Exhibit 10.2
EXECUTION COPY

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$250,000,000
364-DAY
CREDIT AGREEMENT

Dated as of September 30, 2003

Among

INTERSTATE POWER AND LIGHT COMPANY
as Borrower

THE BANKS NAMED HEREIN
as Banks

BANK ONE, NA
as Administrative Agent and LC Issuing Bank

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WACHOVIA BANK, NATIONAL ASSOCIATION
Syndication Agent

BANC ONE CAPITAL MARKETS, INC.
and
WACHOVIA CAPITAL MARKETS, LLC
Co-Lead Arrangers

ABN AMRO BANK N.V.,
BANK OF AMERICA, N.A.
and
BARCLAYS BANK PLC
Co-Documentation Agents

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TABLE OF CONTENTS

    Page ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1           SECTION 1.01
Certain Defined Terms 1           SECTION 1.02 Computation of Time Periods 16 
         SECTION 1.03 Computations of Outstandings 17           SECTION 1.04
Accounting Terms 17  ARTICLE II AMOUNTS AND TERMS OF THE EXTENSIONS OF CREDIT
17           SECTION 2.01 The Advances 17           SECTION 2.02 Making the
Advances 17           SECTION 2.03 Letters of Credit 18           SECTION 2.04
Fees 21           SECTION 2.05 Reduction of the Commitments 22           SECTION
2.06 Repayment of Advances 22           SECTION 2.07 Interest on Advances 22 
         SECTION 2.08 Additional Interest on Eurodollar Rate Advances 23 
         SECTION 2.09 Interest Rate Determination 23           SECTION 2.10
Voluntary Conversion of Advances 24           SECTION 2.11 Optional Prepayments
of Advances 25           SECTION 2.12 Increased Costs 25           SECTION 2.13
Illegality 26           SECTION 2.14 Payments and Computations 26 
         SECTION 2.15 Noteless Agreement; Evidence of Indebtedness 27 
         SECTION 2.16 Taxes 28           SECTION 2.17 Sharing of Payments, Etc.
29           SECTION 2.18 Extension of Revolving Commitment Termination Date;
Term Election 30  ARTICLE III CONDITIONS OF LENDING 31           SECTION 3.01
Conditions Precedent to Closing 31           SECTION 3.02 Conditions Precedent
to Each Extension of Credit 33           SECTION 3.03 Conditions Precedent to
Each Extension of the Revolving Commitment Termination Date 34           SECTION
3.04 Reliance on Certificates 35  ARTICLE IV REPRESENTATIONS AND WARRANTIES 35 
         SECTION 4.01 Representations and Warranties of the Borrower 35  ARTICLE
V COVENANTS OF THE BORROWER 37           SECTION 5.01 Affirmative Covenants 37 
         SECTION 5.02 Negative Covenants 41  ARTICLE VI EVENTS OF DEFAULT 46 
         SECTION 6.01 Events of Default 46           SECTION 6.02 Cash
Collateral Account 48  ARTICLE VII THE AGENT 48           SECTION 7.01
Authorization and Action 48           SECTION 7.02 Agent's Reliance, Etc. 49 
         SECTION 7.03 Bank One and Affiliates 49           SECTION 7.04 Lender
Credit Decision 49           SECTION 7.05 Indemnification 50           SECTION
7.06 Successor Agent 50  ARTICLE VIII MISCELLANEOUS 51           SECTION 8.01
Amendments, Etc. 51           SECTION 8.02 Notices, Etc. 51           SECTION
8.03 No Waiver; Remedies 51           SECTION 8.04 Costs, Expenses, Taxes and
Indemnification 52           SECTION 8.05 Right of Set-off 53           SECTION
8.06 Binding Effect 54           SECTION 8.07 Assignments and Participations 54 
         SECTION 8.08 Confidentiality 57           SECTION 8.09 WAIVER OF JURY
TRIAL 58           SECTION 8.10 Governing Law 59           SECTION 8.11 Relation
of the Parties; No Beneficiary 59           SECTION 8.12 Execution in
Counterparts 59 

EXHIBITS AND SCHEDULES       Exhibit 1.01 - Form of Note Exhibit 2.02(a) - Form
of Notice of Borrowing Exhibit 2.03 - Form of Request for Issuance Exhibit 2.10
- Form of Notice of Conversion Exhibit 3.01(a)(viii)-1 - Form of Opinion of
Foley & Lardner Exhibit 3.01(a)(viii)-2 - Form of Opinion of General Counsel
Exhibit 3.01(a)(viii)-3 - Form of Opinion of King & Spalding LLP Exhibit 8.07 -
Form of Lender Assignment             Schedule I - Commitment Schedule Schedule
II - Existing Liens Schedule III - Existing Debt

364-DAY CREDIT AGREEMENT

Dated as of September 30, 2003

        THIS 364-DAY CREDIT AGREEMENT (this “Agreement”) is made by and among:

(i)  

INTERSTATE POWER AND LIGHT COMPANY, an Iowa corporation (the “Borrower”),

(ii)  

the banks (the “Banks”) listed on the signature pages hereof and the other
Lenders (as hereinafter defined) from time to time party hereto, and

(iii)  

BANK ONE, NA (“Bank One”), as administrative agent (the “Agent”) for the Lenders
hereunder and as the issuer of Letters of Credit (as hereinafter defined) (the
“LC Issuing Bank”).

PRELIMINARY STATEMENTS

(1)  

The Borrower has requested that the Banks and LC Issuing Bank provide certain
Extensions of Credit (as hereinafter defined) to the Borrower.

(2)  

The Banks and LC Issuing Bank have agreed to make such Extensions of Credit
subject to the terms and conditions of this Agreement.

        NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01.     Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

          “Administrative Agency Fee Letter” means the letter agreement, dated
August 27, 2003, among the Borrower, the Parent, WPL, Bank One and Banc One
Capital Markets, Inc.

          “Arranger Fee Letter” means the letter agreement, dated August 27,
2003, among the Borrower, the Parent, WPL, Bank One, Banc One Capital Markets,
Inc., Wachovia Bank, National Association and Wachovia Capital Markets, LLC.

          “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 Rate Advance, each
of which shall be a “Type” of Advance.

          “AEC Facility” means the $650,000,000 364-Day Credit Agreement, dated
as of October 11, 2002, among the Parent, the banks named therein and Bank One,
as the administrative agent.

          “Affected Lender” has the meaning assigned to that term in Section
2.13.

          “Affected Lender Advance” has the meaning assigned to that term in
Section 2.13.

          “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 another entity if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such entity, whether through the
ownership of voting securities, by contract, or otherwise.

          “Alternate Base Rate” means a fluctuating interest rate per annum as
shall be 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 Bank One or its
corporate parent, Bank One Corporation, from time to time, as its corporate base
rate or prime rate of interest; and

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

  Each change in the Alternate Base Rate shall take effect concurrently with any
change in such base or prime rate or the Federal Funds Rate.

          “Applicable Lending Office” means, with respect to each Lender, such
Lender’s Domestic Lending Office in the case of a Base Rate Advance and such
Lender’s Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

          “Applicable Margin” means, for any Eurodollar Rate Advance or Base
Rate Advance, (i) on any date the Utilization Percentage equals or is less than
33-1/3%, the number of basis points set forth below in the columns identified as
Level 1, Level 2, Level 3, Level 4, Level 5 or Level 6 below, opposite the
Eurodollar Rate or the Base Rate, as applicable, and (ii) on any date the
Utilization Percentage exceeds 33-1/3%, the number of basis points set forth
below in the columns identified as Level 1, Level 2, Level 3, Level 4, Level 5
or Level 6 below, opposite the Utilized Eurodollar Rate or the Utilized Base
Rate, as applicable.

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  LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 LEVEL 6 BASIS FOR Reference Reference
Reference Reference Reference Reference PRICING Ratings At Ratings Ratings Less
Ratings Ratings Ratings Less   Least A By Less Than Than Level 2 Less Than Less
Than Than Level 5*   S&P's/A2 By Level 1 But But At Least Level 3 But Level 4
But     Moody's. At Least A- BBB+ By At Least At Least       By S&P's/A3
S&P's/Baa1 BBB By BBB- By       By Moody's. By Moody's. S&P's/Baa2 S&P's/Baa3  
        By Moody's. By Moody's.  

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Basis Points Per Annum

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Eurodollar Rate 55.0 62.5 85.0 95.0 105.0 195.0

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Base Rate 0  0  0  0  0  0 

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Utilized Eurodollar 67.5 75.0 97.5 107.5 130.0 220.0 Rate

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Utilized Base Rate 12.5 12.5 12.5 12.5 25.0 25.0

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* or unrated

  The Applicable Margin will be based upon the Level corresponding to the
Reference Ratings at the time of determination. Any change in the Applicable
Margin resulting from a change in the Reference Ratings shall be effective, as
to any Advance, as of the date on which the applicable rating agency announces
the applicable change in ratings. The Applicable Margin set forth above shall be
increased at all times following the effective date of the Term Election, by
37.5 basis points at Levels 1, 2, 3 and 4 and by 50.0 basis points at Levels 5
and 6.

          “Applicable Rate” means:

    (i)        in the case of each Base Rate Advance, a rate per annum equal at
all times to the sum of the Alternate Base Rate in effect from time to time plus
the Applicable Margin in effect from time to time; and

    (ii)        in the case of each Eurodollar Rate Advance comprising part of
the same Borrowing, a rate per annum during each Interest Period equal at all
times to the sum of the Eurodollar Rate for such Interest Period plus the
Applicable Margin in effect from time to time during such Interest Period.

          “Available Commitment” means, for each Lender at any time on any day,
the unused portion of such Lender’s Commitment, computed after giving effect to
all Extensions of Credit made or to be made on such day, the application of
proceeds therefrom, all prepayments and repayments of Advances made on such day
and all reductions in the LC Outstandings made on such day.

          “Available Commitments” means the aggregate of the Lenders’ Available
Commitments hereunder.

          “Banks”has the meaning assigned to that term in the Preamble to this
Agreement.

          “Base Rate Advance” means an Advance that bears interest as provided
in Section 2.07(a).

          “Bonds” means (i) the Pollution Control Refunding Revenue Bonds,
Series 1973, dated June 1, 1994, issued by the Town of Salix, Iowa ($2,240,000),
(ii) the Pollution Control Refunding Revenue Bonds, Series 1991, dated November
1, 1991, issued by the City of Cedar Rapids, Iowa ($2,240,000), (iii) the
Pollution Control Refunding Revenue Bonds, Series 1991, dated November 1, 1991,
issued by the City of Chillicothe, Iowa ($5,300,000), (iv) the Variable/Fixed
Rate Demand Pollution Control Refunding Revenue Bonds, Series 1992A, dated
March 1, 1992, issued by the City of Chillicothe, Iowa ($2,400,000), (v) the
Variable/Fixed Rate Demand Pollution Control Refunding Revenue Bonds, Series
1998, dated November 1, 1998, issued by the City of Chillicothe, Iowa
($10,000,000), (vi) the Pollution Control Refunding Revenue Bonds, Series 1994A,
dated June 1, 1994, issued by the City of Clinton, Iowa ($5,650,000), (vii) the
Pollution Control Refunding Revenue Bonds, Series 1994B, dated June 1, 1994,
issued by the City of Clinton, Iowa ($1,000,000), (viii) the Pollution Control
Refunding Revenue Bonds, Series 1994A, dated June 1, 1994, issued by the City of
Lansing, Iowa ($5,600,000), (ix) the Pollution Control Refunding Revenue Bonds,
Series 1994B, dated June 1, 1994, issued by the City of Lansing, Iowa
($1,000,000), (x) the Variable/Fixed Rate Demand Pollution Control Refunding
Revenue Bonds, Series 1998 (Dubuque), dated November 1, 1998, issued by the City
of Dubuque, Iowa ($2,650,000), (xi) the Variable/Fixed Rate Demand Pollution
Control Refunding Revenue Bonds, Series 1998 (Lansing), dated November 1, 1998,
issued by the City of Lansing, Iowa ($2,300,000), (xii) the Variable/Fixed Rate
Demand Pollution Control Refunding Revenue Bonds, Series 1999 (Sherburn), dated
February 1, 1999, issued by the City of Sherburn, Minnesota ($3,250,000), and
(xiii) the Variable/Fixed Rate Demand Pollution Control Refunding Revenue Bonds,
Series 1999 (Salix), dated January 1, 1999, issued by the City of Salix, Iowa
($9,600,000) [TO BE UPDATED].

          “Borrowing” means a borrowing consisting of simultaneous Advances of
the same Type, having the same Interest Period and ratably made or Converted on
the same day by each of the Lenders pursuant to Section 2.02 or 2.10, as the
case may be. All Advances of the same Type, having the same Interest Period and
made or Converted on the same day shall be deemed a single Borrowing hereunder
until repaid or next Converted.

          “Business Day” means a day of the year on which banks are not required
or authorized to close in New York City, Chicago, Illinois or Des Moines, Iowa
and, if the applicable Business Day relates to any Eurodollar Rate Advance, on
which dealings are carried on in the London interbank market.

          “Capitalized Lease Obligations” means obligations to pay rent or other
amounts under any lease of (or other arrangement conveying the right to use)
real and/or personal property which obligation is required to be classified and
accounted for as a capital lease on a balance sheet prepared in accordance with
GAAP, and for purposes hereof the amount of such obligations shall be the
capitalized amount determined in accordance with such principles.

          “Cash and Cash Equivalents” means, with respect to any Person, the
aggregate amount of the following, to the extent owned by such Person free and
clear of all Liens, encumbrances and rights of others and not subject to any
judicial, regulatory or other legal constraint: (i) cash on hand; (ii) Dollar
demand deposits maintained in the United States with any commercial bank and
Dollar time deposits maintained in the United States with, or certificates of
deposit having a maturity of one year or less issued by, any commercial bank
which has an office in the United States and which has a combined capital and
surplus of at least $100,000,000; (iii) eurodollar time deposits maintained in
the United States with, or eurodollar certificates of deposit having a maturity
of one year or less issued by, any commercial bank having outstanding unsecured
indebtedness that is rated (on the date of acquisition thereof) A- or better by
S&P or A3 or better by Moody’s (or an equivalent rating by another
nationally-recognized credit rating agency of similar standing if neither of
such corporations is then in the business of rating unsecured bank
indebtedness); (iv) direct obligations of, or unconditionally guaranteed by, the
United States and having a maturity of one year or less; (v) commercial paper
rated (on the date of acquisition thereof) A-1 or P-1 or better by S&P or
Moody’s, respectively (or an equivalent rating by another nationally-recognized
credit rating agency of similar standing if neither of such corporations is then
in the business of rating commercial paper), and having a maturity of one year
or less; (vi) obligations with any Lender or any other commercial bank in
respect of the repurchase of obligations of the type described in clause (iv)
above, provided that such repurchase obligations shall be fully secured by
obligations of the type described in said clause (iv) and the possession of such
obligations shall be transferred to, and segregated from other obligations owned
by, such Lender or such other commercial bank; and (vii) preferred stock of any
Person that is rated A- or better by S&P or A3 or better by Moody’s (or an
equivalent rating by another nationally-recognized credit rating agency of
similar standing if neither of such corporations is then in the business of
rating preferred stock of entities engaged in such businesses).

          “Cash Collateral Account” has the meaning assigned to that term in
Section 6.02.

          “Certifying Officer” has the meaning assigned to that term in Section
5.01(h)(iv).

          “Closing” means the day upon which each of the applicable conditions
precedent enumerated in Section 3.01 shall be fulfilled to the satisfaction of,
or waived with the consent of, the Lenders, the Agent, the LC Issuing Bank and
the Borrower. All transactions contemplated by the Closing shall take place on a
Business Day on or prior to September 30, 2003, at the offices of King &
Spalding LLP, 1185 Avenue of the Americas, New York, New York 10036, at
10:00 a.m. (New York City time), or such later Business Day as the parties
hereto may mutually agree.

          “Co-Lead Arrangers” shall mean, collectively, Banc One Capital
Markets, Inc. and Wachovia Capital Markets, LLC.

          “Commitment” means, for each Lender, the obligation of such Lender to
make Advances to the Borrower and to participate in the reimbursement
obligations of the Borrower in respect of Letters of Credit in an amount no
greater than the amount set forth on Schedule I hereto or, if such Lender has
entered into one or more Lender Assignments, set forth for such Lender in the
Register maintained by the Agent pursuant to Section 8.07(c), in each such case
as such amount may be reduced from time to time pursuant to Section 2.05(a),
(b), (c) or (d).

          “Commitments”means the total of the Lenders’ Commitments hereunder.

          “Confidential Information” has the meaning assigned to that term in
Section 8.08.

          “Consenting Lenders” has the meaning assigned to that term in Section
2.18(c).

          “Consolidated Capital” means, with respect to any Person, at any date
of determination, the sum of (i) Consolidated Debt of such Person,
(ii) consolidated equity of the common stockholders of such Person and its
Consolidated Subsidiaries, (iii) consolidated equity of the preference
stockholders of such Person and its Consolidated Subsidiaries and
(iv) consolidated equity of the preferred stockholders of such Person and its
Consolidated Subsidiaries, in each case determined at such date in accordance
with GAAP.

          “Consolidated Debt” means, with respect to any Person, at any date of
determination, the aggregate Debt of such Person and its Consolidated
Subsidiaries determined on a consolidated basis in accordance with GAAP, but
shall not include Nonrecourse Debt of the Borrower or any of its Subsidiaries.

          “Consolidated Subsidiary” means, with respect to any Person, any
Subsidiary of such Person whose accounts are or are required to be consolidated
with the accounts of such Person in accordance with GAAP.

          “Convert”, “Conversion” and “Converted” each refers to a conversion of
Advances of one Type into Advances of another Type, or to the selection of a
new, or the renewal of the same, Interest Period for Advances, as the case may
be, pursuant to Section 2.09 or 2.10.

