Document:

ex10b2.htm

    Exhibit
10(b)(2)

     

    

     

    

     

    

     

    UNIT
POWER AGREEMENT

     

    by
and between

     

    AEP
GENERATING COMPANY

     

    and

     

    COLUMBUS
SOUTHERN POWER COMPANY

     

    

     

    dated
as of

     

    March
15, 2007

     

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      
        	
                TABLE
      OF CONTENTS

              
	 
      	 
      	
                Page

              	 
      
	
                ARTICLE
      I

              	
                DEFINITIONS

              	
                1

              	 
      
	
                Section
      1.1

              	
                Defined
      Terms

              	
                1

              	 
      
	
                Section
      1.2

              	
                Interpretation

              	
                8

              	 
      
	
                Section
      1.3

              	
                Technical
      Meanings

              	
                9

              	 
      
	
                ARTICLE
      II

              	
                TERM

              	
                9

              	 
      
	
                Section
      2.1

              	
                Term

              	
                9

              	 
      
	
                Section
      2.2

              	
                Delivery
      Period

              	
                9

              	 
      
	
                Section
      2.3

              	
                Extension
      Period

              	
                9

              	 
      
	
                ARTICLE
      III

              	
                PURCHASE
      AND SALE OBLIGATION

              	
                9

              	 
      
	
                Section
      3.1

              	
                Seller’s
      and Buyer’s Obligations

              	
                9

              	 
      
	
                Section
      3.2

              	
                Unit
      Contingent

              	
                9

              	 
      
	
                Section
      3.3

              	
                Delivery
      Point

              	
                9

              	 
      
	
                Section
      3.4

              	
                Scheduling
      and Dispatch

              	
                9

              	 
      
	
                Section
      3.5

              	
                Force
      Majeure

              	
                10

              	 
      
	
                ARTICLE
      IV

              	
                FACILITY
      OPERATIONS

              	
                10

              	 
      
	
                Section
      4.1

              	
                Operation
      and Maintenance

              	
                10

              	 
      
	
                Section
      4.2

              	
                Capital
      Improvements

              	
                10

              	 
      
	
                Section
      4.3

              	
                Planned
      Outage Schedule

              	
                10

              	 
      
	
                Section
      4.4

              	
                Auxiliary
      Power

              	
                10

              	 
      
	
                ARTICLE
      V

              	
                PRICING

              	
                11

              	 
      
	
                Section
      5.1

              	
                Monthly
      Payments

              	
                11

              	 
      
	
                Section
      5.2

              	
                Fuel
      Payment

              	
                11

              	 
      
	
                Section
      5.3

              	
                O&M
      Payment

              	
                11

              	 
      
	
                Section
      5.4

              	
                Depreciation
      Payment

              	
                11

              	 
      
	
                Section
      5.5

              	
                Capacity
      Payment

              	
                11

              	 
      
	
                Section
      5.5

              	
                Tax
      Reimbursement Payment

              	
                12

              	 
      
	
                ARTICLE
      VI

              	
                BILLING
      AND PAYMENT

              	
                12

              	 
      
	
                Section
      6.1

              	
                Billing
      and Payment

              	
                12

              	 
      
	
                Section
      6.2

              	
                Books
      and Records; Audit

              	
                12

              	 
      
	
                Section
      6.3

              	
                Netting
      of Payments

              	
                13

              	 
      
	
                ARTICLE
      VII

              	
                LIMITATIONS

              	
                13

              	 
      
	
                Section
      7.1

              	
                Limitation
      of Remedies, Liability and Damages

              	
                13

              	 
      
	ARTICLE
      VIII  	TAXES	

                13

              	 
	
                Section
      8.1

              	
                Cooperation

              	
                13

              	 
      
	
                Section
      8.2

              	
                Taxes

              	
                13

              	 
      
	
                Section
      8.3

              	
                Change-in-Law
      Taxes

              	
                14

              	 
      
	
                Section
      8.4

              	
                Exemptions

              	
                14

              	 
      
	
                Section
      8.5

              	
                Property
      Taxes

              	
                14

              	 
      
	
                ARTICLE
      IX

              	
                COMPLIANCE
      WITH LAWS

              	
                14

              	 
      
	
                Section
      9.1

              	
                Seller’s
      Compliance

              	
                14

              	 
      
	
                Section
      9.2

              	
                Buyer’s
      Compliance

              	
                14

              	 
      
	
                ARTICLE
      X

              	
                CONDITIONS

              	
                15

              	 
      
	
                Section
      10.1

              	
                Conditions

              	
                15

              	 
      
	
                Section
      10.2

              	
                Obligations
      of Buyer and Seller

              	
                15

              	 
      
	
                Section
      10.3

              	
                Failure
      of Conditions Generally

              	
                15

              	 
      
	
                ARTICLE
      XI

              	
                REPRESENTATIONS
      AND WARRANTIES

              	
                15

              	 
      
	
                Section
      11.1

              	
                Representations
      and Warranties of Both Parties

              	
                15

              	 
      
	
                ARTICLE
      XII

              	
                MISCELLANEOUS

              	
                16

              	 
      
	
                Section
      12.1

              	
                Title
      and Risk of Loss

              	
                16

              	 
      
	
                Section
      12.2

              	
                Indemnity

              	
                16

              	 
      
	
                Section
      12.3

              	
                Amendments
      and Waivers

              	
                16

              	 
      
	
                Section
      12.4

              	
                Notices

              	
                16

              	 
      
	
                Section
      12.5

              	
                Successors
      and Assigns; Assignment

              	
                17

              	 
      
	
                Section
      12.6

              	
                Integration

              	
                17

              	 
      
	
                Section
      12.7

              	
                Acknowledgments

              	
                17

              	 
      
	
                Section
      12.8

              	
                Waiver

              	
                17

              	 
      
	
                Section
      12.9

              	
                Counterparts

              	
                17

              	 
      
	
                Section
      12.10

              	
                Headings

              	
                17

              	 
      
	
                Section
      12.11

              	
                Confidentiality

              	
                17

              	 
      
	
                Section
      12.12

              	
                Governing
      Law

              	
                18

              	 
      
	
                Section
      12.13

              	
                Severability

              	
                18

              	 
      
	
                Section
      12.14

              	
                Mobil/Sierra
      Doctrine

              	
                18

              	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                SCHEDULE   5.5  -  ESTIMATE
      OF INITIAL CAPACITY PAYMENT

              	 
      
	
                SCHEDULE
      12.4  - NOTICE INFORMATION

              	 
      	 
      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    
b

    
 

    POWER
PURCHASE AND SALE AGREEMENT

     

    THIS UNIT POWER AGREEMENT
(this “Agreement”), dated as of March
15, 2007, is by and between AEP Generating Company, an Ohio corporation (“Seller”), and COLUMBUS
SOUTHERN POWER COMPANY an Ohio corporation (“Buyer”).  Buyer and
Seller are sometimes referred to herein individually as a “Party” and collectively as the
“Parties.”

     

    RECITALS

     

    A.           Seller,
a subsidiary of American Electric Power Company, Inc., has agreed to purchase
the Lawrenceburg Generating Station from an affiliate of Public Service
Enterprise Group for approximately $325 million, subject to the satisfaction of
certain conditions precedent, including the receipt of required regulatory
approvals from the Federal Energy Regulatory Commission (FERC) and Indiana
Utility Regulatory Commission.

     

    B.           The
Lawrenceburg Generating Station, located in Lawrenceburg, Ind., is a
combined-cycle, natural-gas power plant with a generating capacity of 1,096
megawatts that  began commercial operation in June 2004.

     

    C.           The
Parties desire to enter into a transaction in which Seller sells and Buyer
purchases all of the capacity, and associated unit contingent energy and
ancillary services, as delivered or made available from the Lawrenceburg
Generating Station, for an initial term of approximately ten (10)
years.

     

    D.           The
Parties desire to set forth certain terms and conditions applicable to such
transaction.

     

    In
consideration of mutual covenants and agreements contained herein, the Parties
agree as follows:

     

    ARTICLE
I

     

    DEFINITIONS

     

    1.1           Defined
Terms.  Unless otherwise defined herein, the following terms,
when used herein, shall have the meaning set forth below:

    

    “Affected Party” has the
meaning set forth in Section
3.7.

     

    “Affiliate” means, with respect
to any Person, any other Person (other than an individual) that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person.  For this purpose,
“control” means the direct or indirect ownership of fifty percent (50%) or more
of the outstanding capital stock or other equity interests having ordinary
voting power.

     

    “Agreement” means this Unit
Power Agreement.

     

     “Allowances” means emission
allowances, emission credits, and any similar rights related to emissions of
NOx,
SO2,
CO2,
mercury, particulates or any other substance under any relevant federal, state
or local law or recognized by any Governmental Authority or other entity, and
all other environmental attributes.

     

    “Ancillary Services” means
regulation and frequency response services; energy imbalance services; automatic
generating control services; spinning, non-spinning, supplemental and
replacement reserve services, reactive power and voltage support services, black
start services and all other services or products ancillary to the operation of
the Facility that are defined as ancillary services in the Transmission
Operator’s relevant transmission tariff or are commonly sold or saleable, to the
extent that the assets comprising the Facility are technically capable of
providing those services or products.

     

    “Approvals” means all
approvals, permits, licenses, consents, waivers or other authorizations from,
notifications to, or filings or registrations with, third parties, including
without limitation, Governmental Approvals.

     

    “Business Day” means any day
except a Saturday, Sunday, or a United States Federal Reserve Bank
holiday.  A Business Day shall open at 8:00 a.m. and close at
5:00 p.m. local time at the relevant Party’s principal place of
business.  The relevant Party, in each instance unless otherwise
specified, shall be the Party from whom the notice, payment or delivery is being
sent and by whom the notice or payment or delivery is to be
received.

     

    “Buyer” has the meaning set
forth in the preamble hereto.

     

    “Buyer’s Contractual Capacity”
means all of the Capacity of the Facility, which entitlement is approximately
1,096 MW as of the date set forth in the preamble to this
Agreement.

     

     “Capacity” means the output
level, expressed in MW, that the Facility, or the components of equipment
thereof, is capable, as of a given moment, of continuously producing and making
available at the Delivery Point, taking into account the operating condition of
the equipment at that time, the auxiliary loads and other relevant
factors.

     

    “Capital Improvements Work”
shall mean the modeling, studying, engineering, design, procurement, purchasing,
construction, inspection, start-up and testing of capital improvements,
replacements, repairs or additions to the Facility.

     

    “Capacity Payment” has the
meaning set forth in Section
5.5.

     

    “Change-in-Law” means, after
the date set forth in the preamble to this Agreement, the adoption, imposition,
promulgation, change in interpretation or modification by a Governmental
Authority of any law, regulation or Governmental Approval, or the issuance of a
final and non-appealable order, judgment, award or decree of a Governmental
Authority having the effect of the foregoing.

     

    “Change-in-Law Taxes” means,
after the date set forth in the preamble to this Agreement, any change (increase
or decrease) in Taxes imposed on Seller on (a) the sale or use of fuel for
generation of electricity, (b) the sale of Capacity or (c) the production or
sale of Energy or Ancillary Services, in any case, resulting from a
Change-in-Law.

     

    “Claims” means all claims or
actions, threatened or filed and, whether groundless, false, fraudulent or
otherwise, that directly or indirectly relate to the subject matter of an
indemnity, and the resulting losses, damages, expenses (including reasonable
attorneys’ fees and disbursements) and court costs, whether incurred by
settlement or otherwise, and whether such claims or actions are threatened or
filed prior to or after the termination of this Agreement.

     

    “Closing” and “Closing Date” have the
meanings set forth in Section 3.1 of the Facility Purchase
Agreement.

     

    “Contract Price” means the
price to be paid by Buyer to Seller for the purchase of the Buyer’s Contractual
Capacity and associated Energy and Ancillary Services, as determined in
accordance with the provisions of Article
V.

     

    “Contract Year” means the
period beginning at 12:01 a.m. EPT on the Start Date and ending on December
31st
of the same year, and each succeeding calendar year thereafter during the
Delivery Period.  If the first or last Contract Year consists of a
shorter period than a full calendar year, including by reason of the termination
of this Agreement prior to the expiration of the Delivery Period, then that
Contract Year may consist of a shorter period than a full calendar year, in
which case with respect to that Contract Year, all terms and provisions of this
Agreement that refer to or are based on a Contract Year shall be adjusted
ratably downward to reflect such shorter period.

     

    “EPT” or “Eastern Prevailing Time” means the
local time at the geographical location of the Delivery Point.

     

    “Delivery Period” has the
meaning set forth in Section
2.2.

     

    “Delivery Point” has the
meaning set forth in Section
3.3.

     

    “Depreciation Payment” has the
meaning set forth in Section
5.4.

     

    “Dispatch” means the actions of
Buyer and/or its designated agents or representatives in controlling and
designating the quantity of Energy and Ancillary Services to be produced by the
Facility.

     

    “Effective Date” means the date
on which all of the conditions precedent set forth in Section 10.1  have been
satisfied or waived, which date shall not be earlier than the Closing
Date.

     

    “End Date” has the meaning set
forth in Section
2.2.

     

    “Energy” means three-phase,
60-cycle alternating current electric energy, expressed in MWh.

     

    “Equitable Defenses” means any
bankruptcy, insolvency, reorganization and other laws affecting creditors’
rights generally, and with regard to equitable remedies, the discretion of the
court before which proceedings to obtain same may be pending.

     

    “Facility” means the
combined-cycle, natural-gas power plant with a nameplate generating capacity of
1,096 megawatts located in or near Lawrenceburg, Indiana, that began commercial
operation in June 2004, commonly known as the Lawrenceburg Generating
Station.

     

    “Facility LMP Point” means the
location recognized by the PJM’s scheduling and settlement systems as the point
at which the 345 kV double circuit lines from the Facility’s 345 kV station
terminate at the Tanners Creek 345 kV Station.

     

    “Facility Purchase Agreement”
means the Purchase and Sale Agreement, dated as of December 29, 2006, by and
between PSEG Lawrenceburg Energy Company LLC, a Delaware limited liability
company, and Seller, pertaining to the acquisition by Seller of the Purchased
Assets, as defined therein, including the Facility.

     

    “FERC” means the Federal Energy
Regulatory Commission or any successor entity with similar
jurisdiction.

     

    “Force Majeure” means an event
or circumstance which prevents one Party from performing its obligations under
this Agreement, which event or circumstance was not reasonably anticipated as of
the date set forth in the preamble to this Agreement, which is not within the
reasonable control of, or the result of the negligence of, the Affected Party,
and which, by the exercise of due diligence, the Affected Party is, by using
reasonable efforts, unable to overcome or avoid or cause to be
avoided.

     

    “Fuel Costs” means all fixed or
variable costs, expenses, losses, liabilities, claims and charges related to the
acquisition, storage, inventory, balancing and transportation and delivery of
fuel for the Facility, including related costs of credit.

     

    “Fuel Payment” has the meaning
set forth in Section
5.2.

     

    “Governmental Approval” means
any permit, authorization, registration, consent, action, waiver, exception,
variance, order, judgment, decree, license, exemption, publication, filing,
notice to, or declaration of or with, or required by any Governmental Authority
or applicable law.

     

    “Governmental Authority” means
any federal, state, tribal, local, or municipal government body; and any
governmental, regulatory, or administrative agency, commission, body, agency,
instrumentality, or other authority exercising or entitled to exercise any
executive, judicial, legislative, administrative, regulatory, or taxing
authority or power, including any court or other tribunal.

     

    “Imbalance Charges” means any
penalties, fees or charges assessed by a Transmission Operator or Transmission
Provider for failure to satisfy requirements for balancing of electric energy
receipts and deliveries or loads and generation, or payable to any other Person
in connection with the delivery of electrical energy in an amount(s) different
from the amount(s) scheduled.

     

    “Income Tax” means any Tax
imposed by any Taxing Authority (i) based upon, measured by or calculated with
respect to gross or net income, profits or receipts (including municipal gross
receipt Taxes, capital gains Taxes and minimum Taxes) or (ii) based upon,
measured by or calculated with respect to multiple bases (including corporate
franchise Taxes) if one or more of such bases is described in clause (i), in
each case together with any interest, penalties or additions attributable to
such Tax.

     

    “Indemnified Parties” has the
meaning set forth in Section
12.2.

     

    “kW” means
kilowatt.

     

    “Mobile-Sierra Doctrine” has
the meaning set forth in Section
12.14.

     

    “Monthly Payment” has the
meaning set forth in Section
5.1.

     

    “MW” means
megawatt.

     

    “MWh” means
megawatt-hour.

     

    “Moody’s” means Moody's
Investors Services, Inc. or its successor.

     

    “O&M Payment” has the
meaning set forth in Section
5.3.

     

    “Operation and Maintenance
Costs” means all fixed or variable costs, expenses, losses, liabilities,
claims, charges and associated credits incurred directly or indirectly in the
performance of Operating Work, but not including Fuel Costs.

     

    “Operating Work” means the
operation, maintenance, use, repair or retirement of the Facility on or after
the Start Date, including but not limited to labor; parts; supplies; insurance;
permits; related taxes; community relations; procurement of ancillary services,
fuel and other consumables; fuel acquisition, transportation balancing and
storage; waste handling and disposal; filing, defense and settlement of claims,
suits and causes of action; procurement (or sale) of Allowances and settlement
of all other environmental charges (or credits) pertaining to the operation of
the Facility; but excluding any Capital Improvements Work.

     

    “Outage” shall mean any
unavailability, in whole or in part, of the Facility whereby it is not capable
of fully operating at its rated capability due to (i) a Forced Derating, Forced
Outage Maintenance Derating, Maintenance Outage, Planned Derating, Planned
Outage, (all as defined in the NERC Generating Unit Availability Data System
(“GADS”) Data Reporting
Instructions); (ii) the actual or anticipated failure of component(s); (iii)
external restrictions; (iv) testing; (v) work being performed; (vi) maintenance;
(vii) construction, or (viii) any other condition or circumstance that reduces
electrical generating output from time to time from the Facility so as to
prevent Seller from performing its obligations in whole or in part.

     

    “Party” has the meaning set
forth on the preamble hereto.

     

     “Person” means any individual,
corporation, partnership, limited liability company, other business organization
of any kind, association, trust, or governmental entity, agency or
instrumentality.

     

    “PJM” means the PJM
Interconnection, LLC or any successor entity with similar
responsibilities.

     

    “Property Tax” means any Tax
resulting from and relating to the assessment of real or personal property by
any Taxing Authority.

     

    “Schedule” or “Scheduling” means the actions
of Buyer and/or its designated agents or representatives, including the
Transmission Operator, if applicable, in notifying, requesting and confirming to
each other the quantity and type of Energy or Ancillary Services associated with
the Facility to be delivered on any given day or days (or in any given hour or
hours, or portion thereof) during the Delivery Period at the Delivery
Point.

     

    “Seller” has the meaning set
forth in the preamble hereto.

     

    “Seller’s Debt Percentage” or
“DP” means the
percentage of Seller’s capital allocable to the Facility that is composed of
long-term debt as reflected on Seller’s books and records as of the relevant
determination date.

     

    “Seller’s Equity Percentage” or
“EP” means the
percentage of Seller’s capital allocable to the Facility that is composed of
equity as reflected on Seller’s books and records as of the relevant
determination date.

     

    “Seller’s Facility Net Book
Value” or “FNBV”
has the meaning set forth in Section
5.5.

     

    “Seller’s Long Term Debt Rate”
or “LTDR” means Seller’s
average annual cost of long-term debt (i.e., debt having maturities of greater
than twelve calendar months) allocable to the Facility as reflected on Seller’s
books and records as of the relevant determination date.

     

    “Seller’s Preferred Stock
Percentage” or “PSP” means the percentage of
Seller’s capital allocable to the Facility that is composed of preferred stock
as reflected on Seller’s books and records as of the relevant determination
date.

     

    “Seller’s Preferred Stock Rate”
or “PSR” means
Seller’s average annual cost of preferred stock allocable to the Facility as
reflected on Seller’s books and records as of the relevant determination
date.

     

    “Seller’s Return on Equity” or
“ROE” means Seller’s
post-tax rate of return on equity, which amount will equal, for each Contract
Year, the average of the daily Moody’s Long-Term Baa Corporate Bond Index for
the month of December of the preceding calendar year, and adding 560 basis
points (5.60 percentage points).

     

    “Seller’s Facility Net Book
Value” or “FNBV”
means the net book value of the Facility as reflected on the books and records
of Seller immediately prior the Contract Year, and including all construction
work in progress (“CWIP”) and working capital
reflected on Seller’s books and records allocable to the Facility.

     

    “Seller’s Weighted Average Cost of
Capital” or “WACOC” has the meaning set
forth in Section
5.5.

     

    “Start Date” has the meaning
set forth in Section
2.2.

     

    “Straddle Period” means, as
appropriate, either any Tax Period beginning before the beginning of the first
Contract Year and ending either during or as of the end of the first Contract
Year or any Tax Period that is longer than one month.  For example,
pursuant to Section
8.5, the Tax Period for Property Taxes is each calendar
year.  Hence, the Tax Period for Property Taxes is a Straddle
Period.

     

    “Tax” or “Taxes” means any federal,
state, local, or foreign income, gross receipts, value added, windfall or other
profits, alternative or add-on minimum, estimated, franchise, profits, sales,
use, real property, personal property, ad valorem, vehicle, airplane, boat,
license, payroll, employment, workers’ compensation, unemployment compensation,
withholding, social security, disability, excise, severance, stamp, occupation,
premium, environmental (including taxes under Code section 59A), customs duties,
import fees, capital stock transfer, title, documentary, or registration, or
other tax, duty, or impost of any kind whatsoever, whether disputed or
not.  “Taxes” includes (i) any liability for the payment of any
amounts described in the preceding sentence as a result of being a member of an
affiliated, consolidated, combined, or unitary group for any taxable period,
(ii) any liability for the payment of any amount described in clause (i) above
as a result of being a Person required to withhold or collect Taxes imposed on
another Person, (iii) any liability for the payment of any amount described in
the preceding sentence or in clause (i) or (ii) of this sentence as a result of
being a transferee of, or successor in interest to, any Person or as a result of
an express or implied obligation to indemnify any Person, and (iv) any and all
interest, penalties, additions to tax, or additional amounts imposed in
connection with or with respect to any amount described above in this
definition.

     

    “Taxing Authority” shall mean,
with respect to any Tax, the governmental entity (national, local, municipal or
otherwise) or political subdivision thereof that imposes such Tax, the agency
(if any) charged with the collection of such Taxes for such entity or
subdivision, including any governmental or quasi-governmental entity, a council
(if any) or agency that imposes, grants or monitors Taxes or the abatements
thereof, or is charged with collecting social security or similar charges or
premiums.

     

    “Tax Period” means the time
period for which or during which a Tax is imposed by any Taxing
Authority.

     

    “Tax Reimbursement Payment” has
the meaning set forth in Section
5.6.

     

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

     

    “Transmission Operator” means
PJM or any Transmission Provider, independent system operator, regional
transmission operator or other transmission operator from time to time having
authority to control the transmission control area to which the Facility is
interconnected.

     

    “Transmission Provider” means
any Person or Persons that owns, operates or controls facilities used for the
transmission of electrical energy in interstate commerce.

     

    “Unit Contingent” or reference
to “Unit Contingency”
means, with respect to Energy or Ancillary Services associated with Buyer’s
Contractual Capacity, that such Energy or Ancillary Services is intended to be
supplied from the Facility and Seller’s failure to deliver such Energy or
Ancillary Services is excused to the extent the Facility (including all
facilities on Seller’s side of the Delivery Point) is unavailable as a result of
(i) an Outage, (ii) Force Majeure or (iii) Buyer’s failure to
perform.

     

    1.2           Interpretation.  Unless
the context otherwise requires:

     

    (a) Words
singular and plural in number will be deemed to include the other and pronouns
having masculine or feminine gender will be deemed to include the
other.

     

    (b) Any
reference herein to any Person includes its successors and permitted assigns
and, in the case of any Government Authority or Taxing Authority, any Person
succeeding to its functions and capacities.

     

    (c) Any
reference herein to any Article, Section, clause, Exhibit or Schedule means and
refers to the appropriate Article, Section or clause in this Agreement or
Exhibit or Schedule to this Agreement.

     

    (d) Other
grammatical forms of defined words or phrases have corresponding
meanings.

     

    (e) The term
“including” when used in this Agreement means “including without
limitation.”

     

    (f) Unless
otherwise specified, a reference to a specific time for the performance of an
obligation is a reference to that time in the place where that obligation is to
be performed.

     

    (g) A
reference to a document or agreement, including this Agreement, includes all
appendices, schedules and exhibits thereto.

     

    (h) A
reference to a document or agreement, including this Agreement, includes a
reference to that document or agreement as amended, supplemented, amended and
restated or otherwise modified from time to time.

     

    (i) If any
payment, act, matter or thing hereunder would occur on a day that is not a
Business Day, then such payment, act, matter or thing shall, unless otherwise
expressly provided for herein, occur on the next succeeding Business
Day.

     

    (j) The words
“hereof,” “hereunder,” “herein,” “herewith,” and “hereto,” and similar words
refer to this Agreement as a whole and not to any particular Article, Section or
clause in this Agreement.

     

    1.3           Technical
Meanings.  Words not otherwise defined herein that have
well-known and generally accepted technical or trade meanings are used herein in
accordance with such recognized meanings, as of the date set forth in the
preamble to this Agreement.

     

    ARTICLE
II

     

    TERM

     

    2.1           Term.  The
term of this Agreement (“Term”) shall commence on the
date set forth in the preamble to this Agreement and shall continue, unless
earlier terminated in accordance with the provisions of this Agreement, until
the End Date.

    

    2.2           Delivery Period. The
period during which the Parties will be obligated to purchase and sell Capacity,
Energy and Ancillary Services as set forth in this Agreement (“Delivery Period”) will
commence on the Effective Date, or such later date as may be jointly specified
by the Parties (“Start
Date”), and end on December 31st of the
year in which the tenth (10th)
anniversary of the Start Date occurs (“End Date”).

    

    2.3           Extension
Period.  Buyer may extend the Delivery Period for an additional
two (2) years by providing six (6) months advance written notice to
Seller.  If extended, the “End Date” of the Delivery
Period will be the last day of the two-year extension period.

    

    ARTICLE
III

     

    PURCHASE
AND SALE OBLIGATION

     

    3.1           Seller’s and Buyer’s
Obligations.  Subject to, and in accordance with, the terms and
conditions of this Agreement, Seller agrees to sell and deliver, and Buyer
agrees to purchase, receive, and pay for, Buyer’s Contractual Capacity and the
Energy and Ancillary Services associated with Buyer’s Contractual Capacity
delivered by Seller to the Delivery Point during each hour of the Delivery
Period.

    

    3.2           Unit
Contingent.  All Energy and Ancillary Services associated with
Buyer’s Contractual Capacity and all of Seller’s obligations to sell and deliver
the Energy and Ancillary Services associated with the Buyer’s Contractual
Capacity are Unit Contingent.

    

    3.3           Delivery
Point.  The Delivery Point for Energy and Ancillary Services
associated with Buyer’s Contractual Capacity will be the border between the
States of Indiana and Ohio on the transmission system of Indiana Michigan Power
Company or its successor .

    

    3.4           Scheduling and
Dispatch.  Buyer or its agent will Schedule and Dispatch the
Energy and Ancillary Services associated with Buyer’s Contractual Capacity in
accordance with this Agreement and within the operating parameters of the
Facility, as determined by Seller from time to time.  Seller will
Schedule and Dispatch, or will cause to be Scheduled and Dispatched, the
Facility in the manner requested by Buyer or its agent pursuant to this
Agreement.  Buyer will be allocated any excess (or deficit) in the
amount of Energy or Ancillary Services made available by Seller at the Delivery
Point over (or under) the amount of Energy or Ancillary Services Scheduled and
Dispatched by Buyer.  Buyer will be responsible for all Imbalance
Charges associated with the Energy and Ancillary Services made available to it
by Seller at the Delivery Point.  The Energy and Ancillary Services
associated with Buyer’s Contractual Capacity will be recorded by the Parties in
the PJM’s scheduling and settlement systems at the Facility LMP
Point.

    

    3.5           Force
Majeure.  To the extent either Party is prevented by Force
Majeure from carrying out, in whole or part, its obligations under this
Agreement (other than an obligation to pay money), and such Party (the “Affected Party”) gives notice
and details of the Force Majeure to the other Party as soon as practicable (but
not later than thirty (30) days thereafter to the extent such details are then
available) then the Affected Party shall be excused from the performance of its
obligations under this Agreement (other than the obligation to make payments) so
long as the Affected Party shall be using all reasonable efforts to overcome the
Force Majeure and resume performance as soon as possible.  The
non-Affected Party shall not be required to perform or resume performance of its
obligations (excluding payment obligations) to the Affected Party corresponding
to the obligations of the Affected Party excused by Force Majeure, until such
time and to the extent the Affected Party resumes its performance.

