EXECUTION COPY

SHORT-TERM
REVOLVING CREDIT AGREEMENT
among
COSTCO WHOLESALE CORPORATION
as Borrower
and
BANK OF AMERICA, N.A.
as Administrative Agent for the Lenders
and
FIRST UNION NATIONAL BANK
as Documentation Agent for the Lenders
and
UNION BANK OF CALIFORNIA
as Syndication Agent for the Lenders
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
as Lenders
Arranged By
BANC OF AMERICA SECURITIES, LLC

November 15, 2000

$250,000,000

TABLE OF CONTENTS

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SHORT-TERM
REVOLVING CREDIT AGREEMENT

    THIS SHORT-TERM REVOLVING CREDIT AGREEMENT ("Agreement") is made as of November 15, 2000, by and among COSTCO WHOLESALE CORPORATION, a Washington corporation (the "Borrower"), each lender from time to time a party hereto (individually a "Lender" and collectively the "Lenders"), and BANK OF AMERICA, N.A., as administrative agent for the Lenders (the "Agent").

RECITALS

A.  Borrower has requested that Lenders provide a revolving line of credit and Lenders and the Agent are willing to do so on the terms and conditions set forth herein.

B.  In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

    Section 1.01  Certain Defined Terms.  As used in this Agreement, the following terms have the following meanings:

    "Absolute Rate" means a rate of interest per annum expressed to the nearest 1/100th of one percent as set forth in a Competitive Bid Loan Offer.

    "Affiliate" of any Person means any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to be "controlled by" any other Person if such other Person possesses, directly or indirectly, power (a) to vote 25% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managing general partners; or (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

    "Agent" means Bank of America, N.A. and any successor administrative agent selected pursuant to Section 9.09 hereof.

    "Agent-Related Persons" means Agent (including any successor agent), together with its Affiliates (including, in the case of Agent, the Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.

    "Applicable Interest Period" means, (i) with respect to any Committed Loan accruing interest at a LIBOR Rate, the period commencing on the first day the Borrower elects to have such LIBOR Rate apply to such Loan and ending either (A) on a day not less than seven (7) or more than thirty (30) days thereafter; or (B) on a day one, two, three or six months thereafter, in either case as specified in the Interest Rate Notice given in respect to such Loan, and (ii) with respect to any Competitive Bid Loan accruing interest at a LIBOR Rate, the period commencing on the first day the Borrower elects to have such LIBOR Rate apply to such Loan and ending on a day one, two, three, four, five, six, seven, eight, nine, ten, eleven or twelve months thereafter provided, however:

    (i)  if any Applicable Interest Period would otherwise end on a day that is not a Business Day, such Applicable Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Applicable Interest Period into another calendar month, in which event such Applicable Interest Period shall end on the preceding Business Day;

    (ii) any Applicable Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Applicable Interest Period) shall end on the last Business Day of the calendar month at the end of such Applicable Interest Period; and

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    (iii) no Applicable Interest Period for any Loan shall extend beyond the Maturity Date.

    "Applicable Interest Rate" means for each Committed Loan, the Base Rate or LIBOR Rate as designated by the Borrower in an Interest Rate Notice given with respect to such Loan (or portion thereof) or as otherwise determined pursuant to Section 2.09 (b).

    "Arranger" means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager.

    "Bank of America" means Bank of America, N.A.

    "Base Rate" means a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus ¹/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate." The prime rate is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in the prime rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

    "Base Rate Loan" means a Committed Loan or portion thereof bearing interest at the Base Rate.

    "Borrower" means Costco Wholesale Corporation, a Washington corporation, and any permitted Successor or assign pursuant to Section 10.05.

    "Borrower's Credit Rating" means a level of credit determined in accordance with the standards set forth in the Pricing Schedule.

    "Business Day" means any day other than Saturday, Sunday or another day on which banks are authorized or obligated to close in San Francisco, California or New York, New York except in the context of the selection of a LIBOR Loan or the calculation of the LIBOR Rate for any Applicable Interest Period, in which event "Business Day" means any day other than Saturday or Sunday on which dealings in foreign currencies and exchange between banks may be carried on in London, England, San Francisco, California, and New York, New York.

    "Capital Adequacy Regulation" means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank.

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

    "Commitment" has the meaning given in Section 2.01.

    "Committed Loans" has the meaning given in Section 2.01.

    "Committed Loan Notes" has the meaning giver in Section 2.12.

    "Competitive Bid Loans" means loans made pursuant to the terms of Sections 2.03 and 2.04.

    "Competitive Bid Loan Notes" has the meaning given in Section 2.12.

    "Competitive Bid Loan Offer" has the meaning given in Section 2.04(b).

    "Competitive Bid Loan Request" has the meaning given in Section 2.04(a).

    "Consolidated Net Income" means for any accounting period the net income of the Borrower and its consolidated Subsidiaries for such period, determined in accordance with generally accepted United States accounting principles consistently applied, excluding, however, (A) proceeds of any life insurance policy, (B) gain or loss arising from any write-up or write-down of capital assets or from the acquisition or retirement or sale of securities of the Borrower, (C) any restoration of any contingency reserve to

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income except to the extent that provision for such reserve was made out of income accrued after the close of the fiscal year of the Borrower last ended as of September 3, 2000, and (D) special credits or charges.

    "Declining Lender" has the meaning set forth in Section 2.06(b).

    "Default" means any event which but for the passage of time or the giving of notice or both would be an Event of Default.

    "Distribution" has the meaning set forth in Section 7.09.

    "Effective Date" has the meaning set forth in Section 2.06(c).

    "Eligible Assignee" has the meaning set forth in Section 10.05.

    "Environmental Laws" means all foreign, federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case relating to environmental, health, safety and land use matters applicable to any property.

    "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.

    "ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

    "Event of Default" has the meaning set forth in Section 8.01.

    "Facilities" means this Agreement and the Extended Revolving Credit Agreement by and among the Agent, the Borrower and the lenders party thereto dated November 15, 2000.

    "Federal Funds Rate" means, for any day, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Federal Reserve Bank of New York (including any such successor, "H.15(519)") on the preceding Business Day opposite the caption "Federal Funds (Effective)"; or, if for any relevant day such rate is not so published on any such preceding Business Day, the rate for such day will be the arithmetic mean as determined by the Agent of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that day by each of three leading brokers of Federal funds transactions in New York City selected by the Agent.

    "Further Taxes" means any and all present or future taxes, levies, assessments, imposts, duties, deductions, fees, withholdings or similar charges (including net income taxes and franchise taxes), and all liabilities with respect thereto, imposed by any jurisdiction on account of amounts payable or paid pursuant to Section 3.01.

    "Governmental Approval" means an approval, permit, license, authorization, certificate, or consent of any Governmental Authority.

    "Governmental Authority" means the government of the United States or any State or any foreign country or any political subdivision of any thereof or any branch, department, agency, instrumentality, court, tribunal or regulatory authority which constitutes a part or exercises any sovereign power of any of the foregoing.