          “Debt” means, for any Person, any and all indebtedness, liabilities
and other monetary obligations of such Person (i) for borrowed money or
evidenced by bonds, debentures, notes or other similar instruments, (ii) to pay
the deferred purchase price of property or services (except trade accounts
payable arising and repaid in the ordinary course of business),
(iii) Capitalized Lease Obligations, (iv) under reimbursement or similar
agreements with respect to letters of credit (other than trade letters of
credit) issued to support indebtedness or obligations of such Person or of
others of the kinds referred to in clauses (i) through (iii) above and clause
(v) below, (v) reasonably quantifiable obligations under direct guaranties or
indemnities, or under support agreements, in respect of, and reasonably
quantifiable obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of, or to
assure an obligee against failure to make payment in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (iv)
above, and (vi) in respect of unfunded vested benefits under Plans. In
determining Debt for any Person, there shall be included accrued interest on the
principal amount thereof to the extent such interest has accrued for more than
six months.

          “Default Rate” means (i) with respect to the unpaid principal of or
interest on any Advance, the greater of (A) 2% per annum above the Applicable
Rate in effect from time to time for such Advance and (B) 2% per annum above the
Applicable Rate in effect from time to time for Base Rate Advances and (ii) with
respect to any other unpaid amount hereunder, 2% per annum above the Applicable
Rate in effect from time to time for Base Rate Advances.

          “Dollars”and the sign “$” each means lawful money of the United
States.

          “Domestic Lending Office” means, with respect to any Lender, the
office or affiliate of such Lender specified as its “Domestic Lending Office”
opposite its name on Schedule I hereto or in the Lender Assignment pursuant to
which it became a Lender, or such other office or affiliate of such Lender as
such Lender may from time to time specify in writing to the Borrower and the
Agent.

          “Eligible Assignee” means (i) a commercial bank or trust company
organized under the laws of the United States, or any State thereof; (ii) a
commercial bank organized under the laws of any other country that is a member
of the OECD, or a political subdivision of any such country, provided that such
bank is acting through a branch or agency located in the United States;
(iii) the central bank of any country that is a member of the OECD; and (iv) any
other commercial bank or other financial institution engaged generally in the
business of extending credit or purchasing debt instruments; provided, however,
that (A) any such Person shall also (1) have outstanding unsecured indebtedness
that is rated A- or better by S&P or A3 or better by Moody’s (or an equivalent
rating by another nationally-recognized credit rating agency of similar standing
if neither of such rating agencies is then in the business of rating unsecured
indebtedness of entities engaged in such businesses) or (2) have combined
capital and surplus (as established in its most recent report of condition to
its primary regulator) of not less than $250,000,000 (or its equivalent in
foreign currency), (B) any Person described in clause (ii), (iii) or (iv) above
shall, on the date on which it is to become a Lender hereunder, (x) be entitled
to receive payments hereunder without deduction or withholding of any United
States Federal income taxes (as contemplated by Section 2.16) and (y) not be
incurring any losses, costs or expenses of the type for which such Person could
demand payment under Section 2.12, and (C) any Person described in clause (ii),
(iii) or (iv) above shall, in addition, be reasonably acceptable to the Agent,
the LC Issuing Bank and, so long as no Event of Default shall have occurred and
be continuing, the Borrower.

          “Equity Interests” means, (i) with respect to a corporation, shares of
capital stock of such corporation or any other interest convertible or
exchangeable into any such interest, (ii) with respect to a limited liability
company, a membership interest in such company, (iii) with respect to a
partnership, a partnership interest in such partnership, and (iv) with respect
to any other Person, an interest in such Person analogous to interests described
in clauses (i) through (iii).

          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.

          “ERISA Affiliate” means, with respect to any Person, any trade or
business (whether or not incorporated) which is a member of a group of which
such Person is a member and which is under common control within the meaning of
the regulations under Section 414(b) or (c) of the Internal Revenue Code
of 1986, as amended from time to time.

          “ERISA Event” means (i) the occurrence of a reportable event, within
the meaning of Section 4043 of ERISA, unless the 30-day notice requirement with
respect thereto has been waived by the PBGC; (ii) the provision by the
administrator of any Plan of notice of intent to terminate such Plan, pursuant
to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (iii) the cessation of
operations at a facility in the circumstances described in Section 4062(e) of
ERISA; (iv) the withdrawal by the Parent or an ERISA Affiliate of the Parent
from a Multiple Employer Plan or a Multiemployer Plan during a plan year for
which it was a “substantial employer”, as defined in Section 4001(a)(2) of
ERISA; (v) the failure by the Parent or an ERISA Affiliate of the Parent to make
a payment to a Plan required under Section 302(f)(1) of ERISA, which failure
results in the imposition of a lien for failure to make required payments;
(vi) the adoption of an amendment to a Plan requiring the provision of security
to such Plan, pursuant to Section 307 of ERISA; or (vii) the institution by the
PBGC of proceedings to terminate a Plan, pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, a Plan.

          “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 Lending Office” means, with respect to any Lender, the
office or affiliate of such Lender specified as its “Eurodollar Lending Office”
opposite its name on Schedule I hereto or in the Lender Assignment pursuant to
which it became a Lender (or, if no such office is specified, its Domestic
Lending Office), or such other office or affiliate of such Lender as such Lender
may from time to time specify in writing to the Borrower and the Agent.

          “Eurodollar Rate” means, for each Interest Period for each Eurodollar
Rate Advance made as part of the same Borrowing, an interest rate per annum
equal to the average (rounded upward to the nearest whole multiple of 1/16 of 1%
per annum, if such average is not such a multiple) of the rate per annum at
which deposits in U.S. dollars are offered by the principal office of each of
the Reference Banks in London, England to prime banks in the London interbank
market at 11:00 a.m. (London time) two Business Days before the first day of
such Interest Period in an amount substantially equal to such Reference Bank’s
Eurodollar Rate Advance made as part of such Borrowing and for a period equal to
such Interest Period. The Eurodollar Rate for the Interest Period for each
Eurodollar Rate Advance made as part of the same Borrowing shall be determined
by the Agent on the basis of applicable rates furnished to and received by the
Agent from the Reference Banks two Business Days before the first day of such
Interest Period, subject, however, to the provisions of Section 2.09.

          “Eurodollar Rate Advance” means an Advance that bears interest as
provided in Section 2.07(b).

          “Eurodollar Reserve Percentage” of any Lender for each Interest Period
for each Eurodollar Rate Advance means the reserve percentage applicable to such
Lender 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
Regulation D or other 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) then applicable to such
Lender with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.

          “Events of Default” has the meaning assigned to that term in
Section 6.01.

          “Existing Facility” means the $200,000,000 364-Day Credit Agreement,
dated as of October 11, 2002, among the Borrower, the banks named therein and
Citibank, N.A., as the administrative agent.

          “Extension of Credit” means (i) the disbursement of the proceeds of
any Borrowing and (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.

          “Facility Fee” means a fee that shall be payable on the aggregate
amount of the Commitment of each Lender, irrespective of usage, payable to each
Lender on the amount of its Commitment at the rate (expressed in basis points
per annum) set forth below in the columns identified as Level 1, Level 2, Level
3, Level 4, Level 5 or Level 6 based on the Reference Ratings.

--------------------------------------------------------------------------------

  LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 LEVEL 6 BASIS FOR Reference Reference
Reference Reference Reference Reference PRICING Ratings At Ratings Ratings Less
Ratings Ratings Ratings Less   Least A By Less Than Than Level 2 Less Than Less
Than Than Level 5*   S&P/A2 By Level 1 But But At Least Level 3 But Level 4 But
    Moody's. At Least A- BBB+ By At Least At Least       By S&P/A3 S&P/Baa1 BBB
By BBB- By       By Moody's. By Moody's. S&P/Baa2 S&P/Baa3           By Moody's.
By Moody's.  

--------------------------------------------------------------------------------

Basis Points 10.0 12.5 15.0 17.5 20.0 30.0

--------------------------------------------------------------------------------

* or unrated

          The Facility Fee will be based upon the Level corresponding to the
Reference Ratings at the time of determination. Any change in the Facility Fee
resulting from a change in the Reference Ratings shall be effective as of the
date on which the applicable rating agency announces the applicable change in
ratings.

          “Federal Funds Rate” means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.

          “GAAP”has the meaning assigned to that term in Section 1.04.

          “Governmental Approval” means any authorization, consent, approval,
license, franchise, lease, ruling, tariff, rate, permit, certificate, exemption
of, or filing or registration with, any governmental authority or other legal or
regulatory body.

          “Granting Lender” has the meaning assigned to that term in Section
8.07(i).

          “Hazardous Substance” means any waste, substance, or material
identified as hazardous, dangerous or toxic by any office, agency, department,
commission, board, bureau, or instrumentality of the United States or of the
State or locality in which the same is located having or exercising jurisdiction
over such waste, substance or material.

          “Hostile Acquisition” means any acquisition involving a tender offer
or proxy contest that has not been recommended or approved by the board of
directors (or similar governing body) of the Person that is the subject of such
acquisition prior to the first public announcement or disclosure relating to
such acquisition.

          “IES”means IES Utilities Inc., an Iowa corporation, as predecessor to
the Borrower.

          “Indemnified Person”has the meaning assigned to that term in
Section 8.04(c).

          “Indentures” means (i) that certain Indenture of Mortgage and Deed of
Trust, dated September 1, 1993, by and between the Borrower and The First
National Bank of Chicago (Bank One Trust Company, National Association,
Successor Trustee), (ii) that certain Indenture of Mortgage and Deed of Trust,
dated August 1, 1940, by and between the Borrower and The First National Bank of
Chicago (Bank One Trust Company, National Association, Successor Trustee), (iii)
that certain Indenture (Mortgage and Deed of Trust), dated February 1, 1923, by
and between the Borrower, The Northern Trust Company (Bank One Trust Company,
National Association, Successor Trustee) and Harold H. Rockwell (Lawrence
Dillard, Successor Trustee), (iv) that certain Indenture, dated January 1, 1948,
by and between the Borrower and JP Morgan Chase Bank (National Association) and
James P. Freeman, (Successor Trustees to The Chase National Bank of the City of
New York and Carl E. Buckley), (v) that certain Indenture, dated December 1,
1995, by and between the Borrower and The First National Bank of Chicago (Bank
One Trust Company, National Association, Successor Trustee), (vi) that certain
Indenture, dated August 1, 1997, by and between the Borrower and The First
National Bank of Chicago (Bank One Trust Company, National Association,
Successor Trustee), and (vii) that certain Indenture, dated as of August 20,
2003, between the Borrower and Bank One Trust Company, National Association,
each as amended and supplemented from time to time.

          “Interest Period” means, for each Eurodollar Rate Advance made as part
of the same Borrowing, the period commencing on the date of such Eurodollar
Rate Advance or the date of the Conversion of any Advance into such a Eurodollar
Rate Advance and ending on the last day of the period selected by the Borrower
pursuant to the provisions below and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be 1, 2, 3 or
6 months, as the Borrower may, upon notice received by the Agent not later than
11:00 a.m. on the third Business Day prior to the first day of such Interest
Period, select; provided, however, that:

(i)  

the Borrower may not select any Interest Period that ends after the Termination
Date;

(ii)  

Interest Periods commencing on the same date for Advances comprising part of the
same Borrowing shall be of the same duration; and

(iii)  

whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided, in the case of
any Interest Period for a Eurodollar Rate Advance, if such extension would cause
the last day of such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the next preceding
Business Day.

          “IPC”means Interstate Power Company, a Delaware corporation, as
predecessor to the Borrower.

          “LC Fee” is defined in Section 2.04(b).

          “LC Issuing Bank” has the meaning assigned to that term in the
preamble to this Agreement.

          “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 LC Issuing
Bank under Letters of Credit.

          “LC Payment Notice” is defined in Section 2.03(d).

          “Lender Assignment” means an assignment and acceptance agreement
entered into by a Lender and an Eligible Assignee, and accepted by the Agent and
the LC Issuing Bank, in substantially the form of Exhibit 8.07.

          “Lenders” means the Banks listed on the signature pages hereof and
each Eligible Assignee that shall become a party hereto pursuant to
Section 8.07.

          “Letter of Credit” means letters of credit issued by the LC Issuing
Bank pursuant to Section 2.03.

          “Lien”has the meaning assigned to that term in Section 5.02(a).

          “Loan Documents” means (i) this Agreement, any Note issued pursuant to
Section 2.15, the Administrative Agency Fee Letter and the Arranger Fee Letter,
(ii) all agreements, documents and instruments in favor of the Agent, the LC
Issuing Bank or the Lenders (or the Agent on behalf of the LC Issuing Bank or
the Lenders), and (iii) all other agreements, instruments and documents now or
hereafter executed and/or delivered pursuant hereto or thereto.

          “Majority Lenders” means, on any date of determination, Lenders that,
collectively, on such date (i) hold greater than 50% of the then outstanding
Advances and participation obligations with respect to the LC Outstandings and,
(ii) if there are no Outstanding Credits, have Percentages in the aggregate
greater than 50%. Any determination of those Lenders constituting the Majority
Lenders shall be made by the Agent and shall be conclusive and binding on all
parties absent manifest error.

          “Margin Stock” has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System.

          “Material Adverse Change” means (i) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole; provided,
however, a downgrade by S&P or Moody’s of its rating of the Borrower or any Debt
of the Borrower shall not, in and of itself, be deemed to be a Material Adverse
Change, but for purposes of clarity in interpreting the foregoing, it is agreed
that the event, change, circumstance or condition that causes such downgrade (or
an announcement of a potential downgrade or a review for possible ratings
change) of any such rating, and the effect or change caused by such downgrade
(or an announcement of a potential downgrade or a review for possible ratings
change), will be considered in whether there has been a Material Adverse Change;
provided, further, the fact that the Borrower is unable to issue Debt in the
commercial paper market due to market conditions generally affecting the
commercial paper market shall not, in and of itself, be deemed to be a Material
Adverse Change; (ii) a material impairment of the ability of the Borrower to
perform its obligations under any Loan Document to which it is a party; or
(iii) a material adverse change upon the legality, validity, binding effect or
enforceability against the Borrower of any Loan Document to which it is a party.

          “Minnesota Approval” means a ruling by the Minnesota Public Utilities
Commission that is required to be obtained in order for the term of this
Agreement to be at least 364 days.

          “Minnesota Limit” means $250,000,000 or, if less, the maximum amount
of short-term debt that the Borrower is permitted to have outstanding pursuant
to the Minnesota Approval (from and after the time that the Minnesota Approval
becomes effective).

          “Minnesota PUC Order” means the order of the Minnesota Public
Utilities Commission (Docket No. E,G-001/S-03-187), dated March 28, 2003.

          “Moody’s”means Moody’s Investors Service, Inc. or any successor
thereto.

          “Multiemployer Plan” means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, which is subject to Title IV of ERISA and to which
the Parent or any ERISA Affiliate of the Parent is making or accruing an
obligation to make contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions, such plan being
maintained pursuant to one or more collective bargaining agreements.

          “Multiple Employer Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, which is subject to Title IV of ERISA and (i) is
maintained for employees of the Parent or an ERISA Affiliate of the Parent and
at least one Person other than the Parent and its ERISA Affiliates or (ii) was
so maintained and in respect of which the Parent or an ERISA Affiliate of the
Parent could have liability under Section 4064 or 4069 of ERISA in the event
such plan has been or were to be terminated.

          “Non-Consenting Lender” has the meaning assigned to that term in
Section 2.18(b).

          “Non-Performing Lender”has the meaning assigned to that term in
Section 2.03(e).

          “Nonrecourse Debt” means any Debt that finances the acquisition,
development, ownership or operation of an asset to the extent that the Person to
which such Debt is owed has no recourse whatsoever to the Borrower or any of its
Affiliates other than:

(i)  

recourse to the named obligor with respect to such Debt (the “Debtor”) for
amounts limited to the cash flow or net cash flow (other than historic cash flow
or historic net cash flow) from the asset; and

(ii)  

recourse to the Debtor for the purpose only of enabling amounts to be claimed in
respect of such Debt in an enforcement of any security interest or lien given by
the Debtor over the asset or the income, cash flow or other proceeds deriving
from the asset (or given by any shareholder or the like in the Debtor over its
shares or like interest in the capital of the Debtor) to secure the Debt, but
only if the extent of the recourse to the Debtor is limited solely to the amount
of any recoveries made on any such enforcement;

(iii)  

recourse to the Debtor generally or indirectly to any Affiliate of the Debtor,
under any form of assurance, undertaking or support, which recourse is limited
to a claim for damages (other than liquidated damages and damages required to be
calculated in a specified way) for a breach of an obligation (other than a
payment obligation or an obligation to comply or to procure compliance by
another with any financial ratios or other tests of financial condition) by the
Person against which such recourse is available; and

(iv)  

recourse to the Debtor, if such Debtor’s assets are limited to the asset so
acquired, developed, owned or operated and other assets used in connection with
or produced by the operation of the asset so acquired, developed, owned or
operated.

          “Note” means a promissory note issued at the request of a Lender
pursuant to Section 2.15, in substantially the form of Exhibit 1.01 hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender resulting
from the Advances made by such Lender.

          “Notice of Borrowing” has the meaning assigned to that term in
Section 2.02(a).

          “Notice of Conversion” has the meaning assigned to that term in
Section 2.10.

          “OECD”means the Organization for Economic Cooperation and Development.

          “Other Taxes” has the meaning assigned to that term in Section
2.16(b).

          “Outstanding Credits” means, on any date of determination, an amount
equal to the sum of (i) the aggregate principal amount of all Borrowings
outstanding on such date plus (ii) the LC Outstandings on such date.

          “Parent”means Alliant Energy Corporation, a Wisconsin corporation.

          “PBGC”means the Pension Benefit Guaranty Corporation (or any successor
entity) established under ERISA.

          “Percentage” means, for any Lender on any date of determination, the
percentage obtained by dividing such Lender’s Commitment on such day by the
total of the Commitments on such date, and multiplying the quotient so obtained
by 100%.

