CREDIT AGREEMENT

by and among

INDIANAPOLIS POWER & LIGHT COMPANY,

THE VARIOUS FINANCIAL INSTITUTIONS

PARTY HERETO,

NATIONAL CITY BANK OF INDIANA,

as Syndication Agent,

and

LASALLE BANK NATIONAL ASSOCIATION,

as Administrative Agent,

dated as of May 16, 2006

___________________________

NATIONAL CITY BANK OF INDIANA

and

LASALLE BANK NATIONAL ASSOCIATION

as Joint Bookrunners and Joint Lead Arrangers

 

TABLE OF CONTENTS

ARTICLE I DEFINITIONS AND ACCOUNTING AND OTHER TERMS ..........1

Section 1.1. Certain DefinedTerms......................................................................... 1

Section 1.2. AccountingTerms.............................................................................. 12

Section 1.3. Other Terms........................................................................................ 13

ARTICLE II AMOUNT AND TERMS OF THE CREDIT....................................13

Section 2.1. Facility AAdvances........................................................................... 13

(A) Amount.....................................................................................................13

(B) Method of Selecting Types and Interest Periods for New Advances ...... 13

Section 2.2. Facility BAdvances........................................................................... 14

(A) Amount.....................................................................................................14

(B) Method of Selecting Types and Interest Periods for New Advances ...... 14

Section 2.3.Interest................................................................................................. 15

(A) Interest Rate..............................................................................................15

(B) Interest Payments......................................................................................15

(C) Computation of Interest............................................................................ 16

Section 2.4. Mandatory Prepayments..................................................................... 16

Section 2.5. Optional PrincipalPayments.............................................................. 16

Section 2.6.Maturity............................................................................................... 16

(A) Facility A Maturity...................................................................................16

(B) Facility BMaturity................................................................................... 16

Section 2.7. Voluntary Reduction or Termination of the Commitments............... 16

Section 2.8. Notes...................................................................................................17

Section 2.9. Making of Payments and Prepayments, Proration and Setoff ........... 17

(A) Making of Payments and Prepayments.................................................... 17

(B)Setoff.........................................................................................................17

(C) Proration ofPayments.............................................................................. 18

(D) Unconditional Obligations and No Deductions ....................................... 18

Section 2.10. Payment on Non-BusinessDays........................................................ 18

Section 2.11. Use ofProceeds.................................................................................. 18

Section 2.12. FacilityFee......................................................................................... 18

Section 2.13. Reimbursement of Costs..................................................................... 19

Section 2.14. Conversion and Continuation of Outstanding Advances................... 19

Section 2.15. Pro Rata Treatment............................................................................. 19

Section 2.16. Telephonic Notices............................................................................. 19

Section 2.17. LendingInstallations.......................................................................... 20

Section 2.18. Non-Receipt of Funds by the Administrative Agent ......................... 20

Section 2.19. Certain Conditions.............................................................................. 20

Section 2.20. Letters of Credit.................................................................................. 20

(A)Issuance.....................................................................................................20

(B)Participations.............................................................................................21

(C)Notice........................................................................................................21

(D) LC Fees.....................................................................................................21

(E) Administration; Reimbursement by Banks.............................................. 22

(F) Reimbursement by the Borrower .............................................................22

(G) Obligations Absolute................................................................................23

(H) Actions of LC Issuer................................................................................. 23

(I) Indemnification.........................................................................................24

(J) Banks'Indemnification............................................................................24

(K) Rights as aBank....................................................................................... 24

(L) CashCollateral.........................................................................................24

(M) Existing Letters ofCredit......................................................................... 24

Section 2.21. Swing Line Loans............................................................................... 25

(A) Amount of Swing Line Loans..................................................................25

(B) BorrowingNotice.....................................................................................25

(C) Making of Swing Line Loans ..................................................................25

(D) Repayment of Swing Line Loans.............................................................25

Section 2.22. Increases in Facility A Commitments................................................26

ARTICLE III YIELD PROTECTION;TAXES............................................................... 27

Section 3.1. Yield Protection.................................................................................. 27

Section 3.2. Changes in Capital Adequacy Regulations........................................28

Section 3.3. Availability of Types of Advances..................................................... 28

Section 3.4. FundingIndemnification.................................................................... 29

Section 3.5.Taxes................................................................................................... 29

Section 3.6. Bank Statements; Survival of Indemnity ...........................................31

ARTICLE IV CONDITIONS OF LENDING ....................................................... 31

Section 4.1. Conditions Precedent to all Credit Extensions...................................31

Section 4.2. Conditions Precedent to Initial Credit Extension...............................31

ARTICLE V REPRESENTATIONS AND WARRANTIES................................. 32

Section 5.1. Representations and Warranties of the Borrower .............................. 32

(A) Organization and Existence...................................................................... 32

(B) Authorization and Absence of Defaults...................................................33

(C) Acquisition ofConsents...........................................................................33

(D) Validity andEnforceability...................................................................... 33

(E) FinancialInformation...............................................................................33

(F) NoLitigation.............................................................................................34

(G) RegulationU............................................................................................34

(H) Absence of Adverse Agreements.............................................................34

(I)Taxes.........................................................................................................34

(J) Accuracy of Representations and Warranties .......................................... 34

(K) Investment Company Act......................................................................... 35

(L)Solvency....................................................................................................35

(M) Licenses, Registrations, and Compliance with Laws............................... 35

(N) Principal Place of Business; Books and Records..................................... 35

(O) Title to Assets and Properties................................................................... 35

(P) Material Adverse Change......................................................................... 36

(Q) Employee BenefitPlans........................................................................... 36

(R) EnvironmentalMatters.............................................................................36

(S) Pari Passu Indebtedness............................................................................37

(T) Reportable Transaction.............................................................................37

ARTICLE VI COVENANTS OF BORROWER........................................... 38

Section 6.1. Affirmative Covenants of the Borrower Other Than Reporting

Requirements...................................................................................... 38

(A) Payment ofTaxes..................................................................................... 38

(B) Preservation ofExistence......................................................................... 38

 (C) Compliance with Laws.............................................................................38

(D) Visitation Rights.......................................................................................39

(E) Keeping of Records and Books of Account............................................. 39

(F) Maintenance of Properties........................................................................ 39

(G) Other Documents......................................................................................39

(H) EnvironmentalLiability...........................................................................39

(I) FurtherAssurances...................................................................................40

(J)Purposes....................................................................................................40

(K) ERISACompliance..................................................................................40

(L)Insurance...................................................................................................41

Section 6.2. Negative Covenants of the Borrower........................................ 41

(A)Liens..........................................................................................................41

(B) Assumptions or Guaranties of Indebtedness............................................ 42

(C) Dissolution................................................................................................43
(D) Sale ofAssets...........................................................................................43

(E) Change in Nature ofBusiness.................................................................. 43

(F) Sale and Leaseback................................................................................... 43

(G) Sale of Accounts....................................................................................... 43

(H)Indebtedness..............................................................................................43

(I) Other Agreements.....................................................................................44

(J) Payment or Prepayment of Other Loans.................................................. 44

(K) Change of FiscalYear.............................................................................. 44

(L) Subordination of Claims........................................................................... 44

(M)Dividends..................................................................................................44

(N) CapitalExpenditures................................................................................44

(O) FinancialCovenants.................................................................................45

(P) Affiliates...................................................................................................45

(Q) Investments and Acquisitions...................................................................45

(R) CertainRestrictions..................................................................................45

Section 6.3. Reporting Requirements .............................................................46

ARTICLE VII EVENTS OFDEFAULT............................................................................................................. 48

Section 7.1. Events of Default................................................................................ 48

ARTICLE VIII REMEDIES OFBANKS.................................................................................................................. 50

ARTICLE IX THEAGENTS................................................................................. 50

Section 9.1. Appointment and Authorization......................................................... 50

Section 9.2. LCIssuer............................................................................................51

Section 9.3. Delegation of Duties........................................................................... 51

Section 9.4. Exculpation of Administrative Agent ................................................51

Section 9.5. Reliance by AdministrativeAgent..................................................... 52

Section 9.6. Notice ofDefault................................................................................ 52

Section 9.7. Credit Decision................................................................................... 52

Section 9.8. Indemnification................................................................................... 53

Section 9.9. Administrative Agent in Individual Capacity ....................................53

Section 9.10. Successor AdministrativeAgent........................................................ 54

Section 9.11. Administrative Agent May File Proofs of Claim............................... 54

Section 9.12. Other Agents; Arrangers and Managers ............................................55

ARTICLE X MISCELLANEOUS........................................................................... 55

Section 10.1. Consent to Jurisdiction and Service of Process .................................55

Section 10.2. Rights and RemediesCumulative...................................................... 55

Section 10.3. Delay or Omission NotWaiver.......................................................... 56

Section 10.4. Amendments....................................................................................... 56

Section 10.5. Notices................................................................................................57

Section 10.6. Costs, Expenses and Taxes; Indemnification.....................................57

Section 10.7.Participations......................................................................................58

(A) Permitted Participants; Effect...................................................................58

(B) Voting Rights............................................................................................59

(C) Benefit of CertainProvisions................................................................... 59

Section 10.8. Binding Effect;Assignment............................................................... 59

Section 10.9. Actual Knowledge.............................................................................. 61

Section 10.10. Governing Law................................................................................... 61

Section 10.11. Severability of Provisions................................................................... 61

Section 10.12. Headings............................................................................................. 61

Section 10.13.Counterparts.......................................................................................61

Section 10.14. Nonliability ofBanks......................................................................... 61

Section 10.15. Nonreliance......................................................................................... 62

Section 10.16. Waiver of JuryTrial........................................................................... 62

Section 10.17. Termination of Existing Facilities...................................................... 62

EXHIBITS

A. Form of Revolving Note

B Form of Facility B Advance Request

C. Form of Opinion of Counsel

D. Form of Assignment Agreement

E. Form of Increase Request

SCHEDULES

I. Banks and Commitments

II. Pricing Schedule

III. Pending Litigation

IV. Existing Investments

V. Existing Letters of Credit

CREDIT AGREEMENT

THIS CREDIT AGREEMENT, dated as of May 16, 2006, is by and among INDIANAPOLIS POWER & LIGHTCOMPANY, an Indiana corporation (the "Borrower"), the undersigned financial institutions(together with their respective successors and assigns, collectively the "Banks" andindividually each a "Bank"), NATIONAL CITY BANK OF INDIANA, as syndication agent (in suchcapacity, the "Syndication Agent") and LASALLE BANK NATIONAL ASSOCIATION("LaSalle"), as administrative agent for the Banks (in such capacity, the"Administrative Agent").

W I T N E S S E T H:

WHEREAS, the Borrower wishes, from time to time, to obtain loans and letters of credit, and Banksare willing to make such extensions of credit to the Borrower, on the terms and conditionshereinafter set forth:

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING AND OTHER TERMS

Section 1.1. Certain Defined Terms. As used in this Agreement, the following words, terms and/orphrases shall have the following meanings and such meanings shall be applicable to both the singularand plural forms of the terms defined: "Acquisition" means any transaction, or any seriesof related transactions, consummated on or after the date of this Agreement, by which the Borroweror any of its Subsidiaries (i) acquires any going business or all or substantially all of the assetsof any firm, corporation, partnership or limited liability company, or division thereof, whetherthrough purchase of assets, merger or otherwise or (ii) directly or indirectly acquires (in onetransaction or as the most recent transaction in a series of transactions) at least a majority (innumber of votes) of the securities of a corporation which have ordinary voting power for theelection of directors (other than securities having such power only by reason of the happening of acontingency) or a majority (by percentage or voting power) of the outstanding ownership interests ofa partnership or limited liability company.

"Additional Facility A Bank" - see Section 2.21.

"Advance" means a borrowing hereunder, (i) made by some or all of the Banks on the samedate or (ii) continued or converted by the Banks on the same date of continuation or conversion,consisting, in either case, of the aggregate amount of the several Loans of the same Type, under thesame Facility and, in the case of LIBOR Loans, for the same Interest Period. The term"Advance" shall include Swing Line Loans unless otherwise expressly provided.

"Advance Request" means a Facility A Advance Request, a Facility B Advance Request

or a Swing Line Borrowing Notice.

"Affiliate" of any Person means any other Person directly or indirectly Controlling,Controlled by or under common Control with such Person. For purposes of this definition, a Personshall be deemed to Control another Person if the Controlling Person owns 10% or more of any class ofvoting securities (or other ownership interests) of the Controlled Person or possesses, directly orindirectly, the power to direct or cause the direction of the management or policies of theControlled Person, whether through ownership of stock, by contract or otherwise.

"Administrative Agent" is defined in the first paragraph hereof.

"Aggregate Commitment" means (i) the aggregate of the Total Commitments of all of theBanks, as reduced from time to time pursuant to the terms hereof and (ii) when used with respect toany particular Facility, the aggregate of the Commitments of all of the Banks with respect to suchFacility, as modified from time to time pursuant to the terms hereof.

"Aggregate Outstanding Credit Exposure" means, at any time, (i) the aggregate of theOutstanding Credit Exposure of all Banks for all Facilities or (ii) when used with respect to anyparticular Facility, the aggregate of the Outstanding Credit Exposure of all Banks for suchFacility.

"Agreement" means this Credit Agreement, as amended or otherwise modified from time totime.

"Applicable Facility Fee Rate" - see the Pricing Schedule.

"Applicable Margin" - see the Pricing Schedule.

"Applicable Percentage" means a Facility A Percentage or a Facility B Percentage, asapplicable.

"Assignment Agreement" - see Section 10.8(B).

"Banks" or "Bank" has the meaning assigned in the first paragraph of thisAgreement. References to the "Banks" shall include the LC Issuer and, unless otherwisespecified, shall include LaSalle in its capacity as Swing Line Bank; for purposes of clarificationonly, to the extent that LaSalle (or any successor LC Issuer or Swing Line Bank) may have any rightsor obligations in addition to those of the other Banks due to its status as LC Issuer or Swing LineBank, its status as such will be specifically referenced.

"Base Rate" means the rate per annum equal to the greater of (a) the Prime Rate ineffect on such day, and (b) the Federal Funds Effective Rate in effect on such day plus one-halfof one percent (1%) per annum. For purposes hereof, "Prime Rate" means the rate ofinterest per annum publicly announced from time to time by LaSalle as its prime commercial lendingrate at its Chicago office; each change in the Prime Rate shall be effective on the date such changeis announced. The prime rate is a reference rate and does not necessarily represent the lowest orbest rate charged to any customer by LaSalle.

"Base Rate Advance" means an Advance that bears interest at the Base Rate.

"Base Rate Loan" means a Loan that bears interest at the Base Rate.

"Bonds" means the $40,000,000 City of Petersburg, Indiana, Pollution Control RefundingRevenue Bonds, Adjustable Rate Tender Securities (ARTS), Series 1995B.

"Borrower" has the meaning assigned in the first paragraph of this Agreement.

"Business Day" means any day on which banks are open for business (other than a

Saturday or Sunday) in New York, New York, Chicago, Illinois and Indianapolis, Indiana, and, ifthe transaction involves a LIBOR Advance, on which dealings are carried on in the London eurodollarinterbank market.

"Capital Lease" means, as to any Person, a lease of any interest in any kind ofproperty or asset, whether real, personal or mixed, or tangible or intangible, by such Person aslessee that is, or should be, in accordance with Financial Accounting Standards Board Statement No.13, as amended from time to time, or, if such statement is not then in effect, such statement ofGAAP as may be applicable, recorded as a "capital lease" on the balance sheet of theBorrower prepared in accordance with GAAP.

"Cash Collateralize" means to deliver cash collateral to the Administrative Agent, tobe held as cash collateral for outstanding Letters of Credit, pursuant to documentation satisfactoryto the Administrative Agent. Derivatives of such term have corresponding meanings.

"Cash Equivalent and Short-Term Investments" means: (a) obligations of, orunconditionally guaranteed by, the United States of America; (b) obligations issued or guaranteed byany person controlled or supervised by and acting as an instrumentality of the United States ofAmerica pursuant to authority granted by the Congress of the United States of America; (c)negotiable or non-negotiable certificates of deposit and time deposits issued by any bank, trustcompany or national banking association, including the Administrative Agent, having total assets inexcess of one (1) billion Dollars and which has combined capital, surplus and undivided profits ofat least $25,000,000 in Dollars of the United States of America; (d) commercial paper of the qualityrated on the date of purchase at "A-1" by S&P or "P-1" by Moody's purchaseddirectly or through recognized money market dealers; (e) municipal obligations the interest on whichis excluded from the gross income of the owners thereof for federal tax purposes under Section 103of the Code, if rated on the date of purchase in one of the two highest rating categories of eitherMoody's or S&P; (f) any repurchase agreement secured by any one or more of the foregoing; (g)any repurchase agreement or guaranteed investment contract from a bank or insurance company rated onthe date of purchase in one of the two highest rating categories of either Moody's or S&P andsecured by any one or more of the foregoing with collateral equal or greater than 102% of theprincipal amount originally invested valued on a weekly basis; (h) units or shares of a QualifiedRegulated Investment Company which invests solely in obligations described in clause (e) above; forpurposes of this clause (h) a Qualified Regulated Investment Company means a qualified regulatedinvestment company as defined by the Internal Revenue Service including any regulated investmentcompany (as defined in Section 851(a) of the Code) which, (i) for the taxable year, meets therequirements of Section 852(a) of the Code, (ii) has authorized and outstanding only one class ofunits or shares and (iii) to the extent practicable invests all of its assets in tax-exempt bonds,or of the weighted average value of its assets is represented by investments in tax-exempt bonds;and (i) money market funds which funds are rated on the date of purchase in one of the two highestrating categories of either Moody's or S&P.

"CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Actof 1980, as amended.

"CERCLIS" means the Comprehensive Environmental Response Compensation LiabilityInformation System List.

"Change" - see Section 3.2.

"Closing Date" means the date on which all conditions precedent set forth in Section4.2 are satisfied or waived by all Banks.

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

"Commitment" means a Facility A Commitment or a Facility B Commitment, asappropriate.

"Commitment Termination Date" means May 16, 2011.

"Consolidated EBIT" means Consolidated Net Income plus, to the extent deducted fromrevenues in determining Consolidated Net Income, (i) Consolidated Interest Expense, (ii) expense forincome taxes paid or accrued and (iii) extraordinary losses incurred other than in the ordinarycourse of business, minus, to the extent included in Consolidated Net Income, extraordinary gainsrealized other than in the ordinary course of business, all calculated for the Borrower and itsSubsidiaries on a consolidated basis.

"Consolidated Interest Expense" means, with reference to any period, the interestexpense of the Borrower and its Subsidiaries calculated on a consolidated basis for such period.

"Consolidated Net Income" means, with reference to any period, the net income (or loss)of the Borrower and its Subsidiaries calculated on a consolidated basis for such period."Consolidated Total Capitalization" means at any time the sum of Total Debt and TotalCapital, each calculated at such time.

"Control" means the possession, directly or indirectly, of the power to direct or causethe direction of the management or policies of a Person, whether through the ability to exercisevoting power, by contract or otherwise. "Controlling" and "Controlled" havemeanings correlative thereto.

"Controlled Group" means all members of a controlled group of corporations, all membersof a controlled group of trades or businesses (whether or not incorporated) under common control andall members of an affiliated service group which, together with the Borrower or any of itsSubsidiaries, are treated as a single employer under Section 414 of the Code or Section 4001 ofERISA.

"Conversion/Continuation Notice" - see Section 2.14.

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

"Default" means an event or condition which with the giving of notice or lapse of timeor both would become an Event of Default.

"Dollars" and the sign "$" mean lawful money of the United States ofAmerica.

"Environmental Laws" means all applicable federal, state or local statutes, laws,ordinances, codes, rules and regulations (including consent decrees and administrative ordersapplicable to the Borrower and its Subsidiaries) relating to public health and safety and protectionof the environment, including without limitation CERCLA and the Resource Conservation and RecoveryAct.

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

"Events of Default" has the meaning assigned to that term in Section 7.1 of thisAgreement.

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

"Existing Facilities" - see Section 10.17.

"Facility" means (a) the Commitments of the Banks and the LC Issuer to make Revolving ALoans, to make and participate in Swing Line Loans and issue and participate in Letters of Credit,and the Loans and Letters of Credit extended under such Commitments ("Facility A") and (b)the Commitments of the Banks to make Revolving B Loans and the Revolving B Loans extended under suchCommitments ("Facility B").

"Facility A" - see the definition of "Facility."

"Facility A Advance Request" - see Section 2.1(B).

"Facility A Bank" means a Bank that holds any Facility A Commitment or any OutstandingCredit Exposure under Facility A.

"Facility A Commitment" means, for each Bank, its commitment to make Revolving A Loansto, and participate in Swing Line Loans made to and Letters of Credit issued upon the applicationof, the Borrower, as such commitment may be reduced from time to time in accordance with the termsof this Agreement. The amount of the Facility A Commitment of each Bank as of May 16, 2006 is setforth on Schedule I.

"Facility A Percentage" means, with respect to a Bank at any time, a portion equal to afraction the numerator of which is such Bank's Facility A Commitment at such time and thedenominator of which is the Aggregate Commitment under Facility A at such time.

"Facility B" - see the definition of "Facility."

"Facility B Advance Request" - see Section 2.2(B).

"Facility B Bank" means any Bank that holds any Facility B Commitment or OutstandingCredit Exposure under Facility B.

"Facility B Commitment" means, for each Bank, its commitment to make Revolving B Loansto the Borrower, as such commitment may be reduced from time to time in accordance with the terms ofthis Agreement. The amount of the Facility B Commitment of each Bank as of May 16, 2006 is set forthon Schedule I.

