total Capital (Ratio of Item 1(j) to
	 	 	Item 2(f))

	 	 	(not to be greater than 0.60 to 1.0) 	_______________ to 1.         

Exhibit C-3 

 

ANNEX 2 TO COMPLIANCE CERTIFICATE

Interest Coverage Ratio (Section 6.8)

	1.	 	EBIT

	 	 	 	 	 	 	 	 	 
	(a)	 	
Consolidated Net Income
	 	 	$______________	 	 	 
	(b)	 	
Interest Expense (including Trust Preferred Securities)
	 	 	$______________	 	 	 
	(c)	 	
Income Tax Expense
	 	 	$______________	 	 	 
	(d)	 	
Excluding Non-operating Gains and Losses
(net of income tax)
	 	 	$______________	 	 	 
	(e)	 	
EBIT (total of (a)+(b)+(c)±(d))
	 	 	$______________
	 	 	 

	 	 	 	 	 	 	 
	2.	 	
Interest Expense (including Trust Preferred Securities)
	
$_____________

	3.	 	Interest Coverage Ratio (Ratio of
Item 1(e) to

	 	 	
Item 2)

(not to be greater than 2.75 to 1.0)		______________to 1.0

Exhibit C-4 

 

EXHIBIT D

OPINION LETTERS

Exhibit D-1 

 

EXHIBIT E

ASSIGNMENT AGREEMENT

     This Assignment Agreement (this “Assignment Agreement”) between
                  
     (the “Assignor”) and          
                       
(the “Assignee”) is dated as of
                       ,
20   . The parties hereto
agree as follows:

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

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

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

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

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

     6.     REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR’S
LIABILITY. The Assignor represents and warrants that (i) it is the legal and

Exhibit E-1 

 

beneficial owner of the interest being assigned by it hereunder, (ii) such
interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor
is duly authorized. It is understood and agreed that the assignment and
assumption hereunder are made without recourse to the Assignor and that the
Assignor makes no other representation or warranty of any kind to the Assignee.
Neither the Assignor nor any of its officers, directors, employees, agents or
attorneys shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan
Document, including without limitation, documents granting the Assignor and the
other Banks a security interest in assets of the Borrower or any guarantor,
(ii) any representation, warranty or statement made in or in connection with
any of the Loan Documents, (iii) the financial condition or creditworthiness of
the Borrower or any guarantor, (iv) the performance of or compliance with any
of the terms or provisions of any of the Loan Documents, (v) inspecting any of
the property, books or records of the Borrower, (vi) the validity,
enforceability, perfection, priority, condition, value or sufficiency of any
collateral securing or purporting to secure the Loans or (vii) any mistake,
error of judgment, or action taken or omitted to be taken in connection with
the Loans or the Loan Documents.

     7.     REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee (i)
confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements requested by the Assignee and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement, (ii) agrees that
it will, independently and without reliance upon the Agent, the Assignor or any
other Bank and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, (iii) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto, (iv) confirms
that the execution and delivery of this Assignment Agreement by the Assignee is
duly authorized, (v) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Documents are required to
be performed by it as a Bank, (vi) agrees that its payment instructions and
notice instructions are as set forth in the attachment to Schedule 1, (vii)
confirms that none of the funds, monies, assets or other consideration being
used to make the purchase and assumption hereunder are “plan assets” as defined
under ERISA and that its rights, benefits and interests in and under the Loan
Documents will not be “plan assets” under ERISA, and (viii) agrees to indemnify
and hold the Assignor harmless against all losses, costs and expenses
(including, without limitation, reasonable attorneys’ fees) and liabilities
incurred by the Assignor in connection with or arising in any manner from the
Assignee’s nonperformance of the obligations assumed under this Assignment
Agreement. The Assignee (a) represents and warrants to the Agent and the
Borrower that under applicable law and treaties no tax will be required to be
withheld by the Agent or the Borrower with respect to any payments to be made
to the Assignee hereunder, (b) agrees to furnish (if it is organized under the
laws of any jurisdiction other than the United States or any State thereof) to
the Agent and the Borrower prior to the time that the Agent or Borrower is
required to make any payment of principal, interest or fees hereunder,
duplicate executed originals of U.S. Internal Revenue Service Form W-8ECI or
W-8BEN (or appropriate replacement forms) and agrees to provide new Forms
W-8ECI or W-BEN (or appropriate replacement forms) upon the expiration of any
previously delivered form or comparable statements in accordance with
applicable U.S.

Exhibit E-2 

 

law and regulations and amendments thereto, duly executed and completed by
the Assignee and (c) agrees to comply with all applicable U.S. laws and
regulations with regard to such withholding tax exemption.

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

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

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

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

Exhibit E-3 

 

SCHEDULE 1

to Assignment Agreement

	1.	 	Description and Date of Credit Agreement:
	 

	 	Credit	  Agreement dated as of May      , 2003 among Public Service Company of
Colorado, the lenders named therein including the Assignor, and Bank
One, NA individually and as Agent for such lenders, as it may be
amended from time to time.
	 

	2.	 	Date of Assignment Agreement:            
                
               
                      , 20   
	 
	3.	 	Amounts (As of Date of Item 2 above):

	 	 	 	 	 
	a	 	
Assignee’s percentage
of Aggregate Commitment
(Advances) purchased
under the Assignment
Agreement**
	 	______%
	 
	b	 	
Amount of Assignor’s
Commitment purchased
under the Assignment
Agreement**
	 	$______

	 	 	 	 	 
	4.	 	
Assignee’s Commitment (or Loans	 	 
	 	 	
with respect to terminated	 	 
	 	 	
Commitments) purchased	 	 
	 	 	
hereunder:
	 	$____________________

	 	 	 	 	 
	5.	 	
Proposed Effective Date:
	 	_____________________________

	6.	 	Non-standard Recordation Fee
Arrangement

N/A***

[Assignor/Assignee

to pay 100% of fee]

[Fee waived by Agent]

Exhibit E-4 

 

Accepted and Agreed:

	 	 	 
	[NAME OF ASSIGNOR]	 	
[NAME OF ASSIGNEE]
	By:	 	
By:
	
	 	

	Title	 	
Title
	
	 	

Exhibit E-5 

 

	 	 	 
	ACCEPTED AND CONSENTED TO****BY	 	
ACCEPTED AND CONSENTED

TO BY
	 
	PUBLIC SERVICE

COMPANY OF COLORADO	 	
BANK ONE, NA, as Agent
	By:	 	
By:
	
	 	

	Title	 	
Title
	
	 	

**     Percentage taken to 10 decimal
places

***   If fee is split 50-50, pick N/A as option

**** Delete if not required by Credit Agreement

Exhibit E-6 

 

Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT

ADMINISTRATIVE INFORMATION SHEET

Attach Assignor’s Administrative Information Sheet, which must

include notice addresses for the Assignor and the Assignee

(Sample form shown below)

ASSIGNOR INFORMATION

Contact:

	 	 	 	 
	Name:	 	
Telephone No.:	 
	
	 	 	

	Fax No.:	 	
Telex No.:	 
	
	 	 	

	 	 	
Answerback:	 
	 	 	 	

Payment Information:

	 	 	 
	Name & ABA # of Destination Bank:	 	 
	 	 	

	Account Name & Number for Wire Transfer:	 	 
	 	 	

	 	 	

	 	 	 
	Other Instructions:	

	 
	Address for Notices for
Assignor:	

ASSIGNEE INFORMATION

Credit Contact:

	 	 	 	 
	Name:	 	
Telephone No.:	
	
	 	 	

	Fax No.:	 	
Telex No.:	 
	
	 	 	

	 	 	
Answerback:	 
	 	 	 	

Exhibit E-7 

 

Key Operations Contacts:

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

Payment Information:

Name & ABA # of Destination Bank:

Account Name & Number for Wire Transfer:

Other Instructions:

Address for Notices for Assignee:

Exhibit E-8 

 

          BANK ONE INFORMATION

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

	 	 	 
	Initial Funding Contact:	 	
Subsequent Operations Contact:
	
	 	

	Name:	 	
Name:
	Telephone No.: (312)	 	
Telephone No.: (312)
	Fax No.: (312)	 	
Fax No.: (312)

	 	Bank One Telex No.: 190201 (Answerback: FNBC UT)

Initial Funding Standards:

Libor Fund 2 days after rates are set.

	 	 	 
	Bank One Wire Instructions:	 	
1 Bank One, NA, ABA # 071000013
	 	 	
LS2 Incoming Account # 481152860000
	 	 	
Ref:     

	 	 	 
	Address for Notices for Bank One:	 	
1 Bank One Plaza, Chicago, IL 60670
	 	 	
Attn: Agency Compliance Division,
	 	 	
Suite IL1-0353
	 	 	
Fax No. (312) 732-2038 or (312) 732-4339

Exhibit E-9 

 

EXHIBIT F

BORROWING CERTIFICATE

, 200    

Bank One, NA,

          for itself and as Agent under the Credit
Agreement described below

          Agreement described below

1 Bank One Plaza

Chicago, Illinois 60670

The Banks, as defined under the Credit

          Agreement described below

          Re: $350,000,000 Public Service Company of Colorado Credit Facility

Ladies and Gentlemen:

     Reference is made to the Credit Agreement dated May      , 2003 (together
with all amendments, modifications and restatements thereof, the “Credit
Agreement”) among Public Service Company of Colorado (the “Borrower”), Bank
One, NA, as Agent, and Banks that are parties thereto. As used herein, terms
defined in the Credit Agreement and not otherwise defined herein have the
meanings given them in the Credit Agreement.

     The Borrower has requested [a Borrowing to be made under Section 2.1 of
the Credit Agreement] [a Letter of Credit to be issued under Section 2.7 of the
Credit Agreement] as more specifically described on Attachment 1.

     I hereby certify to you that the [Borrowing/Letter of Credit (including
the Borrower’s obligation to reimburse the Banks on account of any draw under
such Letter of Credit)] requested by the Borrower (i) has been duly authorized
by the Borrower’s board of directors pursuant to its resolution dated
                          ,
(ii) has been duly authorized by the Public Utilities
Commission of the State of Colorado pursuant to its order dated
                          [** alternate for clause (ii): does not and will not
require any authorization, consent or approval of the Public Utilities
Commission of the State of Colorado], and (iii) does not and will not require
any other authorization, consent or approval by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
other than those that have been obtained, copies of which have been delivered
to the Agent pursuant to Section 5.1(d).

 Exhibit F-1 

 

     I further certify to you that the [Borrowing/Letter of Credit (including
the Borrower’s obligation to reimburse the Banks on account of any draw under
such Letter of Credit)] requested by the Borrower complies with all applicable
requirements of each board resolution and the authorization of the Public
Utilities Commission of the State of Colorado described above, including but
not limited to any applicable limitation on the aggregate amount of debt that
the Borrower may have outstanding at any one time.

	 	PUBLIC SERVICE COMPANY OF
 COLORADO

	 	 	 	 
	 	By	 	 
	 	 	

	 	 	Its	 
	 	 	 	

 Exhibit F-2 

 

Attachment 1

Terms of Borrowing:

	 	 	 
	1.	 	
The Business Day of the proposed Borrowing is
         .
	 	 	 
	2.	 	
The aggregate amount of the proposed Borrowing is $
         .
	 	 	 
	3.	 	
The proposed Borrowing is to be comprised of $     of
Advances to bear interest at the Base Rate and $     of Advances to
bear interest at the Eurodollar Rate.
	 	 	 
	4.	 	
The duration of the Interest Period for Advances that bear
interest at the Eurodollar Rate shall be      months.

Terms of Letter of Credit:

	 	 	 
	1.	 	
The proposed date of issuance is
          .
	 	 	 
	2.	 	
The stated amount of the Letter of Credit is
$          .
	 	 	 
	3.	 	
The Letter of Credit is to be issued to
          .
	 	 	 
	4.	 	
The expiration date of the Letter of Credit is
          .

 Exhibit F-3 

 

SCHEDULE 4.2

CONSENTS

The approvals or authorizations of the following regulatory bodies, depending
upon the characterization of the Borrowings under the Agreement, may be
required and have each been obtained and are in full force and effect:

          Public Utilities Commission of the State of Colorado

 

 

SCHEDULE 4.4

SUBSIDIARIES

PSCO Capital Trust 1 (100%)*

1480 Welton, Inc. (100%)

Green and Clear Lakes Company (100%)

P.S.R. Investments, Inc. (100%)

Various ditch and water companies

*Denotes Restricted Subsidiary

 

 

SCHEDULE 4.7

LITIGATION

1.   See disclosure regarding legal proceedings of the Borrower in
Note 13 to the Consolidated Financial Statements contained in the
Borrower’s Annual Report on Form 10-K for the year ended December
31, 2002 filed with the SEC (the “2002 Form 10-K”).

2.   PSCo Fuel Adjustment Clause Proceedings - Certain wholesale power customers
of PSCo have filed complaints with the FERC alleging PSCo has been improperly
collecting certain fuel and purchased energy costs through the wholesale fuel
cost adjustment clause included in their rates. The FERC consolidated these
complaints and set them for hearing and settlement judge procedures. In
November 2002, the Chief Judge terminated settlement procedures after
settlement was not reached. The Complainants’ filed initial testimony in late
April 2003 claiming the improper inclusion of fuel and purchased energy costs
in the range of $40-50 million related to the 1996 to 2002 period. The
Company is currently analyzing the testimony and will file rebuttal testimony
in June 2003. The hearings are scheduled for August 2003.

PSCo had an Incentive Cost Adjustment (ICA) for periods prior to calendar 2003,
as disclosed in the 2002 Form 10-K. The CPUC is conducting a proceeding to
review and approve the incurred and recoverable 2001 costs under the ICA. In
April 2003, the CPUC Staff and an intervenor filed testimony recommending
disallowance of fuel and purchased energy costs which, if granted, would result
in a $30 million reduction in recoverable 2001 ICA costs. The Company is
currently analyzing the testimony of the CPUC Staff and the intervenor and will
file rebuttal testimony in June 2003. The hearings on this matter are
scheduled to commence in July 2003. If CPUC Staff and the intervenor are
successful, recommended disallowances would also result in a reduction of the
recoverable 2002 ICA costs. A review of the 2002 recoverable ICA costs will be
conducted in a future proceeding.

PSCo has recorded its deferred fuel and purchased energy costs based on the
expected rate recovery of its costs as filed in the above rate
proceedings, without the adjustments proposed by various parties. Pending the
outcome of these regulatory proceedings, we cannot at this time determine
whether any customer refunds or disallowances of PSCo’s deferred costs will be
required.

 

 

SCHEDULE 4.8

ENVIRONMENTAL MATTERS

See disclosure regarding environmental contingencies of the
Borrower in Note 13 to the Consolidated Financial Statements
contained in the 2002 Form 10-K.

 

 

SCHEDULE 4.22

COMPLIANCE WITH LAWS

1.        See disclosure regarding legal proceedings of the Borrower in
Note 13 to the Consolidated Financial Statements contained in the
Borrower’s Annual Report on Form 10-K for the year ended December
31, 2002 filed with the SEC (the “2002 Form 10-K”).

2.        PSCo Fuel Adjustment Clause Proceedings - Certain wholesale power customers
of PSCo have filed complaints with the FERC alleging PSCo has been improperly
collecting certain fuel and purchased energy costs through the wholesale fuel
cost adjustment clause included in their rates. The FERC consolidated these
complaints and set them for hearing and settlement judge procedures. In
November 2002, the Chief Judge terminated settlement procedures after
settlement was not reached. The Complainants’ filed initial testimony in late
April 2003 claiming the improper inclusion of fuel and purchased energy costs
in the range of $40-50 million related to the 1996 to 2002 period. The
Company is currently analyzing the testimony and will file rebuttal testimony
in June 2003. The hearings are scheduled for August 2003.

PSCo had an Incentive Cost Adjustment (ICA) for periods prior to calendar 2003,
as disclosed in the 2002 Form 10-K. The CPUC is conducting a proceeding to
review and approve the incurred and recoverable 2001 costs under the ICA. In
April 2003, the CPUC Staff and an intervenor filed testimony recommending
disallowance of fuel and purchased energy costs which, if granted, would result
in a $30 million reduction in recoverable 2001 ICA costs. The Company is
currently analyzing the testimony of the CPUC Staff and the intervenor and will
file rebuttal testimony in June 2003. The hearings on this matter are
scheduled to commence in July 2003. If CPUC Staff and the intervenor are
successful, recommended disallowances would also result in a reduction of the
recoverable 2002 ICA costs. A review of the 2002 recoverable ICA costs will be
conducted in a future proceeding.