          “Person” means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.

          “Plan”means a Single Employer Plan or a Multiple Employer Plan.

          “PUHCA”means the Public Utility Holding Company Act of 1935, as
amended from time to time.

          “Reference Banks” means Bank One and Wachovia Bank, National
Association, and any additional or substitute Lenders as may be selected from
time to time to act as Reference Banks hereunder by the Agent.

          “Reference Ratings” means the ratings assigned by S&P and Moody’s to
the Reference Securities. For purposes of the foregoing, if the ratings assigned
to such Reference Security by S&P and Moody’s, respectively, are not comparable
(i.e., a “split rating”) by: (x) one level, the level corresponding to the lower
of such two ratings shall control, or (y) two or more levels, the level
corresponding to the rating one level above the lower of such two ratings shall
control, unless either rating is below BBB- or unrated (in the case of S&P) or
Baa3 or unrated (in the case of Moody’s), in which case the lower of the two
ratings shall control.

          “Reference Securities” means the Borrower’s senior unsecured
non-credit enhanced long-term debt.

          “Register”has the meaning assigned to that term in Section 8.07(c).

          “Report”has the meaning assigned to that term in Section 5.01(h)(iv).

          “Request for Issuance” means a request made pursuant to
Section 2.03(a) in the form of Exhibit 2.03.

          “Revolving Commitment Termination Date” means the earlier to occur of
(i) September 28, 2004, or such later date as to which the Lenders may from time
to time agree pursuant to Section 2.18, (ii) March 31, 2004 in the event the
Borrower shall not have obtained the Minnesota Approval on or before such date
and (iii) the date of termination or reduction in whole of the Commitments
pursuant to Section 2.05 or 6.01.

          “S&P” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.

          “Senior Financial Officer” means the President, the Chief Executive
Officer, the Chief Financial Officer or the Treasurer of the Borrower.

          “Significant Subsidiary” means any Subsidiary of the Borrower that, on
a consolidated basis with any of its Subsidiaries as of any date of
determination, accounts for more than 20% of the consolidated assets (valued at
book value) of the Borrower and its Subsidiaries.

          “Single Employer Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, which is subject to Title IV of ERISA and which
(i) is maintained for employees of the Parent or an ERISA Affiliate of the
Parent and no Person other than the Parent and its ERISA Affiliates, or (ii) was
so maintained and in respect of which the Parent or an ERISA Affiliate of the
Parent could have liability under Section 4069 of ERISA in the event such plan
has been or were to be terminated.

          “SPC”has the meaning assigned to that term in Section 8.07(i).

          “Subsidiary” means, with respect to any Person, any corporation or
unincorporated entity of which more than 50% of the outstanding Equity Interests
having ordinary voting power (irrespective of whether at the time Equity
Interests of any other class or classes of such corporation or entity shall or
might have voting power upon the occurrence of any contingency) is at the time
owned by said Person, either directly or through one or more other Subsidiaries.
In the case of an unincorporated entity, a Person shall be deemed to have more
than 50% of interests having ordinary voting power only if such Person’s vote in
respect of such interests comprises more than 50% of the total voting power of
all such interests in the unincorporated entity.

          “Taxes”has the meaning assigned to that term in Section 2.16(a).

          “Term Election” has the meaning assigned to that term in Section
2.18(a).

          “Termination Date” means the Revolving Commitment Termination Date,
or, if the Borrower shall have made the Term Election, the first anniversary of
the Revolving Commitment Termination Date.

          “Type” has the meaning assigned to that term (i) in the definition of
“Advance” when used in such context and (ii) in the definition of “Borrowing”
when used in such context.

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

          “Utilization Percentage” means, as of any time for the determination
thereof, the percentage obtained by dividing the aggregate Outstanding Credits
by the aggregate Commitments then in effect.

          “WPL”means Wisconsin Power and Light Company, a Wisconsin corporation.

          “WPL Facility” means the $150,000,000 Credit Agreement, dated as of
October 11, 2002, as amended, among WPL, the banks named therein and Citibank,
N.A., as administrative agent.

SECTION 1.02.     Computation of Time Periods. Unless otherwise indicated, each
reference in this Agreement to a specific time of day is a reference to Chicago,
Illinois time. In the computation of periods of time under this Agreement, any
period of a specified number of days or months shall be computed by including
the first day or month occurring during such period and excluding the last such
day or month. In the case of a period of time “from” a specified date “to” or
“until” a later specified date, the word “from” means “from and including” and
the words “to” and “until” each means “to but excluding”.

SECTION 1.03.     Computations of Outstandings. Whenever reference is made in
this Agreement to the “principal amount outstanding” on any date under this
Agreement, such reference shall refer to the aggregate principal amount of all
Advances outstanding on such date after giving effect to all Advances to be made
on such date and the application of the proceeds thereof.

SECTION 1.04.     Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles (“GAAP”) consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f).

ARTICLE II
AMOUNTS AND TERMS OF THE EXTENSIONS OF CREDIT

SECTION 2.01.

The Advances.

(a)

Each Lender severally agrees, on the terms and conditions hereinafter set forth,
to make Advances to the Borrower from time to time, during the period from and
including the date hereof, to and up to, but excluding, the Revolving Commitment
Termination Date, in an aggregate outstanding amount not to exceed at any time
such Lender’s Available Commitment. Each Borrowing shall be in an aggregate
amount not less than $5,000,000 (or, if lower, the amount of the Available
Commitments) or an integral multiple of $1,000,000 in excess thereof and shall
consist of Advances of the same Type made on the same day by the Lenders ratably
according to their respective Percentages. Within the limits of each Lender’s
Commitment and as hereinabove and hereinafter provided, the Borrower may request
Borrowings hereunder, and repay or prepay Advances pursuant to Section 2.11 and
utilize the resulting increase in the Available Commitments for further
Extensions of Credit in accordance with the terms hereof.

(b)

In no event shall the Borrower be entitled to request or receive any Borrowings
that would cause the Outstanding Credits to exceed the Commitments.

SECTION 2.02.

Making the Advances.

(a)

Each Borrowing shall be made on notice, given not later than 11:00 a.m. (i) on
the third Business Day prior to the date of the proposed Borrowing, in the case
of a Borrowing comprised of Eurodollar Rate Advances and (ii) on the date of the
proposed Borrowing, in the case of a Borrowing comprised of Base Rate Advances,
in each case by the Borrower to the Agent, which shall give to each Lender
prompt notice thereof by telecopier, telex or cable. Each such notice of a
Borrowing (a “Notice of Borrowing”) shall be by telecopier, telex or cable, in
substantially the form of Exhibit 2.02(a) hereto, specifying therein the
requested (A) date of such Borrowing, (B) Type of Advances comprising such
Borrowing, (C) aggregate amount of such Borrowing and (D) in the case of a
Borrowing comprised of Eurodollar Rate Advances, the initial Interest Period for
each such Advance. Each Lender shall, before (x) 12:00 noon on the date of such
Borrowing, in the case of a Borrowing comprised of Eurodollar Rate Advances, and
(y) 1:00 p.m. on the date of such Borrowing, in the case of a Borrowing
comprised of Base Rate Advances, make available for the account of its
Applicable Lending Office to the Agent at its address referred to in
Section 8.02, in same day funds, such Lender’s ratable portion of such
Borrowing. After the Agent’s receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Agent will promptly make
such funds available to the Borrower at the Agent’s aforesaid address.

(b)

Each Notice of Borrowing shall be irrevocable and binding on the Borrower. In
the case of any Borrowing which the related Notice of Borrowing specifies is to
be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each
Lender against any loss, cost or expense incurred by such Lender as a result of
any failure to fulfill on or before the date specified in such Notice of
Borrowing for such Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Eurodollar Rate Advance to be made by such Lender as part of
such Borrowing when such Advance, as a result of such failure, is not made on
such date.

(c)

Unless the Agent shall have received notice from a Lender prior to the date of
any Borrowing that such Lender will not make available to the Agent such
Lender’s Advance as part of such Borrowing, the Agent may assume that such
Lender has made such Advance available to the Agent on the date of such
Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such Advance available to the Agent, such Lender and the Borrower
severally agree to repay to the Agent forthwith on demand such corresponding
amount, together with interest thereon, for each day from the date such amount
is made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Lender’s
Advance as part of such Borrowing for purposes of this Agreement.

(d)

The failure of any Lender to make the Advance to be made by it as part of any
Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.

SECTION 2.03.

Letters of Credit.

(a)

Subject to the terms and conditions hereof, each Letter of Credit shall be
issued (or the stated maturity thereof extended or terms thereof modified or
amended) on not less than two 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 LC Issuing 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 the
Revolving Commitment Termination Date), (ii) the proposed stated amount of such
Letter of Credit (which shall not be less than $1,000,000), (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 one day prior to the proposed date of
issuance (or effectiveness) specified therein. Not later than 12:00 noon 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 LC Issuing 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.

(b)

No Letter of Credit shall be requested or issued hereunder if, after the
issuance thereof, (i) the Outstanding Credits would exceed the total Commitments
or (ii) the aggregate principal amount of outstanding Letters of Credit would
exceed $125,000,000.

(c)

The Borrower hereby agrees to pay to the Agent for the account of the LC Issuing
Bank and, if they shall have purchased participations in the reimbursement
obligations of the Borrower pursuant to subsection (d) below, the Lenders, on
demand made by the LC Issuing Bank to the Borrower, on and after each date on
which the LC Issuing Bank shall pay any amount under any Letter of Credit issued
by the LC Issuing Bank, a sum equal to the amount so paid plus interest on such
amount from the date so paid by the LC Issuing Bank until repayment to the LC
Issuing Bank in full at a fluctuating interest rate per annum equal to the
interest rate applicable to Base Rate Advances plus, if any amount paid by the
LC Issuing Bank under a Letter of Credit is not reimbursed by the Borrower
within three Business Days, 2%.

(d)

If the LC Issuing Bank shall not have been reimbursed in full for any payment
made by the LC Issuing Bank under a Letter of Credit issued by the LC Issuing
Bank on the date of such payment, the LC Issuing Bank shall give the Agent and
each Lender prompt notice thereof (an “LC Payment Notice”) no later than 12:00
noon on the Business Day immediately succeeding the date of such payment by the
LC Issuing Bank. Each Lender severally agrees to purchase a participation in the
reimbursement obligation of the Borrower to the LC Issuing Bank by paying to the
Agent for the account of the LC Issuing Bank an amount equal to such Lender’s
Percentage of such unreimbursed amount paid by the LC Issuing Bank, plus
interest on such amount at a rate per annum equal to the Federal Funds Rate from
the date of the payment by the LC Issuing Bank to the date of payment to the LC
Issuing Bank by such Lender. Each such payment by a Lender shall be made not
later than 3:00 P.M. on the later to occur of (i) the Business Day immediately
following the date of such payment by the LC Issuing Bank and (ii) the Business
Day on which such Lender shall have received an LC Payment Notice from the LC
Issuing Bank. Each Lender’s obligation to make each such payment to the Agent
for the account of the LC Issuing Bank shall be several and shall not be
affected by the occurrence or continuance of an Event of Default or the failure
of any other Lender to make any payment under this Section 2.03(d). Each Lender
further agrees that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.

(e)

The failure of any Lender to make any payment to the Agent for the account of
the LC Issuing Bank in accordance with subsection (d) above shall not relieve
any other Lender of its obligation to make payment, but no Lender shall be
responsible for the failure of any other Lender. If any Lender (a
“Non-Performing Lender”) shall fail to make any payment to the Agent for the
account of the LC Issuing Bank in accordance with subsection (d) above within
five Business Days after the LC Payment Notice relating thereto, then, for so
long as such failure shall continue, the LC Issuing Bank shall be deemed, for
purposes of Section 8.01 and Article VI hereof, to be a Lender owed a Borrowing
in an amount equal to the outstanding principal amount due and payable by such
Non-Performing Lender to the Agent for the account of the LC Issuing Bank
pursuant to subsection (d) above. Any Non-Performing Lender and the Borrower
(without waiving any claim against such Lender for such Lender’s failure to
purchase a participation in the reimbursement obligations of the Borrower under
subsection (d) above) severally agree to pay to the Agent for the account of the
LC Issuing Bank forthwith on demand such amount, together with interest thereon
for each day from the date such Lender would have purchased its participation
had it complied with the requirements of subsection (d) above until the date
such amount is paid to the Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to Base Rate Advances and (ii) in the case
of such Lender, the Federal Funds Rate.

(f)

The payment obligations of each Lender under Section 2.03(d) and of the Borrower
under this Agreement in respect of any payment under any Letter of Credit by the
LC Issuing Bank 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 this Agreement, any other Loan
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 this
Agreement, any other Loan Document or such Letter of Credit;

(iii)  

the existence of any claim, set-off, defense or other right which 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 LC Issuing Bank, or any other Person, whether in connection
with this Agreement, the transactions contemplated hereby, thereby or by such
Letter of Credit, or any unrelated transaction;

(iv)  

any statement or any other document presented under such Letter of Credit
reasonably 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 LC Issuing Bank under the Letter of Credit issued
by the LC Issuing 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.

(g)

The Borrower assumes all risks of the acts and omissions of any beneficiary or
transferee of any Letter of Credit. Neither the LC Issuing 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 LC Issuing 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. Notwithstanding any provision to the contrary
contained in any Loan Document, the Borrower and each Lender shall have the
right to bring suit against the LC Issuing Bank, and the LC Issuing 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 which
the Borrower or such Lender proves were caused by the LC Issuing Bank’s willful
misconduct or gross negligence, including, in the case of the Borrower, the LC
Issuing 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 LC Issuing Bank may accept sight drafts and accompanying
certificates presented under the Letter of Credit issued by the LC Issuing 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 LC Issuing Bank. Notwithstanding the foregoing, no Lender
shall be obligated to indemnify the Borrower for damages caused by the LC
Issuing Bank’s willful misconduct or gross negligence.

SECTION 2.04.

Fees.

(a)

The Borrower agrees to pay to the Agent for the account of each Lender the
Facility Fee, from the date hereof, in the case of each Bank, and from the
effective date specified in the Lender Assignment pursuant to which it became a
Lender, in the case of each other Lender, until the later of the Termination
Date and the date all Advances are paid in full, payable quarterly in arrears on
the last day of each March, June, September and December during the term of such
Lender’s Commitment, commencing December 31, 2003, and on the later of the
Termination Date and the date all Advances are paid in full.

(b)

The Borrower shall pay to the Agent for the account of each Lender a fee (the
“LC Fee”) on the average daily amount of the sum of the undrawn stated amounts
of all Letters of Credit outstanding on each such day, from the date hereof
until the later to occur of the Termination Date and the date on which no
Letters of Credit are outstanding, payable on the last day of each March, June,
September and December (commencing December 31, 2003) and such later date, at a
rate equal at all times to the Applicable Margin in effect from time to time for
Eurodollar Rate Advances. In addition, the Borrower shall pay to the LC Issuing
Bank such fees for the issuance and maintenance of Letters of Credit and for
drawings thereunder as may be separately agreed between the Borrower and the LC
Issuing Bank.

(c)

In addition to the fees provided for in subsections (a) and (b) above, the
Borrower shall pay (i) to the Agent and the LC Issuing Bank, for their own
accounts, such fees as are provided for in the Administrative Agency Fee Letter
and (ii) to the Lenders and the Co-Lead Arrangers, for their own accounts, such
fees as are provided for in the Arranger Fee Letter.

SECTION 2.05.

Reduction of the Commitments.

(a)

The Borrower shall have the right, upon at least three Business Days’ notice to
the Agent, to terminate in whole or reduce ratably in part the unused portions
of the respective Commitments of the Lenders; provided that the aggregate amount
of the Commitments of the Lenders shall not be reduced to an amount which is
less than the aggregate principal amount of the Extensions of Credit then
outstanding; and provided, further, that each partial reduction shall be in a
minimum amount of $10,000,000 or any whole multiple of $1,000,000 in excess
thereof.

(b)

On and after any date following the effective date of the Term Election, if the
Available Commitments shall exceed the aggregate principal amount of Advances
outstanding, the Available Commitments shall automatically be reduced on such
date by an amount equal to such excess.

(c)

On the Termination Date, the Commitments of the Lenders shall be reduced to
zero.

(d)

Any termination or reduction of the Commitments under this Section 2.05 shall be
irrevocable, and the Commitments shall not thereafter be reinstated.

SECTION 2.06.

Repayment of Advances. The Borrower shall repay the principal amount of each
Advance made by each Lender on the Termination Date.

SECTION 2.07.

Interest on Advances. The Borrower shall pay interest on the unpaid principal
amount of each Advance owing to each Lender from the date of such Advance until
such principal amount shall be paid in full, at the Applicable Rate for such
Advance (except as otherwise provided in this Section 2.07), payable as follows:

(a)

Base Rate Advances. If such Advance is a Base Rate Advance, interest thereon
shall be payable quarterly in arrears on the last day of each March, June,
September and December, on the date of any Conversion of such Base Rate Advance
and on the date such Base Rate Advance shall become due and payable or shall
otherwise be paid in full; provided that at any time an Event of Default shall
have occurred and be continuing, each Base Rate Advance shall bear interest
payable on demand, at a rate per annum equal at all times to the Default Rate.

(b)

Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance, interest
thereon shall be payable on the last day of such Interest Period and, if the
Interest Period for such Advance has a duration of more than three months, on
that day of each third month during such Interest Period that corresponds to the
first day of such Interest Period (or, if any such month does not have a
corresponding day, then on the last day of such month); provided that at any
time an Event of Default shall have occurred and be continuing, each Eurodollar
Rate Advance shall bear interest payable on demand, at a rate per annum equal at
all times to the Default Rate.

SECTION 2.08.