     

    ARTICLE
IV

     

    FACILITY
OPERATIONS

     

    4.1           Operation and
Maintenance.  At all times during the Delivery Period, Seller
shall perform the Operating Work, or cause the Operating Work to be performed,
in accordance with good commercial practice consistent with the procedures
employed by Seller and its Affiliates that are regulated utilities at similar
generating stations.  Subject to reimbursement as set forth in Article V, Seller
shall be responsible for all costs, expenses, losses, liabilities and charges
incurred by it, or on its behalf, in the performance of Operating Work,
including the procurement of ancillary services sufficient to satisfy ancillary
service obligations to the Transmission Operator related to the
Facility.

     

    4.2           Capital
Improvements.  From time to time during the Term, as deemed
necessary by Seller, Seller shall perform, or cause to be performed, Capital
Improvements Work related to  the Facility.  Subject to
reimbursement as set forth in Article V, Seller
shall be responsible for all costs, expenses, losses, liabilities and charges
incurred by it, or on its behalf, in the performance of Capital Improvements
Work.

     

    4.3           Planned Outage
Schedule.  Seller will develop and implement, or cause to be
developed and implemented, a planned outage and maintenance schedule for the
Project that is reasonably acceptable to Buyer.

     

    4.4           Auxiliary
Power.  During any hour that the Facility is out of service,
Seller will procure the energy used by Facility auxiliaries during that hour or,
if requested by Seller and not prohibited by law or the rules of the
Transmission Operator, Buyer shall provide in-kind the Energy used by Facility
auxiliaries during that hour.

     

    ARTICLE
V

     

    PRICING

     

    5.1           Monthly
Payments.  For each calendar month during the Delivery Period,
Buyer shall pay Seller an amount (the “Monthly Payment”) equal to the sum of
(i) a Fuel Payment, (ii) an O&M Payment, (iii) a Depreciation Payment, (iv)
a Capacity Payment and (v) a Tax Reimbursement Payment.  The Monthly
Payment will be Seller’s sole compensation for Seller’s sale and delivery to
Buyer of Buyer’s Contractual Capacity and the Energy and Ancillary Services
associated with Buyer’s Contractual Capacity.

    

    5.2           Fuel
Payment.  For each calendar month during each Contract Year,
Buyer shall pay Seller an amount (the “Fuel Payment”) equal to the
Fuel Costs incurred by Seller for that month.

    

    5.3           O&M
Payment.  For each calendar month during each Contract Year,
Buyer shall pay Seller an amount (the “O&M Payment”) equal to the
Operation and Maintenance Costs of the Facility for that month, less any charges
that are capitalized by Seller.

    

    5.4           Depreciation
Payment.  For each calendar month during each Contract Year,
Buyer shall pay Seller an amount (the “Depreciation Payment”) equal
to the depreciation expenses incurred by Seller at the rate established in this
Section 5.4
during the relevant month and directly related to its ownership interest in the
Facility.  Seller’s depreciation rate as of the date set forth in the
preamble to this Agreement is 3.02% per annum, which rate and payment amount
will be updated effective each January 1st during
the Term of this Agreement to reflect the actual depreciation rate set forth on
its books and records as of that date.

    

    5.5           Capacity
Payment.  For each calendar month during each Contract Year,
Buyer shall pay Seller an amount (the “Capacity Payment”) equal to
the following:

                                    

                       Capacity Payment = FNBV x
WACOC

                                             
12

            where,
 

    FNBV                        =           Seller’s
Facility Net Book Value

    

    WACOC                    =      

       

    

    

    LTDR                         =           Seller’s
Long Term Debt Rate

    

    PSR                           
=           Seller’s
Preferred Stock Rate

    

    ROE                           =           Seller’s
Return on Equity

    

    DP                             
=           Seller’s Debt
Percentage

    

    PSP                           
=           Seller’s
Preferred Stock Percentage

    

    EP                             
=           Seller’s
Equity Percentage

     

    

    A
calculation of the Capacity Payment as of the date set forth in the preamble to
this Agreement is set forth in Schedule
5.5.  Each component of the Capacity Payment will be updated as
of January 1st of each
calendar year during the Term of this Agreement, or at more frequent intervals
as elected by Seller.

    

    5.6           Tax Reimbursement
Payment.  For each calendar month during each Contract Year,
Buyer shall pay Seller an amount (the “Tax Reimbursement Payment”)
equal to all Taxes (other than taxes included in Sections 5.2 through 5.5,
above, such that there will be no duplication of Tax reimbursement to Seller)
for that month applicable to Buyer’s Contractual Capacity and the Energy and
Ancillary Services associated with Buyer’s Contractual Capacity, as more fully
set forth in Article
VIII.  Any Tax based upon income, gross receipts or any similar
Tax for which the inclusion of such Tax in the Monthly Payment would increase
Seller’s liability for any Tax shall be grossed-up so as to make the receipt of
any such Tax neutral to the Seller.  Any Tax for any Straddle Period
shall be included in the Monthly Payment based upon the ratio of the days in the
month for the Monthly Payment over the total number of days in the Tax
Period.  Taxes included in the Monthly Payment may be estimated by
Seller.  The difference between estimated Taxes and the actual Taxes
for which Buyer is responsible will be billed or credited to Buyer, as
appropriate, in one or more installments following the end of the relevant Tax
Period.  For purposes of Taxes subject to the provisions of this
Section 5.6, all Taxes shall be based upon the amount accrued for the relevant
calendar month billing period, including any deferred tax amount.

    

    

    ARTICLE
VI

     

    BILLING
AND PAYMENT

     

    6.1           Billing and
Payment.  The calendar month shall be the standard period for
all payments under this Agreement.  As soon as practicable after the
end of each month, Seller will render to Buyer an invoice for the payment
obligations incurred during the preceding month.  Each component of
the invoice will be described in reasonable detail.  All invoices
under this Agreement shall be due and payable on or before the twentieth
(20th) day of
each month.  Buyer will make payments by electronic funds transfer to
the account designated by Seller, or by other mutually agreeable method(s).

     

    6.2           Books and Records;
Audit.  Seller shall keep, or shall cause to be kept, all
necessary books of record, books of account, and memoranda of all transactions
involving the Facility, in conformance, where required, with the FERC’s
Uniform  System of Accounts.  Seller shall make, or shall
cause to be made, all computations relating the Facility and all allocations of
the costs and expenses of the Facility.  Buyer has the right to
examine the records of Seller to the extent reasonably necessary to verify the
accuracy of any statement, charge or computation made pursuant to this
Agreement.  If requested, Seller shall provide to Buyer statements
evidencing the quantities delivered to Buyer at the Delivery
Point.  If any such examination reveals any inaccuracy in any
statement, the necessary adjustments in such statement and the payments thereof
will be made promptly, provided, however, that any
claim by a Party for overpayment or underpayment with respect to an invoice is
waived unless the other Party is notified of the claim within twelve (12) months
after the invoice is rendered or any specific adjustment to the invoice is
made.  If an invoice is not rendered within twelve (12) months after
the close of the month during which performance occurred, the right to payment
for such performance is waived.

     

    6.3           Netting of
Payments.  The Parties hereby agree that they shall discharge
mutual debts and payment obligations due and owing to each other under this
Agreement through netting, in which case all amounts owed by each Party to the
other Party under this Agreement, including any related damages, interest, and
payments or credits, shall be netted so that only the excess amount remaining
due shall be paid by the Party who owes it.

     

    ARTICLE
VII

     

    LIMITATIONS

     

    7.1           Limitation of Remedies,
Liability and Damages.  EXCEPT AS SET FORTH HEREIN, THERE IS NO
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL
IMPLIED WARRANTIES ARE DISCLAIMED.  FOR BREACH OF ANY PROVISION OF
THIS AGREEMENT, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY,
SUCH DIRECT DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER
REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.  NEITHER PARTY
SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT
DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN
TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE.  IT IS
THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND
THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO,
INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR
CONCURRENT, OR ACTIVE OR PASSIVE.

     

    ARTICLE
VIII

     

    TAXES

     

    8.1           Cooperation.  Each
Party shall use reasonable efforts to implement the provisions of and to
administer this Agreement in accordance with the intent of the parties to
minimize all Taxes, so long as neither Party is materially adversely affected by
such efforts.

     

    8.2           Taxes.  Subject
to reimbursement by Buyer as set forth in Article V, Seller
shall pay or cause to be paid all Taxes imposed on or with respect to the
Buyer’s Contractual Capacity and associated Energy and Ancillary Services
arising prior to the Delivery Point.  Buyer shall pay the Tax
Reimbursement Payment and pay or cause to be paid all Taxes on or with respect
to the Buyer’s Contractual Capacity and associated Energy and Ancillary Services
at and from the Delivery Point.  In the event Seller is required by
law or regulation to remit or pay Taxes which are Buyer’s responsibility
hereunder, Buyer shall promptly reimburse Seller for such Taxes as set forth in
Article
V.  If Buyer is required by law or regulation to remit or pay
Taxes which are Seller’s responsibility hereunder, Buyer may deduct the amount
of any such Taxes from the sums due to Seller under Article V of this
Agreement.  Nothing shall obligate or cause a Party to pay or be
liable to pay any Taxes for which it is exempt under the law.

     

    8.3           Change-in-Law
Taxes.  Buyer shall be responsible for (or receive the benefit
of) all Change-in-Law Taxes.

     

    8.4           Exemptions.  Either
Party, upon written request of the other, shall provide a certificate of
exemption or other reasonably satisfactory evidence of exemption if either Party
is exempt from any Taxes and shall use all reasonable efforts to obtain or
maintain, or to enable the other Party to obtain or maintain, any exemption from
or reduction of any Taxes, whether currently available or becoming available in
the future.  Without limiting the generality of the foregoing, the
Parties agree that, if beneficial to the efforts of either Party to obtain or
maintain any exemption from or reduction of any Taxes, whether currently
available or becoming available in the future, the Parties will cooperate to
restructure the transactions contemplated by this Agreement so as to enable
either Party to obtain or maintain such exemption or reduction, as the case may
be; provided,
however, that
any such restructuring shall not affect adversely the economic consequences of
this Agreement to either Party or subject either Party to any regulatory
jurisdiction other than that to which it is subject on the date set forth in the
preamble to this Agreement.

     

    ARTICLE
IX

     

    COMPLIANCE
WITH LAWS

     

    9.1           Seller’s
Compliance.  Seller shall, at its expense, comply with all
applicable laws and obtain and maintain all Governmental Approvals applicable to
Seller and/or the Facility, or necessary for
Seller’s performance of its obligations hereunder.  Notwithstanding
the foregoing, Seller shall not be deemed in default of this obligation if it is
contesting the application, interpretation, order, or other legal direction or
Governmental Approval of any Governmental Authority in good faith and with due
diligence through appropriate proceedings and if such non-compliance does not
have a material adverse effect on Seller’s performance of this
Agreement.

     

    9.2           Buyer’s
Compliance.  Buyer shall at its expense, at all times, comply
with all applicable laws and obtain and maintain all Governmental Approvals
applicable to Buyer or necessary for Buyer’s performance of its obligations
hereunder.  Notwithstanding the foregoing, Buyer shall not be deemed
in default of this obligation if Buyer is contesting the application,
interpretation, order, or other legal direction or Governmental Approval of any
Governmental Authority in good faith and with due diligence through appropriate
proceedings and if such non-compliance does not have a material adverse effect
on Buyer’s performance of this Agreement.

     

    ARTICLE
X

     

    CONDITIONS

     

    10.1           Conditions.  Subject
to Section
10.2 and except to the
extent waived in writing by the Parties in their sole and absolute discretion,
the obligation of the Parties to consummate the transactions contemplated
hereunder shall be subject to fulfillment of the following
conditions:

     

    (i)           The
occurrence of the Closing.

     

    (ii)           Seller
shall have filed with the FERC and received acceptance of this Agreement that is
satisfactory to Seller and Buyer in their sole judgment and discretion, without
any limitation thereto whatsoever.

     

    (iii)           The
Parties shall each have obtained any and all other Approvals required with
respect to the performance of their respective obligations hereunder and such
Approvals shall be in form and substance satisfactory to Seller and Buyer in
their sole and absolute discretion.

     

    10.2           Obligations of Buyer and
Seller.  Commencing on the date set forth in the preamble to
this Agreement, on the terms and subject to the conditions of this Agreement,
each Party shall use its commercially reasonable efforts to take, or cause to be
taken, all appropriate action, and do, or cause to be done, and assist and
cooperate with the other Party in taking or doing, all things necessary, proper
or advisable to consummate the transactions contemplated hereby, including,
without limitation the satisfaction of the conditions set forth in Section 10.1.

     

    10.3           Failure of Conditions
Generally.  This Agreement may be terminated by either Party in
the event that the conditions set forth in Section 10.1 are not
satisfied or waived by the Parties in accordance with such Section.

     

    ARTICLE
XI

     

    REPRESENTATIONS
AND WARRANTIES

     

    11.1           Representations and
Warranties of Both Parties.  On the date set forth in the
preamble to this Agreement each Party represents and warrants to the other Party
that:

     

    (i)           it
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation;

     

    (ii)           subject
to the fulfillment of the conditions set forth in Section 10.1, it has
all Governmental Approvals necessary for it legally to perform its obligations
under this Agreement;

     

    (iii)           the
execution, delivery and performance of this Agreement are within its powers,
have been duly authorized by all necessary action and do not violate any of the
terms and conditions in its governing documents, any contracts to which it is a
party or any law, rule, regulation, order or the like applicable to
it;

     

    (iv)           this
Agreement constitutes a legally valid and binding obligation enforceable against
it in accordance with its terms; subject to any Equitable Defenses;

     

    (v)           it
is not bankrupt, however evidenced, and there are no proceedings pending or
being contemplated by it or, to its knowledge, threatened against it which would
result in it being or becoming bankrupt;

     

    (vi)           there
is not pending or, to its knowledge, threatened against it any legal proceedings
that could materially adversely affect its ability to perform its obligations
under this Agreement;

     

    (vii)           no
material breach of this Agreement with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement;
and

     

     (viii)                      it
has entered into this Agreement in connection with the conduct of its business
and it has the capacity or ability to make or take delivery of the Buyer’s
Contractual Capacity and associated Energy and Ancillary Services.

     

    ARTICLE
XII

     

    MISCELLANEOUS

     

    12.1           Title and Risk of
Loss.  Title to and risk of loss related to the Capacity and
associated Energy and Ancillary Services shall transfer from Seller to Buyer at
the Delivery Point.  Seller warrants that it will deliver to Buyer the
Capacity and associated Energy and Ancillary Services free and clear of all
liens, security interests, claims and encumbrances or any interest therein or
thereto by any Person arising prior to the Delivery Point.

     

    12.2           
Indemnity.  Each
Party shall indemnify, defend and hold harmless the other Party and such Party’s
partners, directors, officers, employees, agents and representatives (the “Indemnified Parties”) from and
against any Claims arising from or out of any event, circumstance, act or
incident first occurring or existing during the period when control of,
risk of loss related to, and title to the Capacity and associated Energy and
Ancillary Services is vested in such Party as provided in Section 12.1, except
to the extent, as to any Indemnified Party, such Claims are attributable to the
gross negligence or willful misconduct of such Indemnified
Party.  Each Party shall indemnify, defend and hold harmless the other
Party against any Taxes for which such Party is responsible under Article
VIII.  The foregoing indemnities shall forever survive the
termination of the Agreement.

     

    12.3            Amendments and
Waivers.  Neither this Agreement nor any provisions hereof may
be waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by both Parties.

     

    12.4            Notices.  All
notices, requests, statements or payments shall be made as specified in Schedule
12.4.  Notices, other than notices regarding availability,
Scheduling and Dispatch of the Facility shall, unless otherwise specified
herein, be in writing and shall be deemed to be given or made if delivered by
(a) hand delivery, electronic mail or other electronic transmission device
capable of written record or facsimile, in each case, effective at the close of
business on the day actually received, if received during business hours on a
Business Day, otherwise shall be effective at the close of business on the next
Business Day, or (b) United States mail or overnight courier service, in each
case, effective on the next Business Day after it was sent.  Notices
regarding the availability, Scheduling and Dispatch of the Facility may be made
(x) telephonically, effective when made, or (y) by electronic mail or other
electronic device capable of written record, effective when
received.  A Party may change its notice details by providing a notice
of same to the other Party in accordance herewith.

     

    12.5            Successors and Assigns;
Assignment.  The provisions of this Agreement shall be binding
upon and inure to the benefit of the Parties and the Parties’ successors and
assigns permitted hereby and no other Person shall acquire or have any rights
under or by virtue of this Agreement.  Neither Party shall assign this
Agreement or its rights hereunder without the prior written consent of the other
Party, which consent may be withheld in the exercise of its sole discretion;
provided, however, that either
Party may, without the consent of the other Party (and without relieving itself
from liability hereunder) (i) transfer, sell, pledge, encumber or assign this
Agreement or the accounts, revenues or proceeds hereof in connection with any
financing or other financial arrangements, (ii) transfer or assign this
Agreement to an Affiliate which shall agree in writing to be bound by the terms
and conditions of this Agreement.  

     

    12.6            Integration.  This
Agreement constitutes the entire agreement between the Parties relating to the
subject matter hereof and supersedes any and all previous and understandings,
oral or written, between the Parties relating to the subject matter
hereof.

     

    12.7           Acknowledgments.  This
Agreement shall be considered for all purposes as prepared through the joint
efforts of the Parties and shall not be construed against one Party or the other
as a result of the preparation, substitution, submission or other event of
negotiation, drafting or execution hereof.

     

    12.8           Waiver.  No
failure to exercise and no delay in exercising by a Party any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any right, remedy power or privilege.

     

    12.9           Counterparts.  This
Agreement may be executed by the Parties in any number of counterparts, which,
taken together, shall constitute one and the same legal binding
instrument.  Delivery of an executed counterpart of a signature page
of this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart of this Agreement.

     

    12.10          Headings.  The
headings used herein are for convenience and reference purposes
only.

     

    12.11          Confidentiality.  Neither
Party shall disclose the terms or conditions of this Agreement to a third party
(other than the Parties’ employees, lenders, counsel, accountants or advisors
who have a need to know such information and have agreed to keep such terms
confidential) except in order to comply with any applicable law, regulation, or
any exchange, control area or independent system operator rule or in
connection with any court or regulatory proceeding; provided, however, that each
Party shall, to the extent practicable, use reasonable efforts to prevent or
limit the disclosure.  Subject to the provisions of Section 7.1, the
Parties shall be entitled to all remedies available at law or in equity to
enforce, or seek relief in connection with this confidentiality
obligation.

     

    12.12          Governing
Law.  THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED AND PERFORMED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.

     

    12.13          Severability.  Should
any provision of this Agreement be held to be invalid or unenforceable, such
provision shall be invalid or unenforceable only to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
any other provision hereof.

     

    12.14          Mobile/Sierra
Doctrine.  Absent the agreement of all Parties to the proposed
change, the standard of review for changes to any rate, charge, classification,
term or condition of this Agreement, whether proposed by a Party, a non-party or
FERC acting sua
sponte, shall
be the “public interest” standard of review set forth in United Gas Pipe Line Co. v.
Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v.
Sierra Pacific Power Co., 350 U.S. 348 (1956) (the “Mobile-Sierra Doctrine”), or
such other standard of review permissible to preserve the intent of the parties
pursuant to this Section to uphold the sanctity of contracts without
modification.

     

    [signatures
appear on next page]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be executed and delivered by their
duly authorized representatives as of the date set forth in the preamble to this
Agreement.

     

    

     

    
      	
                                                  AEP
      GENERATING COMPANY

                                                  By:           American
      Electric Power Service Corporation

                                                  Its:           Agent

               

               

            
	
                                                  By: ____________________________          

                                                  Name:

                                                  Title:

               

            
	 
      
	
                                                  COLUMBUS
      SOUTHERN POWER COMPANY

                                                  By:           American
      Electric Power Service Corporation

                                                  Its:           Agent

               

            
	
                                                  By:  ____________________________         

                                                  Name:

                                                  Title:

               

            

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    SCHEDULE
5.5

     

     

    INITIAL
CAPACITY PAYMENT

     

     

    

     

     

    The
Capacity Charge as of the date set forth in the preamble to this Agreement is
$2,255,500 per month:

     

     

    

     

     

                    Capacity Payment = FNBV x
WACOC

                                       12

                           where,
 

    FNBV                          =           $325,000,000

    

    WACOC                      =           

                               

    

    LTDR                           =           6.0%

    

    PSR                             
=           0%

    

    ROE                             =           11.82%

    

    DP                               
=           60%

    

    PSP                             
=           0%

    

    EP                               
=           40%

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
12.4

    

    NOTICE
INFORMATION

     

    If to
Seller:

    

          AEP
Generating Company

          One
Riverside Plaza

    Columbus,
Ohio   433215

          Attention:  President

    

          with
a copy to:

    

          AEP
Generating Company

          One
Riverside Plaza

    Columbus,
Ohio   433215

    Attention:  Secretary, AEP
Generating Company

    

    If to
Buyer:

    

          Columbus
Southern Power Company

          One
Riverside Plaza

    Columbus,
Ohio   433215

    Attention:  President

    

          with
a copy to:

    

          Columbus
Southern Power Company

          One
Riverside Plaza

    Columbus,
Ohio   433215

    Attention:  Secretary,
Columbus Southern Power CompanyExhibit 10.5

                                                               EXECUTION COPY
================================================================================

                                CREDIT AGREEMENT

                                   dated as of

                                  May 18, 2007

                                     between

                         CITIZENS COMMUNICATIONS COMPANY

                            The LENDERS Party Hereto

                                       and

                        DEUTSCHE BANK AG NEW YORK BRANCH,
                             as Administrative Agent

                                       and

                         DEUTSCHE BANK SECURITIES INC.,
                      as Sole Lead Arranger and Bookrunner

                                  ------------
                                  $250,000,000
                                  ------------

================================================================================
<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

<S>                                                                                     <C>
                                                                                          Page
                                                                                          ----
                                    ARTICLE I
                                   DEFINITIONS

       SECTION 1.01  Defined Terms...........................................................1
                     -------------
       SECTION 1.02  Terms Generally........................................................12
                     ---------------
       SECTION 1.03  Accounting Terms; GAAP.................................................12
                     ----------------------
<PAGE>
                                   ARTICLE II
                                   THE CREDITS

       SECTION 2.01  The Commitments........................................................13
                     ---------------
       SECTION 2.02  Loans and Borrowings...................................................13
                     --------------------
       SECTION 2.03  Requests for Borrowings................................................13
                     -----------------------
       SECTION 2.04  Letters of Credit......................................................14
                     -----------------
       SECTION 2.05  Funding of Borrowings..................................................18
                     ---------------------
       SECTION 2.06  Interest Elections.....................................................18
                     ------------------
       SECTION 2.07  Termination, Reduction and Increase of the Commitments.................19
                     ------------------------------------------------------
       SECTION 2.08  Repayment and Prepayment of Loans; Evidence of Debt....................21
                     ---------------------------------------------------
       SECTION 2.09  Fees...................................................................22
                     ----
       SECTION 2.10  Interest...............................................................23
                     --------
       SECTION 2.11  Alternate Rate of Interest.............................................23
                     --------------------------
       SECTION 2.12  Increased Costs........................................................24
                     ---------------
       SECTION 2.13  Break Funding Payments.................................................25
                     ----------------------
       SECTION 2.14  Taxes..................................................................25
                     -----
       SECTION 2.15  Payments Generally; Pro Rata Treatment; Sharing of Setoffs.............27
                     ----------------------------------------------------------
       SECTION 2.16  Mitigation Obligations; Replacement of Lenders.........................28
                     ----------------------------------------------

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

       SECTION 3.01  Organization; Powers; Governmental Approvals...........................29
                     --------------------------------------------
       SECTION 3.02  Financial Statements...................................................30
                     --------------------
       SECTION 3.03  No Material Adverse Change.............................................30
                     --------------------------
       SECTION 3.04  Titles to Properties; Possession under Leases..........................30
                     ---------------------------------------------
       SECTION 3.05  Ownership of Subsidiaries..............................................31
                     -------------------------
       SECTION 3.06  Litigation; Compliance with Laws.......................................31
                     --------------------------------
       SECTION 3.07  Agreements.............................................................31
                     ----------
       SECTION 3.08  Federal Reserve Regulations............................................32
                     ---------------------------
       SECTION 3.09  Investment Company Act.................................................32
                     ----------------------
       SECTION 3.10  Use of Proceeds........................................................32
                     ---------------
       SECTION 3.11  Tax Returns............................................................32
                     -----------
       SECTION 3.12  No Material Misstatements..............................................32
                     -------------------------
       SECTION 3.13  Employee Benefit Plans.................................................32
                     ----------------------
       SECTION 3.14  Insurance..............................................................32
                     ---------

                                   ARTICLE IV
                                   CONDITIONS

       SECTION 4.01  Effective Date.........................................................33
                     --------------
       SECTION 4.02  Each Credit Event......................................................34
                     -----------------

                                    ARTICLE V
                              AFFIRMATIVE COVENANTS

       SECTION 5.01  Existence; Businesses and Properties...................................35
                     ------------------------------------
       SECTION 5.02  Financial Statements, Reports, etc.....................................35
                     -----------------------------------
       SECTION 5.03  Litigation and Other Notices...........................................37
                     ----------------------------
       SECTION 5.04  Maintaining Records....................................................37
                     -------------------
       SECTION 5.05  Use of Proceeds........................................................37
                     ---------------

<PAGE>

                                   ARTICLE VI
                               NEGATIVE COVENANTS

       SECTION 6.01  Liens; Restrictions on Sales of Receivables............................38
                     -------------------------------------------
       SECTION 6.02  Ownership of the Principal Subsidiaries................................38
                     ---------------------------------------
       SECTION 6.03  Asset Sales............................................................39
                     -----------
       SECTION 6.04  Mergers................................................................39
                     -------
       SECTION 6.05  Restrictions on Dividends..............................................39
                     -------------------------
       SECTION 6.06  Transactions with Affiliates...........................................39
                     ----------------------------
       SECTION 6.07  Financial Ratio........................................................39
                     ---------------
       SECTION 6.08  Guarantors.............................................................40
                     ----------

                                   ARTICLE VII
                                EVENTS OF DEFAULT

       SECTION 7.01  Events of Default......................................................40
                     -----------------

                                  ARTICLE VIII
                                     AGENCY

       SECTION 8.01  Administrative Agent...................................................42
                     --------------------
       SECTION 8.02  Bookrunners, Etc.......................................................44
                     -----------------

                                   ARTICLE IX
                                  MISCELLANEOUS

       SECTION 9.01  Notices................................................................45
                     -------
       SECTION 9.02  Waivers; Amendments....................................................46
                     -------------------
       SECTION 9.03  Expenses; Indemnity; Damage Waiver.....................................47
                     ----------------------------------
       SECTION 9.04  Successors and Assigns.................................................48
                     ----------------------
       SECTION 9.05  Survival...............................................................50
                     --------
       SECTION 9.06  Counterparts; Integration; Effectiveness; Electronic Execution.........51
                     --------------------------------------------------------------
       SECTION 9.07  Severability...........................................................51
                     ------------
       SECTION 9.08  Right of Setoff........................................................51
                     ---------------
       SECTION 9.09  Governing Law; Jurisdiction; Etc.......................................51
                     ---------------------------------
       SECTION 9.10  WAIVER OF JURY TRIAL...................................................52
                     --------------------
       SECTION 9.11  Headings...............................................................52
                     --------
       SECTION 9.12  Treatment of Certain Information; Confidentiality......................52
                     -------------------------------------------------
       SECTION 9.13  USA PATRIOT Act........................................................53
                     ---------------

</TABLE>

<PAGE>

     CREDIT AGREEMENT dated as of May 18, 2007, between CITIZENS  COMMUNICATIONS
COMPANY,  the LENDERS  party hereto,  and DEUTSCHE  BANK AG NEW YORK BRANCH,  as
Administrative Agent.

     The Borrower (as hereinafter defined) has requested that the Lenders (as so
defined)  extend  credit to it in an  aggregate  principal  or face  amount  not
exceeding $250,000,000 (as such amount may be decreased or increased pursuant to
the terms of this Agreement) at any one time outstanding.