    "Indebtedness" means for any Person (i) all items of indebtedness or liability (except capital, surplus, deferred credits and reserves, as such) which would be included in determining total liabilities as shown on the liability side of a balance sheet as of the date as of which indebtedness is determined, (ii) indebtedness secured by any Lien, whether or not such indebtedness shall have been assumed,

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(iii) any other indebtedness or liability for borrowed money or for the deferred purchase price of property or services for which such Person is directly or contingently liable as obligor, guarantor, or otherwise, or in respect of which such Person otherwise assures a creditor against loss, and (iv) any other obligations of such Person under leases which shall have been or should be recorded as capital leases or so-called synthetic leases.

    "Indemnified Liabilities" has the meaning given in Section 10.06.

    "Indemnities" has the meaning given in Section 10.06.

    "Interest Rate Notice" has the meaning given in Section 2.09(b).

    "Laws" or "Law" means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including without limitation the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, in each case whether or not having the force of law.

    "Lenders" means each lender from time to time party hereto.

    "Lien" means, for any person, any security interest, pledge, mortgage, charge assignment, hypothecation, encumbrance, attachment, garnishment, execution or other voluntary or involuntary lien upon or affecting the revenues of such person or any real or personal property in which such person has or hereafter acquires any interest, except (i) liens for Taxes which are not delinquent or which remain payable without penalty or the validity or amount of which is being contested in good faith by appropriate proceedings upon stay of execution of the enforcement thereof with appropriate reserves having been established therefore; (ii) liens imposed by law (such as mechanics' liens) incurred in good faith in the ordinary course of business which are not delinquent or which remain payable without penalty or the validity or amount of which is being contested in good faith by appropriate proceedings upon stay of execution of the enforcement thereof with, in the case of liens on property of the Borrower or any of its Subsidiaries, provision having been made to the satisfaction of the Agent for the payment thereof in the event the contest is determined adversely to the Borrower or such Subsidiary; and (iii) deposits or pledges under worker's compensation, unemployment insurance, social security or other similar laws or made to secure the performance of bids, tenders, contracts (except for repayment of borrowed money), or leases, or to secure statutory obligations or surety or appeal bonds or to secure indemnity, performance or other similar bonds given in the ordinary course of business.

    "LIBOR Base Rate" means, with respect to LIBOR Loans for the relevant Applicable Interest Period:

    (a) the rate per annum (carried out to the fifth decimal place) equal to the rate determined by the Agent to be the offered rate that appears on the page of the Telerate Screen that displays an average British Bankers Association Interest Settlement Rate (such page currently being page number 3750) for deposits in dollars (for delivery on the first day of such Applicable Interest Period) with a term equivalent to such Applicable Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Applicable Interest Period, or

    (b) in the event the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate per annum (carried to the fifth decimal place) equal to the rate determined by the Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Applicable Interest Settlement Rate for deposits in dollars (for delivery on the first day of such Applicable Interest Period) with a term equivalent to such Applicable Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Applicable Interest Period, or

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    (c) in the event the rates referenced in the preceding subsections (a) and (b) are not available, the rate per annum determined by the Agent as the rate of interest at which dollar deposits (for delivery on the first day of such Applicable Interest Period) in same day funds in the approximate amount of the applicable LIBOR Loan and with a term equivalent to such Applicable Interest Period would be offered by its London Branch to major banks in the offshore dollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Applicable Interest Period.

    "LIBOR Loan" means any Loan or portion thereof bearing interest at the LIBOR Rate.

    "LIBOR Rate" shall mean, with respect to any LIBOR Loan for any Applicable Interest Period, an interest rate per annum equal to the sum of (a) the Margin and (b) the quotient of (i) the LIBOR Base Rate applicable to such Applicable Interest Period divided by (ii) one minus the LIBOR Reserve Percentage.

    "LIBOR Reserve Percentage" means, for any day during any Applicable Interest Period, the reserve percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement) (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"). The LIBOR Rate for each outstanding LIBOR Loan shall be adjusted automatically as of the effective date of any change in the LIBOR Reserve Percentage.

    "Loan Documents" means this Agreement, the Committed Loan Notes, the Competitive Bid Loan Notes, and all other certificates, instruments and other documents executed in connection with this Agreement or the transactions contemplated hereby.

    "Loans" means the Committed Loans and the Competitive Bid Loans.

    "Majority Lenders" means at any time Lenders having an aggregate Percentage Interest of more than fifty percent (50%) provided, however, that if the Commitments of all Lenders shall have been terminated, "Majority Lenders" shall mean at any time the holders of Committed Loan Notes and Competitive Bid Loan Notes who, in the aggregate, have more than fifty percent (50%) of the then-outstanding principal balance of the Loans.

    "Margin" means (a) in the case of a Competitive Bid Loan, the per annum interest rate specified as the "margin" in the related Competitive Bid Loan Offer and (b) in the case of a Committed Loan, a per annum interest rate determined in accordance with the Pricing Schedule.

    "Material Adverse Effect" means any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of any Loan Document, (b) is or could reasonably be expected to be material and adverse to the condition (financial or otherwise), business operations or prospects of the Borrower and its Subsidiaries, taken as a whole, or (c) materially impairs or could reasonably be expected to materially impair the ability of the Borrower to perform its obligations under the Loan Documents.

    "Maturity Date" means November 14, 2001, or such later date as may be established pursuant to Section 2.16 hereof.

    "Officer's Certificate" means a certificate substantially in the form of Exhibit G and signed in the name of the Borrower by its Chairman, President, Executive Vice President and Chief Financial Officer or its Vice President and Treasurer.

    "Other Taxes" means any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the

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execution, delivery, performance, enforcement or registration of, or otherwise with respect to, this Agreement or any other Loan Documents.

    "Outstanding Credit Agreements" means (i) that certain amended and restated extended credit agreement dated February 5, 1997, as amended, among Price/Costco, Inc. as borrower and Bank of America National Trust and Savings Association, Morgan Guaranty Trust Company of New York, CIBC, Inc., Nationsbank of Texas, N.A., Bank of Hawaii, Banque Nationale de Paris, First Union National Bank of North Carolina, Fleet National Bank, United States National Bank of Oregon, Corestates Bank, N.A., and The Bank of New York, as lenders, Bank of America National Trust and Savings Association d/b/a Seafirst Bank, as administrative and syndications agent for the lenders and Morgan Guaranty Trust Company of New York, as documentation agent for the lenders, and (ii) that certain second amended and restated short term credit agreement dated January 24, 2000 among Costco Wholesale Corporation, as borrower, the several financial institutions from time to time party thereto, as the lenders, and Bank of America, N.A., as administrative agent for itself and the lenders.

    "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

    "Pension Plan" means an "employee pension benefit plan" (as such term is defined in ERISA) from time to time maintained by the Borrower, either Guarantor, or a member of the Controlled Group.

    "Percentage Interest" has the meanings given in Section 2.01 as the same may be adjusted pursuant to Section 10.05 from time to time hereafter.

    "Person" means any individual, trustee, corporation, general partnership, limited partnership, limited liability company, joint stock company, trust, unincorporated organization, bank, business association, firm, joint venture, Governmental Authority, or otherwise.

    "Plan" shall mean, at any time, an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is either (a) maintained by the Borrower or any member of a Controlled Group for employees of the Borrower or any member of such Controlled Group or (b) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which the Borrower or any member of a Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five (5) plan years made contributions.

    "Pricing Schedule" means the Schedule attached hereto identified as such.