Additional Interest on Eurodollar Rate Advances. The Borrower shall pay to Agent
for the account of each Lender any costs actually incurred by such Lender with
respect to Eurodollar Rate Advances that are attributable to such Lender’s
compliance with regulations of the Board of Governors of the Federal Reserve
System requiring the maintenance of reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities. Such costs shall be
paid to the Agent for the account of such Lender in the form of additional
interest on the unpaid principal amount of each Eurodollar Rate Advance of such
Lender, from the date of such Advance until such principal amount is paid in
full, at an interest rate per annum equal at all times to the remainder obtained
by subtracting (i) the Eurodollar Rate for the Interest Period for such Advance
from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage
equal to 100% minus the Eurodollar Reserve Percentage of such Lender for such
Interest Period, payable on each date on which interest is payable on such
Advance. Such additional interest shall be determined by such Lender and
notified to the Borrower through the Agent. A certificate as to the amount of
such additional interest, submitted to the Borrower and the Agent by such
Lender, shall be conclusive and binding for all purposes, absent manifest error,
provided that the determination thereof shall have been made by such Lender in
good faith.

SECTION 2.09.

Interest Rate Determination.

(a)

Each Reference Bank agrees to furnish to the Agent timely information for the
purpose of determining each Eurodollar Rate. If any one or more of the Reference
Banks shall not furnish such timely information to the Agent for the purpose of
determining any such interest rate, the Agent shall determine such interest rate
on the basis of timely information furnished by the remaining Reference Banks.

(b)

The Agent shall give prompt notice to the Borrower and the Lenders of the
applicable interest rate determined by the Agent for purposes of Section 2.07(a)
or (b), and the applicable rate, if any, furnished by each Reference Bank for
the purpose of determining the applicable interest rate under Section 2.07(b).

(c)

If fewer than two Reference Banks furnish timely information to the Agent for
determining the Eurodollar Rate, due to the unavailability of funds to such
Reference Banks in the relevant financial markets:

(i)  

the Agent shall forthwith notify the Borrower and the Lenders that the interest
rate cannot be determined for Eurodollar Rate Advances;

(ii)  

each such Eurodollar Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into a Base Rate Advance (or if
such Advance is then a Base Rate Advance, will continue as a Base Rate Advance);
and

(iii)  

the obligation of the Lenders to make, or to Convert Advances into, Eurodollar
Rate Advances shall be suspended until the Agent shall notify the Borrower and
the Lenders that the circumstances causing such suspension no longer exist.

(d)

If, with respect to any Eurodollar Rate Advances, the Majority Lenders notify
the Agent that the Eurodollar Rate for any Interest Period for such Advances
will not adequately reflect the cost to such Majority Lenders of making, funding
or maintaining their respective Eurodollar Rate Advances for such Interest
Period, the Agent shall forthwith so notify the Borrower and the Lenders,
whereupon:

(i)  

each Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance; and

(ii)  

the obligation of the Lenders to make, or to Convert Advances into, Eurodollar
Rate Advances shall be suspended until the Agent shall notify the Borrower and
the Lenders that the circumstances causing such suspension no longer exist.

(e)

If the Borrower shall fail to (i) select the duration of any Interest Period for
any Eurodollar Rate Advance in accordance with the provisions contained in the
definition of “Interest Period” in Section 1.01 or (ii) provide a Notice of
Conversion with respect to any Eurodollar Rate Advance on or prior to 12:00 noon
on the third Business Day prior to the last day of the Interest Period
applicable thereto, the Agent will forthwith so notify the Borrower and the
Lenders and such Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance.

(f)

On the date on which the aggregate unpaid principal amount of Advances
comprising any Borrowing shall be reduced, by payment or prepayment or
otherwise, to less than the product of (i) $1,000,000 and (ii) the number of
Lenders on such date, such Advances shall, if they are Advances of a Type other
than Base Rate Advances, automatically Convert into Base Rate Advances, and on
and after such date the right of the Borrower to Convert such Advances into
Advances of a Type other than Base Rate Advances shall terminate; provided,
however, that if and so long as each such Advance shall be of the same Type and
have the same Interest Period as Advances comprising another Borrowing or other
Borrowings, and the aggregate unpaid principal amount of all such Advances shall
equal or exceed the product of (i) $1,000,000 and (ii) the number of Lenders on
such date, the Borrower shall have the right to continue all such Advances as,
or to Convert all such Advances into, Advances of such Type having such Interest
Period.

(g)

Upon the occurrence and during the continuance of any Event of Default, each
outstanding Eurodollar Rate Advance shall automatically Convert into a Base Rate
Advance at the end of the Interest Period then in effect for such Eurodollar
Rate Advance.

SECTION 2.10.

Voluntary Conversion of Advances. Subject to the conditions set forth below, the
Borrower may, on any Business Day, by delivering a notice of Conversion (a
“Notice of Conversion”) to the Agent not later than 12:00 noon (i) on the third
Business Day prior to the date of the proposed Conversion, in the case of a
Conversion to or in respect of Eurodollar Rate Advances and (ii) on the date of
the proposed Conversion, in the case of a Conversion to or in respect of Base
Rate Advances, and subject to the provisions of Sections 2.09 and 2.14, Convert
all Advances of one Type comprising the same Borrowing into Advances of another
Type; provided, however, that, in the case of any Conversion of any Eurodollar
Rate Advances into Base Rate Advances on a day other than the last day of an
Interest Period for such Eurodollar Rate Advances, the Borrower shall be
obligated to reimburse the Lenders in respect thereof pursuant to
Section 8.04(b). Each such Notice of Conversion shall be in substantially the
form of Exhibit 2.10 and shall, within the restrictions specified above, specify
(A) the date of such Conversion, (B) the Advances to be Converted, (C) if such
Conversion is into Eurodollar Rate Advances, the duration of the Interest Period
for each such Advance, and (D) the aggregate amount of Advances proposed to be
Converted. Notwithstanding the foregoing, the Borrower may not Convert Base Rate
Advances into Eurodollar Rate Advances and may not select a new Interest Period
for Eurodollar Rate Advances at any time an Event of Default has occurred and is
continuing.

SECTION 2.11.

Optional Prepayments of Advances. The Borrower may, upon at least three Business
Days’ notice to the Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall, prepay
for the ratable account of the Lenders the outstanding principal amounts of the
Advances comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that each partial prepayment shall be in an
aggregate principal amount not less than $1,000,000 (or, if lower, the principal
amount outstanding hereunder on the date of such prepayment) or an integral
multiple of $1,000,000 in excess thereof. In the case of any such prepayment of
a Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 8.04(b). Except as provided in
this Section 2.11, the Borrower shall have no right to prepay any principal
amount of any Advances.

SECTION 2.12.

Increased Costs.

(a)

If, due to either (i) the introduction of or any change (other than any change
by way of imposition or increase of reserve requirements, in the case of
Eurodollar Rate Advances, included in the Eurodollar Rate Reserve Percentage) in
or to the interpretation of any law or regulation or (ii) the compliance 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 any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand
by such Lender (with a copy of such demand to the Agent), pay to the Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to the Borrower and the Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error, provided that
the determination thereof shall have been made by such Lender in good faith.

(b)

If any Lender determines that compliance with any law or regulation or any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender’s commitment to lend hereunder and other
commitments of this type, then, upon demand by such Lender (with a copy of such
demand to the Agent), the Borrower shall immediately pay to the Agent for the
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such corporation in
the light of such circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of such
Lender’s Commitment. A certificate as to such amounts submitted to the Borrower
and the Agent by such Lender, describing in reasonable detail the manner in
which such amounts have been calculated, shall be conclusive and binding for all
purposes, absent manifest error, provided that the determination and allocation
thereof shall have been made by such Lender in good faith.

(c)

Notwithstanding any provision of subsections (a) or (b) above to the contrary,
no Lender shall be entitled to demand compensation or be compensated thereunder
to the extent that such compensation relates to any period of time more than 60
days prior to the date upon which such Lender first notified the Borrower of the
occurrence of the event entitling such Lender to such compensation (unless, and
to the extent, that any such compensation so demanded shall relate to the
retroactive application of any event so notified to the Borrower).

SECTION 2.13.

Illegality. Notwithstanding any other provision of this Agreement to the
contrary, if any Lender (the “Affected Lender”) shall notify the Agent and the
Borrower that the introduction of or any change in or to the interpretation of
any law or regulation makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for the Affected Lender or
its Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances
hereunder, all Eurodollar Rate Advances of the Affected Lender shall, on the
fifth Business Day following such notice from the Affected Lender, automatically
be Converted into a like number of Base Rate Advances, each in the amount of the
corresponding Eurodollar Rate Advance of the Affected Lender being so Converted
(each such Advance, as so Converted, being an “Affected Lender Advance”), and
the obligation of the Affected Lender to make, maintain, or Convert Advances
into Eurodollar Rate Advances shall thereupon be suspended until the Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist, or the Affected Lender has been replaced pursuant to
Section 8.07(g). For purposes of any prepayment under this Agreement, each
Affected Lender Advance shall be deemed to continue to be part of the same
Borrowing as the Eurodollar Rate Advances to which it corresponded at the time
of the Conversion of such Affected Lender Advance pursuant to this Section 2.13.

SECTION 2.14.

Payments and Computations.

(a)

The Borrower shall make each payment hereunder not later than 1:00 p.m. on the
day when due in Dollars to the Agent at its address referred to in Section 8.02
in same day funds. The Agent will promptly thereafter cause to be distributed
like funds relating to the payment of principal or interest or fees ratably
(other than amounts payable pursuant to Section 2.08, 2.16, 2.18(c) or 8.04(b))
to the Lenders for the account of their respective Applicable Lending Offices,
and like funds relating to the payment of any other amount payable to any Lender
to such Lender for the account of its Applicable Lending Office, in each case to
be applied in accordance with the terms of this Agreement. Upon its acceptance
of a Lender Assignment and recording of the information contained therein in the
Register pursuant to Section 8.07(d), from and after the effective date
specified in such Lender Assignment, the Agent shall make all payments hereunder
in respect of the interest assigned thereby to the Lender assignee thereunder,
and the parties to such Lender Assignment shall make all appropriate adjustments
in such payments for periods prior to such effective date directly between
themselves.

(b)

The Borrower hereby authorizes each Lender, if and to the extent payment owed to
such Lender is not made when due hereunder held by such Lender, to charge from
time to time against any or all of the Borrower’s accounts with such Lender any
amount so due.

(c)

All computations of interest based on clause (i) of the definition of “Alternate
Base Rate” and of the Facility Fees shall be made by the Agent on the basis of a
year of 365 or 366 days, as the case may be, and all computations of interest
based on the Eurodollar Rate and the Federal Funds Rate and of the LC Fee shall
be made by the Agent, and all computations of interest pursuant to Section 2.09
shall be made by a Lender, on the basis of a year of 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 or fees are payable. Each
determination by the Agent (or, in the case of Section 2.09, by a Lender) of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error, provided that such determination shall have been made by the
Agent or such Lender, as the case may be, in good faith.

(d)

Whenever any payment hereunder shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
payment of interest or fees, as the case may be; provided, however, that if such
extension would cause payment of interest on or principal of Eurodollar Rate
Advances to be made in the next following calendar month, such payment shall be
made on the next preceding Business Day.

(e)

Unless the Agent shall have received notice from the Borrower prior to the date
on which any payment is due to the Lenders hereunder that the Borrower will not
make such payment in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in reliance upon
such assumption, cause to be distributed to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent that the
Borrower shall not have so made such payment in full to the Agent, each Lender
shall repay to the Agent forthwith on demand such amount distributed to such
Lender together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Agent, at the Federal Funds Rate.

SECTION 2.15.

Noteless Agreement; Evidence of Indebtedness.

(a)

Each Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Advance made by such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.

(b)

The Agent shall also maintain accounts in which it will record (i) the amount of
each Advance made hereunder, the Type thereof and the Interest Period (if any)
with respect thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder,
and (iii) the amount of any sum received by the Agent hereunder from the
Borrower and each Lender’s share thereof.

(c)

The entries maintained in the accounts maintained pursuant to subsections (a)
and (b) above shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of the Agent
or any Lender to maintain such accounts or any error therein shall not in any
manner affect the obligation of the Borrower to repay such obligations in
accordance with their terms.

(d)

Any Lender may request that its Advances be evidenced by a Note. In such event,
the Borrower shall prepare, execute and deliver to such Lender a Note payable to
the order of such Lender. Thereafter, the Advances evidenced by such Note and
interest thereon shall at all times (including after any assignment pursuant to
Section 8.07) be represented by one or more Notes payable to the order of the
payee named therein or any assignee pursuant to Section 8.07, except to the
extent that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Advances once again be evidenced as
described in subsections (a) and (b) above.

SECTION 2.16.

Taxes.

(a)

Any and all payments by the Borrower hereunder and under the other Loan
Documents shall be made, in accordance with Section 2.14, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender, the LC Issuing Bank and the Agent, taxes
imposed on its overall net income and franchise taxes imposed on it by any
jurisdiction, unless such Lender, the LC Issuing Bank or the Agent (as the case
may be) would not have had such taxes imposed on it by such jurisdiction but for
such Lender’s, the LC Issuing Bank’s or the Agent’s (as the case may be) having
entered into this Agreement, having consummated the transactions contemplated
hereby or having received payments by the Borrower hereunder or under the other
Loan Documents (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as “Taxes”).
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any other Loan Document to any Lender, the
LC Issuing Bank or the Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.16) such Lender, the
LC Issuing Bank or the Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.

(b)

In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under any other Loan
Document or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter referred to
as “Other Taxes”).

(c)

The Borrower will indemnify each Lender, the LC Issuing Bank and the Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.16) paid by such Lender, the LC Issuing Bank or the Agent (as the case
may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within 30 days
from the date such Lender, the LC Issuing Bank or the Agent (as the case may be)
makes written demand therefor. Nothing herein shall preclude the right of the
Borrower to contest any such Taxes or Other Taxes so paid, and the Lenders in
question, the LC Issuing Bank or the Agent (as the case may be) will, following
notice from, and at the expense of, the Borrower, reasonably cooperate with the
Borrower to preserve the Borrower’s rights to contest such Taxes or Other Taxes.

(d)

Within 30 days after the date of any payment of Taxes, the Borrower will furnish
to the Agent, at its address referred to in Section 8.02, the original or a
certified copy of a receipt evidencing payment thereof.

(e)

The LC Issuing Bank and each Lender agrees that, on or prior to the date upon
which it shall become a party hereto, and upon the reasonable request from time
to time of the Borrower or the Agent, the LC Issuing Bank or such Lender will
deliver to the Borrower and the Agent either (i) a statement that it is
organized under the laws of a jurisdiction within the United States or (ii) duly
completed copies of such form or forms as may from time to time be prescribed by
the United States Internal Revenue Service indicating that the LC Issuing Bank
or such Lender is entitled to receive payments without deduction or withholding
of any United States federal income taxes, as permitted by the Internal Revenue
Code of 1986, as amended from time to time. The LC Issuing Bank and each Lender
that delivers to the Borrower and the Agent the form or forms referred to in the
preceding sentence further undertakes to deliver to the Borrower and the Agent
further copies of such form or forms, or successor applicable form or forms, as
the case may be, as and when any previous form filed by it hereunder shall
expire or shall become incomplete or inaccurate in any respect. The LC Issuing
Bank and each Lender represents and warrants that each such form supplied by it
to the Agent and the Borrower pursuant to this subsection (e), and not
superseded by another form supplied by it, is or will be, as the case may be,
complete and accurate.

(f)

Any Lender claiming any additional amounts payable pursuant to this Section 2.16
shall use its best efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its Applicable Lending
Office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts that may thereafter accrue and would not,
in the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.

(g)

Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.16 shall survive the payment in full of principal and interest
hereunder.

SECTION 2.17.

Sharing of Payments, Etc. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) on account of the Advances made by it (other than pursuant to Section
2.08, 2.12, 2.16, 2.18(c) or 8.04(b)) or on account of the Borrower’s
reimbursement obligations in respect of LC Outstandings in excess of its ratable
share of payments obtained by all the Lenders on account of the Advances or on
account of such reimbursement obligations, such Lender shall forthwith purchase
from the other Lenders such participations in the Advances made by them and such
reimbursement obligations as shall be necessary to cause such purchasing Lender
to share the excess payment ratably with each of them; provided, however, that
if all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery, together with an amount equal to such Lender’s ratable share
(according to the proportion of (i) the amount of such Lender’s required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.17
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) 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 2.18.

Extension of Revolving Commitment Termination Date; Term Election.

(a)

At least 30 but not more than 60 days prior to the then applicable Revolving
Commitment Termination Date, the Borrower may, by delivering a written request
to the Agent (each such request being irrevocable), request that the Revolving
Commitment Termination Date be extended for an additional period of 364 days,
commencing on the then applicable Revolving Commitment Termination Date. Any
such notice shall also indicate whether the Borrower elects, in the event that
the Lenders determine not to extend the Revolving Commitment Termination Date as
requested by the Borrower, to extend the then applicable Termination Date to one
year following such Termination Date (any such election to so extend the
Termination Date being the “Term Election”). Upon receipt of any such notice,
the Agent shall promptly communicate such request to the Lenders.

(b)

No earlier than 30 days prior, and no later than 20 days prior, to the then
applicable Revolving Commitment Termination Date, the Lenders shall indicate to
the Agent whether the Borrower’s request to so extend the Revolving Commitment
Termination Date is acceptable to the Lenders (and, if so, the conditions, if
any, relating to such acceptance), it being understood that the determination by
each Lender will be in its sole and absolute discretion and that the failure of
any Lender to so respond within such period shall be deemed to constitute a
refusal by such Lender to consent to such request, with the result being that
such request is denied (any Lender refusing or deemed to refuse any such
request, a “Non-Consenting Lender”). The Agent shall notify the Borrower, in
writing, of the Lenders’ decisions no later than 15 days prior to the then
applicable Revolving Commitment Termination Date.