PSCo has recorded its deferred fuel and purchased energy costs based on the
expected rate recovery of its costs as filed in the above rate proceedings,
without the adjustments proposed by various parties. Pending the outcome of
these regulatory proceedings, we cannot at this time determine whether any
customer refunds or disallowances of PSCo’s deferred costs will be required.

 

 

SCHEDULE 6.1

LIENS

None.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I DEFINITIONS	 	 	1	 
	Section 1.1
	 	
Definitions
	 	 	1	 
	Section 1.2
	 	
Times
	 	 	12	 
	Section 1.3
	 	
Accounting Terms and Determinations
	 	 	12	 
	ARTICLE II AMOUNT AND TERMS OF THE LOANS AND LETTERS OF CREDIT	 	 	12	 
	Section 2.1
	 	
Committed Advances
	 	 	12	 
	Section 2.2
	 	
Procedure for Making Advances
	 	 	13	 
	Section 2.3
	 	
Interest
	 	 	14	 
	Section 2.4
	 	
Limitation of Outstandings
	 	 	14	 
	Section 2.5
	 	
Principal and Interest Payment Dates
	 	 	15	 
	Section 2.6
	 	
Level Status and Margins
	 	 	15	 
	Section 2.7
	 	
Letters of Credit
	 	 	16	 
	Section 2.8
	 	
Facility and Utilization Fees
	 	 	19	 
	Section 2.9
	 	
Other Fees
	 	 	20	 
	Section 2.10
	 	
Termination or Reduction of the Commitment
	 	 	20	 
	Section 2.11
	 	
Voluntary Prepayments
	 	 	21	 
	Section 2.12
	 	
Computation of Interest and Fees
	 	 	21	 
	Section 2.13
	 	
Payments
	 	 	21	 
	Section 2.14
	 	
Payment on Nonbusiness Days
	 	 	21	 
	Section 2.15
	 	
Use of Advances and Letters of Credit
	 	 	22	 
	Section 2.16
	 	
Increased Costs or Reduction of Yield
	 	 	22	 
	Section 2.17
	 	
Taxes
	 	 	23	 
	Section 2.18
	 	
Capital Adequacy
	 	 	25	 
	Section 2.19
	 	
Mandatory Assignment of Bank’s Interest
	 	 	26	 
	ARTICLE III CONDITIONS PRECEDENT	 	 	26	 
	Section 3.1
	 	
Conditions to Effectiveness
	 	 	26	 
	Section 3.2
	 	
Initial Conditions Precedent
	 	 	26	 
	Section 3.3
	 	
Conditions Precedent to All Advances and Letters of Credit
	 	 	27	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES	 	 	28	 
	Section 4.1
	 	
Corporate Existence and Power
	 	 	28	 
	Section 4.2
	 	
Authorization of Borrowing; No Conflict as to Law or Agreements	 	 	28	 
	Section 4.3
	 	
Legal Agreements
	 	 	29	 
	Section 4.4
	 	
Subsidiaries
	 	 	29	 
	Section 4.5
	 	
Financial Condition; Other Information
	 	 	29	 
	Section 4.6
	 	
Adverse Change
	 	 	30	 
	Section 4.7
	 	
Litigation
	 	 	30	 
	Section 4.8
	 	
Hazardous Substances
	 	 	30	 
	Section 4.9
	 	
Regulation U
	 	 	30	 

-i-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 4.10
	 	
Taxes
	 	 	30	 
	Section 4.11
	 	
Burdensome Restrictions
	 	 	31	 
	Section 4.12
	 	
Titles and Liens
	 	 	31	 
	Section 4.13
	 	
ERISA
	 	 	31	 
	Section 4.14
	 	
Securities Law Matters
	 	 	31	 
	Section 4.15
	 	
Investment Company Act
	 	 	32	 
	Section 4.16
	 	
Public Utility Holding Company Act
	 	 	32	 
	Section 4.17
	 	
Indenture
	 	 	32	 
	Section 4.18
	 	
Authentication of Pledged Securities and Related
First Mortgage Bonds
	 	 	33	 
	Section 4.19
	 	
Solvency
	 	 	33	 
	Section 4.20
	 	
Swap Obligations
	 	 	33	 
	Section 4.21
	 	
Insurance
	 	 	33	 
	Section 4.22
	 	
Compliance With Laws
	 	 	33	 
	ARTICLE V AFFIRMATIVE COVENANTS OF THE BORROWER	 	 	34	 
	Section 5.1
	 	
Financial Statements; Other Notices
	 	 	34	 
	Section 5.2
	 	
Books and Records; Inspection and Examination
	 	 	35	 
	Section 5.3
	 	
Compliance with Laws
	 	 	36	 
	Section 5.4
	 	
Payment of Taxes and Other Claims
	 	 	36	 
	Section 5.5
	 	
Maintenance of Properties
	 	 	36	 
	Section 5.6
	 	
Insurance
	 	 	36	 
	Section 5.7
	 	
Preservation of Corporate Existence
	 	 	37	 
	Section 5.8
	 	
Delivery of Information
	 	 	37	 
	Section 5.9
	 	
Use of Proceeds
	 	 	37	 
	ARTICLE VI NEGATIVE COVENANTS	 	 	37	 
	Section 6.1
	 	
Liens
	 	 	37	 
	Section 6.2
	 	
Sale of Assets
	 	 	39	 
	Section 6.3
	 	
Consolidation and Merger
	 	 	39	 
	Section 6.4
	 	
Hazardous Substances
	 	 	39	 
	Section 6.5
	 	
Restrictions on Nature of Business
	 	 	39	 
	Section 6.6
	 	
Transactions with Affiliates
	 	 	40	 
	Section 6.7
	 	
Ratio of Funded Debt to Total Capital
	 	 	40	 
	Section 6.8
	 	
Interest Coverage Ratio
	 	 	40	 
	ARTICLE VII EVENTS OF DEFAULT, RIGHTS AND REMEDIES	 	 	40	 
	Section 7.1
	 	
Events of Default
	 	 	40	 
	Section 7.2
	 	
Rights and Remedies
	 	 	43	 
	Section 7.3
	 	
Pledge of Cash Collateral Account
	 	 	44	 
	Section 7.4
	 	
Provisions Regarding Pledged Securities
	 	 	45	 

-ii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE
VIII THE AGENT	 	 	46	 
	Section 8.1
	 	
Appointment; Nature of Relationship
	 	 	46	 
	Section 8.2
	 	
Powers
	 	 	46	 
	Section 8.3
	 	
General Immunity
	 	 	46	 
	Section 8.4
	 	
No Responsibility for Loans, Recitals, etc
	 	 	46	 
	Section 8.5
	 	
Action on Instructions of Banks
	 	 	47	 
	Section 8.6
	 	
Employment of Agents and Counsel
	 	 	47	 
	Section 8.7
	 	
Reliance on Documents; Counsel
	 	 	47	 
	Section 8.8
	 	
Agent’s Reimbursement and Indemnification
	 	 	47	 
	Section 8.9
	 	
Notice of Default
	 	 	48	 
	Section 8.10
	 	
Rights as a Bank
	 	 	48	 
	Section 8.11
	 	
Bank Credit Decision
	 	 	48	 
	Section 8.12
	 	
Successor Agent
	 	 	49	 
	Section 8.13
	 	
Delegation to Affiliates
	 	 	49	 
	Section 8.14
	 	
Titles
	 	 	50	 
	Section 8.15
	 	
Distribution of Payments and Proceeds
	 	 	50	 
	Section 8.16
	 	
Expenses
	 	 	51	 
	Section 8.17
	 	
Payments Received Directly by Banks
	 	 	51	 
	Section 8.18
	 	
Agent not Offering Bonds
	 	 	51	 
	ARTICLE IX ASSIGNMENTS AND PARTICIPATIONS	 	 	51	 
	Section 9.1
	 	
Assignments
	 	 	51	 
	Section 9.2
	 	
Participations
	 	 	55	 
	Section 9.3
	 	
Limitation on Assignments and Participations
	 	 	55	 
	ARTICLE X MISCELLANEOUS	 	 	55	 
	Section 10.1
	 	
Disclosure of Information
	 	 	55	 
	Section 10.2
	 	
No Waiver; Cumulative Remedies
	 	 	56	 
	Section 10.3
	 	
Amendments, Etc
	 	 	56	 
	Section 10.4
	 	
Notice
	 	 	57	 
	Section 10.5
	 	
Costs and Expenses
	 	 	57	 
	Section 10.6
	 	
Indemnification by Borrower
	 	 	58	 
	Section 10.7
	 	
Execution in Counterparts
	 	 	58	 
	Section 10.8
	 	
Binding Effect, Assignment
	 	 	58	 
	Section 10.9
	 	
Governing Law
	 	 	58	 
	Section 10.10
	 	
Severability of Provisions
	 	 	59	 
	Section 10.11
	 	
Consent to Jurisdiction
	 	 	59	 
	Section 10.12
	 	
Waiver of Jury Trial
	 	 	59	 
	Section 10.13
	 	
Recalculation of Covenants Following Accounting
Practices Change
	 	 	59	 
	Section 10.14
	 	
Headings
	 	 	60	 
	Section 10.15
	 	
Nonliability of Banks
	 	 	60	 

-iii-

 

TABLE OF CONTENTS

EXHIBITS AND SCHEDULES

	 	 	 
	Exhibit A	 	
Commitment Amounts and Addresses
	Exhibit B	 	
Note
	Exhibit C	 	
Compliance Certificate
	Exhibit D	 	
Opinion of Borrower’s Counsel
	Exhibit E	 	
Assignment Certificate
	Exhibit F	 	
Borrowing Certificate

	 	 	 
	Schedule 4.2	 	
Consents
	Schedule 4.4	 	
Subsidiaries
	Schedule 4.7	 	
Litigation
	Schedule 4.8	 	
Environmental Matters
	Schedule 4.22	 	
Compliance with Laws
	Schedule 6.1	 	
Liens

-iv-<PAGE>

                                                                    EXHIBIT 4.03

                                                                  EXECUTION COPY

================================================================================

                                CREDIT AGREEMENT

                          DATED AS OF FEBRUARY 18, 2003

                                      AMONG

                       SOUTHWESTERN PUBLIC SERVICE COMPANY

                                  THE LENDERS,

                                  BANK ONE, NA,
                                    AS AGENT,

                              THE BANK OF NEW YORK,
                              AS SYNDICATION AGENT
                                       AND

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

================================================================================

<PAGE>

                                CREDIT AGREEMENT

         This Agreement, dated as of February 18, 2003, is among Southwestern
Public Service Company, the Lenders and Bank One, NA, a national banking
association having its principal office in Chicago, Illinois, as Agent. The
parties hereto agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS

         As used in this Agreement:

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

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

         "Affected Lender" is defined in Section 2.19.

         "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.

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

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

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

<PAGE>

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

         "Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.

         "Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.

         "Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.

         "Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.

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

         "Authorized Officer" means any of the following officers of the
Borrower, acting singly: the Chairman of the Board, the Chief Executive Officer,
the Vice Chairman of the Board, the Chief Operating Officer, the President, the
Chief Financial Officer or any Executive Vice President, Senior Vice President,
Vice President, Assistant Vice President, Treasurer or Assistant Treasurer.

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

         "Borrower" means Southwestern Public Service Company, a New Mexico
corporation, and its successors and assigns.

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

         "Borrowing Notice" is defined in Section 2.8.

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

                                       2
<PAGE>

         "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.

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

         "Commitment" means, for each Lender, the obligation of such Lender to
make Loans and to participate in Letters of Credit, in an aggregate amount not
exceeding the amount set forth opposite its signature below or as set forth in
any assignment that has become effective pursuant to Section 12.3.2, as such
amount may be modified from time to time pursuant to the terms hereof.

         "Commitment Fee Rate" means, at any time, the percentage rate per annum
at which Commitment Fees are accruing on the unused portion of the Aggregate
Commitment at such time as set forth in the Pricing Schedule.

         "Consolidated EBITDA" means, for any period, (a) the consolidated net
income of the Company and its Subsidiaries for such period, excluding all
non-operating gains and losses (including extraordinary or unusual gains and
losses, gains and losses from discontinuance of operations, gains and losses
arising from the sale of assets (other than inventory or in connection with a
Qualified Receivables Transaction) and other non-recurring gains and losses),
plus (b) to the extent deducted in determining the amount in clause (a) (but
without duplication), (i) Consolidated Interest Expense, (ii) income taxes,
(iii) depreciation and amortization and (iv) "other income (deductions) - net"
as shown on the Borrower's consolidated statements of income.

         "Consolidated Interest Expense" means, for any period, the consolidated
interest expense of the Company and its Subsidiaries for such period (including
imputed interest on Capitalized Leases and, to the extent not otherwise included
in consolidated interest expense, distributions on Trust Preferred Securities,
but excluding "other financing costs" as shown on the Borrower's consolidated
statements of income).

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

         "Conversion/Continuation Notice" is defined in Section 2.9.

                                       3
<PAGE>

         "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.

         "Credit Extension" means the making of an Advance or the issuance of a
Letter of Credit.

         "Debt to Capitalization Ratio" means the ratio of (a) Total Debt to (b)
the sum of Total Debt plus the Borrower's consolidated stockholders' equity
plus, to the extent not included in stockholders' equity, Mandatorily Redeemable
Stock, as determined in accordance with Agreement Accounting Principles.

         "Default" means an event described in Article VII.

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

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

         "Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurodollar Rate.

         "Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association
Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters
Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, and having a maturity equal to such Interest
Period, provided that (i) if Reuters Screen FRBD is not available to the Agent
for any reason, the applicable Eurodollar Base Rate for the relevant Interest
Period shall instead be the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars as reported by any other generally
recognized financial information service as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period, and (ii) if no such British Bankers'
Association Interest Settlement Rate is available to the Agent, the applicable
Eurodollar Base Rate for the relevant Interest Period shall instead be the rate
determined by the Agent to be the rate at which Bank One or one of its Affiliate
banks offers to place deposits in U.S. dollars with first-class banks in the
London interbank market 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 Bank One'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 2.11, bears interest at the applicable Eurodollar Rate.

                                       4
<PAGE>

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

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

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

         "Existing Agreement" means the Credit Agreement dated as of February
19, 2002, as amended to the date of this Agreement, among the Borrower, the
lenders party thereto, and Bank One, NA, as agent for said lenders.

         "Existing LC" means letter of credit number SLT750771 issued by Issuer
for the account of the Borrower in favor of Southwest Power Pool.

         "Facility Termination Date" means February 17, 2004 or any earlier date
on which the Aggregate Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.

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

         "Final Maturity Date" means February 17, 2004.

         "Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.

         "Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.

         "Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.11, bears interest at the Floating Rate.

         "Indebtedness" means, with respect to any Person, all (but without
duplication) of 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

                                       5
<PAGE>

Person's business payable on terms customary in the trade), (iii) direct or
contingent obligations arising under letters of credit, banker's acceptances,
bank guaranties, surety bonds and similar instruments, (iv) 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, (v) obligations
which are evidenced by notes or other instruments, (vi) obligations of such
Person 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, (vii) Capitalized Lease Obligations, (viii) net
liabilities under interest rate swap, exchange or cap agreements, (ix) Synthetic
Lease Obligations, (x) obligations under other transactions which are the
functional equivalent, or take the place, of borrowing but which do not
constitute a liability on the consolidated balance sheet of such Person and (xi)
Contingent Obligations in respect of any of the foregoing; provided that
Indebtedness shall not include obligations arising under Qualified Receivables
Transactions.

         "Interest Coverage Ratio" means, as of the last day of any fiscal
quarter of the Borrower, the ratio of (i) Consolidated EBITDA for the
four-quarter period ending on such day to (ii) Consolidated Interest Expense for
such period.

         "Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two or three months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two or three months thereafter,
provided that if there is no such numerically corresponding day in such next,
second or third succeeding month, such Interest Period shall end on the last
Business Day of such next, second or third 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 that if said next
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.

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

         "Issuer" means Bank One in its capacity as issuer of Letters of Credit
hereunder.

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

         "Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on its administrative questionnaire or on the signature pages hereof or
otherwise selected by such Lender or the Agent pursuant to Section 2.17.

                                       6
<PAGE>

         "Letter of Credit" means the Existing LC or a letter of credit issued
pursuant to Section 2.20(i).

         "Letter of Credit Application" is defined in Section 2.20(iii).

         "Letter of Credit Collateral Account" is defined in Section 2.20(xi).

         "Letter of Credit Fee" is defined in Section 2.20(iv).

         "Letter of Credit Fee Rate" means, at any time, the percentage rate per
annum applicable to Letter of Credit Fees at such time as set forth in the
Pricing Schedule.

         "Letter of Credit Obligations means, at any time, the sum, without
duplication, of (i) the aggregate undrawn stated amount of all Letters of Credit
at such time plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at such time.