     The  Lenders  are  prepared  to  extend  such  credit  upon the  terms  and
conditions hereof, and, accordingly, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS
                                   -----------

     SECTION 1.01 Defined Terms. As used in this Agreement,  the following terms
have the meanings specified below:

     "ABR",  when used in reference to any Loan or Borrowing,  refers to whether
such Loan, or the Loans  comprising  such Borrowing,  are bearing  interest at a
rate determined by reference to the Alternate Base Rate.

     "Additional  Lender"  has the  meaning  assigned  to such  term in  Section
2.07(e).

     "Adjusted  LIBO Rate"  means,  for the Interest  Period for any  Eurodollar
Borrowing,  an interest rate per annum (rounded  upwards,  if necessary,  to the
next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied
by (b) the Statutory Reserve Rate for such Interest Period.

     "Administrative  Agent"  means DBAG NY, in its  capacity as  administrative
agent for the Lenders hereunder.

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

     "Affiliate" means, with respect to a specified Person,  another Person that
directly,  or  indirectly  through  one or more  intermediaries,  Controls or is
Controlled by or is under common Control with the Person specified.

     "Alternate  Base Rate"  means,  for any day, a rate per annum  equal to the
greater  of (a) the Prime Rate in effect on such day and (b) the  Federal  Funds
Effective  Rate for such day plus 1/2 of 1%.  Any change in the  Alternate  Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective  from and including the effective  date of such change in the Prime
Rate or the Federal Funds Effective Rate, as the case may be.

     "Applicable  Percentage"  means, with respect to any Lender, the percentage
of the  total  Commitments  represented  by  such  Lender's  Commitment.  If the
Commitments  have  terminated or expired,  the Applicable  Percentages  shall be
determined based upon the Commitments most recently in effect,  giving effect to
any assignments.

     "Applicable  Rate"  means,  for any day,  with  respect  to any ABR Loan or
Eurodollar  Loan, or with respect to the commitment fees payable  hereunder,  as
the case may be, the applicable  rate per annum set forth below,  based upon the
Leverage Ratio as of the most recent determination date; provided that until the
earlier of the date the  certificate  is delivered  under  Section  5.02(c) with
respect  to the  fiscal  quarter  ending  March  31,  2007  and  the  date  such
certificate is required to be delivered under Section  5.02(c),  the "Applicable
Rate" shall be the applicable rate per annum set forth below in Pricing Level 2:
<PAGE>
<TABLE>
<CAPTION>

    Pricing            Leverage         Applicable Rate for     Applicable Rate for       Applicable Rate for
     Level              Ratio                ABR Loans            Eurodollar Loans           Commitment Fee
  ------------- ----------------------- --------------------- ------------------------- -------------------------
<S>     <C>                                     <C>                     <C>                       <C>
        1        Less than or equal to          0.000%                  0.625%                    0.175%
                3.00 to 1.00
  ------------- ----------------------- --------------------- ------------------------- -------------------------
                Greater than 3.00 to
       2        1.00 but less than or          0.000%                  0.750%                    0.200%
                equal to 3.50 to 1.00
  ------------- ----------------------- --------------------- ------------------------- -------------------------
                Greater than 3.50 to
       3        1.00 but less than or          0.000%                  0.875%                    0.225%
                equal to 4.00 to 1.00
  ------------- ----------------------- --------------------- ------------------------- -------------------------
       4        Greater than 4.00 to           0.250%                  1.250%                    0.275%
                1.00
  ------------- ----------------------- --------------------- ------------------------- -------------------------
</TABLE>

For purposes of the foregoing,  (i) the Leverage Ratio shall be determined as of
the end of each  fiscal  quarter  of the  Borrower's  fiscal  year and (ii) each
change in the  Applicable  Rate  resulting  from a change in the Leverage  Ratio
shall be effective  during the period  commencing  on and including the date one
Business  Day  after  delivery  to the  Administrative  Agent of the  Borrower's
consolidated  financial  statements delivered pursuant to Section 5.02(a) or (b)
and ending on the date immediately preceding the effective date of the next such
change;  provided that the Leverage Ratio shall be deemed to be in Pricing Level
4 if the  Borrower  fails  to  deliver  the  consolidated  financial  statements
required to be  delivered by it pursuant to Section  5.02(a) or (b),  during the
period  from  the  expiration  of the  time  for  delivery  thereof  until  such
consolidated financial statements are delivered.

     "Asset Exchange" means the exchange or other transfer of telecommunications
assets  between or among the  Borrower  and another  Person or other  Persons in
connection  with which the Borrower  would  transfer  telecommunications  assets
and/or  other  property in  consideration  of the receipt of  telecommunications
assets and/or other property having a fair market value substantially equivalent
to  those  transferred  by the  Borrower  (as  determined  in good  faith by the
Borrower's Board of Directors);  provided that the principal value of the assets
being  transferred to the Borrower  shall be  represented by  telecommunications
assets.

     "Assignment and Assumption" means an assignment and assumption entered into
by a Lender and an  assignee  (with the  consent of any party  whose  consent is
required  by  Section  9.04),  and  accepted  by the  Administrative  Agent,  in
substantially  the  form  of  Exhibit  A or  any  other  form  approved  by  the
Administrative Agent.

     "Availability  Period"  means the period from and  including  the Effective
Date to but excluding  the earlier of the  Commitment  Termination  Date and the
date of termination of the Commitments.

     "Board" means the Board of Governors of the Federal  Reserve  System of the
United States of America.

<PAGE>

     "Borrower" means Citizens Communications Company, a Delaware corporation.

     "Borrowing"  means (a) all ABR Loans made or  converted on the same date or
(b) Eurodollar Loans of the same Type that have the same Interest Period.

     "Borrowing  Approvals"  has the  meaning  assigned  to such term in Section
3.01(b).

     "Borrowing  Request"  means a request by the  Borrower  for a Borrowing  in
accordance with Section 2.03.

     "Business  Day" means any day (a) that is not a  Saturday,  Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed and (b) if such day relates to a borrowing,  a continuation  or
conversion of or into, or the Interest Period for, a Eurodollar Borrowing, or to
a  notice  by  the  Borrower  with  respect  to  any  such  borrowing,  payment,
prepayment, continuation,  conversion, or Interest Period, that is also a day on
which  dealings  in Dollar  deposits  are  carried  out in the London  interbank
market.

     "Capital  Lease  Obligations"  of any Person means the  obligations of such
Person to pay rent or other  amounts  under  any lease of (or other  arrangement
conveying the right to use) real or personal property, or a combination thereof,
which  obligations  are required to be  classified  and accounted for as capital
leases on a balance  sheet of such Person  under GAAP and,  for the  purposes of
this  Agreement,  the  amount  of such  obligations  at any  time  shall  be the
capitalized amount thereof at such time determined in accordance with GAAP.

     A "Change in Control" shall be deemed to have occurred if (a) any Person or
group  (within  the  meaning  of  Rule  13d-5  of the  Securities  and  Exchange
Commission  as in effect on the date hereof)  shall own directly or  indirectly,
beneficially  or of record,  shares  representing  50% or more of the  aggregate
ordinary voting power represented by the issued and outstanding capital stock of
the  Borrower;  or (b) a majority of the seats (other than vacant  seats) on the
board of  directors  of the  Borrower  shall at any time have been  occupied  by
Persons who were neither (i) nominated by the  management  of the Borrower,  nor
(ii) appointed by directors so nominated; or (c) any Person or group (within the
meaning of Rule 13d-5 of the Securities and Exchange  Commission as in effect on
the date hereof) shall otherwise directly or indirectly Control the Borrower.

     "Change in Law" means the occurrence,  after the date of this Agreement, of
any of the  following:  (a) the  adoption  or taking  effect  of any law,  rule,
regulation or treaty,  (b) any change in any law, rule,  regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any  request,  guideline or directive
(whether or not having the force of law) by any Governmental Authority.

     "Code" means the Internal Revenue Code of 1986.

     "Commitment" means, with respect to each Lender, the commitment, if any, of
such  Lender to make  Loans and to acquire  participations  in Letters of Credit
hereunder,  expressed as an amount  representing the maximum aggregate amount of
such Lender's Revolving Credit Exposure hereunder, as such commitment may be (a)
reduced or increased  from time to time pursuant to Section 2.07 and (b) reduced
or  increased  from time to time  pursuant to  assignments  by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender's  Commitment is set
forth on Schedule 1 or in the Assignment  and Assumption  pursuant to which such
Lender shall have assumed its Commitment,  as applicable.  The initial aggregate
amount of the Lenders' Commitments is $250,000,000.

     "Commitment  Termination  Date" means May 18, 2012,  provided  that if such
date is not a Business Day then the "Commitment  Termination  Date" shall be the
immediately preceding Business Day.

<PAGE>

     "Companies" has the meaning assigned to such term in Section 5.02(a).

     "Consolidated   EBITDA"  means,  with  respect  to  the  Borrower  and  its
Subsidiaries  for any period,  the sum of (i)  operating  income for such period
(excluding  integration  and  restructuring  costs) plus (ii)  depreciation  and
amortization  expense for such period plus (iii) the amount of non-cash  charges
for such period exceeding $25,000,000, all determined on a consolidated basis in
accordance with GAAP. For any period of calculation, "Consolidated EBITDA" shall
be adjusted to give pro forma effect to any Material Transaction (without giving
effect to cost savings not actually realized),  as determined  reasonably and in
good faith by a Financial  Officer,  during the period of calculation as if such
Material  Transaction  occurred on the first day of such period of  calculation,
provided that such pro forma calculations shall only include such adjustments as
are permitted under Regulation S-X of the Securities and Exchange Commission. As
used in  this  definition,  "Material  Transaction"  means  any  acquisition  or
disposition  outside the  ordinary  course of business of any property or assets
that (x) constitute  assets  comprising all or substantially all of an operating
unit of a business or equity  interests of a Person  representing  a majority of
the  ordinary  voting  power  or  economic  interests  in such  Person  that are
represented  by all its  outstanding  capital  stock and (y) involves  aggregate
consideration in excess of $50,000,000.

     "Consolidated  Net  Worth"  means,  as at any  date of  determination,  the
consolidated   stockholders'   equity  of  the  Borrower  and  its  consolidated
Subsidiaries,  including  redeemable  preferred  securities where the redemption
date  occurs  after the  Commitment  Termination  Date,  mandatorily  redeemable
convertible  preferred  securities,  mandatorily  convertible  Indebtedness  (or
Indebtedness  subject to  mandatory  forward  purchase  contracts  for equity or
similar   securities)  and  minority  equity  interests  in  other  persons,  as
determined on a consolidated basis in conformity with GAAP consistently applied.

     "Consolidated  Tangible Assets" means, for any Person, total assets of such
Person and its consolidated  Subsidiaries,  determined on a consolidated  basis,
less goodwill,  patents,  trademarks  and other assets  classified as intangible
assets in accordance with GAAP.

     "Control"  means the  possession,  directly or indirectly,  of the power to
direct or cause the direction of the management or policies of a Person, whether
through  the  ability to  exercise  voting  power,  by  contract  or  otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

     "DBAG NY" means the New York Branch of Deutsche Bank AG.

     "Debtor  Relief  Laws" means the  Bankruptcy  Code of the United  States of
America, and all other liquidation, conservatorship,  bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement,  receivership,  insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other  applicable  jurisdictions  from time to time in effect and  affecting the
rights of creditors generally.

     "Default" means any event or condition which, upon notice, lapse of time or
both would, unless cured or waived, become an Event of Default.

     "Dollars" or "$" refers to lawful money of the United States of America.

     "Effective  Date"  means  the date on which  the  conditions  specified  in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

<PAGE>

     "Environmental  Laws"  means  all  national,  federal,  state,  provincial,
municipal  or local laws,  statutes,  ordinances,  orders,  judgments,  decrees,
injunctions,   writs,  policies  and  guidelines  (having  the  force  of  law),
directives,  approvals, notices, rules and regulations and other applicable laws
relating to environmental or occupational  health and safety matters,  including
those relating to the Release or threatened Release of Specified  Substances and
to the generation,  use, storage or transportation of Specified Substances, each
as in effect as of the date of determination.

     "ERISA" means the Employee  Retirement  Income Security Act of 1974 and the
regulations promulgated and the rulings issued thereunder.

     "ERISA   Affiliate"   means  each  trade  or   business   (whether  or  not
incorporated)  which  together with the Borrower or a Subsidiary of the Borrower
would be  deemed  to be a  "single  employer"  within  the  meaning  of  Section
4001(b)(1) of ERISA.

     "ERISA  Termination  Event"  means (i) a  "Reportable  Event"  described in
Section  4043 of ERISA  (other  than a  "Reportable  Event"  not  subject to the
provision  for 30-day  notice to the PBGC under such  regulations),  or (ii) the
withdrawal of the Borrower or any of its ERISA  Affiliates  from a Plan during a
plan  year in  which it was a  "substantial  employer"  as  defined  in  Section
4001(a)(2)  of ERISA,  or (iii) the filing of a notice of intent to  terminate a
Plan or the treatment of a Plan amendment as a termination under Section 4041 of
ERISA,  or (iv) the institution of proceeding to terminate a Plan by the PBGC or
(v) any other event or condition  which might  constitute  grounds under Section
4042 of ERISA  for the  termination  of,  or the  appointment  of a  trustee  to
administer, any Plan.

     "Eurodollar",  when used in reference to any Loan or  Borrowing,  refers to
whether such Loan, or the Loans comprising such Borrowing,  are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.

     "Event of Default" has the meaning assigned to such term in Section 7.01.

     "Excluded  Taxes"  means,  with respect to the  Administrative  Agent,  any
Lender or the Issuing  Bank or any other  recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder,  (a) taxes imposed on
or measured by its overall net income (however denominated), and franchise taxes
imposed  on it (in  lieu  of net  income  taxes),  by the  jurisdiction  (or any
political  subdivision  thereof)  under  the laws of  which  such  recipient  is
organized  or in which its  principal  office is located  or, in the case of any
Lender,  in which its  applicable  lending  office is  located,  (b) any  branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other  jurisdiction  in which the Borrower is located and (c) in the case
of a Foreign  Lender  (other  than an  assignee  pursuant  to a  request  by the
Borrower under Section 2.16(b)),  any withholding tax that is imposed on amounts
payable to such Foreign  Lender at the time such Foreign  Lender becomes a party
hereto (or designates a new lending  office) or is  attributable to such Foreign
Lender's  failure or  inability  (other  than as a result of a Change in Law) to
comply with Section  2.14(e),  except to the extent that such Foreign Lender (or
its assignor,  if any) was entitled, at the time of designation of a new lending
office (or  assignment),  to receive  additional  amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.14(a).

     "Existing  Credit  Agreement"  means the Competitive  Advance and Revolving
Credit Facility Agreement dated as of October 29, 2004, among the Borrower,  the
lenders party thereto, and Bank of America, N.A., as administrative agent, as in
effect on the date hereof.

     "Federal Funds  Effective  Rate" means,  for any day, the weighted  average
(rounded  upwards,  if  necessary,  to the  next  1/100  of 1%) of the  rates on
overnight Federal funds  transactions with members of the Federal Reserve System
arranged by Federal funds brokers,  as published on the next succeeding Business
Day by the  Federal  Reserve  Bank  of New  York,  or,  if  such  rate is not so
published for any day that is a Business Day, the average (rounded  upwards,  if
necessary,  to the  next  1/100 of 1%) of the  quotations  for such day for such
transactions  received  by the  Administrative  Agent from three  Federal  funds
brokers of recognized standing selected by it.

<PAGE>

     "Financial  Officer" of any Person  means the  President,  Chief  Financial
Officer,  Chief  Executive  Officer,  Vice  President - Finance,  Executive Vice
President,  Chief  Accounting  Officer or  Treasurer  of such  corporation.  Any
document  delivered  hereunder  that is signed by a Financial  Officer  shall be
conclusively  presumed to have been authorized by all necessary corporate action
on the part of the Borrower and such  Financial  Officer  shall be  conclusively
presumed to have acted on behalf of the Borrower.

     "Foreign  Lender"  means any Lender that is  organized  under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For  purposes  of this  definition,  the United  States of  America,  each State
thereof  and the  District of Columbia  shall be deemed to  constitute  a single
jurisdiction.

     "GAAP" means generally accepted accounting  principles in the United States
of America.

     "Governmental Approval" means any authorization,  consent, order, approval,
license, franchise, lease, ruling, tariff, rate, permit, certificate,  exemption
of, or filing or registration with, any Governmental Authority.

     "Governmental  Authority"  means the  government  of the  United  States of
America or any other nation, or of any political  subdivision  thereof,  whether
state or local,  and any agency,  authority,  instrumentality,  regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing,  regulatory  or  administrative  powers or functions of or pertaining to
government  (including any  supra-national  bodies such as the European Union or
the European Central Bank).

     "Guarantee"  means,  as  to  any  Person,  any  obligation,  contingent  or
otherwise,  of such  Person  guaranteeing  or  having  the  economic  effect  of
guaranteeing  any  Indebtedness  or other  obligation  payable or performable by
another  Person  (the  "primary  obligor")  in any manner,  whether  directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply  funds for the  purchase or payment of)
such  Indebtedness  or other  obligation,  (ii) to purchase  or lease  property,
securities  or services  for the  purpose of assuring  the obligee in respect of
such  Indebtedness  or other  obligation of the payment or  performance  of such
Indebtedness or other  obligation,  (iii) to maintain  working  capital,  equity
capital or any other  financial  statement  condition  or  liquidity or level of
income or cash flow of the primary  obligor so as to enable the primary  obligor
to pay such  Indebtedness  or other  obligation,  or (iv)  entered  into for the
purpose  of  assuring  in any  other  manner  the  obligee  in  respect  of such
Indebtedness  or other  obligation of the payment or  performance  thereof or to
protect such obligee against loss in respect thereof (in whole or in part).  The
amount of any  Guarantee  shall be deemed to be an amount equal to the stated or
determinable  amount of the related primary  obligation,  or portion thereof, in
respect of which such Guarantee is made or, if not stated or  determinable,  the
maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing  Person  in  good  faith.  The  term  "Guarantee"  as a verb  has a
corresponding meaning.

     "Guaranty  Agreement"  means,  collectively,  each  Guarantee  executed and
delivered pursuant to Section 6.08.

<PAGE>

     "Hostile  Acquisition"  means any Target  Acquisition  (as  defined  below)
involving  a tender  offer or proxy  contest  that has not been  recommended  or
approved by the board of  directors  (or similar  governing  body) of the Person
that is the  subject  of such  Target  Acquisition  prior  to the  first  public
announcement or disclosure relating to such Target Acquisition.  As used in this
definition,  the term "Target Acquisition" means any transaction,  or any series
of related transactions, by which the Borrower and/or any of its Subsidiaries is
to  directly  or  indirectly  (i)  acquire  any  ongoing   business  or  all  or
substantially  all of the  assets of any  Person or  division  thereof,  whether
through  purchase  of  assets,  merger  or  otherwise,   (ii)  acquire  (in  one
transaction  or as the most  recent  transaction  in a series  of  transactions)
control of at least a majority in ordinary  voting power of the  securities of a
Person which have  ordinary  voting power for the election of directors or (iii)
otherwise  acquire  control of a more than 50%  ownership  interest  in any such
Person.

     "Increased  Commitment  Date"  has the  meaning  assigned  to such  term in
Section 2.07(e).

     "Indebtedness"  of  any  Person  means,   without   duplication,   (a)  all
obligations  of such Person for  borrowed  money or with  respect to deposits or
advances of any kind (other than customer  deposits made in the ordinary  course
of business), (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar  instruments,  (c) all  obligations  of such  Person upon which
interest charges are customarily  paid, (d) all obligations of such Person under
conditional  sale or other title  retention  agreements  relating to property or
assets  purchased by such Person,  (e) all  obligations of such Person issued or
assumed  as the  deferred  purchase  price  of  property  or  services,  (f) all
Indebtedness of others secured by (or for which the holder of such  Indebtedness
has an existing  right,  contingent or otherwise,  to be secured by) any Lien on
property  owned or  acquired  by such  Person,  whether  or not the  obligations
secured  thereby have been assumed,  (g) all Capital Lease  Obligations  of such
Person,  (h) all obligations of such Person in respect of Swap Contracts (except
to  the  extent  such  obligations  are  used  as a bona  fide  hedge  of  other
Indebtedness  of such Person),  (i) all obligations of such Person as an account
party in respect of letters of credit and  bankers'  acceptances  (except to the
extent  any such  obligations  are  incurred  in  support  of other  obligations
constituting  Indebtedness  of  such  Person  and  other  than,  to  the  extent
reimbursed if drawn, letters of credit in support of ordinary course performance
obligations),  and (j) all  Guarantees  of such  Person in respect of any of the
foregoing;  provided that the term Indebtedness  shall not include  endorsements
for collection or deposit, in either case in the ordinary course of business.

     "Indemnified Taxes" means Taxes other than Excluded Taxes.

     "Indemnitee" has the meaning assigned to such term in Section 9.03(b).

     "Information" has the meaning assigned to such term in Section 9.12.

     "Interest  Election  Request" means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.06.

     "Interest  Payment  Date"  means (a) with  respect  to any ABR  Loan,  each
Quarterly  Date,  and (b) with respect to any  Eurodollar  Loan, the last day of
each Interest  Period  therefor and, in the case of any Interest  Period of more
than three  months'  duration,  each day prior to the last day of such  Interest
Period that occurs at three-month intervals after the first day of such Interest
Period.

     "Interest  Period" means, for any Eurodollar Loan or Borrowing,  the period
commencing on the date of such Loan or Borrowing  and ending on the  numerically
corresponding  day in the calendar  month that is one, two,  three or six months
(or,  with the consent of each Lender,  nine or twelve  months)  thereafter,  as
specified in the  applicable  Borrowing  Request or Interest  Election  Request;
provided  that  (i) if any  Interest  Period  would  end on a day  other  than a
Business  Day,  such  Interest  Period shall be extended to the next  succeeding
Business  Day unless such next  succeeding  Business  Day would fall in the next
calendar  month,  in which  case  such  Interest  Period  shall  end on the next
preceding  Business Day, and (ii) any Interest Period that commences on the last
Business Day of a calendar  month (or on a day for which there is no numerically
corresponding  day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes  hereof,  the date of a Loan initially  shall be the date on which such
Loan is made and  thereafter  shall  be the  effective  date of the most  recent
conversion or continuation of such Loan.

<PAGE>

     "Issuing  Bank"  means DBAG NY, in its  capacity as an issuer of Letters of
Credit  hereunder,  and its  successors  in such capacity as provided in Section
2.04(j).  The  Issuing  Bank may,  in its  discretion,  arrange  for one or more
Letters of Credit to be issued by  Affiliates of the Issuing Bank, in which case
the term "Issuing Bank" shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate.

     "Laws" means, collectively, all international,  foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations,  ordinances, codes and
administrative   or  judicial   precedents   or   authorities,   including   the
interpretation or administration  thereof by any Governmental  Authority charged
with  the  enforcement,   interpretation  or  administration  thereof,  and  all
applicable   administrative  orders,   directed  duties,   requests,   licenses,
authorizations and permits of, and agreements with, any governmental  authority,
in each case whether or not having the force of law.

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

     "LC Exposure"  means,  at any time,  the sum of (a) the  aggregate  undrawn
amount of all outstanding  Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total LC Exposure at such time.

     "Lenders"  means the Persons  listed on  Schedule 1, any other  Person that
shall have become a party hereto  pursuant to an Assignment  and  Assumption and
any "Additional Lender" pursuant to Section 2.07(e),  other than any such Person
that ceases to be a party hereto pursuant to an Assignment and Assumption.

     "Letter  of  Credit"  means any letter of credit  issued  pursuant  to this
Agreement.

     "Letter of Credit  Documents"  means, with respect to any Letter of Credit,
collectively,  any application  therefor and any other agreements,  instruments,
guarantees or other documents (whether general in application or applicable only
to such  Letter  of  Credit)  governing  or  providing  for (a) the  rights  and
obligations  of the parties  concerned or at risk with respect to such Letter of
Credit or (b) any collateral  security for any of such obligations,  each as the
same may be modified and supplemented and in effect from time to time.

     "Leverage Ratio" means, as of the last day of any fiscal quarter, the ratio
of (a) Total Indebtedness as of such day to (b) Consolidated EBITDA for the four
consecutive fiscal quarters ending on such day.

     "LIBO Rate" means,  for the Interest  Period for any Eurodollar  Borrowing,
the rate  appearing on Reuters Page LIBOR01 (or on any  successor or  substitute
page or service providing rate quotations comparable to those currently provided
on such page, as determined  by the  Administrative  Agent from time to time for
purposes of providing quotations of interest rates applicable to Dollar deposits
in the London interbank  market) at approximately  11:00 a.m.,  London time, two
Business Days prior to the commencement of such Interest Period, as the rate for
Dollar deposits with a maturity comparable to such Interest Period. In the event
that such rate is not available at such time for any reason,  then the LIBO Rate
for  such  Interest  Period  shall  be the  rate at  which  Dollar  deposits  of
$5,000,000 and for a maturity  comparable to such Interest Period are offered by
the principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately  11:00 a.m.,  London time,
two Business Days prior to the commencement of such Interest Period.

<PAGE>

     "Lien" means,  with respect to any asset, (a) any mortgage,  deed of trust,
lien, pledge, encumbrance, charge, or security interest in or on such asset, (b)
the  interest  of a vendor or a lessor  under any  conditional  sale  agreement,
capital lease,  or title retention  agreement  relating to such asset and (c) in
the case of securities,  any purchase option,  call, or similar right of a third
party with respect to such securities.

     "Loan Documents" means, collectively,  this Agreement, the Letter of Credit
Documents,  any  Guaranty  Agreement  and each note  issued  pursuant to Section
2.08(f).

     "Loans"  means the loans made by the  Lenders to the  Borrower  pursuant to
this Agreement.

     "Margin Regulations" means Regulations T, U and X of the Board.

     "Material  Adverse Effect" means a material adverse effect on the business,
assets, operations, financial condition or results of operations of the Borrower
and the Subsidiaries taken as a whole.

     "Material  Transaction"  has  the  meaning  assigned  to  such  term in the
definition of Consolidated EBITDA.

     "Obligations" means all advances to, and debts,  liabilities,  obligations,
covenants  and  duties of,  the  Borrower  arising  under any Loan  Document  or
otherwise  with  respect  to any Loan or Letter  of  Credit,  whether  direct or
indirect (including those acquired by assumption),  absolute or contingent,  due
or to become due, now existing or hereafter  arising and including  interest and
fees that  accrue  after the  commencement  by or against  the  Borrower  or any
Affiliate  thereof of any  proceeding  under any Debtor  Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.

     "Other  Taxes"  means any and all  present or future  stamp or  documentary
taxes or any other excise or property  taxes,  charges or similar levies arising
from any payment  made  hereunder  or under any other Loan  Document or from the
execution,  delivery  or  enforcement  of, or  otherwise  with  respect to, this
Agreement or any other Loan Document.

     "Participant" means any Person to whom a participation is sold as permitted
by clause (d) of Section 9.04.

     "PBGC"  means the  Pension  Benefit  Guaranty  Corporation  referred to and
defined in ERISA.

     "Person" means any natural person, corporation,  limited liability company,
trust, joint venture, association, company, partnership,  Governmental Authority
or other entity.

     "Plan" means any pension plan (including a  multiemployer  plan) subject to
the  provisions  of  Title  IV of ERISA  or  Section  412 of the  Code  which is
maintained for or to which  contributions are made for employees of the Borrower
or any ERISA Affiliate.

     "Prime Rate" means the per annum rate of interest  established from time to
time by DBAG NY at its  principal  office  in New  York,  New York as its  prime
lending  rate.  Any change in the interest rate  resulting  from a change in the
Prime Rate shall become  effective as of 12:01 a.m. of the Business Day on which
each change in the Prime Rate is announced by DBAG NY. The prime lending rate is
a reference rate used by DBAG NY in determining  interest rates on certain loans
and is not intended to be the lowest rate of interest  charged on any  extension
of credit to any  debtor.  DBAG NY may make  commercial  loans or other loans at
rates of interest at, above, or below its prime lending rate.

<PAGE>

     "Principal   Subsidiary"   means  any  Subsidiary  of  the  Borrower  whose
Consolidated  Tangible  Assets  comprise  in excess  of 25% of the  Consolidated
Tangible Assets of the Borrower and its consolidated Subsidiaries as of the date
hereof or at any time hereafter.