"Facility B Percentage" means, with respect to a Bank at any time, a portion equal to afraction the numerator of which is such Bank's Facility B Commitment at such time and thedenominator of which is the Aggregate Commitment under Facility B at such time.

"Federal Funds Effective Rate" means, for any day, the weighted average of the ratesfor overnight Federal funds transactions with members of the Federal Reserve System arranged byFederal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bankof New York, or, if such rate is not so published for any day which is a Business Day, the averageof the quotations for the day of such transactions received by LaSalle from three Federal fundsbrokers of recognized standing selected by it.

"FERC" means the Federal Energy Regulatory Commission and any successor agency

thereto.

"FERC Order" means the order issued by the FERC to the Borrower dated July 23, 2004,Docket No. ES04-38-000, or an extension, renewal or replacement of such order in form and substancesatisfactory to the Banks.

"Financing Documents" means, collectively, this Agreement, the LC Applications, theNotes, and each other agreement, instrument or document now or hereafter executed in connectionherewith or therewith.

"Fitch" - see the Pricing Schedule.

"Fitch Rating" - see the Pricing Schedule.

"FPA" means the Federal Power Act, as amended, and all rules and regulationspromulgated thereunder.

"GAAP" means generally accepted accounting principles in effect from time to time inthe United States of America.

 "Hazardous Materials" - see Section 6.1(H).

"Indebtedness" means all obligations and liabilities of the Borrower to any Person(including without limitation all debts, claims and indebtedness) whether primary, secondary,direct, contingent, fixed or payable, heretofore, now and/or from time to time hereafter owing, dueor payable, however evidenced, created, incurred, acquired or owing and however arising, whetherunder written or oral agreement, operation of law, or otherwise. Indebtedness includes, withoutlimiting the generality of the foregoing: (a) obligations or liabilities of any Person that aresecured by any Lien upon property owned by the Borrower even though the Borrower has not assumed orbecome liable for the payment therefor; and (b) obligations or liabilities created or arising underany lease of real or personal property, or conditional sale or other title retention agreement withrespect to property used and/or acquired by the Borrower, even though the rights and remedies of thelessor, seller and/or lender thereunder are limited to repossession of such property.

"Indemnified Amounts" - see Section 10.6(B).

"Indemnitee" - see Section 10.6(B).

"Interest Period" means, with respect to any LIBOR Advance, the one month, two month,three month or six month period selected by the Borrower and commencing on the date of such Advance.No Interest Period for Revolving A Loans or Revolving B Loans may extend past the CommitmentTermination Date. Each Interest Period for a LIBOR Advance that begins on the last day of a calendarmonth (or on a day for which there is no numerically corresponding day in the appropriate subsequentmonth) shall end on the last Business Day of the appropriate subsequent calendar month. EachInterest Period for a LIBOR Advance which would otherwise end on a day which is not a Business Dayshall end on the immediately succeeding Business Day (unless such immediately succeeding BusinessDay is in another calendar month, in which case such Interest Period shall end on the immediatelypreceding Business Day).

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

"IPALCO" means IPALCO Enterprises, Inc., an Indiana corporation.

"IPSCA" means the Indiana Public Service Commission Act, as amended, I.C.  8-1-2-1 etseq., and all rules and regulations promulgated thereunder.

"IURC" means the Indiana Utility Regulatory Commission and any successor agencythereto.

"IURC Order" means the order issued by the IURC to the Borrower dated March 22, 2006,Cause No. 42968, or an extension, renewal or replacement of such order in form and substancesatisfactory to the Banks.

"LaSalle" is defined in the first paragraph hereof.

"LC Application" - see Section 2.20(C).

"LC Fee" - see Section 2.20(D).

"LC Issuer" means LaSalle in its capacity as issuer of Letters of Credit hereunder.

"LC Obligations" means, at any time, the sum of (i) the aggregate undrawn amount underall Letters of Credit outstanding at such time plus (ii) the aggregate unpaid amount at such time ofall Reimbursement Obligations.

"LC Payment Date" - see Section 2.20(E).

"LC Sublimit" - see Section 2.20(A).

"Lending Installation" means, with respect to a Bank or the Administrative Agent, theoffice, branch, Subsidiary or Affiliate of such Bank or the Administrative Agent listed on thesignature pages hereof or on a Schedule or otherwise selected by such Bank or the AdministrativeAgent pursuant to Section 2.17.

"Letter of Credit" - see Section 2.20(A).

"Liabilities" means, at any time, all liabilities of the Borrower and its Subsidiariesthat would be shown on a consolidated balance sheet of the Borrower prepared in accordance with GAAPat such time.

"LIBOR Advance" means an Advance which bears interest at the applicable LIBOR Rate.

"LIBOR Base Rate" means, with respect to any LIBOR Advance for any Interest Period, arate of interest equal to the per annum rate of interest at which Dollar deposits in an amountcomparable to the amount of the LIBOR Loan of LaSalle for such Interest Period and for a periodequal to such Interest Period are offered in the London Interbank Eurodollar market at 11:00 a.m.(London time) two Business Days prior to the commencement of such Interest Period, as displayed inthe Bloomberg Financial Markets system, or other authoritative source selected by the AdministrativeAgent in its sole discretion. The Administrative Agent's determination of the LIBOR Base Rate shallbe conclusive, absent manifest error.

"LIBOR Loan" means a Loan which bears interest at the applicable LIBOR Rate.

"LIBOR Rate" means, for each Interest Period for LIBOR Advances, the rate of interestper annum determined by the following formula:

LIBOR Rate = LIBOR Base Rate 1 - LIBOR Reserve Percentage.

"LIBOR Reserve Percentage" means, with respect to any Interest Period for any LIBORAdvance, the maximum aggregate reserve requirement (including all basis, supplemental, marginal andother reserves) which is imposed under Regulation D on "Eurocurrency liabilities" as thatterm is defined in Regulation D.

"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement,encumbrances, lien (statutory or other) or other security agreement or preferential arrangement ofany kind or nature whatsoever (including without limitation any conditional sale or other titleretention agreement) having substantially the same economic effect as any of the foregoing and thefiling of any financing statement under the applicable Uniform Commercial Code or comparable law ofany jurisdiction in respect of any of the foregoing.

"Loan" means, with respect to a Bank, such Bank's portion of any Advance.

"Master Letter of Credit Agreement" means the Master Letter of Credit Agreement datedas of December 17, 2002 between the Borrower and the LC Issuer, as the same may be amended,supplemented or otherwise modified from time to time, including any amendment and restatementthereof, any replacement thereof and any successor thereto.

"Material Adverse Effect" means a material adverse effect on the operations, business,properties, prospects or condition (financial or otherwise) of the Borrower or the Borrower and itsSubsidiaries, taken as a whole, or on the ability of the Borrower to carry out its obligations underthe Financing Documents.

"Modify" and "Modification" - see Section 2.20(A).

"Moody's" - see the Pricing Schedule.

"Moody's Rating" - see the Pricing Schedule.

"Multiemployer Pension Plan" means a multiemployer plan, as defined in Section4001(a)(3) of ERISA, to which the Borrower or any other member of the Controlled Group may have anyliability.

"Non-U.S. Bank" - see Section 3.5(iv).

"Notes" means the Revolving Notes of the Borrower, payable to the order of therespective Banks and substantially in the form of Exhibit A, as the same may be amended or otherwisemodified from time to time.

"Obligations" means all unpaid principal of and accrued and unpaid interest on theLoans, all Reimbursement Obligations, all accrued and unpaid fees and all expenses, reimbursements,indemnities and other obligations of the Borrower to the Banks or to any Bank, the AdministrativeAgent, the LC Issuer or any Indemnitee arising under the Financing Documents.

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

"Outstanding Credit Exposure" means, as to any Bank at any time, (i) the sum of (a) theaggregate principal amount of its Loans outstanding at such time plus (b) an amount equal to itsFacility A Percentage of the LC Obligations at such time plus (c) an amount equal to its Facility APercentage of the aggregate principal amount of Swing Line Loans outstanding at such time or (ii)when used with respect to a particular Facility, the sum of (a) the aggregate principal amount ofits Loans under such Facility outstanding at such time plus (b) if such Facility is Facility A, anamount equal to its Facility A Percentage of the LC Obligations and Swing Line Loans at suchtime.

"Participant" - see Section 10.7(A).

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

"Pension Plan" means a "pension plan", as such term is defined in Section3(2) of ERISA, which is subject to Title IV of ERISA or the minimum funding standards of ERISA(other than a Multiemployer Pension Plan), and as to which the Borrower or any member of theControlled Group may have any liability, including any liability by reason of having been asubstantial employer within the meaning of Section 4063 of ERISA at any time during the precedingfive years, or by reason of being deemed to be a contributing sponsor under Section 4069 ofERISA.

"Person" means any individual, sole proprietorship, partnership, limited liabilitycompany, joint venture, trust, unincorporated organization, association, corporation, institution,entity, party or government (whether national, federal, state, county, city, municipal or otherwise,including without limitation any instrumentality, division, agency, body or department thereof).

"Pricing Schedule" - see Schedule II.

"Pro Rata Share" means, with respect to a Bank, a portion equal to a fraction thenumerator of which is such Bank's Total Commitment and the denominator of which is the AggregateCommitment.

"Purchaser" - see Section 10.8(B).

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

"Reimbursement Obligations" means, at any time, the aggregate of all obligations of theBorrower then outstanding under Section 2.20 to reimburse the LC Issuer for amounts paid by the LCIssuer in respect of any one or more drawings under Letters of Credit.

"Release" means a "release", as such term is defined in CERCLA.

"Reportable Event" means a "reportable event" as defined in Section 4043 ofERISA and the regulations issued thereunder as to which the PBGC has not waived the notificationrequirement of Section 4043(a), or the failure of a Pension Plan to meet the minimum fundingstandards of Section 412 of the Code (without regard to whether the Pension Plan is a plan describedin Section 4021(a)(2) of ERISA) or under Section 302 of ERISA.

"Required Banks" means Banks in the aggregate having more than 50% of the AggregateCommitment or, if the Aggregate Commitment has been terminated, Banks in the aggregate holding morethan 50% of the Aggregate Outstanding Credit Exposure.

"Required Facility A Banks" means Banks in the aggregate having more than 50% of theAggregate Commitment under Facility A or, if the Facility A Commitments have been terminated, Banksin the aggregate holding more than 50% of the Aggregate Outstanding Credit Exposure under FacilityA.

"Required Facility B Banks" means Banks in the aggregate having more than 50% of theAggregate Commitment under Facility B or, if the Facility B Commitments have been terminated, Banksin the aggregate holding more than 50% of the Aggregate Outstanding Credit Exposure under FacilityB.

"Resource Conservation and Recovery Act" means the Resource Conservation and RecoveryAct, 42 U.S.C. Section 6901, et seq., as in effect from time to time. 

"Revolving A Loans" - see Section 2.1(A).

"Revolving B Loans" - see Section 2.2(A).

"S&P" - see the Pricing Schedule.

"S&P Rating" - see the Pricing Schedule.

"Subsidiary" with respect to any Person, means, at any date, any corporation, limitedliability company, partnership, association or other entity the accounts of which would beconsolidated with those of such Person in such Person's consolidated financial statements if suchfinancial statements were prepared in accordance with GAAP as of such date, as well as any othercorporation, limited liability company, partnership, association or other entity (a) of whichsecurities or other ownership interests representing more than 50% of the equity or more than 50% ofthe ordinary voting power or, in the case of a partnership, more than 50% of the general partnershipinterests are, as of such date, owned, controlled or held by such Person or such Person's otherSubsidiaries, or (b) that is, as of such date, otherwise Controlled by such Person or one or moreSubsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. Unlessthe context otherwise requires, each reference to Subsidiaries herein shall be a reference toSubsidiaries of the Borrower.

"Swing Line Bank" means LaSalle or such other Bank which may succeed to its rights andobligations as Swing Line Bank pursuant to the terms of this Agreement.

"Swing Line Borrowing Notice" is defined in Section 2.21(B).

"Swing Line Commitment" means the obligation of the Swing Line Bank to make Swing LineLoans up to a maximum principal amount of $10,000,000 at any one time outstanding.

"Swing Line Loan" means a Loan made available to the Borrower by the Swing Line Bankpursuant to Section 2.21.

"Taxes" means any and all present or future taxes, duties, levies, imposts, deductions,charges or withholdings, and any and all liabilities with respect to the foregoing, but excludingExcluded Taxes and Other Taxes.

"Termination Event" means, with respect to a Pension Plan that is subject to Title IVof ERISA, (a) a Reportable Event, (b) the withdrawal of the Borrower or any other member of theControlled Group from such Pension Plan during a plan year in which the Borrower or any other memberof the Controlled Group was a "substantial employer" as defined in Section 4001(a)(2) ofERISA or was deemed such under Section 4068(f) of ERISA, (c) the termination of such Pension Plan,the filing of a notice of intent to terminate the Pension Plan or the treatment of an amendment ofsuch Pension Plan as a termination under Section 4041 of ERISA, (d) the institution by the PBGC ofproceedings to terminate such Pension Plan or (e) any event or condition that might constitutegrounds under Section 4042 of ERISA for the termination of, or appointment of a trustee toadminister, such Pension Plan.

"Total Capital" means, at any time, the amount shown opposite the captions"stockholders' equity," and "preferred stock" on the balance sheet of theBorrower at such time.

"Total Debt" means at any time (a) all interest-bearing Liabilities of the Borrower andits Subsidiaries, (b) all securitized facilities of the Borrower and its Subsidiaries, (c) allCapital Lease obligations of the Borrower and its Subsidiaries and (d) all letter of creditobligations of the Borrower and its Subsidiaries; provided, however, that the term "TotalDebt" shall not include accounts payable and accruals of the Borrower that would be shown assuch on the balance sheet of the Borrower prepared in accordance with GAAP.

"Total Commitment" means, for each Bank, its commitment to make Loans to, andparticipate in Swing Line Loans made to and in Letters of Credit issued upon the application of, theBorrower, as such commitment may be modified from time to time in accordance with the terms of thisAgreement. The amount of the Total Commitment of each Bank as of May 16, 2006 is set forth onSchedule I.

"Transferee" - see Section 10.8(D).

"Trustee" means J.P. Morgan Trust Company National Association, in its capacity asTrustee for the Bonds, or any successor thereto.

"Type" means, with respect to any Advance, its nature as a Base Rate Advance or a LIBORAdvance and with respect to any Loan, its nature as a Base Rate Loan or a LIBOR Loan.

Section 1.2. Accounting Terms. All accounting terms not specifically defined herein shall beconstrued in accordance with GAAP, calculations of amounts for the purposes of calculating anyfinancial covenants or ratios hereunder shall be made in accordance with GAAP applied in a mannerconsistent with the Borrower's financial statements for the year ended December 31, 2005, and allfinancial data submitted pursuant to this Agreement shall be prepared in accordance with GAAP.

Section 1.3. Other Terms. The words "hereof," "herein" and"hereunder" and words of similar import when used in this Agreement shall refer to thisAgreement as a whole and not to any particular provision of this Agreement.

ARTICLE II

AMOUNT AND TERMS OF THE CREDIT

Section 2.1. Facility A Advances.

(A) Amount. Each Facility A Bank severally agrees, subject to the terms and conditions of thisAgreement, including, but not limited to, the conditions precedent contained in Article IV hereof,to (i) from time to time before the Commitment Termination Date, make revolving loans to theBorrower for the purposes described in Section 2.11(i) ("Revolving A Loans") and (ii)participate in Swing Line Loans made to and Letters of Credit issued upon the request of theBorrower, from time to time, provided that, after giving effect to the making of each such Loan andthe issuance of each such Letter of Credit (i) such Bank's Outstanding Credit Exposure in respect ofFacility A shall not exceed its Facility A Commitment and (ii) such Bank's Outstanding CreditExposure shall not exceed its Total Commitment. In no event may the Aggregate Outstanding CreditExposure under Facility A exceed the amount of the Aggregate Commitment with respect to suchFacility. Each Advance (other than any Swing Line Loan) under Facility A shall consist of RevolvingA Loans made by each Facility A Bank ratably in proportion to such Bank's respective Facility APercentage. Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrowunder Facility A at any time prior to the Commitment Termination Date. In accordance with the termsof this Agreement, at the Borrower's option, borrowings under Facility A (other than any Swing LineLoan) may be Base Rate Advances or LIBOR Advances or a combination thereof in principal amounts of$1,000,000 or larger integral multiples thereof, as more fully described in this Agreement. The LCIssuer will issue Letters of Credit hereunder on the terms and conditions set forth in Section2.20.

(B) Method of Selecting Types and Interest Periods for New Advances. For each Advance underFacility A (other than any Swing Line Loan), the Borrower shall select the Type of Advance and, inthe case of each LIBOR Advance, the Interest Period applicable thereto from time to time. TheBorrower shall give the Administrative Agent irrevocable notice (a "Facility A AdvanceRequest") of each Advance under Facility A (other than any Swing Line Loan) not later than (x)in the case of a Base Rate Advance, noon (Chicago time) on the borrowing date of such Base RateAdvance and (y) in the case of a LIBOR Advance, 10:00 a.m. (Chicago time) three Business Days beforethe borrowing date of such LIBOR Advance. Each Facility A Advance Request shall specify:

(i) that it is a request for an Advance under Facility A,

(ii) the borrowing date, which shall be a Business Day, of the Advance requested thereby,

(iii) the aggregate amount of such Advance,

(iv) the Type of Advance selected and

(v) in the case of each LIBOR Advance, the Interest Period applicable thereto.

Not later than 2:00 p.m. (Chicago time) on each borrowing date under Facility A, each Facility ABank shall make available its Revolving A Loan or Revolving A Loans in funds immediately availablein Chicago to the Administrative Agent at its address specified pursuant to Section 10.5. TheAdministrative Agent will make the funds so received from the Banks available to the Borrower at theAdministrative Agent's aforesaid address.

Section 2.2. Facility B Advances.

(A) Amount. From time to time before the Commitment Termination Date, each Facility B Bankseverally agrees, subject to the terms and conditions of this Agreement, including, but not limitedto, the conditions precedent contained in Article IV hereof, to make revolving loans to the Borrowerfor the purposes described in Section 2.11(ii) ("Revolving B Loans"), provided that, aftergiving effect to the making of each such Loan (i) such Bank's Outstanding Credit Exposure in respectof Facility B shall not exceed its Facility B Commitment and (ii) such Bank's Outstanding CreditExposure shall not exceed its Total Commitment. In no event may the Aggregate Outstanding CreditExposure under Facility B exceed the amount of the Aggregate Commitment with respect to suchFacility. Each Advance under Facility B shall consist of Revolving B Loans made by each Facility BBank ratably in proportion to such Bank's respective Facility B Percentage. Subject to the terms ofthis Agreement, the Borrower may borrow, repay and reborrow under Facility B at any time prior tothe Commitment Termination Date. In accordance with the terms of this Agreement, at the Borrower'soption, borrowings under Facility B may be Base Rate Advances or LIBOR Advances or a combinationthereof in principal amounts of $1,000,000 or larger integral multiples thereof, as more fullydescribed in this Agreement.

(B) Method of Selecting Types and Interest Periods for New Advances. For each Advance underFacility B, the Trustee for the Bonds may, on behalf of the Borrower, submit to the AdministrativeAgent an irrevocable notice in the form of Exhibit B (a "Facility B Advance Request") forsuch Advance not later than (x) in the case of a Base Rate Advance, noon (Chicago time) on theborrowing date of such Base Rate Advance and (y) in the case of a LIBOR Advance, 10:00 a.m. (Chicagotime) three Business Days before the borrowing date of such LIBOR Advance, requesting that anAdvance under Facility B be made on the requested borrowing date, which shall be a Business Day, andthe aggregate amount of such Advance. Concurrently with any  Facility B Advance Request, theBorrower shall provide a written notice to the Administrative Agent specifying the Type of Advancerequested by such Facility B Advance Request and, in the case of any requested LIBOR Advance, theInterest Period applicable thereto; provided that, if the Administrative Agent does not receive suchconcurrent notice prior to 10:00 a.m., Chicago time, at least three Business Days prior to the dateof the requested Advance specifying that such Advance is to be a LIBOR Advance and the InterestPeriod of such LIBOR Advance, such Advance shall be a Base Rate Advance. Upon any Facility B AdvanceRequest being submitted to the Administrative Agent, the Borrower shall deliver a certificate to theAdministrative Agent, in form and substance satisfactory to the Administrative Agent, to the effectthat all conditions precedent set forth in Sections 4.1 and 4.2, as applicable, have been satisfied.The Borrower hereby irrevocably authorizes the Trustee to submit Facility B Advance Requests onbehalf of the Borrower, solely for the purpose set forth in Section 2.11(ii). Without limiting thegenerality of Section 9.5, the Administrative Agent may conclusively rely on any document purportedto be submitted by the Trustee believed by the Administrative Agent to be genuine and to have beensigned or presented by the proper Person. Not later than 2:00 p.m. (Chicago time) on each borrowingdate under Facility B, each Facility B Bank shall make available its Revolving B Loan or Revolving BLoans in funds immediately available in Chicago to the Administrative Agent at its address specifiedpursuant to Section 10.5. The Administrative Agent will make the funds so received from the Banksavailable to the Trustee at the Administrative Agent's aforesaid address.

Section 2.3. Interest.

