CREDIT AGREEMENT

Exhibit 10.1

CREDIT AGREEMENT

Dated as of April 6, 2006

among

WISCONSIN ENERGY CORPORATION,
as Borrower ,

THE LENDERS IDENTIFIED HEREIN,

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

and

JPMORGAN CHASE BANK, N.A.,
as Fronting Bank

J. P. MORGAN SECURITIES INC.
WACHOVIA CAPITAL MARKETS, LLC ,
Co-Lead Arrangers

CITIBANK, N.A.
U.S. BANK NATIONAL ASSOCIATION
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., CHICAGO BRANCH ,
Co-Documentation Agents

and

WACHOVIA BANK, NATIONAL ASSOCIATION ,
Syndication Agent

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CREDIT AGREEMENT

     This CREDIT AGREEMENT (this “ Agreement ”), dated as of April 6, 2006, is entered into among WISCONSIN ENERGY CORPORATION, a Wisconsin corporation, the Lenders (as defined herein), JPMORGAN CHASE BANK, N.A. (“ JPMorgan ”), as Administrative Agent (in such capacity, the “ Agent ”), and JPMorgan, as Fronting Bank (as defined below).

RECITALS

      WHEREAS , the Borrower has requested that the Lenders provide a $900,000,000 five year revolving credit and letter of credit facility to the Borrower for the purposes hereinafter set forth; and

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

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

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

      SECTION 1.1. Definitions .

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

     “ Advance ” means an advance by a Lender to the Borrower as part of a Borrowing and refers to a Base Rate Advance or a Eurodollar Advance.

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

     “ Agent ” has the meaning ascribed to such term in the preamble hereto.

     “ Agreement ” has the meaning ascribed to such term in the preamble hereto.

     “ Applicable Margin ” means, with respect to Base Rate Advances, 0.0% per annum and, with respect to Eurodollar Advances, the amount per annum set forth below in the column identified by the Applicable Rating Level at the time of determination. The Applicable Margin

shall increase by an amount equal to the Utilization Fee set forth below (the “ Utilization Fee ”) during any period (and for only such period) in which more than 50% of the Commitments are utilized. Upon the occurrence and during the continuance of any Event of Default, the Applicable Margin shall increase by 2.0% per annum , and if any Advance is a Eurodollar Advance, it will convert to a Base Rate Advance at the end of the Interest Period then in effect for such Eurodollar Advance.

     Any change in the Applicable Margin shall be effective on the date on which Moody’s, S&P or Fitch, as the case may be, announces any change in any rating that results in a change in the Applicable Rating Level.

     “ Applicable Rating Level ” means, at any time, the number set forth below in the row next to the then-applicable ratings by S&P, Moody’s and Fitch, respectively, of the Borrower’s long-term senior unsecured debt.

Notwithstanding the foregoing, if the Borrower shall (i) fail to maintain a rating of its senior unsecured debt by at least two of Moody’s, S&P and Fitch, Level 7 shall be the pricing level; (ii) maintain a rating of its senior unsecured debt from only two of Moody’s, S&P and Fitch and (A) there is a difference of one level in such ratings, then the higher of such ratings shall be used to determine the Applicable Rating Level, or (B) there is a difference of more than one level in such ratings, then the rating that is one level below the higher of such ratings shall be used to determine the Applicable Rating Level; and (iii) maintain a rating of its senior unsecured debt from all three of Moody’s, S&P and Fitch and there is a difference in such ratings such that (A) two of such ratings fall in the same Applicable Rating Level and are higher than the third, then the higher of such ratings will be used to determine the Applicable Rating Level, (B) two of such ratings fall in the same Applicable Rating Level and are lower than the third, then the lower of such ratings will be used to determine the Applicable Rating Level, and (C) all three such ratings fall in different Applicable Rating Levels, then the intermediate rating will be used to determine the Applicable Rating Level.

     “ Approved Fund ” means with respect to any Lender that is a fund that invests in bank loans, any other fund that invests in commercial loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

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

     “ Base Rate ” means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the higher of:

          (i) the rate of interest announced publicly by JPMorgan in New York City, from time to time, as JPMorgan’s base rate; and

          (ii) 1/2 of 1% per annum above the Federal Funds Rate.

If for any reason the Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable after due inquiry to ascertain the Federal Funds Rate for any reason, including the inability or failure of the Agent to obtain sufficient quotations in accordance with the terms hereof, the Base Rate shall be determined without regard to clause (ii) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the Base Rate due to a change in JPMorgan’s base rate or the Federal Funds Rate shall be effective on the effective date of such change in the base rate or the Federal Funds Rate, as the case may be.

     “ Base Rate Advance ” means an Advance that bears interest based on the Base Rate.

     “ Base Rate Borrowing ” means a Borrowing consisting of simultaneous Base Rate Advances.

     “ Borrower ” means (i) Wisconsin Energy Corporation, a Wisconsin corporation or (ii) any successor to Wisconsin Energy Corporation permitted by Section 8.2. It is understood that the term “Borrower” does not include the Subsidiaries of the Borrower.

     “ Borrowing ” means a borrowing consisting of simultaneous Advances of the same Type made by each of the Lenders pursuant to Section 2.1 or converted pursuant to Section 2.4.

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

     “ Capitalization ” means the sum of (i) Total Funded Debt plus (ii) Net Worth.

     “ Cash Collateral Account ” has the meaning assigned such term in Section 9.2(d).

     “ Change of Control ” means any of the following events: (i) any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) has become, directly or indirectly, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have “beneficial ownership” of all shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), by way of merger, consolidation or otherwise, of 30% or more of the voting power of the Voting Stock of the Borrower on a fully-diluted basis, after giving effect to the conversion and exercise of all outstanding warrants, options and other securities of the Borrower (whether or not such securities are then currently convertible or exercisable) and (ii) during any period of two consecutive calendar years, individuals who at the beginning of such period constituted the board of directors of the Borrower cease for any reason to constitute a majority of the directors of the Borrower then in office unless (A) such new directors were elected by a majority of the directors of the Borrower who constituted the board of directors of the Borrower at the beginning of such period or (B) the reason for such directors failing to constitute a majority is a result of retirement by directors due to age, death or disability.

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

     “ Commitment ” means, as to any Lender, the amount set opposite such Lender’s name on Schedule I hereto or, if such Lender has entered into any Assignment Agreement, set forth for such Lender in the Register maintained by the Agent pursuant to Section 11.3(c), as such amount may be reduced pursuant to Section 2.6.

     “ Commitment Percentage ” means, for each Lender, the percentage identified as its Commitment Percentage opposite such Lender’s name on Schedule I attached hereto, as such percentage may be modified by assignment in accordance with the terms of this Agreement.

     “ Credit Documents ” means this Agreement, any promissory note and all other related agreements delivered hereunder or thereunder.