     "Quarterly Dates" means the last Business Day of March, June, September and
December in each year,  the first of which shall be the first such day after the
date hereof.

     "Register" has the meaning set forth in Section 9.04.

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

     "Release" means any spilling, emitting, discharging,  depositing, escaping,
leaching,  dumping or other  releasing,  including the movement of any Specified
Substance  through the air, soil,  surface water,  groundwater or property,  and
when used as a verb has a like meaning.

     "Required  Lenders" means,  at any time,  Lenders having  Revolving  Credit
Exposures representing more than 50% of the aggregate Revolving Credit Exposures
at such time or,  at any time  when  there  are no  Revolving  Credit  Exposures
outstanding, Lenders having Commitments representing more than 50% of the sum of
the total Commitments at such time.

     "Restricted  Payment" means any dividend or other distribution  (whether in
cash,  securities or other  property) with respect to any capital stock or other
equity  interest of the Borrower or any Subsidiary,  or any payment  (whether in
cash,  securities  or other  property),  including  any sinking  fund or similar
deposit,  on  account  of the  purchase,  redemption,  retirement,  acquisition,
cancellation or termination of any such capital stock or other equity  interest,
or on account of any return of capital to the Borrower's stockholders,  partners
or members (or the equivalent Person thereof).

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

     "Securitization  Transaction" means (a) any transfer of accounts receivable
or interests  therein (i) to a trust,  partnership,  corporation or other entity
(other than a Subsidiary),  which transfer or pledge is funded by such entity in
whole  or in part  by the  issuance  to one or  more  lenders  or  investors  of
indebtedness or other securities that are to receive  payments  principally from
the cash flow derived  from such  accounts  receivable  or interests in accounts
receivable, or (ii) directly to one or more investors or other purchasers (other
than  any  Subsidiary),  or (b) any  transaction  in  which  the  Borrower  or a
Subsidiary  incurs  Indebtedness   secured  principally  by  Liens  on  accounts
receivable.  The "amount" of any  Securitization  Transaction shall be deemed at
any time to be (A) in the case of a  transaction  described in clause (a) of the
preceding sentence,  the aggregate uncollected amount of the accounts receivable
transferred  pursuant  to  such  Securitization  Transaction,  net of  any  such
accounts receivable that have been written off as uncollectible,  and (B) in the
case of a  transaction  described in clause (b) of the preceding  sentence,  the
aggregate  outstanding  principal amount of the Indebtedness secured by Liens on
accounts receivable incurred pursuant to such Securitization Transaction.

<PAGE>

     "Specified Substance" means (i) any chemical, material or substance defined
as or included in the definition of "hazardous substances",  "hazardous wastes",
"hazardous materials", "extremely hazardous waste", "restricted hazardous waste"
or  "toxic   substances"  or  words  of  similar  import  under  any  applicable
Environmental  Laws;  (ii) any (A) oil,  natural  gas,  petroleum  or  petroleum
derived  substance,  any  drilling  fluids,  produced  waters  and other  wastes
associated with the exploration, development or production of crude oil, natural
gas or geothermal fluid, any flammable substances or explosives, any radioactive
materials, any hazardous wastes or substances, any toxic wastes or substances or
(B) other  materials or  pollutants  that,  in the case of both (A) and (B), (1)
pose a hazard to the property of the Borrower or any of its  Subsidiaries or any
part  thereof or to persons on or about such  property or to any other  property
that may be affected by the Release of such  materials or  pollutants  from such
property  or any part  thereof or to persons on or about such other  property or
(2) cause  such  property  or such  other  property  to be in  violation  of any
Environmental Law; (iii) asbestos,  urea formaldehyde foam insulation,  toluene,
polychlorinated biphenyls and any electrical equipment which contains any oil or
dielectric fluid  containing  levels of  polychlorinated  biphenyls in excess of
fifty parts per million; and (iv) any sound, vibration, heat, radiation or other
form of energy and any other chemical, material or substance,  exposure to which
is prohibited, limited or regulated by any Governmental Authority.

     "Statutory  Reserve Rate" means, for the Interest Period for any Eurodollar
Borrowing,  a fraction  (expressed as a decimal),  the numerator of which is the
number one and the  denominator  of which is the number one minus the arithmetic
mean,  taken over each day in such  Interest  Period,  of the  aggregate  of the
maximum  reserve  percentages  (including  any marginal,  special,  emergency or
supplemental  reserves) expressed as a decimal established by the Board to which
the Administrative Agent is subject for eurocurrency funding (currently referred
to as  "Eurocurrency  liabilities"  in Regulation D of the Board).  Such reserve
percentages  shall include those imposed  pursuant to Regulation D of the Board.
Eurodollar  Loans shall be deemed to constitute  eurocurrency  funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions  or  offsets  that may be  available  from time to time to any Lender
under  Regulation D of the Board or any  comparable  regulation.  The  Statutory
Reserve Rate shall be adjusted  automatically on and as of the effective date of
any change in any reserve percentage.

     "Subsidiary"  means,  with respect to any Person (herein referred to as the
"parent"), any corporation,  partnership,  association, or other business entity
(a) of which securities or other ownership interests  representing more than 50%
of the equity or more than 50% of the ordinary  voting power or more than 50% of
the general  partnership  interests are, at the time any  determination is being
made, owned, controlled, or held by the parent, or (b) which is, at the time any
determination  is  made,  otherwise  Controlled  by the  parent  or one or  more
subsidiaries of the parent or by the parent and one or more  subsidiaries of the
parent.  Unless  otherwise  indicated,  all  references  in  this  Agreement  to
"Subsidiaries" shall be construed as references to Subsidiaries of the Borrower.

     "Swap Contract" means (a) any and all rate swap transactions,  basis swaps,
credit  derivative  transactions,  forward rate  transactions,  commodity swaps,
commodity options, forward commodity contracts,  equity or equity index swaps or
options,  bond or bond price or bond index  swaps or options or forward  bond or
forward bond price or forward bond index  transactions,  interest  rate options,
forward foreign exchange  transactions,  cap transactions,  floor  transactions,
collar  transactions,  currency  swap  transactions,  cross-currency  rate  swap
transactions,   currency   options,   spot  contracts,   or  any  other  similar
transactions or any  combination of any of the foregoing  (including any options
to enter  into any of the  foregoing),  whether or not any such  transaction  is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related  confirmations,  which are subject to the terms and
conditions  of, or governed  by, any form of master  agreement  published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange  Master  Agreement,  or any other  master  agreement  (any such  master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.

<PAGE>

     "Swap  Termination  Value"  means,  in  respect  of any  one or  more  Swap
Contracts,  after  taking into  account  the effect of any  legally  enforceable
netting agreement relating to such Swap Contracts,  (a) for any date on or after
the date such Swap  Contracts  have been  closed  out and  termination  value(s)
determined in accordance therewith,  such termination value(s),  and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts  (which may include a Lender or any Affiliate of a
Lender).

     "Taxes"  means  all  present  or future  taxes,  levies,  imposts,  duties,
deductions,  withholdings,  assessments,  fees or other  charges  imposed by any
Governmental  Authority,  including any interest,  additions to tax or penalties
applicable thereto.

     "Total  Indebtedness" means, as of any date, the aggregate principal amount
of Indebtedness of the Borrower and its consolidated Subsidiaries outstanding as
of such date, in the amount and only to the extent that such Indebtedness  would
be reflected on a balance sheet prepared as of such date on a consolidated basis
in accordance with GAAP minus the amount of the cash and cash equivalents of the
Borrower and its  consolidated  Subsidiaries in excess of $50,000,000 that would
be reflected on such balance sheet.

     "Transactions"  means  the  execution,  delivery  and  performance  by  the
Borrower of this Agreement and the other Loan Documents, the borrowing of Loans,
the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

     "Type", when used in reference to any Loan or Borrowing,  refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

     SECTION 1.02 Terms  Generally.  The definitions of terms herein shall apply
equally to the  singular  and plural  forms of the terms  defined.  Whenever the
context may require,  any pronoun  shall  include the  corresponding  masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed  by the phrase  "without  limitation".  The word "will"
shall be  construed  to have the same  meaning  and effect as the word  "shall".
Unless the context requires  otherwise (a) any definition of or reference to any
agreement,  instrument or other document  herein shall be construed as referring
to such  agreement,  instrument or other  document as from time to time amended,
supplemented  or  otherwise  modified  (subject  to  any  restrictions  on  such
amendments,  supplements or modifications  set forth herein),  (b) any reference
herein to any Person shall be construed to include such Person's  successors and
assigns, (c) the words "herein", "hereof" and "hereunder",  and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any  particular  provision  hereof,  (d)  all  references  herein  to  Articles,
Sections,  Exhibits  and  Schedules  shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to
any law or regulation herein shall,  unless otherwise  specified,  refer to such
law or regulation as amended, modified or supplemented from time to time and (f)
the words "asset" and "property" shall be construed to have the same meaning and
effect  and to  refer  to  any  and  all  tangible  and  intangible  assets  and
properties, including cash, securities, accounts and contract rights.

     SECTION 1.03 Accounting Terms; GAAP. Except as otherwise expressly provided
herein,  all terms of an  accounting  or financial  nature shall be construed in
accordance  with GAAP as in  effect  from time to time;  provided  that,  if the
Borrower  notifies  the  Administrative  Agent  that the  Borrower  requests  an
amendment  to any  provision  hereof  to  eliminate  the  effect  of any  change
occurring  after the date  hereof in GAAP or in the  application  thereof on the
operation  of  such  provision  (or if the  Administrative  Agent  notifies  the
Borrower that the Required  Lenders request an amendment to any provision hereof
for such  purpose),  regardless  of whether any such  notice is given  before or
after such change in GAAP or in the  application  thereof,  then such  provision
shall be interpreted  on the basis of GAAP as in effect and applied  immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.  To enable the ready
and  consistent  determination  of  compliance  with the  covenants set forth in
Article  VI, the  Borrower  will not change the last day of its fiscal year from
December 31, or the last days of the first three fiscal  quarters in each of its
fiscal years from March 31, June 30 and September 30, respectively.

<PAGE>

                                   ARTICLE II

                                   THE CREDITS
                                   -----------

     SECTION 2.01 The Commitments. Subject to the terms and conditions set forth
herein,  each  Lender  agrees to make  Loans to the  Borrower  from time to time
during the  Availability  Period in an aggregate  principal amount that will not
result in (a) such Lender's  Revolving  Credit Exposure  exceeding such Lender's
Commitment  or (b) the total  Revolving  Credit  Exposures  exceeding  the total
Commitments. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, prepay and reborrow Loans.

     SECTION 2.02 Loans and Borrowings.

     (a) Obligations of Lenders.  Each Loan shall be made as part of a Borrowing
consisting  of Loans  made by the  Lenders  ratably  in  accordance  with  their
respective  Commitments.  The failure of any Lender to make any Loan required to
be made by it shall not relieve any other Lender of its  obligations  hereunder;
provided that the  Commitments of the Lenders are several and no Lender shall be
responsible  for any other  Lender's  failure  to make  Loans as  required.  The
amounts payable at any time hereunder  shall be a separate and independent  debt
of the  Borrower to each Lender and each Lender shall be entitled to protect and
enforce its rights under this  Agreement  and the other Loan  Documents,  and it
shall not be necessary for any other Lender to be joined as an additional  party
in any proceedings for such purpose.

     (b) Type of  Loans.  Subject  to  Section  2.11,  each  Borrowing  shall be
comprised  entirely  of ABR Loans or of  Eurodollar  Loans as the  Borrower  may
request  in  accordance  herewith.  Each  Lender  at its  option  may  make  any
Eurodollar  Loan by causing any domestic or foreign  branch or Affiliate of such
Lender to make such Loan;  provided  that any  exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance  with the
terms of this Agreement.

     (c) Minimum  Amounts;  Limitation on Number of  Borrowings.  Each Borrowing
shall  be  in an  aggregate  amount  of  $10,000,000  or a  larger  multiple  of
$1,000,000; provided that an ABR Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total  Commitments or that is required
to finance the  reimbursement  of an LC  Disbursement as contemplated by Section
2.04(f).  Borrowings of more than one Type may be  outstanding at the same time;
provided that there shall not at any time be more than a total of ten Eurodollar
Borrowings outstanding.

     (d) Limitations on Interest Periods. Notwithstanding any other provision of
this  Agreement,  the Borrower  shall not be entitled to request (or to elect to
convert to or continue as a Eurodollar  Borrowing) any Borrowing if the Interest
Period requested therefor would end after the Commitment Termination Date.

     SECTION 2.03 Requests for Borrowings.

<PAGE>

     (a) Notice by the  Borrower.  To request a Borrowing,  the  Borrower  shall
notify the Administrative  Agent of such request (i) in the case of a Eurodollar
Borrowing,  not later than 11:00 a.m.,  New York City time,  three Business Days
before  the  date of the  proposed  Borrowing,  or  (ii)  in the  case of an ABR
Borrowing,  not later than 12:00  noon,  New York City time,  on the date of the
proposed Borrowing; provided that any such notice of an ABR Borrowing to finance
the  reimbursement  of an LC Disbursement as contemplated by Section 2.04(f) may
be given not later  than  10:00  a.m.,  New York City  time,  on the date of the
proposed Borrowing. Each such Borrowing Request shall be irrevocable.

     (b) Content of Borrowing Requests. Each Borrowing Request shall specify the
following information in compliance with Section 2.02:

     (i)  the aggregate amount of the requested Borrowing;

     (ii) the date of such Borrowing, which shall be a Business Day;

     (iii) whether  such  Borrowing  is to be an ABR  Borrowing  or a Eurodollar
          Borrowing;

     (iv) in the case of a Eurodollar  Borrowing,  the Interest Period therefor,
          which shall be a period  contemplated  by the  definition  of the term
          "Interest Period" and permitted under Section 2.02(d); and

     (v)  the location and number of the  Borrower's  account to which funds are
          to be disbursed,  which shall comply with the  requirements of Section
          2.05.

     (c) Notice by the Administrative  Agent to the Lenders.  Promptly following
receipt  of  a  Borrowing   Request  in  accordance   with  this  Section,   the
Administrative  Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.

     (d)  Failure to Elect.  If no  election  as to the Type of a  Borrowing  is
specified,  then  the  requested  Borrowing  shall  be an ABR  Borrowing.  If no
Interest Period is specified with respect to any requested Eurodollar Borrowing,
the Borrower shall be deemed to have selected an Interest  Period of one month's
duration.

     SECTION 2.04 Letters of Credit.

     (a)  General.  Subject to the terms and  conditions  set forth  herein,  in
addition to the Loans provided for in Section 2.01, the Borrower may request the
Issuing Bank to issue, at any time and from time to time during the Availability
Period,  Letters of Credit for its own account in such form as is  acceptable to
the Administrative  Agent and the Issuing Bank in its reasonable  determination.
Letters  of  Credit  issued  hereunder  shall  constitute   utilization  of  the
Commitments.

     (b) Notice of Issuance,  Amendment,  Renewal or  Extension.  To request the
issuance of a Letter of Credit (or the  amendment,  renewal or  extension  of an
outstanding  Letter of Credit),  the Borrower shall hand deliver or telecopy (or
transmit by electronic  communication,  if  arrangements  for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the  Administrative  Agent
(reasonably in advance of the requested date of issuance,  amendment, renewal or
extension)  a  notice  requesting  the  issuance  of  a  Letter  of  Credit,  or
identifying  the  Letter of Credit  to be  amended,  renewed  or  extended,  and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business  Day),  the date on which such  Letter of Credit is to expire  (which
shall comply with paragraph (d) of this  Section),  the amount of such Letter of
Credit,  the  name  and  address  of the  beneficiary  thereof  and  such  other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit.  If requested by the Issuing  Bank,  the Borrower also shall submit a
letter of credit  application on the Issuing Bank's  standard form in connection
with any  request  for a Letter of  Credit.  In the  event of any  inconsistency
between the terms and  conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement  submitted by the
Borrower to, or entered into by the Borrower  with, the Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.

<PAGE>

     (c)  Limitations on Amounts.  A Letter of Credit shall be issued,  amended,
renewed  or  extended  only if (A) (and upon  issuance,  amendment,  renewal  or
extension of each Letter of Credit the Borrower shall be deemed to represent and
warrant  that),  after giving  effect to such  issuance,  amendment,  renewal or
extension (i) the aggregate LC Exposure  shall not exceed  $50,000,000  and (ii)
the total Revolving Credit Exposures shall not exceed the total Commitments, and
(B)  the  Issuing  Bank  shall  not  have  received   written  notice  from  the
Administrative  Agent (at the  request  of the  Required  Lenders)  at least one
Business  Day prior to the  requested  date of issuance,  amendment,  renewal or
extension that one or more of the conditions contained in Section 4.02 shall not
be satisfied with respect thereto.

     (d) Expiration  Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date twelve months after the date of
the  issuance of such  Letter of Credit and (ii) the date that is five  Business
Days prior to the Commitment Termination Date; provided, that a Letter of Credit
may provide for the automatic  renewal thereof for additional  one-year  periods
(but shall in no event extend beyond the date referred to in clause (ii) above).

     (e) Participations.  By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit  increasing  the amount  thereof) by the Issuing Bank, and
without any further  action on the part of the Issuing Bank or the Lenders,  the
Issuing Bank hereby grants to each Lender,  and each Lender hereby acquires from
the  Issuing  Bank,  a  participation  in such  Letter of  Credit  equal to such
Lender's  Applicable  Percentage of the aggregate  amount  available to be drawn
under such  Letter of  Credit.  Each  Lender  acknowledges  and agrees  that its
obligation  to  acquire  participations  and fund  ABR  Loans  pursuant  to this
sentence of this clause (e) and the next  sentence  hereof in respect of Letters
of Credit is  absolute  and  unconditional  and  shall  not be  affected  by any
circumstance  whatsoever,  including any amendment,  renewal or extension of any
Letter of Credit or the occurrence and  continuance of a Default or reduction or
termination of the Commitments.

     In  consideration  and in furtherance of the foregoing,  each Lender hereby
absolutely and  unconditionally  agrees to pay to the Administrative  Agent, for
the account of the Issuing Bank, such Lender's Applicable  Percentage of each LC
Disbursement  made by the Issuing Bank  promptly upon the request of the Issuing
Bank  at any  time  from  the  time  of  such  LC  Disbursement  until  such  LC
Disbursement   is   reimbursed  by  the  Borrower  or  at  any  time  after  any
reimbursement payment is required to be refunded to the Borrower for any reason.
Each such payment  shall be deemed to be an ABR Loan by such Lender and shall be
made without any offset,  abatement,  withholding or reduction whatsoever.  Each
such  payment  shall be made in the same manner as provided in Section 2.05 with
respect to Loans made by such  Lender (and  Section  2.05 shall  apply,  mutatis
mutandis,  to the payment  obligations of the Lenders),  and the  Administrative
Agent shall  promptly pay to the Issuing Bank the amounts so received by it from
the  Lenders.  Promptly  following  receipt by the  Administrative  Agent of any
payment  from  the  Borrower  pursuant  to the  next  following  paragraph,  the
Administrative  Agent shall  distribute  such payment to the Issuing Bank or, to
the extent that the Lenders  have made  payments  pursuant to this  paragraph to
reimburse the Issuing  Bank,  then to such Lenders and the Issuing Bank as their
interests may appear.

     (f)  Reimbursement.  If the Issuing Bank shall make any LC  Disbursement in
respect of a Letter of Credit,  the Borrower shall reimburse the Issuing Bank in
respect of such LC Disbursement by paying to the Administrative  Agent an amount
equal to such LC Disbursement  not later than 12:00 noon, New York City time, on
(i) the Business Day that the Borrower  receives notice of such LC Disbursement,
if such notice is received  prior to 10:00 a.m., New York City time, or (ii) the
Business  Day  immediately  following  the day that the Borrower  receives  such
notice, if such notice is not received prior to such time. If the Borrower fails
to make such payment when due, the Administrative Agent shall notify each Lender
of the  applicable  LC  Disbursement,  the payment then due from the Borrower in
respect thereof and such Lender's Applicable  Percentage thereof. The Borrower's
obligations under this clause (f) shall be satisfied to the extent of the making
of ABR Loans under clause (e) above.

<PAGE>

     (g)  Obligations  Absolute.  The  Borrower's  obligation  to  reimburse  LC
Disbursements  as provided in paragraph  (f) of this Section  shall be absolute,
unconditional  and  irrevocable,  and shall be performed  strictly in accordance
with the terms of this Agreement under any and all circumstances  whatsoever and
irrespective  of (i) any lack of  validity  or  enforceability  of any Letter of
Credit,  or any term or  provision  therein,  (ii) any  draft or other  document
presented  under a Letter of Credit proving to be forged,  fraudulent or invalid
in any  respect or any  statement  therein  being  untrue or  inaccurate  in any
respect,  (iii)  payment by the  Issuing  Bank under a Letter of Credit  against
presentation of a draft or other document that does not comply strictly with the
terms of such  Letter  of  Credit,  or (iv)  any  other  event  or  circumstance
whatsoever,  whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder.

     Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any
of their Related Parties,  shall have any liability or  responsibility by reason
of or in connection with the issuance or transfer of any Letter of Credit by the
Issuing  Bank  or  any  payment  or  failure  to  make  any  payment  thereunder
(irrespective  of  any  of  the  circumstances  referred  to  in  the  preceding
sentence), or any error, omission,  interruption,  loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation  of technical terms or any consequence  arising from
causes beyond the control of the Issuing Bank; provided that the foregoing shall
not be construed  to excuse the Issuing  Bank from  liability to the Borrower to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby  waived by the  Borrower to the extent  permitted by
applicable  law) suffered by the Borrower that are caused by the Issuing  Bank's
failure to exercise care when  determining  whether  drafts and other  documents
presented  under a Letter of Credit comply with the terms  thereof.  The parties
hereto  expressly  agree  that,  in the absence of gross  negligence  or willful
misconduct on the part of the Issuing Bank (as finally  determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised care
in each such determination, and that:

     (i)  the Issuing Bank may accept  documents that appear on their face to be
          in substantial compliance with the terms of a Letter of Credit without
          responsibility for further investigation,  regardless of any notice or
          information to the contrary, and may make payment upon presentation of
          documents  that appear on their face to be in  substantial  compliance
          with the terms of such Letter of Credit;

     (ii) the  Issuing  Bank shall have the right,  in its sole  discretion,  to
          decline  to accept  such  documents  and to make such  payment if such
          documents are not in strict  compliance  with the terms of such Letter
          of Credit; and

     (iii) this sentence shall establish the standard of care to be exercised by
          the Issuing Bank when  determining  whether drafts and other documents
          presented  under a Letter of Credit comply with the terms thereof (and
          the parties hereto hereby waive, to the extent permitted by applicable
          law, any standard of care inconsistent with the foregoing).

<PAGE>

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

     (i) Interim  Interest.  If the Issuing Bank shall make any LC Disbursement,
then,  unless the Borrower shall  reimburse such LC  Disbursement in full on the
date  such LC  Disbursement  is made,  the  unpaid  amount  thereof  shall  bear
interest,  for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement,  at
the rate per annum then applicable to ABR Loans;  provided that, if the Borrower
fails to reimburse  such LC  Disbursement  when due pursuant to paragraph (f) of
this Section,  then Section 2.10(c) shall apply.  Interest  accrued  pursuant to
this  paragraph  shall be for account of the Issuing Bank,  except that interest
accrued on and after the date of payment by any Lender pursuant to paragraph (f)
of this  Section to  reimburse  the  Issuing  Bank shall be for  account of such
Lender to the extent of such payment.

     (j)  Replacement  of the Issuing Bank.  The Issuing Bank may be replaced at
any time by written agreement between the Borrower,  the  Administrative  Agent,
the replaced  Issuing Bank and the successor  Issuing Bank.  The  Administrative
Agent shall notify the Lenders of any such  replacement  of the Issuing Bank. At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees  accrued for the account of the replaced  Issuing  Bank  pursuant to
Section 2.09(b). From and after the effective date of any such replacement,  (i)
the  successor  Issuing  Bank shall have all the rights and  obligations  of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all  previous  Issuing  Banks,  as the  context  shall  require.  After  the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall  continue to have all the rights and  obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.

     (k) Cash  Collateralization.  If any Event of  Default  shall  occur and be
continuing,  on the  Business  Day that the  Borrower  receives  notice from the
Administrative  Agent or the Required  Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing more than 50% of the
total LC Exposure)  demanding  the deposit of cash  collateral  pursuant to this
paragraph,  the Borrower shall immediately  deposit into an account  established
and  maintained  on the books and  records of the  Administrative  Agent,  which
account may be a  "securities  account"  (within the meaning of Section 8-501 of
the Uniform  Commercial Code as in effect in the State of New York), in the name
of the  Administrative  Agent and for the benefit of the  Lenders,  an amount in
cash  equal to the LC  Exposure  as of such date  plus any  accrued  and  unpaid
interest  thereon;  provided that the obligation to deposit such cash collateral
shall become effective  immediately,  and such deposit shall become  immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower  described in clause (h) or
(i) of Section 7.01. Such deposit shall be held by the  Administrative  Agent as
collateral for the payment and  performance  of the  obligations of the Borrower
under this Agreement.

     The  Administrative  Agent  shall  have  exclusive  dominion  and  control,
including the exclusive right of withdrawal,  over such account.  Other than any
interest earned on the investment of such deposits,  which  investments shall be
made at the option and sole  discretion of the  Administrative  Agent and at the
Borrower's risk and expense, such deposits shall not bear interest.  Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such  account  shall be applied by the  Administrative  Agent to  reimburse  the
Issuing Bank for LC  Disbursements  for which it has not been reimbursed and, to
the  extent  not  so  applied,  shall  be  held  for  the  satisfaction  of  the
reimbursement  obligations  of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of
Lenders with LC Exposure representing 100% of the total LC Exposure), be applied
to satisfy  other  obligations  of the  Borrower  under this  Agreement.  If the
Borrower  is  required to provide an amount of cash  collateral  hereunder  as a
result of the occurrence of an Event of Default,  such amount (to the extent not
applied as aforesaid)  shall be returned to the Borrower  within three  Business
Days after all Events of Default have been cured or waived.

<PAGE>

     SECTION 2.05 Funding of Borrowings.

     (a) Funding by Lenders.  Each Lender  shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds  by (i)  12:00  noon,  New York  City  time,  in the case of a  Eurodollar
Borrowing,  and (ii)  3:00  p.m.,  New  York  City  time,  in the case of an ABR
Borrowing, in each case to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders.  The  Administrative
Agent will make such Loans  available to the Borrower by promptly  crediting the
amounts so received, in like funds, to an account of the Borrower agreed between
the Borrower and the Administrative  Agent; provided that ABR Borrowings made to
finance the  reimbursement  of an LC Disbursement as provided in Section 2.04(f)
shall be remitted by the Administrative Agent to the Issuing Bank.

     (b)  Presumption by the  Administrative  Agent.  Unless the  Administrative
Agent shall have received notice from a Lender prior to (i) the proposed date of
any Eurodollar Borrowing or (ii) in the case of any proposed ABR Borrowing, 3:00
p.m., New York City time, on the proposed date of such ABR Borrowing,  that such
Lender will not make available to the  Administrative  Agent such Lender's share
of such Borrowing, the Administrative Agent may assume that such Lender has made
such share  available  on such date in  accordance  with  paragraph  (a) of this
Section  and may,  in  reliance  upon such  assumption,  make  available  to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable  Borrowing  available to the  Administrative  Agent,
then  the  applicable  Lender  and the  Borrower  severally  agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon,  for each day from and including the date such amount is made available
to the  Borrower  to but  excluding  the date of payment  to the  Administrative
Agent, at (i) in the case of a payment to be made by such Lender, the greater of
the Federal Funds  Effective  Rate and a rate  determined by the  Administrative
Agent in accordance with banking  industry rules on interbank  compensation  and
(ii) in the case of a payment  to be made by the  Borrower,  the  interest  rate
applicable to ABR Loans. If the Borrower and such Lender shall pay such interest
to  the  Administrative  Agent  for  the  same  or an  overlapping  period,  the
Administrative  Agent shall  promptly  remit to the  Borrower the amount of such
interest paid by the Borrower for such period.  If such Lender pays its share of
the applicable  Borrowing to the  Administrative  Agent, then the amount so paid
shall  constitute such Lender's Loan included in such Borrowing.  Any payment by
the  Borrower  shall be without  prejudice  to any claim the  Borrower  may have
against  a  Lender  that  shall  have  failed  to  make  such   payment  to  the
Administrative Agent.

     SECTION 2.06 Interest Elections.