(A) Interest Rate. Interest shall accrue on the Loans subject to and in accordance with the termsand conditions of this Agreement and the Notes as follows:

(i) Base Rate Advances shall bear interest at the Base Rate plus the Applicable Margin; and

(ii) LIBOR Advances shall bear interest at the LIBOR Rate applicable to each Interest Period forsuch Advance plus the Applicable Margin in effect for each day during the relevant period; provided,however, that during the continuance of any Default or Event of Default, unless the Required Banksotherwise consent, each Advance shall bear interest at a rate per annum equal to the rate applicablethereto from time to time in effect plus 2%.

(B) Interest Payments. Interest accrued on each Base Rate Advance shall be

payable on the last day of each calendar quarter, commencing with the first such date to occurafter the date hereof, and at maturity. Interest accrued on each LIBOR Advance having an InterestPeriod longer than three months shall also be payable on the last day of each three month intervalduring such Interest Period. Interest accrued on each LIBOR Advance shall be payable on the last dayof its applicable Interest Period, on any date on which such LIBOR Advance is prepaid, whether byacceleration or otherwise, and at maturity.

(C) Computation of Interest. Interest due under this Agreement and under the Notes shall becomputed for the actual number of days elapsed on the basis of a year of 365 or 366 days, as thecase may be, on Base Rate Advances, and on the basis of a 360- day year on LIBOR Advances.

Section 2.4. Mandatory Prepayments. If the Aggregate Outstanding Credit Exposure with respect toany Facility exceeds the Aggregate Commitment for such Facility, the Borrower shall forthwith make amandatory prepayment of the Loans in such Facility (and/or, if the affected Facility is Facility A,Cash Collateralize LC Obligations) in an amount equal to such excess.

Section 2.5. Optional Principal Payments. The Borrower may from time to time pay, without penaltyor premium, all outstanding Base Rate Advances (other than Swing Line Loans), or, in a minimumaggregate amount of $1,000,000 or any larger integral multiple of $100,000 in excess thereof, anyportion of the outstanding Base Rate Advances upon prior notice to the Administrative Agent on orprior to 11:00 a.m. (Chicago time) on the date of prepayment. The Borrower may at any time pay,without penalty or premium, all outstanding Swing Line Loans, or, in a minimum amount of $100,000and increments of $50,000 in excess thereof, any portion of the outstanding Swing Line Loans, withnotice to the Administrative Agent and the Swing Line Bank by 11:00 a.m. (Chicago time) on the dateof repayment. The Borrower may from time to time pay, subject to the payment of any fundingindemnification amounts required by Section 3.4 but without penalty or premium, all outstandingLIBOR Advances, or, in a minimum aggregate amount of $1,000,000 or any larger integral multiplethereof, any portion of the outstanding LIBOR Advances upon three Business Days' prior notice to theAdministrative Agent.

Section 2.6. Maturity.

(A) Facility A Maturity. If not sooner paid or accelerated pursuant to the terms of thisAgreement, the Revolving A Loans and all other unpaid Obligations with respect to Facility A shallbe paid in full by the Borrower on the Commitment Termination Date.

(B) Facility B Maturity. If not sooner paid or accelerated pursuant to the terms of thisAgreement, the Revolving B Loans and all other unpaid Obligations with respect to Facility B shallbe paid in full by the Borrower on the Commitment Termination Date.

Section 2.7. Voluntary Reduction or Termination of the Commitments. The Borrower may from time totime on at least three Business Days' prior written notice received by the Administrative Agent(which shall promptly advise each Bank thereof) permanently reduce the amount of the AggregateCommitment in respect of any Facility to an amount not less than the Aggregate Outstanding CreditExposure for such Facility. Any such reduction shall be in an amount of at least $5,000,000 or in alarger integral multiple of $1,000,000 and shall be pro rata among the Banks holding Commitments insuch Facility. The Borrower may at any time on like notice terminate the Commitments upon payment infull of all Loans and all other Obligations of the Borrower under the Financing Documents and CashCollateralization in full of the Letters of Credit. If, after giving effect to any reduction of theAggregate Commitment for Facility A, the LC Sublimit or the Swing Line Commitment exceeds the amountof the Aggregate Commitment for Facility A, the LC Sublimit or the Swing Line Commitment, asapplicable, shall be automatically reduced by the amount of such excess.

Section 2.8. Notes. Each Loan of each Bank shall be evidenced by a Note. Each Bank is herebyauthorized to record the principal amount of each of its Loans and each repayment on any schedule toits Note (and each such record shall be conclusive, absent manifest error); provided that neitherthe failure to so record nor any error in such recordation shall affect the Borrower's obligationsunder such Note.

Section 2.9. Making of Payments and Prepayments, Proration and Setoff.

(A) Making of Payments and Prepayments. Except as set forth below, all payments and prepaymentsof principal, fees, interest and any other amounts owed from time to time under this Agreement andunder the Notes shall be made to the Administrative Agent at the Administrative Agent's addressspecified pursuant to Section 10.5 in Dollars and in immediately available funds prior to 2:00 p.m.,Chicago time, on the date due. The Administrative Agent shall promptly remit to each Bank its shareof all such payments received in collected funds by the Administrative Agent for the account of suchBank. The Borrower hereby irrevocably authorizes the Banks, if and to the extent payment of anyprincipal, interest, Reimbursement Obligations and/or fees hereunder and/or under the otherFinancing Documents is not made when due, to charge against any of the Borrower's accounts with theBanks an amount equal to the amount thereof not paid when due. Any such payment or prepayment whichis received by the Administrative Agent in Dollars and in immediately available funds after 2:00p.m., Chicago time, on a Business Day shall be deemed received for all purposes of this Agreement onthe next succeeding Business Day except that solely for the purpose of determining whether an Eventof Default has occurred, any such payment or prepayment if received by the Administrative Agentprior to the close of the Administrative Agent's business on a Business Day shall be deemed receivedon such Business Day. All payments under Section 3.1 and (to the extent they relate to a Change)Section 3.2 shall be made directly to the affected Bank.

(B) Setoff. While any Event of Default exists, each of the Banks is hereby authorized at any timeand from time to time, without notice to the Borrower (any such notice being expressly waived by theBorrower), 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 each of the Banksto or for the credit or the account of the Borrower against any and all of the Obligations now orhereafter existing irrespective of whether or not any Bank shall have made any demand under thisAgreement or the Notes and although such Obligations may be unmatured. Each Bank exercising suchright of setoff and application agrees to promptly notify the Borrower after any such setoff andapplication; provided that the failure to give such notice shall not affect the validity of suchsetoff and application. The rights of the Banks under this Section 2.09(B) are in addition to allother rights and remedies (including, without limitation, other rights of setoff) that the Banks mayhave.

(C) Proration of Payments. If any Bank, whether by setoff or otherwise, has

payment made to it upon its Outstanding Credit Exposure (other than payments received pursuant toSection 3.1 or (to the extent relating to compensation for a Change) Section 3.2) in a greaterproportion than that received by any other Bank, such Bank agrees to purchase such participations inthe Aggregate Outstanding Credit Exposure held by the other Banks so that after such purchase eachBank will hold its Applicable Percentage of the Aggregate Outstanding Credit Exposure of eachFacility. If any Bank, whether in connection with setoff or amounts which might be subject to setoffor otherwise, receives collateral or other protection for the Obligations or such amounts which maybe subject to setoff, such Bank agrees, promptly upon demand, to take such action necessary suchthat all Banks share in the benefits of such collateral ratably in proportion to their respectivePro Rata Shares of the Aggregate Outstanding Credit Exposure. In case any such payment is disturbedby legal process or otherwise, appropriate further adjustments shall be made.

(D) Unconditional Obligations and No Deductions. The Borrower's obligation to make all paymentsprovided for in this Agreement and/or the Notes shall be unconditional. Each such payment shall bemade without deduction for any claim, defense or offset of any type, regardless of whether anyclaims, defenses or offsets of any type exist. Section 2.10. Payment on Non-Business Days. Wheneverany payment to be made hereunder or under the Notes shall be stated to be due on a day other than aBusiness Day, subject to the last sentence of the definition of "Interest Period," suchpayment shall be made on the next succeeding Business Day, and such extension of time shall in suchcase be included in the computation of payment of fees, if any, and interest under this Agreementand under the Notes.

Section 2.11. Use of Proceeds.

The Borrower shall:

(i) use the proceeds of the Revolving A Loans and Letters of Credit for working capital andgeneral corporate purposes and 

(ii) use the proceeds of the Revolving B Loans solely to provide liquidity support for theBonds.

It is understood that, notwithstanding anything to the contrary herein, the Banks shall be underno obligation to advance moneys under this Agreement directly to the Borrower in respect of FacilityB Advances and that only the Trustee may submit Facility B Advance Requests, and only on behalf ofthe Borrower for the purpose of liquidity support for the Bonds.

Section 2.12. Facility Fee. The Borrower agrees to pay to the Administrative Agent for theaccount of each Bank a facility fee at a per annum rate equal to the Applicable Facility Fee Rate onsuch Bank's Total Commitment (regardless of usage) from the date hereof to and including theCommitment Termination Date. Such fee shall accrue from the date hereof, shall be payable in arrearson the last day of each calendar quarter and on the Commitment Termination Date, and shall becomputed for the number of actual days elapsed in a 360-day year. All accrued facility fees shall bepayable on the effective date of any termination of the obligations of the Banks to make Loanshereunder.

Section 2.13. Reimbursement of Costs. The Borrower agrees to reimburse the Administrative Agentfor all reasonable costs (including, but not limited to, legal fees, accountants' fees, recordingfees, filing fees, title searches, lien searches, title insurance and credit investigations)incurred by the Administrative Agent in connection with the Credit Extensions made hereunder.

Section 2.14. Conversion and Continuation of Outstanding Advances. Base Rate

Advances shall continue as Base Rate Advances unless and until such Base Rate Advances areconverted into LIBOR Advances pursuant to this Section 2.14 or are repaid. Each LIBOR Advance shallcontinue as a LIBOR Advance until the end of the then applicable Interest Period therefor, at whichtime such LIBOR Advance shall be automatically converted into a Base Rate Advance unless (x) suchLIBOR Advance is or was repaid or (y) the Borrower shall have given the Administrative Agent aConversion/Continuation Notice (defined below) requesting that, at the end of such Interest Period,such LIBOR Advance continue as a LIBOR Advance for the same or another Interest Period. The Borrowermay elect from time to time to convert all or any part of a Base Rate Advance (other than Swing LineLoans) into a LIBOR Advance; provided that each Advance shall be a minimum aggregate amount of$1,000,000 or any larger integral multiple thereof. The Borrower shall give the Administrative Agentirrevocable notice (a "Conversion/Continuation Notice") of each conversion of a Base RateAdvance into a LIBOR Advance or continuation of a LIBOR Advance not later than 10:00 a.m. (Chicagotime) at least three Business Days prior to the date of the requested conversion or continuation,specifying: (i) the requested date, which shall be a Business Day, of such conversion orcontinuation, (ii) the aggregate amount and Type of the Advance which is to be converted orcontinued and (iii) the amount of such Advance which is to be converted into or continued as a LIBORAdvance and the duration of the Interest Period applicable thereto. 

Section 2.15. Pro Rata Treatment. All borrowings, conversions and continuations within anyFacility shall be effected so that after giving effect thereto each Bank will have a pro rata share(according to its Applicable Percentage ) of all Advances in such Facility. All payments withrespect to any Facility shall be applied so that after giving effect thereto each Bank shall havereceived its pro rata share (according to the proportion that its Loans in such Facility bears toall Loans in such Facility) thereof.

Section 2.16. Telephonic Notices. 

The Borrower hereby authorizes the Banks and the Administrative Agent to extend, convert orcontinue Advances, effect selections of Types of Advances and to transfer funds based on telephonicnotices made by any person or persons the Administrative Agent or any Bank in good faith believes tobe acting on behalf of the Trustee or the Borrower, it being understood that the foregoingauthorization is specifically intended to allow Advance Requests and Continuation/Conversion Noticesto be given telephonically. The Borrower agrees to deliver promptly to the Administrative Agent awritten confirmation, if such confirmation is requested by the Administrative Agent or any Bank, ofeach telephonic notice signed by an authorized officer of the Trustee or the Borrower. If thewritten confirmation differs in any material respect from the action taken by the AdministrativeAgent and the Banks, the records of the Administrative Agent and the Banks shall govern absentmanifest error.

Section 2.17. Lending Installations. Each Bank may book its Loans and its participations in anyLC Obligations and the LC Issuer may book the Letters of Credit at any Lending Installation selectedby such Bank or the LC Issuer, as the case may be, and may change its Lending Installation from timeto time. All terms of this Agreement shall apply to any such Lending Installation and the Loans,Letters of Credit, participations in LC Obligations and any Notes issued hereunder shall be deemedheld by each Bank or the LC Issuer, as the case may be, for the benefit of any such LendingInstallation. Each Bank and the LC Issuer may, by written notice to the Administrative Agent and theBorrower in accordance with Section 10.5, designate replacement or additional Lending Installationsthrough which Loans will be made by it or Letters of Credit will be issued by it and for whoseaccount Loan payments or payments with respect to Letters of Credit are to be made.

Section 2.18. Non-Receipt of Funds by the Administrative Agent. Unless the Borrower or a Bank, asthe case may be, notifies the Administrative Agent prior to the date on which it is scheduled tomake payment to the Administrative Agent of (i) in the case of a Bank, the proceeds of a Loan or(ii) in the case of the Borrower, a payment of principal, interest or fees to the AdministrativeAgent for the account of the Banks, that it does not intend to make such payment, the AdministrativeAgent may assume that such payment has been made. The Administrative Agent may, but shall not beobligated to, make the amount of such payment available to the intended recipient in reliance uponsuch assumption. If such Bank or the Borrower, as the case may be, has not in fact made such paymentto the Administrative Agent, the recipient of such payment shall, on demand by the AdministrativeAgent, repay to the Administrative Agent the amount so made available together with interest thereonin respect of each day during the period commencing on the date such amount was so made available bythe Administrative Agent until the date the Administrative Agent recovers such amount at a rate perannum equal to (x) in the case of payment by a Bank, the Federal Funds Effective Rate for such dayfor the first three days and, thereafter, the interest rate applicable to the relevant Loan or (y)in the case of payment bythe Borrower, the interest rate applicable to the relevant Loan.

Section 2.19. Certain Conditions. Notwithstanding any other provision of this Agreement, no Bankshall have an obligation to make any Loan, or to permit the continuation of or conversion into anyLIBOR Loan, and the LC Issuer shall not have any obligation to issue any Letter of Credit, if anEvent of Default or Default exists.

Section 2.20. Letters of Credit.

(A) Issuance. The LC Issuer hereby agrees, on the terms and conditions set forth in thisAgreement (including Article IV), to issue letters of credit (each, a "Letter of Credit")and to extend, increase, decrease or otherwise modify each Letter of Credit ("Modify," andeach such action a "Modification"), from time to time prior to the Commitment TerminationDate upon the request of the Borrower; provided that immediately after each such Letter of Credit isissued or Modified, (i) the aggregate amount of the outstanding LC Obligations shall not exceed$30,000,000 (the "LC Sublimit") and (ii) the Aggregate Outstanding Credit Exposure withrespect to Facility A shall not exceed the Aggregate Commitment for such Facility. No Letter ofCredit shall have an expiry date later than the earlier to occur of (x) one year after the date ofissuance thereof (provided that any Letter of Credit may, with the consent of the LC Issuer, beautomatically renewable for successive one-year periods (which shall in no event extend beyond thedate referred to in the following clause (y)) and (y) five Business Days prior to the CommitmentTermination Date.

(B) Participations. Upon the issuance or Modification by the LC Issuer of a Letter of Credit inaccordance with this Section 2.20, the LC Issuer shall be deemed, without further action by anyparty hereto, to have unconditionally and irrevocably sold to each Facility A Bank, and each suchBank shall be deemed, without further action by any party hereto, to have unconditionally andirrevocably purchased from the LC Issuer, a participation in such Letter of Credit and the relatedLC Obligations equal to its Facility A Percentage thereof.

(C) Notice. Subject to Section 2.20(A), the Borrower shall give the LC Issuer notice prior to10:00 a.m. (Chicago time) at least three Business Days prior to the proposed date of issuance orModification of each Letter of Credit, specifying the beneficiary, the proposed date of issuance (orModification) and the expiry date of such Letter of Credit, and describing the proposed terms ofsuch Letter of Credit and the nature of the transactions proposed to be supported thereby. Uponreceipt of such notice, the LC Issuer shall promptly notify the Administrative Agent, and theAdministrative Agent shall promptly notify each Facility A Bank, of the contents thereof and of theamount of such Bank's participation in such proposed Letter of Credit. The issuance or Modificationby the LC Issuer of any Letter of Credit shall, in addition to the conditions precedent set forth inArticle IV (the satisfaction of which the LC Issuer shall have no duty to ascertain), be subject tothe conditions precedent that such Letter of Credit shall be satisfactory to the LC Issuer and thatthe Borrower shall have executed and delivered such application agreement and/or such otherinstruments and agreements relating to such Letter of Credit as the LC Issuer shall have reasonablyrequested (each, an "LC Application"), including without limitation the Master Letter ofCredit Agreement. In the event of any conflict between the terms of this Agreement and the terms ofany LC Application or the Master Letter of Credit Agreement, the terms of this Agreement shallcontrol.

(D) LC Fees. The Borrower shall pay to the Administrative Agent, for the account of the FacilityA Banks ratably in accordance with their respective Facility A Percentages, with respect to eachLetter of Credit, a letter of credit fee at a per annum rate equal to the Applicable Margin forLIBOR Loans in effect from time to time on the average daily undrawn stated amount under such Letterof Credit, such fee to be payable in arrears (i) on the last day of each calendar quarter and (ii)on the Commitment Termination Date (such fee, the "LC Fee"); provided that, unless theRequired Banks otherwise consent, the LC Fee shall be increased by 2% per annum during thecontinuance of any Default or Event of Default. Such fee shall be computed for the actual number ofdays elapsed in a 360-day year. The Borrower shall also pay to the LC Issuer for its own account (x)a fronting fee in an amount in the amount separately agreed between the Borrower and the LC Issuerand (y) documentary and processing charges in connection with the issuance or Modification of anddraws under Letters of Credit in accordance with the LC Issuer's standard schedule for such chargesas in effect from time to time.

(E) Administration; Reimbursement by Banks. Upon receipt from the beneficiary of any Letter ofCredit of any demand for payment under such Letter of Credit, the LC Issuer shall notify theAdministrative Agent and the Administrative Agent shall promptly notify the Borrower and eachFacility A Bank as to the amount to be paid by the LC Issuer as a result of such demand and theproposed payment date (the "LC Payment Date"). The responsibility of the LC Issuer to theBorrower and each Bank shall be only to determine that the documents (including, without limitation,each demand for payment) delivered under each Letter of Credit in connection with such presentmentshall be in conformity in all material respects with such Letter of Credit. Each Facility A Bankshall be unconditionally and irrevocably liable without regard to the occurrence of any Default orEvent of Default or any condition precedent whatsoever, to reimburse the LC Issuer on demand for (i)such Bank's Facility A Percentage of the amount of each payment made by the LC Issuer under eachLetter of Credit to the extent such amount is not reimbursed by the Borrower pursuant to Section2.20(F), plus (ii) interest on the foregoing amount to be reimbursed by such Bank, for each day fromthe date of the LC Issuer's demand for such reimbursement to the date on which such Bank pays theamount to be reimbursed by it, at a rate of interest per annum equal to the Federal Funds EffectiveRate for the first three days and, thereafter, at a rate of interest equal to the rate applicable toBase Rate Advances.

(F) Reimbursement by the Borrower. The Borrower shall be irrevocably and unconditionallyobligated to reimburse the LC Issuer on or before the applicable LC Payment Date for any amounts tobe paid by the LC Issuer upon any drawing under any Letter of Credit, without presentment, demand,protest or other formalities of any kind; provided that neither the Borrower nor any Bank shallhereby be precluded from asserting any claim for direct (but not consequential) damages suffered bythe Borrower or such Bank to the extent, but only to the extent, caused by (i) the willfulmisconduct or gross negligence of the LC Issuer (as determined by a court of competent jurisdictionin a final, non-appealable judgment) in determining whether a request presented under any Letter ofCredit issued by it complied with the terms of such Letter of Credit or (ii) the LC Issuer's failureto pay under any Letter of Credit after the presentation to it of a request strictly complying withthe terms and conditions of such Letter of Credit. All such amounts paid by the LC Issuer andremaining unpaid by the Borrower shall bear interest, payable on demand, for each day until paid ata rate per annum equal to (x) the rate applicable to Base Rate Advances for such day if such dayfalls on or before the applicable LC Payment Date and (y) the sum of 2% plus the rate applicable toBase Rate Advances for such day if such day falls after such LC Payment Date. The LC Issuer will payto each Facility A Bank ratably in accordance with its Facility A Percentage all amounts received byit from the Borrower for application in payment, in whole or in part, of the ReimbursementObligation in respect of any Letter of Credit issued by the LC Issuer, but only to the extent suchBank has made payment to the LC Issuer in respect of such Letter of Credit pursuant to Section2.20(E). Subject to the terms and conditions of this Agreement (including without limitation thesubmission of a Facility A Advance Request in compliance with Section 2.1(B) and the satisfaction ofthe applicable conditions precedent set forth in Article IV), the Borrower may request an Advanceunder Facility A for the purpose of satisfying any Reimbursement Obligation.