     “ Default ” means any event, act or condition that, with notice or lapse of time, or both, would constitute an Event of Default.

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

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

     “ Effective Date ” means the date on which the conditions set forth in Section 5.1 shall have been satisfied.

     “ Eligible Assignee ” means a Person that is (i) a Lender, (ii) an Affiliate of a Lender, (iii) approved by the Agent, the Borrower and the Fronting Bank (such approvals not to be unreasonably withheld or delayed) or (iv) a financial institution Affiliate of any Lender or an Approved Fund of any Lender immediately prior to any assignment provided in each case that (A) the Borrower’s approval is not required during the existence and continuation of an Event of Default, (B) approval by the Borrower shall be deemed given if no objection is received by the assigning Lender and the Agent from the Borrower within five Business Day after notice of such proposed assignment has been received by the Borrower and (C) neither the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.

     “ Environmental Laws ” means any legal requirement of any Governmental Authority pertaining to (i) the protection of the environment, (ii) the protection of natural resources and wildlife, (iii) the protection or use of surface water and groundwater, (iv) the management, manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, release, threatened release, abatement, removal, remediation or handling of, or exposure to, any hazardous or toxic substance or material or (v) pollution (including any release to land surface water and groundwater) and includes, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 USC 9601 et seq ., Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendment of 1984, 42 USC 6901 et seq. , Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 et seq. , Clean Air Act of 1966, as amended, 42 USC 7401 et seq. , Toxic Substances Control Act of 1976, 15 USC 2601 et seq. , Hazardous Materials Transportation Act, 49 USC App. 1801 et seq. , Oil Pollution Act of 1990, 33 USC 2701 et seq. , Emergency Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et seq. , National Environmental Policy Act of 1969, 42 USC 4321 et seq. , Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq. , any analogous implementing or successor law, and any amendment, rule, regulation, order, or directive issued thereunder.

     “ Environmental Trust Bonds ” has the meaning assigned to such term in Section 196.027 of the Wisconsin Statutes or any successor thereto.

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

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

     “ Eurocurrency Liabilities ” has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

     “ Eurodollar Advance ” means an Advance bearing interest at the Eurodollar Rate.

     “ Eurodollar Borrowing ” means a Borrowing consisting of simultaneous Eurodollar Advances.

     “ Eurodollar Rate ” means, for the Interest Period applicable thereto, the rate per annum equal to the sum of (i) the London Interbank Offered Rate plus (ii) the Applicable Margin.

     “ Eurodollar Rate Reserve Percentage ” of any Lender for the Interest Period for any Eurodollar Advance means the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period.

     “ Event of Default ” has the meaning specified in Section 9.1.

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

     “ Extension of Credit ” means (i) the making of an Advance, (ii) the issuance of a Letter of Credit or the amendment of any Letter of Credit having the effect of extending the stated termination date thereof or increasing the maximum amount available to be drawn thereunder or (iii) the funding of a participation in the unpaid reimbursement obligation of the Borrower with respect to a payment made by the Fronting Bank under a Letter of Credit (excluding any reimbursement obligation that has been repaid with the proceeds of any Advance).

     “ Facility Fee Percentage ” means the rate per annum set forth in the column identified by the Applicable Rating Level at the time of determination:

Any change in the Facility Fee Percentage shall be effective on the date on which Moody’s, S&P or Fitch, as the case may be, announces any change in any rating that results in a change in the Applicable Rating Level.

     “ Fee Letters ” means (i) that certain letter agreement, dated February 28, 2006, among the Borrower, JPMorgan and J. P. Morgan Securities Inc. and (ii) that certain Letter Agreement, dated February 28, 2006, among the Borrower, Wachovia Bank, National Association and Wachovia Capital Markets, LLC, in each case, as amended, modified, supplemented or replaced from time to time.

     “ Federal Funds Rate ” means for any day the rate per annum (rounded upward to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Agent on such day on such transactions as determined by the Agent.

     “ Fitch ” means Fitch Ratings Ltd., or any successor or assignee of the business of such company in the business of rating securities.

     “ Fronting Bank ” means JPMorgan, as issuer of Letters of Credit, and/or such other Lender that may be appointed from time to time by the Borrower (and that agrees to such appointment) to act in such a capacity under this Agreement.

     “ Funded Debt ” of any Person means, without duplication, the sum of (i) all Indebtedness of such Person for borrowed money, (ii) all purchase money Indebtedness of such Person, (iii) the principal portion of all obligations of such Person under capital lease obligations, (iv) all obligations, contingent or otherwise, relative to the face amount of all letters of credit (other than letters of credit supporting trade payables in the ordinary course of business), whether or not drawn, and banker’s acceptances issued for the account of such Person, in each case in excess of $10 million, subject to the further limitations hereafter provided (it being understood that, to the extent an undrawn letter of credit supports another obligation consisting of Indebtedness, in calculating aggregated Indebtedness only such other obligation shall be included), (v) all Guaranty Obligations of such Person with respect to Indebtedness and obligations of the type described in clauses (i) through (iv) hereof of another Person in excess of $10 million, subject to the further limitations hereafter provided, (vi) all Indebtedness and obligations of the type described in clauses (i), (ii), (iii), (iv), (viii) and (ix) hereof of another Person in excess of $10 million, subject to the further limitations hereafter provided, secured by a Lien on any property

of such Person whether or not such Indebtedness or obligations has been assumed by such Person, (vii) all Indebtedness and obligations of the type described in clauses (i), (ii), (iii), (iv), (viii) and (ix) hereof of any partnership or unincorporated joint venture in excess of $10 million, subject to the further limitations hereafter provided, to the extent such Person is legally obligated, net of any assets of such partnership or joint venture, (viii) the outstanding principal balance in excess of $10 million, subject to the further limitations hereafter provided, under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product of such Person where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an operating lease in accordance with GAAP, (ix) all net obligations of such Person in excess of $10 million, subject to the further limitations hereafter provided, in respect of interest rate protection agreements, foreign currency exchange agreements, commodity purchase or option agreements or other interest or exchange rate or commodity price hedging agreements and (x) all Indebtedness and obligations of the types described in the foregoing clauses (iv) through (ix) hereof, to the extent excluded from the definition of “Funded Debt” hereunder (as a result of such Indebtedness or obligation being less than $10 million), and to the extent in excess of $200 million in the aggregate.

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

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

     “ Guaranty Obligations ” means, with respect to any Person, without duplication, any obligations (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing any Indebtedness of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (i) to purchase any such Indebtedness or other obligation or any property constituting security therefor, (ii) to advance or provide funds or other support for the payment or purchase of such Indebtedness or obligation or to maintain working capital, solvency or other balance sheet condition of such other Person (including, without limitation, maintenance agreements, comfort letters, take or pay arrangements, put agreements or similar agreements or arrangements) for the benefit of the holder of Indebtedness of such other Person, (iii) to lease or purchase property, securities or services primarily for the purpose of assuring the owner of such Indebtedness or (iv) to otherwise assure or hold harmless the owner of such Indebtedness or obligation against loss in respect thereof. The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guaranty Obligation is made.