     (a)  Elections  by  the  Borrower.  The  Loans  comprising  each  Borrowing
initially  shall be of the Type  specified in the applicable  Borrowing  Request
and,  in the case of a  Eurodollar  Borrowing,  shall have the  Interest  Period
specified  in such  Borrowing  Request.  Thereafter,  the  Borrower may elect to
convert such  Borrowing to a Borrowing of a different  Type or to continue  such
Borrowing  as a  Borrowing  of the same  Type and,  in the case of a  Eurodollar
Borrowing,  may elect the  Interest  Period  therefor,  all as  provided in this
Section.  The  Borrower  may elect  different  options with respect to different
portions of the affected  Borrowing,  in which case each such  portion  shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans  comprising  each such  portion  shall be  considered  a  separate
Borrowing.

<PAGE>

     (b) Notice of Elections.  To make an election pursuant to this Section, the
Borrower shall notify the Administrative Agent of such election by the time that
a Borrowing  Request  would be required  under Section 2.03 if the Borrower were
requesting a Borrowing of the Type  resulting  from such  election to be made on
the effective date of such election.  Each such Interest  Election Request shall
be irrevocable.

     (c) Content of Interest Election  Requests.  Each Interest Election Request
shall specify the following information in compliance with Section 2.02:

     (i)  the Borrowing to which such Interest  Election Request applies and, if
          different options are being elected with respect to different portions
          thereof,  the  portions  thereof  to be  allocated  to each  resulting
          Borrowing (in which case the  information to be specified  pursuant to
          clauses  (iii) and (iv) below shall be  specified  for each  resulting
          Borrowing);

     (ii) the  effective  date of the election  made  pursuant to such  Interest
          Election Request, which shall be a Business Day;

     (iii) whether  the  resulting  Borrowing  is to be an  ABR  Borrowing  or a
          Eurodollar Borrowing; and

     (iv) if the  resulting  Borrowing is a Eurodollar  Borrowing,  the Interest
          Period therefor after giving effect to such election, which shall be a
          period  contemplated  by the definition of the term "Interest  Period"
          and permitted under Section 2.02(d).

     (d) Notice by the Administrative  Agent to the Lenders.  Promptly following
receipt of an Interest Election Request,  the Administrative  Agent shall advise
each  Lender  of the  details  thereof  and of  such  Lender's  portion  of each
resulting Borrowing.

     (e) Failure to Elect; Events of Default. If the Borrower fails to deliver a
timely and  complete  Interest  Election  Request  with  respect to a Eurodollar
Borrowing prior to the end of the Interest Period  therefor,  then,  unless such
Eurodollar  Borrowing is repaid as provided herein, the Borrower shall be deemed
to have selected an Interest Period of one month's duration.

     Notwithstanding  any contrary  provision hereof, if an Event of Default has
occurred and is continuing and the  Administrative  Agent, at the request of the
Required Lenders, so notifies the Borrower, then, so long as an Event of Default
is continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar  Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period therefor.

     SECTION 2.07 Termination, Reduction and Increase of the Commitments.

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

     (b)  Voluntary  Termination  or  Reduction.  The  Borrower  may at any time
terminate, or from time to time reduce, the Commitments;  provided that (i) each
partial  reduction of the Commitments  shall be in an amount that is $10,000,000
or a larger  multiple of $1,000,000 and (ii) the Borrower shall not terminate or
reduce the Commitments  if, after giving effect to any concurrent  prepayment of
the Loans in accordance with Section 2.08, the total Revolving  Credit Exposures
would exceed the total Commitments.

<PAGE>

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

     (d) Effect of Termination or Reduction. Any termination or reduction of the
Commitments shall be permanent.  Each reduction of the Commitments shall be made
ratably among the Lenders in accordance with their respective Commitments.

     (e) Increase of Commitments.  The Borrower shall have the right at any time
to increase the  aggregate  Commitments  hereunder to the extent that the sum of
the aggregate  Commitments  hereunder  (after giving effect to such increase) do
not exceed  $350,000,000  by adding to this Agreement one or more other lenders,
which may include any Lender (each such lender an "Additional  Lender") with the
approval of the Administrative Agent (not to be unreasonably withheld),  each of
which  Additional  Lenders  shall have  entered  into an  agreement  in form and
substance  satisfactory to the Borrower and the Administrative Agent pursuant to
which  such  Additional  Lender  shall  undertake  a  Commitment  (if  any  such
Additional  Lender is a Lender,  its  Commitment  shall be in  addition  to such
Lender's  Commitment  hereunder)  which such Commitment shall be in an amount at
least equal to  $10,000,000  or a larger  multiple of  $1,000,000,  and upon the
effectiveness  of such  agreement  (the  date of the  effectiveness  of any such
agreement being hereinafter referred to as the "Increased Commitment Date") such
Additional  Lender  shall  thereupon  become a "Lender" for all purposes of this
Agreement.

     Notwithstanding  the foregoing,  the increase in the aggregate  Commitments
hereunder pursuant to this Section 2.07(e) shall not be effective unless:

     (i)  the Borrower shall have given the  Administrative  Agent notice of any
          such increase at least 10 days prior to any such Increased  Commitment
          Date;

     (ii) no Default  shall have  occurred and be  continuing  on the  Increased
          Commitment Date (both  immediately prior to and after giving effect to
          the increase in Commitments on the Increased Commitment Date);

     (iii) no existing  Lender  shall be under any  obligation  to increase  its
          Commitment  and any such decision  whether to increase its  Commitment
          shall be in such Lender's sole and absolute discretion;

     (iv) if any Loan or Letter of Credit  shall be  outstanding,  the  Borrower
          shall have borrowed Loans from each of the  Additional  Lenders on the
          Increased  Commitment Date, and the Additional Lenders shall have made
          Loans to the Borrower (in the case of Eurodollar  Loans, with Interest
          Period(s)  ending  on the  date(s)  of any then  outstanding  Interest
          Period(s)) and shall be deemed to have acquired  participations in any
          outstanding Letters of Credit, and  (notwithstanding the provisions of
          Section 2.15 requiring that borrowings and prepayments be made ratably
          in  accordance  with the  principal  amounts  of the Loans held by the
          Lenders) the Borrower in coordination  with the  Administrative  Agent
          shall have taken such  actions,  including,  if  necessary,  prepaying
          Loans  held by the  other  Lenders  (together  with  accrued  interest
          thereon and any amounts owing  pursuant to Section 2.13 as a result of
          such payment) in such amounts as may be necessary so that after giving
          effect  to such  Loans,  purchases  and  prepayments  the  Loans  (and
          Interest Period(s) of Eurodollar Loan(s)) and the LC Exposure shall be
          held by the Lenders pro rata in accordance with the respective amounts
          of their  Commitments (as so increased) and, in that  connection,  the
          Issuing Bank shall be deemed to have released any Lenders so deemed to
          have sold  participations in outstanding Letters of Credit on the date
          of such replacement from such sold participation; and

     (v)  there  shall have been no  reduction  of the  Commitments  pursuant to
          Section 2.07(b) on or prior to any such Increased Commitment Date.

<PAGE>

Promptly following any increase of Commitments pursuant to this Section 2.07(e),
the  Administrative  Agent shall provide  notice thereof to each of the Lenders.
Without  limiting the  Obligations of the Borrower  provided for in this Section
2.07,  the  Administrative  Agent  and the  Lenders  agree  that  they  will use
commercially  reasonable  efforts to attempt to  minimize  the costs of the type
referred  to in  Section  2.13  that  the  Borrower  would  otherwise  incur  in
connection with an increase of the Commitments.

     SECTION 2.08 Repayment and Prepayment of Loans; Evidence of Debt.

     (a) Repayment and Prepayment.  The Borrower hereby unconditionally promises
to pay to the  Administrative  Agent for account of the Lenders the  outstanding
principal amount of the Loans on the Commitment  Termination  Date. The Borrower
shall have the right at any time and from time to time to prepay  any  Borrowing
in whole or in part, subject to the requirements of this Section.

     (b)  Manner  of  Payment.  Prior  to any  repayment  or  prepayment  of any
Borrowings  hereunder,  the Borrower shall select the Borrowing or Borrowings to
be paid and shall notify the Administrative  Agent of such selection and payment
(i) in the case of payment of a Eurodollar Borrowing, not later than 11:00 a.m.,
New York City time,  three Business Days before the date of such payment or (ii)
in the case of payment of an ABR Borrowing,  not later than 12:00 noon, New York
City  time,  on the  date of  such  payment;  provided  that  each  simultaneous
repayment  or  prepayment  of ABR and  Eurodollar  Borrowings  shall be applied,
first, to pay any outstanding ABR Borrowings and, second, to other Borrowings in
the order of the remaining  duration of their  respective  Interest Periods (the
Borrowing with the shortest remaining Interest Period to be repaid first).  Each
repayment or  prepayment  of a Borrowing  shall be applied  ratably to the Loans
included in such  Borrowing.  Each such notice  shall be  irrevocable  and shall
specify  the  repayment  or  prepayment  date and the  principal  amount of each
Borrowing or portion  thereof to be repaid or prepaid;  provided  that,  if such
notice is given in connection  with a conditional  notice of  termination of the
Commitments as  contemplated by Section 2.07, then such notice of prepayment may
be revoked if such notice of termination  is revoked in accordance  with Section
2.07.  Promptly following receipt of any such notice,  the Administrative  Agent
shall advise the Lenders of the  contents  thereof.  Each  partial  repayment or
prepayment of any Borrowing  shall be in an aggregate  amount of $5,000,000 or a
larger multiple of $1,000,000.  Repayments and Prepayments  shall be accompanied
by accrued interest to the extent required by Section 2.10.

     (c)  Maintenance  of Records by  Lenders.  Each  Lender  shall  maintain in
accordance with its usual practice  records  evidencing the  indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender,  including
the amounts of principal and interest  payable and paid to such Lender from time
to time hereunder.

     (d) Maintenance of Records by the Administrative  Agent. The Administrative
Agent  shall  maintain  records in which it shall  record (i) the amount of each
Loan made hereunder,  the Type thereof and each Interest Period  therefor,  (ii)
the amount of any  principal  or  interest  due and payable or to become due and
payable from the Borrower to each Lender  hereunder  and (iii) the amount of any
sum received by the  Administrative  Agent  hereunder for account of the Lenders
and each Lender's share thereof.

<PAGE>

     (e) Effect of Entries.  The entries made in the records maintained pursuant
to  paragraph  (c) or (d) of this Section  shall be prima facie  evidence of the
existence and amounts of the  obligations  recorded  therein;  provided that the
failure of any Lender or the  Administrative  Agent to maintain  such records or
any error therein shall not in any manner affect the  obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.

     (f)  Promissory  Notes.  Any  Lender may  request  that Loans made by it be
evidenced by a promissory  note.  In such event,  the  Borrower  shall  prepare,
execute and deliver to such Lender a promissory note payable to such Lender (or,
if requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative  Agent.  Thereafter,  the Loans evidenced by
such promissory note and interest  thereon shall at all times  (including  after
assignment  pursuant to Section 9.04) be represented  by one or more  promissory
notes in such form payable to the payee named  therein  (or, if such  promissory
note is a registered note, to such payee and its registered assigns).

     SECTION 2.09 Fees.

     (a) Commitment Fees. The Borrower agrees to pay to the Administrative Agent
for  account  of each  Lender  a  commitment  fee,  which  shall  accrue  at the
Applicable  Rate on the average  daily unused  amount of the  Commitment of such
Lender during the period from and including the date hereof to but excluding the
date such  Commitment  terminates.  Accrued  commitment fees shall be payable in
arrears  on each  Quarterly  Date  and on the date  the  Commitments  terminate,
commencing on the first such date to occur after the date hereof. All commitment
fees shall be  computed  on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day). For purposes of computing commitment fees, the Commitment of a Lender
shall  be  deemed  to be used to the  extent  of the  outstanding  Loans  and LC
Exposure of such Lender.

     (b)  Letter  of  Credit  Fees.  The  Borrower  agrees  to  pay  (i)  to the
Administrative Agent for account of each Lender a participation fee with respect
to its  participations  in Letters of Credit,  which shall  accrue at a rate per
annum equal to the Applicable Rate applicable to interest on Eurodollar Loans on
the average  daily amount of such  Lender's LC Exposure  (excluding  any portion
thereof  attributable to unreimbursed LC  Disbursements)  during the period from
and including the Effective Date to but excluding the later of the date on which
such Lender's Commitment  terminates and the date on which such Lender ceases to
have any LC Exposure,  and (ii) to the Issuing Bank a fronting fee,  which shall
accrue at the rate of 0.125%  per annum on the  average  daily  amount of the LC
Exposure  (excluding  any  portion  thereof   attributable  to  unreimbursed  LC
Disbursements)  during the period from and including  the Effective  Date to but
excluding the later of the date of termination of the  Commitments  and the date
on which  there  ceases to be any LC  Exposure,  as well as the  Issuing  Bank's
standard fees with respect to the issuance,  amendment,  renewal or extension of
any Letter of Credit or processing of drawings  thereunder.  Participation  fees
and fronting fees accrued  through and including  each  Quarterly  Date shall be
payable on the third Business Day following such Quarterly  Date,  commencing on
the first such date to occur after the  Effective  Date;  provided that all such
fees  shall be payable on the date on which the  Commitments  terminate  and any
such fees accruing after the date on which the  Commitments  terminate  shall be
payable on demand.  Any other fees payable to the Issuing Bank  pursuant to this
paragraph shall be payable within 10 days after demand.  All participation  fees
and fronting fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual  number of days elapsed  (including  the first day but
excluding the last day).

     (c)  Administrative   Agent  Fees.  The  Borrower  agrees  to  pay  to  the
Administrative  Agent,  for its own account,  fees payable in the amounts and at
the times  separately  agreed upon between the  Borrower and the  Administrative
Agent.

<PAGE>

     (d) Payment of Fees. All fees payable  hereunder shall be paid on the dates
due, in immediately  available  funds,  to the  Administrative  Agent (or to the
Issuing Bank, in the case of fees payable to it) for  distribution,  in the case
of facility fees and participation  fees, to the Lenders entitled thereto.  Fees
paid shall not be refundable under any circumstances.

     SECTION 2.10 Interest.

     (a) ABR Loans.  The Loans comprising each ABR Borrowing shall bear interest
at a rate per annum equal to the Alternate Base Rate plus the Applicable Rate.

     (b) Eurodollar Loans. The Loans comprising each Eurodollar  Borrowing shall
bear  interest  at a rate per  annum  equal to the  Adjusted  LIBO  Rate for the
Interest Period for such Borrowing plus the Applicable Rate.

     (c) Default Interest. Notwithstanding the foregoing, if any principal of or
interest  on any  Loan  or any  fee or  other  amount  payable  by the  Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise,  such  overdue  amount shall bear  interest,  after as well as before
judgment, at a rate per annum equal to 2% plus the Alternate Base Rate.

     (d) Payment of Interest.  Accrued interest on each Loan shall be payable in
arrears on each Interest  Payment Date for such Loan and upon termination of the
Commitments;  provided  that (i) interest  accrued  pursuant to paragraph (c) of
this Section  shall be payable on demand;  (ii) in the event of any repayment or
prepayment  of any Loan  (other  than a  prepayment  of an ABR Loan prior to the
Commitment Termination Date), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such  repayment or prepayment  and (iii)
in the event of any conversion of any Eurodollar  Borrowing  prior to the end of
the  Interest  Period  therefor,  accrued  interest on such  Borrowing  shall be
payable on the effective date of such conversion.

     (e) Computation. All interest hereunder shall be computed on the basis of a
year of 360 days,  except that  interest  computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual  number of days elapsed  (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted  LIBO Rate shall be determined by the  Administrative  Agent,  and such
determination shall be conclusive absent manifest error.

     SECTION 2.11 Alternate Rate of Interest.  If prior to the  commencement  of
the Interest Period for any Eurodollar Borrowing:

     (a) the  Administrative  Agent  determines  (which  determination  shall be
conclusive  absent  manifest  error) that adequate and  reasonable  means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or

     (b) the  Administrative  Agent is advised by the Required  Lenders that the
Adjusted  LIBO Rate for such  Interest  Period  will not  adequately  and fairly
reflect the cost to such Lenders of making or maintaining their respective Loans
included in such Borrowing for such Interest Period;

then the Administrative  Agent shall give notice thereof to the Borrower and the
Lenders as promptly as  practicable  thereafter  and,  until the  Administrative
Agent notifies the Borrower and the Lenders that the  circumstances  giving rise
to such notice no longer exist, (i) any Interest  Election Request that requests
the conversion of any Borrowing to, or the  continuation  of any Borrowing as, a
Eurodollar  Borrowing shall be ineffective and such Borrowing  (unless  prepaid)
shall be  continued  as,  or  converted  to,  an ABR  Borrowing  and (ii) if any
Borrowing Request requests a Eurodollar Borrowing,  such Borrowing shall be made
as an ABR Borrowing.

<PAGE>

     SECTION 2.12 Increased Costs.

     (a) Increased Costs Generally. If any Change in Law shall:

     (i)  impose,  modify  or deem  applicable  any  reserve,  special  deposit,
          compulsory  loan,  insurance  charge or  similar  requirement  against
          assets of,  deposits with or for the account of, or credit extended or
          participated  in  by,  any  Lender  (except  any  reserve  requirement
          reflected in the Adjusted LIBO Rate) or the Issuing Bank;

     (ii) change the basis of taxation of payments to such Lender or the Issuing
          Bank in respect thereof  (except for Indemnified  Taxes or Other Taxes
          covered by Section  2.14 and the  imposition  of, or any change in the
          rate of, any Excluded Tax payable by such Lender or the Issuing Bank);
          or

     (iii) impose on any  Lender or the  Issuing  Bank or the  London  interbank
          market any other condition,  cost or expense  affecting this Agreement
          or  Eurodollar  Loans  made by such  Lender or any Letter of Credit or
          participation therein;

and the result of any of the  foregoing  shall be to  increase  the cost to such
Lender of making or  maintaining  any  Eurodollar  Loan (or of  maintaining  its
obligation  to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of  participating  in, issuing or maintaining  any Letter of Credit
(or of  maintaining  its  obligation to participate in or to issue any Letter of
Credit),  or to reduce  the amount of any sum  received  or  receivable  by such
Lender or the Issuing  Bank  hereunder  (whether of  principal,  interest or any
other amount),  in each case by an amount reasonably deemed by such Lender to be
material,  then,  upon request of such Lender or the Issuing Bank,  the Borrower
will pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will  compensate  such Lender or the Issuing  Bank,  as the
case may be, for such additional costs incurred or reduction suffered.

     (b) Capital Requirements. If any Lender or the Issuing Bank determines that
any Change in Law  affecting  such  Lender or the  Issuing  Bank or any  lending
office of such Lender or such Lender's or the Issuing Bank's holding company, if
any, regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or the Issuing  Bank's capital or on the capital
of such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this  Agreement,  the  Commitment  of such  Lender or the  Loans  made by, or
participations  in Letters of Credit  held by,  such  Lender,  or the Letters of
Credit  issued by the Issuing  Bank,  to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing  Bank's  holding  company could
have  achieved  but for such  Change  in Law  (taking  into  consideration  such
Lender's or the Issuing Bank's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy), then from time
to time the Borrower  will pay to such Lender or the Issuing  Bank,  as the case
may be, such additional  amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender's or the Issuing Bank's holding company for any such
reduction suffered.

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

<PAGE>

     (d) Delay in  Requests.  Failure  or delay on the part of any Lender or the
Issuing  Bank  to  demand  compensation  pursuant  to  this  Section  shall  not
constitute a waiver of such Lender's or the Issuing  Bank's right to demand such
compensation,  provided that the Borrower  shall not be required to compensate a
Lender or the Issuing  Bank  pursuant to this  Section for any  increased  costs
incurred or  reductions  suffered more than 120 days prior to the date that such
Lender or the Issuing  Bank,  as the case may be,  notifies  the Borrower of the
Change in Law giving  rise to such  increased  costs or  reductions  and of such
Lender's or the Issuing Bank's intention to claim compensation  therefor (except
that, if the Change in Law giving rise to such increased  costs or reductions is
retroactive,  then the  120-day  period  referred  to above shall be extended to
include the period of retroactive effect thereof).

     (e) Termination or Assignment.  If any Lender shall have delivered a notice
or  certificate  pursuant to paragraph  (c) above,  the Borrower  shall have the
right,  at its own  expense,  upon notice to such Lender and the  Administrative
Agent,  to require such Lender to (i) terminate its  Commitment or (ii) transfer
and assign without  recourse (in accordance with and subject to the restrictions
contained  in  Section  9.04)  all or a  portion  of its  interest,  rights  and
obligations under this Agreement to another financial institution (which must be
reasonably  acceptable  to the  Administrative  Agent)  which shall  assume such
obligations;  provided that (A) no such termination or assignment shall conflict
with any law, rule, or regulation or order of any Governmental Authority and (B)
the  Borrower or the  assignee,  as the case may be,  shall pay to the  affected
Lender  in  immediately  available  funds  on the  date of such  termination  or
assignment  the principal of and interest  accrued to the date of payment on the
Loans made by it hereunder and all other amounts accrued for its account or owed
to it hereunder (including under Section 2.13).

     SECTION 2.13 Break Funding Payments. In the event of (a) the payment of any
principal  of any  Eurodollar  Loan other  than on the last day of the  Interest
Period  therefor  (including  as a  result  of an  Event  of  Default),  (b) the
conversion  of any  Eurodollar  Loan other than on the last day of the  Interest
Period therefor, (c) the failure to borrow, convert, continue or prepay any Loan
on the date specified in any notice  delivered  pursuant  hereto  (regardless of
whether such notice is permitted to be revocable  under  Section  2.08(b) and is
revoked in accordance herewith),  or (d) the assignment as a result of a request
by the Borrower pursuant to Section 2.16(b) of any Eurodollar Loan other than on
the last day of the  Interest  Period  therefor,  then,  in any such event,  the
Borrower  shall   compensate   each  Lender  for  its  loss,  cost  and  expense
attributable  to such event.  In the case of a Eurodollar  Loan, the loss to any
Lender  attributable  to any such  event  shall be deemed to  include  an amount
determined  by such Lender to be equal to the excess,  if any, of (i) the amount
of interest  that such  Lender  would pay for a deposit  equal to the  principal
amount of such Loan for the period  from the date of such  payment,  conversion,
failure or assignment to the last day of the Interest  Period for such Loan (or,
in the case of a failure to borrow,  convert or  continue,  the  duration of the
Interest  Period that would have  resulted  from such  borrowing,  conversion or
continuation)  if the  interest  rate  payable on such deposit were equal to the
Adjusted  LIBO Rate for such Interest  Period,  over (ii) the amount of interest
that such  Lender  would earn on such  principal  amount for such period if such
Lender were to invest such principal amount for such period at the interest rate
that would be bid by such  Lender (or an  affiliate  of such  Lender) for Dollar
deposits from other banks in the eurodollar  market at the  commencement of such
period.  A  certificate  of any Lender  setting forth any amount or amounts that
such Lender is entitled to receive  pursuant to this Section  shall be delivered
to the Borrower and shall be  conclusive  absent  manifest  error.  The Borrower
shall pay such Lender the amount shown as due on any such certificate  within 10
days after receipt thereof.

     SECTION 2.14 Taxes.

<PAGE>

     (a) Any and all payments by or on account of any obligation of the Borrower
hereunder or under any other Loan  Document  shall be made free and clear of and
without  reduction  or  withholding  for any  Indemnified  Taxes or Other Taxes,
provided that if the Borrower  shall be required by applicable law to deduct any
Indemnified  Taxes (including any Other Taxes) from such payments,  then (i) 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) the Administrative  Agent, Lender or Issuing Bank, as the case may
be,  receives  an amount  equal to the sum it would  have  received  had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall timely pay the full amount deducted to the relevant  Governmental
Authority in accordance with applicable law.

     (b) Without  limiting the  provisions of paragraph (a) above,  the Borrower
shall  timely pay any Other  Taxes to the  relevant  Governmental  Authority  in
accordance with applicable law.

     (c) The Borrower shall indemnify the Administrative  Agent, each Lender and
the Issuing Bank,  within 10 days after demand therefor,  for the full amount of
any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or  attributable  to amounts  payable under this Section)
paid by the  Administrative  Agent, such Lender or the Issuing Bank, as the case
may be, on or with respect to any payment by or on account of any  obligation of
the Borrower  hereunder  or under any other Loan  Document,  and any  penalties,
interest and  reasonable  expenses  arising  therefrom or with respect  thereto,
whether or not such  Indemnified  Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental  Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender or
the  Issuing  Bank  (with  a  copy  to  the  Administrative  Agent),  or by  the
Administrative  Agent on its own behalf or on behalf of a Lender or the  Issuing
Bank, shall be conclusive absent manifest error.

     (d) As soon as practicable  after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such  Governmental  Authority  evidencing  such  payment,  a copy of the  return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

     (e) Any Foreign  Lender that is entitled to an exemption  from or reduction
of withholding  tax under the law of the  jurisdiction  in which the Borrower is
resident for tax purposes,  or any treaty to which such jurisdiction is a party,
with  respect  to  payments  hereunder  or under any other Loan  Document  shall
deliver to the Borrower (with a copy to the  Administrative  Agent), at the time
or times prescribed by applicable law or reasonably requested by the Borrower or
the  Administrative  Agent, such properly  completed and executed  documentation
prescribed  by applicable  law or  reasonably  requested by the Borrower as will
permit such  payments to be made  without  withholding  or at a reduced  rate of
withholding.  In  addition,  any Lender,  if  requested  by the  Borrower or the
Administrative  Agent,  shall  deliver such other  documentation  prescribed  by
applicable  law or  reasonably  requested by the Borrower or the  Administrative
Agent as will  enable the  Borrower  or the  Administrative  Agent to  determine
whether  or not such  Lender is  subject to backup  withholding  or  information
reporting requirements.

     (f) If the  Administrative  Agent, a Lender or the Issuing Bank determines,
in its sole  discretion,  that it has  received  a refund  of any Taxes or Other
Taxes as to which it has been  indemnified  by the  Borrower or with  respect to
which the Borrower has paid  additional  amounts  pursuant to this  Section,  it
shall pay to the Borrower an amount equal to such refund (but only to the extent
of indemnity  payments  made, or additional  amounts paid, by the Borrower under
this  Section  with  respect  to the Taxes or Other  Taxes  giving  rise to such
refund),  net of all out-of-pocket  expenses of the  Administrative  Agent, such
Lender or the Issuing Bank, as the case may be, and without interest (other than
any interest paid by the relevant  Governmental  Authority  with respect to such
refund),  provided  that the  Borrower,  upon the request of the  Administrative
Agent,  such Lender or the Issuing Bank, agrees to repay the amount paid over to
the  Borrower  (plus any  penalties,  interest or other  charges  imposed by the
relevant Governmental Authority) to the Administrative Agent, such Lender or the
Issuing Bank in the event the  Administrative  Agent, such Lender or the Issuing
Bank is  required  to repay such  refund to such  Governmental  Authority.  This
paragraph shall not be construed to require the Administrative Agent, any Lender
or the Issuing Bank to make available its tax returns (or any other  information
relating to its taxes that it deems  confidential in its reasonable  discretion)
to the Borrower or any other Person.

<PAGE>

     SECTION 2.15 Payments Generally; Pro Rata Treatment; Sharing of Setoffs.

     (a) Payments by the Borrower. The Borrower shall make each payment required
to  be  made  by  it  hereunder  (whether  of  principal,   interest,   fees  or
reimbursement  of LC  Disbursements,  or of amounts  payable under Section 2.12,
Section 2.13 or Section  2.14, or  otherwise),  or under any other Loan Document
(except to the extent otherwise  provided  therein),  prior to 2:00pm,  New York
City time, on the date when due, in immediately  available funds, without setoff
or  counterclaim.  Any amounts  received after such time on any date may, in the
discretion of the  Administrative  Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating  interest thereon.  All
such payments  shall be made to the  Administrative  Agent at its offices at the
address  provided  pursuant  to  Section  9.01,  except as  otherwise  expressly
provided in the relevant Loan  Document and except  payments to be made directly
to the  Issuing  Bank as  expressly  provided  herein and  payments  pursuant to
Section 2.12,  Section 2.13,  Section 2.14 and Section 9.03, which shall be made
directly  to the  Persons  entitled  thereto.  The  Administrative  Agent  shall
distribute  any such payments  received by it for account of any other Person to
the appropriate  recipient  promptly  following receipt thereof.  If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next  succeeding  Business  Day and, in the case of any
payment accruing  interest,  interest thereon shall be payable for the period of
such extension.  All payments hereunder or under any other Loan Document (except
to the extent otherwise provided therein) shall be made in Dollars.