(G) Obligations Absolute. The Borrower's obligations under this Section 2.20 shall be absoluteand unconditional under any and all circumstances and irrespective of any setoff, counterclaim ordefense to payment which the Borrower may have or have had against the LC Issuer, any Bank or anybeneficiary of a Letter of Credit. The Borrower further agrees with the LC Issuer and the Banks thatthe LC Issuer and the Banks shall not be responsible for, and the Borrower's ReimbursementObligation in respect of any Letter of Credit shall not be affected by, among other things, thevalidity or genuineness of documents or of any endorsement thereon, even if such documents should infact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between oramong the Borrower, any of its Affiliates, the beneficiary of any Letter of Credit or any financinginstitution or other party to whom any Letter of Credit may be transferred or any claim or defensewhatsoever of the Borrower or of any of its Affiliates against the beneficiary of any Letter ofCredit or any such transferee; provided that, notwithstanding the foregoing, the Borrower may have aclaim against the LC Issuer, and the LC Issuer may be liable to the Borrower, to the extent, butonly to the extent, of any direct, as opposed to consequential, damages suffered by the Borrowerwhich were caused by the LC Issuer's willful misconduct or gross negligence (as determined by acourt of competent jurisdiction in a final, non-appealable judgment) in determining whether arequest presented under any Letter of Credit complied with the terms of such Letter of Credit. Inthe absence of gross negligence or willful misconduct (as determined by the final, non-appealablejudgment of a court of competent jurisdiction), the LC Issuer shall not be liable for any error,omission, interruption or delay in transmission, dispatch or delivery of any message or advice,however transmitted, in connection with any Letter of Credit. The Borrower agrees that any actiontaken or omitted by the LC Issuer or any Bank under or in connection with any Letter of Credit andthe related drafts and documents, if done without gross negligence or willful misconduct, shall bebinding upon the Borrower and shall not result in any liability of the LC Issuer or any Bank to theBorrower.

(H) Actions of LC Issuer. The LC Issuer shall be entitled to rely, and shall be fully protectedin relying, upon any Letter of Credit, draft, writing, resolution, notice, consent, certificate,affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order orother document believed by it to be genuine and correct and to have been signed, sent or made by theproper Person or Persons, and upon advice and statements of legal counsel, independent accountantsand other experts selected by the LC Issuer. The LC Issuer shall be fully justified in failing orrefusing to take any action under this Agreement unless it shall first have received such advice orconcurrence of the Required Banks as it may reasonably deem appropriate or it shall first beindemnified to its reasonable satisfaction by the Banks against any and all liability and expensewhich may be incurred by it by reason of taking or continuing to take any such action.Notwithstanding any other provision of this Section 2.20, the LC Issuer shall in all cases be fullyprotected in acting, or in refraining from acting, under this Agreement in accordance with a requestof the Required Facility A Banks, and such request and any action taken or failure to act pursuantthereto shall be binding upon the Banks and any future holders of a participation in any Letter ofCredit.

(I) Indemnification. The Borrower hereby agrees to indemnify and hold harmless each Bank, the LCIssuer and the Administrative Agent, and their respective directors, officers, agents and employeesfrom and against any and all claims and damages, losses, liabilities, costs or expenses which suchBank, the LC Issuer or the Administrative Agent may incur (or which may be claimed against suchBank, the LC Issuer or the Administrative Agent by any Person whatsoever) by reason of or inconnection with the issuance, execution and delivery or transfer of or payment or failure to payunder any Letter of Credit or any actual or proposed use of any Letter of Credit, including, withoutlimitation, any claims, damages, losses, liabilities, costs or expenses which the LC Issuer mayincur by reason of or in connection with the failure of any other Bank to fulfill or comply with itsobligations to the LC Issuer hereunder; provided that the Borrower shall not be required toindemnify any Bank, the LC Issuer or the Administrative Agent and their respective directors,offices, agents and employees, for any claims, damages, losses, liabilities, costs or expenses tothe extent, but only to the extent, (x) the same are determined by a court of competent jurisdictionin a final, nonappealable judgment to have resulted solely from the willful misconduct or grossnegligence of the LC Issuer or (y) caused by the LC Issuer's failure to pay under any Letter ofCredit after the presentation to it of a request strictly complying with the terms and conditions ofsuch Letter of Credit.

(J) Banks' Indemnification. Each Bank shall, ratably in accordance with its Facility APercentage, indemnify the LC Issuer, its affiliates and their respective directors, officers, agentsand employees (to the extent not reimbursed by the Borrower) against any cost, expense (including,without limitation, reasonable counsel fees and disbursements), claim, demand, action, loss orliability (except such as result from such indemnitees' gross negligence or willful misconduct orthe LC Issuer's failure to pay under any Letter of Credit after the presentation to it of a requeststrictly complying with the terms and conditions of the Letter of Credit) that such indemnitees maysuffer or incur in connection with this Section 2.20 or any action taken or omitted by suchindemnitees hereunder.

(K) Rights as a Bank. In its capacity as a Bank, the LC Issuer shall have the same rights andobligations as any other Bank.

(L) Cash Collateral. If, on the Commitment Termination Date, any Letter of Credit may for anyreason remain outstanding and partially or wholly undrawn, the Borrower shall immediately CashCollateralize in full all LC Obligations with respect to then-outstanding Letters of Credit.

(M) Existing Letters of Credit. The Borrower, the Banks and the Administrative Agent agree that,on the Closing Date, the letters of credit issued by LaSalle and listed on Schedule V shall bedeemed to be, and constitute, Letters of Credit issued hereunder. Without limiting the generality ofthe foregoing, each Facility A Bank shall be deemed to have purchased from the LC Issuer aparticipation in such Letters of Credit on the Closing Date pursuant to Section 2.20(B). The letterof credit fees payable under Section 2.20(D) with respect to such Letters of Credit shall accruefrom the Closing Date. No fronting fees shall be payable under Section 2.20(D) with respect to suchLetters of Credit.

Section 2.21. Swing Line Loans.

(A) Amount of Swing Line Loans. Upon the satisfaction of the conditions precedent set forth inArticle IV, from and including the date of this Agreement and prior to the Commitment TerminationDate, the Swing Line Bank agrees, on the terms and conditions set forth in this Agreement, to makeSwing Line Loans to the Borrower from time to time in an aggregate principal amount not to exceedthe Swing Line Commitment, provided that (x) the Aggregate Outstanding Credit Exposure in respect ofFacility A shall not at any time exceed the Aggregate Commitment in respect of Facility A and (y)the Aggregate Outstanding Credit Exposure shall not at any time exceed the Aggregate Commitment, andprovided further that at no time shall the sum of (i) the Swing Line Bank's Facility A Percentage ofthe Swing Line Loans, plus (ii) the outstanding Revolving A Loans made by the Swing Line Bankpursuant to Section 2.1, exceed the Swing Line Bank's Facility A Commitment at such time. Subject tothe terms of this Agreement, the Borrower may borrow, repay and reborrow Swing Line Loans at anytime prior to the Commitment Termination Date.

(B) Borrowing Notice. The Borrower shall deliver to the Administrative Agent and the Swing LineBank irrevocable notice (a "Swing Line Borrowing Notice") not later than noon (Chicagotime) on the borrowing date of each Swing Line Loan, specifying (i) the applicable borrowing date(which date shall be a Business Day), and (ii) the aggregate amount of the requested Swing Line Loanwhich shall be an amount not less than $100,000. The Swing Line Loans shall bear interest at theBase Rate plus the Applicable Margin.

(C) Making of Swing Line Loans. Promptly after receipt of a Swing Line Borrowing Notice, theAdministrative Agent shall notify each Facility A Bank by fax, or other similar form oftransmission, of the requested Swing Line Loan. Not later than 2:00 p.m. (Chicago time) on theapplicable borrowing date, the Swing Line Bank shall make available the Swing Line Loan, in fundsimmediately available in Chicago, to the Administrative Agent at its address specified pursuant toSection 10.5. The Administrative Agent will promptly make the funds so received from the Swing LineBank available to the Borrower in the Borrower's bank account at the Administrative Agent on theborrowing date.

(D) Repayment of Swing Line Loans. Each Swing Line Loan shall be paid in full by the Borrower onor before the tenth Business Day after the Borrowing Date for such Swing Line Loan. In addition, theSwing Line Bank (i) may at any time in its sole discretion with respect to any outstanding SwingLine Loan, or (ii) shall on the fifth Business Day after the borrowing date of any Swing Line Loan,require each Facility A Bank (including the Swing Line Bank) to make a Revolving A Loan in theamount of such Facility A Bank's Facility A Percentage of such Swing Line Loan (including, withoutlimitation, any interest accrued and unpaid thereon), for the purpose of repaying such Swing LineLoan. Not later than noon (Chicago time) on the date of any notice received pursuant to this Section2.21(D), each Facility A Bank shall make available its required Revolving A Loan, in fundsimmediately available in Chicago to the Administrative Agent at its address specified pursuant toSection 10.5. Revolving A Advances made pursuant to this Section 2.21(D) shall initially be BaseRate Advances and thereafter may be continued as Base Rate Advances or converted into LIBOR Advancesin the manner provided in Section 2.14 and subject to the other conditions and limitations set forthin this Article II. Unless a Facility A Bank shall have notified the Swing Line Bank, prior to itsmaking any Swing Line Loan, that any applicable condition precedent set forth in Section 4.1 or 4.2had not then been satisfied, such Facility A Bank's obligation to make Revolving A Loans pursuant tothis Section 2.21(D) to repay Swing Line Loans shall be unconditional, continuing, irrevocable andabsolute and shall not be affected by any circumstances, including, without limitation, (a) any set-off, counterclaim, recoupment, defense or other right which such Facility A Bank may have againstthe Administrative Agent, the Swing Line Bank or any other Person, (b) the occurrence or continuanceof an Event of Default or Default, (c) any adverse change in the condition (financial or otherwise)of the Borrower or (d) any other circumstances, happening or event whatsoever. In the event that anyFacility A Bank fails to make payment to the Administrative Agent of any amount due under thisSection 2.21(D), the Administrative Agent shall be entitled to receive, retain and apply againstsuch obligation the principal and interest otherwise payable to such Facility A Bank hereunder untilthe Administrative Agent receives such payment from such Facility A Bank or such obligation isotherwise fully satisfied. In addition to the foregoing, if for any reason any Facility A Bank failsto make payment to the Administrative Agent of any amount due under this Section 2.21(D), suchFacility A Bank shall be deemed, at the option of the Administrative Agent, to have unconditionallyand irrevocably purchased from the Swing Line Bank, without recourse or warranty, an undividedinterest and participation in the applicable Swing Line Loan in the amount of such Revolving A Loan,and such interest and participation may be recovered from such Facility A Bank together withinterest thereon at the Federal Funds Effective Rate for each day during the period commencing onthe date of demand and ending on the date such amount is received. On the Commitment TerminationDate, the Borrower shall repay in full the outstanding principal balance of the Swing LineLoans.

Section 2.22. Increases in Facility A Commitments. So long as no Event of Default or Defaultexists or would result therefrom, the Borrower may, from time to time, by means of a letterdelivered to the Administrative Agent substantially in the form of Exhibit E, request that theAggregate Commitment for Facility A be increased to up to $109,400,000 by (a) increasing theFacility A Commitment of one or more Facility A Banks that have agreed to such increase and/or (b)adding one or more commercial banks or other Persons as a Facility A Bank party hereto (each an"Additional Facility A Bank") with a Facility A Commitment in an amount agreed to by anysuch Additional Facility A Bank; provided that no Additional Facility A Bank shall be added as aparty hereto without the written consent of the Administrative Agent, the Swing Line Bank and the LCIssuer (which shall not be unreasonably withheld). Any increase in the Aggregate Commitment forFacility A pursuant to this Section 2.22 shall be effective three Business Days after the date onwhich the Administrative Agent has received and accepted the applicable increase letter in the formof Annex 1 to Exhibit E (in the case of an increase in the Facility A Commitment of an existingFacility A Bank) or assumption letter in the form of Annex 2 to Exhibit E (in the case of theaddition of an Additional Facility A Bank). The Administrative Agent shall promptly notify theBorrower and the Banks of any increase in the amount of the Aggregate Commitment for Facility Apursuant to this Section 2.22 and of the Facility A Commitment of each Facility A Bank after givingeffect thereto. The Borrower acknowledges that, in order to maintain Advances in Facility A inaccordance with each Facility A Bank's pro rata share of all outstanding Advances in Facility Aprior to any increase in the Aggregate Commitment for Facility A pursuant to this Section 2.22, areallocation of the Facility A Commitments as a result of a non-pro-rata increase in the AggregateCommitment for Facility A may require prepayment of all or portions of certain Advances on the dateof such increase (and any such prepayment shall be subject to the provisions of Section 3.4).

ARTICLE III

YIELD PROTECTION; TAXES

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

(i) subjects any Bank or any applicable Lending Installation or the LC Issuer to any Taxes, orchanges the basis of taxation of payments (other than with respect to Excluded Taxes) to any Bank orthe LC Issuer in respect of its LIBOR Loans, Letters of Credit or participations therein, or

(ii) imposes or increases or deems applicable any reserve, assessment, insurance charge, specialdeposit or similar requirement against assets of, deposits with or for the account of, or creditextended by, any Bank or any applicable Lending Installation or the LC Issuer (other than reservesand assessments taken into account in determining the interest rate applicable to LIBOR Advances),or

(iii) imposes any other condition the result of which is to increase the cost to any Bank or anyapplicable Lending Installation or the LC Issuer of making, funding or maintaining its LIBOR Loans,or of issuing or participating in Letters of Credit, or reduces any amount receivable by any Bank orany applicable Lending Installation or the LC Issuer in connection with its LIBOR Loans, Letters ofCredit or participations therein, or requires any Bank or any applicable Lending Installation or theLC Issuer to make any payment calculated by reference to the amount of LIBOR Loans, Letters ofCredit or participations therein held or interest or LC Fees received by it, by an amount deemedmaterial by such Bank or the LC Issuer as the case may be, and the result of any of the foregoing isto increase the cost to such Bank or applicable Lending Installation or the LC Issuer, as the casemay be, of making or maintaining its LIBOR Loans or Commitments or of issuing or participating inLetters of Credit or to reduce the return received by such Bank or applicable Lending Installationor the LC Issuer, as the case may be, in connection with such LIBOR Loans, Commitments, Letters ofCredit or participations therein, in any event by an amount which such Bank or the LC Issuerreasonably deems material, then, within seven Business Days of demand by such Bank or the LC Issuer,as the case may be, the Borrower shall pay such Bank or the LC Issuer, as the case may be, suchadditional amount or amounts as will compensate such Bank or the LC Issuer, as the case may be, forsuch increased cost or reduction in amount received.

Section 3.2. Changes in Capital Adequacy Regulations. If a Bank or the LC Issuer determines theamount of capital required or expected to be maintained by such Bank or the LC Issuer, any LendingInstallation of such Bank or the LC Issuer, or any Person controlling such Bank or the LC Issuer isincreased as a result of a Change, then, within seven Business Days of demand by such Bank or the LCIssuer, the Borrower shall pay such Bank or the LC Issuer the amount necessary to compensate for anyshortfall in the rate of return on the portion of such increased capital which such Bank or the LCIssuer determines is attributable to this Agreement, its Outstanding Credit Exposure or itsCommitments to make Loans and issue or participate in Letters of Credit, as the case may be,hereunder (after taking into account such Bank's or the LC Issuer's policies as to capitaladequacy). "Change" means (i) any change after the date of this Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or change in any other law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation or directive (whether or not havingthe force of law) after the date of this Agreement which affects the amount of capital required orexpected to be maintained by any Bank or the LC Issuer or any Lending Installation or any Personcontrolling any Bank or the LC Issuer. "Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including,without limitation, transition rules, and (ii) the corresponding capital regulations promulgated byregulatory authorities outside the United States implementing the July 1988 report of the BasleCommittee on Banking Regulation and Supervisory Practices entitled "International Convergenceof Capital Measurements and Capital Standards," including, without limitation, transitionrules, and any amendments to such regulations adopted prior to the date of this Agreement.

Section 3.3. Availability of Types of Advances. If any Bank determines that maintenance of itsLIBOR Loans at a suitable Lending Installation would violate any applicable law, rule, regulation ordirective, whether or not having the force of law, or if the Required Banks determine that (i)deposits of a type and maturity appropriate to match fund LIBOR Loans are not available or (ii) theinterest rate applicable to LIBOR Loans does not accurately reflect the cost of making ormaintaining LIBOR Loans, then the Administrative Agent shall suspend the availability of LIBOR Loansand require any affected LIBOR Loans to be repaid or converted to Base Rate Loans, either on thelast day of the Interest Period thereof or on such earlier date on which an affected Bank may nolonger lawfully continue to maintain such LIBOR Loan (as determined by such Bank), subject to thepayment of any funding indemnification amounts required by Section 3.4.

Section 3.4. Funding Indemnification. If any payment of a LIBOR Advance occurs on a date which isnot the last day of the applicable Interest Period, whether because of acceleration, prepayment orotherwise, or a LIBOR Advance is not made on the date specified by the Borrower (or the Trustee onbehalf of the Borrower) for any reason other than default by the Banks, the Borrower will indemnifyeach Bank for any loss or cost incurred by it resulting therefrom, including, without limitation,any loss or cost in liquidating or employing deposits acquired to fund or maintain such LIBORAdvance.

Section 3.5. Taxes. (i) All payments by the Borrower to or for the account of any Bank, the LCIssuer or the Administrative Agent hereunder or under any Note or LC Application shall be made freeand clear of and without deduction for any and all Taxes. If the Borrower shall be required by lawto deduct any Taxes from or in respect of any sum payable hereunder to any Bank, the LC Issuer orthe Administrative Agent, (a) the sum payable shall be increased as necessary so that after makingall required deductions (including, without limitation, deductions applicable to additional sumspayable under this Section 3.5) such Bank, the LC Issuer or the Administrative Agent (as the casemay be) receives an amount equal to the sum it would have received had no such deductions been made,(b) the Borrower shall make such deductions, (c) the Borrower shall pay the full amount deducted tothe relevant authority in accordance with applicable law and (d) the Borrower shall furnish to theAdministrative Agent the original copy of a receipt evidencing payment thereof within 30 days aftersuch payment is made. (ii) In addition, the Borrower hereby agrees to pay any present or futurestamp or documentary taxes and any other excise or property taxes, charges or similar levies whicharise from any payment made hereunder or under any Note or LC Application or from the execution ordelivery of, or otherwise with respect to, this Agreement or any Note or LC Application ("OtherTaxes"). (iii) The Borrower hereby agrees to indemnify the Administrative Agent, the LC Issuerand each Bank for the full amount of Taxes or Other Taxes (including, without limitation, any Taxesor Other Taxes imposed on amounts payable under this Section 3.5) paid by the Administrative Agent,the LC Issuer or such Bank as a result of its Commitments, its Credit Extensions hereunder orotherwise in connection with its participation in this Agreement and any liability (including,without limitation, penalties, interest and expenses) arising therefrom or with respect thereto.Payments due under this indemnification shall be made within 30 days of the date the AdministrativeAgent, the LC Issuer or such Bank makes demand therefor pursuant to Section 3.6. (iv) Each Bank thatis not incorporated under the laws of the United States of America or a state thereof (each a"Non-U.S. Bank") agrees that it will, not more than ten Business Days after the date ofthis Agreement, (a) deliver to the Administrative Agent two duly completed copies of United StatesInternal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such Bank is entitledto receive payments under this Agreement without deduction or withholding of any United Statesfederal income taxes and (b) deliver to the Administrative Agent a United States Internal RevenueForm W-8 or W-9, as the case may be, and certify that it is entitled to an exemption from UnitedStates backup withholding tax. Each Non-U.S. Bank further undertakes to deliver to each of theBorrower and the Administrative Agent (x) renewals or additional copies of such form (or anysuccessor form) on or before the date that such form expires or becomes obsolete, and (y) after theoccurrence of any event requiring a change in the most recent forms so delivered by it, suchadditional forms or amendments thereto as may be reasonably requested by the Borrower or theAdministrative Agent. All forms or amendments described in the preceding sentence shall certify thatsuch Bank is entitled to receive payments under this Agreement without deduction or withholding ofany United States federal income taxes, unless an event (including without limitation any change intreaty, law or regulation) has occurred prior to the date on which any such delivery would otherwisebe required which renders all such forms inapplicable or which would prevent such Bank from dulycompleting and delivering any such form or amendment with respect to it and such Bank advises theBorrower and the Administrative Agent that it is not capable of receiving payments without anydeduction or withholding of United States federal income tax. (v) For any period during which a Non-U.S. Bank has failed to provide the Borrower with an appropriate form pursuant to clause (iv) above(unless such failure is due to a change in treaty, law or regulation, or any change in theinterpretation or administration thereof by any governmental authority, occurring subsequent to thedate on which a form originally was required to be provided), such Non-U.S. Bank shall not beentitled to indemnification under this Section 3.5 with respect to Taxes imposed by the UnitedStates; provided that, should a Non- U.S. Bank which is otherwise exempt from or subject to areduced rate of withholding tax become subject to Taxes because of its failure to deliver a formrequired under clause (iv), above, the Borrower shall take such steps as such Non-U.S. Bank shallreasonably request to assist such Non-U.S. Bank to recover such Taxes. (vi) Any Bank that isentitled to an exemption from or reduction of withholding tax with respect to payments under thisAgreement or any Note pursuant to the law of any relevant jurisdiction or any treaty shall deliverto the Borrower (with a copy to the Administrative Agent), at the time or times prescribed byapplicable law, such properly completed and executed documentation prescribed by applicable law aswill permit such payments to be made without withholding or at a reduced rate. (vii) If the U.S.Internal Revenue Service or any other governmental authority of the United States or any othercountry or any political subdivision thereof asserts a claim that the Administrative Agent did notproperly withhold tax from amounts paid to or for the account of any Bank (because the appropriateform was not delivered or properly completed, because such Bank failed to notify the AdministrativeAgent of a change in circumstances which rendered its exemption from withholding ineffective, or forany other reason), such Bank shall indemnify the Administrative Agent fully for all amounts paid,directly or indirectly, by the Administrative Agent as tax, withholding therefor, or otherwise,including penalties and interest, and including taxes imposed by any jurisdiction on amounts payableto the Administrative Agent under this subsection, together with all costs and expenses relatedthereto (including attorneys fees and time charges of attorneys for the Administrative Agent, whichattorneys may be employees of the Administrative Agent). The obligations of the Banks under thisSection 3.5(vii) shall survive the payment of the Obligations and termination of this Agreement.