         "Letter of Credit Payment Date" is defined in Section 2.20(v).

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

         "Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).

         "Loan Documents" means this Agreement, any Notes issued pursuant to
Section 2.13, any Letter of Credit and any Letter of Credit Application.

         "Mandatorily Redeemable Stock" means, with respect to any Person, any
share of such Person's capital stock to the extent that it is (a) redeemable,
payable or required to be purchased or otherwise retired or extinguished, or
convertible into any Indebtedness or other liability of such Person, (i) at a
fixed or determinable date, whether by operation of a sinking fund or otherwise,
(ii) at the option of any Person other than such Person or (iii) upon the
occurrence of a condition not solely within the control of such Person, such as
a redemption required to be made out of future earnings or (b) convertible into
Mandatorily Redeemable Stock.

         "Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of 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 or the rights
or remedies of the Agent, the Lenders or the Issuer thereunder.

         "Material Indebtedness" is defined in Section 7.5.

         "Modify" and "Modification" are defined in Section 2.20(i)

                                       7
<PAGE>

         "Moody's" means Moody's Investors Service, Inc.

         "Multiemployer Plan" means a 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.

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

         "Note" means any promissory note issued at the request of a Lender
pursuant to Section 2.13 in the form of Exhibit D.

         "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 Agent, the Issuer or any
indemnified party arising under the Loan Documents.

         "Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any sale and leaseback
transaction which is not a Capitalized Lease, (iii) all Synthetic Lease
Obligations of such Person and (iv) any obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person, but excluding from this clause (iv) any Operating Lease which does not
give rise to Synthetic Lease Obligations.

         "Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee.

         "Outstanding Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Loans outstanding at such time,
plus (ii) an amount equal to its pro rata share of the Letter of Credit
Obligations at such time.

         "Other Taxes" is defined in Section 3.5(ii).

         "Participants" is defined in Section 12.2.1.

         "Payment Date" means the last day of each March, June, September and
December.

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

         "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 the Schedule attached hereto identified as
such.

                                       8
<PAGE>

         "Prime Rate" means a rate per annum equal to the prime rate of interest
announced by Bank One or by its parent, BANK ONE CORPORATION, from time to time,
changing when and as said prime rate changes.

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

         "Purchasers" is defined in Section 12.3.1.

         "Qualified Receivables Transaction" means any transaction or series of
transactions pursuant to which the Borrower or any Subsidiary sells, conveys,
pledges or otherwise transfers 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 all of the terms and
conditions of such transaction or series of transactions, including the amount
and type of any recourse to the Borrower or any Subsidiary with respect to the
assets transferred, are reasonably acceptable to the Agent.

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

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

         "Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors 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 2.20 to reimburse the
Issuer for amounts paid by the Issuer in respect of any one or more drawings
under Letters of Credit.

         "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, however, 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, however, 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; and provided, further, that the events described on Schedule
5.9 shall not constitute a Reportable

                                       9
<PAGE>

Event unless the Required Lenders determine that such events have had or are
reasonably expected to have a Material Adverse Effect.

         "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 unpaid principal
amount of the Aggregate Outstanding Credit Exposure.

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

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

         "Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.

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

         "SEC" means the Securities and Exchange Commission.

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

         "Significant Subsidiary" means, as of any date of determination, each
Subsidiary of the Borrower that meets any of the following criteria:

                  (i)      the Borrower's and its other Subsidiaries'
         Investments in and to such Subsidiary (and its respective
         Subsidiaries), as shown in the consolidated financial statements of the
         Borrower and its Subsidiaries prepared as of the end of the fiscal
         quarter ended most recently prior to such date of determination, exceed
         10% of the total consolidated assets of the Borrower and its
         Subsidiaries; or

                  (ii)     the assets of such Subsidiary (and its respective
         Subsidiaries) represent more than 10% of the consolidated assets of the
         Borrower and its Subsidiaries as would be shown in the consolidated
         financial statements referred to in clause (i) above; or

                  (iii)    such Subsidiary (and its respective Subsidiaries) is
         responsible for more than 10% of the consolidated net sales or of the
         consolidated net income of the Borrower and its Subsidiaries as
         reflected in the financial statements referred to in clause (i) above.

         "Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.

         "Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled,

                                       10
<PAGE>

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

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

         "Synthetic Lease Obligation" means the monetary obligation of a Person
under (i) a so-called synthetic or off-balance sheet or tax retention lease or
(ii) an agreement for the use or possession of property creating obligations
that do not appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person, would be characterized as indebtedness
of such Person (without regard to accounting treatment). The amount of Synthetic
Lease Obligations of any Person under any such lease or agreement shall be the
amount which would be shown as a liability on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles if such lease or
agreement were accounted for as a Capitalized Lease.

         "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 and Other Taxes.

         "Total Debt" means all Indebtedness of the Borrower and its
Subsidiaries (including Trust Preferred Securities, but excluding Mandatorily
Redeemable Stock), determined on a consolidated basis in accordance with
Agreement Accounting Principles. For purposes of calculating Total Debt,
obligations under interest rate swaps and similar arrangements shall be marked
to market in accordance with Financial Accounting Standard 133.

         "Transferee" is defined in Section 12.4.

         "Trust Preferred Securities" means preferred stock issued by a trust,
the common equities of which are owned by the Borrower.

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

         "Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.

                                       11
<PAGE>

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

         "Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.

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

                                  ARTICLE II.

                                  THE CREDITS

         2.1      Commitment. From and including the date of this Agreement and
prior to the Facility Termination Date, subject to the terms and conditions set
forth in this Agreement, (a) each Lender severally agrees to make Loans to the
Borrower from time to time in amounts not to exceed in the aggregate at any one
time outstanding the amount of its Commitment and (b) the Issuer agrees to issue
Letters of Credit for the account of the Borrower in an aggregate amount not to
exceed $10,000,000 (and each Lender severally agrees to participate in each such
Letter of Credit as more fully set forth in Section 2.20). Subject to the terms
of this Agreement, the Borrower may borrow, repay and reborrow at any time prior
to the Facility Termination Date. The Commitments hereunder shall expire on the
Facility Termination Date. Any repayments of Loans after the Facility
Termination Date may not be reborrowed.

         2.2      Required Payments; Maturity. The Aggregate Outstanding Credit
Exposure and all other unpaid Obligations shall be paid in full (or, the case of
any Letter of Credit, a Letter of Credit Collateral Account shall be established
in accordance with Section 2.20(xi)) by the Borrower on the Final Maturity Date.

         2.3      Ratable Loans. Each Advance hereunder shall consist of Loans
made from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.

         2.4      Types of Advances. The Advances may be Floating Rate Advances
or Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.

         2.5      Commitment Fee; Changes in Aggregate Commitment; Up-Front
Fees.

         (i)      The Borrower agrees to pay to the Agent for the account of
each Lender a commitment fee at a per annum rate equal to the Commitment Fee
Rate on the daily unused portion of such Lender's Commitment from the date
hereof to and including the Facility Termination Date, payable on each Payment
Date hereafter and on the Facility Termination Date.

                                       12
<PAGE>

         (ii)     The Borrower may permanently reduce the Aggregate Commitment
in whole, or in part ratably among the Lenders in integral multiples of
$1,000,000, upon at least ten (10) Business Days' written notice to the Agent,
which notice shall specify the amount of any such reduction, provided that the
amount of the Aggregate Commitment may not be reduced below the Aggregate
Outstanding Credit Exposure. All accrued commitment fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Loans hereunder.

         (iii)    The Borrower may, from time to time, by means of a letter
delivered to the Agent substantially in the form of Exhibit E, request that the
Aggregate Commitment be increased to up to $125,000,000 (less the amount of any
previous reductions of the Aggregate Commitment pursuant to clause (ii) above)
by (a) increasing the Commitment of one or more Lenders which have agreed to
such increase and/or (b) adding one or more commercial banks or other Persons as
a party hereto (each an "Additional Lender") with a Commitment in an amount
agreed to by any such Additional Lender; provided that no Additional Lender
shall be added as a party hereto without the written consent of the Agent (which
shall not be unreasonably withheld) or if a Default or an Unmatured Default
exists. Any increase in the Aggregate Commitment pursuant to this clause (iii)
shall be effective three Business Days after the date on which the Agent has
received (and, to the extent applicable, consented to) the applicable increase
letter in the form of Annex 1 to Exhibit E (in the case of an increase in the
Commitment of an existing Lender) or assumption letter in the form of Annex 2 to
Exhibit E (in the case of an Additional Lender). The Agent shall promptly notify
the Borrower and the Lenders of any increase in the amount of the Aggregate
Commitment pursuant to this clause (iii) and of each Lender's pro rata share of
the Aggregate Commitment of each Lender after giving effect thereto. The
Borrower acknowledges that, in order to maintain ratable Advances in accordance
with each Lender's pro rata share of the Aggregate Commitment, prepayment of all
or portions of certain ratable Advances may be required on the date of any
increase in the Aggregate Commitment pursuant to this clause (iii) (and any such
prepayment shall be subject to the provisions of Section 3.4).

         (iv)     The Borrower agrees to pay to the Agent on behalf of each
Lender on the date the Borrower signs this Agreement an up-front fee in the
amount previously agreed upon among the Company, the Agent and such Lender.

         2.6      Minimum Amount of Each Advance. Each Eurodollar Advance shall
be in the minimum amount of $1,000,000 (and in multiples of $100,000 if in
excess thereof), and each Floating Rate Advance shall be in the minimum amount
of $1,000,000 (and in multiples of $100,000 if in excess thereof), provided that
any Floating Rate Advance may be in the amount of the unused Aggregate
Commitment.

         2.7      Optional Principal Payments. The Borrower may from time to
time pay, without penalty or premium, all outstanding Floating Rate Advances,
or, in a minimum aggregate amount of $1,000,000 or any integral multiple of
$100,000 in excess thereof, any portion of the outstanding Floating Rate
Advances upon two Business Days' prior notice to the Agent. The Borrower may
from time to time pay, subject to the payment of any funding indemnification
amounts required by Section 3.4 but without penalty or premium, all outstanding
Eurodollar Advances, or, in a minimum aggregate amount of $1,000,000 or any
integral multiple of $100,000 in excess thereof, any portion of the outstanding
Eurodollar Advances upon three Business Days' prior notice to the Agent.

                                       13
<PAGE>

         2.8      Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) at least one Business Day before the
Borrowing Date of each Floating Rate Advance and three Business Days before the
Borrowing Date for each Eurodollar Advance, specifying:

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

         (ii)     the aggregate amount of such Advance,

         (iii)    the Type of Advance selected, and

         (iv)     in the case of each Eurodollar Advance, the Interest Period
                  applicable thereto.

Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII. The Agent will make
the funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.

         2.9      Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances pursuant to this
Section 2.9 or are repaid in accordance with Section 2.7. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then
applicable Interest Period therefor, at which time such Eurodollar Advance shall
be automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with Section 2.7 or (y) the
Borrower shall have given the Agent a Conversion/Continuation Notice (as defined
below) requesting that, at the end of such Interest Period, such Eurodollar
Advance continue as a Eurodollar Advance for the same or another Interest
Period. Subject to the terms of Section 2.6, the Borrower may elect from time to
time to convert all or any part of a Floating Rate Advance into a Eurodollar
Advance. The Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate Advance
into a Eurodollar Advance or continuation of a Eurodollar Advance not later than
10:00 a.m. (Chicago time) at least three Business Days prior to the date of the
requested conversion or continuation, specifying:

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

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

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

         2.10     Changes in Interest Rate, etc. Each Floating Rate Advance
shall bear interest on the outstanding principal amount thereof, for each day
from and including the date such Advance is made or is automatically converted
from a Eurodollar Advance into a Floating Rate Advance

                                       14
<PAGE>

pursuant to Section 2.9, to but excluding the date it is paid or is converted
into a Eurodollar Advance pursuant to Section 2.9 hereof, at a rate per annum
equal to the Floating Rate for such day. Changes in the rate of interest on that
portion of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate. Each Eurodollar
Advance shall bear interest on the outstanding principal amount thereof from and
including the first day of the Interest Period applicable thereto to (but not
including) the last day of such Interest Period at the interest rate determined
by the Agent as applicable to such Eurodollar Advance based upon the Borrower's
selections under Sections 2.8 and 2.9 and otherwise in accordance with the terms
hereof. No Interest Period may end after the Final Maturity Date.

         2.11     Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.8 or 2.9, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default the Required Lenders may, at their option,
by notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum, (ii) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Floating Rate in effect from time to time plus 2% per annum
and (iii) the Letter of Credit Fee Rate shall be increased by 2% per annum,
provided that, during the continuance of a Default under Section 7.6 or 7.7, the
interest rates set forth in clauses (i) and (ii) above and the increase in the
Letter of Credit Fee Rate set forth in clause (iii) above shall be applicable to
all applicable Credit Extensions without any election or action on the part of
the Agent or any Lender.

         2.12     Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with Bank One
for each payment of principal, interest, Reimbursement Obligations and fees as
it becomes due hereunder.

         2.13     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.

                                       15
<PAGE>

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

         (iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided that the failure of the
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 their terms.

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

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

         2.15     Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof, on any date
on which the Floating Rate Advance is prepaid, whether due to acceleration or
otherwise, and at maturity. Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Advance converted into a Eurodollar
Advance on a day other than a Payment Date shall be payable on the date of
conversion. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest and commitment fees shall be
calculated for actual days elapsed on the basis of a 360-day year, except that
interest accruing at the Prime Rate shall be calculated for actual days elapsed
on the basis of a 365, or when appropriate 366, day year. Interest shall be
payable for the day an Advance is made but not for the day of any payment on the
amount paid if

                                       16
<PAGE>

payment is received prior to noon (local time) at the place of payment. If any
payment of principal of or interest on an Advance shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such payment.

         2.16     Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.

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

         2.18     Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The 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 Agent, the recipient of such payment shall, on demand by the
Agent, repay to the 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 Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.

         2.19     Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender
so affected an "Affected Lender"), the Borrower may elect, if such amounts
continue to be charged or such suspension is still effective, to replace such
Affected Lender as a Lender party to this Agreement, provided that no Default or
Unmatured Default shall have occurred and be continuing at the time of such
replacement, and provided, further, that, concurrently with such replacement,
(i) another bank or other entity which is reasonably satisfactory to the
Borrower and the Agent shall agree, as of such date, to purchase for cash the
Advances and other Obligations due to the Affected Lender pursuant to an
assignment substantially in the form of Exhibit B and to become a Lender for all
purposes under

                                       17
<PAGE>

this Agreement and to assume all obligations of the Affected Lender to be
terminated as of such date and to comply with the requirements of Section 12.3
applicable to assignments, and (ii) the Borrower shall pay to such Affected
Lender in same day funds on the day of such replacement (A) all interest, fees
and other amounts then accrued but unpaid to such Affected Lender by the
Borrower hereunder to and including the date of termination, including without
limitation payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5,
and (B) an amount, if any, equal to the payment which would have been due to
such Lender on the day of such replacement under Section 3.4 had the Loans of
such Affected Lender been prepaid on such date rather than sold to the
replacement Lender.

         2.20     Letters of Credit.

         (i)      Issuance. The Issuer hereby agrees, on the terms and
conditions set forth in this Agreement, to issue standby letters of credit and
to renew, extend, increase, decrease or otherwise modify Letters of Credit
("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
Letter of Credit is issued or Modified, (i) the aggregate amount of the
outstanding LC Obligations shall not exceed $10,000,000 and (ii) the Aggregate
Outstanding Credit Exposure shall not exceed the Aggregate Commitment. No Letter
of Credit shall have an expiry date later than the scheduled Facility
Termination Date. By their execution of this Agreement, the Borrower, each
Lender, the Issuer and the Agent agree that, effective as of the date of this
Agreement, the Existing LC shall be a Letter of Credit under this Agreement and
subject to the terms hereof.

         (ii)     Participations. On the date of this Agreement, with respect to
the Existing LC, and upon the issuance of each other Letter of Credit or the
Modification of any Letter of Credit in accordance with this Section 2.20, the
Issuer shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably sold to each Lender, and each Lender shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably purchased from the Issuer, a participation in such Letter of Credit
(and each Modification thereof) and the related LC Obligations in proportion to
its pro rata share of the Aggregate Commitment.