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

     (c) Pro Rata Treatment. Except to the extent otherwise provided herein: (i)
each  Borrowing  shall be made from the Lenders,  each payment of commitment fee
under  Section  2.09  shall  be  made  for  account  of the  Lenders,  and  each
termination  or reduction of the amount of the  Commitments  under  Section 2.07
shall  be  applied  to the  respective  Commitments  of the  Lenders,  pro  rata
according to the amounts of their  respective  Commitments;  (ii) each Borrowing
shall be allocated pro rata among the Lenders  according to the amounts of their
respective  Commitments (in the case of the making of Loans) or their respective
Loans that are to be included in such Borrowing (in the case of conversions  and
continuations of Loans);  (iii) each payment or prepayment of principal of Loans
by the Borrower  shall be made for account of the Lenders pro rata in accordance
with the respective unpaid principal amounts of the Loans held by them; and (iv)
each payment of interest on Loans by the  Borrower  shall be made for account of
the  Lenders pro rata in  accordance  with the amounts of interest on such Loans
then due and payable to the respective Lenders.

     (d) Sharing of Payments by Lenders.  If any Lender shall, by exercising any
right of setoff or counterclaim  or otherwise,  obtain payment in respect of any
principal  of or  interest  on any of its Loans or other  obligations  hereunder
resulting in such  Lender's  receiving  payment of a proportion of the aggregate
amount of its Loans and  accrued  interest  thereon  or other  such  obligations
greater  than its pro rata share  thereof as  provided  herein,  then the Lender
receiving such greater proportion shall (A) notify the  Administrative  Agent of
such fact and (B) purchase (for cash at face value)  participations in the Loans
and such other obligations of the other Lenders,  or make such other adjustments
as shall be equitable,  so that the benefit of all such payments shall be shared
by the Lenders ratably in accordance  with the aggregate  amount of principal of
and accrued  interest on their  respective  Loans and other  amounts owing them,
provided that:

<PAGE>

     (i)  if any such participations are purchased and all or any portion of the
          payment giving rise thereto is recovered, such participations shall be
          rescinded  and the  purchase  price  restored  to the  extent  of such
          recovery, without interest; and

     (ii) the  provisions of this  paragraph  shall not be construed to apply to
          (x) any payment  made by the  Borrower  pursuant to and in  accordance
          with the express terms of this  Agreement or (y) any payment  obtained
          by a  Lender  as  consideration  for  the  assignment  of or sale of a
          participation   in  any  of  its   Loans  or   participations   in  LC
          Disbursements  to any  assignee  or  participant,  other  than  to the
          Borrower or any Subsidiary thereof (as to which the provisions of this
          paragraph shall apply).

The  Borrower  consents  to the  foregoing  and  agrees,  to the  extent  it may
effectively  do  so  under   applicable   law,  that  any  Lender   acquiring  a
participation  pursuant to the foregoing  arrangements  may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct  creditor of the Borrower in the amount of
such participation.

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

     (f) Certain  Deductions by the  Administrative  Agent.  If any Lender shall
fail to make any payment  required to be made by it pursuant to Section 2.04(e),
Section  2.05 or Section  2.15(e),  then the  Administrative  Agent may,  in its
discretion  (notwithstanding  any contrary provision hereof),  apply any amounts
thereafter  received by the  Administrative  Agent for account of such Lender to
satisfy such Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.

     SECTION 2.16 Mitigation Obligations; Replacement of Lenders.

     (a)  Designation  of a Different  Lending  Office.  If any Lender  requests
compensation  under Section 2.12, or requires the Borrower to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section  2.14,  then such  Lender  shall use  reasonable  efforts to
designate a different  lending office for funding or booking its Loans hereunder
or to assign its rights and  obligations  hereunder  to another of its  offices,
branches or affiliates,  if, in the judgment of such Lender, such designation or
assignment  (i) would  eliminate or reduce amounts  payable  pursuant to Section
2.12 or  Section  2.14,  as the case may be, in the  future  and (ii)  would not
subject such Lender to any unreimbursed  cost or expense and would not otherwise
be  disadvantageous  to such  Lender.  The  Borrower  hereby  agrees  to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

<PAGE>

     (b)  Replacement  of Lenders.  If any Lender  requests  compensation  under
Section 2.12, or if the Borrower is required to pay any additional amount to any
Lender or any  Governmental  Authority for the account of any Lender pursuant to
Section  2.14,  or if any  Lender  defaults  in its  obligation  to  fund  Loans
hereunder, then the Borrower may, at its sole expense and effort, upon notice to
such  Lender and the  Administrative  Agent,  require  such Lender to assign and
delegate,  without  recourse (in accordance with and subject to the restrictions
contained in, and consents  required by,  Section  9.04),  all of its interests,
rights and obligations under this Agreement and the related Loan Documents to an
assignee  that shall  assume such  obligations  (which  assignee  may be another
Lender, if a Lender accepts such assignment), provided that:

     (i)  the  Borrower  shall  have  paid  to  the  Administrative   Agent  the
          assignment fee specified in Section 9.04;

     (ii) such  Lender  shall have  received  payment of an amount  equal to the
          outstanding   principal  of  its  Loans  and   participations   in  LC
          Disbursements,  accrued interest  thereon,  accrued fees and all other
          amounts  payable to it  hereunder  and under the other Loan  Documents
          (including  any amounts  under Section 2.13) from the assignee (to the
          extent of such outstanding principal and accrued interest and fees) or
          the Borrower (in the case of all other amounts);

     (iii) in the  case  of any  such  assignment  resulting  from a  claim  for
          compensation  under  Section  2.12  or  payments  required  to be made
          pursuant to Section 2.14,  such  assignment will result in a reduction
          in such compensation or payments thereafter; and

     (iv) such assignment does not conflict with applicable law.

A Lender shall not be required to make any such  assignment  or  delegation  if,
prior  thereto,  as a result  of a  waiver  by such  Lender  or  otherwise,  the
circumstances  entitling the Borrower to require such  assignment and delegation
cease to apply.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

     The Borrower  represents  and  warrants to the  Administrative  Agent,  the
Issuing Bank and each of the Lenders that:

     SECTION 3.01 Organization; Powers; Governmental Approvals.

     (a) The Borrower and each Principal  Subsidiary  (i) is a corporation  duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction of its organization,  (ii) has all requisite power and authority to
own its property and assets and to carry on its  business as now  conducted  and
(iii) is qualified to do business in every jurisdiction where such qualification
is required,  except  where the failure so to qualify  would not have a Material
Adverse Effect. The Borrower's  execution,  delivery and performance of the Loan
Documents  are within its  corporate  powers,  have been duly  authorized by all
necessary  action and do not violate or create a default  under (A) law, (B) its
constituent documents,  or (C) any contractual provision binding upon it, except
to the extent (in the case of violations or defaults described under clauses (A)
or (C)) such  violation or default would not reasonably be expected to result in
a Material  Adverse Effect and would not have an adverse effect on the validity,
binding effect or  enforceability  of this Agreement or any other Loan Documents
and  would  not   materially   adversely   affect  any  of  the  rights  of  the
Administrative Agent or any Lender under or in connection with this Agreement or
any other Loan  Documents.  Each of the Loan  Documents  constitutes  the legal,
valid  and  binding  obligation  of  the  Borrower  enforceable  against  it  in
accordance  with its terms  (except  as such  enforceability  may be  limited by
applicable  bankruptcy,  reorganization,  insolvency,  moratorium and other laws
affecting the rights of creditors  generally  and general  principles of equity,
including an implied covenant of good faith and fair dealing).

<PAGE>

     (b) Except for (i) any Governmental  Approvals  required in connection with
any  Borrowings  (such  approvals  being  "Borrowing  Approvals")  and  (ii) any
Governmental  Approvals  the  failure to obtain  which could not  reasonably  be
expected  to result in a  Material  Adverse  Effect or affect  the  validity  or
enforceability  of this Agreement or any other Loan Document,  all  Governmental
Approvals required in connection with the execution and delivery by the Borrower
of this  Agreement  and the other  Loan  Documents  and the  performance  by the
Borrower of its  obligations  hereunder and thereunder  have been, and, prior to
the time of any Borrowing,  all Borrowing Approvals will be, duly obtained,  are
(or,  in the case of  Borrowing  Approvals,  will be) in full  force and  effect
without  having  been  amended or  modified  in any  manner  that may impair the
ability of the Borrower to perform its obligations under this Agreement, and are
not (or,  in the case of  Borrowing  Approvals,  will not be) the subject of any
pending appeal, stay or other challenge.

     SECTION  3.02  Financial  Statements.  The  Borrower  has  furnished to the
Lenders,  for itself and its  Subsidiaries,  its most  recent  filings  with the
Securities and Exchange  Commission on Forms 10-K and 10-Q.  Such Forms 10-K and
10-Q do not contain any untrue  statement of a material  fact or omit to state a
material  fact  necessary  to  make  any  statement  therein,  in  light  of the
circumstances  under which it was made,  not  misleading.  Each of the financial
statements  in such  Forms  10-K and 10-Q has  been,  and each of the  financial
statements  to be  furnished  pursuant  to  Section  5.02 will be,  prepared  in
accordance with GAAP applied consistently with prior periods,  except as therein
noted,  and fairly presents or will fairly present in all material  respects the
consolidated  financial  position of the Borrower and its Subsidiaries as of the
date  thereof  and  the  results  of the  operations  of the  Borrower  and  its
Subsidiaries for the period then ended.

     SECTION 3.03 No Material  Adverse Change.  Since the date of the Borrower's
most recent financial statements contained in its Annual Report on Form 10-K for
the fiscal year ended  December 31, 2006,  furnished to the Lenders  pursuant to
Section  3.02,  there has been no  material  adverse  change  in,  and there has
occurred no event or condition  which is likely to result in a material  adverse
change in, the financial condition,  results of operations,  business, assets or
operations  of the  Borrower  and the  Subsidiaries  taken as a whole  (it being
understood that the  consummation of an Asset Exchange shall not constitute such
a material adverse change).

     SECTION 3.04 Titles to Properties; Possession under Leases.

     (a) To the best of the Borrower's  knowledge,  each of the Borrower and the
Principal  Subsidiaries  has good and  marketable  title to, or valid  leasehold
interests in, or other rights to use or occupy, all its material  properties and
assets, except for minor defects in title that do not interfere with its ability
to conduct its business as currently conducted or to utilize such properties and
assets for their intended purposes.  All such material properties and assets are
free and clear of Liens, other than Liens expressly permitted by Section 6.01.

     (b) Each of the Borrower and the Principal  Subsidiaries  has complied with
all  obligations  under all material  leases to which it is a party and all such
leases  are in full force and  effect,  except  where such  failure to comply or
maintain such leases in full force and effect would not have a Material  Adverse
Effect.   Each  of  the  Borrower  and  the  Subsidiaries  enjoys  peaceful  and
undisturbed  possession under all such material leases except where such failure
would not have a Material Adverse Effect.

<PAGE>

     SECTION 3.05 Ownership of  Subsidiaries.  The Borrower owns, free and clear
of any Lien (other than Liens expressly  permitted by Section 6.01),  all of the
issued  and  outstanding  shares  of  common  stock  of  each  of the  Principal
Subsidiaries.

     SECTION 3.06 Litigation; Compliance with Laws.

     (a)  There  is  no  action,  suit,  or  proceeding,   or  any  governmental
investigation or any  arbitration,  in each case pending or, to the knowledge of
the Borrower,  threatened against the Borrower or any of the Subsidiaries or any
material  property  of  any  thereof  before  any  court  or  arbitrator  or any
governmental or  administrative  body,  agency, or official which (i) challenges
the validity of this Agreement or any other Loan  Document,  (ii) may reasonably
be expected to have a material  adverse effect on the ability of the Borrower to
perform any of its  obligations  under this Agreement or any other Loan Document
or on the rights of or benefits available to the Lenders under this Agreement or
any other Loan  Document or (iii) except as disclosed in the  Borrower's  Annual
Report  on Form  10-K for the  fiscal  year  ended  December  31,  2006,  or its
quarterly  report  on Form  10-Q for the  quarter  ended  March  31,  2007,  may
reasonably be expected to have a Material Adverse Effect.

     (b) Neither the Borrower nor any of the Subsidiaries is in violation of any
law,  rule, or  regulation,  or in default with respect to any  judgment,  writ,
injunction  or decree of any  Governmental  Authority,  where such  violation or
default could reasonably be anticipated to result in a Material Adverse Effect.

     (c) Except as set forth in or contemplated  by the financial  statements or
other reports  referred to in Section 3.02 and which have been  delivered to the
Lenders  on or  prior  to the  date  hereof,  (i) the  Borrower  and each of its
Subsidiaries  have complied with all  Environmental  Laws,  except to the extent
that failure to so comply is not  reasonably  likely to have a Material  Adverse
Effect,  (ii)  neither the Borrower  nor any of its  Subsidiaries  has failed to
obtain,  maintain or comply with any permit, license or other approval under any
Environmental  Law, except where such failure is not reasonably likely to have a
Material Adverse Effect,  (iii) neither the Borrower nor any of its Subsidiaries
has  received  notice of any  failure to comply  with any  Environmental  Law or
become subject to any liability under any  Environmental  Law, except where such
failure or liability is not reasonably likely to have a Material Adverse Effect,
(iv) no facilities of the Borrower or any of its Subsidiaries are used to manage
any Specified  Substance in violation of any law, except to the extent that such
violations,  individually or in the aggregate, are not reasonably likely to have
a  Material  Adverse  Effect,  and (v)  the  Borrower  is  aware  of no  events,
conditions or circumstances  involving any Release of a Specified Substance that
is reasonably likely to have a Material Adverse Effect.

     SECTION 3.07 Agreements.

     (a)  Neither the  Borrower  nor any of the  Subsidiaries  is a party to any
agreement  or  instrument  or  subject  to any  corporate  restriction  that has
resulted,  or could  reasonably be anticipated to result,  in a Material Adverse
Effect.

     (b) Neither the Borrower nor any of the  Subsidiaries  is in default in any
manner under any  provision of any  indenture or other  agreement or  instrument
evidencing Indebtedness,  or any other material agreement or instrument to which
it is a party or by which it or any of its  properties  or assets  are or may be
bound,  where  such  default  could  reasonably  be  anticipated  to result in a
Material Adverse Effect.

<PAGE>

     SECTION 3.08 Federal  Reserve  Regulations.  No part of the proceeds of the
Loans will be used,  whether  directly or indirectly,  and whether  immediately,
incidentally,  or  ultimately,  for any purpose which entails a violation of, or
which is inconsistent with, the provisions of the Margin Regulations.

     SECTION 3.09  Investment  Company Act.  Neither the Borrower nor any of the
Subsidiaries is an "investment  company" as defined in, or subject to regulation
under, the Investment Company Act of 1940.

     SECTION  3.10 Use of Proceeds.  The  Borrower  will use the proceeds of the
Loans only for general corporate purposes, including working capital and support
of  commercial  paper  issuances  and  Securitization   Transactions   permitted
hereunder as well as one or more acquisitions or Asset Exchanges;  provided that
no such  proceeds  shall  be used (i) to make any  Restricted  Payment,  or (ii)
directly or indirectly in connection with any Hostile Acquisition.

     SECTION 3.11 Tax Returns.  Each of the  Borrower and the  Subsidiaries  has
filed or caused to be filed all Federal, state and local tax returns required to
have been  filed by it and has paid or  caused to be paid all taxes  shown to be
due and payable on such returns or on any assessments received by it, except (i)
taxes that are being contested in good faith by appropriate  proceedings and for
which the Borrower shall have set aside on its books adequate  reserves and (ii)
where such failure to file or pay would not  reasonably be expected to result in
a Material Adverse Effect.

     SECTION 3.12 No Material Misstatements. No statement,  information, report,
financial  statement,  exhibit  or  schedule  furnished  by or on  behalf of the
Borrower  to the  Administrative  Agent or any  Lender  in  connection  with the
syndication  or  negotiation  of this  Agreement  or any other Loan  Document or
included herein or therein or delivered  pursuant  hereto or thereto  contained,
contains,  or will contain any material  misstatement  of fact or  intentionally
omitted,  omits,  or will omit to state any material fact  necessary to make the
statements  therein,  in the light of the  circumstances  under which they were,
are, or will be made, not misleading.

     SECTION 3.13 Employee Benefit Plans.

     (a) Each Plan is in compliance  with ERISA,  except for such  noncompliance
that has not resulted,  and could not reasonably be anticipated to result,  in a
Material Adverse Effect.

     (b) No Plan has an  accumulated  or waived  funding  deficiency  within the
meaning  of  Section  412 or  Section  418B of the  Code,  except  for any  such
deficiency  that has not resulted,  and could not  reasonably be  anticipated to
result, in a Material Adverse Effect.

     (c) No proceedings  have been instituted to terminate any Plan,  except for
such proceedings where the termination of a Plan has not resulted, and could not
reasonably be anticipated to result, in a Material Adverse Effect.

     (d) Neither the Borrower nor any Subsidiary or ERISA Affiliate has incurred
any liability to or on account of a Plan under ERISA (other than  obligations to
make  contributions in accordance with such Plan), and no condition exists which
presents a material risk to the Borrower or any  Subsidiary of incurring  such a
liability,  except for such  liabilities  that have not resulted,  and could not
reasonably be anticipated to result, in a Material Adverse Effect.

     SECTION 3.14 Insurance. Each of the Borrower and the Principal Subsidiaries
maintains   insurance  with  financially  sound  and  reputable   insurers,   or
self-insurance,  with respect to its  properties  and  business  against loss or
damage of the kind  customarily  insured  against by reputable  companies in the
same or  similar  business  and of such  types and in such  amounts  (with  such
deductible   amounts)  as  is  customary  for  such   companies   under  similar
circumstances.

<PAGE>

                                   ARTICLE IV

                                   CONDITIONS
                                   ----------

     SECTION 4.01 Effective  Date. The  obligations of the Lenders to make Loans
and of the Issuing Bank to issue  Letters of Credit  hereunder  shall not become
effective until the date on which each of the following  conditions is satisfied
(or waived in accordance with Section 9.02):

          (a)  Executed  Counterparts.   The  Administrative  Agent  shall  have
     received from each party hereto either (i) a counterpart  of this Agreement
     signed  on  behalf  of such  party  or  (ii)  written  evidence  reasonably
     satisfactory  to the  Administrative  Agent  (which  may  include  telecopy
     transmission of a signed  signature page to this Agreement) that such party
     has signed a counterpart of this Agreement.

          (b) Opinion of General  Counsel to the  Borrower.  The  Administrative
     Agent shall have  received a favorable  written  opinion  (addressed to the
     Administrative  Agent and the  Lenders  and dated  the  Effective  Date) of
     Hilary E. Glassman, Esq., General Counsel to the Borrower, substantially in
     the form of Exhibit B, and  covering  such other  matters  relating  to the
     Borrower,  this Agreement or the Transactions as the  Administrative  Agent
     shall reasonably request (and the Borrower hereby instructs such counsel to
     deliver such opinion to the Lenders and the Administrative Agent).

          (c)  Opinion  of  Special  New  York  Counsel  to  the  Borrower.  The
     Administrative  Agent  shall have  received  a  favorable  written  opinion
     (addressed  to the  Administrative  Agent  and the  Lenders  and  dated the
     Effective Date) of Cravath, Swaine & Moore LLP, special New York Counsel to
     the  Borrower,  substantially  in the form of Exhibit C, and covering  such
     other matters relating to the Borrower,  this Agreement or the Transactions
     as the  Administrative  Agent shall  reasonably  request  (and the Borrower
     hereby  instructs  such  counsel to deliver such opinion to the Lenders and
     the Administrative Agent).

          (d) Opinion of Milbank,  Tweed,  Hadley & McCloy LLP, Special New York
     Counsel  to DBAG NY.  The  Administrative  Agent  shall  have  received  an
     opinion, dated the Effective Date, of Milbank,  Tweed, Hadley & McCloy LLP,
     special New York counsel to DBAG NY, substantially in the form of Exhibit D
     (and DBAG NY hereby  instructs  such counsel to deliver such opinion to the
     Lenders).

          (e) Legal  Matters.  All legal matters  incident to this Agreement and
     the  borrowings   hereunder   shall  be  reasonably   satisfactory  to  the
     Administrative Agent and the Lenders.

          (f) Corporate Documents. The Administrative Agent shall have received,
     in form and substance  reasonably  satisfactory  to it, such  documents and
     certificates  as the  Administrative  Agent or its counsel  may  reasonably
     request  relating to the  organization,  existence and good standing of the
     Borrower and the authorization of the Transactions.

          (g)  Officer's  Certificate.   The  Administrative  Agent  shall  have
     received,   in  form  and  substance  reasonably   satisfactory  to  it,  a
     certificate,  dated the Effective Date and signed by a Financial Officer of
     the  Borrower,   confirming   that  as  of  the  Effective   Date  (i)  the
     representations  and warranties of the Borrower set forth in this Agreement
     and in the  other  Loan  Documents  are true and  correct  in all  material
     respects and (ii) no Default shall have occurred and be continuing.

<PAGE>

          (h) Fees. The Administrative Agent and the Lenders shall have received
     payment  of all  fees  as the  Borrower  shall  have  agreed  to pay to the
     Administrative  Agent or any Lender in connection  herewith,  including the
     reasonable  fees and  expenses  of  Milbank,  Tweed,  Hadley & McCloy  LLP,
     special New York counsel to DBAG NY, in  connection  with the  negotiation,
     preparation,  execution  and delivery of this  Agreement and the other Loan
     Documents  and the  extensions  of credit  hereunder  (to the  extent  that
     statements for such fees and expenses have been delivered to the Borrower).

          (i) Termination of Existing Credit Agreement. The Administrative Agent
     shall have  received  evidence  that the  principal  of and interest on the
     loans  under,  and all other  amounts  owing  under or in  respect  of, the
     Existing Credit Agreement shall have been (or shall simultaneously be) paid
     in full and all  commitments  to extend  credit  thereunder  of any  lender
     thereunder shall have been terminated,  in each case in a manner reasonably
     satisfactory to the Administrative Agent.

          (j) Necessary Consents and Approvals.  The Administrative  Agent shall
     have received evidence,  in form and substance  reasonably  satisfactory to
     it, that all consents,  licenses,  permits and governmental and third-party
     consents  and  approvals  required  for the  due  execution,  delivery  and
     performance by the Borrower of this Agreement have been obtained and remain
     in full force and effect.

     Notwithstanding the foregoing, the obligations of the Lenders to make Loans
and of the Issuing Bank to issue  Letters of Credit  hereunder  shall not become
effective  unless  each of the  foregoing  conditions  is  satisfied  (or waived
pursuant to Section  9.02) at or prior to 3:00 p.m.,  New York City time, on May
30, 2007 (and, in the event such conditions are not so satisfied or waived,  the
Commitments shall terminate at such time).

     SECTION 4.02 Each Credit Event.  The  obligation of each Lender to make any
Loan,  including any Loans on the date hereof, and of the Issuing Bank to issue,
amend,  renew or extend any Letter of Credit,  is subject to the satisfaction of
the following conditions:

          (a) the  representations  and  warranties of the Borrower set forth in
     this  Agreement and in the other Loan  Documents  (except  Section 3.03 and
     3.06(a) in the case of a  conversion  of a Loan from one Type to another or
     the  continuation  of a Loan  with a new  Interest  Period  that  does  not
     increase  the  principal  amount  thereof or the  amendment  of a Letter of
     Credit that does not  increase the face amount  thereof)  shall be true and
     correct in all material  respects on and as of the date of such Loan or the
     date of issuance, amendment, renewal or extension of such Letter of Credit,
     as applicable  (except to the extent such  representations  and  warranties
     expressly  relate to an earlier  date, in which case they shall be true and
     correct in all material respects as of such earlier date); and

          (b) at the time of and immediately after giving effect to such Loan or
     the issuance,  amendment, renewal or extension of such Letter of Credit, as
     applicable, no Default shall have occurred and be continuing.

     Each  Borrowing  and each  issuance,  amendment,  renewal or extension of a
Letter of Credit shall be deemed to constitute a representation  and warranty by
the  Borrower on the date thereof as to the matters  specified in the  preceding
sentence.
<PAGE>

                                    ARTICLE V

                              AFFIRMATIVE COVENANTS
                              ---------------------

     The  Borrower  covenants  and agrees  with the  Administrative  Agent,  the
Issuing Bank and each Lender  that,  so long as this  Agreement  shall remain in
effect or the principal of or interest on any Loan (or any portion thereof),  or
any other expenses or amounts payable hereunder,  shall be unpaid, or any Letter
of Credit shall remain outstanding, the Borrower will:

     SECTION 5.01 Existence; Businesses and Properties.

     (a) Preserve and  maintain,  cause each of the  Principal  Subsidiaries  to
preserve and maintain,  and cause each other Subsidiary to preserve and maintain
(where the  failure by any such other  Subsidiary  to so preserve  and  maintain
would likely result in a Material  Adverse  Effect),  its  corporate  existence,
rights and franchises,  except in connection  with an Asset  Exchange,  provided
that the corporate  existence of any Principal  Subsidiary  may be terminated if
such  termination  is not  disadvantageous  to the  Administrative  Agent or any
Lender;

     (b) continue to own all of the  outstanding  shares of common stock of each
Principal Subsidiary, except in connection with an Asset Exchange;

     (c) comply,  and cause each of the Subsidiaries to comply,  in all material
respects, with all applicable laws, rules, regulations and orders, including all
Environmental Laws;

     (d) pay, and cause each of the Subsidiaries to pay, before any such amounts
become delinquent,  (i) all taxes,  assessments and governmental charges imposed
upon it or upon its property,  and (ii) all claims  (including claims for labor,
materials, supplies, or services) which might, if unpaid, become a Lien upon its
property, unless, in each case, the validity or amount thereof is being disputed
in good faith,  and the Borrower has maintained  adequate  reserves with respect
thereto,  in each case where the failure to so pay would be reasonably  expected
to cause a Material Adverse Effect;

     (e) keep,  and cause  each of the  Subsidiaries  to keep,  proper  books of
record and account,  containing  complete and accurate  entries of all financial
and business  transactions  of the Borrower and such  Subsidiary in all material
respects;

     (f) continue to carry on, and cause each  Principal  Subsidiary to continue
to carry on,  substantially  the same type of business  as the  Borrower or such
Principal  Subsidiary  conducted as of the date hereof and  business  reasonably
related  thereto,  except for changes in such business that result from an Asset
Exchange; and

     (g) maintain or cause to be maintained insurance with financially sound and
reputable  insurers,  or  self-insurance,  with  respect to its  properties  and
business and the  properties  and business of the  Subsidiaries  against loss or
damage of the kinds  customarily  insured against by reputable  companies in the
same or  similar  businesses,  such  insurance  to be of such  types and in such
amounts (with such deductible  amounts) as is customary for such companies under
similar circumstances;

provided that the foregoing  shall not limit the right of the Borrower or any of
its  Subsidiaries  to engage in any  transaction  not  otherwise  prohibited  by
Section 6.02, 6.03 or 6.04.