(c)

Subject to the satisfaction of the conditions set forth in Section 3.03, in the
event that the sum of the Commitments of the Lenders that have consented to the
Borrower’s request to extend the then applicable Revolving Commitment
Termination Date (the “Consenting Lenders”) plus the Commitments of
Non-Consenting Lenders with respect to such request that have been assigned
pursuant to Section 8.07(g) hereof shall constitute greater than 50% of the
aggregate Commitments, the then applicable Revolving Commitment Termination Date
shall be extended for an additional period of 364 days with respect to the
Commitments of such Consenting Lenders. The Commitments of Non-Consenting
Lenders with respect to such request shall automatically terminate on the last
day of the then applicable Revolving Commitment Termination Date (and the
principal amount of all Advances made by such Non-Consenting Lenders, together
with accrued interest and fees to such date, shall be repaid), unless assigned
pursuant to Section 8.07(g) hereof; provided that, before the Borrower may
solicit Eligible Assignees other than the Consenting Lenders, the Consenting
Lenders shall have at least five days before the end of the then applicable
Revolving Commitment Termination Date to determine whether to purchase by
assignment the Commitments of such Non-Consenting Lenders.

(d)

In the event that any request by the Borrower pursuant to subsection (a) above
shall be denied and the Borrower shall have indicated in such request that, in
the event of such denial, it has determined to effect the Term Election, then,
effective as of the Revolving Commitment Termination Date, the Termination Date
shall be extended to the first anniversary of the Revolving Commitment
Termination Date; provided that on such date and on the Revolving Commitment
Termination Date (i) the representations and warranties contained in Section
4.01 are true and correct, before and after giving effect to the Term Election,
and (ii) no event has occurred and is continuing, or would result from the Term
Election, that constitutes an Event of Default or an Unmatured Default. In
addition, in the event that the Borrower shall not have requested an extension
of the Revolving Commitment Termination Date pursuant to subsection (a) above,
the Borrower may nonetheless make the Term Election by giving written notice to
such effect to the Agent (which shall promptly give notice thereof to the
Lenders) at least ten Business Days prior to the Revolving Commitment
Termination Date, whereupon, effective as of the Revolving Commitment
Termination Date, the Termination Date shall be extended to the first
anniversary of the Revolving Commitment Termination Date; provided that on such
date and on the then applicable Revolving Commitment Termination Date (i) the
representations and warranties contained in Section 4.01 are true and correct,
before and after giving effect to the Term Election, and (ii) no event has
occurred and is continuing, or would result from the Term Election, that
constitutes an Event of Default or an Unmatured Default.

(e)

Notwithstanding anything contained herein to the contrary, the Borrower’s right
to effect the Term Election as provided in either subsection (a) or (d) above
shall not affect any rights or remedies that the Lenders or the Agent may have
at such time under Section 6.01 as a result of any Event of Default or Unmatured
Default that may have occurred and then be continuing, either at the time of the
giving of such notice or on the then applicable Revolving Commitment Termination
Date.

ARTICLE III
CONDITIONS OF LENDING

SECTION 3.01.

Conditions Precedent to Closing. The Commitments of the Lenders and the
obligation of the LC Issuing Bank to issue Letters of Credit shall not become
effective unless the following conditions precedent shall have been fulfilled:

(a)

The Agent shall have received the following, each dated the date of the Closing,
in form and substance satisfactory to the Lenders and in sufficient copies for
the LC Issuing Bank and each Lender:

(i)  

this Agreement, duly executed by the Borrower, each Lender, the LC Issuing Bank
and the Agent;

(ii)  

each Note requested by a Lender pursuant to Section 2.15 payable to the order of
each such Lender, duly completed and executed by the Borrower;

(iii)  

copies of (A) the resolutions of the Board of Directors of the Borrower
approving this Agreement and the other Loan Documents to which it is, or is to
be, a party, and (B) all documents evidencing other necessary corporate action
on the part of the Borrower with respect to this Agreement and the other Loan
Documents, certified by the Secretary or an Assistant Secretary of the Borrower;

(iv)  

a certificate of the Secretary or an Assistant Secretary of the Borrower
certifying the names, true signatures and incumbency of the officers of the
Borrower authorized to sign this Agreement and the other Loan Documents to which
it is, or is to be, a party;

(v)  

copies of the Certificate of Incorporation (or comparable charter document) and
by-laws of the Borrower, together with all amendments thereto, certified by the
Secretary or an Assistant Secretary of the Borrower;

(vi)  

copies of all Governmental Approvals (other than the Minnesota Approval), if
any, required in connection with the execution, delivery and performance of this
Agreement and the other Loan Documents, certified by the Secretary or an
Assistant Secretary of the Borrower;

(vii)  

copies of the financial statements referred to in Section 4.01(f), certified by
the Secretary or an Assistant Secretary of the Borrower;

(viii)  

favorable opinions of:

(A)  

Foley & Lardner, special counsel for the Borrower, in substantially the form of
Exhibit 3.01(a)(viii)-1 and as to such other matters as the Majority Lenders,
through the Agent, may reasonably request;

(B)  

Barbara J. Swan, General Counsel of the Borrower, in substantially the form of
Exhibit 3.01(a)(viii)-2 and as to such other matters as the Majority Lenders,
through the Agent, may reasonably request; and

(C)  

King & Spalding LLP, special New York counsel to the Agent, in substantially the
form of Exhibit 3.01(a)(viii)-3 and as to such other matters as the Majority
Lenders, through the Agent, may reasonably request; and

(ix)  

such other approvals, opinions and documents as any Lender, through the Agent,
may reasonably request.

(b)

The following statements shall be true and correct, and the Agent shall have
received a certificate of a duly authorized officer of the Borrower, dated the
date of the Closing and in sufficient copies for each Lender, stating that:

(i)  

the representations and warranties set forth in Section 4.01 of this Agreement
are true and correct on and as of the date of the Closing as though made on and
as of such date, and

(ii)  

no event has occurred and is continuing that constitutes an Unmatured Default or
an Event of Default.

(c)

The Borrower shall have paid (i) all fees payable hereunder or payable pursuant
to the Administrative Agency Fee Letter and the Arranger Fee Letter to the
extent then due and payable, and (ii) all costs and expenses of the Agent
(including counsel fees and disbursements) incurred through (and for which
statements have been provided prior to) the Closing.

(d)

The Agent shall have received evidence that all amounts outstanding under the
Existing Facility, the AEC Facility and the WPL Facility, whether for principal,
interest, fees or otherwise, shall have been paid in full, and all commitments
to lend thereunder shall have been terminated.

SECTION 3.02.

Conditions Precedent to Each Extension of Credit. The obligation of (i) each
Lender to make an Advance on the occasion of each Borrowing (including the
initial Borrowing) that would cause the aggregate principal amount of Advances
outstanding hereunder to increase and (ii) the LC Issuing Bank to issue any
Letter of Credit shall be subject to the conditions precedent that, on the date
of such Extension of Credit:

(a)

the following statements shall be true and correct (and each of the giving of
the applicable Notice of Borrowing or Request for Issuance, as the case may be,
and the acceptance by the Borrower of the proceeds of such Borrowing or the
issuance of such Letter of Credit, as the case may be, shall constitute a
representation and warranty by the Borrower that, on the date of such Extension
of Credit, such statements are true and correct):

(i)  

the representations and warranties contained in Section 4.01 are true and
correct on and as of the date of such Extension of Credit, before and after
giving effect to the application of the proceeds of any Borrowing made in
connection therewith or the issuance or amendment of any Letter of Credit in
connection therewith, as the case may be, as though made on and as of such date;
and

(ii)  

no event has occurred and is continuing, or would result from such Extension of
Credit or from the application of the proceeds of any Borrowing made in
connection therewith or the issuance or amendment of any Letter of Credit in
connection therewith, as the case may be, that constitutes an Event of Default
or an Unmatured Default; and

(b)

if the Borrower has obtained the Minnesota Approval, the Agent shall have
received certified copies of the Minnesota Approval and the Borrowing, together
with all other Borrowings at such time outstanding hereunder, shall not exceed
the Minnesota Limit; and

(c)

the Agent shall have received such other approvals, opinions, or documents as
the Agent, or the Majority Lenders through the Agent, may reasonably request,
and such approvals, opinions, and documents shall be satisfactory in form and
substance to the Agent.

SECTION 3.03.

Conditions Precedent to Each Extension of the Revolving Commitment Termination
Date. In the event that the Borrower shall request an extension of the Revolving
Commitment Termination Date pursuant to Section 2.18, such extension shall take
effect on the then applicable Revolving Commitment Termination Date, subject to
the satisfaction of the following conditions precedent on or prior to such date,
together with such other conditions precedent as the Consenting Lenders may
require in connection with such extension:

(a)

the Agent shall have prepared and delivered to the Borrower, the LC Issuing Bank
and each Lender (including each new bank and other financial institution to
which a Non-Consenting Lender’s Commitment has been assigned pursuant to Section
8.07(g) hereof) a revised Schedule I that reflects the Commitments of each
Lender after giving effect to such extension;

(b)

the Borrower shall have paid all fees payable hereunder or payable under or
referenced in Section 2.04, to the extent then due and payable;

(c)

the Agent shall have received the following, in form and substance satisfactory
to the Lenders and in sufficient copies for each Lender:

(i)  

copies of all Governmental Approvals, if any, required in connection with such
extension, certified by the Secretary or an Assistant Secretary of the Borrower;
and

(ii)  

favorable opinions of:

(A)  

Foley & Lardner, special counsel for the Borrower, in form acceptable to the
Agent;

(B)  

Barbara J. Swan, General Counsel of the Borrower, in form acceptable to the
Agent; and

(d)

the Agent shall have received such other documents and legal opinions in respect
of any aspect or consequence of the transactions contemplated by Section 2.18 as
the Agent shall reasonably request, including, without limitation, copies of the
resolutions, in form and substance satisfactory to the Agent, of the Board of
Directors of the Borrower authorizing the extension of the Revolving Commitment
Termination Date; and

(e)

the following statements shall be true and correct and the Agent shall have
received a certificate of a duly authorized officer of the Borrower, dated on
and as of such date and in sufficient copies for each Lender, stating that:

(i)  

the representations and warranties contained in Section 4.01 are true and
correct on and as of such date as though made on and as of such date; and

(ii)  

no event has occurred and is continuing, or would result from such extension of
the Revolving Commitment Termination Date, that constitutes an Event of Default
or an Unmatured Default.

SECTION 3.04.

Reliance on Certificates. The Lenders, the LC Issuing Bank and the Agent shall
be entitled to rely conclusively upon the certificates delivered from time to
time by officers of the Borrower as to the names, incumbency, authority and
signatures of the respective Persons named therein until such time as the Agent
may receive a replacement certificate, in form acceptable to the Agent, from an
officer of such Person identified to the Agent as having authority to deliver
such certificate, setting forth the names and true signatures of the officers
and other representatives of such Person thereafter authorized to act on behalf
of such Person.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

SECTION 4.01.

Representations and Warranties of the Borrower. The Borrower represents and
warrants as follows:

(a)

The Borrower and each of its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to do business in, and is in good standing
in, all other jurisdictions where the nature of its business or the nature of
property owned or used by it makes such qualification necessary (except where
the failure to so qualify would not constitute a Material Adverse Change).

(b)

The execution, delivery and performance by the Borrower of this Agreement and
the other Loan Documents to which it is or will be a party, and the receipt by
the Borrower of the proceeds of Extensions of Credit on the date of any
Extension of Credit, are within the Borrower’s corporate powers, have been duly
authorized by all necessary corporate action, and do not and will not contravene
(i) the Borrower’s charter or by-laws, (ii) any law, or (iii) any legal or
contractual restriction binding on or affecting the Borrower (including, without
limitation, the Minnesota PUC Order); and such execution, delivery and
performance do not and will not result in or require the creation of any Lien
(other than pursuant to the Loan Documents) upon or with respect to any of its
properties.

(c)

No Governmental Approval is required in connection with the execution, delivery
or performance by the Borrower of any Loan Document to which the Borrower is a
party, except for the following: (i) Securities and Exchange Commission Release
Nos. 35-27542, 70-10052, dated June 21, 2002, 35-27575, 70-10052, dated October
10, 2002, and 35-27615, 70-10052, dated December 13, 2002, which have been duly
filed or obtained and are in full force and effect; (ii) the Minnesota PUC
Order, which has been duly filed or obtained and is final and in full force and
effect; and (iii) any Governmental Approval constituting the Minnesota Approval,
which, on and at all times following March 31, 2004, will have been obtained and
will be final and in full force and effect.

(d)

This Agreement is, and each other Loan Document to which the Borrower will be a
party when executed and delivered hereunder will be, legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their respective terms, subject to the qualifications, however, that the
enforcement of the rights and remedies herein and therein is subject to
bankruptcy and other similar laws of general application affecting rights and
remedies of creditors and that the remedy of specific performance or of
injunctive relief is subject to the discretion of the court before which any
proceedings therefor may be brought.

(e)

Since December 31, 2002, there has been no Material Adverse Change.

(f)

The audited consolidated balance sheets of the Borrower and its Subsidiaries as
at December 31, 2002, and the related audited consolidated statements of income
of the Borrower and its Subsidiaries for the fiscal year then ended, and the
unaudited consolidated balance sheets of the Borrower and its Subsidiaries as at
June 30, 2003 and the related unaudited consolidated statements of income for
the six-month period then ended, copies of each of which have been furnished to
each Bank, fairly present (subject, in the case of such balance sheets and
statements of income for the six months ended June 30, 2003, to year-end
adjustments) the consolidated financial condition of the Borrower and its
Subsidiaries as at such dates and the consolidated results of operations of the
Borrower and its Subsidiaries for the periods ended on such dates, all in
accordance, in all material respects, with GAAP.

(g)

Except as disclosed in the Parent’s Report on Form 10-K for the year ended
December 31, 2002 and Report on Form 10-Q for the period ended June 30, 2003,
there is no pending or threatened action or proceeding affecting the Borrower or
any of its Subsidiaries or properties before any court, governmental agency or
arbitrator, that might reasonably be expected to constitute a Material Adverse
Change and since December 31, 2002 there have been no material adverse
developments in any action or proceeding so disclosed.

(h)

No ERISA Event has occurred or is reasonably expected to occur with respect to
any Plan of the Borrower or any of its ERISA Affiliates which would result in a
material liability to the Borrower. No “prohibited transaction” has occurred
with respect to any Plan of the Borrower that is reasonably expected to result
in a material liability to the Borrower. Neither the Borrower nor any of its
ERISA Affiliates has incurred nor reasonably expects to incur any material
withdrawal liability under ERISA to any Multiemployer Plan.

(i)

The Borrower has filed all tax returns (Federal, state and local) required to be
filed and paid all taxes shown thereon to be due, including interest and
penalties, or, to the extent the Borrower is contesting in good faith an
assertion of liability based on such returns, has provided adequate reserves for
payment thereof in accordance with GAAP.

(j)

The Borrower is not an “investment company” or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended.

(k)

Neither the Borrower nor any Subsidiary of the Borrower is engaged principally,
or as one of its important activities, in the business of purchasing or carrying
Margin Stock, or extending credit for the purpose of purchasing or carrying
Margin Stock. After the making of each Extension of Credit, Margin Stock will
constitute less than 25 percent of the assets (as determined by any reasonable
method) of the Borrower and its Subsidiaries on a consolidated basis.

(l)

As of the date hereof, the Borrower is not a “holding company” within the
meaning of PUHCA.

ARTICLE V
COVENANTS OF THE BORROWER

SECTION 5.01.  

Affirmative Covenants. So long as any amount in respect of this Agreement shall
remain unpaid, any Lender shall have any Commitment or any Letter of Credit
shall remain outstanding, the Borrower will, unless the Majority Lenders shall
otherwise consent in writing:

(a)  

Payment of Taxes, Etc. Pay and discharge, and cause each of its Subsidiaries to
pay and discharge, before the same shall become delinquent, all taxes,
assessments and governmental charges, royalties or levies imposed upon it or
upon its property except, in the case of taxes, to the extent the Borrower or
such Subsidiary is contesting the same in good faith and by appropriate
proceedings and has set aside adequate reserves for the payment thereof in
accordance with GAAP.

(b)  

Maintenance of Insurance. Maintain, or cause to be maintained, insurance or
other risk management program covering the Borrower and each of its Subsidiaries
and their respective properties in effect at all times in such amounts and
covering such risks and using such means as are usual and customary for
companies of a similar size (based on the aggregate book value of the Parent’s
assets, as determined on a consolidated basis in accordance with GAAP), engaged
in similar businesses and owning similar properties, either with reputable
insurance companies or, in whole or in part, by establishing reserves of one or
more insurance funds or other risk management mechanisms, either alone or with
other corporations or associations.

(c)  

Preservation of Existence, Etc. Preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its corporate existence, material rights
(statutory and otherwise) and franchises; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to preserve and maintain
any such right or franchise, and no such Subsidiary shall be required to
preserve and maintain its corporate existence, unless the failure to do so would
constitute a Material Adverse Change.

(d)  

Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to comply,
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority, including without limitation any such laws, rules,
regulations and orders relating to zoning, environmental protection, use and
disposal of Hazardous Substances, land use, ERISA, construction and building
restrictions, and employee safety and health matters relating to business
operations, the non-compliance with which would constitute a Material Adverse
Change.

(e)  

Inspection Rights. At the reasonable expense of the Borrower, at any time and
from time to time upon reasonable notice, permit or arrange for the Agent, the
LC Issuing Bank, the Lenders and their respective agents and representatives to
examine and make copies of and abstracts from the records and books of account
of, and the properties of, the Borrower and each of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower and its Subsidiaries
with the Borrower and its Subsidiaries and their respective officers, directors
and accountants.

(f)  

Keeping of Books. Keep, and cause its Subsidiaries to keep, proper records and
books of account, in which full and correct entries shall be made of all
financial transactions of the Borrower and its Subsidiaries and the assets and
business of the Borrower and its Subsidiaries, in accordance with GAAP.