         (iii)    Notice. Subject to Section 2.20(i), the Borrower shall give
the Issuer notice prior to 10:00 a.m. (Chicago time) at least three Business
Days prior to the proposed date of issuance or Modification of each Letter of
Credit, specifying the beneficiary, the proposed date of issuance (or
Modification) and the expiry date of such Letter of Credit, and describing the
proposed terms of such Letter of Credit and the nature of the transactions
proposed to be supported thereby. Upon receipt of such notice, the Issuer shall
promptly notify the Agent, and the Agent shall promptly notify each Lender, of
the contents thereof and of the amount of such Lender's participation in such
proposed Letter of Credit. The issuance or Modification by the Issuer of any
Letter of Credit shall, in addition to the conditions precedent set forth in
Article IV (the satisfaction of which the Issuer shall have no duty to
ascertain), be subject to the conditions precedent that such Letter of Credit
shall be satisfactory to the Issuer and that the Borrower shall have executed
and delivered such application agreement and/or such other instruments and
agreements relating to such Letter of Credit as the Issuer shall have reasonably
requested (each a

                                       18
<PAGE>

"Letter of Credit Application"). In the event of any conflict between the terms
of this Agreement and the terms of any Letter of Credit Application, the terms
of this Agreement shall control.

         (iv)     Letter of Credit Fees. The Borrower shall pay to the Agent,
for the account of the Lenders ratably in accordance with their respective pro
rata shares of the Aggregate Commitment, with respect to each Letter of Credit,
a letter of credit fee (the "Letter of Credit Fee") at a per annum rate equal to
the Letter of Credit Fee Rate in effect from time to time on the undrawn stated
amount available under such Letter of Credit, such fee to be payable in arrears
on each Payment Date. The Borrower shall also pay to the Issuer for its own
account (x) a fronting fee in the amount agreed to by the Issuer and the
Borrower from time to time, with such fee to be payable in arrears on each
Payment Date, and (y) documentary and processing charges in connection with the
issuance or Modification of and draws under Letters of Credit in accordance with
the Issuer's standard schedule for such charges as in effect from time to time.

         (v)      Administration; Reimbursement by Lenders. Upon receipt from
the beneficiary of any Letter of Credit of any demand for payment under such
Letter of Credit, the Issuer shall notify the Agent and the Agent shall promptly
notify the Borrower and each other Lender as to the amount to be paid by the
Issuer as a result of such demand and the proposed payment date (the "Letter of
Credit Payment Date"). The responsibility of the Issuer to the Borrower and each
Lender shall be only to determine that the documents (including each demand for
payment) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such Letter of
Credit. The Issuer shall endeavor to exercise the same care in its issuance and
administration of Letters of Credit as it does with respect to letters of credit
in which no participations are granted, it being understood that in the absence
of any gross negligence or willful misconduct by the Issuer, each Lender shall
be unconditionally and irrevocably obligated, without regard to the occurrence
of any Default or any condition precedent whatsoever, to reimburse the Issuer on
demand for (i) such Lender's pro rata share (determined by such Lender's pro
rata share of the Aggregate Commitment) of the amount of each payment made by
the Issuer under each applicable Letter of Credit to the extent such amount is
not reimbursed by the Borrower pursuant to Section 2.20(vi) below, plus (ii)
interest on the foregoing amount for each day from the date of the applicable
payment by the Issuer 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 or, beginning on third Business Day after demand for such amount
by the Issuer, the rate applicable to Floating Rate Advances.

         (vi)     Reimbursement by Borrower. The Borrower shall be irrevocably
and unconditionally obligated to reimburse the Issuer on or before the
applicable Letter of Credit Payment Date for any amount to be paid by the Issuer
upon any drawing under any Letter of Credit issued by the Issuer, without
presentment, demand, protest or other formalities of any kind; provided that the
Borrower shall not hereby be precluded from asserting any claim for direct (but
not consequential) damages suffered by the Borrower to the extent, but only to
the extent, caused by (i) the willful misconduct or gross negligence of the
Issuer in determining whether a request presented under any Letter of Credit
issued by it complied with the terms of such Letter of Credit or (ii) the
Issuer's failure to pay under any Letter of Credit issued by it after the
presentation to it of a request strictly complying with the terms and conditions
of such Letter of Credit. All such amounts paid by the 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 the sum of 2%

                                       19
<PAGE>

plus the rate applicable to Floating Rate Advances. The Issuer will pay to each
Lender ratably in accordance with its pro rata share of the Aggregate Commitment
all amounts received by it from the Borrower for application in payment, in
whole or in part, of the Reimbursement Obligation in respect of any Letter of
Credit issued by the Issuer, but only to the extent such Lender has made payment
to the Issuer in respect of such Letter of Credit pursuant to Section 2.20(v).

         (vii)    Obligations Absolute. The Borrower's obligations under this
Section 2.20 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Issuer, any Lender or any beneficiary
of a Letter of Credit. The Borrower further agrees with the Issuer and the
Lenders that neither the Issuer nor any Lender shall be responsible for, and the
Borrower's Reimbursement Obligation in respect of any Letter of Credit shall not
be affected by, among other things, the validity or genuineness of documents or
of any endorsements thereon, even if such documents should in fact prove to be
in any or all respects invalid, fraudulent or forged, or any dispute between or
among the Borrower, any of its Affiliates, the beneficiary of any Letter of
Credit or any financing institution or other party to whom any Letter of Credit
may be transferred or any claims or defenses whatsoever of the Borrower or of
any of its Affiliates against the beneficiary of any Letter of Credit or any
such transferee. The Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit. The
Borrower agrees that any action taken or omitted by the Issuer or any Lender
under or in connection with any Letter of Credit and the related drafts and
documents, if done without gross negligence or willful misconduct, shall be
binding upon the Borrower and shall not put the Issuer or any Lender under any
liability to the Borrower. Nothing in this Section 2.20(vii) is intended to
limit the right of the Borrower to make a claim against the Issuer for damages
as contemplated by the proviso to the first sentence of Section 2.20(vi).

         (viii)   Actions of Issuer. The Issuer shall be entitled to rely, and
shall be fully protected in relying, upon any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the Issuer. The
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 2.20, the 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 Letter of Credit.

         (ix)     Indemnification. The Borrower hereby agrees to indemnify and
hold harmless each Lender, the Issuer and the Agent, and their respective
directors, officers, agents and employees, from and against any and all claims
and damages, losses, liabilities, costs or expenses which such Lender, the
Issuer or the Agent may incur (or which may be claimed against such

                                       20
<PAGE>

Lender, the Issuer or the 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 Letter of Credit or any actual or proposed use of
any Letter of Credit, including, without limitation, any claims, damages,
losses, liabilities, costs or expenses which the Issuer may incur by reason of
or in connection with (i) the failure of any other Lender to fulfill or comply
with its obligations to the Issuer hereunder (but nothing herein contained shall
affect any rights the Borrower may have against any defaulting Lender) or (ii)
by reason of or on account of the Issuer issuing any Letter of Credit which
specifies that the term "Beneficiary" included therein includes any successor by
operation of law of the named Beneficiary, but which Letter of Credit does not
require that any drawing by any such successor Beneficiary be accompanied by a
copy of a legal document, satisfactory to the Issuer, evidencing the appointment
of such successor Beneficiary; provided that the Borrower shall not be required
to indemnify any Lender, the Issuer or the Agent for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to the extent,
caused by (x) the willful misconduct or gross negligence of the Issuer in
determining whether a request presented under any Letter of Credit issued by the
Issuer complied with the terms of such Letter of Credit or (y) the Issuer's
failure to pay under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of such Letter of
Credit. Nothing in this Section 2.20(ix) is intended to limit the obligations of
the Borrower under any other provision of this Agreement.

         (X)      Lenders' Indemnification. Each Lender shall, ratably in
accordance with its pro rata share of the Aggregate Commitment, indemnify the
Issuer, its affiliates and its directors, officers, agents and employees (to the
extent not reimbursed by the Borrower) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from such indemnitees' gross negligence or
willful misconduct or the Issuer's failure to pay under any Letter of Credit
after the presentation to it of a request strictly complying with the terms and
conditions of the Letter of Credit) that such indemnitees may suffer or incur in
connection with this Section 2.20 or any action taken or omitted by such
indemnitees hereunder.

         (xi)     Letter of Credit Collateral Account. The Borrower agrees that
it will, upon the request of the Agent or the Required Lenders and until the
final expiration date of any Letter of Credit and thereafter as long as any
amount is payable to the Issuer or the Lenders in respect of any Letter of
Credit, maintain a special collateral account pursuant to arrangements
satisfactory to the Agent (the "Letter of Credit Collateral Account") at the
Agent's office at the address specified pursuant to Article XIII, in the name of
such Borrower but under the sole dominion and control of the Agent, for the
benefit of the Lenders and in which the Borrower shall have no interest other
than as set forth in Section 8.1. The Borrower hereby pledges, assigns and
grants to the Agent, on behalf of and for the ratable benefit of the Lenders and
the Issuer, a security interest in all of the Borrower's right, title and
interest in and to all funds which may from time to time be on deposit in the
Letter of Credit Collateral Account to secure the prompt and complete payment
and performance of the Obligations. The Agent will invest any funds on deposit
from time to time in the Letter of Credit Collateral Account in certificates of
deposit of Bank One having a maturity not exceeding 30 days. Nothing in this
Section 2.20(xi) shall either obligate the Agent to require the Borrower to
deposit any funds in the Letter of Credit Collateral Account or limit the right
of the Agent to release any funds held in the Letter of Credit Collateral
Account in each case other than as required by Section 8.1; provided that if one
or more Letters

                                       21
<PAGE>

of Credit are outstanding on the Facility Termination Date, the Borrower shall
deposit funds in the Letter of Credit Collateral Account in an amount equal to
the stated amount of all such Letters of Credit, and such account shall at all
times thereafter have a balance in excess of the full amount available to be
drawn under such Letters of Credit.

         (xii)    Rights as a Lender. In its capacity as a Lender, the Issuer
shall have the same rights and obligations as any other Lender.

                                  ARTICLE III.

                             YIELD PROTECTION; TAXES

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

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

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

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

and the result of any of the foregoing is to increase the cost to such Lender,
the applicable Lending Installation or the Issuer of making or maintaining its
Eurodollar Loans, Letters of Credit or Commitment or to reduce the return
received by such Lender, the applicable Lending Installation or the Issuer in
connection with such Eurodollar Loans, Letters of Credit or Commitment, then,
within 15 days of demand by such Lender or the Issuer, the Borrower shall

                                       22
<PAGE>

pay such Lender or the Issuer such additional amount or amounts as will
compensate such Lender or the Issuer for such increased cost or reduction in
amount received.

         3.2      Changes in Capital Adequacy Regulations. If a Lender or the
Issuer determines the amount of capital required or expected to be maintained by
such Lender, the Issuer, any Lending Installation of such Lender or any
corporation controlling such Lender or the Issuer is increased as a result of a
Change, then, within 15 days of demand by such Lender or the Issuer, the
Borrower shall pay such Lender or the Issuer the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender or the Issuer determines is attributable to this Agreement,
its Outstanding Credit Exposure or its Commitment to make Loans and issue or
participate in Letters of Credit, as the case may be, hereunder (after taking
into account such Lender's or the Issuer's policies as to capital adequacy).
"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, any Lending Installation or the Issuer or any
corporation controlling any Lender or the Issuer. "Risk-Based Capital
Guidelines" means (i) the risk-based capital guidelines in effect in the United
States on the date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory authorities outside
the United States implementing the July 1988 report of the Basle Committee on
Banking Regulation and Supervisory Practices Entitled "International Convergence
of Capital Measurements and Capital Standards," including transition rules, and
any amendments to such regulations adopted prior to the date of this Agreement.

         3.3      Availability of Types of Advances. If any Lender determines
that maintenance of its Eurodollar Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate Advances
(on or before the date required by such law, rule, regulation or directive),
subject to the payment of any funding indemnification amounts required by
Section 3.4.

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

         3.5      Taxes. (i) All payments by the Borrower to or for the account
of any Lender, the Issuer or the Agent hereunder or under any Note 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

                                       23
<PAGE>

from or in respect of any sum payable hereunder to any Lender, the Issuer or the
Agent, (a) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.5) such Lender, the Issuer or the 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 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 Letter of Credit Application or from the execution or delivery of,
or otherwise with respect to, this Agreement, any Note or any Letter of Credit
Application ("Other Taxes").

         (iii) The Borrower hereby agrees to indemnify the Agent, each Lender
and the Issuer for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent, such Lender or the Issuer and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days of
the date the Agent, such Lender or the Issuer 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, not less than ten Business Days after the date of this Agreement, (i)
deliver to each of the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, certifying in either
case that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes, and
(ii) deliver to each of the Borrower and the Agent a United States Internal
Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to
an exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrower and the 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 Agent. All forms or amendments described in the preceding
sentence shall certify that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form or amendment with respect to it and such Lender advises the Borrower and
the Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.

         (v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv), above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any

                                       24
<PAGE>

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 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 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 Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.

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

                                       25
<PAGE>

                                  ARTICLE IV.

                              CONDITIONS PRECEDENT

         4.1      Initial Credit Extension. The Lenders and the Issuer shall not
be required to make the initial Credit Extension hereunder unless the Borrower
has furnished to the Agent with sufficient copies for the Lenders:

         (i)      Copies of the articles or certificate of incorporation of the
                  Borrower, together with all amendments, and a certificate of
                  good standing, each certified by the appropriate governmental
                  officer in its jurisdiction of incorporation.

         (ii)     Copies certified by the Secretary or Assistant Secretary of
                  the Borrower, of its by-laws and of its Board of Directors'
                  resolutions and of resolutions or actions of any other body
                  authorizing the execution of the Loan Documents to which the
                  Borrower is a party.

         (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 officers of the
                  Borrower authorized to sign the Loan Documents to which the
                  Borrower is a party, upon which certificate the Agent and the
                  Lenders shall be entitled to rely until informed of any change
                  in writing by the Borrower.

         (iv)     Evidence,in form and substance satisfactory to the Agent, that
                  the Borrower has obtained all governmental approvals necessary
                  for it to enter into the Loan Documents.

         (v)      A certificate, signed by an Authorized Officer of the
                  Borrower, stating that on the initial Borrowing Date no
                  Default or Unmatured Default has occurred and is continuing.

         (vi)     A written opinion of the Borrower's counsel, addressed to the
                  Lenders in substantially the form of Exhibit A.

         (vii)    Any Notes requested by a Lender pursuant to Section 2.13
                  payable to the order of each such requesting Lender.

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

         (ix)     Evidence,in form and substance satisfactory to the Agent, of
                  the termination of the Existing Agreement and the repayment in
                  full of all outstanding obligations of the Borrower thereunder
                  (it being understood that the Existing LC shall become a
                  Letter of Credit hereunder on the date of this Agreement).

                                       26
<PAGE>

         (x)      If the initial Credit Extension will be the issuance of a
                  Letter of Credit, a properly completed Letter of Credit
                  Application.

         (xi)     Such other documents as any Lender or its counsel may have
                  reasonably requested.

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

         (i)      There exists no Default or Unmatured Default.

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

         (iii)    All legal matters incident to the making of such Credit
                  Extension shall be satisfactory to the Lenders and their
                  counsel.

         Each Borrowing Notice and each request for the issuance of a Letter of
Credit shall constitute a representation and warranty by the Borrower that the
conditions contained in Sections 4.2(i) and (ii) have been satisfied.

                                   ARTICLE V.

                         REPRESENTATIONS AND WARRANTIES

         The Borrower represents and warrants to the Lenders that:

         5.1      Existence and Standing. Each of the Borrower and its
Subsidiaries is a corporation, partnership or limited liability company duly and
properly incorporated or organized, as the case may be, validly existing and (to
the extent such concept applies to such entity) in good standing under the laws
of its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.

         5.2      Authorization and Validity. The Borrower has the corporate
power and authority and legal right to execute and deliver the Loan Documents
and to perform its obligations thereunder. The execution and delivery by the
Borrower of the Loan Documents and the performance of its obligations thereunder
have been duly authorized by proper corporate proceedings. After giving effect
to each Credit Extension hereunder, the aggregate amount of all Indebtedness and
borrowings of the Borrower will not exceed the maximum amount of Indebtedness
and borrowings authorized by the Borrower's Board of Directors. The Loan
Documents constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.

                                       27
<PAGE>

         5.3      No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate (i) any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or any of its Subsidiaries, or (ii) the
Borrower's or any Subsidiary's articles or certificate of incorporation,
partnership agreement, certificate of partnership, articles or certificate of
organization, bylaws, or operating or other management agreement, as the case
may be, or (iii) the provisions of any indenture, instrument or agreement to
which the Borrower or any of its Subsidiaries is a party or is subject, or by
which it, or its Property, is bound, or conflict with or constitute a default
thereunder, or result in, or require, the creation or imposition of any Lien in,
of or on the Property of the Borrower or a Subsidiary pursuant to the terms of
any such indenture, instrument or agreement. No order, consent, adjudication,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, or other action in respect of any
governmental or public body or authority, or any subdivision thereof, which has
not been obtained by the Borrower or any of its Subsidiaries and is in full
force and effect, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and performance by
the Borrower of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents, except that the Borrower is
required to make a notice filing with the SEC pursuant to the SEC's Rule 52
adopted pursuant to the Public Utility Holding Company Act of 1935, as amended.
The Borrower covenants that it will make the notice filing referred to in the
preceding sentence within the time limited prescribed therefor and further
represents that no further consent, approval, license, authorization or
validation of the SEC is required in connection therewith.