     SECTION  5.02  Financial  Statements,  Reports,  etc.  In the  case  of the
Borrower, furnish to the Administrative Agent and each Lender:

<PAGE>

          (a) as soon as  available  and in any event  within 110 days after the
     end of each  fiscal  year,  consolidated  balance  sheets  and the  related
     statements  of income and cash flows of the Borrower  and its  Subsidiaries
     (the Borrower and its Subsidiaries  being  collectively  referred to as the
     "Companies") as of the close of such fiscal year (which  requirement  shall
     be deemed satisfied by the delivery of the Borrower's Annual Report on Form
     10-K (or any  successor  form) for such  year),  all audited by KPMG LLP or
     other independent  public  accountants of recognized  national standing and
     accompanied  by an opinion  of such  accountants  to the  effect  that such
     consolidated  financial  statements fairly present in all material respects
     the  financial  condition  and results of  operations of the Companies on a
     consolidated basis in accordance with GAAP consistently applied;

          (b)  within 65 days  after the end of each of the first  three  fiscal
     quarters of each  fiscal year  (commencing  with the fiscal  quarter  ended
     March 31,  2007),  consolidated  balance  sheets and related  statements of
     income  and cash  flows of the  Companies  as of the  close of such  fiscal
     quarter and the then elapsed portion of the fiscal year (which  requirement
     shall be deemed  satisfied  by the  delivery  of the  Borrower's  Quarterly
     Report  on Form  10-Q  (or any  successor  form)  for such  quarter),  each
     certified  by a  Financial  Officer  as  fairly  presenting  the  financial
     condition  and results of  operations  of the  Companies on a  consolidated
     basis in  accordance  with GAAP  consistently  applied,  subject  to normal
     year-end audit adjustments;

          (c)  concurrently  with any  delivery of  financial  statements  under
     paragraph  (a) or (b) of this Section  5.02, a  certificate  of a Financial
     Officer of the Borrower (i) certifying as to whether a Default has occurred
     and,  if a Default has  occurred,  specifying  the details  thereof and any
     action taken or proposed to be taken with respect  thereto and (ii) setting
     forth reasonably detailed  calculations  (including with respect to any pro
     forma effect given to a Material Transaction) demonstrating compliance with
     Section 6.07 as of the last day of the most recent fiscal  quarter  covered
     by such financial statements;

          (d)  promptly  upon the  mailing  or  filing  thereof,  copies  of all
     financial statements, reports and proxy statements mailed to the Borrower's
     public shareholders,  and copies of all registration statements (other than
     those on Form S-8) and Form  8-K's  (to the  extent  that  such Form  8-K's
     disclose  actual or  potential  adverse  developments  with  respect to the
     Borrower or any of its Subsidiaries that constitute, or could reasonably be
     anticipated  to  constitute,  a  Material  Adverse  Effect)  filed with the
     Securities  and  Exchange  Commission  (or any  successor  thereto)  or any
     national securities exchange;

          (e) promptly  after (i) the  occurrence  thereof,  notice of any ERISA
     Termination Event or "prohibited  transaction",  as such term is defined in
     Section 4975 of the Code,  with respect to any Plan that results,  or could
     reasonably be anticipated to result,  in a Material  Adverse Effect,  which
     notice  shall  specify  the  nature  thereof  and the  Borrower's  proposed
     response thereto,  and (ii) actual knowledge thereof,  copies of any notice
     of  PBGC's  intention  to  terminate  or to  have a  trustee  appointed  to
     administer any Plan; and

          (f) promptly, from time to time, such other information, regarding its
     operations,  business affairs and financial  condition,  or compliance with
     the terms of this Agreement,  as the Administrative Agent or any Lender may
     reasonably request.

<PAGE>

Documents required to be delivered  pursuant to Section 5.02(a),  (b) or (d) (to
the extent any such documents are included in materials otherwise filed with the
Securities and Exchange  Commission (or any successor thereto)) may be delivered
electronically  and if so delivered,  shall be deemed to have been  delivered on
the date (i) on which the  Borrower  posts such  documents,  or  provides a link
thereto  at  www.czn.com;  or (ii) on which  such  documents  are  posted on the
Borrower's  behalf on an  Internet or  intranet  website,  if any, to which each
Lender  and  the  Administrative   Agent  have  access  (whether  a  commercial,
third-party website or whether sponsored by the Administrative Agent);  provided
that:  (i) the Borrower  shall  deliver  paper  copies of such  documents to the
Administrative  Agent or any Lender that  requests  the Borrower to deliver such
paper copies until a written request to cease  delivering  paper copies is given
by the  Administrative  Agent or such Lender and (ii) the Borrower  shall notify
the  Administrative  Agent and each Lender (by telecopier or electronic mail) of
the posting of any such  documents  and provide to the  Administrative  Agent by
electronic  mail  electronic  versions  (i.e.,  soft copies) of such  documents.
Notwithstanding  anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the compliance  certificates  required by
Section  5.02(c)  to  the  Administrative  Agent.  Except  for  such  compliance
certificates,  the Administrative  Agent shall have no obligation to request the
delivery or to maintain  copies of the documents  referred to above,  and in any
event shall have no  responsibility  to monitor  compliance by the Borrower with
any such request for delivery,  and each Lender shall be solely  responsible for
requesting delivery to it or maintaining its copies of such documents.

     SECTION 5.03  Litigation and Other Notices.  Furnish to the  Administrative
Agent and each Lender prompt written notice of the following:

          (a) any Event of Default or Default,  specifying the nature and extent
     thereof  and the  corrective  action  (if any)  proposed  to be taken  with
     respect thereto;

          (b) the filing or commencement  of, or any written notice of intention
     of any Person to file or commence, any action, suit or proceeding,  whether
     at law or in equity or by or before any Governmental Authority, against the
     Borrower  or any of the  Subsidiaries  which  is  reasonably  likely  to be
     adversely determined and which, if adversely  determined,  could reasonably
     be anticipated to result in a Material Adverse Effect; and

          (c) any  development  with respect to the  Borrower or any  Subsidiary
     that has resulted in, or could  reasonably be  anticipated  to result in, a
     Material Adverse Effect.

     SECTION  5.04  Maintaining  Records.  Maintain  all  financial  records  in
accordance  with GAAP and, upon  reasonable  notice,  permit the  Administrative
Agent and each Lender to visit and inspect the financial records of the Borrower
at reasonable  times and as often as  reasonably  requested and to make extracts
from and  copies of such  financial  records,  and  permit  any  representatives
designated  by the  Administrative  Agent or any Lender to discuss the  affairs,
finances and condition of the Borrower  with the  appropriate  officers  thereof
and, with the Borrower's consent (which shall not be unreasonably withheld), the
independent  accountants  therefor;  provided  that  if the  Borrower  shall  so
require, a single  representative shall be appointed by Lenders holding at least
50% of the aggregate  outstanding principal balance of the Loans to exercise the
rights  granted to the Lenders  under this Section 5.04;  provided  further that
when an Event of Default  exists the  Administrative  Agent or any Lender may do
any of the foregoing, upon reasonable notice, at any time during normal business
hours (without appointment of a single representative by the Lenders).

     SECTION  5.05 Use of  Proceeds.  Use the  proceeds  of the  Loans  only for
general corporate purposes,  including working capital and support of commercial
paper issuances and Securitization  Transactions  permitted hereunder as well as
one or more  acquisitions  or Asset  Exchanges;  provided  that no such proceeds
shall be used (i) to make any Restricted Payment, or (ii) directly or indirectly
in connection with any Hostile Acquisition.

<PAGE>
                                   ARTICLE VI

                               NEGATIVE COVENANTS
                               ------------------

     The Borrower  covenants  and agrees with each Lender,  the Issuing Bank and
the Administrative  Agent that, so long as this Agreement shall remain in effect
or the  principal  of or interest on any Loan (or any portion  thereof),  or any
other expenses or amounts  payable  hereunder,  shall be unpaid or any Letter of
Credit shall remain outstanding, it will not:

     SECTION 6.01 Liens;  Restrictions on Sales of Receivables.  Create,  incur,
assume,  or suffer to exist,  or permit  any of the  Principal  Subsidiaries  to
create,  incur,  assume, or suffer to exist, any Lien on any of its property now
owned or hereafter  acquired to secure any  Indebtedness  of the Borrower or any
such Principal Subsidiary, or sell or assign any accounts receivable (other than
in the  ordinary  course  of  business  substantially  in  accordance  with  the
Borrower's  past  practice),  other than: (a) Liens incurred or deposits made in
the  ordinary  course of business  to secure  surety and appeal  bonds,  leases,
return-of-money bonds and other similar obligations (exclusive of obligations of
the  payment of borrowed  money);  (b) pledges or deposits to secure the utility
obligations  of the Borrower  incurred in the ordinary  course of business;  (c)
Liens upon or in property now owned or hereafter acquired to secure Indebtedness
incurred  solely for the purpose of financing the  acquisition,  construction or
improvement of any property,  provided that such  Indebtedness  shall not exceed
the fair market value of the property being  acquired,  constructed or improved;
(d) Liens on the assets of any  Principal  Subsidiary to secure the repayment of
project financing for such Principal Subsidiary;  (e) Liens on the assets of any
Person merged or consolidated with or into (in accordance with Section 6.04) the
Borrower  or any  Principal  Subsidiary  that were in effect at the time of such
merger or  consolidation;  (f) Liens for  taxes,  assessments  and  governmental
charges or  levies,  which are not yet due or are which are being  contested  in
good faith by appropriate  proceedings;  (g) Liens securing  Indebtedness of the
Borrower or any Principal Subsidiary to the Rural Electrification Administration
or the Rural  Utilities  Service  (or any  successor  to any such  agency);  (h)
carriers', warehousemen's,  mechanics', materialmen's, repairmen's, suppliers or
other  like  Liens  arising  in the  ordinary  course of  business  relating  to
obligations not overdue for a period of more than 60 days or which are bonded or
being  contested  in good  faith by  appropriate  proceedings;  (i)  pledges  or
deposits in connection with workers' compensation laws or similar legislation or
to secure  public or statutory  obligations;  (j) Liens  incurred on deposits to
secure the performance of bids, trade contracts,  leases, statutory obligations,
surety and  appeal  bonds,  performance  bonds and other  obligations  of a like
nature  incurred in the ordinary  course of business;  (k) easements,  rights of
way,  restrictions and other encumbrances  incurred which, in the aggregate,  do
not materially interfere with the ordinary conduct of business; (l) restrictions
by  Governmental  Authorities  on the  operations,  business  or  assets  of the
Borrower  or its  Subsidiaries  that are  customary  in the  Borrower's  and its
Subsidiaries'  businesses;  (m) sales of accounts  receivable  pursuant  to, and
Liens  existing  or  deemed  to exist in  connection  with,  any  Securitization
Transactions,  provided  that the  aggregate  amount of all such  Securitization
Transactions  shall not at any time  exceed  $150,000,000;  and (n) other  Liens
securing Indebtedness outstanding in an aggregate principal amount not to exceed
$25,000,000;  provided that the Borrower or any Principal Subsidiary may create,
incur,  assume or suffer to exist other Liens (in addition to Liens  excepted by
the  foregoing  clauses  (a)  through  (n)) on its  assets so long as such Liens
equally and ratably secure the Obligations pursuant to documentation in form and
substance reasonably satisfactory to the Administrative Agent.

     SECTION 6.02 Ownership of the Principal Subsidiaries. Sell, assign, pledge,
or otherwise transfer or dispose of any shares of common stock, voting stock, or
stock  convertible  into  voting or common  stock of any  Principal  Subsidiary,
except (a) to another  Subsidiary or (b) in connection  with an Asset  Exchange;
provided that the Borrower may pledge any shares of common stock,  voting stock,
or stock convertible into voting or common stock of any Principal  Subsidiary so
long as such  pledge  equally and ratably  secures the  Obligations  pursuant to
documentation   in  form   and   substance   reasonably   satisfactory   to  the
Administrative Agent.

<PAGE>

     SECTION  6.03 Asset Sales.  Except in  connection  with an Asset  Exchange,
permit  any  Principal  Subsidiary  to sell,  assign,  or  otherwise  dispose of
telecommunications   assets   (whether  in  one   transaction  or  a  series  of
transactions),  if the net,  after-tax proceeds thereof are used by the Borrower
or any  Subsidiary  to prepay  (other than a mandatory  prepayment in accordance
with the terms of the applicable governing documents,  including pursuant to any
put provision)  Indebtedness  incurred after the date hereof which  Indebtedness
has a maturity later than the Commitment  Termination Date (other than bridge or
other  financings  incurred  in  connection  with an  asset  purchase  or  sale,
including  acquisition  indebtedness  or  indebtedness  of an acquired entity or
indebtedness  incurred  to  refinance  indebtedness  outstanding  as of the date
hereof).

     SECTION 6.04 Mergers. Merge or consolidate with, or sell, assign, lease, or
otherwise  dispose of (whether in one  transaction or a series of  transactions)
all  or  substantially  all  of its  assets  (whether  now  owned  or  hereafter
acquired), except in connection with an Asset Exchange, to any Person, or permit
any Principal Subsidiary to do so, except that any Subsidiary may merge into or,
subject to Section 6.03, transfer assets to the Borrower or any other Subsidiary
and  the  Borrower  may  merge  with  any  Person;  provided  that,  immediately
thereafter  and  after  giving  effect  thereto,  no  event  shall  occur  or be
continuing  which  constitutes an Event of Default or a Default and, in the case
of any such merger to which the Borrower is a party,  either the Borrower is the
surviving  corporation  or the  surviving  entity  (if not the  Borrower)  has a
consolidated  net worth (as  determined  in  accordance  with GAAP)  immediately
subsequent  to such merger at least equal to the  Consolidated  Net Worth of the
Borrower  immediately prior to such merger and expressly assumes the obligations
of the Borrower hereunder;  provided that,  notwithstanding  the foregoing,  the
Borrower and any of the Principal  Subsidiaries  may sell assets in the ordinary
course of its business and may sell or otherwise dispose of worn out or obsolete
equipment on a basis consistent with good business practices.

     SECTION 6.05 Restrictions on Dividends.

     (a) Enter  into or permit  any  Principal  Subsidiary  to enter  into,  any
contract or  agreement  (other  than with a  governmental  regulatory  authority
having jurisdiction over the Borrower or such Principal Subsidiary)  restricting
the ability of such Principal  Subsidiary to pay dividends or make distributions
to the  Borrower in any manner that would  impair the ability of the Borrower to
meet its present and future obligations hereunder.

     (b) In the  case  of the  Borrower  only,  declare  or  make,  directly  or
indirectly,  any  Restricted  Payment,  or incur any  obligation  (contingent or
otherwise)  to do so, in each case if any Event of Default has  occurred  and is
continuing at the time of such action or will result  therefrom  (but  excluding
the payment of dividends  declared and  announced by the Board of Directors at a
time when no Event of Default existed).

     SECTION 6.06  Transactions  with  Affiliates.  Except in connection with an
Asset  Exchange,  sell or  transfer  any  property  or assets to, or purchase or
acquire  any  property  or  assets  from,  or  otherwise  engage  in  any  other
transactions  with, any of its Affiliates,  except that as long as no Default or
Event of Default  shall have  occurred  and be  continuing,  the Borrower or any
Subsidiary may engage in any of the foregoing  transactions  (i) in the ordinary
course of business at prices and on terms and  conditions  not less favorable to
the Borrower or such Subsidiary than could be obtained on an arm's-length  basis
from unrelated  third parties,  (ii) as otherwise may be required by any Federal
or state Governmental  Authority,  or (iii) so long as such transactions are not
materially disadvantageous to the Borrower.

     SECTION 6.07 Financial Ratio.  Permit the Leverage Ratio as of the last day
of any fiscal quarter to be greater than 4.5 to 1.

<PAGE>

     SECTION 6.08 Guarantors.  Permit any Subsidiary to enter into,  directly or
indirectly,  any Guarantee of any Indebtedness of the Borrower or any Subsidiary
unless  the  Obligations  are  Guaranteed  on a pari  passu  basis  pursuant  to
documentation   in  form   and   substance   reasonably   satisfactory   to  the
Administrative  Agent,  except  (i) any  Guarantee  in  effect  at the time such
Subsidiary  becomes a Subsidiary of the Borrower,  so long as such Guarantee was
not entered into solely in contemplation of such Person becoming a Subsidiary of
the  Borrower,  (ii) any  Guarantee in effect as of the  Effective  Date that is
listed on Schedule 2, and (iii) additional Guarantees  aggregating not more than
$25,000,000 at any one time outstanding.

                                   ARTICLE VII

                                EVENTS OF DEFAULT
                                -----------------

     SECTION 7.01 Events of Default.  If any of the following events ("Events of
Default") shall occur:

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

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

          (c) any representation or warranty made or deemed made by or on behalf
     of the Borrower or any of its  Subsidiaries  in or in connection  with this
     Agreement  or any other Loan  Document  or any  amendment  or  modification
     hereof or thereof, or any waiver hereunder or thereunder, or in any report,
     certificate, financial statement or other document furnished pursuant to or
     in  connection  with this  Agreement  or any  other  Loan  Document  or any
     amendment or  modification  hereof or thereof,  or any waiver  hereunder or
     thereunder,  shall prove to have been incorrect when made or deemed made in
     any material respect;

          (d) the  Borrower  shall  fail to observe  or  perform  any  covenant,
     condition or agreement  contained in Section  5.01(f) or Section 5.05 or in
     Article VI;

          (e) the  Borrower  shall  fail to observe  or  perform  any  covenant,
     condition  or  agreement  contained  in this  Agreement  (other  than those
     specified  in clause  (a),  (b) or (d) of this  Article)  or any other Loan
     Document and such failure shall continue unremedied for a period of 30 days
     after the earlier to occur of (i) the Borrower obtaining  knowledge thereof
     and (ii) the date that notice thereof shall have been given to the Borrower
     by the Administrative Agent or any Lender;

          (f) the Borrower or any  Principal  Subsidiary  shall fail to make any
     payment of any amount in respect of Indebtedness in an aggregate  principal
     amount of  $50,000,000  or more,  when and as the same shall become due and
     payable after giving effect to any applicable grace periods;

          (g) any event or condition  occurs that results in any Indebtedness of
     any one or more  of the  Borrower  and  its  Principal  Subsidiaries  in an
     aggregate principal amount exceeding  $50,000,000 becoming due prior to its
     scheduled  maturity or that enables or permits the holder or holders of any
     such  Indebtedness  or any trustee or agent on its or their behalf to cause
     any  such  Indebtedness  to  become  due,  or to  require  the  prepayment,
     repurchase,  redemption  or  defeasance  thereof,  prior  to its  scheduled
     maturity,  in each case after giving effect to any applicable grace period;
     or any such  Indebtedness  shall be required to be prepaid (other than by a
     regularly  scheduled  required  prepayment,  pursuant  to any put right (or
     similar right) of the holder thereof, or by the exercise by the Borrower or
     any Principal  Subsidiary of its right to make a voluntary  prepayment)  in
     whole or in part prior to its stated  maturity;  or there  occurs under any
     Swap Contract an Early  Termination Date (as defined in such Swap Contract)
     resulting  from (A) any event of  default  under such Swap  Contract  as to
     which the Borrower or any Principal  Subsidiary is the Defaulting Party (as
     defined in such Swap Contract) or (B) any Termination  Event (as defined in
     such Swap  Contract)  under such Swap  Contract as to which the Borrower or
     any  Principal  Subsidiary  is an  Affected  Party (as defined in such Swap
     Contract)  and, in either  event,  the Swap  Termination  Value owed by the
     Borrower  or  such   Subsidiary  as  a  result   thereof  is  greater  than
     $50,000,000;  provided  that  this  clause  (g)  shall  not  apply  to  any
     Indebtedness  that  becomes  due as a result of a voluntary  redemption  or
     repayment of such Indebtedness effected in accordance with the terms of the
     agreement  governing such  Indebtedness and which is not prohibited by this
     Agreement;

<PAGE>

          (h) an  involuntary  proceeding  shall be commenced or an  involuntary
     petition  shall be filed in a court of competent  jurisdiction  seeking (i)
     liquidation,  reorganization  or other relief in respect of the Borrower or
     any of its Principal Subsidiaries or its debts, or of a substantial part of
     its assets, under any Federal or state bankruptcy, insolvency, receivership
     or similar  law now or  hereafter  in effect or (ii) the  appointment  of a
     receiver, trustee, custodian, sequestrator, conservator or similar official
     for the Borrower or any of its Principal  Subsidiaries or for a substantial
     part of its assets,  and,  in any such case,  such  proceeding  or petition
     shall continue  undismissed  for a period of 60 or more days or an order or
     decree approving or ordering any of the foregoing shall be entered;

          (i)  the  Borrower  or any of its  Principal  Subsidiaries  shall  (i)
     voluntarily   commence  any   proceeding  or  file  any  petition   seeking
     liquidation,  reorganization  or other  relief  under any  Federal or state
     bankruptcy,  insolvency,  receivership  or similar law now or  hereafter in
     effect,  (ii) consent to the institution of, or fail to contest in a timely
     and appropriate  manner, any proceeding or petition described in clause (h)
     of this  Article,  (iii)  apply  for or  consent  to the  appointment  of a
     receiver, trustee, custodian, sequestrator, conservator or similar official
     for the Borrower or any of its Principal  Subsidiaries or for a substantial
     part of its assets, (iv) file an answer admitting the material  allegations
     of a petition filed against it in any such  proceeding,  (v) make a general
     assignment  for the  benefit of  creditors  or (vi) take any action for the
     purpose of effecting any of the foregoing;

          (j) one or more  judgments  for the  payment of money in an  aggregate
     amount in excess of $50,000,000  shall be rendered  against the Borrower or
     any of its  Subsidiaries  or any  combination  thereof  and the same  shall
     remain  undischarged  for a period  of 30  consecutive  days  during  which
     execution shall not be effectively  stayed,  or any action shall be legally
     taken by a  judgment  creditor  to attach  or levy  upon any  assets of the
     Borrower or any of its Subsidiaries to enforce any such judgment;

          (k) a Plan  shall  fail  to  maintain  the  minimum  funding  standard
     required  by  Section  412(a)  of the Code for any plan year or a waiver of
     such standard is sought or granted under  Section  412(d),  or a Plan is or
     shall have been terminated or the subject of termination  proceedings under
     ERISA, or the Borrower or an ERISA Affiliate has incurred a liability to or
     on account of a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA,
     and there  shall  result  from any such event or events a Material  Adverse
     Effect; or

<PAGE>

          (l) a Change in Control shall occur;

then,  and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Section 7.01), and at any time thereafter
during the continuance of such event, the Administrative Agent at the request of
the Required  Lenders shall,  by notice to the Borrower,  take any or all of the
following   actions,   at  the  same  or  different  times:  (i)  terminate  the
Commitments,  and thereupon the Commitments  shall terminate  immediately,  (ii)
declare the Loans then  outstanding  to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable),  and thereupon the principal of the Loans so
declared to be due and payable,  together with accrued  interest thereon and all
fees and other obligations of the Borrower accrued  hereunder,  shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower, and (iii) require that
the Borrower cash collaterize the LC Exposure  pursuant to Section 2.04(k);  and
in case of any event with respect to the Borrower described in clause (h) or (i)
of this Article, the Commitments shall automatically terminate and the principal
of the Loans then  outstanding,  together with accrued  interest thereon and all
fees  and  other   obligations  of  the  Borrower   accrued   hereunder,   shall
automatically  become due and payable and the Borrower  shall  automatically  be
required to provide such cash collateral,  without presentment,  demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower.

                                  ARTICLE VIII

                                     AGENCY
                                     ------

          SECTION 8.01 Administrative Agent.

     Each of the Lenders and the Issuing Bank hereby  irrevocably  appoints DBAG
NY to act on its  behalf as the  Administrative  Agent  hereunder  and under the
other  Loan  Documents  and  authorizes  the  Administrative  Agent to take such
actions  on its behalf  and to  exercise  such  powers as are  delegated  to the
Administrative Agent by the terms hereof or thereof,  together with such actions
and powers as are reasonably  incidental thereto. The provisions of this Article
are solely for the  benefit of the  Administrative  Agent,  the  Lenders and the
Issuing  Bank,  and  the  Borrower  shall  not  have  rights  as a  third  party
beneficiary  of any of  such  provisions  except  with  respect  to a  successor
Administrative Agent.

     The Person serving as the  Administrative  Agent  hereunder  shall have the
same rights and powers in its  capacity as a Lender as any other  Lender and may
exercise  the same as though it were not the  Administrative  Agent and the term
"Lender" or "Lenders" shall,  unless otherwise expressly indicated or unless the
context  otherwise  requires,  include the Person serving as the  Administrative
Agent hereunder in its individual  capacity.  Such Person and its Affiliates may
accept  deposits  from,  lend money to, act as the  financial  advisor or in any
other  advisory  capacity for and generally  engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if such Person were
not the Administrative  Agent hereunder and without any duty to account therefor
to the Lenders.

     The  Administrative  Agent shall not have any duties or obligations  except
those  expressly  set forth  herein  and in the other  Loan  Documents.  Without
limiting the generality of the foregoing, the Administrative Agent:

          (a) shall not be subject to any  fiduciary  or other  implied  duties,
     regardless of whether a Default has occurred and is continuing;

          (b)  shall  not  have any duty to take  any  discretionary  action  or
     exercise any discretionary  powers,  except discretionary rights and powers
     expressly  contemplated  hereby or by the  other  Loan  Documents  that the
     Administrative  Agent is required to exercise as directed in writing by the
     Required  Lenders  (or such other  number or  percentage  of the Lenders as
     shall be  expressly  provided  for herein or in the other Loan  Documents),
     provided  that the  Administrative  Agent shall not be required to take any
     action that,  in its opinion or the opinion of its counsel,  may expose the
     Administrative  Agent to liability or that is contrary to any Loan Document
     or applicable law; and

<PAGE>

          (c) shall not,  except as expressly  set forth herein and in the other
     Loan Documents,  have any duty to disclose, and shall not be liable for the
     failure to disclose, any information relating to the Borrower or any of its
     Affiliates that is communicated to or obtained by the Person serving as the
     Administrative Agent or any of its Affiliates in any capacity.

The  Administrative  Agent shall not be liable for any action taken or not taken
by it (i) with the  consent or at the request of the  Required  Lenders (or such
other  number or  percentage  of the  Lenders as shall be  necessary,  or as the
Administrative  Agent shall believe in good faith shall be necessary,  under the
circumstances  as  provided  in Section  9.02) or (ii) in the absence of its own
gross negligence or willful misconduct. The Administrative Agent shall be deemed
not to have  knowledge of any Default  unless and until notice  describing  such
Default is given to the  Administrative  Agent by the Borrower,  a Lender or the
Issuing Bank.

     The  Administrative  Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement,  warranty or representation made in
or in  connection  with this  Agreement  or any other  Loan  Document,  (ii) the
contents of any  certificate,  report or other document  delivered  hereunder or
thereunder or in  connection  herewith or therewith,  (iii) the  performance  or
observance of any of the covenants,  agreements or other terms or conditions set
forth herein or therein or the  occurrence  of any Default,  (iv) the  validity,
enforceability,  effectiveness or genuineness of this Agreement,  any other Loan
Document or any other agreement,  instrument or document or (v) the satisfaction
of any  condition  set forth in Article IV or  elsewhere  herein,  other than to
confirm   receipt  of  items   expressly   required  to  be   delivered  to  the
Administrative Agent.

     The  Administrative  Agent shall be  entitled  to rely upon,  and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement,  instrument,  document or other  writing  (including  any  electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Administrative Agent also may rely upon any statement made to
it orally or by  telephone  and  believed  by it to have been made by the proper
Person,  and shall not incur any liability for relying  thereon.  In determining
compliance with any condition hereunder to the making of a Loan, or the issuance
of a Letter of Credit,  that by its terms must be fulfilled to the  satisfaction
of a Lender or the Issuing Bank, the Administrative  Agent may presume that such
condition  is  satisfactory  to such  Lender  or the  Issuing  Bank  unless  the
Administrative Agent shall have received notice to the contrary from such Lender
or the  Issuing  Bank prior to the making of such Loan or the  issuance  of such
Letter of Credit. The  Administrative  Agent may consult with legal counsel (who
may be counsel for the  Borrower),  independent  accountants  and other  experts
selected by it, and shall not be liable for any action  taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

     The Administrative Agent may perform any and all of its duties and exercise
its rights and powers  hereunder or under any other Loan  Document by or through
any  one  or  more  sub-agents  appointed  by  the  Administrative   Agent.  The
Administrative  Agent  and any such  sub-agent  may  perform  any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties.  The  exculpatory  provisions  of this Article  shall apply to any such
sub-agent and to the Related  Parties of the  Administrative  Agent and any such
sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit  facilities  provided for herein as well as activities
as Administrative Agent.

<PAGE>

     The Administrative  Agent may at any time give notice of its resignation to
the Lenders, the Issuing Bank and the Borrower.  Upon receipt of any such notice
of  resignation,  the  Required  Lenders  shall  have  the  right to  appoint  a
successor,  which  shall be a bank with an office in New York,  New York,  or an
Affiliate of any such bank with an office in New York,  New York and which shall
be reasonably  acceptable to the Borrower.  If no such successor shall have been
so appointed by the Required  Lenders and shall have accepted  such  appointment
within 30 days  after the  retiring  Administrative  Agent  gives  notice of its
resignation, then the retiring Administrative Agent may on behalf of the Lenders
and the Issuing  Bank,  appoint a  successor  Administrative  Agent  meeting the
qualifications set forth above,  provided that if the Administrative Agent shall
notify the Borrower and the Lenders that no qualifying  Person has accepted such
appointment,  then  such  resignation  shall  nonetheless  become  effective  in
accordance with such notice and (1) the retiring  Administrative  Agent shall be
discharged  from its duties and  obligations  hereunder and under the other Loan
Documents and (2) all payments, communications and determinations provided to be
made by, to or through the  Administrative  Agent shall instead be made by or to
each  Lender and the  Issuing  Bank  directly,  until such time as the  Required
Lenders appoint a successor  Administrative  Agent as provided for above in this
paragraph.  Upon the acceptance of a successor's  appointment as  Administrative
Agent  hereunder,  such successor shall succeed to and become vested with all of
the  rights,  powers,  privileges  and  duties  of  the  retiring  (or  retired)
Administrative Agent, and the retiring  Administrative Agent shall be discharged
from all of its  duties  and  obligations  hereunder  or under  the  other  Loan
Documents  (if not  already  discharged  therefrom  as  provided  above  in this
paragraph). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor  unless  otherwise  agreed
between the  Borrower  and such  successor.  After the  retiring  Administrative
Agent's resignation hereunder and under the other Loan Documents, the provisions
of this  Article  and Section  9.03 shall  continue in effect for the benefit of
such retiring  Administrative Agent, its sub-agents and their respective Related
Parties in respect  of any  actions  taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent.