    "Required Notice of Borrowing" means a written request for a Committed Loan from Borrower substantially in the form attached hereto as Exhibit G executed by the Borrower's Chairman, President or Executive Vice President and Chief Financial Officer (or such other person as may be designated in a writing delivered to the Agent by the Borrower's Senior Vice President and Chief Financial Officer) delivered to Agent and containing the information set forth in Section 2.02 which shall be delivered prior to 9:00 a.m. (San Francisco, California time) on the requested date of borrowing provided, however, if Borrower shall at the same time elect to have interest accrue on such Committed Loan at a LIBOR Rate the Required Notice of Borrowing shall be given prior to 10:00 a.m. (San Francisco, California time) on a Business Day at least three (3) Business Days before the requested date of borrowing. Requests for borrowing received after the designated hour will be deemed received on the next succeeding Business Day.

    "Requirement of Law" means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

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    "Subsidiary" of any Person means (i) any corporation of which a majority (by number of shares or by number of votes) of any class of outstanding capital stock normally entitled to vote for the election of one or more directors (regardless of any contingency which does or may suspend or dilute the voting rights of such class) is at such time owned directly or indirectly by such Person or by one or more Subsidiaries of such Person or (ii) any partnership, limited liability company, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to "Subsidiary" shall mean a Subsidiary of the Borrower.

    "Successor" means, for any corporation or banking association, any successor by merger or consolidation, or by acquisition of substantially all of the assets of the predecessor.

    "Taxes" means any and all present or future taxes, levies, assessments, imposts, duties, deductions, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, in the case of each Lender and the Agent, respectively, franchise taxes, gross receipts taxes imposed under Washington State statute and taxes imposed on or measured by its net income by the jurisdiction (or any political subdivision thereof) under the laws of which such Lender or the Agent, as the case may be, is organized or maintains a lending office.

    "Total Commitment" means the Commitments collectively, which Commitments equal Two Hundred Fifty Million Dollars ($250,000,000) in the aggregate as of the date hereof, as such amount may be reduced or adjusted from time to time in accordance with this Agreement.

    "TPC" means The Price Company, a California corporation.

    "Unfunded Vested Liabilities" shall mean, with respect to any Plan, at any time, the amount (if any) by which (a) the present value of all vested nonforfeitable benefits under such Plan exceeds (b) the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of the Borrower or any member of the Controlled Group to the PBGC or the Plan under Title IV of ERISA.

    Section 1.02  General Principles Applicable to Definitions.  Definitions given in Section 1.01 shall be equally applicable to both singular and plural forms of the terms therein defined and references herein to "he" or "it" shall be applicable to persons whether masculine, feminine or neuter. References herein to any document including, but without limitation, this Agreement shall be deemed a reference to such document as it now exists, and as, from time to time hereafter, the same may be amended. References herein to a "person" or "persons" shall be deemed to be references to an individual, corporation, partnership, trust, unincorporated association, joint venture, joint-stock company, government (including political subdivisions), Governmental Authority or agency or any other entity.

    Section 1.03  Accounting Terms.  Except as otherwise provided herein, accounting terms not specifically defined shall be construed, and all accounting procedures shall be performed, in accordance with generally accepted United States accounting principles consistently applied.

ARTICLE II
THE LOANS

    Section 2.01  Committed Loans.  Each Lender severally agrees on the terms and conditions of this Agreement to make loans ("Committed Loans") to the Borrower from time to time on Business Days during the period beginning on the date hereof and ending on the Maturity Date in an aggregate principal amount not exceeding at any one time the lesser of (a) the principal amount set forth opposite such Lender's name in Schedule 2.01 (such Lender's "Commitment") or (b) the percentage interest set forth opposite such Lender's name on Schedule 2.01 attached hereto (such Lender's

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"Percentage Interest") of the difference between the (i) Total Commitment and (ii) the then-outstanding principal balance of the Loans.

    Section 2.02  Manner of Borrowing a Committed Loan.  The Borrower shall give the Agent the Required Notice of Borrowing specifying the date of the borrowing of any Committed Loan and the amount thereof, which shall be an integral multiple of One Million Dollars ($1,000,000) and not less than Five Million Dollars ($5,000,000). Such notice shall be irrevocable and shall be deemed to constitute a representation and warranty by the Borrower that as of the date of the notice the statements set forth in Article V hereof (other than Section 5.06(b) for borrowings after the date hereof) are true and correct and that no Default or Event of Default has occurred and is continuing. On receipt of such notice, the Agent shall promptly notify each Lender by telephone (confirmed immediately by telex, facsimile transmission or cable), telex, facsimile transmission, or cable of the date of the borrowing. Each Lender shall before 11:00 a.m. (San Francisco, California time) on the date of the borrowing, pay the lesser of (a) such Lender's Percentage Interest of the aggregate principal amount of the requested borrowing identified in the Required Notice of Borrowing or (b) the maximum amount such Lender is committed to advance pursuant to the terms of Section 2.01 hereof in immediately available funds to the office of the Agent. Upon fulfillment to the Agent's satisfaction of the applicable conditions set forth in Article IV, and after receipt by the Agent of such funds, subject to Section 2.08, the Agent will promptly make such immediately available funds available to the Borrower by depositing them to the ordinary checking account maintained by the Borrower with the Agent.

    Section 2.03  Competitive Bid Loan.  The Borrower may request Competitive Bid Loans from time to time on any Business Day during the period beginning on the date hereof and ending on the Maturity Date in the manner set forth in Section 2.04 and in amounts not to exceed the difference between (a) the Total Commitment and (b) the then-outstanding principal balance of the Loans.

    Section 2.04  Manner of Borrowing a Competitive Bid Loan.

    (a) When the Borrower wishes to request offers for Competitive Bid Loans, it shall transmit by telex or facsimile transmission a Competitive Bid Loan Request substantially in the form of Exhibit D hereto ("Competitive Bid Loan Request") to be received by Agent no later than (i) 10:00 a.m. (San Francisco, California time) at least four (4) Business Days prior to the borrowing date proposed therein, in the case of a request for a Competitive Bid Loan which is to accrue interest at LIBOR Rate or (ii) 9:00 a.m. (San Francisco, California time) at least one (1) Business Day prior to the borrowing date proposed therein, in the case of a request for a Competitive Bid Loan to accrue interest at an Absolute Rate, specifying in each case:

(A)  the proposed borrowing date, which shall be a Business Day, for the proposed Competitive Bid Loan;

(B)  the aggregate principal amount of such proposed Competitive Bid Loan;

(C)  whether the requested Competitive Bid Loan is to accrue interest at a LIBOR Rate or an Absolute Rate; and

(D)  in the case of a request for a Competitive Bid Loan to accrue interest at the LIBOR Rate, the Applicable Interest Period and in the case of a request for a Competitive Bid Loan to accrue interest at an Absolute Rate, the maturity date, which may not be less than seven (7) days or more than three hundred sixty-five (365) days after the proposed borrowing date and, in any event, may not be after the Maturity Date.