     “ Hybrid Equity Securities ” means any securities issued by the Borrower or a Subsidiary or a financing vehicle of the Borrower that (i) are classified at the time of issuance thereof as possessing a minimum of “intermediate equity content” by S&P and Basket C equity credit by Moody’s and (ii) require no repayments or prepayments and no mandatory redemptions or repurchases, in each case, prior to at least 91 days after the occurrence of the Maturity Date and the repayment in full of the Outstanding Credits and all other amounts due under this Agreement.

     “ Indebtedness ” of any Person means, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (iii) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person to the extent of the value of such property (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (iv) all obligations, other than intercompany items, of such Person issued or assumed as the deferred purchase price of property or services purchased by such Person that would appear as liabilities on a balance sheet of such Person, (v) 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, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (vi) all Guaranty Obligations of such Person, (vii) the principal portion of all obligations of such Person under (A) capital lease obligations and (B) any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product of such Person where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an operating lease in accordance with GAAP, (viii) all obligations of such Person to repurchase any securities, which repurchase obligation is related to the issuance thereof, including, without limitation, obligations commonly known as residual equity appreciation potential shares, (ix) all net obligations of such Person in respect of interest rate protection agreements, foreign currency exchange agreements, commodity purchase or option agreements or other interest or exchange rate or commodity price hedging arrangements, (x) the maximum amount of all performance and standby letters of credit issued or bankers’ acceptance facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), and (xi) the aggregate amount of uncollected accounts receivable of such Person subject at such time to a sale of receivables (or similar transaction) regardless of whether such transaction is effected without recourse to such Person or in a manner that would not be reflected on the balance sheet of such Person in accordance with GAAP. The Indebtedness of any Person shall include the Indebtedness of any partnership or unincorporated joint venture for which such Person is legally obligated.

     “ Interest Payment Date ” means (i) as to Base Rate Advances, quarterly in arrears on the last day of each March, June, September and December and the Maturity Date and (ii) as to Eurodollar Advances, the last day of each applicable Interest Period and the Maturity Date and, in addition, where the applicable Interest Period for a Eurodollar Advance is greater than three months, then also on the last day of each fiscal quarter of the Borrower during such Interest Period. If an Interest Payment Date falls on a date that is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day, except that in the case of Eurodollar Advances where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding day.

     “ Interest Period ” means, as to Eurodollar Advances, a period of one, two, three or, subject to availability, six months’ duration, as the Borrower may elect, commencing, in each case, on the date of the borrowing (including continuations and conversions of Eurodollar Advances); provided, however, (i) if any Interest Period would end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day (except that where the next succeeding Business Day falls in the next succeeding calendar

month, then on the next preceding Business Day), (ii) no Interest Period shall extend beyond the Maturity Date and (iii) with respect to Eurodollar Advances, where an Interest Period begins on a day for which there is no numerically corresponding day in the calendar month in which the Interest Period is to end, such Interest Period shall end on the last Business Day of such calendar month.

     “ Issuance Fee ” has the meaning specified in Section 3.4(b).

     “ JPMorgan ” has the meaning ascribed to such term in the preamble hereto.

     “ LC Commitment Amount ” means, at any time, an amount equal to the sum of the Commitments of all Lenders at such time.

     “ LC Fee ” has the meaning specified in Section 3.4(b).

     “ LC Outstandings ” means, on any date of determination, the sum of the undrawn stated amounts of all Letters of Credit that are outstanding on such date plus the aggregate principal amount of all unpaid reimbursement obligations of the Borrower on such date with respect to payments made by the Fronting Bank under Letters of Credit (excluding reimbursement obligations that have been repaid with the proceeds of any Advance).

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

     “ Letter of Credit ” means a letter of credit issued by the Fronting Bank pursuant to Section 2.8, as such letter of credit may from time to time be amended, modified or extended in accordance with the terms of this Agreement.

     “ Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), preference, priority or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the Uniform Commercial Code as adopted and in effect in the relevant jurisdiction or other similar recording or notice statute, and any lease in the nature thereof).

     “ London Interbank Offered Rate ” means, with respect to any Eurodollar Borrowing for the Interest Period applicable thereto, the rate of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Dow Jones Markets Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Dow Jones Markets Page 3750, the applicable rate shall be the arithmetic mean of all such rates. If, for any reason, such rate is not available, the term “ London Interbank Offered Rate ” shall mean, with respect to any Eurodollar Borrowing for the Interest Period applicable thereto, the rate of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such

Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.

     “ Mandatory Borrowing ” has the meaning assigned to such term in Section 2.8(f).

     “ Material Adverse Effect ” means a material adverse effect on (i) the business, condition (financial or otherwise), operations or prospects of the Borrower, (ii) the ability of the Borrower to perform its obligations under this Agreement or (iii) the validity or enforceability of this Agreement, any of the other Credit Documents, or the rights and remedies of the Lenders hereunder or thereunder.

     “ Maturity Date ” means the earlier to occur of (i) April 6, 2011, or such later date that may be established from time to time pursuant to Section 2.7 hereof, and (ii) the date of termination in whole of the Commitments pursuant to Section 2.6 or Section 9.2 hereof.

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

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

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

     “ Net Worth ” means, as of any date, the shareholders’ equity or net worth of the Borrower and its Subsidiaries (including but not limited to the value of any Trust Preferred Securities or Hybrid Equity Securities), on a consolidated basis, as determined in accordance with GAAP.

     “ Notice of Borrowing ” means a request by the Borrower for a Borrowing in the form of Exhibit A.

     “ Notice of Continuation/Conversion ” means a request by the Borrower for the continuation or conversion of a Borrowing in the form of Exhibit B.

     “ Outstanding Credits ” at any time means the sum of the aggregate principal amount of Advances outstanding at such time plus the LC Outstandings at such time.