         5.4      Financial Statements. The September 30, 2002 consolidated
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Borrower and
its Subsidiaries at such date and the consolidated results of their operations
for the period then ended.

         5.5      Material Adverse Change. Since September 30, 2002 no event has
occurred which could reasonably be expected to have a Material Adverse Effect.

         5.6      Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said 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 as to which adequate
reserves have been provided in accordance with Agreement Accounting Principles
and as to which no Lien exists. The United States income tax returns of the
Borrower and its Subsidiaries have been audited by the Internal Revenue Service
through the fiscal year ended July 31, 1997. No tax liens have been filed
against the Borrower or any Subsidiary. The charges, accruals and reserves on
the books of the Borrower and its Subsidiaries in respect of any taxes or other
governmental charges are adequate.

                                       28
<PAGE>

         5.7      Litigation and Contingent Obligations. Except as described on
Schedule 5.7 or in the Borrower's annual report on Form 10K for the year ended
December 31, 2001 and the Borrower's quarterly reports on Form 10Q for the
periods ended March 31, 2002, June 30, 2002 and September 30, 2002, there is no
litigation, arbitration, governmental investigation, proceeding or inquiry
pending or, to the knowledge of any of their officers, threatened against or
affecting the Borrower or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect or which seeks to prevent, enjoin or
delay the making of any Loans. Other than any liability incident to any
litigation, arbitration or proceeding which could not reasonably be expected to
have a Material Adverse Effect, the Borrower has no material contingent
obligations not provided for or disclosed in the financial statements referred
to in Section 5.4.

         5.8      Subsidiaries. As of the date of this Agreement, the Borrower
has no Subsidiaries other than Southwestern Public Service Capital I.

         5.9      ERISA. The Unfunded Liabilities of all Single Employer Plans
do not in the aggregate exceed $25,000,000. Each Plan complies in all material
respects with all applicable requirements of law and regulations, no Reportable
Event has occurred with respect to any Plan, neither the Borrower nor any other
member of the Controlled Group (while it was a member of the Controlled Group)
has withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to reorganize or terminate any Plan. Neither the Borrower nor any other
member of the Controlled Group is party to any Multiemployer Plan.

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

         5.11     Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.

         5.12     Material Agreements. Neither the Borrower nor any Subsidiary
is a party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness.

         5.13     Compliance With Laws. The Borrower and its Subsidiaries have
complied in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof having jurisdiction over the conduct of
their respective businesses or the ownership of their respective Property.

                                       29
<PAGE>

         5.14     Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Loans hereunder gives rise to a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code.

         5.15     Environmental Matters. In the ordinary course of its business,
the officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect. Neither the Borrower 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.

         5.16     Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.

         5.17     Public Utility Holding Company Act. The Borrower is a
subsidiary of Xcel Energy Inc., which is a regulated "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.

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

                                  ARTICLE VI.

                                  COVENANTS

         During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:

         6.1      Financial Reporting. The Borrower will maintain, for itself
and each Subsidiary, a system of accounting established and administered in
accordance with Agreement Accounting Principles, and furnish to the Lenders:

         (i)      Within 90 days after the close of each of its fiscal years, an
                  unqualified (except for qualifications relating to changes in
                  accounting principles or practices reflecting changes in
                  generally accepted accounting principles and required or
                  approved by the Borrower's independent certified public
                  accountants) audit report

                                       30
<PAGE>

                  certified by nationally recognized independent certified
                  public accountants, prepared in accordance with Agreement
                  Accounting Principles on a consolidated basis for itself and
                  its Subsidiaries, including balance sheets as of the end of
                  such period, related profit and loss and reconciliation of
                  surplus statements, and a statement of cash flows, accompanied
                  by any management letter prepared by said accountants.

         (ii)     Within 45 days after the close of the first three quarterly
                  periods of each of its fiscal years, for itself and its
                  Subsidiaries, consolidated unaudited balance sheets as at the
                  close of each such period and consolidated profit and loss and
                  reconciliation of surplus statements and a statement of cash
                  flows for the period from the beginning of such fiscal year to
                  the end of such quarter, all certified by an Authorized
                  Officer.

         (iii)    As soon as possible and in any event within 10 days after the
                  Borrower knows that any Reportable Event has occurred with
                  respect to any Plan, a statement, signed by an Authorized
                  Officer, describing said Reportable Event and the action which
                  the Borrower proposes to take with respect thereto.

         (iv)     As soon as possible and in any event within 10 days after
                  receipt by the Borrower, a copy of (a) any notice or claim to
                  the effect that the Borrower or any of its Subsidiaries is or
                  may be liable to any Person as a result of the release by the
                  Borrower, any of its Subsidiaries, or any other Person of any
                  toxic or hazardous waste or substance into the environment,
                  and (b) any notice alleging any violation of any federal,
                  state or local environmental, health or safety law or
                  regulation by the Borrower or any of its Subsidiaries, which,
                  in either case, could reasonably be expected to have a
                  Material Adverse Effect.

         (v)      Promptly upon the furnishing thereof to the shareholders of
                  the Borrower, copies of all financial statements, reports and
                  proxy statements so furnished.

         (vi)     Promptly upon the filing thereof, copies of all registration
                  statements and annual, quarterly, monthly or other regular
                  reports which the Borrower or any of its Subsidiaries files
                  with the SEC.

         (vii)    Together with the annual and quarterly reports referred to in
                  clauses (i) and (ii) above, a certificate in the form of
                  Exhibit F, certified by an Authorized Officer.

         (viii)   Such other information (including non-financial information)
                  as the Agent or any Lender may from time to time reasonably
                  request.

         6.2      Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Credit Extensions for general corporate
purposes and to repay outstanding Credit Extensions. The Borrower will not, nor
will it permit any Subsidiary to, use any of the proceeds of the Credit
Extensions to purchase or carry any "margin stock" (as defined in Regulation U)
or to make any hostile Acquisition.

                                       31
<PAGE>

         6.3      Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders within five (5) days
of the occurrence of any Default or Unmatured Default and of any other
development, financial or otherwise, which could reasonably be expected to have
a Material Adverse Effect (it being understood and agreed that the Borrower and
its Subsidiaries shall not be required to make separate disclosure under this
Section 6.3 of occurrences or developments which have previously been disclosed
to the Lenders in any financial statements or other information delivered to the
Lenders pursuant to Section 6.1).

         6.4      Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.

         6.5      Taxes. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles.

         6.6      Insurance. The Borrower will, and will cause each Subsidiary
to, maintain a self-insurance program, and maintain with financially sound and
reputable insurance companies insurance on all their Property in such amounts
and covering such risks as is consistent with sound business practice, and the
Borrower will furnish to any Lender upon request full information as to the
insurance carried.

         6.7      Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, where failure to do so could
reasonably be expected to have a Material Adverse Effect.

         6.8      Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, do all things necessary to maintain, preserve, protect and
keep its Property in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.

         6.9      Inspection. The Borrower will, and will cause each Subsidiary
to, permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and

                                       32
<PAGE>

to be advised as to the same by, their respective officers at such reasonable
times and intervals as the Agent or any Lender may designate.

         6.10     Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except that,
so long as both immediately prior to and after giving effect to such merger or
consolidation, no Default or Unmatured Default shall have occurred and be
continuing, then (i) any Subsidiary may merge with the Borrower or a
Wholly-Owned Subsidiary and (ii) the Borrower may merge or consolidate with any
other Person so long as the Borrower is the surviving entity.

         6.11     Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:

         (i)      Sales of inventory in the ordinary course of business.

         (ii)     Leases, sales or other dispositions of its Property that,
                  together with all other Property of the Borrower and its
                  Subsidiaries previously leased, sold or disposed of (other
                  than inventory in the ordinary course of business) as
                  permitted by this Section during the twelve-month period
                  ending with the month in which any such lease, sale or other
                  disposition occurs, do not constitute a Substantial Portion of
                  the Property of the Borrower and its Subsidiaries.

         (iii)    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.

         6.12     Debt to Capitalization Ratio. The Borrower will not at any
time permit the Debt to Capitalization Ratio to be greater than 0.55 to 1.00.

         6.13     Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio as of the last day of any fiscal quarter to be less than
2.75 to 1.0.

         6.14     Liens. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except:

         (a) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or thereafter can
be paid without penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on its books.

         (b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due or
which are being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its books.

                                       33
<PAGE>

         (c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation.

         (d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not in
any material way affect the marketability of the same or interfere with the use
thereof in the business of the Borrower or its Subsidiaries.

         (e) Liens existing on the date hereof and described in Schedule 6.14.

         (f) Liens incurred in connection with Qualified Receivables
Transactions.

         (g) Purchase money Liens arising in the ordinary course of business;
provided that the aggregate amount of Indebtedness secured by all such Liens
shall not at any time exceed $5,000,000.

         6.15     Intercompany Transactions. The Borrower will not, and will not
permit any Subsidiary to, (a) make any loan or advance to, or any investment in,
Xcel Energy Inc. or any Affiliate thereof (other than the Borrower or any
Subsidiary thereof); or (b) enter into any other transaction with Xcel Energy
Inc. or any Affiliate thereof (other than the Borrower or any Subsidiary
thereof) except 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 arms' length
transaction with unrelated third parties. Nothing in this Section 6.15 shall
restrict the ability of the Borrower to pay dividends to Xcel Energy Inc. so
long as no Default or Unmatured Default exists or would result therefrom.

         6.16     Off-Balance Sheet Liabilities. The Borrower will not at any
time permit the aggregate amount of all Off-Balance Sheet Liabilities (excluding
(i) Receivables Transaction Attributed Obligations and (ii) the existing
Off-Balance Sheet Liabilities listed on Schedule 6.16) of the Borrower and its
Subsidiaries to exceed $100,000,000.

         6.17     Receivables Transaction Attributed Obligations. The Borrower
will not at any time permit the aggregate amount of all Receivables Transaction
Attributed Obligations to exceed $75,000,000.

                                  ARTICLE VII.

                                   DEFAULTS

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

         7.1      Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent
under or in connection with this Agreement, any Loan, 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.

                                       34
<PAGE>

         7.2      Nonpayment of principal of any Loan when due, nonpayment of
any Reimbursement Obligation within one Business Day after the same becomes due,
or nonpayment of interest upon any Loan or of any commitment fee, Letter of
Credit Fee or other obligations under any of the Loan Documents within five days
after the same becomes due.

         7.3      The breach by the Borrower of any of the terms or provisions
of Section 6.2, 6.3, 6.10, 6.12 or 6.13.

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

         7.5      Failure of the Borrower and/or any of its Significant
Subsidiaries to pay when due any Indebtedness aggregating in excess of
$25,000,000 ("Material Indebtedness"); or the default by the Borrower and/or any
of its Significant Subsidiaries in the performance of any term, provision or
condition contained in any agreement under which any such Material Indebtedness
was created or is governed, or any other event shall occur or condition exist,
the effect of which default or event is to cause, or to permit the holder or
holders of such Material Indebtedness to cause, such Indebtedness to become due
prior to its stated maturity; or any Material Indebtedness of the Borrower
and/or any of its Significant 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 Significant Subsidiaries shall not pay, or admit in writing its inability
to pay, its debts generally as they become due.

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

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

         7.8      Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
portion of the Property of the Borrower and its Subsidiaries which, when taken
together with all other Property of the Borrower and its

                                       35
<PAGE>

Subsidiaries so condemned, seized, appropriated, or taken custody or control of,
during the twelve-month period ending with the month in which any such action
occurs, constitutes a Substantial Portion.

         7.9      The Borrower or any of its Significant Subsidiaries shall fail
within 30 days to pay, bond or otherwise discharge one or more (i) judgments or
orders for the payment of money in excess of $25,000,000 (or the equivalent
thereof in currencies other than U.S. Dollars) in the aggregate, or (ii)
nonmonetary judgments or orders which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, which judgment(s), in
any such case, is/are not stayed on appeal or otherwise being appropriately
contested in good faith.

         7.10     The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $25,000,000; any Reportable Event shall occur in
connection with any Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA in excess of
$5,000,000; a contribution failure occurs with respect to any Plan sufficient to
give rise to a Lien under section 302(f) of ERISA; or the Borrower or any other
member of the Controlled Group shall become party to any Multiemployer Plan.

         7.11     The Borrower or any of its Significant Subsidiaries shall (i)
be the subject of any proceeding or investigation pertaining to the release by
the Borrower, any of its Significant Subsidiaries 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.

         7.12     The representations and warranties set forth in Section 5.14
("Plan Assets; Prohibited Transactions") shall at any time not be true and
correct.

         7.13     Xcel Energy Inc. or any successor thereto shall cease to own,
free and clear of all Liens or other encumbrances, 100% of the outstanding
shares of voting stock of the Borrower on a fully diluted basis.

                                 ARTICLE VIII.

                 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

         8.1      Acceleration; Letter of Credit Collection Account.

         (i) If any Default described in Section 7.6 or 7.7 occurs with respect
to the Borrower, the obligations of the Lenders to make Loans hereunder and the
obligation and power of the Issuer to issue Letters of Credit shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Agent, any Lender or
the Issuer and the Borrower will be and become thereby unconditionally
obligated, without any further notice, act or demand, to pay to the Agent an
amount in immediately available funds, which funds shall be held in the Letter
of Credit Collateral Account, equal to the excess of (x) the amount of LC
Obligations at such time over (y) the amount on deposit in the Letter of Credit
Collateral Account at such time which is free and clear of all rights and claims
of third parties and has not been applied against the Obligations (such
difference, the "Collateral Shortfall Amount"). If any other Default occurs and
is continuing, the Required Lenders (or the Agent

                                       36
<PAGE>

with the consent of the Required Lenders) may (a) terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the Issuer to issue Letters of Credit, or declare the Obligations to be due
and payable, or both, whereupon 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, and/or (b) upon notice to the
Borrower and in addition to the continuing right to demand payment of all
amounts payable under this Agreement, make demand on the Borrower to pay, and
the Borrower will, forthwith upon such demand and without any further notice or
act, pay to the Agent in immediately available funds the Collateral Shortfall
Amount, which funds shall be deposited in the Letter of Credit Collateral
Account.

         (ii) If at any time while any Default exists, the Agent determines that
the Collateral Shortfall Amount at such time is greater than zero, the Agent may
make demand on the Borrower to pay, and the Borrower will, forthwith upon such
demand and without any further notice or act, pay to the Agent in immediately
available funds the Collateral Shortfall Amount, which funds shall be deposited
in the Letter of Credit Collateral Account.

         (iii) The Agent may at any time or from time to time, after funds are
deposited in the Letter of Credit Collateral Account, apply such funds to the
payment of the Obligations and any other amounts as shall from time to time have
become due and payable by the Borrower to the Lenders or the Issuer under the
Loan Documents.

         (iv) At any time while any Default is continuing, neither the Borrower
nor any Person claiming on behalf of or through the Borrower shall have any
right to withdraw any of the funds held in the Letter of Credit Collateral
Account. After all of the Obligations have been indefeasibly paid in full and
the Aggregate Commitment has been terminated, any funds remaining in the Letter
of Credit Collateral Account shall be returned by the Agent to the Borrower or
paid to whomever may be legally entitled thereto at such time.

         If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as 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
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.

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

         (i)      Extend the final maturity of any Loan or the Final Maturity
                  Date, or extend the expiry date of any Letter of Credit to a
                  date after the Facility Termination Date, forgive all or any
                  portion of the principal amount thereof, or reduce the rate or

                                       37
<PAGE>

                  extend the time of payment of interest or fees thereon or any
                  Reimbursement Obligation related thereto.

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

         (iii)    Extend the Facility Termination Date, or reduce the amount or
                  extend the payment date for, the mandatory payments required
                  under Section 2.2, or increase the amount of the Aggregate
                  Commitment or of the Commitment of any Lender hereunder, or
                  permit the Borrower to assign its rights under this Agreement.

         (iv)     Amend this Section 8.2.

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

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

                                  ARTICLE IX.

                               GENERAL PROVISIONS

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

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

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

                                       38
<PAGE>

         9.4      Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent, the Lenders and the
Issuer and supersede all prior agreements and understandings among the Borrower,
the Agent, the Lenders and the Issuer relating to the subject matter thereof
other than the fee letter described in Section 10.13.