The Borrower may transmit up to three (3) Competitive Bid Loan Requests on a single day. Except as set forth in the preceding sentence, no Competitive Bid Loan Request shall be given within five (5) Business Days of any other Competitive Bid Loan Request. Each Competitive Bid Loan Request shall be in a minimum principal amount of Five Million Dollars ($5,000,000) and in integral multiples

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of One Million Dollars ($1,000,000). A Competitive Bid Loan Request that does not substantially conform to the terms hereof shall be rejected and the Agent shall promptly notify the Borrower of such rejection by telex or facsimile transmission. Each Competitive Bid Loan Request shall be deemed to constitute a representation and warranty by the Borrower that as of the date of such Request the statements set forth in Article V hereof, other than Section 5.06(b), are true and correct and that no Default or Event of Default has occurred and is continuing.

    (b) Promptly, and in any event before 2:00 p.m. (San Francisco, California time) on the same Business Day that any conforming Competitive Bid Loan Request is received, the Agent shall send to each of the Lenders by telex or facsimile transmission a copy of such Competitive Bid Loan Request(s), which shall constitute an invitation by the Borrower to each Lender to submit an irrevocable offer ("Competitive Bid Loan Offer") to make some or all of the requested Competitive Bid Loan at a rate of interest determined by each Lender in its sole discretion.

    (c) Each Lender may, in its sole discretion, submit one or more Competitive Bid Loan Offers each containing an offer to make a Competitive Bid Loan in response to a Competitive Bid Loan Request. Each Competitive Bid Loan Offer must comply with the requirements of this Section 2.04(c) and must be submitted to the Agent by telex or facsimile transmission in the case of a Competitive Bid Loan Offer for a Loan accruing interest at a LIBOR Rate not later than 9:00 a.m. (San Francisco, California time) at least three (3) Business Days prior to the proposed borrowing date, or in the case of a Competitive Bid Loan Offer for a loan accruing interest at an Absolute Rate, not later than 7:00 a.m. (San Francisco, California time) on the proposed borrowing date, provided, however, that if the Agent in its capacity as Lender intends to submit one or more Competitive Bid Loan Offers it may only do so if it notifies the Borrower of the terms of such offer or offers not later than 8:45 a.m. (San Francisco, California time) at least three (3) Business Days prior to the proposed borrowing date for a loan to accrue interest at a LIBOR Rate and not later than 6:45 a.m. (San Francisco, California time) on the proposed borrowing date for a Loan to accrue interest at an Absolute Rate. Each Competitive Bid Loan Offer shall be in substantially the form of Exhibit E hereto and shall specify:

    (i)  the proposed borrowing date, which shall be the same as that set forth in the corresponding Competitive Bid Loan Request,

    (ii) the principal amount of the Competitive Bid Loan for which each such offer is being made, which principal amount (A) may be greater than, less than or equal to the Commitment of the offering Lender, (B) must be at least Five Million Dollars ($5,000,000) and an integral multiple of One Million Dollars ($1,000,000), and (C) may not exceed the principal amount of the Competitive Bid Loan for which offers were requested in the corresponding Competitive Bid Loan Request,

    (iii) in the case of a Competitive Bid Loan Offer for a Competitive Bid Loan accruing interest at a LIBOR Rate, the Margin offered for such Competitive Bid Loan (which Margin may be a positive or negative increment), and in the case of a Competitive Bid Loan Offer for a Competitive Bid Loan accruing interest at an Absolute Rate, the Absolute Rate offered for such Competitive Bid Loan,

    (iv) the minimum or maximum amount, if any, of the Competitive Bid Loan Offer which may be accepted by the Borrower, and

    (v) the identity of the offering Lender.

    (d) The Agent shall reject any Competitive Bid Loan Offer that:

    (i)  is not substantially in compliance with the terms of Section 2.04(c);

    (ii) contains qualifying, conditional or similar language, other than any such language contained in Exhibit E hereto;

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    (iii) proposes terms other than or in addition to those set forth in the corresponding Competitive Bid Loan Request; or

    (iv) arrives after the time set forth in Section 2.04(c).

If any Competitive Bid Loan Offer is rejected pursuant to this Section 2.04(d), the Agent shall promptly notify the affected Lender of such rejection by telex or facsimile transmission.

    (e) The Agent shall promptly notify the Borrower of the terms of all conforming Competitive Bid Loan Offers submitted by the Lenders in response to each Competitive Bid Loan Request. (Any Competitive Bid Loan Offer received by Agent which conforms with the requirements of Section 2.04(c) but which is made in respect of a Competitive Bid Loan for which a conforming Competitive Bid Loan Offer has already been received from the same Lender shall be disregarded by the Agent unless such subsequent Competitive Bid Loan Offer specifically states that it is submitted to correct an error in such former Competitive Bid Loan Offer.) The Agent's notice to the Borrower shall specify the aggregate principal amount of the Competitive Bid Loan for which conforming offers have been received and the respective LIBOR Rates or Absolute Rates, as the case may be.

    (f)  Not later than 9:30 a.m. (San Francisco, California time) at least three (3) Business Days prior to the proposed borrowing date, in the case of a Competitive Bid Loan to accrue interest at a LIBOR Rate, or 7:30 a.m. (San Francisco, California time) on the proposed borrowing date, in the case of a Competitive Bid Loan to accrue interest at an Absolute Rate, the Borrower shall notify the Agent of the aggregate principal amount of the Competitive Bid Loan(s) it elects to accept for each outstanding Competitive Bid Loan Request; provided, however, that the aggregate principal amount of the accepted Competitive Bid Loan(s) may not exceed the amount set forth in the related Competitive Bid Loan Request and provided, further, that notwithstanding Borrower's acceptance of a particular principal amount of Competitive Bid Loan, the actual aggregate principal amount of the Competitive Bid Loan to be made may be less than the amount accepted by the Borrower if after giving effect to the terms of subsection 2.04(g) less than all of the accepted principal would be allocated to the Lenders submitting Competitive Bid Loan Offers. The failure by the Borrower to give the notice herein provided for to the Agent in respect of any Competitive Bid Loan Request shall be deemed to be an election to decline all Competitive Bid Loan Offers submitted in respect of such Request.

    (g) In respect of each Competitive Bid Loan Request for which Borrower has notified Agent that it will accept one or more Competitive Bid Loan(s) in an aggregate principal amount, the Agent shall allocate such aggregate principal amount of the Loan(s) among the Lenders submitting Competitive Bid Loan Offers in response to such Request on the basis of the ascending Margins or Absolute Rates, as the case may be, as set forth in such Competitive Bid Loan Offers up to the maximum principal amounts set forth therein provided, however, that if such ascending order would result in any Lender being allocated a Competitive Bid Loan in an amount less than the minimum, if any, specified in such Lender's Competitive Bid Loan Offer, the Competitive Bid Loan shall be allocated as if such Lender had never submitted such Competitive Bid Loan Offer. If Competitive Bid Loan Offers are received from two or more Lenders designating the same Margin or Absolute Rate, as the case may be, and if some or all of the Competitive Bid Loan would be allocable to such Lenders pursuant to the terms of the preceding sentence, the Agent shall allocate the portion of the Competitive Bid Loan which is to accrue interest at the designated LIBOR Rate or Absolute Rate among such Lenders. In making such allocation the Agent shall exercise its sole discretion but shall be guided by the following principles:

    (i)  allocation to the Lenders shall, to the extent possible, be in integral multiples of One Million Dollars ($1,000,000);

    (ii) no Lender shall be allocated a portion of any Competitive Bid Loan which is less than the minimum amount which such Lender has indicated that it is willing to accept in the applicable Competitive Bid Loan Offer; and

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    (iii) to the extent consistent with the foregoing considerations, the principal amount of the Competitive Bid Loan to be allocated among the Lenders, shall be allocated approximately in proportion to the aggregate principal amount of each of their respective Competitive Bid Loan Offers.