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

     “ Permitted Liens ” means (i) Liens securing the obligations of the Borrower hereunder, (ii) Liens for taxes not yet due or Liens for taxes being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the property subject to any such Lien is not yet subject to foreclosures, sale or loss on account thereof), (iii) Liens in respect of property imposed by law arising in the ordinary course of business such as materialmen’s, mechanics’, warehousemen’s,

carriers’, landlords’ and other nonconsensual statutory Liens that are not yet due and payable, which have been in existence less than 90 days or that are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the property subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof), (iv) pledges or deposits made in the ordinary course of business to secure payment of worker’s compensation insurance, unemployment insurance, pensions or social security programs, (v) Liens arising from good faith deposits in connection with or to secure performance of tenders, bids, leases, government contracts, performance and return of money bonds and other similar obligations incurred in the ordinary course of business (other than obligations in respect of the payment of borrowed money), (vi) Liens arising from good faith deposits in connection with or to secure performance of statutory obligations and surety and appeal bonds, (vii) easements, rights of way, restrictions (including zoning restrictions), minor defects or irregularities in title and other similar charges or encumbrances not, in any material respect, impairing the use of the encumbered property for its intended purposes, (viii) judgment Liens that would not constitute an Event of Default, (ix) Liens arising by virtue of any statutory or common law provision relating to banker’s liens, rights of set off or similar rights as to deposit accounts or other funds maintained with a creditor depository institution, (x) any Lien created or arising over any property (or any improvements thereto) that is acquired, constructed or created by the Borrower or any Significant Subsidiary, but only if (a) such Lien secures only principal amounts (not exceeding the cost of such acquisition, construction, creation or improvement) of Indebtedness incurred for the purposes of such acquisition, construction, creation or improvement together with any costs, expenses, interest and fees incurred in relation thereto or a guarantee given in respect thereof and (b) such Lien is confined solely to the property so acquired, constructed or created or such improvement (including any such Lien so created or arising in connection with the Borrower’s Power the Future Strategic Plan), (xi) any Lien on any property or assets acquired from a Person that is merged or consolidated with or into the Borrower or any Significant Subsidiary as permitted under Section 8.2 and is not created in anticipation of any such merger or consolidation, (xii) any Lien on any property or assets existing at the time of acquisition of such property or assets by the Borrower or any Significant Subsidiary and that is not created in anticipation of such acquisition, (xiii) any Lien or encumbrance, moneys sufficient for the discharge of which have been deposited in trust with the trustee under the Borrower’s Debt Securities Indenture dated as of March 15, 1999, as heretofore or hereafter amended, modified and supplemented, with The First National Bank of Chicago, as trustee (the “ Indenture ”), providing for certain debt securities or with the trustee or mortgagee under the instrument evidencing such Lien or encumbrance, with irrevocable authority to the trustee under the Indenture or to such other trustee or mortgagee to apply such moneys to the discharge of such Lien or encumbrance to the extent required for such purpose, (xiv) Liens incurred to secure the Borrower’s payment obligations pursuant to Section 7.06 of the Indenture, (xv) any extension, renewal or replacement (or successive extensions, renewals or replacements), as a whole or in part, of any Liens referred to in the foregoing clauses (i) through (xiv), for amounts not exceeding the principal amount of the Indebtedness secured by the Lien so extended, renewed or replaced; provided that such extension, renewal or replacement Lien is limited to all or a part of the same property or assets that were covered by the Lien extended, renewed or replaced (plus improvements on such property or assets), (xvi) Liens permitted under the Subsidiary Credit Agreements and (xvii) other Liens not previously

described in clauses (i) through (xvi) above to the extent such Liens, in the aggregate, do not secure Indebtedness exceeding 15% of Total Assets.

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

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

     “ Power the Future Capitalized Leases ” means any capital lease obligations recorded on the consolidated balance sheet of the Borrower and its Subsidiaries and not eliminated in consolidation related to the Borrower’s Power the Future strategic plan, including but not limited to the Port Washington I Facility Lease Agreement between Port Washington Generating Station, LLC, as lessor, and Wisconsin Electric Power Company, as Lessee, dated as of May 28, 2003; the Port Washington II Facility Lease Agreement between Port Washington Generating Station, LLC, as lessor, and Wisconsin Electric Power Company, as Lessee, dated as of May 28, 2003; the Elm Road I Facility Lease Agreement between Elm Road Generating Station Supercritical, LLC, as lessor, and Wisconsin Electric Power Company, as Lessee, dated as of November 9, 2004; and the Elm Road II Facility Lease Agreement between Elm Road Generating Station Supercritical, LLC, as lessor, and Wisconsin Electric Power Company, as Lessee, dated as of November 9, 2004; in each case, as amended, restated, supplemented or modified.

     “ Register ” has the meaning set forth in Section 11.3(c).

     “ Regulation D, U or X ” means Regulation D, U or X, respectively, of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

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

     “ Request for Issuance ” means a request made pursuant to Section 2.8(a) in the form of Exhibit E.

     “ Required Lenders ” means Lenders holding in excess of 50% of outstanding Advances, or, if no Advances are outstanding, in excess of 50% of the Commitments.

     “ S&P ” means Standard & Poor’s Rating Services, a division of McGraw Hill, Inc., or any successor or assignee of the business of such division in the business of rating securities.

     “ Significant Subsidiary ” means, with respect to any Person at any time, any Subsidiary of such Person that as of such time has total assets in excess of 10% of the total assets of such Person and its consolidated Subsidiaries.

     “ Single Employer Plan ” means any Plan that is covered by Title IV of ERISA, but that is not a Multiemployer Plan.

     “ Solvent ” means, with respect to any Person as of a particular date, that on such date (i) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (ii) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature in their ordinary course, (iii) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s assets would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (iv) the fair value of the assets of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person and (v) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

     “ Subsidiary ” means, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time, any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (ii) any partnership, association, joint venture, limited liability company or other entity in which such person directly or indirectly through Subsidiaries has more than 50% equity interest at any time.

     “ Subsidiary Credit Agreements ” means (i) that certain Credit Agreement, dated as of the date hereof, among Wisconsin Gas LLC, a Wisconsin limited liability company, the lenders party thereto, Citibank, N.A., as administrative agent, and U.S. Bank National Association, as Fronting Bank, and (ii) that certain Credit Agreement, dated as of the date hereof, among Wisconsin Electric Power Company, a Wisconsin corporation, the lenders party thereto and U.S. Bank National Association, as administrative agent and as fronting bank, as each may be amended, restated, supplemented or modified.

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

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

     “ Total Funded Debt ” means all Funded Debt of the Borrower and its Subsidiaries, on a consolidated basis, as determined in accordance with GAAP.

     “ Trust Preferred Stock ” means any trust preferred securities issued by a subsidiary capital trust established by the Borrower or any of its Subsidiaries reflected in the consolidated financial statements of the Borrower and its Subsidiaries, along with any junior subordinated debt obligations of the Borrower or its Subsidiaries so long as (i) the terms thereof require no repayments or prepayments and no mandatory redemptions or repurchases, in each case, prior to at least 91 days after the occurrence of the Maturity Date and the repayment in full of the Outstanding Credits and all other amounts due under this Agreement, (ii) such securities are subordinated and junior in right of payment to all obligations of the Borrower or any of its Subsidiaries for or in respect of borrowed money and (iii) the obligors in respect of such preferred securities and subordinated debt have the right to defer interest and dividend payments on similar terms customary for trust preferred securities and not materially less favorable to the interests of the Borrower or the Lenders.