Section 3.6. Bank Statements; Survival of Indemnity. To the extent reasonably possible, each Bankshall designate an alternate Lending Installation with respect to its LIBOR Loans to reduce anyliability of the Borrower to such Bank under Sections 3.1, 3.2 and 3.5 or to avoid theunavailability of LIBOR Loans under Section 3.3, so long as such designation is not, in the judgmentof such Bank, disadvantageous to such Bank. Each Bank shall deliver a written statement of such Bankto the Borrower (with a copy to the Administrative Agent) as to the amount due, if any, underSection 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable detail thecalculations upon which such Bank determined such amount and shall be final, conclusive and bindingon the Borrower in the absence of manifest error. Determination of amounts payable under suchSections in connection with a LIBOR Loan shall be calculated as though each Bank funded its LIBORLoan through the purchase of a deposit of the type and maturity corresponding to the deposit used asa reference in determining the LIBOR Rate applicable to such Loan, whether in fact that is the caseor not. Unless otherwise provided herein, the amount specified in the written statement of any Bankshall be payable on demand after receipt by the Borrower of such written statement. The obligationsof the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Loans and otherobligations under the Financing Documents and termination of this Agreement.

ARTICLE IV

CONDITIONS OF LENDING

Section 4.1. Conditions Precedent to all Credit Extensions. Unless the Required Banks otherwiseconsent in writing, the obligations of the Banks to make any Credit Extension (except as otherwiseset forth in Section 2.21(D) with respect to Revolving A Loans for the purpose of repaying SwingLine Loans) is subject to performance by the Borrower of all of its obligations under this Agreementand to the satisfaction of the conditions precedent that all legal matters incidental to the CreditExtension shall be satisfactory to counsel for the Administrative Agent and that the followingconditions shall be met: (A) The representations and warranties of the Borrower contained in Section5.1 of this Agreement are true and accurate on the date of such Credit Extension; provided that therepresentation and warranty set forth in Section 5.1(P) shall not be required to be made on any dateother than the Closing Date. (B) No Default or Event of Default shall then be in existence or wouldbe created thereby. Each Advance Request or request for issuance of a Letter of Credit with respectto each such Credit Extension shall constitute a representation and warranty by the Borrower thatthe conditions contained in this Section 4.1 have been satisfied.

Section 4.2. Conditions Precedent to Initial Credit Extension. The obligation of the Banks tomake the initial Credit Extension is subject to the receipt by the Banks on or before the ClosingDate of all of the following, each dated the Closing Date or another date prior to the Closing Dateacceptable to the Banks and each to be in the form and substance acceptable to the AdministrativeAgent: 

(A) The Notes and any other documents required hereunder.

(B) A favorable opinion of Barnes & Thornburg LLP, counsel to the

Borrower, substantially in the form of Exhibit C attached hereto.

(C) Certified copies of the FERC Order and the IURC Order.

(D) A Certificate of Existence from the Secretary of State of Indiana, dated not more than fivedays before the Closing Date, stating that the Borrower is duly organized and existing under thelaws of the State of Indiana.

(E) Payment to the Administrative Agent and the Banks of the fees specified in this Agreement asbeing payable on the Closing Date and the legal fees of the Administrative Agent and otherexpenses.

(F) Evidence required by the Administrative Agent to establish that the Borrower has theauthority to enter into this Agreement and that all Financing Documents executed in connection withthe Credit Extensions will be valid and binding obligations of the Borrower, fully enforceable inaccordance with their respective terms under applicable law. Such evidence shall include, withoutlimitation, the opinion of counsel referred to in Section 4.2(B) hereof, resolutions of the board ofdirectors of the Borrower and a certificate of the Secretary of the Borrower certifying thesame.

(G) Copies of the Borrower's Articles of Incorporation and By-Laws, each as amended to date,certified by the Secretary of the Borrower.

(H) A written certificate of the Secretary of the Borrower as to the names and signatures of theofficers of the Borrower authorized to sign this Agreement and the Notes and other documents to beexecuted and delivered pursuant hereto.

(I) Such other information about the Borrower and/or its assets, business and/or financialcondition as the Administrative Agent or any Bank may reasonably request.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Section 5.1. Representations and Warranties of the Borrower. The Borrower represents and warrantsto the Administrative Agent and the Banks that, after giving effect to the Credit Extensions and theapplication of the proceeds thereof (which representations and warranties shall survive the makingof the Credit Extensions and the termination of this Agreement):

(A) Organization and Existence. The Borrower is a corporation, duly organized and validlyexisting under the laws of the State of Indiana and is duly qualified to do business in alljurisdictions in which such qualification is required, except where failure to so qualify would nothave a Material Adverse Effect, and has all requisite power and authority to conduct its business,to own its properties and to execute and deliver, and to perform all of its obligations under, theFinancing Documents.

(B) Authorization and Absence of Defaults. The execution, delivery to the Administrative Agentand the Banks, the incurrence by the Borrower of the Indebtedness under the Financing Documents andperformance by the Borrower of its obligations under the Financing Documents have been dulyauthorized by all necessary corporate and governmental action and do not (i) require any consent orapproval of the shareholders or board of directors of the Borrower which has not been obtained, (ii)violate any provision of any law, rule, regulation (including, without limitation, Regulations U andX of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction,decree, determination or award presently in effect having applicability to the Borrower or itsSubsidiaries and/or the Articles of Incorporation or By-Laws, where applicable, of the Borrower andits Subsidiaries, (iii) result in a breach of or constitute a default under any indenture or loan orcredit agreement or any other agreement, lease or instrument to which the Borrower or any of itsSubsidiaries is a party or by which it or its properties may be bound or affected or (iv) result in,or require, the creation or imposition of any Lien on any of the properties or revenues of theBorrower and its Subsidiaries. The Borrower and each Subsidiary is in compliance with each law,rule, regulation, order, writ, judgment, injunction, decree, determination or award described inclause (ii) above and is in compliance with each indenture, agreement, lease or instrument describedin clause (iii) above, except, in each case, where the failure to be in compliance is immaterial tothe financial condition or business of the Borrower and its Subsidiaries.

(C) Acquisition of Consents. No authorization, consent, approval, license or exemption of, orfiling or registration with, any court or governmental department, commission, board, bureau, agencyor instrumentality, domestic or foreign (including without limitation any authorization, consent,approval, license or exemption of, or filing with, the FERC, the IURC and any other regulatoryauthority having jurisdiction) is necessary for the valid execution and delivery to theAdministrative Agent and the Banks, the incurrence by the Borrower of the Indebtedness under theFinancing Documents and the performance by the Borrower of its obligations under the FinancingDocuments, other than those already obtained and copies of which have been provided to theAdministrative Agent and the Banks.

(D) Validity and Enforceability. This Agreement is, and each of the other Financing Documentswhen delivered hereunder will be, the legal, valid and binding obligation of the Borrowerenforceable against the Borrower in accordance with its terms, except to the extent enforceabilitythereof is limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors'rights generally, and by general principles of equity.

(E) Financial Information. All financial statements which have been or will be furnished to theAdministrative Agent or the Banks by the Borrower are, and will be, true and correct and reflect, orwill reflect when delivered in the future, fairly the financial condition of the Borrower and itsSubsidiaries and have been, or will be, prepared in accordance with GAAP consistently applied. TheBorrower and its Subsidiaries have no contingent liabilities, liabilities for taxes, unusual forwardor long term commitments outside the ordinary course of business, or unrealized or anticipatedlosses from any unfavorable commitments which are material with respect to the operations, condition(financial or otherwise), properties, prospects or business of the Borrower and its Subsidiariesexcept as reflected or provided for in such financial statements.

(F) No Litigation. Except as set forth on Schedule III, there are no actions, suits orproceedings pending or, to the knowledge of the Borrower, threatened against or affecting theBorrower, its Subsidiaries or any of its or their properties before any court or governmentaldepartment, commission, board, bureau, agency or instrumentality, domestic or foreign, which ifdetermined adversely to the Borrower or any Subsidiary would draw into question the legal existenceof the Borrower and/or the validity, authorization and/or enforceability of the Financing Documentsand/or any provision thereof and/or could have a Material Adverse Effect.

(G) Regulation U. The Borrower is not engaged in the business of extending credit for the purposeof purchasing or carrying "margin stock" within the meaning of Regulation U of the Boardof Governors of the Federal Reserve System (12 CFR, Part 221), does not own and has no presentintention of acquiring any such margin stock. None of the proceeds of the Credit Extensions will beused directly or indirectly by the Borrower for the purpose of purchasing or carrying, or for thepurpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry,any such margin stock or for any other purpose which might constitute the transaction contemplatedhereby a "purpose credit" within the meaning of said Regulation U, or cause this Agreementto violate any other regulation of the Board of Governors of the Federal Reserve System or theSecurities Exchange Act of 1934, as amended, or any rules or regulations promulgated under saidregulations or said statute.

(H) Absence of Adverse Agreements. Neither the Borrower nor any Subsidiary is a party to anyindenture, loan or credit agreement or any lease or other agreement or instrument or subject to anycorporate or partnership restriction which would alter the manner in which the Borrower and itsSubsidiaries do business and which would have a Material Adverse Effect.

(I) Taxes. The Borrower and its Subsidiaries have filed all tax returns (federal, state andlocal) required to be filed and paid all taxes shown thereon to be due, including interest andpenalties, except those which are being contested in good faith by appropriate proceedings and withrespect to which adequate reserves for payment thereof have been provided in accordance withGAAP.

(J) Accuracy of Representations and Warranties. None of the Borrower's representations orwarranties set forth in this Agreement or in any document, certificate or other written informationfurnished pursuant to this Agreement or in connection with the transactions contemplated herebycontains or will contain any untrue statement of a material fact or omits or will omit to state amaterial fact necessary to make any statement of fact contained herein or therein, in light of thecircumstances under which it was made, not misleading.

(K) Investment Company Act. The Borrower is not an "investment company" or a company"controlled" by an "investment company" as such terms are defined in theInvestment Company Act of 1940, as amended.

(L) Solvency. Immediately after the consummation of the transactions to occur on the Closing Dateand immediately following the making of each Credit Extension, the Borrower (i) will be able to payits debts as they become due, (ii) will have funds and capital sufficient to carry on its businessand all businesses in which it is about to engage and (iii) will own property having a value both atfair valuation and at fair saleable value in the ordinary course of the Borrower's business greaterthan the amount required to pay its Indebtedness, including, for this purpose, unliquidated anddisputed claims. The Borrower will not be rendered insolvent by the execution and delivery of thisAgreement and the consummation or performance of the transactions contemplated herein.

(M) Licenses, Registrations, and Compliance with Laws. Each of the

Borrower and each of its Subsidiaries has all permits, governmental licenses, registrations, andapprovals necessary to carry out its businesses as presently conducted and as required by law(including, without limitation, the FPA and the IPSCA) or the rules and regulations of any federal,foreign, governmental, state, county or local association, corporation, or governmental agency,body, instrumentality or commission having jurisdiction over the Borrower or its Subsidiaries,including, but not limited to, the FERC, the IURC, the United States Environmental ProtectionAgency, the United States Department of Labor, the United States Occupational Safety and HealthAdministration, the United States Equal Employment Opportunity Commission and analogous and relatedstate and foreign agencies, except for such permits, licenses, registrations and approvals thefailure to obtain would not reasonably be expected to have a Material Adverse Effect. There is noviolation or failure of compliance on the part of the Borrower or any Subsidiary with any of theforegoing permits, licenses, registrations, approvals, rules or regulations, and there is no action,proceeding or investigation pending or, to the knowledge of the Borrower, threatened, nor has theBorrower received any notice of such, which might result in the termination or suspension of anysuch permit, license, registration or approval, except for such violations, failures, actions,proceedings or investigations which would not reasonably be expected to have a Material AdverseEffect.

(N) Principal Place of Business; Books and Records. The Borrower's chief executive office islocated at the Borrower's address set forth beneath its signature hereto. All of the Borrower'sbooks and records are kept at such address.

(O) Title to Assets and Properties. The Borrower has good and marketable title to all of itsproperties and assets except such imperfections in title, if any, that do not materially interferewith the present or proposed use of such property or otherwise materially impair businessoperations, free and clear of all Liens other than Liens permitted by Section 6.2(A).

(P) Material Adverse Change. There has been no material adverse change in the operations,business, properties, prospects or condition, financial or otherwise, of the Borrower and itsSubsidiaries since December 31, 2005.

(Q) Employee Benefit Plans. Each employee benefit plan as to which the Borrower or any Subsidiarymay have any liability complies in all material respects with all applicable requirements of law andregulations, and (i) no Reportable Event has occurred and is continuing with respect to any suchplan, (ii) neither the Borrower nor any Subsidiary has withdrawn from any such plan and (iii) nosuch plan has been terminated.

(R) Environmental Matters. To the best of the Borrower's knowledge:

(1) all facilities and property (including underlying groundwater) owned or leased by theBorrower or any of its Subsidiaries have been, and continue to be, owned or leased by the Borrowerand its Subsidiaries in material compliance with all Environmental Laws; (2) except as disclosed onSchedule III, there have been no past, and there are no pending or threatened (i) claims,complaints, notices or requests for information received by the Borrower or any of its Subsidiarieswith respect to any alleged violation of any Environmental Law which, individually or in theaggregate, have, or are reasonably expected to have, a Material Adverse Effect, or (ii) complaints,notices or inquiries to the Borrower or any of its Subsidiaries regarding potential liability underany Environmental Law which, individually or in the aggregate, have, or are reasonably expected tohave, a Material Adverse Effect; (3) there have been no Releases of Hazardous Materials at, on orunder any property now or previously owned or leased by the Borrower or any of its Subsidiariesthat, singly or in the aggregate, have had, or may reasonably be expected to have, a MaterialAdverse Effect; (4) the Borrower and its Subsidiaries have been issued and are in materialcompliance with all permits, certificates, approvals, licenses and other authorizations relating toenvironmental matters and necessary or desirable for their businesses; (5) no property now orpreviously owned or leased by the Borrower or any of its Subsidiaries is listed or (with respect toowned property only) proposed for listing on the National Priorities List pursuant to CERCLA, on theCERCLIS or on any similar state list of sites requiring investigation or clean-up; and (6) there areno underground storage tanks, active or abandoned, including petroleum storage tanks, on or underany property now or previously owned or leased by the Borrower or any of its Subsidiaries that,singly or in the aggregate, have had, or may reasonably be expected to have, a Material AdverseEffect.

(S) Pari Passu Indebtedness. The Indebtedness of the Borrower under the Financing Documents ranksat least pari passu with all other unsecured Indebtedness of the Borrower.

(T) Reportable Transaction. The Borrower does not intend to treat the Credit Extensions andrelated transactions as being a "reportable transaction" (within the meaning of TreasuryRegulation Section 1.6011-4). In the event the Borrower determines to take any action inconsistentwith such intention, it will promptly notify the Administrative Agent thereof.

(U) Pension Plans.

(i) Each Pension Plan complies in all material respects with all applicable requirements of lawand regulations. No contribution failure under Section 412 of the Code, Section 302 of ERISA or theterms of any Pension Plan has occurred with respect to any Pension Plan, sufficient to give rise toa Lien under Section 302(f) of ERISA, or otherwise to have a Material Adverse Effect. There are nopending or, to the knowledge of Borrower, threatened, claims, actions, investigations or lawsuitsagainst any Pension Plan, any fiduciary of any Pension Plan, or Borrower or other any member of theControlled Group with respect to a Pension Plan or a Multiemployer Pension Plan which couldreasonably be expected to have a Material Adverse Effect. No Termination Event has occurred or isreasonably expected to occur with respect to any Pension Plan, which could reasonably be expected tohave a Material Adverse Effect. (ii) All contributions (if any) have been made to any MultiemployerPension Plan that are required to be made by the Borrower or any other member of the ControlledGroup under the terms of the plan or of any collective bargaining agreement or by applicable law;neither the Borrower nor any other member of the Controlled Group has withdrawn or partiallywithdrawn from any Multiemployer Pension Plan, incurred any withdrawal liability with respect to anysuch plan or received notice of any claim or demand for withdrawal liability or partial withdrawalliability from any such plan, and no condition has occurred which, if continued, could result in awithdrawal or partial withdrawal from any such plan; and neither the Borrower nor any other memberof the Controlled Group has received any notice that any Multiemployer Pension Plan is inreorganization, that increased contributions may be required to avoid a reduction in plan benefitsor the imposition of any excise tax, that any such plan is or has been funded at a rate less thanthat required under Section 412 of the Code, that any such plan is or may be terminated, or that anysuch plan is or may become insolvent.

ARTICLE VI

COVENANTS OF BORROWER

Section 6.1. Affirmative Covenants of the Borrower Other Than Reporting Requirements. From thedate hereof and thereafter for so long as any Obligations are outstanding or the Borrower isindebted to the Banks under any of the Financing Documents and until all Commitments are terminated,the Borrower shall ensure that it shall, and shall cause each of its Subsidiaries to, unless theRequired Banks shall otherwise consent in writing:

(A) Payment of Taxes. Pay and discharge all taxes and assessments and governmental charges orlevies imposed upon it or upon its income or profits, or upon any properties belonging to it, priorto the date on which penalties attach thereto, and all lawful claims for the same which, if unpaid,might become a Lien upon any of its properties, provided that (unless and until foreclosure,restraint, sale or any similar proceeding shall have been commenced) the Borrower and itsSubsidiaries shall not be required to pay any such tax, assessment, charge, levy or claim which isbeing contested in good faith and by proper proceedings and for which proper reserves or otherprovisions have been made in accordance with GAAP.

(B) Preservation of Existence. Preserve and maintain in full force and effect its legalexistence, rights and privileges in the jurisdiction of its organization, preserve and maintain alllicenses, governmental approvals, trademarks, patents, trade secrets, copyrights and trade namesowned or possessed by it and which are necessary or, in its reasonable business judgment, desirablein view of its business and operations or the ownership of its properties and qualify or remainqualified as a foreign corporation in each jurisdiction in which such qualification is necessary or,in the Borrower's reasonable business judgment, desirable in view of its business and operations andownership of properties.

(C) Compliance with Laws. (i) Comply with the requirements of all present and future applicablelaws (including, without limitation, the FPA and the IPSCA), rules, regulations and orders of anygovernmental authority having jurisdiction over it and/or its business, except where the failure tocomply would not have a Material Adverse Effect, (ii) without limiting clause (i) above, ensure thatno person who owns a controlling interest in or otherwise controls the Borrower is or shall be (x)listed on the Specially Designated Nationals and Blocked Person List maintained by the Office ofForeign Assets Control ("OFAC"), Department of the Treasury, and/or any other similarlists maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation or (y) aperson designated under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001),any related enabling legislation or any other similar Executive Orders and (iii) without limitingclause (i) above, comply with all applicable Bank Secrecy Act and anti-money laundering laws andregulations.

(D) Visitation Rights.

(i) Permit, at any reasonable time and from time to time, the Banks or any agent orrepresentative thereof (including without limitation the Administrative Agent), to examine and makecopies of and abstracts from the financial records and books of account of, and visit the propertiesof the Borrower and its Subsidiaries, to discuss the affairs, finances and accounts of the Borrowerand its Subsidiaries with any of its officers or employees designated by the Borrower for suchpurposes and/or any independent certified public accountant of the Borrower.

(ii) Permit, at any reasonable time and from time to time so long as any Obligation isoutstanding or any Commitment exists, the Banks or any agent or representative thereof (includingwithout limitation the Administrative Agent), to enter the properties of the Borrower and itsSubsidiaries and to inspect the property occupied by the Borrower and related equipment, propertyand soil, and to conduct soil or water sampling, testing, monitoring, digging, drilling and analysesand to review any documents, materials, inventories, financial data or notices or correspondence toor from private parties or governmental authorities in connection therewith.

(E) Keeping of Records and Books of Account. Keep adequate records and books of accountreflecting all financial transactions, in which complete entries will be made, and maintain astandard system of accounting, all in accordance with GAAP and with applicable requirements of anygovernmental authority having jurisdiction over the Borrower or the applicable Subsidiary.

(F) Maintenance of Properties. Maintain and preserve all of its properties necessary or useful inthe proper conduct of its business in good working order, repair and condition at all times,ordinary wear and tear excepted, and not commit waste or allow waste to be committed against itsproperties.

(G) Other Documents. Except as otherwise required by this Agreement, pay, perform and fulfill allof its obligations and covenants under each material document, instrument or agreement to which itis a party.