Allocations by the Agent of the amounts of Competitive Bid Loan among the Lenders shall be conclusive and binding in the absence of manifest error. The Agent shall notify each Lender allocated one or more Competitive Bid Loan (or portions thereof) and the aggregate principal amount so allocated, in the case of a Competitive Bid Loan to accrue interest at a LIBOR Rate prior to 10:00 a.m. (San Francisco, California time) on the date the Borrower has notified the Agent of its election to accept such Competitive Bid Loan(s) and in the case of a Competitive Bid Loan to accrue interest at the Absolute Rate, prior to 8:00 a.m. (San Francisco, California time) on the date the Borrower has notified the Agent of its election to accept such Competitive Bid Loan(s). Promptly thereafter, Agent shall notify all Lenders of the principal amounts and interest rates of all such accepted Competitive Bid Loan.

    (h) If pursuant to Section 2.04(g), any Lender is notified that some or all of its Competitive Bid Loan Offer has been accepted, such Lender shall, before 11:00 a.m. (San Francisco, California time) on the borrowing date specified in the Competitive Bid Loan Request applicable thereto, make available to the Agent the amount of the Competitive Bid Loan to be made by such Lender, in immediately available funds at the office of the Agent at such address as Agent shall from time to time designate. Upon fulfillment to the Agent's satisfaction of the applicable conditions set forth in Article IV and after receipt by Agent of such funds, the Agent will make such immediately available funds available to the Borrower by depositing them to the ordinary checking account maintained by the Borrower with the Agent.

    (i)  If the Borrower accepts some or all of a Competitive Bid Loan Offer pursuant to this Section 2.04 and thereafter the Borrower declines to take the Loan or a condition precedent to the making of such Loan is not satisfied or waived, Borrower shall indemnify the Agent and the affected Lender for all losses and any costs which the Agent or such Lender may sustain as a consequence thereof including, without limitation, the cost of redeployment of funds at rates lower than the cost to the Lender of such funds. A certificate of the Agent or such Lender setting forth the amount due to it pursuant to this Section 2.04(i) and the basis for, and calculation of such amount shall be prima facie evidence of the matters set forth therein. Payment of the amount owed shall be due within fifteen (15) days after the Borrower's receipt of such certificate.

    (j)  Nothing in this Section 2.04 shall be construed as right of first offer in favor of the Lenders or to otherwise limit the ability of the Borrower to request and accept credit facilities from any person (including any of the Lenders), provided that no Default or Event of Default would otherwise arise or exist as a result of the Borrower executing, delivering or performing under such other credit facilities.

    (k) Each outstanding Competitive Bid Loan shall reduce pro tanto the available Total Commitment, and each Lender's Commitment shall be deemed used for all purposes by an amount equal to its Percentage Interest of the outstanding amount of such Competitive Bid Loan but Competitive Bid Loans shall not reduce or affect any individual Lender's available Commitment or Percentage Interest.

    Section 2.05  Reduction of Commitments.  Upon not less than five (5) Business Days' written notice to the Agent, the Borrower may terminate the Total Commitment, in whole or in part, provided that each partial reduction of the Total Commitment shall be in an amount not less than Ten Million Dollars ($10,000,000) and, provided, further, that in no event may the Total Commitment be reduced to an amount less than the sum of the then-outstanding principal balance of the Loans. Any reduction in the Total Commitment shall be deemed to be a proportionate reduction in each Lender's Commitment

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therein such that after making such reduction, each Lender's Commitment therein will be in an amount equal to its Percentage Interest of the then-reduced Total Commitment.

    Section 2.06  Increase in Total Commitment.

    (a) The Borrower may from time to time (but no more often than once each calendar year) request an increase in the combined commitments under both Facilities up to an aggregate of $100,000,000 upon three (3) Business Days' notice to the Agent (who shall promptly notify the Lenders); provided, however, in no event shall the aggregate commitments, under the Facilities, after giving effect to such increase, exceed $600,000,000. Such request shall include a certificate signed by a responsible officer stating that (i) the representations and warranties contained in Article V are true and correct on and as of the date of such certificate, and will remain true and correct after giving effect to such increase in commitments, and (ii) no Default or Event of Default exists or would result from such increase in commitments. Each Lender shall notify the Agent whether (x) it agrees to increase its Commitment by an amount equal to or less than its pro rata share of such requested increase, or (y) it does not agree to any increase in its Commitment. Any Lender not responding within the above time period shall be deemed to have elected not to increase its Commitment. The Agent shall, after receiving notification from all the Lenders or after the expiration of such period, whichever is earlier, notify the Borrower and the Lenders of the results thereof.

    (b) If any Lender declines, or is deemed to have declined, to participate in any such increase to the full extent of its pro rata share thereof (a "Declining Lender"), the Borrower may request, through the Agent, that one or more other Lenders or Eligible Assignees, in their sole discretion, provide Commitment(s) equal to such shortfall.

    (c) If any Commitments are increased in accordance with this Section 2.06, the Agent and the Borrower shall determine the effective date of such increase (the "Effective Date"), and the Agent shall promptly notify the Lenders thereof. On or prior to the Effective Date, the Borrower shall deliver to the Agent, in form and substance satisfactory to the Agent: (i) corporate resolutions and incumbency certificates of the Borrower dated as of the Effective Date approving such increase in sufficient copies for each Lender, and (ii) new or amended Notes, if requested by any new or affected Lender, evidencing such new or revised Commitments.

    (d) The Borrower shall prepay any LIBOR Loans outstanding on the Effective Date (and pay any breakfunding costs in connection therewith) to the extent necessary to keep outstanding Committed Loans ratable with any revised Commitment Percentages arising from a nonratable increase in the Commitments under this section. In conjunction with such increase, the Lenders (new or existing) shall accept (and the existing Lenders shall make) an assignment at par of Committed Loans outstanding at the time of such Commitment increase such that, after giving effect thereto, all Committed Loans are held by the Lenders on a pro rata basis.

    (e) This Section 2.06 shall supersede any provisions in Section 10.11 to the contrary.

    Section 2.07  Repayment of Principal.  The Borrower shall repay to the Agent for the account of the Lenders the principal amount of each Committed Loan on or before the Maturity Date. The Borrower shall repay to the Agent for the account of each Lender which has made a Competitive Bid Loan the principal amount of such Competitive Bid Loan on the maturity date specified by the Borrower in its related Competitive Bid Loan Request.

    Section 2.08  Agent's Right to Fund.  Unless Agent shall have received notice from a Lender prior to 12:00 noon (San Francisco, California time) on the date of any Loan that such Lender will not make available to Agent such Lender's Percentage Interest of the requested borrowing in the case of a Committed Loan or such Lender's Competitive Bid Loan, if any, to be made on such date in the case of a Competitive Bid Loan, Agent may assume that such Lender has made such funds available to Agent on the date of such Loans in accordance with Section 2.02 or Section 2.04 hereof and Agent

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may, in reliance upon such assumption, make available to Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such portion available to Agent and if Agent shall have advanced such portion to the Borrower, such Lender and Borrower severally agree to pay to Agent forthwith on demand such corresponding amount, together with interest thereon for each day from the date such amount is made available to Borrower until the date such amount is repaid to Agent, at (a) in the case of Borrower, for Committed Loans, the Applicable Interest Rate and for Competitive Bid Loan, the rate designated in the applicable Competitive Bid Loan Offer and (b) in the case of such Lender, the Federal Funds Rate. Any such repayment by Borrower shall be without prejudice to any rights it may have against the Lender that has failed to make available its funds for any requested borrowing.