     “ Type ” when used with respect to any Advance or Borrowing, refers to the rate of interest on such Advance or the Advances comprising such Borrowing (either the Base Rate or the Eurodollar Rate).

     “ Utilization Fee ” has the meaning set forth in the definition of “Applicable Margin”.

     “ Voting Stock ” means, (i) for any Person that is a corporation, all classes of the capital stock (or other voting interests) of such Person then outstanding and normally entitled to vote in the election of its directors or, (ii) for any Person that is a limited liability company, the membership interests in such Person then outstanding.

      SECTION 1.2. Computation of Time Periods.

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

      SECTION 1.3. Accounting Terms.

     Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall be prepared, in accordance with GAAP applied on a consistent basis. All calculations made for the purposes of determining compliance with this Agreement shall (except as otherwise expressly provided herein) be made by application of GAAP applied on a basis consistent with the most recent annual or quarterly financial statements delivered pursuant to Section 7.1 (or, prior to the delivery of the first financial statements pursuant to Section 7.1, consistent with the financial statements described in Section 5.1(e)); provided, however, if (i) the Borrower shall object to determining such

compliance on such basis at the time of delivery of such financial statements due to any change in GAAP or the rules promulgated with respect thereto or (ii) the Agent or the Required Lenders shall so object in writing within 30 days after delivery of such financial statements, then such calculations shall be made on a basis consistent with the financial statements most recently delivered by the Borrower to the Lenders as to which no such objection shall have been made.

ARTICLE II
THE COMMITMENTS AND THE EXTENSIONS OF CREDIT

      SECTION 2.1. The Commitments.

     Subject to the terms and conditions set forth herein, each Lender severally agrees to make Advances to the Borrower in Dollars, at any time and from time to time prior to the Maturity Date, in an amount not to exceed at any time such Lender’s Commitment, the Fronting Bank agrees to issue Letters of Credit for the account of the Borrower at any time and from time to time until the fifth Business Day preceding the Maturity Date in an aggregate stated amount at any time outstanding not to exceed the LC Commitment Amount, and each Lender agrees to purchase participations in such Letters of Credit as more fully set forth in Section 2.8; provided , however, that (i) the aggregate amount of Outstanding Credits shall not exceed the aggregate Commitments and (ii) with respect to each individual Lender, such Lender’s pro rata share of Outstanding Credits shall not exceed such Lender’s Commitment Percentage of the aggregate Commitments. Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow Advances.

      SECTION 2.2. Method of Borrowing.

     By no later than 11:00 a.m. (i) on the date of the requested Borrowing that will comprise Base Rate Advances or (ii) three Business Days prior to the date of the requested Borrowing that will comprise Eurodollar Advances, the Borrower shall submit to the Agent a written Notice of Borrowing in the form of Exhibit A setting forth (A) the amount requested, (B) whether such Advances shall accrue interest at the Base Rate or the Eurodollar Rate, (C) with respect to Borrowings that will comprise Eurodollar Advances, the Interest Period applicable thereto, and (D) certification that the Borrower has complied in all respects with Section 5.2.

      SECTION 2.3. Funding of Borrowings.

     (a) Upon receipt of a Notice of Borrowing, the Agent shall promptly inform the Lenders as to the terms thereof. Each such Lender shall make its Commitment Percentage of the requested Borrowing available to the Agent by 1:00 p.m. on the date specified in the Notice of Borrowing by deposit, in Dollars, of immediately available funds at the principal offices of the Agent in New York, New York or at such other address as the Agent may designate in writing. The amount of the requested Borrowing will then be made available to the Borrower by the Agent by crediting the account of the Borrower on the books of such office of the Agent, to the extent the amount of such Borrowing is made available to the Agent.

     (b) No Lender shall be responsible for the failure or delay by any other Lender in its obligation to make Advances hereunder; provided , however, that the failure of any Lender to

fulfill its obligations hereunder shall not relieve any other Lender of its obligations hereunder. Unless the Agent shall have been notified by any Lender prior to the date of any such Borrowing (in the case of a Eurodollar Borrowing) or the time of any such Borrowing (in the case of a Base Rate Borrowing) that such Lender does not intend to make available to the Agent its portion of the Borrowing to be made on such date, the Agent may assume that such Lender has made such amount available to the Agent on the date of such Borrowing, and the Agent in reliance upon such assumption, may (in its sole discretion but without any obligation to do so) make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Agent, the Agent shall be able to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent will promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a per annum rate equal to, (i) if from the Borrower, the applicable rate for such Advance pursuant to the Notice of Borrowing and (ii) if from a Lender, the Federal Funds Rate.

      SECTION 2.4. Continuations and Conversions.

     The Borrower shall have the option, on any Business Day, to continue existing Eurodollar Advances for a subsequent Interest Period, to convert Base Rate Advances into Eurodollar Advances or to convert Eurodollar Advances into Base Rate Advances; provided , however, that (i) each such continuation or conversion must be requested by the Borrower pursuant to a written Notice of Continuation/Conversion, in the form of Exhibit B, in compliance with the terms set forth below, (ii) except as provided in Section 4.1, Eurodollar Advances may be continued or converted into Base Rate Advances only on the last day of the Interest Period applicable hereto, (iii) Eurodollar Advances may not be continued nor may Base Rate Advances be converted into Eurodollar Advances during the existence and continuation of a Default or Event of Default and (iv) any request to extend a Eurodollar Advance that fails to comply with the terms hereof or any failure to request an extension of a Eurodollar Advance that fails to comply with the terms hereof or any failure to request an extension of a Eurodollar Advance at the end of an Interest Period shall constitute a conversion to a Base Rate Advance on the last day of the applicable Interest Period. Each continuation or conversion must be requested by the Borrower no later than 11:00 a.m. (A) on the date for a requested conversion of a Eurodollar Advance to a Base Rate Advance or (B) three Business Days prior to the date for a requested continuation of a Eurodollar Advance or conversion of a Base Rate Advance to a Eurodollar Advance, in each case pursuant to a written Notice of Continuation/Conversion submitted to the Agent, which shall set forth (1) whether the Borrower wishes to continue or convert such Advances and (2) if the request is to continue a Eurodollar Advance or convert a Base Rate Advance to a Eurodollar Advance, the Interest Period applicable thereto.

      SECTION 2.5. Minimum Amounts.

     Each request for a Borrowing or a conversion or continuation hereunder shall be subject to the following requirements: (i) each Borrowing consisting of Eurodollar Advances shall be in a minimum of $5,000,000 (and in integral multiples of $1,000,000 in excess thereof); (ii) each

Borrowing consisting of Base Rate Advances shall be in a minimum amount of the lesser of $500,000 (and in integral multiples of $500,000 in excess thereof) and the remaining amount available to be borrowed; and (iii) no more than ten Eurodollar Borrowings shall be outstanding hereunder at any one time. For the purposes of this Section, all Eurodollar Borrowings with the same Interest Periods that begin and end on the same date shall be considered as one Eurodollar Borrowing, but Eurodollar Borrowings with different Interest Periods, even if they begin on the same date, shall be considered separate Eurodollar Borrowings.