(H) Environmental Liability. (i) Conduct and complete all investigations, studies, sampling andtesting and all remedial, removal and other actions necessary to clean up and remove all HazardousMaterials (as hereinafter defined) on, from or affecting the property occupied, in compliance withor in accordance with all laws, rules, regulations, orders and directives of all federal, state andlocal governmental authorities, and (ii) defend, indemnify, and hold harmless the AdministrativeAgent, the Banks, their employees, agents, officers and directors, from and against any claims,demands, penalties, fines, liabilities, settlements, damages, costs or expenses (including, withoutlimitation, reasonable attorney and consultant fees, investigation and laboratory fees, court costsand litigation expenses) of whatever kind or nature, known or unknown, contingent or otherwise,arising out of or in any way related to (a) the existing or future presence at, on, from oraffecting any real estate owned by the Borrower of any materials, pollutants, substances or wasteswhich are defined, determined, or identified as hazardous, toxic or otherwise environmentallydegrading under any Environmental Law (any such materials, pollutants, wastes, and substances beingherein collectively referred to as "Hazardous Materials"), (b) the violation of anyEnvironmental Law concerning the generation, handling, storage, treatment or disposal of any suchHazardous Materials by the Borrower or (c) the enforcement of this Section 6.1(H) or the assertionby the Borrower of any defense to the obligations hereunder, whether any of such matters arisebefore or after the Closing Date, including, without limitation, (x) the costs of removal of any andall Hazardous Materials, (y) additional costs required to take necessary precautions to protectagainst the Release of Hazardous Materials into the air, any body of water, any other public domainor any surrounding areas and (z) costs incurred to comply with all applicable laws, orders,judgments or regulations with respect to Hazardous Materials.

(I) Further Assurances. From time to time hereafter, execute and deliver, or cause to be executedand delivered, such additional instruments, certificates and documents and take all such actions asthe Administrative Agent or the Banks shall reasonably request for the purpose of implementing oreffectuating the provisions of the Financing Documents and, upon the exercise by the AdministrativeAgent or the Banks of any power, right, privilege or remedy pursuant to the Financing Documentswhich requires any consent, approval, registration, qualification or authorization of anygovernmental authority or instrumentality, exercise and deliver all applications, certifications,instruments and other documents and papers that the Administrative Agent or the Banks may be sorequired to obtain. Without limiting the generality of the foregoing, the Borrower will give allnecessary notices to, make all necessary filings with, and obtain all necessary authorizations andapprovals of, the FERC and the IURC with respect to the transactions contemplated by the FinancingDocuments.

(J) Purposes. Use the proceeds of the Credit Extensions solely for the purposes hereindescribed.

(K) ERISA Compliance.

(i) Maintain, and cause each other member of the Controlled Group to maintain, each Pension Planin substantial compliance with all applicable requirements of law and regulations.

(ii) Make, and cause each other member of the Controlled Group to make, on a timely basis, allrequired contributions to any Multiemployer Pension Plan.

(iii) Not, and not permit any other member of the Controlled Group to (i) seek a waiver of theminimum funding standards of ERISA, (ii) terminate or withdraw from any Pension Plan orMultiemployer Pension Plan or (iii) take any other action with respect to any Pension Plan thatwould reasonably be expected to entitle the PBGC to terminate, impose liability in respect of, orcause a trustee to be appointed to administer, any Pension Plan, unless the actions or eventsdescribed in clauses (i), (ii) and (iii) individually or in the aggregate would not have a MaterialAdverse Effect.

(L) Insurance. Maintain with financially sound and reputable insurance companies insurance on alltheir property in such amounts and covering such risks as is consistent with sound businesspractice, and the Borrower will furnish to the Administrative Agent or any Bank upon request fullinformation as to the insurance carried.

Section 6.2. Negative Covenants of the Borrower. From the date hereof and thereafter for so longas any portion of the Obligations is outstanding or the Borrower is indebted to the Banks under anyof the Financing Documents and until all Commitments have been terminated, the Borrower shall not,and shall not permit any of its Subsidiaries to, without the prior written consent of the RequiredBanks:

(A) Liens. Create, incur, assume, or suffer to exist any Lien of any nature, upon or with respectto any of its properties, now owned or hereafter acquired, or assign as collateral or otherwiseconvey as collateral, any right to receive income, except that the foregoing restrictions shall notapply to:

(i) Liens for taxes, assessments, or governmental charges or levies on property if the same shallnot at the time be delinquent or thereafter can be paid without penalty or interest, or (ifforeclosure, distraint, sale or other similar proceedings shall not have been commenced) are beingcontested in good faith and by appropriate proceedings diligently conducted and for which properreserve or other provision has been made in accordance with GAAP;

(ii) Liens imposed by law, such as carriers', warehousemen's and mechanics' liens, bankers' set-off rights and other similar liens arising in the ordinary course of business for sums not yet dueor being contested in good faith and by appropriate proceedings diligently conducted and for whichproper reserve or other provisions has been made in accordance with GAAP;

(iii) Liens arising in the ordinary course of business out of pledges or deposits under worker'scompensation laws, unemployment insurance, old age pensions, or other Social Security or retirementbenefits, or similar legislation;

(iv) Liens arising from or upon any judgment or award, provided that such judgment or award isbeing contested in good faith by proper appeal proceedings and only so long as execution thereonshall be stayed;

(v) deposits to secure the performance of bids, trade contracts (other than for borrowed money),leases, statutory obligations, surety bonds, performance bonds and other obligations of a likenature incurred in the ordinary course of business;

(vi) easements, rights of way, restrictions and other similar encumbrances incurred in theordinary course of business which, in the aggregate, are not substantial in amount, and which do notin any case materially detract from the value of the property subject thereto or interfere with theordinary conduct of business by the Borrower or the applicable Subsidiary;

(vii) Liens against property of the Borrower securing Indebtedness of the Borrower which isevidenced by the Mortgage and Deed of Trust dated May 1, 1940, from the Borrower to AmericanNational Bank and Trust Company of Chicago (or any successor trustee), and any and all supplementsthereto;

(viii) Liens on any property acquired, constructed or improved by the Borrower or any Subsidiaryafter the Closing Date which are created or assumed contemporaneously with, or within one hundredtwenty days after, such acquisition or completion of such construction or improvement, or within sixmonths thereafter pursuant to a firm commitment for financing arranged with a lender or investorwithin such one hundred twenty day period, to secure or provide for the payment of all or any partof such acquisition, construction or improvement incurred after the Closing Date (provided that nosuch Lien shall extend to or cover any property other than the property so acquired or constructed,or the improvements on the property so improved), or in addition to Liens contemplated by clause(ix) below, Liens on any property existing at the time of acquisition thereof (other than any suchLien created in contemplation of such acquisition), provided that the Liens shall not apply to anyproperty theretofore owned by the Borrower or any Subsidiary other than, in the case of any suchconstruction or improvement, any theretofore unimproved real property on which the property isconstructed or the improvement is located; 

(ix) Liens existing on any property of a Person existing at the time such Person is merged intoor consolidated with the Borrower or any Subsidiary or becomes a Subsidiary; provided that suchLiens were not created in contemplation of such merger, consolidation or acquisition and do notextend to any assets other than those of the Person so merged into or consolidated with the Borroweror such Subsidiary or acquired by the Borrower or such Subsidiary; and

(x) Liens or charges incurred in the ordinary course of business of the Borrower or anySubsidiary which were not incurred in connection with the borrowing of money or the obtaining of anadvance or credit, and which do not in the aggregate materially detract from the value of itsproperty or assets or materially impair the use thereof in the operation of its business.

(B) Assumptions or Guaranties of Indebtedness. Assume, guarantee, endorse, or otherwise becomecontingently liable in connection with any obligation, except:

(i) pursuant to the provisions of this Agreement and Indebtedness to the Banks;

(ii) Indebtedness incurred in the ordinary course of business;

(iii) assumptions, guaranties, endorsements and contingent liabilities within the definition ofIndebtedness or permitted by Section 6.2(H)(iii);

(iv) if such is approved by the IURC; and

(v) such other contingent liabilities incurred after the date hereof which do not exceed$25,000,000 in the aggregate at any time.

(C) Dissolution. Dissolve, liquidate, wind up, merge or consolidate with another Person;provided, however (i) the Borrower may merge with another Person if upon the completion of suchmerger, the Borrower is the surviving entity, (ii) any Subsidiary may be merged into the Borrower ora wholly owned Subsidiary and (iii) the Borrower may dissolve immaterial Subsidiaries (a Subsidiarybeing deemed "immaterial" for this purpose if it has less than 2% of the assets of theBorrower and its consolidated Subsidiaries).

(D) Sale of Assets. Sell, lease, transfer or dispose of any of its assets except:

(i) in the ordinary course of business;

(ii) as approved by the IURC; or

(iii) as such are released under the Mortgage and Deed of Trust dated May 1, 1940, from theBorrower to American National Bank and Trust Company of Chicago (or any successor trustee), and anyand all supplements thereto.

(E) Change in Nature of Business. Make any material change in the nature of its business.

(F) Sale and Leaseback. Enter into any sale and leaseback arrangement with any lender orinvestor, or enter into any leases except in the normal course of business at reasonable rentscomparable to those paid for similar leasehold interests in the area and except for those which donot exceed $25,000,000 in any single transaction.

(G) Sale of Accounts. Sell, assign, discount, or dispose in any way of promissory notes or tradeacceptances held by the Borrower or any Subsidiary, with or without recourse, except in the ordinarycourse of business.

(H) Indebtedness. Incur, create, become or be liable directly or indirectly in any manner withrespect to or permit to exist any Indebtedness except:

(i) Indebtedness arising in the ordinary course of business (other than Indebtedness for borrowedmoney);

(ii) Indebtedness under the Financing Documents;

(iii) Indebtedness with respect to trade obligations and other normal accruals and customerdeposits in the ordinary course of business not yet due and payable in accordance with customarytrade terms or with respect to which the Borrower or the applicable Subsidiary is contesting in goodfaith the amount or validity thereof by appropriate proceedings and then only to the extent suchPerson has set aside on its books adequate reserves therefor;

(iv) Indebtedness of the Borrower outstanding in the form of certain lines of credit in anaggregate principal amount not to exceed $175,000,000 at any time;

(v) Indebtedness of the Borrower arising under commercial paper obligations;

(vi) Indebtedness of the Borrower approved by the IURC or the FERC ("ApprovedIndebtedness"), provided that such Approved Indebtedness is at least pari passu in right ofpayment with the Indebtedness arising under the Financing Documents (it being understood that therelative "right of payment" of any Indebtedness, within the meaning of this clause, isdetermined without consideration of any priority that results from collateral security); and

(vii) Indebtedness secured by Liens permitted under Section 6.2(A).

(I) Other Agreements. If there exists an Event of Default or a Default, amend any of the terms orconditions of any indenture, agreement, documents, note or other instrument evidencing, securing, orrelating to any other Indebtedness permitted under Section 6.2(H).

(J) Payment or Prepayment of Other Loans. If there exists an Event of Default or Default, makeany payment or prepayment of any principal of or interest on any Indebtedness (other than theObligations) or any payment, prepayment, redemption, defeasance, sinking fund payment, otherrepayment of principal or deposit for the purpose of any of the foregoing.

(K) Change of Fiscal Year. Change its fiscal year.

(L) Subordination of Claims. If there exists an Event of Default or Default, subordinate orpermit to be subordinated any present or future claim against or obligation of another Person,except as ordered in a bankruptcy or similar creditors' remedy proceeding of such other Person.

(M) Dividends. If there exists an Event of Default or Default, declare or make payment ofdividends to shareholders of the Borrower; provided that Subsidiaries may pay dividends to theBorrower or to Subsidiaries that are wholly owned by the Borrower.

(N) Capital Expenditures. If there exists an Event of Default or Default, fund aggregate capitalexpenditures in any fiscal year in amounts exceeding the amount of depreciation expense reflected inthe financial statements of the Borrower for such fiscal year.

(O) Financial Covenants.

(i) Permit the ratio, determined as of the end of each of its fiscal quarters for the then most-recently ended four fiscal quarters, of (i) Consolidated EBIT to (ii) Consolidated Interest Expenseto be less than 2.5 to 1.0.

(ii) Permit the ratio, determined as of the end of each of its fiscal quarters, of (i) Total Debtto (ii) Consolidated Total Capitalization to be greater than .65 to 1.0.

(P) Affiliates. Enter into any transaction (including, without limitation, the purchase or saleof any property or service) with, or make any payment or transfer to, any Affiliate except in theordinary course of business and pursuant to the reasonable requirements of the Borrower's or suchSubsidiary's business and upon fair and reasonable terms no less favorable to the Borrower or suchSubsidiary than the Borrower or such Subsidiary would obtain in a comparable arms'-lengthtransaction. 

(Q) Investments and Acquisitions. Make or suffer to exist any Investments (including withoutlimitation, loans and advances to, and other Investments in, Subsidiaries), or commitments therefor,or to create any Subsidiary or to become or remain a partner in any partnership or joint venture, orto make any Acquisition of any Person, except:

(i) Cash Equivalent or Short-Term Investments.

(ii) Investments in Subsidiaries and other Investments, in each case in existence on the datehereof and described in Schedule IV.

(iii) Investments in Persons principally engaged in a field of enterprise engaged in by theBorrower and its Subsidiaries on the date hereof and any other field of enterprise substantiallyrelated, ancillary or complementary thereto.

(iv) other Investments not exceeding $5,000,000 in the aggregate outstanding at any time.

(R) Certain Restrictions. Not permit any Subsidiary to, directly or indirectly, create orotherwise cause or suffer to exist or become effective any encumbrance or restriction on the abilityof any Subsidiary to (a) pay dividends or make other distributions on its capital stock owned by theBorrower or any Subsidiary, or pay any Indebtedness owed to the Borrower or any Subsidiary (otherthan customary limits imposed by corporate law and fraudulent conveyance statutes), (b) make loansor advances to the Borrower or (c) transfer any of its assets or properties to the Borrower, exceptfor such encumbrances or restrictions existing by reason of or under (i) applicable law, (ii) thisAgreement and the other Financing Documents, (iii) customary restrictions with respect to aSubsidiary pursuant to an agreement that has been entered into for the sale or disposition of all orsubstantially all of the capital stock of such Subsidiary and (iv) restrictions binding on anySubsidiary on the date it becomes a Subsidiary, provided such restrictions were not created incontemplation of such Person becoming a Subsidiary.

Section 6.3. Reporting Requirements From the date hereof and thereafter for so long as anyportion of a Commitment is outstanding or the Borrower is indebted to the Banks under any of theFinancing Documents, the Borrower shall, unless the Required Banks shall otherwise consent inwriting, furnish or cause to be furnished to the Banks:

(A) as soon as possible and in any event upon acquiring knowledge of an Event of Default orDefault, a written statement of an officer of the Borrower setting forth details of such Event ofDefault or Default and the action which the Borrower proposes to take with respect thereto;

(B) within one hundred twenty days after the end of each fiscal year of the Borrower, anunqualified audit report certified by independent certified public accountants acceptable to theRequired Banks, prepared in accordance with GAAP on a consolidated basis for the Borrower and itsSubsidiaries, including balance sheets as of the end of such period, related profit and loss andreconciliation of surplus statements, and a statement of cash flows, accompanied by any managementletter prepared by said accountants;

(C) within forty-five days after the end of each of the first three quarterly fiscal periods ofthe Borrower in each fiscal year, a consolidated unaudited balance sheet of the Borrower and itsSubsidiaries, and the related consolidated statements of income and statements of cash flows for theBorrower and its Subsidiaries, for the portion of the fiscal year to the end of such fiscal quarter,all of the foregoing prepared by the Borrower in reasonable detail in accordance with GAAPapplicable to interim financial statements and certified by the Borrower's Vice President and chieffinancial officer or Treasurer as fairly presenting the financial condition of the Borrower and itsSubsidiaries as at the dates thereof and their results of operations for the periods coveredthereby, subject to customary year-end audit adjustments;

(D) simultaneously with the furnishing of the year-end financial statements of the Borrower to bedelivered pursuant to Section 6.3(B) and the quarterly statements of the Borrower to be deliveredpursuant to Section 6.3(C), a certificate of an officer which shall contain (i) a computation of thefinancial ratios set forth in Section 6.2(O) with respect to the period covered by such financialstatements and (ii) a statement to the effect that no Event of Default or Default has occurred,without having been waived in writing, or if there shall have been an Event of Default notpreviously waived in writing pursuant to the provisions hereof, or a Default, such certificate shalldisclose the nature thereof;

(E) promptly after the commencement thereof, notice of all material actions, suits andproceedings before any court or governmental department, commission, board, bureau, agency orinstrumentality, domestic or foreign, affecting the Borrower or any Subsidiary;

(F) promptly upon becoming aware of any of the following, written notice describing the same andthe steps being taken by the Borrower or the Subsidiary affected thereby with respect thereto: theinstitution of any steps by any member of the Controlled Group or any other Person to terminate anyPension Plan, or the failure of any member of the Controlled Group to make a required contributionto any Pension Plan (if such failure is sufficient to give rise to a Lien under Section 302(f) ofERISA) or to any Multiemployer Pension Plan, or the taking of any action with respect to a PensionPlan which could result in the requirement that the Borrower furnish a bond or other security to thePBGC or such Pension Plan, or the occurrence of any event with respect to any Pension Plan orMultiemployer Pension Plan which could result in the incurrence by any member of the ControlledGroup of any material liability, fine or penalty (including any claim or demand for withdrawalliability or partial withdrawal from any Multiemployer Pension Plan), or any material increase inthe contingent liability of the Borrower with respect to any post-retirement welfare benefit plan orother employee benefit plan of the Borrower or another member of the Controlled Group, or any noticethat any Multiemployer Pension Plan is in reorganization, that increased contributions may berequired to avoid a reduction in plan benefits or the imposition of an excise tax, that any suchplan is or has been funded at a rate less than that required under Section 412 of the Code, that anysuch plan is or may be terminated, or that any such plan is or may become insolvent;

(G) such other information respecting the business, properties, or the condition or operations,financial or otherwise, of the Borrower and its Subsidiaries as the Administrative Agent or theBanks may, from time to time, reasonably request;

(H) prompt written notice of the occurrence of any event which has had or which might reasonablybe expected to have a Material Adverse Effect;

(I) immediately, copies of any and all notices, correspondence, warnings, guidance or otherwritten materials specifically directed at the Borrower or any Subsidiary which have a materialimpact on the Borrower's ability to carry out its businesses as presently conducted and whichinclude, but shall not be limited to, any directives, compliance requirements or enforcementrequirements received from any governmental authority in connection with the property owned orleased by the Borrower or any Subsidiary, the substances contained therein, or the equipment oroperations of the Borrower or any Subsidiary in connection therewith;

(J) promptly and in any event within five days thereafter, written notice of any change in thename of the Borrower;

(K) promptly, written notice of any filing with the IURC to seek authority to issue any preferredstock;

(L) promptly upon receipt of the same, a copy of any extension, renewal or replacement of theFERC Order, certified by an officer of the Borrower; and

(M) as soon as possible and in any event within 10 days after the Borrower knows that anyReportable Event has occurred, a statement, signed by the Vice President and chief financial officerof the Borrower, describing said Reportable Event and the action which the Borrower proposes to takewith respect thereto.

ARTICLE VII

EVENTS OF DEFAULT

Section 7.1. Events of Default. The Borrower shall be in default under each of the FinancingDocuments, upon the occurrence of any one or more of the following events ("Events ofDefault"):

(A) the Borrower shall fail to make due and punctual payment of any fees, interest and/or otheramounts payable as provided in the Notes and/or in this Agreement within ten days of the date whendue and payable; or if the Borrower shall fail to make due and punctual payment of any principal orReimbursement Obligation as provided in this Agreement or any other Financing Document when due andpayable; or if the Borrower shall fail to make any such payment of fees, interest, principal,Reimbursement Obligations and/or any other amount under this Agreement and/or the Notes on the datewhen such payment becomes due and payable by acceleration; or

(B) the Borrower or any Subsidiary shall make an assignment for the benefit of creditors, orshall fail generally to pay its debts as they become due, or shall admit in writing its inability topay its debts as they become due, or shall file a voluntary petition in bankruptcy, or shall fileany petition or answer seeking any reorganization, arrangement, composition, adjustment,liquidation, dissolution or similar relief under the present or any future federal bankruptcy lawsor other applicable federal, state or other statute, law or regulation, or shall seek or consent toor acquiesce in the appointment of any trustee, receiver or liquidator of it or of all or anysubstantial part of its properties, or if corporate action shall be taken for the purpose ofeffecting any of the foregoing; or 

(C) without the application, approval or consent of the Borrower or any Subsidiary, (i) theBorrower or any Subsidiary shall be the subject of a bankruptcy proceeding, or (ii) any proceedingagainst the Borrower or any Subsidiary seeking any reorganization, arrangement, composition,adjustment, liquidation, dissolution or similar relief under any present or any future federalbankruptcy law or other applicable federal, foreign, state or other statute, law or regulation shallbe commenced or (iii) any trustee, receiver, custodian or liquidator of the Borrower or anySubsidiary or of all or any substantial part of any or all of its properties shall be appointedwithout its consent or acquiescence; provided that in any of the cases described above in thisSection 7.1(C), such proceeding or appointment shall not be an Event of Default if the Borrower orthe applicable Subsidiary shall cause such proceeding or appointment to be discharged, vacated,dismissed or stayed within forty-five days after commencement thereof; or 

(D) final judgment or judgments in the aggregate amount of $5,000,000 or more shall be renderedagainst the Borrower or any Subsidiary and shall remain undischarged, unstayed or unpaid for anaggregate of forty-five days (whether or not consecutive) after entry thereof; or

(E) any default shall occur under the terms applicable to any Indebtedness of the Borrower or anySubsidiary in an aggregate amount (for all such Indebtedness so affected) exceeding $5,000,000 andsuch default shall (i) consist of the failure to pay such Indebtedness when due, whether byacceleration or otherwise, or (ii) accelerate the maturity of such Indebtedness or permit the holderor holders thereof, or any trustee or agent for such holder or holders, to cause such Indebtednessto become due and payable (or require the Borrower or any Subsidiary to purchase or redeem suchIndebtedness) prior to its expressed maturity; or

(F) any representation or warranty made or deemed made by or on behalf of the Borrower or any ofits Subsidiaries to the Banks or the Administrative Agent under or in connection with thisAgreement, any Credit Extension, or any certificate or information delivered in connection with thisAgreement or any other Financing Document shall be materially false on the date as of which made;or

(G) the breach by the Borrower of any of the terms or provisions of Section 6.1(B) 6.1(J),6.1(L), 6.2 or 6.3(A); or

(H) the breach by the Borrower (other than a breach which constitutes an Event of Default underanother Section of this Article VII) of any of the terms or provisions of this Agreement which isnot remedied within 30 days; or

(I) there shall be any attachment of any deposit or other property of the Borrower in thepossession of the Banks or any attachment of any other property of the Borrower, which shall not bedischarged within thirty days of the date of such attachment; or

(J) (i) any Person institutes steps to terminate a Pension Plan if as a result of suchtermination the Borrower or any member of the Controlled Group could be required to make acontribution to such Pension Plan, or could incur a liability or obligation to such Pension Plan, inan amount that would reasonably be expected to have a Material Adverse Effect, (ii) a contributionfailure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section302(f) of ERISA or (iii) there shall occur any withdrawal or partial withdrawal from a MultiemployerPension Plan and the withdrawal liability (without unaccrued interest) to Multiemployer PensionPlans as a result of such withdrawal (including any outstanding withdrawal liability that theBorrower or any member of the Controlled Group have incurred on the date of such withdrawal) is inan amount that would reasonably be expected to have a Material Adverse Effect; or

(K) (i) IPALCO shall at any time fail to own, directly or indirectly, all of the issued andoutstanding common stock of the Borrower or (ii) IPALCO shall at any time not be entitled to elect amajority of the members of the Board of Directors of the

Borrower; or

(L) this Agreement or any other Financing Document shall be nullified or shall cease to be infull force and effect; or

(M) the Borrower shall suffer to exist beyond any applicable grace period any event of defaultunder the Mortgage and Deed of Trust from the Borrower to American National Bank and Trust Companyof Chicago (or any successor trustee), dated May 1, 1940, and any and all supplements thereto,unless such event of default has been waived in writing by the appropriate party or parties to suchagreement.