         9.5      Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the extent to which
the 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 Arranger shall enjoy the benefits of the provisions of
Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and
shall have the right to enforce such provisions on its own behalf and in its own
name to the same extent as if it were a party to this Agreement.

         9.6      Expenses; Indemnification. (i) The Borrower shall reimburse
the Agent and the Arranger for all reasonable costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and reasonable time
charges of attorneys for the Agent, which attorneys may be employees of the
Agent) paid or incurred by the Agent or the Arranger in connection with the
preparation, negotiation, execution, delivery, syndication, review, amendment,
modification, and administration of the Loan Documents. The Borrower also agrees
to reimburse the Agent, the Arranger, the Lenders and the Issuer for all
reasonable costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' fees and reasonable time charges of attorneys for the
Agent, the Arranger, the Lenders and the Issuer, which attorneys may be
employees of the Agent, the Arranger, the Lenders or the Issuer) paid or
incurred by the Agent, the Arranger, any Lender or the Issuer in connection with
the collection and enforcement of the Loan Documents.

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

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

                                       39
<PAGE>

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

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

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

         9.11     Limited Disclosure. (a) Notwithstanding anything to the
contrary herein, the Borrower, each Lender and the Agent hereby agree that, from
the commencement of discussions with respect to the facility established by this
Agreement (the "Facility"), the Borrower, each Lender and the Agent (and each of
their respective, and their respective Affiliates', employees, officers,
directors, representatives, advisors and agents) are permitted to disclose to
any and all Persons, without limitation of any kind, the structure and tax
aspects (as such terms are used in sections 6011 and 6111 of the Code) of the
Facility, and all materials or any kind (including opinions or other tax
analyses) that are provided to the Borrower, any Lender or the Agent related to
such structure and tax aspects. In this regard, each of the Borrower, each
Lender and the Agent acknowledges and agrees that the disclosure of the
structure or tax aspects of the Facility is not limited in any way by an express
or implied understanding or agreement, oral or written (whether or not such
understanding or agreement is legally binding). Furthermore, each of the
Borrower, each Lender and the Agent acknowledges and agrees that it does not
know or have reason to know that its use or disclosure of information relating
to the structure or tax aspects of the Facility is limited in any other manner
(such as where the Facility is claimed to be proprietary or exclusive) for the
benefit of any other Person.

         (b) Neither the Agent nor any Lender may disclose to any Person any
Specified Information (as defined below) except to its, and its Affiliates',
officers, employees, agents,

                                       40
<PAGE>

accountants, legal counsel, advisors and other representatives who have a need
to know such Specified Information. "Specified Information" means information
that the Borrower furnishes to the Agent or any Lender in a writing designated
as confidential, but does not include any such information that (i) relates to
the "structure" or "tax aspects" of the transactions contemplated by this
Agreement, as such terms are used in Sections 6011, 6111 and 6112 of the Code
and the regulations promulgated thereunder or (ii) is or becomes generally
available to the public or that is or becomes available to the Agent or such
Lender from a source other than the Borrower.

         (c) The provisions of subsection (b) above shall not apply to Specified
Information (i) that is a matter of general public knowledge or has heretofore
been or is hereafter published in any source generally available to the public,
(ii) that is required to be disclosed by law, regulation or judicial order,
including pursuant to the tax shelter regulations under Sections 6011, 6111 and
6112 of the Code, (iii) that is requested by any regulatory body with
jurisdiction over the Agent or any Lender, or (iv) that is disclosed to legal
counsel, accountants and other professional advisors to such Lender, in
connection with the exercise of any right or remedy hereunder or under any Note
or any suit or other litigation or proceeding relating to this Agreement or any
Note, to a rating agency if required by such agency in connection with a rating
relating to Credit Extensions hereunder or to assignees or participants or
potential assignees or participants who agree to be bound by the provisions of
this Section 9.11.

         (d) The provisions of this Section 9.11 supersede any confidentiality
obligations of any Lender or the Agent relating to the Facility under any
agreement between the Borrower and any such party. The parties hereto agree that
any such confidentiality obligations of any Lender or the Agent shall be deemed
void ab initio to the extent the same relate to the Facility.

         9.12     Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) for the repayment of the
Credit Extensions provided for herein.

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

                                   ARTICLE X.

                                   THE AGENT

         10.1     Appointment; Nature of Relationship. Bank One, is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the 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 Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have

                                       41
<PAGE>

any fiduciary responsibilities to any Lender by reason of this Agreement or any
other Loan Document and that the 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 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 Section 9-105 of the 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 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 Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the terms
of each thereof, together with such powers as are reasonably incidental thereto.
The 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 Agent.

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

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

         10.5     Action on Instructions of Lenders. The 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 (or, when expressly required hereunder, all of the
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 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 Agent shall be fully justified in

                                       42
<PAGE>

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 Agent may execute any of
its duties as 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 Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.

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

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

         10.9     Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the 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 Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders.

                                       43
<PAGE>

         10.10    Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The 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 of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The 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 Agent, the 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 Agent, the 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 Agent. The 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 Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders; provided that the
Agent may not be removed unless the Agent (in its individual capacity) and any
affiliate thereof acting as Issuer is relieved of all of its duties as Issuer
pursuant to documentation reasonably satisfactory to such Person on or prior to
the date of such removal. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint, on behalf of the Borrower and the
Lenders, a successor Agent. If no successor Agent shall have been so appointed
by the Required Lenders within thirty days after the resigning Agent's giving
notice of its intention to resign, then the resigning Agent may appoint, on
behalf of the Borrower and the Lenders, a successor Agent. Notwithstanding the
previous sentence, the Agent may at any time without the consent of any Lender
and with the consent of the Borrower, not to be unreasonably withheld or
delayed, appoint any of its Affiliates which is a commercial bank as a successor
Agent hereunder. If the Agent has resigned or been removed and no successor
Agent has been appointed, the Lenders may perform all the duties of the 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 Agent shall be deemed to be appointed hereunder until such
successor Agent has accepted the appointment. Any such successor Agent shall be
a commercial bank having capital and retained earnings of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed 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 Agent,

                                       44
<PAGE>

the provisions of this Article X shall continue in effect for the benefit of
such Agent in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Agent by merger, or the Agent assigns its
duties and obligations to an Affiliate pursuant to this Section 10.12, then the
term "Prime Rate" as used in this Agreement shall mean the prime rate, base rate
or other analogous rate of the new Agent.

         10.13    Agent's Fee. The Borrower agrees to pay to the Agent, for its
own account, the fees agreed to by the Borrower and the Agent pursuant to that
certain letter agreement dated January 23, 2003, or as otherwise agreed from
time to time.

         10.14    Delegation to Affiliates. The Borrower and the Lenders agree
that the 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 Agent is entitled under Articles IX and X.

         10.15    Syndication Agent. No Lender identified on the cover page, the
signature pages or otherwise in this Agreement, or in any document related
hereto, as being the "Syndication Agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement in such
capacity other than those applicable to all Lenders. Each Lender acknowledges
that it has not relied, and will not rely, on the Syndication Agent in deciding
to enter into this Agreement or in taking or refraining from taking any action
hereunder or pursuant hereto.

                                  ARTICLE XI.

                            SETOFF; RATABLE PAYMENTS

         11.1     Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, 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 and payments
made to the Issuer in respect of Reimbursement Obligations so long as the
Lenders have not funded their participations therein) 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
ratable proportion of the Aggregate Outstanding Credit Exposure. If any Lender,
whether in connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligations or such
amounts which may be subject to setoff, such Lender agrees, promptly upon

                                       45
<PAGE>

demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Aggregate Outstanding
Credit Exposure. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.

                                  ARTICLE XII.

                BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

         12.1     Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3. The parties to this Agreement acknowledge that clause (ii) of
this Section 12.1 relates only to absolute assignments and does not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by any Lender of all or any portion of its rights under
this Agreement and any Note to a Federal Reserve Bank; 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 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 Agent may in its discretion (but shall not be required to)
follow instructions from the Person which made any Loan or which holds any Note
to direct payments relating to such Loan or Note to another Person. Any assignee
of the rights to any Loan or any Note agrees by acceptance of such assignment to
be bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the owner of the rights to any Loan (whether
or not a Note has been issued in evidence thereof), shall be conclusive and
binding on any subsequent holder or assignee of the rights to such Loan.

         12.2     Participations.

                  12.2.1   Permitted Participants; Effect. Any Lender may, in
         the ordinary course of its business and in accordance with applicable
         law, at any time sell to one or more banks or other entities
         ("Participants") participating interests in any Outstanding Credit
         Exposure owing to such Lender, any Note held by such Lender, any
         Commitment of such Lender or any other interest of such Lender under
         the Loan Documents. 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 Agent shall continue to deal solely and
         directly with such Lender in connection with such Lender's rights and
         obligations under the Loan Documents.

                                       46
<PAGE>

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

                  12.2.3   Benefit of Setoff. The Borrower agrees that each
         Participant shall be deemed to have the right of setoff provided in
         Section 11.1 in respect of its participating interest in amounts owing
         under the Loan Documents to the same extent as if the amount of its
         participating interest were owing directly to it as a Lender under the
         Loan Documents, provided that each Lender shall retain the right of
         setoff provided in Section 11.1 with respect to the amount of
         participating interests sold to each Participant. The Lenders agree to
         share with each Participant, and each Participant, by exercising the
         right of setoff provided in Section 11.1, agrees to share with each
         Lender, any amount received pursuant to the exercise of its right of
         setoff, such amounts to be shared in accordance with Section 11.2 as if
         each Participant were a Lender.

         12.3     Assignments.

                  12.3.1   Permitted Assignments. Any Lender may, in the
         ordinary course of its business and in accordance with applicable law,
         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. Such assignment shall be substantially in the form of
         Exhibit C or in such other form as may be agreed to by the parties
         thereto. The consent of the Borrower and the 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 consent 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 Agent otherwise consents) be in an amount not less than the
         lesser of (i) $10,000,000 or (ii) the remaining amount of the assigning
         Lender's Commitment (calculated as at the date of such assignment) or
         outstanding Loans (if the applicable Commitment has been terminated).

                  12.3.2   Effect; Effective Date. Upon (i) delivery to the
         Agent of an assignment, together with any consents required by Section
         12.3.1, and (ii) payment of a $3,500 fee to the Agent for processing
         such assignment (unless such fee is waived by the 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

                                       47
<PAGE>

         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 Agent shall be required to release the
         transferor Lender with respect to the percentage of the Aggregate
         Commitment and the Aggregate Outstanding Credit Exposure assigned to
         such Purchaser. Upon the consummation of any assignment to a Purchaser
         pursuant to this Section 12.3.2, the transferor Lender, the Agent and
         the Borrower shall, if the transferor Lender or the Purchaser desires
         that its Loans be evidenced by Notes, make appropriate arrangements so
         that new Notes or, as appropriate, replacement Notes are issued to such
         transferor Lender and new Notes or, as appropriate, replacement Notes,
         are issued to such Purchaser, in each case in principal amounts
         reflecting their respective Commitments, as adjusted pursuant to such
         assignment.

         12.4     Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.

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

                                 ARTICLE XIII.

                                   NOTICES

         13.1     Notices. Except as otherwise permitted by Section 2.14 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 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 in its administrative questionnaire 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 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, or (ii) 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
Agent under Article II shall not be effective until received.

         13.2     Change of Address. The Borrower, the 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.

                                       48

<PAGE>

                                  ARTICLE XIV.

                                  COUNTERPARTS

         This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.

                                   ARTICLE XV.

                     CHOICE OF LAW; CONSENT TO JURISDICTION;
                   WAIVER OF JURY TRIAL; MAXIMUM INTEREST RATE

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

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

         15.3     WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE ISSUER AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY

                                       49

<PAGE>

ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.

         15.4     Maximum Interest Rate. No provision of the Loan Documents
shall require the payment or permit the collection of interest in excess of the
maximum permitted by applicable law ("Maximum Rate"). If any interest in excess
of the Maximum Rate is provided for or shall be adjudicated to be provided for
in the Notes or otherwise in connection with this Agreement, the provisions of
this Section 15.4 shall govern and prevail and neither the Borrower nor the
sureties, guarantors, successors or assigns of the Borrower shall be obligated
to pay the excess amount of the interest or any other excess sum paid for the
use, forbearance, or detention of sums loaned. In the event the Agent or any
Lender ever receives, collects or applies as interest any amount in excess of
the Maximum Rate, the amount by which such amount exceeds the Maximum Rate shall
be applied as a payment and reduction of the principal of indebtedness evidenced
by the Loans, and, if the principal amount of the Loans has been paid in full,
any remaining excess shall forthwith be paid to the Borrower.

                                       50

<PAGE>

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

                                     SOUTHWESTERN PUBLIC SERVICE
                                     COMPANY

                                     By: /s/ Benjamin G.S. Fowke III
                                        ----------------------------------------
                                           Title: Vice President and Treasurer

                                     By: /s/ Judith A. Delaney
                                         ---------------------------------------
                                           Title: Assistant Treasurer

                                     800 Nicollet Mall, Suite 2900
                                     Minneapolis, MN 55402
                                     Attention: Mary Schell
                                     Telephone: (612) 215-5362
                                     Fax: (612) 215-5370

                                                                Credit Agreement

<PAGE>

Commitments

$34,000,000                          BANK ONE, NA,
                                     Individually and as Agent

                                     By: /s/ Jane A. Bek
                                         ---------------------------------------
                                         Title: Director
                                                --------------------------------

                                     1 Bank One Plaza
                                     Chicago, Illinois 60670
                                     Attention: Jane Bek
                                     Telephone: (312) 732-3422
                                     Fax: (312) 732-5435

                                                                Credit Agreement

<PAGE>

$26,000,000                          THE BANK OF NEW YORK, as Syndication
                                     Agent and as a Lender

                                     By: /s/
                                        ----------------------------------------
                                         Title: Managing Director
                                               ---------------------------------

                                                                Credit Agreement

<PAGE>

$15,000,000                          THE BANK OF TOKYO-MITSUBISHI, LTD.

                                     By: /s/ D Barnell
                                         ---------------------------------------
                                         Title: Vice President
                                                --------------------------------

                                     By: /s/ John M. Mearns
                                         ---------------------------------------
                                         Title: VP & Manager
                                                --------------------------------

                                                                Credit Agreement

<PAGE>

$15,000,000                          UBS AG, CAYMAN ISLANDS BRANCH

                                     By: /s/ Barbara Ezell-McMichael
                                        ----------------------------------------
                                         Title: Associate Director
                                                --------------------------------

                                     By: /s/
                                         ---------------------------------------
                                         Title: Director
                                                --------------------------------

                                                                Credit Agreement

<PAGE>

$10,000,000                          AMARILLO NATIONAL BANK

                                     By: /s/
                                         ---------------------------------------
                                         Title: Executive Vice President
                                               ---------------------------------

                                                                Credit Agreement

<PAGE>

                                PRICING SCHEDULE

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
  APPLICABLE                 LEVEL I    LEVEL II  LEVEL III   LEVEL IV   LEVEL V
    MARGIN                   STATUS      STATUS    STATUS      STATUS    STATUS
---------------------------------------------------------------------------------
<S>                          <C>        <C>       <C>         <C>        <C>
Eurodollar Rate              0.875%     1.000%     1.250%      1.500%     2.500%
---------------------------------------------------------------------------------
Floating Rate                 zero%      zero%      zero%       zero%      1.00%
---------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
                             LEVEL I    LEVEL II   LEVEL III   LEVEL IV   LEVEL V
      FEES                   STATUS      STATUS     STATUS      STATUS     STATUS
---------------------------------------------------------------------------------
<S>                          <C>        <C>        <C>         <C>        <C>
Commitment Fee Rate           0.125%     0.150%      0.175%     0.250%     0.350%
---------------------------------------------------------------------------------
Letter of Credit Fee Rate     0.875%     1.000%      1.250%     1.500%     2.500%
---------------------------------------------------------------------------------
</TABLE>

         For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:

         "Level I Status" exists at any date if, on such date, the Borrower's
Moody's Rating is A3 or better and the Borrower's S&P Rating is A- or better.

         "Level II Status" exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status and (ii) the Borrower's Moody's Rating is
Baa1 or better and the Borrower's S&P Rating is BBB+ or better.

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

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

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

         "Moody's Rating" means, at any time, the rating issued by Moody's and
then in effect with respect to the Borrower's senior unsecured long-term debt
securities without third-party credit enhancement.

         "S&P Rating" means, at any time, the rating issued by S&P and then in
effect with respect to the Borrower's senior unsecured long-term debt securities
without third-party credit enhancement.

<PAGE>

         "Status" means Level I Status, Level II Status, Level III Status, Level
IV Status or Level V Status.