      SECTION 2.6. Reduction of the Commitments.

     Upon at least five Business Days’ notice, the Borrower shall have the right to permanently terminate or reduce the aggregate unused amount of the Commitments at any time or from time to time; provided that each partial reduction shall be in an aggregate amount at least equal to $5,000,000 and in integral multiples of $1,000,000 above such amount and no reduction shall be made that would reduce the Commitments to an amount less than the then Outstanding Credits. Any reduction in (or termination of) the Commitments shall be permanent and may not be reinstated.

      SECTION 2.7. Extension of Maturity Date.

     (a) Not earlier than 45 days prior to, nor later than 30 days prior to, the then-effective Maturity Date, the Borrower may request by Requisite Notice (as defined below) made to the Agent (which shall promptly notify the Lenders) a one-year extension of the Maturity Date. Such request shall include a certificate signed by a Responsible Officer (as defined below) stating that (i) the representations and warranties contained in Article VI are true and correct on and as of the date of such certificate and (ii) no Default or Event of Default has occurred and is continuing. Each Lender shall notify the Agent by Requisite Notice by the date specified by the Agent (which date shall be a Business Day and shall not be less than 15 Business Days prior to, nor more than 30 days prior to, the then Maturity Date) that either (A) such Lender declines to consent to extending the Maturity Date or (B) such Lender consents to extending the Maturity Date. Any Lender not responding within the above time period shall be deemed not to have consented to extending the Maturity Date. The Agent shall, after receiving the notifications from all of the Lenders or the expiration of such period, whichever is earlier, notify the Borrower and the Lenders of the results thereof. The Borrower may request no more than two extensions pursuant to this Section.

     (b) If any Lender declines, or is deemed to have declined, to consent to such request for extension (a “ Declining Lender ”), provided that (i) no Default or Event of Default has occurred and is continuing at such time and (ii) the Required Lenders are non-Declining Lenders, the Borrower may, at its own expense (such expense to include any transfer fee payable to the Agent under Section 11.3(b) and any expense pursuant to Section 4.3) and in its sole discretion, require such Declining Lender to transfer and assign in whole (but not in part) without recourse (in accordance with and subject to the terms and conditions of Section 11.3(b)) all of its interests, rights and obligations under this Agreement to an Eligible Assignee, which shall assume such assigned obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (A) such assignment shall not conflict with any law, rule or regulation or order of any court or other Governmental Authority and (B) the assigning Declining Lender

shall have received in immediately available funds the principal of and interest accrued to the date of such payment on the portion of the Advances hereunder held by such assigning Declining Lender and all other amounts owed to such assigning Declining Lender hereunder, including amounts owed pursuant to Sections 4.1 through 4.4.

     (c) If the conditions set forth in subsection (b) above have been satisfied, the Maturity Date shall be extended (solely with respect to the non-Declining Lenders) to the date that is one year after the then-effective Maturity Date, effective as of the date to be determined by the Agent and the Borrower (the “ Maturity Extension Decision Date ”), and the Agent shall promptly notify the Lenders thereof. On or prior to the Maturity Extension Decision Date, the Borrower shall deliver to the Agent, in form and substance satisfactory to the Agent and the Lenders (i) the resolutions of the Board of Directors of the Borrower authorizing such extension, certified as in effect as of the Maturity Extension Decision Date and the related incumbency certificate of the Borrower, (ii) new or amended promissory notes, if requested by any new or affected Lender, evidencing the new or revised Commitment of such Lender, (iii) a certificate of the Borrower stating that on and as of such Maturity Extension Decision Date, and after giving effect to the extension to be effective on such date, (A) the representations and warranties set forth in Article VI are true and correct and (B) no Default or Event of Default is continuing. The Agent shall distribute an amended Schedule I to this Agreement (which shall thereafter be incorporated into this Agreement), to reflect any changes in Lenders, the Commitments and each Lender’s Commitment Percentage.

     (d) For purposes of this Section:

     (i) “ Responsible Officer ” means the chairman of the board, chief executive officer, president, chief financial officer, treasurer, or assistant treasurer of the Borrower. Any document or certificate hereunder that is signed by a Responsible Officer shall be conclusively presumed to have been authorized by all necessary corporate action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.

     (ii) “ Requisite Notice ” means irrevocable written notice to the intended recipient or irrevocable telephonic notice to the intended recipient, immediately followed by a written notice to such recipient. Such notices shall be (i) delivered to such recipient at the address or telephone number specified on Schedule II or as otherwise designated by such recipient by Requisite Notice to each other party hereto, and (ii) if made by the Borrower, given or made by a Responsible Officer. Any written notice delivered shall be delivered as provided in Section 11.1. Any notice sent by other than hardcopy shall be promptly confirmed by a telephone call to the recipient and, if requested by the Agent, by a manually-signed hardcopy thereof.

      SECTION 2.8. Letters of Credit.

     (a) Subject to the terms and conditions hereof, the Fronting Bank agrees to issue Letters of Credit from time to time for the account of the Borrower (or to extend the stated maturity thereof or to modify or amend the terms thereof) for the purposes set forth in Section 7.9 on not less than five Business Days’ prior notice thereof by delivery of a Request for

Issuance to the Agent (which shall promptly distribute copies thereof to the Lenders) and the Fronting Bank. Each Request for Issuance shall specify (i) the date (which shall be a Business Day) of issuance of such Letter of Credit (or the date of effectiveness of such extension, modification or amendment) and the stated expiry date thereof (which shall be no later than one year following the date of such issuance), (ii) the proposed stated amount of such Letter of Credit, (iii) the name and address of the beneficiary of such Letter of Credit and (iv) a statement of drawing conditions applicable to such Letter of Credit, and if such Request for Issuance relates to an amendment or modification of a Letter of Credit, it shall be accompanied by the consent of the beneficiary of the Letter of Credit thereto. Each Request for Issuance shall be irrevocable unless modified or rescinded by the Borrower not less than two Business Days prior to the proposed date of issuance (or effectiveness) specified therein. Not later than 12:00 noon (New York City time) on the proposed date of issuance (or effectiveness) specified in such Request for Issuance, and upon fulfillment of the applicable conditions precedent and the other requirements set forth herein, the Fronting Bank shall issue (or extend, amend or modify) such Letter of Credit and provide notice and a copy thereof to the Agent, which shall promptly furnish copies thereof to the Lenders. The Fronting Bank shall provide to the Agent, on a monthly basis, a list of the amounts and expiration dates of all undrawn Letters of Credit, a copy of which list the Agent shall furnish to each Lender that requests such list.