(g)  

Maintenance of Properties, Etc. Maintain, and cause each of its Subsidiaries to
maintain, good and marketable title to, and preserve, maintain, develop, and
operate in substantial conformity with all laws and material contractual
obligations, all of its properties which are used or useful in the conduct of
its business in good working order and condition, ordinary wear and tear
excepted, except where the failure to do so would not constitute a Material
Adverse Change.

(h)  

Reporting Requirements. Furnish to each Lender:

(i)  

  as soon as possible and in any event within five Business Days after the
occurrence of each Unmatured Default or Event of Default continuing on the date
of such statement, a statement of a Senior Financial Officer setting forth
details of such Unmatured Default or Event of Default and the action that the
Borrower proposes to take with respect thereto;

(ii)  

  as soon as available and in any event within 60 days after the end of each of
the first three quarters of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such quarter
and consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, all in reasonable
detail and duly certified (subject to year-end audit adjustments) by a Senior
Financial Officer as having been prepared in accordance (in all material
respects) with GAAP, together with a certificate of said officer stating that no
Unmatured Default or Event of Default has occurred and is continuing or, if an
Unmatured Default or Event of Default has occurred and is continuing, a
statement as to the nature thereof and the action that the Borrower proposes to
take with respect thereto;

(iii)  

  as soon as available and in any event within 120 days after the end of each
fiscal year of the Borrower, a copy of the audited consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such fiscal year and
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for such fiscal year, together with a certificate
of a Senior Financial Officer stating that no Unmatured Default or Event of
Default has occurred and is continuing or, if an Unmatured Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action that the Borrower proposes to take with respect thereto;

(iv)  

  concurrently with the delivery of the financial statements referred to in
clauses (ii) and (iii) above (each a “Report”), a certificate signed by the
principal executive officer and the principal financial officer of the
Borrower(each, a “Certifying Officer”) certifying that (i) each Certifying
Officer has reviewed the Report; (ii) based on such Certifying Officer’s
knowledge, the Report does not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which such statements were made, not
misleading; (iii) based on such Certifying Officer’s knowledge, the financial
statements, and other financial information included in the Report, fairly
represent in all material respects the financial condition and results of
operations of the Borrower and its Subsidiaries as of, and for, the period
presented in the Report; (iv) such Certifying Officer and the other Certifying
Officer (A) are responsible for establishing and maintaining internal controls;
(B) have designed such internal controls to ensure that material information
relating to the Borrower and its Subsidiaries is made known to such officers by
others within the entities, particularly during the period in which the periodic
reports are being prepared; (C) have evaluated the effectiveness of the internal
controls of the Borrower as of a date within 90 days prior to the Report; and
(D) have presented in the Report their conclusions about the effectiveness of
their internal controls based on their evaluation as of that date; (v) such
Certifying Officer and the other Certifying Officer have disclosed to the
auditors and the audit committee of the Board of Directors of the Borrower (A)
all significant deficiencies in the design or operation of internal controls
which could adversely affect the ability of the Borrower to record, process,
summarize, and report financial data and have identified for the Borrower’s
auditors any material weakness in internal controls; and (B) any fraud, whether
or not material, that involves management or other employees who have a
significant role in the internal controls of the Borrower; and (vi) such
Certifying Officer and the other Certifying Officer have indicated in the Report
whether or not there were significant changes in internal controls or other
factors that could significantly affect internal controls or in other factors
that could significantly affect internal controls subsequent to the date of
their evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses. Furthermore, such certificate signed by
the Certifying Officers shall (i) certify as to whether a Default or Event of
Default has occurred and is continuing on the date of such certificate, and if a
Default or an Event of Default has then occurred and is continuing, specifying
the details thereof and the action that the Borrower has taken or proposes to
take with respect thereto, (ii) set forth in reasonable detail calculations
demonstrating compliance with Section 5.02(i) and (iii) state whether any change
in GAAP or the application thereof has occurred since the date of the audited
financial statements referred to in Section 4.01 and, if any change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate;

(v)  

  as soon as possible and in any event (A) within 30 days after any ERISA Event
described in clause (i) of the definition of ERISA Event with respect to any
Plan of the Borrower or any ERISA Affiliate of the Borrower has occurred and (B)
within 10 days after any other ERISA Event with respect to any Plan of the
Borrower or any ERISA Affiliate of the Borrower has occurred, a statement of a
Senior Financial Officer describing such ERISA Event and the action, if any,
which the Borrower or such ERISA Affiliate proposes to take with respect
thereto;

(vi)  

  promptly after receipt thereof by the Borrower or any of its ERISA Affiliates
from the PBGC copies of each notice received by the Borrower or such ERISA
Affiliate of the PBGC’s intention to terminate any Plan of the Borrower or such
ERISA Affiliate or to have a trustee appointed to administer any such Plan;

(vii)  

  promptly after receipt thereof by the Borrower or any ERISA Affiliate of the
Borrower from a Multiemployer Plan sponsor, a copy of each notice received by
the Borrower or such ERISA Affiliate concerning the imposition or amount of
withdrawal liability in an aggregate principal amount of at least $250,000
pursuant to Section 4202 of ERISA in respect of which the Borrower or such ERISA
Affiliate is reasonably expected to be liable;

(viii)  

  promptly after the Borrower becomes aware of the occurrence thereof, notice of
all actions, suits, proceedings or other events (A) of the type described in
Section 4.01(g) or (B) for which the Agent, the LC Issuing Bank and the Lenders
will be entitled to indemnity under Section 8.04(c);

(ix)  

  promptly after the sending or filing thereof, copies of all such proxy
statements, financial statements, and reports which the Borrower sends to its
public security holders (if any), and copies of all regular, periodic and
special reports, and all registration statements and periodic or special
reports, if any, which the Borrower files with the Securities and Exchange
Commission or any governmental authority which may be substituted therefor, or
with any national securities exchange; and

(x)  

  promptly after requested, such other information respecting the business,
properties, results of operations, prospects, revenues, condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries as the Agent
or any Lender through the Agent may from time to time reasonably request.

(i)  

Use of Proceeds. Use the proceeds of the Advances hereunder solely for the
Borrower’s general corporate purposes (including supporting commercial paper
issued by the Borrower) and in compliance with the Minnesota PUC Order, and not
to finance any Hostile Acquisition.

(j)  

Further Assurances. At the expense of the Borrower, promptly execute and
deliver, or cause to be promptly executed and delivered, all further instruments
and documents, and take and cause to be taken all further actions, that may be
necessary or that the Majority Lenders through the Agent may reasonably request
to enable the Lenders, the LC Issuing Bank and the Agent to enforce the terms
and provisions of this Agreement and to exercise their rights and remedies
hereunder or under any other Loan Document. In addition, the Borrower will use
all reasonable efforts to duly obtain Governmental Approvals required in
connection with the Loan Documents from time to time on or prior to such date as
the same may become legally required, and thereafter to maintain all such
Governmental Approvals in full force and effect.

SECTION 5.02.  

Negative Covenants. So long as any amount in respect of this Agreement shall
remain unpaid, any Lender shall have any Commitment or any Letter of Credit
shall remain outstanding, the Borrower will not, without the written consent of
the Majority Lenders:

(a)  

Liens, Etc. Create, incur, assume, or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume, or suffer to exist, any lien, security
interest, or other charge or encumbrance (including the lien or retained
security title of a conditional vendor) of any kind, or any other type of
arrangement intended or having the effect of conferring upon a creditor a
preferential interest upon or with respect to any of its properties of any
character (including, without limitation, accounts) (any of the foregoing being
referred to herein as a “Lien”), excluding, however, from the operation of the
foregoing restrictions the Liens created under the Loan Documents and the
following:

(i)  

  Liens for taxes, assessments or governmental charges or levies to the extent
not past due;

(ii)  

  Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s
and repairmen’s liens and other similar Liens arising in the ordinary course of
business securing obligations which are not overdue or which are being contested
in good faith, provided that any such contested Lien securing an amount claimed
in excess of $1,000,000 shall be fully bonded within 90 days after the
imposition of such Lien;

(iii)  

  pledges or deposits to secure obligations under workmen’s compensation laws or
similar legislation, to secure public or statutory obligations of the Borrower
or such Subsidiary, or to secure the utility obligations of any such Subsidiary
incurred in the ordinary course of business;

(iv)  

  (A) purchase money Liens upon or in property now owned or hereafter acquired
by the Borrower or any of its Subsidiaries in the ordinary course of business
(consistent with present practices, it being understood that for purposes of
this clause, the purchase, construction or maintenance of generating facilities
by the Borrower or any of its Subsidiaries shall be deemed to be in the ordinary
course of business and consistent with present practices) to secure (1) the
purchase price of such property or (2) Debt incurred solely for the purpose of
financing the acquisition, construction or improvement of any such property to
be subject to such Liens, or (B) Liens existing on any such property at the time
of acquisition, or extensions, renewals or replacements of any of the foregoing
for the same or a lesser amount, provided that no such Lien shall extend to or
cover any property other than the property being acquired, constructed or
improved and replacements, modifications and proceeds of such property, and no
such extension, renewal or replacement shall extend to or cover any property not
theretofore subject to the Lien being extended, renewed or replaced;

(v)  

  Liens constituting easements, restrictions and other similar encumbrances
arising in the ordinary course of business, which in the aggregate do not
materially adversely affect the Borrower’s use of its properties;

(vi)  

  attachment, judgment or other similar Liens arising in connection with court
proceedings, provided that the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith by appropriate proceedings or the payment of which is covered in
full (subject to customary deductible amounts) by insurance maintained with
responsible insurance companies;

(vii)  

  Liens securing Debt permitted by Section 5.02(b)(i)(B) and (D);

(viii)  

  other Liens set forth in Schedule II hereto, and any extensions or renewals of
any such Liens upon or in the same property theretofore subject thereto;

(ix)  

  Liens securing obligations under agreements entered into pursuant to the Iowa
Industrial New Jobs Training Act or any similar or successor legislation;
provided that such obligations do not exceed $1,000,000 in the aggregate at any
one time outstanding;

(x)  

  Liens incurred in connection with sales of assets permitted under Section
5.02(f)(viii); and

(xi)  

  Liens incurred by the Borrower or any of its Subsidiaries on assets of the
Borrower and its Subsidiaries (A) securing the payment obligations of the
Borrower or any of its Subsidiaries under contracts (other than contracts for
borrowed money) or (B) posted as cash collateral in connection with Non-Recourse
Debt, in an aggregate principal amount not to exceed $50,000,000.

(b)  

Debt. (i)  Create, incur, assume, or suffer to exist any Debt other than:

(A)  

  Debt hereunder and under the other Loan Documents;

(B)  

  Debt issued pursuant to the Indentures;

(C)  

  other Debt of the Borrower that is pari passu with, or subordinate to, the
Debt hereunder or secured by a Lien permitted under Section 5.02(a); and

(D)  

  Debt evidenced by the Bonds;

  provided, however, that, both immediately before and after the incurrence of
any Debt described in clause (B), (C) or (D) of this paragraph (i), the Borrower
shall be in compliance with the covenant set forth in Section 5.02(i).

(ii)  

  Permit any of its Subsidiaries to create, incur, assume, or suffer to exist
any Debt other than:

(A)  

  Debt of any Person acquired by the Borrower or any such Subsidiary (whether by
merger, stock or asset purchase, or otherwise) that was in effect and
outstanding at the time of acquisition;

(B)  

  Debt owing by any such Subsidiary to the Borrower or to any other such
Subsidiary;

(C)  

  Debt of such Subsidiaries under working capital lines and with respect to
Capitalized Lease Obligations not to exceed $5,000,000 in the aggregate at any
one time outstanding (such dollar limitation to apply to the Debt of any Persons
acquired by and merged into any such Subsidiary to the extent of any surviving
working capital lines and Capitalized Lease Obligations of any such Person that
shall survive such acquisition and merger);

(D)  

  Debt secured by Liens permitted by Section 5.02(a)(iv); and

(E)  

  other Debt set forth in Schedule III hereto;

  provided, however, that, both immediately before and after the incurrence of
any Debt described in clause (A), (B), (C), (D) or (E) of this paragraph (ii),
the Borrower shall be in compliance with the covenant set forth in
Section 5.02(i).

(c)

Compliance with ERISA. (i) Permit to exist any “accumulated funding deficiency”
(as defined in Section 412(a) of the Internal Revenue Code of 1986, as amended
from time to time) (unless such deficiency exists with respect to a Multiple
Employer Plan or Multiemployer Plan and the Borrower has no control over the
reduction or elimination of such deficiency), (ii) terminate, or permit any
ERISA Affiliate of the Borrower to terminate, any Plan of the Borrower or such
ERISA Affiliate so as to result in any material (in the opinion of the Majority
Lenders) liability of the Borrower to the PBGC, or (iii) permit to exist any
occurrence of any Reportable Event (as defined in Title IV of ERISA), or any
other event or condition, which presents a material (in the opinion of the
Majority Lenders) risk of such a termination by the PBGC of any Plan of the
Borrower or such ERISA Affiliate and such a material liability to the Borrower.

(d)

Transactions with Affiliates. Enter into, or permit any of its Subsidiaries to
enter into, any transaction with an Affiliate of the Borrower, unless such
transaction is on terms no less favorable to the Borrower or such Subsidiary, as
the case may be, than if the transaction had been negotiated in good faith on an
arm’s length basis with a Person that was not an Affiliate of the Borrower, or
such transaction has been approved by (i) the Securities and Exchange Commission
pursuant to PUHCA; (ii) the Minnesota Public Utilities Commission; or (iii) the
Illinois Commerce Commission.

(e)

Mergers, Etc.

(i)  

merge with or into or consolidate with or into any other Person, except the
Borrower may merge with or into or consolidate with or into any of its
Subsidiaries, provided that immediately after giving effect thereto, (A) no
event shall occur and be continuing that constitutes an Unmatured Default or an
Event of Default, (B) the Borrower is the surviving corporation and (C) the
Borrower shall not be liable with respect to any Debt or allow its property to
be subject to any Lien which it could not become liable with respect to or allow
its property to become subject to under this Agreement or any other Loan
Document on the date of such transaction; or

(ii)  

permit any of its Subsidiaries to merge with or into or consolidate with or into
any other Person, except that any such Subsidiary may merge with or into any
other Person, provided that immediately after giving effect thereto, (A) the
surviving corporation is a Subsidiary of the Borrower, (B) no event shall occur
and be continuing that constitutes an Unmatured Default or an Event of Default
and (C) the Borrower or any of its Subsidiaries shall not be liable with respect
to any Debt or allow its property to be subject to any Lien which it could not
become liable with respect to or allow its property to become subject to under
this Agreement or any other Loan Document on the date of such transaction.

(f)

Sales, Etc., of Assets. Sell, lease, transfer, assign or otherwise dispose of
any of its assets, or permit any of its Subsidiaries to sell, lease, transfer,
assign or otherwise dispose of any of its assets, except (i)  sales, leases,
transfers and assignments from one Subsidiary of the Borrower to another such
Subsidiary or to the Borrower, (ii) in any transaction in which the net proceeds
from such sale, lease, transfer, assignment or disposition are solely Cash and
Cash Equivalents and such proceeds are (A) applied solely as a permanent
reduction of the Commitments and prepayment of Advances pursuant to
Sections 2.05, 2.11 and 2.12, or (B) applied solely to pay or prepay Debt
(together with a permanent reduction of any commitments relating to such Debt)
incurred by the Borrower or any such Subsidiary in connection with the project
comprising such assets, (iii) in connection with a sale and leaseback
transaction, (iv) sales, leases, transfers and assignments of other assets
representing not in excess of 5% of the consolidated assets (valued at book
value) of the Borrower and its Subsidiaries in the aggregate from the date
hereof until the Termination Date in any single or series of transactions,
whether or not related, (v) sales, leases, transfers and assignments of worn out
or obsolete equipment no longer used and useful in the business of the Borrower
and its Subsidiaries, (vi) dispositions of the transmission assets of the
Borrower and its Subsidiaries to TRANSlink Transmission Company or to any other
Regional Transmission Organization authorized by the Federal Energy Regulatory
Commission, (vii) sale or capital contribution of nuclear generation assets to
Nuclear Management Company LLC and (viii) sales of contracts and accounts
receivable of the Borrower, including, but not limited to, sales of accounts
receivable in connection with (A) the Receivables Purchase Agreement, dated as
of April 30, 2001 (as amended from time to time), among Ciesco, LLC, Alliant
Energy SPE LLC, Citicorp North America, Inc. and Alliant Energy Corporate
Services, Inc. and (B) the Receivables Purchase Agreement, dated as of April 30,
2001 (as amended from time to time), among Citibank, N.A., Alliant Energy SPE
LLC, Citicorp North America, Inc. and Alliant Energy Corporate Services, Inc.;
provided in each case that no Unmatured Default or Event of Default shall have
occurred and be continuing after giving effect thereto.

(g)

Maintenance of Ownership of Significant Subsidiaries. Sell, assign, transfer,
pledge or otherwise dispose of any Equity Interests of any of its Significant
Subsidiaries or any warrants, rights or options to acquire such Equity
Interests, or permit any of its Significant Subsidiaries to issue, sell or
otherwise dispose of any shares of its Equity Interests or the Equity Interests
of any other of its Subsidiaries or any warrants, rights or options to acquire
such capital stock, except (and only to the extent) as may be necessary to give
effect to a transaction permitted by subsection (e), above.

(h)

Restrictive Agreements. Directly or indirectly, enter into, incur or permit to
exist, or permit, directly or indirectly, any of its Significant Subsidiaries to
enter into, incur or permit to exist, any agreement or other arrangement that
prohibits, restricts or imposes any condition upon the ability of the Borrower
or any Significant Subsidiary to declare or pay dividends or other distributions
to the Parent, the Borrower or any other Significant Subsidiary; provided that
the foregoing limitations do not apply to (i) financial covenants that require
the maintenance of a minimum net worth or compliance with financial tests as
conditions to the ability to pay dividends or make other distributions with
respect to capital stock or otherwise; (ii) restrictions that arise only if
dividends on preferred stock have not been paid; and (iii) limitations or
restrictions imposed by law or in regulatory proceedings.