ARTICLE VIII

REMEDIES OF BANKS

Upon the occurrence and during the continuance of one or more Events of Default, the RequiredBanks (or the Administrative Agent with the consent of the Required Banks) may, by notice to theBorrower, declare the obligation of the Banks to make Loans and the obligation of the LC Issuer toissue Letters of Credit to be terminated, whereupon the same shall forthwith terminate and theRequired Banks (or the Administrative Agent with the consent of the Required Banks) may, by noticeto the Borrower, declare the entire unpaid principal amount of the Loans and any and all otherObligations under the Financing Documents to be forthwith due and payable, whereupon the Obligationsshall become and be forthwith due and payable and the Borrower shall become immediately obligated toCash Collateralize all Letters of Credit, all without presentment, demand, protest or further noticeof any kind, all of which are hereby expressly waived by the Borrower; provided, however, that uponthe occurrence of an Event of Default under Section 7.1(B) or (C) of this Agreement, all of theObligations shall be immediately due and payable and the Borrower shall become immediately obligatedto Cash Collateralize all Letters of Credit, without any need for the Required Banks or theAdministrative Agent to make any such declaration or take any action, and the Commitments and theobligation of the LC Issuer to issue Letters of Credit shall simultaneously terminate. Any cashcollateral delivered hereunder shall be held by the Administrative Agent (without liability forinterest thereon) and applied to obligations arising in connection with any drawing under a Letterof Credit. After the expiration or termination of all Letters of Credit, such cash collateral shallbe applied by the Administrative Agent to any remaining obligations hereunder and any excess shallbe delivered to the Borrower or as a court of competent jurisdiction may direct.

ARTICLE IX

THE AGENTS

Section 9.1. Appointment and Authorization. Each Bank hereby irrevocably (subject to Section9.10) appoints, designates and authorizes the Administrative Agent to take such action on its behalfunder the provisions of this Agreement and each other Financing Document and to exercise such powersand perform such duties as are expressly delegated to it by the terms of this Agreement or any otherFinancing Document, together with such powers as are reasonably 1334249 0299483151 incidental thereto. Notwithstanding any provision to the contrary contained elsewhere inthis Agreement or in any other Financing Document, the Administrative Agent shall not have any dutyor responsibility except those expressly set forth herein, nor shall the Administrative Agent haveor be deemed to have any fiduciary relationship with any Bank or participant, and no impliedcovenants, functions, responsibilities, duties, obligations or liabilities shall be read into thisAgreement or any other Financing Document or otherwise exist against the Administrative Agent.Without limiting the generality of the foregoing sentence, the use of the term "agent"herein and in other Financing Documents with reference to the Agent is not intended to connote anyfiduciary or other implied (or express) obligations arising under agency doctrine of any applicablelaw. Instead, such term is used merely as a matter of market custom, and is intended to create orreflect only an administrative relationship between independent contracting parties. Section 9.2. LCIssuer. The LC Issuer shall act on behalf of the Facility A Banks (according to their Facility APercentages) with respect to any Letters of Credit issued by it and the documents associatedtherewith. The LC Issuer shall have all of the benefits and immunities (a) provided to theAdministrative Agent in this Article IX with respect to any acts taken or omissions suffered by theLC Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and theapplications and agreements for letters of credit pertaining to such Letters of Credit as fully asif the term "Administrative Agent", as used in this Article IX, included the LC Issuerwith respect to such acts or omissions and (b) as additionally provided in this Agreement withrespect to the LC Issuer.

Section 9.3. Delegation of Duties. The Administrative Agent may execute any of its duties underthis Agreement or any other Financing Document by or through agents, employees or attorneys in factand shall be entitled to advice of counsel and other consultants or experts concerning all matterspertaining to such duties. The Administrative Agent shall not be responsible for the negligence ormisconduct of any agent or attorney in fact that it selects in the absence of gross negligence orwillful misconduct.

Section 9.4. Exculpation of Administrative Agent. None of the Administrative Agent nor any of itsdirectors, officers, employees or agents shall (a) be liable for any action taken or omitted to betaken by any of them under or in connection with this Agreement or any other Financing Document orthe transactions contemplated hereby (except to the extent resulting from its own gross negligenceor willful misconduct in connection with its duties expressly set forth herein as determined by afinal, nonappealable judgment by a court of competent jurisdiction), or (b) be responsible in anymanner to any Bank or participant for any recital, statement, representation or warranty made by theBorrower or any Affiliate, or any officer thereof, contained in this Agreement or in any otherFinancing Document, or in any certificate, report, statement or other document referred to orprovided for in, or received by the Administrative Agent under or in connection with, this Agreementor any other Financing Document, or the validity, effectiveness, genuineness, enforceability orsufficiency of this Agreement or any other Financing Document (or the creation, perfection orpriority of any Lien or security interest therein), or for any failure of the Borrower or any otherparty to any Financing Document to perform its Obligations hereunder or thereunder. TheAdministrative Agent shall not be under any obligation to any Bank to ascertain or to inquire as tothe observance or performance of any of the agreements contained in, or conditions of, thisAgreement or any other Financing Document, or to inspect the properties, books or records of theBorrower or any of the Borrower's Subsidiaries or Affiliates.

Section 9.5. Reliance by Administrative Agent. The Administrative Agent shall be entitled torely, and shall be fully protected in relying, upon any writing, communication, signature,resolution, representation, notice, consent, certificate, electronic mail message, affidavit,letter, telegram, facsimile, telex or telephone message, statement or other document or conversationbelieved by it to be genuine and correct and to have been signed, sent or made by the proper Personor Persons, and upon advice and statements of legal counsel (including counsel to the Borrower),independent accountants and other experts selected by the Administrative Agent. The AdministrativeAgent shall be fully justified in failing or refusing to take any action under this Agreement or anyother Financing Document unless it shall first receive such advice or concurrence of the RequiredBanks as it deems appropriate and, if it so requests, confirmation from the Banks of theirobligation to indemnify the Administrative Agent against any and all liability and expense which maybe incurred by it by reason of taking or continuing to take any such action. The AdministrativeAgent shall in all cases be fully protected in acting, or in refraining from acting, under thisAgreement or any other Financing Document in accordance with a request or consent of the RequiredBanks and such request and any action taken or failure to act pursuant thereto shall be binding uponeach Bank. For purposes of determining compliance with the conditions specified in Article IV, eachBank that has signed this Agreement shall be deemed to have consented to, approved or accepted or tobe satisfied with, each document or other matter required thereunder to be consented to or approvedby or acceptable or satisfactory to a Bank unless the Administrative Agent shall have receivedwritten notice from such Bank prior to the proposed Closing Date specifying its objectionthereto.

Section 9.6. Notice of Default. The Administrative Agent shall not be deemed to have knowledge ornotice of the occurrence of any Event of Default or Default except with respect to defaults in thepayment of principal, interest and fees required to be paid to the Administrative Agent for theaccount of the Banks, unless the Administrative Agent shall have received written notice from a Bankor the Borrower referring to this Agreement, describing such Event of Default or Default and statingthat such notice is a "notice of default". The Administrative Agent will notify the Banksof its receipt of any such notice. The Administrative Agent shall take such action with respect tosuch Event of Default or Default as may be requested by the Required Banks in accordance withArticle VIII; provided that unless and until the Administrative Agent has received any such request,the Administrative Agent may (but shall not be obligated to) take such action, or refrain fromtaking such action, with respect to such Event of Default or Default as it shall deem advisable orin the best interest of the Banks.

Section 9.7. Credit Decision. Each Bank acknowledges that the Administrative Agent has not madeany representation or warranty to it, and that no act by the Administrative Agent hereafter taken,including any consent and acceptance of any assignment or review of the affairs of the Loan Parties,shall be deemed to constitute any representation or warranty by the Administrative Agent to any Bankas to any matter, including whether the Administrative Agent has disclosed material information inits possession. Each Bank represents to the Administrative Agent that it has, independently andwithout reliance upon the Administrative Agent and based on such documents and information as it hasdeemed appropriate, made its own appraisal of and investigation into the business, prospects,operations, property, financial and other condition and 1334249 02994831 53creditworthiness of the Borrower, and made its own decision to enter into this Agreement and toextend credit to the Borrower hereunder. Each Bank also represents that it will, independently andwithout reliance upon the Administrative Agent and based on such documents and information as itshall deem appropriate at the time, continue to make its own credit analysis, appraisals anddecisions in taking or not taking action under this Agreement and the other Financing Documents, andto make such investigations as it deems necessary to inform itself as to the business, prospects,operations, property, financial and other condition and creditworthiness of the Borrower. Except fornotices, reports and other documents expressly herein required to be furnished to the Banks by theAdministrative Agent, the Administrative Agent shall not have any duty or responsibility to provideany Bank with any credit or other information concerning the business, prospects, operations,property, financial or other condition or creditworthiness of the Borrower which may come into thepossession of the Administrative Agent.

Section 9.8. Indemnification. Whether or not the transactions contemplated hereby areconsummated, each Bank shall indemnify upon demand the Administrative Agent and its directors,officers, employees and agents (to the extent not reimbursed by or on behalf of the Borrower andwithout limiting the obligation of the Borrower to do so), according to its applicable Pro RataShare, from and against any and all Indemnified Amounts; provided that no Bank shall be liable forany payment to any such Person of any portion of the Indemnified Liabilities to the extentdetermined by a final, nonappealable judgment by a court of competent jurisdiction to have resultedfrom the applicable Person's own gross negligence or willful misconduct. No action taken inaccordance with the directions of the Required Banks shall be deemed to constitute gross negligenceor willful misconduct for purposes of this Section. Without limitation of the foregoing, each Bankshall reimburse the Administrative Agent upon demand for its ratable share of any costs or out ofpocket expenses (including attorney's fees and disbursements and taxes) incurred by theAdministrative Agent in connection with the preparation, execution, delivery, administration,modification, amendment or enforcement (whether through negotiations, legal proceedings orotherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, anyother Financing Document, or any document contemplated by or referred to herein, to the extent thatthe Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrower. Theundertaking in this Section shall survive repayment of the Loans, cancellation of the Notes,expiration or termination of the Letters of Credit, termination of this Agreement and theresignation or replacement of the Administrative Agent.

Section 9.9. Administrative Agent in Individual Capacity. LaSalle and its Affiliates may makeloans to, issue letters of credit for the account of, accept deposits from, acquire equity interestsin and generally engage in any kind of banking, trust, financial advisory, underwriting or otherbusiness with the Borrower and its Affiliates as though LaSalle were not the Administrative Agenthereunder and without notice to or consent of any Bank. Each Bank acknowledges that, pursuant tosuch activities, LaSalle or its Affiliates may receive information regarding the Borrower or itsAffiliates (including information that may be subject to confidentiality obligations in favor of theBorrower or such Affiliate) and acknowledge that the Administrative Agent shall be under noobligation to provide such information to them. With respect to their Loans (if any), LaSalle andits Affiliates shall have the same rights and powers under this Agreement as any other Bank and mayexercise the same as though LaSalle were not the Administrative Agent, and the terms"Bank" and "Banks" include LaSalle and its Affiliates, to the extent applicable,in their individual capacities.

Section 9.10. Successor Administrative Agent. The Administrative Agent may resign asAdministrative Agent upon 30 days' notice to the Banks. If the Administrative Agent resigns underthis Agreement, the Required Banks shall appoint from among the Banks a successor agent for theBanks. If no successor agent is appointed prior to the effective date of the resignation of theAdministrative Agent, the Administrative Agent may appoint, after consulting with the Banks, asuccessor agent from among the Banks. Upon the acceptance of its appointment as successor agenthereunder, such successor agent shall succeed to all the rights, powers and duties of the retiringAdministrative Agent and the term "Administrative Agent" shall mean such successor agent,and the retiring Administrative Agent's appointment, powers and duties as Administrative Agent shallbe terminated. After any retiring Administrative Agent's resignation hereunder as AdministrativeAgent, the provisions of this Article IX and Section 10.6 shall inure to its benefit as to anyactions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.If no successor agent has accepted appointment as Administrative Agent by the date which is 30 daysfollowing a retiring Administrative Agent's notice of resignation, the retiring AdministrativeAgent's resignation shall nevertheless thereupon become effective and the Banks shall perform all ofthe duties of the Administrative Agent hereunder until such time, if any, as the Required Banksappoint a successor agent as provided for above.

Section 9.11. Administrative Agent May File Proofs of Claim. In case of the pendency of anyreceivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,composition or other judicial proceeding relative to the Borrower, the Administrative Agent(irrespective of whether the principal of any Loan shall then be due and payable as herein expressedor by declaration or otherwise and irrespective of whether the Administrative Agent shall have madeany demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding orotherwise: (A) to file and prove a claim for the whole amount of the principal and interest owingand unpaid in respect of the Loans, and all other Obligations that are owing and unpaid and to filesuch other documents as may be necessary or advisable in order to have the claims of the Banks andthe Administrative Agent (including any claim for the reasonable compensation, expenses,disbursements and advances of the Banks and the Administrative Agent and their respective agents andcounsel and all other amounts due the Banks and the Administrative Agent under Section 10.6) allowedin such judicial proceedings; and (B) to collect and receive any monies or other property payable ordeliverable on any such claims and to distribute the same; and any custodian, receiver, assignee,trustee, liquidator, sequestrator or other similar official in any such judicial proceeding ishereby authorized by each Bank to make such payments to the Administrative Agent and, in the eventthat the Administrative Agent shall consent to the making of such payments directly to the Banks, topay to the Administrative Agent any amount due for the reasonable compensation, expenses,disbursements and advances of the Administrative Agent 1334249 02994831 55 andits agents and counsel, and any other amounts due the Administrative Agent under Section 10.6.Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize orconsent to or accept or adopt on behalf of any Bank any plan of reorganization, arrangement,adjustment or composition affecting the Obligations or the rights of any Bank or to authorize theAdministrative Agent to vote in respect of the claim of any Bank in any such proceeding.

Section 9.12. Other Agents; Arrangers and Managers. None of the Banks or other Persons identifiedon the facing page or signature pages of this Agreement as a "syndication agent,""documentation agent," "co-agent," "book manager," "leadmanager," "arranger," "lead arranger" or "co-arranger", if any,shall have any right, power, obligation, liability, responsibility or duty under this Agreementother than, in the case of such Banks, those applicable to all Banks as such. Without limiting theforegoing, none of the Banks or other Persons so identified shall have or be deemed to have anyfiduciary relationship with any Bank. Each Bank acknowledges that it has not relied, and will notrely, on any of the Banks or other Persons so identified in deciding to enter into this Agreement orin taking or not taking action hereunder.

ARTICLE X

MISCELLANEOUS

Section 10.1. Consent to Jurisdiction and Service of Process. **EXCEPT TO THE EXTENT PROHIBITEDBY APPLICABLE LAW, THE BORROWER IRREVOCABLY:**
(A) **AGREES THAT ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF THIS AGREEMENT,THE OTHER FINANCING DOCUMENTS OR THE CREDIT EXTENSIONS MAY BE BROUGHT IN THE COURTS OF RECORD OF THESTATE OF ILLINOIS SITTING IN CHICAGO OR THE COURTS OF THE UNITED STATES
LOCATED IN THE STATE OF ILLINOIS SITTING IN CHICAGO; (B) **CONSENTS TO THE NON-EXCLUSIVEJURISDICTION OF EACH SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING;**
(C) **WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTIONOR PROCEEDING IN ANY OF SUCH COURTS OR THAT ANY OF SUCH COURTS IS AN INCONVENIENT FORUM; AND**
(D) **CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONALSERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS.**
Section 10.2. Rights and Remedies Cumulative. No right or remedy conferred upon or reservedto the Administrative Agent or the Banks in the Financing Documents is intended to be exclusive ofany other right or remedy and every such right and remedy shall, to the extent permitted by law, becumulative and in addition to every other right and remedy given under the Financing Documents ornow or hereafter existing at law or in equity or otherwise. The assertion or employment of any rightor remedy under this Agreement, or otherwise, shall not prevent the concurrent assertion oremployment of any other appropriate right or remedy.

Section 10.3. Delay or Omission Not Waiver. No delay in exercising or failure to exercise by theAdministrative Agent or any Bank of any right or remedy under the Financing Documents shall impairany such right or remedy or constitute a waiver of any Event of Default or an acquiescence therein.Every right and remedy given under the Financing Documents or by law to the Administrative Agent andthe Banks may be exercised from time to time and as often as may be deemed expedient by theAdministrative Agent or the Banks.

Section 10.4. Amendments. Subject to the provisions of this Section 10.4, the Required Banks (orthe Administrative Agent with the consent in writing of the Required Banks) and the Borrower mayenter into agreements supplemental hereto for the purpose of adding or modifying any provisions tothe Financing Documents or changing in any manner the rights of the Banks or the Borrower hereunderor waiving any Event of Default or Default hereunder; provided, however, that (i) no suchsupplemental agreement shall, without the consent of each Facility A Bank: (A) Extend the maturityof any Loan under Facility A, or extend the expiry date of any Letter of Credit to a date after thedate which is five Business Days prior to the Commitment Termination Date or reduce the principalamount of any Loan under Facility A or any Reimbursement Obligation, or reduce the rate or extendthe time of payment of interest or fees thereon or Reimbursement Obligations related thereto; or (B)Reduce the percentages specified in the definition of "Required Facility A Banks"; (ii) nosuch supplemental agreement shall, without the consent of the Required Facility A Banks, amend,modify or waive any provision of this Agreement that provides for the approval or concurrence of theRequired Facility A Banks, or amend, modify or waive Section 2.1, 2.4 (as it relates to mandatoryprepayments under Facility A), 2.11(i), 2.14 (as it relates to conversions and continuations ofAdvances under Facility A), 2.20, 2.21 or 4.1 (as it relates to Credit Extensions under Facility A);(iii) no such supplemental agreement shall, without the consent of each Facility B Bank: (A) Extendthe maturity of any Loan under Facility B or reduce the principal amount of any Loan under FacilityB, or reduce the rate or extend the time of payment of interest or fees thereon; or (B) Reduce thepercentages specified in the definition of "Required Facility B Banks"; (iv) no suchsupplemental agreement shall, without the consent of the Required Facility B Banks, amend, modify orwaive any provision of this Agreement that provides for the approval or concurrence of the RequiredFacility B Banks, or amend, modify or waive Section 2.2, 2.4 (as it relates to mandatory prepaymentsunder Facility B), 2.11(ii), 2.14 (as it relates to conversions and continuations of Advances underFacility B) or 4.1 (as it relates to Credit Extensions under Facility B); (v) no such supplementalagreement shall, without the consent of each Bank directly affected thereby, increase any Commitmentof such Bank; and (vi) no such supplemental agreement shall, without the consent of each Bank: (A)Extend the Commitment Termination Date; (B) Permit the Borrower to assign its rights under thisAgreement; (C) Reduce the percentages specified in the definition of "Required Banks"; or(D) Amend this Section 10.4. No amendment of any provision of this Agreement relating to theAdministrative Agent shall be effective without the written consent of the Administrative Agent, noamendment of any provision relating to the LC Issuer shall be effective without the written consentof the LC Issuer and no amendment of any provision of this Agreement relating to the Swing Line Bankor any Swing Line Loans shall be effective without the written consent of the Swing Line Bank.