     (b) No Letter of Credit shall be requested or issued hereunder if, after the issuance thereof, (i) the Outstanding Credits would exceed the aggregate Commitments or (ii) the LC Outstandings would exceed the LC Commitment Amount.

     (c) In the event that any Letter of Credit remains outstanding beyond the fifteenth day prior to the Maturity Date, the Borrower shall either (i) pay to the Agent an amount equal to 103% of the LC Outstandings on the later of such date and the date of issuance of such Letter of Credit, which amount the Agent shall hold in the Cash Collateral Account for the account of the Borrower, without interest, for the purpose of paying any draft presented, with the excess, if any, to be returned to the Borrower upon termination or expiration of such Letter of Credit and payment in full of all amounts due hereunder or (ii) deliver a back-up letter of credit to the Agent securing the Borrower’s reimbursement obligations with respect to such Letter of Credit in form and substance acceptable to the Fronting Bank and the Agent and from a creditworthy financial institution acceptable to the Agent. While any Letter of Credit is outstanding, the Agent may not release funds held in the Cash Collateral Account pursuant to this subsection (c) without the consent of all Lenders.

     (d) Each Lender, upon issuance of a Letter of Credit, shall be deemed to have purchased without recourse a participation from the Fronting Bank in such Letter of Credit and the rights and obligations arising thereunder and any collateral relating thereto, in each case in an amount equal to such Lender’s Commitment Percentage of the obligations under such Letter of Credit, and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the Fronting Bank therefor and discharge when due, such Lender’s Commitment Percentage of the obligations arising under such Letter of Credit. Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to the extent that the Fronting Bank has not been reimbursed as required hereunder or under any such Letter of Credit, each Lender shall pay to the Fronting Bank its Commitment Percentage of such unreimbursed drawing in same day funds on the day of notification by the Fronting Bank of an

unreimbursed drawing pursuant to the provisions of subsection (e). The obligation of each Lender so to reimburse the Fronting Bank shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of the Borrower to reimburse the Fronting Bank under any Letter of Credit, together with interest as hereinafter provided.

     (e) In the event of any drawing under any Letter of Credit, the Fronting Bank will promptly notify the Borrower. Unless the Borrower shall immediately notify the Fronting Bank of its intent otherwise to reimburse the Fronting Bank for any drawing made prior to the Maturity Date, the Borrower shall be deemed to have requested a Base Rate Advance in the amount of such drawing as provided in subsection (f), the proceeds of which will be used to satisfy the reimbursement obligation of the Borrower with respect to such drawing. If, at any time on or after the Maturity Date, any drawing is made under any Letter of Credit, the Fronting Bank shall instruct the Agent to withdraw from the Cash Collateral Account funds in an amount equal to the amount of such drawing, which the Agent shall transfer to the Fronting Bank in order to reimburse the Fronting Bank for such drawing. In the case of any drawing made under any Letter of Credit prior to the Maturity Date, the Borrower shall reimburse the Fronting Bank on the day such drawing is paid either with the proceeds of an Advance obtained hereunder or otherwise in same day funds as provided herein. If the Borrower shall fail to reimburse the Fronting Bank as provided herein, the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the Base Rate plus two percent (2%) per annum . The Borrower’s reimbursement obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment that the applicable account party or the Borrower may claim or have against the Fronting Bank, the Lenders, the beneficiary of the Letter of Credit drawn upon or any other Person, including, without limitation, any defense based on any failure of the applicable account party or the Borrower to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit. The Fronting Bank will promptly notify the Lenders of the amount of any unreimbursed drawing and each Lender shall promptly pay to the Fronting Bank, in immediately available funds, the amount of such Lender’s Commitment Percentage of such unreimbursed drawing. Such payment shall be made on the day such notice is received by such Lender from the Fronting Bank if such notice is received at or before 2:00 p.m., otherwise such payment shall be made at or before 12:00 noon on the Business Day next succeeding the day such notice is received. If such Lender does not pay such amount to the Fronting Bank in full upon such request, such Lender shall, on demand, pay to the Fronting Bank interest on the unpaid amount during the period from the date the Lender received the notice regarding the unreimbursed drawing until the Lender pays such amount to the Fronting Bank in full at a rate per annum equal to, if paid within two Business Days of the date of drawing, the Federal Funds Rate and thereafter at a rate equal to the Base Rate. Each Lender’s obligation to make such payment to the Fronting Bank, and the right of the Fronting Bank to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Agreement or the Commitments, the existence of a Default or Event of Default or the acceleration of the obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever. Simultaneously with the making of each such payment by a Lender to the Fronting Bank, such Lender shall, automatically and without any further action on the part of the Fronting Bank or such Lender, acquire a participation in an amount equal to such payment (excluding the

portion of such payment constituting interest owing to the Fronting Bank) in the related unreimbursed drawing portion of the LC Outstandings and in the interest thereon, and shall have a claim against the Borrower with respect thereto.

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

     (g) The payment obligations of each Lender under subsection (d) and of the Borrower under this Agreement in respect of any payment under any Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the following circumstances:

     (i) any lack of validity or enforceability of any Credit Document or any other agreement or instrument relating thereto or to such Letter of Credit;

     (ii) any amendment or waiver of, or any consent to departure from, the terms of any Credit Document or such Letter of Credit;

     (iii) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary, or any transferee, of such Letter of Credit (or any persons for whom any such beneficiary or any such transferee may be acting), the Fronting Bank, or any other person, whether in connection with any Credit Document, the transactions contemplated hereby or by such Letter of Credit, or any unrelated transaction;

     (iv) any statement or any other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

     (v) payment in good faith by the Fronting Bank under the Letter of Credit issued by the Fronting Bank against presentation of a draft or certificate that does not comply with the terms of such Letter of Credit; or

     (vi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

     (h) The Borrower assumes all risks of the acts and omissions of any beneficiary or transferee of any Letter of Credit. Neither the Fronting Bank, the Lenders nor any of their respective officers, directors, employees, agents or Affiliates shall be liable or responsible for (i) the use that may be made of such Letter of Credit or any acts or omissions of any beneficiary or transferee thereof in connection therewith, (ii) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged, (iii) payment by the Fronting Bank against presentation of documents that do not comply with the terms of such Letter of Credit, including failure of any documents to bear any reference or adequate reference to such Letter of Credit, or (iv) any other circumstances whatsoever in making or failing to make payment under such Letter of Credit, except that, and notwithstanding subsection (f) and the foregoing clauses (i) through (iii), the Borrower and each Lender shall have the right to bring suit against the Fronting Bank, and the Fronting Bank shall be liable to the Borrower and any Lender, to the extent of any direct, as opposed to consequential, damages suffered by the Borrower or such Lender that the Borrower or such Lender proves were caused by the Fronting Bank’s willful misconduct or gross negligence, including, in the case of the Borrower, the Fronting Bank’s willful failure to make timely payment under such Letter of Credit following the presentation to it by the beneficiary thereof of a draft and accompanying certificate(s) that strictly comply with the terms and conditions of such Letter of Credit. In furtherance and not in limitation of the foregoing, the Fronting Bank may accept sight drafts and accompanying certificates presented under the Letter of Credit issued by the Fronting Bank that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and payment against such documents shall not constitute willful misconduct or gross negligence by the Fronting Bank. Notwithstanding the foregoing, no Lender shall be obligated to indemnify the Borrower for damages caused by the Fronting Bank’s willful misconduct or gross negligence.