(i)

Capitalization Ratio. Permit the ratio of Consolidated Debt of the Borrower to
Consolidated Capital of the Borrower to exceed .58 to 1.00.

(j)

Synthetic Lease Restrictions. Enter into or permit any Subsidiary to enter into
a synthetic lease transaction.

ARTICLE VI
EVENTS OF DEFAULT

SECTION 6.01.

Events of Default. If any of the following events (each an “Event of Default”)
shall occur and be continuing after the applicable grace period and notice
requirement (if any):

(a)

The Borrower shall fail to pay any principal of any Borrowing or any
reimbursement obligation in respect of a Letter of Credit when the same becomes
due and payable; or

(b)

The Borrower shall fail to pay any interest on any Borrowing or any other amount
due under this Agreement for two days after the same becomes due; or

(c)

Any representation or warranty made by or on behalf of the Borrower in any Loan
Document or in any certificate or other writing delivered pursuant thereto shall
prove to have been incorrect in any material respect when made or deemed made;
or

(d)

The Borrower shall fail to perform or observe any term or covenant on its part
to be performed or observed contained in Section 5.01(c), 5.01(h)(i) or 5.02
(other than subsections (c) and (d) thereof); or

(e)

The Borrower shall fail to perform or observe any other term or covenant on its
part to be performed or observed contained in this Agreement or in any other
Loan Document, and any such failure shall remain unremedied, after the earlier
of (i) actual knowledge by the Borrower thereof, and (ii) written notice thereof
shall have been given to the Borrower by the Agent, for a period of 30 days; or

(f)

The Borrower or any of its Subsidiaries shall fail to pay any of its Debt,
including any interest or premium thereon (but excluding Debt hereunder),
aggregating $25,000,000 or more when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in any agreement
or instrument relating to such Debt; or any other default under any agreement or
instrument relating to any such Debt, or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such default or event is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof as
a result of a default or other similar adverse event; or

(g)

The Borrower or any of its Subsidiaries shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make an assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Borrower or any of its
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of its debts under any law relating to bankruptcy,
insolvency, or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property and, in the case of
a proceeding instituted against the Borrower or any of its Subsidiaries, either
such proceeding shall remain undismissed or unstayed for a period of 60 days or
any of the actions sought in such proceeding (including without limitation the
entry of an order for relief against the Borrower or any of its Subsidiaries or
the appointment of a receiver, trustee, custodian or other similar official for
the Borrower or such Subsidiary or any of its property) shall occur; or the
Borrower shall take any corporate or other action to authorize any of the
actions set forth above in this subsection (g); or

(h)

Any judgment or order for the payment of money equal to or in excess of
$25,000,000 shall be rendered against the Borrower or any of its Subsidiaries or
their respective properties and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or

(i)

Any material provision of any Loan Document to which the Borrower is a party
shall for any reason cease to be valid and binding on the Borrower or the
Borrower shall so assert in writing; or

(j)

Any Governmental Approval required in connection with the execution, delivery
and performance of the Loan Documents shall be rescinded, revoked, otherwise
terminated, or amended or modified in any manner that is materially adverse to
the interests of the Lenders, the LC Issuing Bank and the Agent; or

(k)

Any ERISA Event shall have occurred with respect to a Plan that could reasonably
be expected to result in a material liability to the Borrower, and, 30 days
after notice thereof shall have been given to the Borrower by the Agent, the LC
Issuing Bank or any Lender, such ERISA Event shall still exist; or

(l)

The Parent shall cease to own 100% of the common equity interests of the
Borrower or shall cease to have the power (whether or not exercised) to elect a
majority of the Borrower’s directors.

  then, and in any such event, the Agent (i) shall at the request, or may with
the consent, of the holders of greater than 50% of the principal amount of the
Advances then outstanding or, if no Advances are then outstanding, Lenders
having greater than 50% of the Commitments, by notice to the Borrower, declare
the obligation of each Lender to make Advances and the obligation of the LC
Issuing Bank to issue Letters of Credit to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the holders of greater than 50% in principal amount of the Advances
then outstanding or, if no Advances are then outstanding, Lenders having greater
than 50% of the Commitments, by notice to the Borrower, declare the Advances (if
any), all interest thereon and all other amounts payable under this Agreement to
be forthwith due and payable, whereupon the Advances, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower under the
Federal Bankruptcy Code, (A) the obligation of the LC Issuing Bank to issue
Letters of Credit, the Commitments and the obligation of each Lender to make
Advances shall automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.

SECTION 6.02.     Cash Collateral Account. Notwithstanding anything to the
contrary contained herein, no notice given or declaration made by the Agent
pursuant to this Article VI shall affect (i) the obligation of the LC Issuing
Bank to make any payment under any Letter of Credit in accordance with the terms
of such Letter of Credit or (ii) the obligations of each Lender in respect of
each such Letter of Credit; provided, however, that if an Event of Default has
occurred and is continuing, the Agent shall at the request, or may with the
consent, of the Majority Lenders, upon notice to the Borrower, require the
Borrower to deposit with the Agent an amount in the cash collateral account (the
“Cash Collateral Account”) described below equal to the LC Outstandings on such
date. Such Cash Collateral Account shall at all times be free and clear of all
rights or claims of third parties. The Cash Collateral Account shall be
maintained with the Agent in the name of, and under the sole dominion and
control of, the Agent, and amounts deposited in the Cash Collateral Account
shall bear interest at a rate equal to the rate generally offered by Bank One
for deposits equal to the amount deposited by the Borrower in the Cash
Collateral Account, for a term to be determined by the Agent, in its sole
discretion. The Borrower hereby grants to the Agent for the benefit of the LC
Issuing Bank and the Lenders a Lien in and hereby assigns to the Agent for the
benefit of LC Issuing Bank and the Lenders all of its right, title and interest
in, the Cash Collateral Account and all funds from time to time on deposit
therein to secure its reimbursement obligations in respect of Letters of Credit.
If any drawings then outstanding or thereafter made are not reimbursed in full
immediately upon demand or, in the case of subsequent drawings, upon being made,
then, in any such event, the Agent may apply the amounts then on deposit in the
Cash Collateral Account, toward the payment in full of any of the Obligations as
and when such obligations shall become due and payable. Upon payment in full,
after the termination of the Letters of Credit, of all such obligations, the
Agent will repay and reassign to the Borrower any cash then in the Cash
Collateral Account and the Lien of the Agent on the Cash Collateral Account and
the funds therein shall automatically terminate.

ARTICLE VII
THE AGENT

SECTION 7.01.     Authorization and Action. Each of the LC Issuing Bank and each
Lender hereby appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
the Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. As to any matters not expressly provided for by this
Agreement or any other Loan Document (including, without limitation, enforcement
or collection of the Borrowings), the Agent shall not be required to exercise
any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Majority Lenders, and such instructions
shall be binding upon all Lenders and all holders of Notes (if any); provided,
however, that the Agent shall not be required to take any action which exposes
the Agent to personal liability or which is contrary to this Agreement or
applicable law. The Agent agrees to give to each Lender prompt notice of each
notice given to it by the Borrower pursuant to the terms of this Agreement. The
Agent shall be deemed to have exercised reasonable care in the administration
and enforcement of this Agreement and the other Loan Documents if it undertakes
such administration and enforcement in a manner substantially equal to that
which Bank One accords credit facilities similar to the credit facility
hereunder for which it is the sole lender.

SECTION 7.02.     Agent’s Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
any other Loan Document, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the Agent:
(i) may treat the payee of any Note as the holder thereof until the Agent
receives and accepts a Lender Assignment entered into by the Lender which is the
payee of such Note, as assignor, and an Eligible Assignee, as assignee, as
provided in Section 8.07; (ii) may consult with legal counsel (including counsel
for the Borrower), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (iii) makes no warranty or representation to any Lender and shall not
be responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with this Agreement or any
other Loan Document; (iv) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
this Agreement or any other Loan Document on the part of the Borrower or to
inspect the property (including the books and records) of the Borrower; (v)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; and (vi) shall incur no liability under or in respect of this
Agreement or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.

SECTION 7.03.     Bank One and Affiliates. With respect to its Commitment and
the Advances made by it, Bank One shall have the same rights and powers under
this Agreement as any other Lender and may exercise the same as though it were
not the Agent; and the term “Bank” or “Banks” and “Lender” or “Lenders” shall,
unless otherwise expressly indicated, include Bank One in its individual
capacity. Bank One and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any kind of business
with, the Borrower, any of its Subsidiaries and any Person who may do business
with or own securities of the Borrower or any such Subsidiary, all as if Bank
One were not the Agent and without any duty to account therefor to the Lenders.

SECTION 7.04.     Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements referred to in Section 4.01(f) and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.

SECTION 7.05.     Indemnification. The Lenders agree to indemnify the Agent (to
the extent not reimbursed by the Borrower), ratably according to (i) on or
before the Termination Date, the respective Percentages of the Lenders, or (ii)
after the Termination Date, the respective outstanding principal amounts of the
Advances, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement,
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent’s gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
to the extent that the Agent is not reimbursed for such expenses by the
Borrower.

SECTION 7.06.     Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower and may be removed at any
time with or without cause by the Majority Lenders, with any such resignation or
removal to become effective only upon the appointment of a successor Agent
pursuant to this Section 7.06. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Agent, which shall
be a Lender or shall be another commercial bank or trust company (and reasonably
acceptable to the Borrower so long as no Event of Default exists) organized
under the laws of the United States or of any State thereof. If no successor
Agent shall have been so appointed by the Majority Lenders, and shall have
accepted such appointment, within 30 days after the retiring Agent’s giving of
notice of resignation or the Majority Lenders’ removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a Lender or shall be another commercial bank or trust
company organized under the laws of the United States of any State thereof
reasonably acceptable to the Borrower. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring Agent’s
resignation or removal hereunder as Agent, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.

ARTICLE VIII
MISCELLANEOUS

SECTION 8.01.

Amendments, Etc. No amendment or waiver of any provision of any Loan Document,
nor consent to any departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Majority Lenders
and, in the case of any amendment, the Borrower, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the following:
(a) waive, modify or eliminate any of the conditions specified in Section 3.01,
3.02 or 3.03, (b) increase or extend the Commitments of the Lenders or subject
the Lenders to any additional obligations, (c) reduce the principal of, or
interest on, the Advances, any Applicable Margin or any fees or other amounts
payable hereunder, (d) postpone any date fixed for any payment of principal of,
or interest on, the Advances or any fees or other amounts payable hereunder,
(e) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Advances, or the number of Lenders, which shall be
required for the Lenders or any of them to take any action hereunder, (f) amend
this Section 8.01, or (g) release any collateral for the obligations of the
Borrower hereunder; and provided, further, that no amendment, waiver or consent
shall affect the rights or duties of the Agent or the LC Issuing Bank under this
Agreement or any Note, unless such amendment, waiver or consent is in writing
and signed by the Agent and the LC Issuing Bank, as the case may be, in addition
to the Lenders required above to take such action; and provided, further that
this Agreement may be amended and restated without the consent of any Lender,
the LC Issuing Bank or the Agent if, upon giving effect to such amendment and
restatement, such Lender, the LC Issuing Bank or the Agent, as the case may be,
shall no longer be a party to this Agreement (as so amended and restated) or
have any Commitment or other obligation hereunder or under any Letter of Credit
and shall have been paid in full all amounts payable hereunder to such Lender,
the LC Issuing Bank or the Agent, as the case may be.

SECTION 8.02.

Notices, Etc. All notices and other communications provided for hereunder and
under the other Loan Documents shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied, telegraphed,
telexed, cabled or delivered, if to the Borrower, at its address at 4902 North
Biltmore Lane, Madison, Wisconsin 53718-2132 Attn: Treasurer, or P.O. Box 77007,
Madison, Wisconsin 53707-1007 Attn: Treasurer; if to any Bank, at its Domestic
Lending Office specified opposite its name on Schedule I hereto; if to any other
Lender, at its Domestic Lending Office specified in the Lender Assignment
pursuant to which it became a Lender; and if to the Agent, at its address at
1 Bank One Plaza, Chicago, Illinois 60670, Attention: Robert G. Bussa; or, as to
each party, at such other address as shall be designated by such party in a
written notice to the other parties. All such notices and communications shall,
when mailed, telecopied, telegraphed, telexed or cabled, be effective five days
after being deposited in the mails, or when delivered to the telegraph company,
telecopied, confirmed by telex answerback or delivered to the cable company,
respectively, except that notices and communications to the Agent pursuant to
Article II or VII shall not be effective until received by the Agent.

SECTION 8.03.

No Waiver; Remedies. No failure on the part of any Lender, the LC Issuing Bank
or the Agent to exercise, and no delay in exercising, any right hereunder or
under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

SECTION 8.04.

Costs, Expenses, Taxes and Indemnification.

(a)

The Borrower agrees to pay on demand all costs and expenses of the Agent in
connection with the preparation (including, without limitation, printing costs),
negotiation, execution, delivery, modification and amendment of this Agreement
and the other Loan Documents, and the other documents and instruments to be
delivered hereunder and thereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Agent with respect
thereto and with respect to the administration of, and advising the Agent as to
its rights and responsibilities under, this Agreement and the other Loan
Documents. The Borrower further agrees to pay on demand all costs and expenses,
if any (including, without limitation, reasonable counsel fees and expenses of
the Agent, the LC Issuing Bank and each Lender), in connection with the
enforcement and workout (whether through negotiations, legal proceedings or
otherwise) of this Agreement and the other Loan Documents and the other
documents and instruments to be delivered hereunder and thereunder, including,
without limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 8.04(a). In addition, the Borrower
shall pay any and all stamp and other taxes payable or determined to be payable
in connection with the execution and delivery of this Agreement and the other
Loan Documents, and the other documents and instruments to be delivered
hereunder and thereunder, and agrees to save the Agent, the LC Issuing Bank and
each Lender harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes.

(b)

If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is
made other than on the last day of the Interest Period for such Advance as a
result of a payment or Conversion pursuant to Section 2.09(f), 2.10, 2.11 or
2.13 or acceleration of the maturity of the Advances pursuant to Section 6.01 or
for any other reason, the Borrower shall, upon demand by any Lender or the LC
Issuing Bank (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender or the LC Issuing Bank, as the case may be, any amounts
required to compensate such Lender or the LC Issuing Bank for any additional
losses, costs or expenses which it may reasonably incur as a result of such
payment or Conversion, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.

(c)

The Borrower hereby agrees to indemnify and hold each Lender, the Agent, the LC
Issuing Bank and their respective officers, directors, employees, professional
advisors and affiliates (each, an “Indemnified Person”) harmless from and
against any and all claims, damages, losses, liabilities, costs or expenses
(including reasonable attorney’s fees and expenses, whether or not such
Indemnified Person is named as a party to any proceeding or is otherwise
subjected to judicial or legal process arising from any such proceeding) which
any of them may incur or which may be claimed against any of them by any Person
(except for such claims, damages, losses, liabilities, costs and expenses
resulting from such Indemnified Person’s gross negligence or willful
misconduct):

(i)  

by reason of or resulting from the execution, delivery or performance of any of
the Loan Documents or any transaction contemplated thereby, or the use by the
Borrower of the proceeds of any Advance or the use by the Borrower or any
beneficiary of any Letter of Credit of such Letter of Credit;

(ii)  

in connection with any documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of any of the
Loan Documents; or

(iii)  

in connection with or resulting from the utilization, storage, disposal,
treatment, generation, transportation, release or ownership of any Hazardous
Substance (A) at, upon, or under any property of the Borrower or any of its
Affiliates or (B) by or on behalf of the Borrower or any of its Affiliates at
any time and in any place.

(d)

The Borrower’s obligations under this Section 8.04 shall survive the repayment
of all amounts owing to the Lenders hereunder and the termination of the
Commitments. If and to the extent that the obligations of the Borrower under
this Section 8.04 are unenforceable for any reason, the Borrower agrees to make
the maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.

SECTION 8.05.

Right of Set-off.

(a)

Upon (i) the occurrence and during the continuance of any Event of Default and
(ii) the making of the request or the granting of the consent by the Majority
Lenders specified by Section 6.01 to authorize the Agent to declare all amounts
owing hereunder due and payable pursuant to the provisions of Section 6.01, each
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under any Loan Document, irrespective of whether or
not such Lender shall have made any demand under such Loan Document and although
such obligations may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such set-off and application made by such Lender, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Lender may have.

(b)

The Borrower agrees that it shall have no right of set-off, deduction or
counterclaim in respect of its obligations hereunder, and that the obligations
of the Lenders hereunder are several and not joint. Nothing contained herein
shall constitute a relinquishment or waiver of the Borrower’s rights to any
independent claim that the Borrower may have against the Agent, the LC Issuing
Bank or any Lender for the Agent’s, the LC Issuing Bank’s or such Lender’s, as
the case may be, gross negligence or willful misconduct; provided that no Lender
shall be liable for the conduct of the Agent, the LC Issuing Bank or any other
Lender; provided further that the Agent shall not be liable for the conduct of
any Lender or the LC Issuing Bank, and the LC Issuing Bank shall not be liable
for the conduct of any Lender or the Agent; provided, however that none of the
Agent, any Lender or the LC Issuing Bank shall be liable to the Borrower for any
amounts representing indirect, special, consequential or punitive damages
suffered by the Borrower.

SECTION

 8.06.Binding Effect. This Agreement shall become effective when it shall have
been executed by the Borrower and the Agent and when the Agent shall have been
notified in writing by each Bank that such Bank has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrower, the Agent, the
LC Issuing Bank and each Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.

SECTION 8.07.

Assignments and Participations.