    Section 2.09  Interest on Committed Loans.  

    (a) General Provisions.  The Borrower agrees to pay to Agent for the account of each Lender interest on the unpaid principal amount of each Committed Loan from the date of such Loan until such Loan shall be due and payable at a per annum rate equal to the Applicable Interest Rate, and, if default shall occur in the payment when due of any such Loan, from the maturity of that Loan until it is paid in full at a per annum rate equal to two percentage points (2%) above the Base Rate (changing as the Base Rate changes). Accrued but unpaid interest on each Committed Loan accruing interest at a LIBOR Rate shall be paid on the last day of each Applicable Interest Period, on the date of any principal payment (to the extent accrued on the principal amount paid), at the Maturity Date and, additionally, in the case of such a Loan for which the Applicable Interest Period is six months, on the day that is three months after the commencement of such Applicable Interest Period. Accrued but unpaid interest on each Base Rate Loan shall be paid on the last Business Day of each calendar month commencing on November 30, 2000 and continuing on the last Business Day of each calendar month thereafter and on the date of any principal payment (to the extent accrued on the principal amount paid) and on the Maturity Date. Unpaid interest accruing on amounts in default shall be payable on demand.

    (b) Selection of LIBOR Rate.  The Borrower may, subject to the requirements of this Section 2.09(b), on at least three (3) Business Days' prior written notice elect to have interest accrue on any Committed Loan or any portion thereof at a LIBOR Rate for an Applicable Interest Period. Such notice (herein, an "Interest Rate Notice") shall be deemed delivered on receipt by Agent except that the Interest Rate Notice received by the Agent after 10:00 a.m., (San Francisco, California time), on any Business Day, shall be deemed to be received on the immediately succeeding Business Day. Such Interest Rate Notice shall identify, subject to the conditions of this Section 2.09(b), the Committed Loan or portions thereof and the Applicable Interest Period which the Borrower selects. Any such Interest Rate Notice shall be irrevocable and shall constitute a representation and warranty by the Borrower that as of the date of such Interest Rate Notice, the statements set forth in Article V are true and correct and that no Event of Default or Default has occurred and is continuing. On receipt of such Interest Rate Notice, the Agent shall promptly notify each Lender by telephone (confirmed promptly by telex or facsimile transmission) of the information set forth in the Interest Rate Notice. Borrower's right to select a LIBOR Rate to apply to a Committed Loan or any portion thereof shall be subject to the following conditions: (i) the aggregate of all Committed Loans or portions thereof to accrue interest at a particular LIBOR Rate for the same Applicable Interest Period shall be an integral multiple of one Million Dollars ($1,000,000) and not less than Five Million Dollars ($5,000,000); (ii) the Borrower shall not have selected more than six (6) different LIBOR Rates or Applicable Interest Periods to be applicable to portions of the Committed Loans at any one time; (iii) a LIBOR Rate may not be selected for any Committed Loan or portion thereof which is already accruing interest at a LIBOR Rate unless such selection is only to become effective at the maturity of the Applicable Interest Period then in effect; (iv) the Agent or any Lender shall not have given notice pursuant to Sections 3.02 or 3.05 that the LIBOR Rate is not available; (v) no Default or Event of

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Default shall have occurred and be continuing and (vi) if the Borrower elects to have some portion (but less than all) of the Committed Loans, accrue interest at a designated LIBOR Rate, the Borrower shall select a portion of each Lender's Committed Loans, to accrue interest at such rate in proportion to their respective Percentage Interests. In the absence of an effective request for the application of a LIBOR Rate, the Committed Loans or remaining portions thereof shall accrue interest at the Base Rate. Any Interest Rate Notice which specifies a LIBOR Rate but fails to identify an Applicable Interest Period shall be deemed to be a request for the designated LIBOR Rate for an Applicable Interest Period of one (1) month. The Interest Rate Notice may be given with and contained in any Required Notice of Borrowing. If the Borrower delivers an Interest Rate Notice with any Required Notice of Borrowing for a Committed Loan and the Borrower thereafter declines to take such Committed Loan or a condition precedent to the making of such Loan is not satisfied or waived, Borrower shall indemnify the Agent and each Lender for all losses and any costs which the Agent or any Lender may sustain as a consequence thereof including, without limitation, the costs of redeployment of funds at rates lower than the cost to the Lenders of such funds. A certificate of the Agent or any Lender setting forth the amount due to it pursuant to this subparagraph (b) and the basis for, and the calculation of, such amount shall be prima facie evidence of the amount due pursuant to this subparagraph (b). Payment of the amount owed shall be due within fifteen (15) days after the Borrower's receipt of such certificate.

    (c) Applicable Days For Computation of Interest.  Computations of interest for Base Rate Loans shall be made on the basis of a year of three hundred sixty-five (365) days (or three hundred sixty-six (366) days as applicable), and for LIBOR loans, shall be made on the basis of a year of three hundred sixty (360) days, in each case, for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable.

    Section 2.10  Interest on Competitive Bid Loan.  The Borrower shall pay interest on the unpaid principal amount of each Competitive Bid Loan from the borrowing date to the stated maturity date thereof, as the rate of interest determined pursuant to Section 2.04 above (calculated on the basis of a 360-day year for the actual number of days elapsed), payable on the stated maturity date thereof provided, however, if the stated maturity date is more than three months after the borrowing date, accrued but unpaid interest shall also be payable in three-month intervals commencing on the day that is three months after such borrowing date. If all or a portion of the principal amount of any Competitive Bid Loan shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue principal amount shall bear interest from the date on which such payment was due at a rate per annum which is two percent (2%) above the rate which would otherwise be applicable to such Competitive Bid Loan until such Competitive Bid Loan's scheduled maturity date, and for each day thereafter until paid at a rate per annum which is two percent (2%) above the Base Rate (changing as such Base Rate changes). Unpaid interest accruing on amounts in default shall be payable on demand.

    Section 2.11  Prepayments.

    (a) Committed Loans.  Base Rate Loans may be repaid at any time without penalty or premium. If a Committed Loan accruing interest at the LIBOR Rate is paid prior to the end of the Applicable Interest Period (regardless of whether such payment is voluntary, mandatory or the result of the Agent's or Lenders' collection efforts) breakfunding costs in accordance with Section 3.04 shall be paid at the time of such payment.

    (b) Competitive Bid Loan.  The Borrower may not voluntarily prepay any Competitive Bid Loan.