     Each Lender and the Issuing Bank  acknowledges  that it has,  independently
and without reliance upon the Administrative Agent or any other Lender or any of
their  Related  Parties and based on such  documents and  information  as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement.  Each Lender and the  Issuing  Bank also  acknowledges  that it will,
independently  and without reliance upon the  Administrative  Agent or any other
Lender  or any of  their  Related  Parties  and  based  on  such  documents  and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan  Document  or any related  agreement  or any  document  furnished
hereunder or thereunder.

     Except as  otherwise  provided  in  Section  9.02(b)  with  respect to this
Agreement,  the Administrative Agent may, with the prior consent of the Required
Lenders (but not otherwise),  consent to any modification,  supplement or waiver
under any of the Loan Documents.

     SECTION  8.02   Bookrunners,   Etc..   Anything   herein  to  the  contrary
notwithstanding,  none of the  bookrunners,  arrangers,  syndication  agents  or
documentation  agents  listed on the cover page  hereof  shall have any  powers,
duties  or  responsibilities  under  this  Agreement  or any of the  other  Loan
Documents, except in its capacity, as applicable, as the Administrative Agent, a
Lender or the Issuing Bank hereunder.

                                   ARTICLE IX

                                  MISCELLANEOUS
                                  -------------

<PAGE>

     SECTION 9.01 Notices.

     (a)  Notices  Generally.  Except as provided in  paragraph  (b) below,  all
notices, requests, demands and other communications provided for herein shall be
in writing and shall be delivered by hand or overnight  courier service,  mailed
by certified or registered mail or sent by telecopier, as follows:

          (i) if to the Borrower,  to it at Citizens  Communications  Company, 3
     High Ridge  Park,  Stamford,  Connecticut  06905,  Attention  of  Treasurer
     (Telecopier No. 203-614-4602; Telephone No. 203-614-5124;  Electronic Mail:
     darmour@czn.com),  with a copy to Citizens  Communications  Company, 3 High
     Ridge Park,  Stamford,  Connecticut  06905,  Attention  of General  Counsel
     (Telecopier No. 203-614-4651; Telephone No. 203-614-5600;  Electronic Mail:
     hilary.glassman@czn.com);

          (ii) if to the  Administrative  Agent,  to  Deutsche  Bank AG New York
     Branch,  60 Wall  Street,  New York,  New York 10005,  Attention  of Maxeen
     Jacques   (Telecopier  No.   201-593-2307;   Telephone  No.   201-593-2483;
     Electronic Mail: maxeen.jacques@db.com);

          (iii) if to DBAG NY as  Issuing  Bank,  to  Deutsche  Bank AG New York
     Branch,  60 Wall  Street,  New  York,  New York  10005,  Attention  of Lyyn
     Nicaretta   (Telecopier  No.  212-797-0780;   Telephone  No.  212-250-9631;
     Electronic  Mail:  lynn.nicaretta@db.com),  with a copy to Deutsche Bank AG
     New York Branch, 60 Wall Street, New York, New York 10005, Attention of Ann
     Thompson   (Telecopier  No.   212-797-0780;   Telephone  No.  212-250-9639;
     Electronic Mail: ann.thompson@db.com); and

          (iv) if to a Lender,  to it at its address (or telecopier  number) set
     forth in its Administrative Questionnaire.

Notices sent by hand or  overnight  courier  service,  or mailed by certified or
registered mail, shall be deemed to have been given when received;  notices sent
by telecopier  shall be deemed to have been given when sent (except that, if not
given during normal  business hours for the  recipient,  shall be deemed to have
been  given  at the  opening  of  business  on the  next  business  day  for the
recipient).  Notices delivered through  electronic  communications to the extent
provided  in  paragraph  (b)  below,  shall be  effective  as  provided  in said
paragraph (b).

     (b)  Electronic  Communications.  Notices and other  communications  to the
Lenders  and the  Issuing  Bank  hereunder  may be  delivered  or  furnished  by
electronic  communication  (including e-mail and Internet or intranet  websites)
pursuant to procedures approved by the Administrative  Agent,  provided that the
foregoing  shall not apply to notices to any Lender or the Issuing Bank pursuant
to Article II if such Lender or the Issuing  Bank, as  applicable,  has notified
the  Administrative  Agent that it is incapable of receiving  notices under such
Article by electronic  communication.  The Administrative  Agent or the Borrower
may, in its discretion,  agree to accept notices and other  communications to it
hereunder by electronic  communications  pursuant to procedures  approved by it,
provided that approval of such  procedures may be limited to particular  notices
or communications.

     Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications  sent to an  e-mail  address  shall be deemed  received  upon the
sender's receipt of an  acknowledgement  from the intended recipient (such as by
the "return receipt requested"  function,  as available,  return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent  during the normal  business  hours of the  recipient,  such  notice or
communication  shall be deemed to have been sent at the  opening of  business on
the next  business day for the  recipient,  and (ii)  notices or  communications
posted to an Internet  or intranet  website  shall be deemed  received  upon the
deemed  receipt by the intended  recipient at its e-mail address as described in
the foregoing  clause (i) of notification  that such notice or  communication is
available and identifying the website address therefor.

<PAGE>

     (c) Change of  Address,  Etc.  Any party  hereto may change its  address or
telecopier  number for notices and other  communications  hereunder by notice to
the other  parties  hereto (or,  in the case of any such change by a Lender,  by
notice to the Borrower and the Administrative Agent).

     SECTION 9.02 Waivers; Amendments.

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

     (b)  Amendments.  Neither this  Agreement nor any  provision  hereof may be
waived,  amended or modified  except  pursuant to an agreement or  agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower
and the Administrative Agent with the consent of the Required Lenders;  provided
that no such agreement shall

          (i) increase the Commitment of any Lender without the written  consent
     of such Lender,

          (ii) reduce the  principal  amount of any Loan or LC  Disbursement  or
     reduce the rate of interest thereon,  or reduce any fees payable hereunder,
     without the written consent of each Lender adversely affected thereby,

          (iii) postpone the scheduled  date of payment of the principal  amount
     of any  Loan or LC  Disbursement,  or any  interest  thereon,  or any  fees
     payable  hereunder,  or reduce  the  amount  of,  waive or excuse  any such
     payment,  or postpone the scheduled  date of expiration of any  Commitment,
     without the written consent of each Lender affected thereby,

          (iv)  change  Section  2.15(b) or (c) in a manner that would alter the
     pro rata sharing of payments  required  thereby without the written consent
     of each Lender, or

          (v) change any of the  provisions of this Section or the percentage in
     the definition of the term "Required Lenders" or any other provision hereof
     specifying the number or percentage of Lenders required to waive,  amend or
     modify any rights hereunder or make any  determination or grant any consent
     hereunder, without the written consent of each Lender;

and provided  further that no such  agreement  shall amend,  modify or otherwise
affect  the rights or duties of the  Administrative  Agent or the  Issuing  Bank
hereunder without the prior written consent of the  Administrative  Agent or the
Issuing Bank, as the case may be.

<PAGE>

          SECTION 9.03 Expenses; Indemnity; Damage Waiver.

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

     (b)  Indemnification  by the  Borrower.  The Borrower  shall  indemnify the
Administrative  Agent (and any sub-agent  thereof),  each Lender and the Issuing
Bank,  and each Related Party of any of the foregoing  Persons (each such Person
being called an "Indemnitee")  against,  and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including
the  reasonable  fees,   charges  and  disbursements  of  any  counsel  for  any
Indemnitee),  incurred by any  Indemnitee or asserted  against any Indemnitee by
any third party or by the Borrower  arising out of, in connection  with, or as a
result of (i) the  execution  or  delivery  of this  Agreement,  any other  Loan
Document or any  agreement or  instrument  contemplated  hereby or thereby,  the
performance by the parties hereto of their respective  obligations  hereunder or
thereunder  or the  consummation  of the  Transactions  contemplated  hereby  or
thereby,  (ii) any Loan or Letter of  Credit or the use or  proposed  use of the
proceeds therefrom  (including any refusal by the Issuing Bank to honor a demand
for payment  under a Letter of Credit if the  documents  presented in connection
with such demand do not strictly comply with the terms of such Letter of Credit)
or  (iii)  any  actual  or  prospective  claim,  litigation,   investigation  or
proceeding relating to any of the foregoing,  whether based on contract, tort or
any other  theory,  whether  brought by a third  party or by the  Borrower,  and
regardless  of whether any  Indemnitee  is a party  thereto,  provided that such
indemnity shall not, as to any Indemnitee,  be available to the extent that such
losses,  claims,  damages,  liabilities or related  expenses are determined by a
court of  competent  jurisdiction  by final and  nonappealable  judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.

     (c)  Reimbursement  by  Lenders.  To the extent that the  Borrower  for any
reason fails to indefeasibly  pay any amount required under paragraph (a) or (b)
of this Section to be paid by it to the  Administrative  Agent (or any sub-agent
thereof) or the Issuing Bank or any Related Party of any of the foregoing,  each
Lender  severally  agrees  to pay to  the  Administrative  Agent  (or  any  such
sub-agent) or the Issuing Bank or such Related  Party,  as the case may be, such
Lender's  Applicable  Percentage  (determined as of the time that the applicable
unreimbursed  expense or  indemnity  payment is sought) of such  unpaid  amount,
provided that the  unreimbursed  expense or  indemnified  loss,  claim,  damage,
liability  or related  expense,  as the case may be, was incurred by or asserted
against the Administrative  Agent (or any such sub-agent) or the Issuing Bank in
its  capacity  as such,  or against any  Related  Party of any of the  foregoing
acting for the Administrative  Agent (or any such sub-agent) or the Issuing Bank
in connection  with such  capacity.  The  obligations  of the Lenders under this
paragraph (c) are several obligations.

<PAGE>

     (d) Waiver of Consequential  Damages,  Etc. To the fullest extent permitted
by applicable law, the Borrower shall not assert,  and hereby waives,  any claim
against any  Indemnitee,  on any theory of  liability,  for  special,  indirect,
consequential  or  punitive  damages  (as  opposed to direct or actual  damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby or thereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds  thereof.  No Indemnitee  referred to in paragraph (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other  information  transmission  systems in connection  with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.

     (e) Payments.  All amounts due under this Section shall be payable promptly
after demand therefor.

     SECTION 9.04 Successors and Assigns.

     (a)  Successors  and Assigns  Generally.  The  provisions of this Agreement
shall be binding  upon and inure to the benefit of the parties  hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or  otherwise  transfer  any of its rights or  obligations  hereunder
without the prior written consent of the  Administrative  Agent and each Lender,
and no Lender may assign or otherwise  transfer any of its rights or obligations
hereunder  except  (i) to an  assignee  in  accordance  with the  provisions  of
paragraph (b) of this Section,  (ii) by way of  participation in accordance with
the  provisions  of  paragraph  (d) of this Section or (iii) by way of pledge or
assignment of a security  interest  subject to the restrictions of paragraph (f)
of this Section  (and any other  attempted  assignment  or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be  construed  to confer upon any Person  (other than the parties  hereto,
their  respective  successors and assigns  permitted  hereby,  the Issuing Bank,
Participants to the extent provided in paragraph (d) of this Section and, to the
extent  expressly  contemplated  hereby,  the  Related  Parties  of  each of the
Administrative  Agent,  the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

     (b)  Assignments  by  Lenders.  Any Lender may at any time assign to one or
more  assignees  all or a portion  of its  rights  and  obligations  under  this
Agreement  (including  all or a portion of its  Commitment  and the Loans at the
time owing to it) to any  Person;  provided  that any such  assignment  shall be
subject to the following conditions:

     (i) Minimum Amounts.

          (A) in the case of an assignment of the entire remaining amount of the
     assigning  Lender's  Commitment and the Loans at the time owing to it or in
     the case of an  assignment  to a Lender or an  Affiliate  of a  Lender,  no
     minimum amount need be assigned; and

          (B) in any case not described in paragraph  (b)(i)(A) of this Section,
     the aggregate  amount of the  Commitment  (which for this purpose  includes
     Loans outstanding  thereunder) or, if the applicable Commitment is not then
     in effect, the principal  outstanding balance of the Loans of the assigning
     Lender  subject  to each  such  assignment  (determined  as of the date the
     Assignment and Assumption  with respect to such  assignment is delivered to
     the Administrative Agent or, if "Trade Date" is specified in the Assignment
     and Assumption,  as of the Trade Date) shall not be less than  $10,000,000,
     unless each of the Administrative Agent and, so long as no Event of Default
     has occurred and is continuing,  the Borrower otherwise consents (each such
     consent not to be unreasonably withheld or delayed).

<PAGE>

     (ii)  Proportionate  Amounts.  Each partial  assignment shall be made as an
assignment  of a  proportionate  part of all the assigning  Lender's  rights and
obligations  under this  Agreement  with  respect to the Loan or the  Commitment
assigned.

     (iii)  Required  Consents.  No consent shall be required for any assignment
except to the extent  required by  paragraph  (b)(i)(B)  of this Section and, in
addition:

          (A) the consent of the Borrower  (such consent not to be  unreasonably
     withheld or delayed)  shall be required  unless (x) an Event of Default has
     occurred  and is  continuing  at the  time of such  assignment  or (y) such
     assignment is to a Lender or an Affiliate of a Lender;

          (B) the consent of the  Administrative  Agent (such  consent not to be
     unreasonably  withheld or delayed) shall be required if such  assignment is
     to a Person that is not a Lender or an Affiliate of a Lender; and

          (C)  the  consent  of the  Issuing  Bank  shall  be  required  for any
     assignment  that increases the obligation of the assignee to participate in
     exposure  under  one or  more  Letters  of  Credit  (whether  or  not  then
     outstanding).

     (iv)  Assignment  and  Assumption.  The  parties to each  assignment  shall
execute and deliver to the  Administrative  Agent an Assignment and  Assumption,
together with a processing and recordation fee of $3,500,  and the assignee,  if
it is not a Lender,  shall deliver to the Administrative Agent an Administrative
Questionnaire.

     (v) No Assignment to the Borrower.  No such assignment shall be made to the
Borrower or any of the Borrower's Affiliates or Subsidiaries.

     (vi) No Assignment to Natural Persons.  No such assignment shall be made to
a natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement  and, to the extent of the interest  assigned by such  Assignment  and
Assumption,  have the rights and  obligations of a Lender under this  Agreement,
and the  assigning  Lender  thereunder  shall,  to the  extent  of the  interest
assigned by such  Assignment and  Assumption,  be released from its  obligations
under this Agreement (and, in the case of an Assignment and Assumption  covering
all of the assigning Lender's rights and obligations under this Agreement,  such
Lender  shall cease to be a party  hereto) but shall  continue to be entitled to
the  benefits  of  Section  2.13 and  Section  9.03  with  respect  to facts and
circumstances  occurring  prior to the effective  date of such  assignment.  Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this  paragraph  shall be treated for purposes of this
Agreement  as a sale by such  Lender  of a  participation  in  such  rights  and
obligations in accordance with paragraph (d) of this Section.

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

<PAGE>

     (d) Participations.  Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative  Agent, sell participations to any
Person  (other than a natural  person or the  Borrower or any of the  Borrower's
Affiliates or  Subsidiaries)  in all or a portion of such Lender's rights and/or
obligations  under this Agreement  (including all or a portion of its Commitment
and/or the Loans owing to it); provided that (i) such Lender's obligations under
this  Agreement  shall remain  unchanged,  (ii) such Lender shall remain  solely
responsible to the other parties hereto for the performance of such  obligations
and (iii) the Borrower,  the  Administrative  Agent, the Lenders and the Issuing
Bank shall  continue to deal solely and directly  with such Lender in connection
with such Lender's rights and obligations under this Agreement.

     Any  agreement  or  instrument  pursuant  to  which a Lender  sells  such a
participation  shall  provide  that such Lender  shall  retain the sole right to
enforce this Agreement and to approve any amendment,  modification  or waiver of
any provision of this Agreement;  provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any  amendment,  modification  or waiver  described  in Section  9.02(b) that
affects such Participant. Subject to paragraph (e) of this Section, the Borrower
agrees that each  Participant  shall be entitled to the benefits of Section 2.13
to the same  extent as if it were a Lender  and had  acquired  its  interest  by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each  Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender,  provided that such Participant agrees to be subject to
Section 2.15(d) as though it were a Lender.

     (e)  Limitations  upon  Participant  Rights.  A  Participant  shall  not be
entitled to receive any greater payment under Section 2.12 and Section 2.14 than
the  applicable  Lender would have been  entitled to receive with respect to the
participation sold to such Participant,  unless the sale of the participation to
such  Participant  is  made  with  the  Borrower's  prior  written  consent.   A
Participant  that  would be a Foreign  Lender  if it were a Lender  shall not be
entitled to the  benefits of Section 2.14 unless the Borrower is notified of the
participation  sold to such  Participant and such  Participant  agrees,  for the
benefit of the  Borrower,  to comply  with  Section  2.14(e) as though it were a
Lender.

     (f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest  in all or any  portion of its rights  under this  Agreement  to secure
obligations  of such  Lender,  including  any  pledge  or  assignment  to secure
obligations  to a  Federal  Reserve  Bank;  provided  that  no  such  pledge  or
assignment  shall release such Lender from any of its  obligations  hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

     SECTION 9.05  Survival.  All  covenants,  agreements,  representations  and
warranties  made  by  the  Borrower  herein  and in the  certificates  or  other
instruments  delivered in connection with or pursuant to this Agreement shall be
considered  to have been  relied  upon by the  other  parties  hereto  and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit,  regardless of any investigation  made by
any  such  other   party  or  on  its  behalf  and   notwithstanding   that  the
Administrative  Agent,  the  Issuing  Bank or any  Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is  extended  hereunder,  and shall  continue in full force and effect as
long as the  principal of or any accrued  interest on any Loan or any fee or any
other  amount  payable  under this  Agreement is  outstanding  and unpaid or any
Letter of Credit is outstanding and so long as the Commitments  have not expired
or terminated.  The provisions of Section 2.12,  Section 2.13,  Section 2.14 and
Section 9.03 shall survive and remain in full force and effect regardless of the
consummation  of the  Transactions  contemplated  hereby,  the  repayment of the
Loans,  the  expiration  or  termination  of  the  Letters  of  Credit  and  the
Commitments or the termination of this Agreement or any provision hereof.

<PAGE>

     SECTION   9.06   Counterparts;   Integration;   Effectiveness;   Electronic
Execution.

     (a)  Counterparts;   Integration;  Effectiveness.  This  Agreement  may  be
executed  in  counterparts   (and  by  different  parties  hereto  in  different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Agreement and the other
Loan Documents,  and any separate letter agreements with respect to fees payable
to the  Administrative  Agent,  constitute the entire contract between and among
the parties  relating to the subject  matter  hereof and  supersede  any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof.  Except as provided in Section 4.01,  this Agreement shall become
effective when it shall have been executed by the Administrative  Agent and when
the  Administrative  Agent shall have received  counterparts  hereof that,  when
taken  together,  bear  the  signatures  of each of the  other  parties  hereto.
Delivery of an executed  counterpart  of a signature  page to this  Agreement by
electronic  transmission  shall be effective as delivery of a manually  executed
counterpart of this Agreement.

     (b) Electronic Execution of Assignments.  The words "execution",  "signed",
"signature"  and words of like import in any Assignment and Assumption  shall be
deemed to include electronic  signatures or the keeping of records in electronic
form,   each  of  which  shall  be  of  the  same  legal  effect,   validity  or
enforceability  as a manually  executed  signature  or the use of a  paper-based
recordkeeping  system,  as the case may be, to the extent and as provided for in
any applicable law,  including the Federal  Electronic  Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other  similar  state laws based on the Uniform  Electronic  Transactions
Act.

     SECTION  9.07  Severability.  Any  provision of this  Agreement  held to be
invalid,  illegal  or  unenforceable  in  any  jurisdiction  shall,  as to  such
jurisdiction,  be  ineffective to the extent of such  invalidity,  illegality or
unenforceability without affecting the validity,  legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a  particular  jurisdiction  shall not  invalidate  such  provision in any other
jurisdiction.

     SECTION 9.08 Right of Setoff.  If an Event of Default  shall have  occurred
and be continuing,  each Lender,  the Issuing Bank and each of their  respective
Affiliates  is  hereby  authorized  at any time and  from  time to time,  to the
fullest  extent  permitted by  applicable  law, to set off and apply any and all
deposits (general or special, time or demand,  provisional or final, in whatever
currency) at any time held and other  obligations (in whatever  currency) at any
time owing by such Lender,  the Issuing Bank or any such Affiliate to or for the
credit or the account of the Borrower  against any and all of the obligations of
the Borrower now or hereafter  existing  under this  Agreement or any other Loan
Document to such Lender or the Issuing Bank, irrespective of whether or not such
Lender or the Issuing  Bank shall have made any demand  under this  Agreement or
any other Loan  Document and although  such  obligations  of the Borrower may be
contingent  or unmatured or are owed to a branch or office of such Lender or the
Issuing  Bank  different  from the  branch or office  holding  such  deposit  or
obligated on such indebtedness.  The rights of each Lender, the Issuing Bank and
their  respective  Affiliates under this Section are in addition to other rights
and remedies  (including  other rights of setoff) that such Lender,  the Issuing
Bank or their  respective  Affiliates may have. Each Lender and the Issuing Bank
agrees to notify the Borrower and the  Administrative  Agent  promptly after any
such setoff and application, provided that the failure to give such notice shall
not affect the validity of such setoff and application.

     SECTION 9.09 Governing Law; Jurisdiction; Etc.

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

<PAGE>

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

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

     (d) Service of Process.  Each party hereto irrevocably  consents to service
of process in the manner  provided for notices in Section 9.01.  Nothing in this
Agreement  will  affect  the right of any party  hereto to serve  process in any
other manner permitted by applicable law.

     SECTION  9.10 WAIVER OF JURY TRIAL.  EACH PARTY HERETO  HEREBY  IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS  AGREEMENT  OR ANY OTHER LOAN  DOCUMENT OR THE  TRANSACTIONS
CONTEMPLATED  HEREBY OR THEREBY  (WHETHER  BASED ON CONTRACT,  TORT OR ANY OTHER
THEORY).  EACH  PARTY  HERETO (A)  CERTIFIES  THAT NO  REPRESENTATIVE,  AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,  EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER  PERSON  WOULD  NOT,  IN THE  EVENT OF  LITIGATION,  SEEK TO  ENFORCE  THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES  THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     SECTION  9.11  Headings.  Article  and  Section  headings  and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement  and  shall  not  affect  the   construction  of,  or  be  taken  into
consideration in interpreting, this Agreement.

     SECTION 9.12 Treatment of Certain Information; Confidentiality. Each of the
Administrative  Agent,  the Issuing Bank and the Lenders  agrees to maintain the
confidentiality  of the Information (as defined below),  except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates' respective
partners,   directors,   officers,   employees,   agents,   advisors  and  other
representatives (it being understood that the Persons to whom such disclosure is
made  will be  informed  of the  confidential  nature  of such  Information  and
instructed to keep such Information  confidential),  (b) to the extent requested
by any regulatory  authority  purporting to have jurisdiction over it (including
any  self-regulatory  authority,  such as the National  Association of Insurance
Commissioners)  (and, in the case of any  non-ordinary  course  disclosure under
this clause (b), the disclosing party shall use its reasonable efforts to inform
the  Borrower  thereof  prior to any such  disclosure  and, in any event,  shall
promptly  inform  the  Borrower  thereof,  in each  case to the  extent  legally
permitted  to do  so),  (c)  to  the  extent  required  by  applicable  laws  or
regulations  or by any  subpoena  or similar  legal  process  (in which case the
disclosing party shall use its reasonable efforts to inform the Borrower thereof
prior to any such  disclosure  and,  in any  event,  shall  promptly  inform the
Borrower thereof, in each case to the extent legally permitted to do so), (d) to
any other party  hereto,  (e) in  connection  with the  exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding  relating
to this  Agreement  or any other  Loan  Document  or the  enforcement  of rights
hereunder  or  thereunder,  (f) subject to an  agreement  containing  provisions
substantially  the same as  those of this  Section,  to (i) any  assignee  of or
Participant  in, or any  prospective  assignee of or Participant  in, any of its
rights or  obligations  under this  Agreement or (ii) any actual or  prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such  Information  (x)  becomes  publicly  available  other than as a
result  of  a  breach  of  this   Section  or  (y)  becomes   available  to  the
Administrative  Agent, the Issuing Bank or any Lender or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower.

<PAGE>

     For purposes of this Section,  "Information" means all information received
from the Borrower or any of its Subsidiaries  relating to the Borrower or any of
its  Subsidiaries  or any of their  respective  businesses,  other than any such
information that is available to the  Administrative  Agent, the Issuing Bank or
any Lender on a nonconfidential basis prior to disclosure by the Borrower or any
of its Subsidiaries; provided that, in the case of information received from the
Borrower or any of its Subsidiaries  after the date hereof,  such information is
clearly identified at the time of delivery as confidential.  Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered  to have complied with its  obligation to do so if such Person has
exercised  the same  degree  of care to  maintain  the  confidentiality  of such
Information as such Person would accord to its own confidential information.

     SECTION 9.13 USA PATRIOT Act. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed  into law  October  26,  2001)),  such Lender may be required to obtain,
verify and record  information that identifies the Borrower,  which  information
includes the name and address of the Borrower  and other  information  that will
allow such Lender to identify the Borrower in accordance with said Act.

<PAGE>

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

                                         CITIZENS COMMUNICATIONS COMPANY

                                         By /s/ Donald R. Shassian
                                            -------------------------
                                            Name: Donald R. Shassian
                                            Title: Chief Financial Officer

                                         DEUTSCHE BANK AG NEW YORK BRANCH,
                                             as Administrative Agent

                                         By /s/ Yvonne Tilden
                                            --------------------------
                                             Name: Yvonne Tilden
                                             Title: Vice President

                                         By /s/ Andreas Neumeier
                                            ---------------------------
                                             Name: Andreas Neumeier
                                             Title: Director

<PAGE>

                                     LENDERS
                                     -------

                                           DEUTSCHE BANK AG NEW YORK BRANCH

                                           By /s/ Yvonne Tilden
                                              -------------------------
                                               Name: Yvonne Tilden
                                               Title: Vice President

                                           By /s/ Andreas Neumeier
                                              -------------------------
                                               Name: Andreas Neumeier
                                               Title: Director

                                           CITIBANK, N.A.

                                           By /s/ Ross Levitsky
                                              ---------------------------
                                               Name: Ross Levitsky
                                               Title: Vice President

                                           CREDIT SUISSE, CAYMAN ISLANDS BRANCH

                                           By /s/ Doreen Barr
                                              ----------------------------
                                               Name: Doreen Barr
                                               Title: Vice President

                                           By /s/ Rianka Mohan
                                              ------------------------------
                                               Name: Rianka Mohan
                                               Title: Vice President

                                           GOLDMAN SACHS CREDIT PARTNERS L.P.

                                           By /s/ Mark Walton
                                              ------------------------------
                                               Name:  Mark Walton
                                               Title: Authorized Signatory

<PAGE>

                                             JPMORGAN CHASE BANK, N.A.

                                             By /s/ John Kowalczuk
                                                --------------------------
                                                 Name: John Kowalczuk
                                                 Title: Vice President

                                             UBS LOAN FINANCE LLC

                                             By /s/ Irja R. Otsa
                                                --------------------------
                                                 Name: Irja R. Otsa
                                                 Title: Associate Director

                                             By  /s/ David B. Julie
                                                --------------------------
                                                 Name: David B. Julie
                                                 Title: Associate Director

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