(a)

Each Lender may assign to one or more Eligible Assignees all or a portion of its
rights and obligations under the Loan Documents (including, without limitation,
all or a portion of its Commitment, the Advances owing to it and the Note or
Notes (if any) held by it); provided, however, that (i) each such assignment
shall be of a constant, and not a varying, percentage of all of the assigning
Lender’s rights and obligations under the Loan Documents, (ii) the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Lender Assignment with respect to
such assignment) shall in no event be less than the lesser of the amount of such
Lender’s then remaining Commitment and $5,000,000 or any whole multiple of
$1,000,000 in excess thereof (except in the case of assignments between Lenders
at the time already parties hereto and between a Lender and an Affiliate of such
Lender), (iii) the Agent, the LC Issuing Bank and, so long as no Event of
Default shall have occurred and be continuing, the Borrower, shall have
consented to such assignment (which may not be unreasonably withheld or
delayed), and (iv) the parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording in the Register, a Lender
Assignment, together with any Note or Notes (if any) subject to such assignment
and a processing and recordation fee of $3,500. Promptly following its receipt
of such Lender Assignment, Note or Notes (if any) and fee, the Agent shall
accept and record such Lender Assignment in the Register. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Lender Assignment, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Lender Assignment, have the rights and obligations of a
Lender hereunder and (y) the Lender assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Lender Assignment, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of a Lender Assignment covering all or
the remaining portion of an assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto). Notwithstanding
anything to the contrary contained in this Agreement, any Lender may at any
time, with notice to the Borrower, the Agent and the LC Issuing Bank, assign all
or any portion of the Advances owing to it to any other Lender or any Affiliate
of a Lender. No such assignment, other than to an Eligible Assignee, a Lender or
an Affiliate of a Lender, shall release the assigning Lender from its
obligations hereunder.

(b)

By executing and delivering a Lender Assignment, the Lender assignor thereunder
and the assignee thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such Lender Assignment,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with any Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Loan Document
or any other instrument or document furnished pursuant thereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under any
Loan Document or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of each Loan Document,
together with copies of the financial statements referred to in Section 4.01(f)
hereof and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Lender Assignment;
(iv) such assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

(c)

The Agent shall maintain at its address referred to in Section 8.02 a copy of
each Lender Assignment delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Advances owing to, each Lender from time to time (the
“Register”). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

(d)

Upon its receipt of a Lender Assignment executed by an assigning Lender and an
assignee representing that it is an Eligible Assignee, together with any Note or
Notes (if any) subject to such assignment, the Agent shall, if such Lender
Assignment has been completed and is in substantially the form of Exhibit 8.07
hereto, (i) accept such Lender Assignment, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower.

(e)

Each Lender may sell participations to one or more banks, financial institutions
or other entities in all or a portion of its rights and obligations under the
Loan Documents (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes (if any) held by it);
provided, however, that (i) such Lender’s obligations under this Agreement
(including, without limitation, its Commitment to the Borrower hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender shall
remain the holder of any such Note (if any) for all purposes of this Agreement,
and (iv) the Borrower, the Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.

(f)

Any Lender may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 8.07, disclose to the
assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree, in accordance with
the terms of Section 8.08, to preserve the confidentiality of any Confidential
Information relating to the Borrower received by it from such Lender.

(g)

If any Lender (or any bank, financial institution, or other entity to which such
Lender has sold a participation) shall (i) make any demand for payment under
Section 2.08 or 2.12, (ii) give notice to the Agent pursuant to Section 2.13 or
(iii) determine not to extend the Revolving Commitment Termination Date in
response to any request by the Borrower pursuant to Section 2.18, then (A) in
the case of any demand made under clause (i) above, or the occurrence of the
event described in clause (ii) above, within 30 days after any such demand or
occurrence (if, but only if, in the case of any demanded payment described in
clause (i), such demanded payment has been made by the Borrower), and (B) in the
case of the occurrence of the event described in clause (iii) above, at any time
prior to the then-scheduled Revolving Commitment Termination Date, the Borrower
may, with the approval of the Agent and the LC Issuing Bank (which approval
shall not be unreasonably withheld), and provided that no Event of Default or
Unmatured Default shall then have occurred and be continuing, demand that such
Lender assign in accordance with this Section 8.07 to one or more Eligible
Assignees designated by the Borrower all (but not less than all) of such
Lender’s Commitment and the Advances owing to it within the period ending on the
latest to occur of (x) the last day in the period described in clause (A) or (B)
above, as applicable, and (y) the last day of the longest of the then current
Interest Periods for such Advances. If any such Eligible Assignee designated by
the Borrower shall fail to consummate such assignment on terms acceptable to
such Lender, or if the Borrower shall fail to designate any such Eligible
Assignees for all or part of such Lender’s Commitment or Advances, then such
demand by the Borrower shall become ineffective; it being understood for
purposes of this subsection (g) that such assignment shall be conclusively
deemed to be on terms acceptable to such Lender, and such Lender shall be
compelled to consummate such assignment to an Eligible Assignee designated by
the Borrower, if such Eligible Assignee (1) shall agree to such assignment by
entering into a Lender Assignment with such Lender and (2) shall offer
compensation to such Lender in an amount equal to all amounts then owing by the
Borrower to such Lender hereunder, whether for principal, interest, fees, costs
or expenses (other than the demanded payment referred to above and payable by
the Borrower as a condition to the Borrower’s right to demand such assignment),
or otherwise.

(h)

Anything in this Section 8.07 to the contrary notwithstanding, any Lender may
assign and pledge all or any portion of its Commitment and the Advances owing to
it to any Federal Reserve Bank (and its transferees) as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve System
and any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its obligations hereunder.

(i)

Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”) of
such Granting Lender identified as such in writing from time to time by the
Granting Lender to the Agent, the LC Issuing Bank and the Borrower, the option
to provide to the Borrower all or any part of any Advance that such Granting
Lender would otherwise be obligated to make to the Borrower pursuant to this
Agreement; provided that (i) nothing herein shall constitute a commitment by any
such SPC to make any Advance, (ii) if such SPC elects not to exercise such
option or otherwise fails to provide all or any part of such Advance, the
Granting Lender shall be obligated to make such Advance pursuant to the terms
hereof and (iii) no SPC or Granting Lender shall be entitled to receive any
greater amount pursuant to Section 2.12 or 8.04(b) than the Granting Lender
would have been entitled to receive had the Granting Lender not otherwise
granted such SPC the option to provide any Advance to the Borrower. The making
of an Advance by an SPC hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Advance were made by such Granting
Lender. Each party hereto hereby agrees that no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement for which a Lender
would otherwise be liable so long as, and to the extent that, the related
Granting Lender provides such indemnity or makes such payment. In furtherance of
the foregoing, each party hereto hereby agrees (which agreement shall survive
the termination of this Agreement) that, prior to the date that is one year and
one day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against or join any other
person in instituting against such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. Notwithstanding the foregoing, the Granting Lender
unconditionally agrees to indemnify the Borrower, the LC Issuing Bank, the Agent
and each Lender against all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be incurred by or asserted against the
Borrower, the LC Issuing Bank, the Agent or such Lender, as the case may be, in
any way relating to or arising as a consequence of any such forbearance or delay
in the initiation of any such proceeding against its SPC. Each party hereto
hereby acknowledges and agrees that no SPC shall have the rights of a Lender
hereunder, such rights being retained by the applicable Granting Lender.
Accordingly, and without limiting the foregoing, each party hereby further
acknowledges and agrees that no SPC shall have any voting rights hereunder and
that the voting rights attributable to any Advance made by an SPC shall be
exercised only by the relevant Granting Lender and that each Granting Lender
shall serve as the administrative agent and attorney-in-fact for its SPC and
shall on behalf of its SPC receive any and all payments made for the benefit of
such SPC and take all actions hereunder to the extent, if any, such SPC shall
have any rights hereunder. In addition, notwithstanding anything to the contrary
contained in this Agreement any SPC may (i) with notice to, but without the
prior written consent of any other party hereto, assign all or a portion of its
interest in any Advances to the Granting Lender and (ii) disclose on a
confidential basis any information relating to its Advances to any rating
agency, commercial paper dealer or provider of any surety, guarantee or credit
or liquidity enhancement to such SPC. This Section 8.07(i) may not be amended
without the prior written consent of each Granting Lender, all or any part of
whose Advance is being funded by an SPC at the time of such amendment.

SECTION     8.08.Confidentiality. In connection with the negotiation and
administration of this Agreement and the other Loan Documents, the Borrower has
furnished and will from time to time furnish to the Agent, the LC Issuing Bank
and the Lenders (each, a “Recipient”) written information which is identified to
the Recipient in writing, when delivered, as confidential (such information,
other than any such information which (i) as publicly available, or otherwise
known to the Recipient, at the time of disclosure, (ii) subsequently becomes
publicly available other than through any act or omission by the Recipient or
(iii) otherwise subsequently becomes known to the Recipient other than through a
Person whom the Recipient knows to be acting in violation of his or its
obligations to the Borrower, being hereinafter referred to as “Confidential
Information”). The Recipient will maintain the confidentiality of any
Confidential Information in accordance with such procedures as the Recipient
applies generally to information of that nature. It is understood, however, that
the foregoing will not restrict the Recipient’s ability to freely exchange such
Confidential Information with its Affiliates or with current or prospective
participants in or assignees of, or any current or prospective counterparty (or
its advisors) to any swap, securitization or derivative transaction relating to,
the Recipient’s position herein, but the Recipient’s ability to so exchange
Confidential Information shall be conditioned upon any such Affiliate’s or
prospective participant’s or assignee’s or counterparty’s entering into an
understanding as to confidentiality similar to this provision. It is further
understood that the foregoing will not prohibit the disclosure of any or all
Confidential Information if and to the extent that such disclosure may be
required (i) by a regulatory agency or otherwise in connection with an
examination of the Recipient’s records by appropriate authorities, (ii) pursuant
to court order, subpoena or other legal process or in connection with any
pending or threatened litigation, (iii) otherwise as required by law, or (iv) in
order to protect its interests or its rights or remedies hereunder or under the
other Loan Documents; in the event of any required disclosure under clause (ii)
or (iii) above, the Recipient agrees to use reasonable efforts to inform the
Borrower as promptly as practicable.

        Notwithstanding anything herein to the contrary, the Agent, the LC
Issuing Bank or any Lender (and each officer, director, employee, agent and
advisor of such Person) may disclose to any and all other Persons, without
limitation of any kind, the “tax treatment” and “tax structure” (in each case
within the meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to such Person relating to such “tax treatment”
and “tax structure”. For the avoidance of doubt, no disclosure to any Person is
permitted to the extent such exposure does not relate to such “tax treatment” or
“tax structure”. The foregoing is intended to comply with the presumption set
forth in Treasury Regulation Section 1.6011-4(b)(3)(iii) and should be
interpreted in a manner consistent with such regulation.

SECTION 8.09.     WAIVER OF JURY TRIAL. THE AGENT, THE LC ISSUING BANK, THE
LENDERS AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE AGENT, THE LC ISSUING BANK, SUCH
LENDERS OR THE BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT,
THE LC ISSUING BANK AND THE LENDERS ENTERING INTO THIS AGREEMENT.

SECTION 8.10.     Governing Law. This Agreement and the other Loan Documents
shall be governed by, and construed in accordance with, the laws of the State of
New York. The Borrower, each Lender, the LC Issuing Bank and the Agent
(i) irrevocably submits to the non-exclusive jurisdiction of any New York State
court or Federal court sitting in New York City in any action arising out of any
Loan Document, (ii) agrees that all claims in such action may be decided in such
court, (iii) waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum and (iv) consents to the service of process by mail,
provided that a copy shall be promptly sent by overnight courier to Foley &
Lardner, Firstar Center, 777 East Wisconsin Avenue, Milwaukee, Wisconsin
53202-5367, Attention: Emory Ireland, Esq. A final judgment in any such action
shall be conclusive and may be enforced in other jurisdictions. Nothing herein
shall affect the right of any party to serve legal process in any manner
permitted by law or affect its right to bring any action in any other court.

SECTION 8.11.     Relation of the Parties; No Beneficiary. No term, provision or
requirement, whether express or implied, of any Loan Document, or actions taken
or to be taken by any party thereunder, shall be construed to create a
partnership, association, or joint venture between such parties or any of them.
No term or provision of the Loan Documents shall be construed to confer a
benefit upon, or grant a right or privilege to, any Person other than the
parties thereto.

SECTION 8.12.     Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

SECTION 8.13.     Entire Agreement. This Agreement, together with any Note, the
Administrative Agency Fee Letter, the Arranger Fee Letter and any other
agreements, instruments and other documents required to be executed and
delivered in connection herewith, represents the entire agreement of the parties
hereto and supersedes all prior agreements and understandings of the parties
with respect to the subject matter covered hereby.

S-1

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

  INTERSTATE POWER AND LIGHT COMPANY          
By____________________________________      Name:      Title:               BANK
ONE, NA,   as Agent, as LC Issuing Bank and as Lender          
By____________________________________      Name:      Title:

S-2

  WACHOVIA BANK, NATIONAL ASSOCIATION          
By_____________________________________      Name:      Title:

SCHEDULE I

INTERSTATE POWER AND LIGHT COMPANY
364-Day Credit Agreement, dated as of September 30, 2003,
among Interstate Power and Light Company, as Borrower,
the Banks named therein and Bank One, NA, as Administrative Agent and LC Issuing
Bank

Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office Bank
One, NA $18,900,000  1 Bank One Plaza, Suite 0363 Same as Domestic Lending    
Chicago, Illinois 60670-0363 Office     Attention: Robert G. Bussa   Wachovia
Bank, National $18,900,000  201 S. College St. Same as Domestic Lending
Association   DC-05 Office     NC-0760       Attention: Cynthia Rawson      
Tel: 704-374-4425       Fax: 704-715-0097       Email:
Cynthia.rawson@wachovia.com   ABN Amro Bank N.V. $18,300,000  208 S. La Salle
St. Same as Domestic Lending     Suite 1500 Office     Chicago, IL 60604-1003  
    Attention: Loan Administration       Tel: 312-992-5150       Fax:
312-992-5155       Email: cpu.team.b@abnamro.com   Australia And New Zealand
$9,600,000  1177 Avenue of the Americas Same as Domestic Lending Banking Group
Limited   6th Floor Office     New York, NY 10036       Attention: Tessie Amante
      Tel: 212-801-9744       Fax: 212-536-9244       Email: tamante@anz.com  
Bank of America, N.A. $18,300,000  901 Main St. Same as Domestic Lending    
TX1-492-14-05 Office     Dallas, TX 75202       Attention: Eldred Sholars      
Tel: 214-209-4111       Fax: 214-290-9422       Email:
eldred.sholars@bankofamerica.com   The Bank of Tokyo- $17,400,000  Harborside
Financial Center Same as Domestic Lending Mitsubishi, Ltd. Chicago   500 Plaza 3
Office Branch   Jersey City, NJ 07311       Attention: Jimmy Yu       Tel:
201-413-8566       Fax: 201-521-2335       Email: jyu@btmna.com   Barclays Bank
PLC $18,300,000  222 Broadway Same as Domestic Lending     New York, NY 10038
Office     Attention: Michele Fuimo, GSU       Tel: 212-412-3717       Fax:
212-412-5305       Email: Michele.fuimo@barcap.com   Citibank N.A. $9,600,000 
Two Penn's Way Same as Domestic Lending     Suite 200 Office     New Castle, DE
19720       Attention: Karen Riley       Tel: 302-894-6084       Fax:
302-894-6120       Email: Karen.riley@citigroup.com   Cobank, ACB $9,600,000 
5500 S. Quebec St. Same as Domestic Lending     Greenwood Village, CO 80111
Office     Attention: Deann Sullivan       Tel: 303-740-4315       Fax:
303-740-4021       Email: fulfillment@cobank.com   Fleet National Bank
$14,050,000  100 Federal Street Same as Domestic Lending     MA DE 10009H Office
    Boston, MA 02110       Attention: Jesse Philips       Tel: 617-434-3571    
  Fax: 617-434-0201       Email: jesse_m_philips@fleet.com   KBC Bank N.V.
$9,600,000  125 W. 55th St. Same as Domestic Lending     New York, NY 10019
Office     Attention: Robert Pacifici/Loan       Administration       Tel:
212-541-0671       Fax: 212-956-5581       Email:   KeyBank National
$17,400,000  127 Public Square Same as Domestic Lending Association  
OH-01-27-0611 Office     Cleveland, OH 44114       Attention: Carrie Kielski    
  Tel: 216-689-4013       Fax: 216-689-4981       Email:
Carolyn_zielski@keybank.com   Lehman Brothers Bank, FSB $14,050,000  745 7th
Avenue Same as Domestic Lending     16th Floor Office     New York, NY 10019    
  Attention: Michael Herr       Tel: 212-526-6560       Fax: 212-520-0450      
Email: mherr@lehman.com   Merrill Lynch Bank USA $14,050,000  15 W. South Temple
Same as Domestic Lending     Suite 300 Office     Salt Lake City, UT 84101      
Attention: Julie Young       Tel: 801-526-8331       Fax: 801-359-4667      
Email: Julie_young@ml.com   Mizuho Corporate Bank, $9,600,000  1800 Plaza Ten
Same as Domestic Lending Ltd.   Jersey City, NJ 07311 Office     Attention:
Pamela Chen       Tel: 201-626-9302       Fax: 201-626-9942       Email:
Pamela.chen@mizuhocbus.com   National Australia Bank $14,050,000  200 Park
Avenue Same as Domestic Lending     34th Floor Office     New York, NY 10166    
  Attention: Mike Lorusso       Tel: 212-916-9602       Fax: 212-983-7360      
Email:   Wells Fargo Bank, N.A. $18,300,000  201 Third St. Same as Domestic
Lending     MAC 0187-081 Office     San Francisco, CA 94103       Attention:
Ginnie Padgett       Tel: 415-477-5374       Fax: 415-979-0675       Email:  
TOTAL $250,000,000 

SCHEDULE II

EXISTING LIENS

[TO BE PROVIDED]

SCHEDULE III

EXISTING DEBT

[TO BE PROVIDED]