    Section 2.12  Notes.  The Committed Loans shall be evidenced by promissory notes of the Borrower substantially in the form of Exhibit A hereto, with appropriate insertions, payable to the order of the Lenders, dated as of the date hereof, and for each Lender in the face amount of such Lender's Commitment (the "Committed Loan Notes"). The Competitive Bid Loan made by each

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Lender shall be evidenced by promissory notes of the Borrower, substantially in the form of Exhibit B hereto, with appropriate insertions, payable to the order of such Lender, dated as of the date hereof and in the face amount of the Total Commitment (the "Competitive Bid Loan Notes"). Each Lender is hereby authorized to record the date and amount of Committed Loans it makes and the date and amount of each payment of principal and interest thereon on a schedule annexed to its Committed Loan Note or maintained in connection therewith. Each Lender is hereby authorized to record the date and amount of each Competitive Bid Loan made by such Lender, the maturity date thereof, the date and amount of each payment of principal and interest thereon and the interest rate with respect thereto on a schedule annexed to its Competitive Bid Loan Note or maintained in connection therewith. Any such recordation by any Lender shall constitute prima facie evidence of the accuracy of the information so recorded; provided, however, that the failure to make any such recordation or any error in any such recordation shall not affect the obligations of the Borrower hereunder, under the Committed Loan Notes, or under the Competitive Bid Loan Notes.

    Section 2.13  Manner of Payments.

    (a) All payments and prepayments of principal and interest on any Loan and all other amounts payable hereunder by the Borrower to the Agent or any Lender shall be made by paying the same in United States Dollars and in immediately available funds to the office of the Agent not later than 10:00 a.m., San Francisco, California time, on the date on which such payment or prepayment shall become due.

    (b) The Borrower hereby authorizes the Agent and each Lender, if and to the extent any payment is not promptly made pursuant to this Agreement or any other Loan Document, to charge from time to time against any or all of the accounts of the Borrower with the Agent or such Lender or any affiliate of the Agent or any Lender any amount due hereunder or under such other Loan Document.

    (c) Whenever any payment hereunder or under any other Loan Document shall be stated to be due or whenever the last day of any interest period would otherwise occur on a day other than a Business Day, such payment shall be made and the last day of such interest period shall occur on the next succeeding Business Day and such extension of time shall in such case be included in the computation and payment of interest or facility fees, as the case may be, unless such extension would cause such payment to be made or the last day of such interest period to occur in the next following calendar month, in which case such payment shall be due and the last day of such interest period shall occur on the next preceding Business Day.

    (d) Any payment made by the Borrower hereunder shall be applied first, against fees, expenses and indemnities due hereunder; second, against interest due on amounts in Default on any Committed Loan, if any; third, against interest due on amounts in Default on any Competitive Bid Loan, if any (applied pro rata in proportion to the amounts in Default if more than one such Competitive Bid Loan is in Default); fourth, against interest due on any Committed Loan, if any; fifth, against interest due on any Competitive Bid Loan, if any (applied pro rata in proportion to the aggregate interest due on all Competitive Bid Loans if more than one such Competitive Bid Loan is outstanding); sixth, against Committed Loan principal amounts in Default, if any; seventh, against Competitive Bid Loan principal amounts in Default, if any, (applied pro rata in proportion to the amounts in Default if more than one such Competitive Bid Loan is in Default); eighth, against Committed Loan principal, if any, and ninth, against Competitive Bid Loan principal, if any, (applied pro rata in proportion to the then-outstanding principal balance of all Competitive Bid Loans if more than one such Competitive Bid Loan is outstanding).

    Section 2.14  Fees.

    (a) Facility Fees.  At all times prior to the Maturity Date, the Borrower agrees to pay to the Agent for the respective accounts of the Lenders pro rata according to their Percentage Interests, a

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facility fee computed daily and equal to the Facility Fee Rate computed daily on an amount equal to the Total Commitment. As used herein the "Facility Fee Rate" shall be determined in accordance with the Pricing Schedule.

    (b) Utilization Fees.  At all times prior to the Maturity Date, the Borrower agrees to pay to the Agent for the respective accounts of the Lenders pro rata according to their Percentage Interests, a utilization fee computed daily and equal to the Utilization Fee Rate computed daily on all outstanding Loans under the Facilities if the aggregate outstanding Loans on such date (including Competitive Bid Loans) equal or exceed 33% of the Total Commitment. As used herein, the "Utilization Fee Rate" shall be determined in accordance with the Pricing Schedule.

    (c) The fees set forth in subsection (a) and (b) above shall be payable in arrears at quarterly intervals commencing on December 31, 2000 and payable on the last Business Day of each March, June, September and December thereafter, except that such accrued fees shall be payable on the Maturity Date and on demand after Default. Computations of such fees shall be made on the basis of a year of three hundred sixty (360) days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such fees are payable.

    (d) Lenders' Upfront Fee.  On the date hereof, Borrower shall pay to Agent, for the respective accounts of the Lenders pro rata according to their Percentage Interests, an upfront fee in an amount set forth in a letter from the Arranger to each Lender and acknowledged by that Lender, a copy of which has been provided to Borrower by Agent, as the applicable upfront fee for such Lender. Such upfront fees are for the credit facilities committed by each Lender under this Agreement and are fully earned on the date paid. The upfront fee paid to each Lender is solely for its own account and is nonrefundable.

    (e) Syndication, Administrative and Competitive Bid Agency Fees.  The Borrower shall pay to the Agent and certain other parties, for their own account, structuring and syndication, administrative and competitive bid agency fees in such amounts and at such times as are set forth in that certain letter agreement dated September 25, 2000, by and among Agent, the Borrower, and certain other parties.

    Section 2.15  Sharing of Payments, Etc.  Each borrowing of Committed Loans from the Lenders under Section 2.01 will be made pro rata in accordance with each Lender's Percentage Interest. Each payment and prepayment of the Committed Loans and each payment of interest on the Committed Loans will be made pro rata to each Lender in accordance with its Percentage Interest. If any Lender shall obtain any payment in respect of the Borrower's obligations under this Agreement, the Committed Loan Notes or the Competitive Bid Loan Notes (whether voluntary or involuntary, through the exercise of any right of set-off or otherwise) in excess of the share which it would have been entitled to receive had such payment been made to the Agent and applied pursuant to the terms of Section 2.13(d) hereof, such Lender shall forthwith purchase from the other Lenders such participations in the Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them, but if any of such excess payment is afterward recovered from such purchasing Lender, the purchase shall be rescinded and the purchase price restored, without interest, to the extent of such recovery. Borrower authorizes the purchase of such participations and agrees that any Lender so purchasing a participation from another Lender may exercise all its rights to payment (including the right of setoff) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.

    Section 2.16  Extension of Maturity Date.  The Borrower may request that the Lenders extend the Maturity Date for successive periods of three hundred sixty-four (364) days by notifying the Lenders and the Agent in writing on a day not more than eighty-nine (89) and not less than sixty (60) days prior to the then-existing Maturity Date. Such request shall include a certificate signed by a responsible officer stating that (i) the representations and warranties contained in Article V are true and correct on and as of the date of such certificate and (ii) no Default or Event of Default exists. If all Lenders

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consent to such an extension, the Lenders shall so notify the Borrower and the Agent in writing no earlier than thirty (30) days and no later than twenty (20) days prior to the then-existing Maturity Date. If all Lenders provide the Borrower and Agent with such a written notice the Maturity Date shall be extended for three hundred sixty-four (364) days. If any Lender in its sole discretion does not provide a written notice evidencing its consent as herein provided, the request for extension shall be deemed denied by all Lenders.

ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY

    Section 3.01  Taxes.

    (a) Any and all payments by the Borrower to any Lender or the Agent under this Agreement or any other Credit Document shall be made free and clear of, and without deduction or withholding for, any Taxes, except as otherwise provided in Section 3.01(e). In addition, the Borrower shall pay all applicable Other Taxes and Further Taxes except as otherwise provided in Section 3.01(e).

    (b) Subject to Sections 3.01(e) and 3.08(a), if the Borrower shall be required by law to deduct or withhold any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable hereunder to any Lender or the Agent, then:

    (i)  the sum payable shall be increased as necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section), such Lender or the Agent, as the case may be, receives and retains an amount equal to the sum it would have received and retained had no such deductions or withholdings been made;

    (ii) the Borrower shall make such deductions and withholdings;

    (iii) the Borrower shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law; and

    (iv) the Borrower shall also pay to each Lender or the Agent for the account of such Lender, at the time interest is paid, Further Taxes in the amount that the respective Lender specifies as necessary to preserve the after-tax yield such Lender would have received if such Taxes, Other Taxes or Further Taxes had not been imposed.

    (c) Subject to Sections 3.01(e) and 3.08(a), the Borrower agrees to indemnify and hold harmless each Lender and the Agent for the full amount of (i) Taxes, (ii) Other Taxes, and (iii) Further Taxes in the amount that the respective Lender or the Agent specifies as necessary to preserve the after-tax yield such Lender or the Agent would have received if such Taxes, Other Taxes or Further Taxes had not been imposed, and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days after the date the applicable Lender or the Agent makes written demand therefor.

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    (d) Within 30 days after the date of any payment by the Borrower of Taxes, Other Taxes or Further Taxes, the Borrower shall furnish to each Lender or the Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to such Lender or the Agent.

    (e) If the Borrower is required to pay any amount to any Lender or the Agent pursuant to Section 3.01(b) or (c), then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its lending office so as to eliminate any such additional payment by the Borrower which may thereafter accrue, if such change in the sole judgment of such Lender is not otherwise disadvantageous to such Lender. In the event that any Lender fails to comply with its obligations as set forth in the previous sentence, the Borrower shall not be required to pay an amount which would not have been payable had such Lender complied with its obligations under this Section 3.01(e).

    Section 3.02  Illegality.

    (a) If any Lender determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation or administration of any Requirement of Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for such Lender or its applicable lending office to make LIBOR Loans, then, on notice thereof by such Lender to the Borrower through the Agent, any obligation of that Lender to make LIBOR Loans shall be suspended until such Lender notifies the Agent and the Borrower that the circumstances giving rise to such determination no longer exist.

    (b) If a Lender determines that it is unlawful to maintain any LIBOR Loan the Borrower shall, upon receipt by the Borrower of notice of such fact and demand from such Lender (with a copy to the Agent), prepay in full such LIBOR Loans of such Lender then outstanding, together with interest accrued thereon and amounts required under Section 3.04, either on the last day of the Applicable Interest Period thereof in the case of LIBOR Loans if such Lender may lawfully continue to maintain such LIBOR Loans to such day, or immediately, in the case of LIBOR Loans if such Lender may not lawfully continue to maintain such LIBOR Loan.

    (c) If the obligation of any Lender to make or maintain LIBOR Loans has been so terminated or suspended, the Borrower may elect, by giving notice to such Lender through the Agent that all Loans which would otherwise be made by such Lender as LIBOR Loans shall be instead made as Base Rate Loans.

    (d) Before giving any notice to the Agent under this Section 3.02, the affected Lender shall use reasonable efforts consistent with legal and regulatory requirements to change the jurisdiction of its lending office with respect to its LIBOR Loans if such change will avoid the need for giving such notice or making such demand and will not, in the sole judgment of such Lender, be illegal or otherwise disadvantageous to such Lender.

    Section 3.03  Increased Costs and Reduction of Return.

    (a) If any Lender determines that, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation or (ii) the compliance by such Lender with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining any LIBOR Loans, then the Borrower shall be liable for, and shall from time to time, upon demand (with a copy of such demand to be sent to the Agent), pay to the Agent for the account of such Lender additional amounts as are sufficient to compensate such Lender for such increased costs.

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    (b) If any Lender shall have determined that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance by such Lender (or its lending office) or any Person controlling such Lender with any introduction of or change in any Capital Adequacy Regulation, affects or would affect the amount of capital required or expected to be maintained by such Lender or any Person controlling such Lender and (taking into consideration such Lender's or such Person's policies with respect to capital adequacy) determines that the amount of such capital is increased as a consequence of its Commitments or other obligations under this Agreement, then, upon demand of such Lender to the Borrower through the Agent, the Borrower shall pay to such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender or such Person for such increase.

    Section 3.04  Funding Losses.  The Borrower shall promptly reimburse each Lender and hold each Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of:

    (a) the failure of the Borrower to make on a timely basis any payment of principal of any LIBOR Loan;

    (b) the failure of the Borrower to borrow, continue or convert a Loan after the Borrower has given (or is deemed to have given) a Required Notice of Borrowing;

    (c) the failure of the Borrower to make any prepayment after a notice of same;

    (d) the prepayment (including pursuant to Section 2.11) or other payment (including after acceleration thereof) of a LIBOR Loan on a day that is not the last day of the Applicable Interest Period; or

    (e) the automatic conversion under Section 3.05 of any LIBOR Loan to a Base Rate Loan on a day that is not the last day of the relevant Applicable Interest Period,

    including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its LIBOR Loans or from fees payable to terminate the deposits from which such funds were obtained. For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.04 and under Section 3.03(a), each LIBOR Loan made by a Lender (and each related reserve, special deposit or similar requirement) shall be conclusively deemed to have been funded at the LIBOR Rate for such LIBOR Loan by a matching deposit or other borrowing in the interbank eurocurrency market for a comparable amount, comparable currency and for a comparable period, whether or not such LIBOR Loan is in fact so funded.

    Section 3.05  Inability to Determine Rates.  If the Agent determines that the LIBOR Rate applicable pursuant to Section 2.09(b) for any requested Applicable Interest Period with respect to a proposed LIBOR Loan does not adequately and fairly reflect the cost to any Lender of funding such Loan, the Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of such Lender to make or maintain LIBOR Loans hereunder shall be suspended until the Agent revokes such notice in writing. Upon receipt of such notice, the Borrower may revoke any applicable Required Notice of Borrowing then submitted by it. If the Borrower does not revoke any such notice, such Lender shall make, convert or continue any such Committed Loans bearing interest at a LIBOR Rate, in the amount specified in the applicable notice submitted by the Borrower, but such LIBOR Loans shall be made, converted or continued as Base Rate Loans instead of LIBOR Loans.

    Section 3.06  Reserves on LIBOR Loans.  The Borrower shall pay to each Lender in the event that and as long as such Lender shall be required under regulations of the Federal Reserve Board to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or

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deposits (currently known as "Eurocurrency liabilities"), and any additional costs on the unpaid principal amount of each LIBOR Loan equal to the actual costs of such reserves (other than reserves taken into account in determining the LIBOR Rate) allocated to such Loan by such Lender (as reasonably determined by such Lender in good faith, which determination shall be conclusiv