     (i) The letters of credit listed on Schedule III shall be deemed “Letters of Credit” upon the occurrence of the Effective Date.

ARTICLE III
PAYMENTS

      SECTION 3.1. Interest.

     (a)  Interest Rate.

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

     (ii) All Eurodollar Advances shall accrue interest at the Eurodollar Rate applicable to such Eurodollar Advance.

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

      SECTION 3.2. Prepayments.

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

     (b)  Mandatory Prepayments . If at any time the Outstanding Credits exceed the aggregate Commitments, the Borrower shall immediately make a principal payment to the Agent and/or deposit funds in the Cash Collateral Account in respect of LC Outstandings pursuant to Section 9.2(d) for the ratable accounts of the Lenders as shall be necessary in order that the Outstanding Credits (after giving effect to such prepayment) minus the amount held in the Cash Collateral Account after giving effect to such cash collateralization will be less than or equal to the aggregate Commitments. Any payments made under this subsection (b) shall be subject to Section 4.3 and, in the case of principal payments, shall be applied first to Base Rate Advances, and then to Eurodollar Advances in direct order of Interest Period maturities.

      SECTION 3.3. Payment in full at Maturity.

     On the Maturity Date, the entire outstanding principal balance of all Advances, together with accrued but unpaid interest and all other sums owing under this Agreement, shall be due and payable in full.

      SECTION 3.4. Fees.

     (a)  Facility Fee . In consideration of the Commitments being made available by the Lenders hereunder, the Borrower agrees to pay to the Agent, for the pro rata benefit of each Lender, a facility fee at a rate per annum equal to the Facility Fee Percentage in effect from time to time commencing on the date hereof, on the Commitment from time to time of such Lender (regardless of usage), quarterly in arrears, on the last day of each March, June, September and December, on the Maturity Date, and (if applicable) on the date after the Maturity Date on which all Advances and other amounts payable by the Borrower hereunder are paid in full (without regard to any termination of the Commitments on the Maturity Date).

     (b)  LC Fee. The Borrower agrees to pay the Agent for the account of the Fronting Bank an issuance fee (an “ Issuance Fee ”) and such other charges as are separately agreed upon with the Fronting Bank, and agrees to pay to the Agent for the account of the Lenders a fee (the “ LC Fee ”) on the face amount of each Letter of Credit issued by the Fronting Bank calculated at a rate per annum at all times equal to the Applicable Margin in effect for Eurodollar Rate Advances, in each case computed on the basis of the actual number of days that each Letter of Credit is outstanding over a year of 360 days, payable quarterly in arrears on each March 31, June 30, September 30 and December 31, and on the date that such Letter of Credit expires or is drawn in full.

     (c)  Administrative Fees . The Borrower agrees to pay such other fees as agreed to by the Borrower in the Fee Letters.

      SECTION 3.5. Place and Manner of Payments.

     All payments of principal, interest, fees, expenses and other amounts to be made by the Borrower under this Agreement shall be received without setoff, deduction or counterclaim not later than 2:00 p.m. on the date when due in Dollars and in immediately available funds by the Agent at its offices in New York, New York. The Borrower shall, at the time it makes any payment under this Agreement, specify to the Agent the Outstanding Credits, fees or other amounts payable by the Borrower hereunder to which such payment is to be applied (and in the event that it fails to specify, or if such application would be inconsistent with the terms hereof, the Agent shall distribute such payment to the Lenders in such manner as it reasonably determines in its sole discretion).

      SECTION 3.6. Pro Rata Treatment.

     Except to the extent otherwise provided herein, all Borrowings, each payment or prepayment of principal of any Advance, each payment of interest on the Advances, each payment of facility fees, LC Fees, each reduction of the Commitments, and each conversion or continuation of any Advance, shall be allocated pro rata among the Lenders in accordance with the respective Commitment Percentages; provided that, if any Lender shall have failed to fund its applicable pro rata share of any Borrowing, then any amount to which such Lender would otherwise be entitled pursuant to this Section 3.6 shall instead be payable to the Agent until the share of such Borrowing not funded by such Lender has been repaid; and provided , further, that in the event any amount paid to any Lender pursuant to this Section 3.6 is rescinded or must

otherwise be returned by the Agent, each Lender shall, upon the request of the Agent, repay to the Agent the amount so paid to such Lender, with interest for the period commencing on the date such payment is returned by the Agent until the date the Agent receives such repayment at a rate per annum equal to, during the period to but excluding the date two Business Days after such request, the Federal Funds Rate, and thereafter, the Base Rate plus two percent per annum .

      SECTION 3.7. Computations of Interest and Fees.

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

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

      SECTION 3.8. Sharing of Payments.

     Each Lender agrees that, in the event that any Lender shall obtain payment in respect of any Extension of Credit or any other obligation owing to such Lender under this Agreement through the exercise of a right of set-off, banker’s lien, counterclaim or otherwise (including, but not limited to, pursuant to the Bankruptcy Code) in excess of its pro rata share as provided for in

this Agreement, such Lender shall promptly purchase from the other Lenders a participation in such Extension of Credit and other obligations, in such amounts and with such other adjustments from time to time, as shall be equitable in order that all Lenders share such payment in accordance with their respective ratable shares as provided for in this Agreement. Each Lender further agrees that if a payment to a Lender (which is obtained by such Lender through the exercise of a right of set-off, banker’s lien, counterclaim or otherwise) shall be rescinded or must otherwise be restored, each Lender that shall have shared the benefit of such payment shall, by repurchase of a participation theretofore sold, return its share of that benefit to each Lender whose payment shall have been rescinded or otherwise restored. The Borrower agrees that any Lender so purchasing such a participation may, to the fullest extent permitted by law, exercise all rights of payment, including set-off, banker’s lien or counterclaim, with respect to such participation as fully as if such Lender were a holder of such Advance or other obligation in the amount of such participation. Except as otherwise expressly provided in this Agreement, if any Lender shall fail to remit to the Agent or any other Lender an amount payable by such Lender to the Agent or such other Lender pursuant to this Agreement on the date when such amount is due, such payments shall accrue interest thereon, for each day from the date such amount is due until the day such amount is