         The Applicable Margin, the Commitment Fee Rate and the Letter of Credit
Fee Rate shall be determined in accordance with the foregoing table based on the
Borrower's Status as determined from its 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. If at any time the
Borrower has no Moody's Rating or no S&P Rating, Level V Status shall exist.

<PAGE>

                                  SCHEDULE 5.7

                       LITIGATION; CONTINGENT LIABILITIES

         On July 24, 1995, Lamb County Electric Cooperative, Inc. (LCEC)
petitioned the Public Utility Commission of Texas (PUCT) for a cease and desist
order against the Borrower. LCEC alleged that the Borrower had been unlawfully
providing service to oil-field customers and their facilities in LCEC's singly
certificated area. The Borrower responded that it was lawfully entitled to serve
oil field customers under "grandfather rights" granted to it in the same order
that granted LCEC its certificated area. Ultimately, the Commission issued an
order granting the Borrower's motion for summary disposition, thus denying
LCEC's petition. LCEC appealed the Commission's order to district court, which
upheld the order. LCEC then appealed to the Third Court of Appeals, which
reversed the district court judgment and remanded the case to the Commission for
an evidentiary hearing. The LCEC complaint was transferred to the State Office
of Administrative Hearings (SOAH) for processing. A hearing on the merits was
held October 7-10, 2002, and we are currently waiting for a Proposal For
Decision from the SOAH Administrative Law Judge. In related litigation, on
October 18, 1996, LCEC filed an action for damages based on its claim that the
Borrower has been unlawfully providing service to oil field customers in its
certificated area. This case has remained dormant pending a final determination
by the PUCT of the lawfulness of the service. Damages resulting from a decision
adverse to the Borrower could be material.

                                    Schedule
                                     5.7-1

<PAGE>

                                  SCHEDULE 5.9

                           EXCLUDED REPORTABLE EVENTS

         Pursuant to 29 CFR Part 4043, Subparts A and B, a Reportable Event
occurred on November 22, 2002, when five former officers of NRG Energy, Inc. a
wholly owned subsidiary of Xcel Energy Inc., filed an involuntary petition in
the United States Bankruptcy Court, District of Minnesota, alleging non-payment
of certain obligations arising out of their employment with NRG Energy, Inc.

         Xcel Energy Inc., as plan sponsor of the Xcel Energy Pension Plan, of
which NRG Energy, Inc. is a participating employer, has complied with the
Pension Benefit Guaranty Corporation's Reporting and Notification requirements,
and takes the position that the Involuntary Petition has no impact on the funded
status of the Xcel Energy Pension Plan.

                                    Schedule
                                      5.9-1

<PAGE>

                                  SCHEDULE 6.14

                                 EXISTING LIENS

1.       Liens in connection with the $25,000,000 aggregate principal amount of
Red River Authority of Texas Adjustable Rate Tender Securities (Pollution
Control Revenue Refunding Bonds, Southwestern Public Service Company Project),
Series 1996

2.       Liens in connection with the $57,300,000 aggregate principal amount of
Potter County Development Corporation Pollution Control Revenue Refunding Bonds
(Southwestern Public Service Company Project), Series 1996

3.       Liens in connection with the $44,500,000 aggregate principal amount of
Red River Authority of Texas Adjustable Rate Tender Securities (Pollution
Control Revenue Refunding Bonds, Southwestern Public Service Company Project),
Series 1991

4.       Liens in connection with financing in the amount of approximately
$17,700,000 relating to construction of electric bulk power transmission system,
including approximately 284 miles of transmission lines and rights under related
construction contracts, transmission agreement and power sales agreement

5.       Leases with respect to assets or Property of the Southwestern Public
Service Company entered into in the ordinary course of business

6.       Liens in connection with any attachment, decree or judgment not
constituting a Default under Section 7.9

                                    Schedule
                                     6.14-1

<PAGE>

                                  SCHEDULE 6.16

                          OFF-BALANCE SHEET LIABILITIES

Existing letters of credit issued in favor of Southwest Power Pool in the
aggregate amount of $6,206,763.

Existing Synthetic Lease with an unamortized balance of $13,679,274.13.

                                    Schedule
                                     6.16-1

<PAGE>

                                    EXHIBIT A

                                 FORM OF OPINION

                                February 18, 2003

To:      The Agent and the Lenders who are parties to the
         Credit Agreement described below.

Re:      Southwestern Public Service Company

Ladies and Gentlemen:

         We have acted as counsel for Southwestern Public Service Company (the
"Borrower") and have represented the Borrower in connection with its execution
and delivery of a Credit Agreement dated as of February 18, 2003 (the
"Agreement"), among the Borrower, the Lenders named therein, Bank One, NA, as
Agent, The Bank of New York, as Syndication Agent, and Bank One Capital Markets,
Inc., as Lead Arranger and Sole Book Runner, providing for Credit Extensions in
an aggregate principal amount not exceeding $125,000,000 at any one time
outstanding. All capitalized terms used in this opinion and not otherwise
defined herein shall have the meanings attributed to them in the Agreement.

         We are not general counsel to the Borrower, and our representation
consists of advising the Borrower on corporate matters as to which we have been
specifically consulted. In connection with this opinion, we have examined the
originals or photocopies of the Agreement, the Notes executed and to be executed
by the Borrower, and such corporate records, agreements and instruments of the
Borrower, certificates of public officials and of officers of the Borrower, such
other documents and records, and such matters of law, as we have deemed
necessary or appropriate for purposes of the opinions rendered below. In such
examination, we have assumed the genuineness of all signatures (other than those
of the Borrower), the authenticity of all documents submitted to us as copies
and the authenticity of the originals of such latter documents. In addition,
where relevant facts were not independently established, we have relied as to
matters of fact (but not conclusions of law) upon the aforesaid agreements,
corporate records, instruments, documents and certificates, discussions with
officers and representatives of the Borrower, the representations and warranties
of the Borrower contained in the Agreement and the certificates of officers of
the Borrower being delivered to you in connection with the Agreement. In
rendering this opinion, we have also assumed that the Agreement has been duly
authorized, executed and delivered by, and is the legal, valid and binding
agreement of, and is enforceable against, the Lenders.

         Based on the foregoing examination, and subject to the limitations and
qualifications set forth in this letter, we are of the opinion that:

         1.       The Borrower is a corporation, duly and properly incorporated,
validly existing, and in good standing under the laws of New Mexico and has all
requisite authority to conduct its business in each jurisdiction in which
qualification is required, except where the failure to

                                   Exhibit A-1

<PAGE>

so qualify would not have a Material Adverse Effect.

         2.       The execution and delivery by the Borrower of the Loan
Documents and the performance by the Borrower of its obligations thereunder have
been duly authorized by proper corporate proceedings on the part of the Borrower
and will not:

                  (a)      require any consent of the Borrower's shareholders;

                  (b)      violate (i) any law, rule, regulation, order, writ,
         judgment, injunction, decree or award binding on the Borrower or (ii)
         the Borrower's restated articles of incorporation, or bylaws, or (iii)
         the provisions of any indenture, instrument or agreement to which the
         Borrower is a party or is subject, or by which it, or its Property, is
         bound, or conflict with or constitute a default thereunder; or

                  (c)      result in, or require, the creation or imposition of
         any Lien in, of, or on the Property of the Borrower pursuant to the
         terms of any indenture, instrument or agreement binding upon the
         Borrower.

         3.       The Loan Documents have been duly executed and delivered by
the Borrower and constitute the legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their terms except
to the extent the enforcement thereof may be limited by bankruptcy, insolvency
or similar laws affecting the enforcement of creditors' rights generally and
subject also to the availability of equitable remedies if equitable remedies are
sought.

         4.       Except as set forth in the Borrower's Annual Report on Form
10-K for the fiscal year ended December 31, 2001, the Borrower's Quarterly
reports on Form 10-Q for the quarters ended March 31, 2002, June 30, 2002, and
September 30, 2002, and in Schedule 5.7 to the Agreement, there is no
litigation, arbitration, governmental investigation, proceeding or inquiry
pending or, to the best of our knowledge after due inquiry, threatened against
the Borrower which, if adversely determined, could reasonably be expected to
have a Material Adverse Effect.

         5.       No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof which has not been obtained by the
Borrower is required to be obtained by the Borrower in connection with the
execution and delivery of the Loan Documents, the borrowings under the
Agreement, the payment and performance by the Borrower of the Obligations, or
the legality, validity, binding effect or enforceability of any of the Loan
Documents.

         This opinion is subject to and qualified in all respects by the
following:

         1.       This opinion is limited to federal law and the laws of New
Mexico as in effect on the date hereof, and we disclaim any responsibility to
inform you of any changes after the date

                                   Exhibit A-2

<PAGE>

hereof. We express no opinion as to (a) any matter that may be governed by the
laws of any other jurisdiction; (b) state and federal securities, tax, and ERISA
laws, rules, and regulations; or (c) potential liability imposed by any of the
foregoing laws with respect to the transactions contemplated by the Agreement.

         2.       We express no opinion not expressly stated herein, and no
further or other opinion shall be implied.

          This opinion is being delivered solely in connection with the closing
under the Agreement that is being consummated on the date hereof. The opinions
expressed herein are based upon the laws mentioned above in effect on the date
hereof, and we assume no obligation to revise or supplement this letter to take
into account any event, action, interpretation, change of circumstance, change
of law or other matters coming to our attention after the date hereof.

          This opinion may be relied upon by the Agent, the Lenders, and their
participants, assignees and other transferees.

                                Very truly yours,

                                   Exhibit A-3

<PAGE>

                                    EXHIBIT B

                          FORM OF ASSIGNMENT AGREEMENT

         This Assignment Agreement (this "Assignment Agreement") between
_______________________________ (the "Assignor") and _________________________
(the "Assignee") is dated as of ___________________, 20___. The parties hereto
agree as follows:

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

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

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

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

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

         6.       REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that (i) it is the legal and

                                   Exhibit B-1

<PAGE>

beneficial owner of the interest being assigned by it hereunder, (ii) such
interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor is
duly authorized. It is understood and agreed that the assignment and assumption
hereunder are made without recourse to the Assignor and that the Assignor makes
no other representation or warranty of any kind to the Assignee. Neither the
Assignor nor any of its officers, directors, employees, agents or attorneys
shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan Document,
including without limitation, documents granting the Assignor and the other
Lenders a security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
property, books or records of the Borrower, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.

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

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

         9.       NOTICES. Notices shall be given under this Assignment
Agreement in the manner set forth in the Credit Agreement. For the purpose
hereof, the addresses of the parties

                                   Exhibit B-2

<PAGE>

hereto (until notice of a change is delivered) shall be the address set forth in
the attachment to Schedule 1.

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

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

                                   Exhibit B-3

<PAGE>

                                   SCHEDULE 1
                             to Assignment Agreement

1.       Description and Date of Credit Agreement:

           Credit Agreement dated as of February 18, 2003 among Southwestern
                  Public Service Company, the lenders named therein including
                  the Assignor, and Bank One, NA individually and as Agent for
                  such lenders, as it may be amended from time to time.

2.       Date of Assignment Agreement:_______________, 20

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

a.   Assignee's percentage
     of Aggregate Commitment
     (Advances) purchased
     under the Assignment
     Agreement**                                     ____%

b.   Amount of
     Assignor's Commitment
     purchased
     under the Assignment
     Agreement**                                     $____

4.       Assignee's Commitment (or Loans
         with respect to terminated
         Commitments) purchased
         hereunder:                                         $__________________

5.       Proposed Effective Date:                           ____________________

6.       Non-standard Recordation Fee
         Arrangement

                                                     N/A***
                                                     [Assignor/Assignee
                                                     to pay 100% of fee]
                                                     [Fee waived by Agent]

                                   Exhibit B-4

<PAGE>

Accepted and Agreed:

[NAME OF ASSIGNOR]                        [NAME OF ASSIGNEE]

By:______________________________         By:___________________________________
Title ___________________________         Title:________________________________

                                   Exhibit B-5

<PAGE>

ACCEPTED AND CONSENTED TO****BY           ACCEPTED AND CONSENTED
                                          TO BY

SOUTHWESTERN PUBLIC                       BANK ONE, NA, as Agent
SERVICE COMPANY

By:______________________________         By:___________________________________
Title ___________________________         Title:________________________________

**   Percentage taken to 10 decimal places

***  If fee is split 50-50, pick N/A as option

**** Delete if not required by Credit Agreement

                                   Exhibit B-6

<PAGE>

                Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT

                        ADMINISTRATIVE INFORMATION SHEET

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

                              ASSIGNOR INFORMATION

CONTACT:

Name:____________________________         Telephone No.:________________________
Fax No.:_________________________         Telex No.:____________________________
                                          Answerback:___________________________

PAYMENT INFORMATION:

Name & ABA # of Destination Bank:        _______________________________________
Account Name & Number for Wire Transfer: _______________________________________
                                         _______________________________________

Other Instructions:_____________________________________________________________

ADDRESS FOR NOTICES FOR ASSIGNOR:__________________

                              ASSIGNEE INFORMATION

CREDIT CONTACT:

Name:____________________________         Telephone No.:________________________
Fax No.:_________________________         Telex No.:____________________________
                                          Answerback:___________________________

                                   Exhibit B-7

<PAGE>

KEY OPERATIONS CONTACTS:

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

PAYMENT INFORMATION:

Name & ABA # of Destination Bank:

Account Name & Number for Wire Transfer:

Other Instructions:

ADDRESS FOR NOTICES FOR ASSIGNEE:

                                   Exhibit B-8

<PAGE>

                  BANK ONE INFORMATION

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

INITIAL FUNDING CONTACT:                         SUBSEQUENT OPERATIONS CONTACT:

Name:                                            Name:
Telephone No.: (312)                             Telephone No.: (312)
Fax No.: (312)                                   Fax No.: (312)

                                        Bank One Telex No.: 190201 (Answerback:
                                        FNBC UT)
INITIAL FUNDING STANDARDS:

Libor Fund 2 days after rates are set.

BANK ONE WIRE INSTRUCTIONS:             Bank One, NA, ABA # 071000013
                                        LS2 Incoming Account # 481152860000
                                        Ref:________________

ADDRESS FOR NOTICES FOR BANK ONE:       1 Bank One Plaza, Chicago, IL 60670
                                        Attn: Agency Compliance Division, Suite
                                        IL1-0353
                                        Fax No. (312) 732-2038 or (312) 732-4339

                                   Exhibit B-9

<PAGE>

                                    EXHIBIT C

         FORM OF LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION

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

         Re:      Credit Agreement, dated as of February 18, 2003 (as the same
may be amended or modified, the "Credit Agreement"), among Southwestern Public
Service Company (the "Borrower"), the Lenders named therein and the Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned thereto in the Credit Agreement.

         The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Credit Extensions or other extensions of credit from time to time until receipt
by the Agent of a specific written revocation of such instructions by the
Borrower, provided that the Agent may otherwise transfer funds as hereafter
directed in writing by the Borrower in accordance with Section 13.1 of the
Credit Agreement or based on any telephonic notice made in accordance with
Section 2.14 of the Credit Agreement.

         Facility Identification Number(s)______________________________________

         Customer/Account Name: Southwestern Public Service Company

         Transfer Funds To _____________________________________________________

         For Account No. _______________________________________________________

         Reference/Attention To ________________________________________________

         Authorized Officer (Customer Representative) Date________________

         ___________________________________________   ___________________
         (Please Print)                                Signature

         Bank Officer Name                             Date_____________________

         ___________________________________________   _________________________
         (Please Print)                                Signature

    (Deliver Completed Form to Credit Support Staff For Immediate Processing)

                                   Exhibit C-1

<PAGE>

                                    EXHIBIT D

                                  FORM OF NOTE

                                                                          [Date]

                  Southwestern Public Service Company, a New Mexico corporation
(the "Borrower"), promises to pay to the order of _____________________________
(the "Lender") the aggregate unpaid principal amount of all Loans made by the
Lender to the Borrower pursuant to Article II of the Agreement (as hereinafter
defined), in immediately available funds at the main office of Bank One, NA in
Chicago, Illinois, as Agent, together with interest on the unpaid principal
amount hereof at the rates and on the dates set forth in the Agreement. The
Borrower shall pay the principal of and accrued and unpaid interest on the Loans
in full on the Final Maturity Date.

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

                  This Note is one of the Notes issued pursuant to, and is
entitled to the benefits of, the Credit Agreement dated as of February 18, 2003
(which, as it may be amended or modified and in effect from time to time, is
herein called the "Agreement"), among the Borrower, the lenders party thereto,
including the Lender, and Bank One, NA, as Agent, to which Agreement reference
is hereby made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which this Note may be prepaid or its
maturity date accelerated. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the Agreement.

                  Notwithstanding anything to the contrary in this Note, no
provision of this Note shall require the payment or permit the collection of
interest in excess of the maximum permitted by applicable law ("Maximum Rate").
If any interest in excess of the Maximum Rate is provided for or shall be
adjudicated to be so provided, in this Note or otherwise in connection with the
loan transaction, the provisions of this paragraph shall govern and prevail, and
neither the Borrower nor the sureties, guarantors, successors or assigns of the
Borrower shall be obligated to pay the excess of the interest or any other
excess sum paid for the use, forbearance, or detention of sums loaned. If for
any reason interest in excess of the Maximum Rate shall be deemed charged,
required or permitted by any court of competent jurisdiction, the excess shall
be applied a payment and reduction of the principal of indebtedness evidenced by
this Note, and, if the principal amount has been paid in full, any remaining
excess shall forthwith be paid to the Borrower.

                                   Exhibit D-1

<PAGE>

                  This Note shall be construed in accordance with the internal
laws (and not the law of conflicts) of the State of Illinois, but giving effect
to Federal laws applicable to national banks.

                                          SOUTHWESTERN PUBLIC SERVICE
                                          COMPANY

                                          By: __________________________________
                                          Print Name:___________________________
                                          Title:________________________________

                                          By: __________________________________
                                          Print Name:___________________________
                                          Title:________________________________

                                   Exhibit D-2

<PAGE>

                   SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
                                       TO
                   NOTE OF SOUTHWESTERN PUBLIC SERVICE COMPANY
                               DATED____________,

<TABLE>
<CAPTION>
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                               Principal               Maturity               Principal
         Date               Amount of Loan        of Interest Period         Amount Paid          Unpaid Balance
----------------------------------------------------------------------------------------------------------------
<S>                         <C>                   <C>                        <C>                  <C>

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
</TABLE>

                                   Exhibit D-3

<PAGE>

                                    EXHIBIT E

                            FORM OF INCREASE REQUEST

                        _________________________, 20___

Bank One, NA, as Agent under the
Credit Agreement referred to below

Ladies/Gentlemen:

         Please refer to the Credit Agreement dated as of February 18, 2003
among Southwestern Public Service Company (the "Borrower"), various financial
institutions and Bank One, NA, as Agent (as amended, modified, extended or
restated from time to time, the "Credit Agreement"). Capitalized terms used but
not defined herein have the respective meanings set forth in the Credit
Agreement.

         In accordance with Section 2.5(iii) of the Credit Agreement, the
Borrower requests an increase in the Aggregate Commitment from $__________ to
$__________. Such increase shall be made by [increasing the Commitment of
____________ from $________ to $________] [adding _____________ as a Lender
under the Credit Agreement with a Commitment of $____________] as set forth in
the letter attached hereto. Such increase shall be effective three Business Days
after the date that the Agent accepts the letter attached hereto or such other
date as is agreed among the Borrower, the Agent and the [increasing] [new]
Lender.

                                          Very truly yours,

                                          SOUTHWESTERN PUBLIC SERVICE COMPANY

                                          By: __________________________________
                                          Name: ________________________________
                                          Title: _______________________________

                                   Exhibit E-1

<PAGE>

                              ANNEX I TO EXHIBIT E

                                     [Date]

Bank One, NA, as Agent under the
Credit Agreement referred to below

Ladies/Gentlemen:

         Please refer to the letter dated __________, 20__ from Southwestern
Public Service Company (the "Borrower") requesting an increase in the Aggregate
Commitment from $__________ to $__________ pursuant to Section 2.5(iii) of the
Credit Agreement dated as of February 18, 2003 among the Borrower, various
financial institutions and Bank One, NA, as Agent (as amended, modified,
extended or restated from time to time, the "Credit Agreement"). Capitalized
terms used but not defined herein have the respective meanings set forth in the
Credit Agreement.

         The undersigned hereby confirms that it has agreed to increase its
Commitment under the Credit Agreement from $__________ to $__________ effective
on the date which is three Business Days after the acceptance hereof by the
Agent or on such other date as may be agreed among the Borrower, the Agent and
the undersigned.

                                          Very truly yours,

                                          [NAME OF INCREASING BANK]

                                          By:_________________________
                                          Title:______________________

Accepted as of

_________, ____

BANK ONE, NA, as Agent

By: __________________________________
Name: ________________________________
Title: _______________________________

                                   Exhibit E-2

<PAGE>

                              ANNEX II TO EXHIBIT E

                                     [Date]

Bank One, NA, as Agent under the
Credit Agreement referred to below

Ladies/Gentlemen:

         Please refer to the letter dated __________, 20___ from Southwestern
Public Service Company (the "Borrower") requesting an increase in the Aggregate
Commitment from $__________ to $__________ pursuant to Section 2.5(iii) of the
Credit Agreement dated as of February 18, 2003 among the Borrower, various
financial institutions and Bank One, NA, as Agent (as amended, modified,
extended or restated from time to time, the "Credit Agreement"). Capitalized
terms used but not defined herein have the respective meanings set forth in the
Credit Agreement.

         The undersigned hereby confirms that it has agreed to become a Lender
under the Credit Agreement with a Commitment of $__________ effective on the
date which is three Business Days after the acceptance hereof, and consent
hereto, by the Agent or on such other date as may be agreed among the Borrower,
the Agent and the undersigned.

         The undersigned (a) acknowledges that it has received a copy of the
Credit Agreement and the Schedules and Exhibits thereto, together with copies of
the most recent financial statements delivered by the Borrower pursuant to the
Credit Agreement, and such other documents and information as it has deemed
appropriate to make its own credit and legal analysis and decision to become a
Lender under the Credit Agreement; and (b) agrees that it will, independently
and without reliance upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit and legal decisions in taking or not taking action under the
Credit Agreement.

         The undersigned represents and warrants that (i) it is duly organized
and existing and it has full power and authority to take, and has taken, all
action necessary to execute and deliver this letter and to become a Lender under
the Credit Agreement; and (ii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution and delivery of this letter and the performance of its
obligations as a Lender under the Credit Agreement.

         The undersigned agrees to execute and deliver such other instruments,
and take such other actions, as the Agent may reasonably request in connection
with the transactions contemplated by this letter.

                                   Exhibit E-3

<PAGE>

         The following administrative details apply to the undersigned:

(A)      Notice Address:

Legal name: _____________________________
Address: ________________________________
_______________________________
_______________________________
Attention:  _____________________________
Telephone: (___) ________________________
Facsimile: (___) ________________________

(B)      Payment Instructions:

Account No.: ___________________________
At:          ___________________________
_______________________________
_______________________________
Reference: ___________________________
Attention: ___________________________

         The undersigned acknowledges and agrees that, on the date on which the
undersigned becomes a Lender under the Credit Agreement as set forth in the
second paragraph hereof, the undersigned will be bound by the terms of the
Credit Agreement as fully and to the same extent as if the undersigned were an
original Lender under the Credit Agreement.

                                          Very truly yours,

                                          [NAME OF NEW LENDER]

                                          By:_________________________
                                          Title:______________________

Accepted and consented to as of
______________, 20___

BANK ONE, NA, as Agent

By: _____________________________
Name: ___________________________
Title: ____________________________

                                   Exhibit E-4

<PAGE>

                                    EXHIBIT F

                         FORM OF COMPLIANCE CERTIFICATE

                        _________________________, 20___

Bank One, NA, as Agent under the
Credit Agreement referred to below

Ladies/Gentlemen:

         Please refer to the Credit Agreement dated as of February 18, 2003
among Southwestern Public Service Company (the "Borrower"), various financial
institutions and Bank One, NA, as Agent (as amended, modified, extended or
restated from time to time, the "Credit Agreement"). Capitalized terms used but
not defined herein have the respective meanings set forth in the Credit
Agreement.

         The Borrower certifies to you that (a) set forth on the Annexes hereto
are correct calculations of the financial covenants set forth in Sections 6.12
and 6.13 of the Credit Agreement as of _______________; and (b) no Default or
Unmatured Default exists as of the date of this Certificate[, except as
specified in reasonable detail below:]

                                          Very truly yours,

                                          SOUTHWESTERN PUBLIC SERVICE COMPANY

                                          By: __________________________________
                                          Name: ________________________________
                                          Title: _______________________________

                                   Exhibit F-1

<PAGE>

                        ANNEX 1 TO COMPLIANCE CERTIFICATE

Debt to Capitalization Ratio (Section 6.12)

1. Indebtedness

    (a) Long-term debt (including current maturities) $_____________

    (b) Commercial paper & other short term debt      $_____________

    (c) Letters of credit                             $_____________

    (d) Net liabilities under swaps, etc.             $_____________

    (e) Capitalized Lease Obligations                 $_____________

    (f) Synthetic Lease Obligations                   $_____________

    (g) Trust Preferred Securities                    $_____________

    (h) Total Debt (sum of (a) through (g))                         $___________

2. Capitalization

    (a) Total Common Stock                            $_____________

    (b) Total Retained Earnings                       $_____________

    (c) Total Debt (from 1(h) above)                  $_____________

    (d) Capitalization (sum of (a) through (c))                     $___________

3. Debt to Capitalization Ratio (1(h) to 2(d))                        ____ to 1.
     (not to be greater than 0.55 to 1.0)

                                   Exhibit F-2

<PAGE>

                        ANNEX 2 TO COMPLIANCE CERTIFICATE

Interest Coverage Ratio (Section 6.13)

1.  EBITDA

     (a) Consolidated Net Income                       $_____________

     (b) Consolidated Interest Expense                 $_____________

     (c) Income Taxes                                  $_____________

     (d) Depreciation and Amortization                 $_____________

     (e) Other Income/Deductions (Net)                 $_____________

     (f) Extraordinary Items (net of income tax)(Net)  $_____________

     (g) EBITDA (total of (a)+(b)+(c)+(d)+/-(e)+/-(f)) $_____________

2.  Consolidated Interest Expense                                    $__________

3.   Interest Coverage Ratio (1(g) to 2)                             ____ to 1.0
        (not to be less than 2.75 to 1.0)

                                   Exhibit F-3

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                  PAGE
<S>               <C>                                                                                             <C>
ARTICLE I.            DEFINITIONS...............................................................................    1

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

         2.1      Commitment....................................................................................   12

         2.2      Required Payments; Maturity...................................................................   12

         2.3      Ratable Loans.................................................................................   12

         2.4      Types of Advances.............................................................................   12

         2.5      Commitment Fee; Changes in Aggregate Commitment; Up-Front Fees................................   12

         2.6      Minimum Amount of Each Advance................................................................   13

         2.7      Optional Principal Payments...................................................................   13

         2.8      Method of Selecting Types and Interest Periods for New Advances...............................   13

         2.9      Conversion and Continuation of Outstanding Advances...........................................   14

         2.10     Changes in Interest Rate, etc.................................................................   14

         2.11     Rates Applicable After Default................................................................   15

         2.12     Method of Payment.............................................................................   15

         2.13     Noteless Agreement; Evidence of Indebtedness..................................................   15

         2.14     Telephonic Notices............................................................................   16

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

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

         2.17     Lending Installations.........................................................................   17

         2.18     Non-Receipt of Funds by the Agent.............................................................   17

         2.19     Replacement of Lender.........................................................................   17

         2.20     Letters of Credit.............................................................................   18

                  (i)      Issuance.............................................................................   18

                  (ii)     Participations.......................................................................   18

                  (iii)    Notice...............................................................................   18

                  (iv)     Letter of Credit Fees................................................................   19

                  (v)      Administration; Reimbursement by Lenders.............................................   19

                  (vi)     Reimbursement by Borrower............................................................   19

                  (vii)    Obligations Absolute.................................................................   20
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                  (viii)   Actions of Issuer....................................................................   20

                  (ix)     Indemnification......................................................................   20

                  (x)      Lenders' Indemnification.............................................................   21

                  (xi)     Letter of Credit Collateral Account..................................................   21

                  (xii)    Rights as a Lender...................................................................   22

ARTICLE III.          YIELD PROTECTION; TAXES...................................................................   22

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

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

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

         3.4      Funding Indemnification.......................................................................   23

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

         3.6      Lender Statements; Survival of Indemnity......................................................   25

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

         4.1      Initial Credit Extension......................................................................   26

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

ARTICLE V.            REPRESENTATIONS AND WARRANTIES............................................................   27

         5.1      Existence and Standing........................................................................   27

         5.2      Authorization and Validity....................................................................   27

         5.3      No Conflict; Government Consent...............................................................   28

         5.4      Financial Statements..........................................................................   28

         5.5      Material Adverse Change.......................................................................   28

         5.6      Taxes.........................................................................................   28

         5.7      Litigation and Contingent Obligations.........................................................   29

         5.8      Subsidiaries..................................................................................   29

         5.9      ERISA.........................................................................................   29

         5.10     Accuracy of Information.......................................................................   29

         5.11     Regulation U..................................................................................   29

         5.12     Material Agreements...........................................................................   29

         5.13     Compliance With Laws..........................................................................   29

         5.14     Plan Assets; Prohibited Transactions..........................................................   30
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         5.15     Environmental Matters.........................................................................   30

         5.16     Investment Company Act........................................................................   30

         5.17     Public Utility Holding Company Act............................................................   30

         5.18     Insurance.....................................................................................   30

ARTICLE VI.           COVENANTS.................................................................................   30

         6.1      Financial Reporting...........................................................................   30

         6.2      Use of Proceeds...............................................................................   32

         6.3      Notice of Default.............................................................................   32

         6.4      Conduct of Business...........................................................................   32

         6.5      Taxes.........................................................................................   32

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

         6.7      Compliance with Laws..........................................................................   32

         6.8      Maintenance of Properties.....................................................................   33

         6.9      Inspection....................................................................................   33

         6.10     Merger........................................................................................   33

         6.11     Sale of Assets................................................................................   33

         6.12     Debt to Capitalization Ratio..................................................................   33

         6.13     Interest Coverage Ratio.......................................................................   33

         6.14     Liens.........................................................................................   34

         6.15     Intercompany Transactions.....................................................................   34

         6.16     Off-Balance Sheet Liabilities.................................................................   34

         6.17     Receivables Transaction Attributed Obligations................................................   34

ARTICLE VII.          DEFAULTS..................................................................................   35

ARTICLE VIII.         ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES............................................   36

         8.1      Acceleration; Letter of Credit Collection Account.............................................   37

         8.2      Amendments....................................................................................   38

         8.3      Preservation of Rights........................................................................   38

ARTICLE IX.           GENERAL PROVISIONS........................................................................   38

         9.1      Survival of Representations...................................................................   39

         9.2      Governmental Regulation.......................................................................   39
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         9.3      Headings......................................................................................   39

         9.4      Entire Agreement..............................................................................   39

         9.5      Several Obligations; Benefits of this Agreement...............................................   39

         9.6      Expenses; Indemnification.....................................................................   39

         9.7      Numbers of Documents..........................................................................   40

         9.8      Accounting....................................................................................   40

         9.9      Severability of Provisions....................................................................   40

         9.10     Nonliability of Lenders.......................................................................   40

         9.11     Limited Disclosure............................................................................   40

         9.12     Nonreliance...................................................................................   41

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

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

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

         10.2     Powers........................................................................................   42

         10.3     General Immunity..............................................................................   42

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

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

         10.6     Employment of Agents and Counsel..............................................................   43

         10.7     Reliance on Documents; Counsel................................................................   43

         10.8     Agent's Reimbursement and Indemnification.....................................................   43

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

         10.10    Rights as a Lender............................................................................   44

         10.11    Lender Credit Decision........................................................................   44

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

         10.13    Agent's Fee...................................................................................   45

         10.14    Delegation to Affiliates......................................................................   45

         10.15    Syndication Agent.............................................................................   46

ARTICLE XI.           SETOFF; RATABLE PAYMENTS..................................................................   46

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

         11.2     Ratable Payments..............................................................................   46
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ARTICLE XII.          BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.........................................   46

         12.1     Successors and Assigns........................................................................   46

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

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

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

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

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

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

         13.2     Change of Address.............................................................................   49

ARTICLE XIV.          COUNTERPARTS..............................................................................   49

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

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

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

         15.3     WAIVER OF JURY TRIAL..........................................................................   50

         15.4     Maximum Interest Rate.........................................................................   50
</TABLE>

SCHEDULES

         Pricing Schedule
         5.7   -   Litigation and Contingent Liabilities
         5.9   -   Excluded Reportable Events
         6.14  -   Existing Liens
         6.16  -   Off-Balance Sheet Liabilities

EXHIBITS

         A Form of Opinion of Counsel to the Borrower
         B Form of Assignment Agreement
         C Form of Money Transfer Instructions
         D Form of Note
         E Form of Increase Request
         F Form of Compliance Certificate

                                      -v-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]