Section 10.5. Notices. All notices, requests, demands and other communications provided forhereunder shall be in writing (including telecopied communication) and mailed, telecopied ordelivered to the applicable party at its address shown beneath its signature hereto or, as to anyparty, at such other address as shall be designated by such party in a written notice to each otherparty complying as to the delivery with the terms of this section. Notices sent by facsimiletransmission shall be deemed to have been given when sent; notices sent by mail shall be deemed tohave been given three Business Days after the date when sent by registered or certified mail,postage prepaid; and notices sent by hand delivery or overnight courier service shall be deemed tohave been given when received. As specified in Section 2.16, for purposes of Sections 2.1(B) and2.14, the Administrative Agent shall be entitled to rely on telephonic instructions from any personthat the Administrative Agent in good faith believes is an authorized officer or employee of theBorrower, and the Borrower shall hold the Administrative Agent and each other Bank harmless from anyloss, cost or expense resulting from any such reliance.

Section 10.6. Costs, Expenses and Taxes; Indemnification.

(A) The Borrower agrees to pay on demand the reasonable fees and out-of pocket expenses of theAdministrative Agent (including fees and charges of counsel to the Administrative Agent) inconnection with the preparation, execution, delivery, amendment and administration of the FinancingDocuments and the Credit Extensions. The Borrower agrees to pay on demand all reasonable costs andexpenses (including, without limitation, reasonable attorneys' fees) incurred by the AdministrativeAgent and the Banks, upon or after an Event of Default, if any, in connection with the enforcementof any of the Financing Documents, any refinancing or restructuring of the credit arrangementsprovided hereunder in the nature of a "work-out" or any insolvency or bankruptcyproceeding involving the Borrower and any amendments, waivers or consents with respect to any of theforegoing. In addition, the Borrower shall pay on demand any and all stamp and other taxes and feespayable or determined to be payable in connection with the execution and delivery of the FinancingDocuments, and agrees to save each of the Banks harmless from and against any and all liabilitieswith respect to or resulting from any delay in paying or omission to pay such taxes or fees, exceptthose resulting from such Bank's gross negligence or willful misconduct. (B) The Borrower agrees toindemnify the Administrative Agent and each Bank, and each of their respective directors, officersand employees (the "Indemnitees") against all losses, claims, damages, penalties,judgments, liabilities and expenses (including, without limitation, all expenses of litigation orpreparation therefor whether or not the Administrative Agent or any Bank is a party thereto)(collectively, the "Indemnified Amounts") which any of them may pay or incur arising outof or relating to this Agreement, the other Financing Documents, the transactions contemplatedhereby or the direct or indirect application or proposed application of the proceeds of any CreditExtension hereunder; provided that the Borrower shall not be liable to any Indemnitee for anyIndemnified Amount to the extent a court of competent jurisdiction has determined in a final non-appealable judgment that the foregoing resulted solely from such Indemnitee's gross negligence orwillful misconduct. If and to the extent that the foregoing undertaking may be unenforceable for anyreason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfactionof each of the Indemnified Amounts which is permissible under applicable law. The Borrower furtheragrees (y) to assert no claims for consequential damages on any theory of liability in connection inany way with the Financing Documents or the transactions evidenced thereby and (z) not to settle anyclaim, litigation or proceeding relating to the Financing Documents or the transactions evidencedthereby unless such settlement released all Indemnitees from any and all liability in respect ofsuch transaction or unless each Indemnitee approves such settlement. (C) The obligations of theBorrower under this Section 10.6 shall survive the termination of this Agreement.

Section 10.7. Participations.

(A) Permitted Participants; Effect. Any Bank may at any time sell to one or more banks or otherentities ("Participants") participating interests in any Outstanding Credit Exposure ofsuch Bank, any Note held by such Bank, any Commitment of such Bank or any other interest of suchBank under the Financing Documents. In the event of any such sale by a Bank of participatinginterests to a Participant, such Bank's obligations under the Financing Documents shall remainunchanged, such Bank shall remain solely responsible to the other parties hereto for the performanceof such obligations, such Bank shall remain the owner of its Outstanding Credit Exposure and theholder of any Note issued to it in evidence thereof for all purposes under the Financing Documents,all amounts payable by the Borrower under this Agreement shall be determined as if such Bank had notsold such participating interests, and the Borrower and the Administrative Agent shall continue todeal solely and directly with such Bank in connection with such Bank's rights and obligations underthe Financing Documents. (B) Voting Rights. Each Bank shall retain the sole right to approve,without the consent of any Participant, any amendment, modification or waiver of any provision ofthe Financing Documents other than any amendment, modification or waiver with respect to any CreditExtension or Commitment in which such Participant has an interest which would require consent of allof the Banks (and all the Banks in a particular Facility to the extent the participation relates tothat Facility) pursuant to the terms of Section 10.4 or of any other Financing Document. (C) Benefitof Certain Provisions. The Borrower agrees that each Participant shall be deemedto have the right of setoff provided in Section 2.09(B) in respect of its participating interest inamounts owing under the Financing Documents to the same extent as if the amount of its participatinginterest were owing directly to it as a Bank under the Financing Documents, provided that each Bankshall retain the right of setoff provided in Section 2.09(B) with respect to the amount ofparticipating interests sold to each Participant. The Banks agree to share with each Participant,and each Participant, by exercising the right of setoff provided in Section 2.09(B), agrees to sharewith each Bank, any amount received pursuant to the exercise of its right of setoff, such amounts tobe shared in accordance with Section 2.09(C) as if such Participant were a Bank. The Borrowerfurther agrees that each Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4 and3.5 to the same extent as if it were a Bank and had acquired its interest by assignment pursuant toSection 10.8, provided that (i) a Participant shall not be entitled to receive any greater paymentunder Section 3.1, 3.2 or 3.5 than the Bank who sold the participating interest to such Participantwould have received had it retained such interest for its own account, unless the sale of suchinterest to such Participant is made with the prior written consent of the Borrower and (ii) anyParticipant not incorporated under the laws of the United States of America or any State thereofagrees to comply with the provisions of Section 3.5 to the same extent as if it were a Bank. Section10.8. Binding Effect; Assignment. (A) This Agreement shall be binding upon and inure to the benefitof the Borrower, the Administrative Agent and the Banks and their respective successors and assigns,except that the Borrower shall not have the right to assign its rights hereunder or any interestherein without the prior written consent of all Banks. (B) Any Bank may at any time assign to one ormore banks or other entities ("Purchasers") all or any part of its Loans, Commitments andits rights and obligations under its Note and under this Agreement. Such assignment shall be insubstantially the form of Exhibit D (an "Assignment Agreement"). Each such assignmentshall either be in an amount equal to the entire applicable Commitment and Loans of the assigningBank or (unless each of the Borrower and the Administrative Agent otherwise consents) be in anaggregate amount not less than $5,000,000. Unless an Event of Default has occurred and iscontinuing, the consent of the Borrower shall be required prior to an assignment becoming effectivewith respect to a Purchaser which is not a Bank or an Affiliate thereof. Such consent shall not beunreasonably withheld. The consent of the Administrative Agent, the LC Issuer and the Swing LineBank shall be required prior to an assignment becoming effective. Notwithstanding the foregoingprovisions of this Section 10.8(B), any Bank may at any time assign all or any portions of itsOutstanding Credit Exposure and Note to a Federal Reserve Bank (but no such assignment shall releaseany Bank from any of its obligations hereunder). (C) Upon delivery to the Administrative Agent andthe Borrower of (i) an assignment, together with any consent required by this Section 10.8, and (ii)payment of a $3,500 fee to the Administrative Agent for processing such assignment, such assignmentshall become effective on the effective date specified in such assignment. On and after theeffective date of such assignment, such Purchaser shall for all purposes be a Bank party to thisAgreement and shall have all the rights and obligations of a Bank under this Agreement, to the sameextent as if it were an original party hereto, and no further consent or action by the Borrower, theAdministrative Agent or any other Bank shall be required to release the transferor Bank with respectto the percentage of the Outstanding Credit Exposure and Commitments assigned to such Purchaser.Upon the consummation of any assignment to a Purchaser pursuant to this Section 10.8, the transferorBank and the Borrower shall make appropriate arrangements so that a replacement Note is issued tosuch transferor Bank and a new Note or, as appropriate, a replacement Note is issued to suchPurchaser, in each case in principal amounts reflecting its Pro Rata Share of the AggregateCommitment. (D) The Borrower authorizes each Bank to disclose to any Participant or Purchaser or anyother entity acquiring an interest in this Agreement or its Note by operation of law (each a"Transferee") and any prospective Transferee any and all information in such Bank'spossession concerning the creditworthiness of the Borrower and its Subsidiaries. (E) This Agreementand all covenants, representations and warranties made herein and/or in any of the other FinancingDocuments shall survive the making of the Credit Extensions, the execution and delivery of theFinancing Documents and shall continue in effect so long as any amounts payable under or inconnection with any of the Financing Documents or any other Indebtedness of the Borrower to theBanks remains unpaid or any Commitment remains outstanding; provided, however, that Section 10.6shall survive and remain in full force and effect after expiration of the Commitments and repaymentin full of all amounts payable under or in connection with all of the Financing Documents and anyother such Indebtedness. (F) The Administrative Agent shall maintain a copy of each AssignmentAgreement delivered and accepted by it and register (the "Register") for the recordationof names and addresses of the Banks and the Commitments of each Bank from time to time and whethersuch Bank is the original Bank or an assignee. No assignment shall be 1334249 0299483161 effective unless and until the Assignment Agreement is accepted and registered in theRegister. All records of transfer of a Bank's interest in the Register shall be conclusive, absentmanifest error, as to the ownership of the interests in the Loans. The Administrative Agent shallnot incur any liability of any kind with respect to any Bank with respect to the maintenance of theRegister.

Section 10.9. Actual Knowledge. For purposes of this Agreement, none of the Administrative Agentand Banks shall be deemed to have actual knowledge of any fact or state of facts unless the seniorloan officer or any other officer responsible for the Borrower's account established pursuant tothis Agreement at the Administrative Agent or such Bank shall, in fact, have actual knowledge ofsuch fact or state of facts or unless written notice of such fact shall have been received by theAdministrative Agent or such Bank in accordance with Section 10.5.

Section 10.10. Governing Law. This Agreement and the other Financing Documents shall be governedby and construed in accordance with the laws of the State of Illinois applicable to contracts madeand to be wholly performed in said State.

Section 10.11. Severability of Provisions. Any provision of any Financing Document which isprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective tothe extent of such prohibition or unenforceability without invalidating the remaining provisions oraffecting the validity or enforceability of such provision in any other jurisdiction.

Section 10.12. Headings. Article and Section headings in this Agreement are included herein forconvenience of reference only and shall not constitute a part of this Agreement for any otherpurpose.

Section 10.13. Counterparts. This Agreement may be executed in any number of counterparts, all ofwhich together shall constitute one instrument, and any of the parties hereto may execute thisAgreement by signing any such counterpart.

Section 10.14. Nonliability of Banks. The relationship between the Borrower on the one hand andthe Banks and the Administrative Agent on the other hand shall be solely that of borrower andlender. Neither the Administrative Agent nor any Bank shall have any fiduciary responsibilities tothe Borrower. Neither the Administrative Agent nor any Bank undertakes any responsibility to theBorrower to review or inform the Borrower of any matter in connection with any phase of theBorrower's business or operations. The Borrower agrees that neither the Administrative Agent nor anyBank shall have liability to the Borrower (whether sounding in tort, contract or otherwise) forlosses suffered by the Borrower in connection with, arising out of, or in any way related to, thetransactions contemplated and the relationship established by the Financing Documents, or any act,omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the grossnegligence or willful misconduct of the party from which recovery is sought. Neither theAdministrative Agent nor any Bank shall have any liability with respect to, and the Borrower herebywaives, releases and agrees not to sue for, any special, indirect, consequential or punitive damagessuffered by the Borrower in connection with, arising out of, or in any way related to the FinancingDocuments or the transactions contemplated thereby. 

Section 10.15. Nonreliance. Each Bank hereby represents that it is not relying on or looking toany margin stock (as defined in Regulation U of the Board of Governors of the Federal ReserveSystem) for the repayment of the Credit Extensions provided for herein.

Section 10.16. Waiver of Jury Trial**. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH BANKHEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, ORCONNECTED WITH ANY FINANCING DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.**
Section 10.17. Termination of Existing Facilities. The Borrower and the Banks that are partyto the Existing Facility (defined below) agree that: (i) on the Closing Date, the Borrower shall payin full all Indebtedness under (x) the Credit Agreement, dated as of June 4, 2003, among theBorrower, the banks party thereto and LaSalle as agent, as amended, and (y) the Credit Agreement,dated as of May 20, 2004, among the Borrower, the banks party thereto and The Huntington NationalBank, as agent, as amended (the "Existing Facilities"), and (ii) the Existing Facilitiesshall be terminated on the Closing Date.

 [SIGNATURES TO FOLLOW]

 

 

 

 

 

 

 

SCHEDULE I

BANKS AND COMMITMENTS

Bank
Facility A   Commitment
Facility B Commitment
Total Commitment
LaSalle Bank National Association
$16,782,752.91
$8,517,247.09
$25,300,000.00
National City Bank of Indiana
$16,782,752.91
$8,517,247.09
$25,300,000.00
The Huntington National Bank
$13,266,998.32
$6,733,001.68
$20,000,000.00
Fifth Third Bank
$9,950,248.76
$5,049,751.24
$15,000,000.00
Union Bank of California, N.A
$9,950,248.76
$5,049,751.24
$15,000,000.00
U.S. Bank National Association
$6,633,499.17
$3,366,500.83
$10,000,000.00
JPMorgan Chase Bank, N.A
. $6,633,499.17
$3,366,500.83
$10,000,000.00
TOTAL
$80,000,000.00
$40,600,000.00
$120,600,000.00
 

SCHEDULE II

PRICING SCHEDULE

The "Applicable Margin" and "Applicable Facility Fee Rate" for any day arethe

respective rates per annum set forth below corresponding to the Status that exists on suchday:

**Borrower's Ratings (Fitch/Moody's/S&P)**Applicable Margin Base Rate Advances**Applicable Margin LIBOR Advances**Applicable Facility Fee Rate**Level 1

> A-/A3/A- 
0%
0.25%
0.05%**Level 2

> BBB+/Baa1/BBB+
0%
0.30%
0.10%**Level 3

> BBB/Baa2/BBB
0%
0.45%
0.125%**Level 4

> BBB-/Baa3/BBB-
0%
0.60%
0.15%**Level 5

> BB+/Ba1/BB+
0%
0.80%
0.20%**Level 6

< BB+/Ba1/BB+
0%
1.00%
0.25%

For purposes of this Schedule, the following terms have the following meanings: "Fitch"means Fitch, Inc. "Fitch Rating" means the rating assigned to the senior unsecured long-term debt securities of the Borrower without third-party credit enhancement, and any rating assignedto any other debt security of Fitch shall be disregarded. If Fitch does not maintain a seniorunsecured debt rating for the Borrower, "Fitch Rating" shall mean the corporate creditrating assigned by Fitch to the Borrower. The rating in effect on any date is that in effect on theclose of business on such date.

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

"Moody's Rating" means the rating assigned to the senior unsecured long-term debtsecurities of the Borrower without third-party credit enhancement, and any rating assigned to anyother debt security of the Borrower shall be disregarded. If Moody's does not maintain a seniorunsecured debt rating for the Borrower, "Moody's Rating" shall mean the corporate creditrating assigned by Moody's to the Borrower. The rating in effect on any date is that in effect onthe close of business on such date.

"Rating" means a Fitch Rating, Moody's Rating or S&P Rating, as appropriate.

"Rating Agency" means Fitch, Moody's or S&P, as appropriate.

"S&P" means Standard & Poor's Ratings Group.

"S&P Rating" means the rating assigned to the senior unsecured long-term debtsecurities of the Borrower without third-party credit enhancement, and any rating assigned to anyother debt security of the Borrower shall be disregarded. If S&P does not maintain a seniorunsecured debt rating for the Borrower, "S&P Rating" shall mean the corporate creditrating assigned by S&P to the Borrower. The rating in effect on any date is that in effect onthe close of business on such date.

"Status" refers to the determination of which of Level 1 Status, Level 2 Status, Level3 Status, Level 4 Status, Level 5 Status or Level 6 Status exists at any date. For purposes of theforegoing, (a) if no Rating Agency shall have in effect a Rating, the Applicable Margin will be setin accordance with Level 6; (b) if only one Rating Agency shall

have in effect a Rating, the Applicable Margin and the Applicable Facility Fee Rate shall bedetermined by reference to the available Rating; (c) if only two of the Rating Agencies have ineffect a Rating and such Ratings shall fall within different levels, the Applicable Margin and theApplicable Facility Fee Rate shall be based upon the higher Rating unless such Ratings differ by twoor more levels, in which case the applicable level will be deemed to be one level below the higherof such levels; (d) if the Ratings shall fall within three different levels, then the ApplicableMargin and the Applicable Facility Fee Rate shall be based upon one level above the mid-pointbetween the highest and lowest Rating (or if such calculation does not yield an exact mid-pointRating, the higher of the two intermediate mid-point Ratings); (e) if the Ratings shall fall withindifferent levels and two of the Ratings fall in the same level (the "Majority Level"), andthe third Rating is in a different level, then the Applicable Margin shall be determined byreference to the Majority Level; and (f) if any Rating shall be changed, such change shall beeffective as of the date on which such change is first announced publicly by the Rating Agencymaking such change. 

SCHEDULE III

PENDING LITIGATION

Many years ago, Borrower obtained, through purchases from several owners, a substantial tract ofland as a potential site for a future power plant. Borrower later determined it no longer intendedto build a power plant on that land and sold it in 2004. In September 2004, a former owner of aparcel included within Borrower's land sued Borrower in Morgan County Superior Court in a purportedclass action to force Borrower to pay any profit on the sale to the various former owners, as wellas profits received from ground leases and timber sales. The plaintiff contended, in essence, thatBorrower obtained the various parcels through eminent domain or the threat of eminent domain andalleged violations of Indiana's eminent domain statute, conversion and unjust enrichment. Borrowerbelieves the suit is without merit. At this time discovery has not yet begun and the court has notcertified a class. While we cannot predict the outcome, we do not expect the matter will have amaterial adverse effect on Borrower's financial statements. As of March 31, 2006, Borrower was adefendant in approximately 114 pending lawsuits alleging personal injury or wrongful death stemmingfrom exposure to asbestos and asbestos containing products formerly located in Borrower powerplants. Borrower has been named as a "premises defendant" in that Borrower did not mine,manufacture, distribute or install asbestos or asbestos containing products. These suits have beenbrought on behalf of persons who worked for contractors or subcontractors hired by Borrower.Borrower has insurance which may cover some portions of these claims; currently, these cases arebeing defended by counsel retained by various insurers who wrote policies applicable to the periodof time during which much of the exposure has been alleged. It is possible that material additionalloss with regard to the asbestos lawsuits could be incurred. At this time, an estimate of additionalloss cannot be made. Borrower has settled a number of asbestos related lawsuits for amounts which,individually and in the aggregate, are not material to Borrower's financial position, results ofoperations, or cash flows. Historically, settlements paid on Borrower's behalf have been comprisedof proceeds from one or more insurers along with comparatively smaller contributions by Borrower. Weare unable to estimate the number of, the effect of, or losses or range of loss which are reasonablypossible from the pending lawsuits or any additional asbestos suits. Furthermore, we are unable toestimate the portion of a settlement amount, if any, that may be paid from any insurance coveragefor any known or unknown claims. Accordingly, there is no assurance that the pending or anyadditional suits will not have a material adverse effect on Borrower's financial statements. Inaddition to the foregoing, Borrower is a defendant in various actions relating to various aspects ofits business. While it is impossible to predict the ultimate disposition of any litigation, Borrowerdoes not believe that any of these lawsuits, either individually or in the aggregate, will have amaterial adverse effect on its financial condition, results of operations or liquidity.

SCHEDULE IV

EXISTING INVESTMENTS
**Name**Book Value at 4/30/06
IPL Funding Corporation
$ 50,000.00
Tecumseh Coal -- Common Stock
379,508.08
Lynx Capital Corporation
100,000.00
National Equity Fund
217,323.00
 

SCHEDULE V

EXISTING LETTERS OF CREDIT

Letter of Credit No. S547248 in the stated amount of $750,000 issued to Safety National CasualtyCorporation as beneficiary.

EXHIBIT A

REVOLVING NOTE

$__,000,000 ___________, 20__

Chicago, Illinois

FOR VALUE RECEIVED, INDIANAPOLIS POWER & LIGHT COMPANY, an Indiana corporation (the"Borrower"), having its principal offices at One Monument Circle, Indianapolis, Indiana46204, unconditionally promises to pay to the order of _________________________ (the"Bank"), at the principal office of LASALLE BANK NATIONAL ASSOCIATION (the"Administrative Agent"), in Chicago, Illinois, the principal sum of _________ Dollars($_________) or, if less, the aggregate unpaid principal amount of all Loans made by the Bank to theBorrower pursuant to the provisions of that certain Credit Agreement (as amended or otherwisemodified from time to time, the "Credit Agreement"), dated as of May 16, 2006, by andamong the Borrower, various financial institutions and the Administrative Agent. If not definedherein, all capitalized terms shall have the meanings as defined in the Credit Agreement.

The Borrower further promises to pay interest on the unpaid principal amount hereof from the dateof each Loan until such Loan is paid in full at the rate(s) and at the time(s) provided in theCredit Agreement. Payments of both principal and interest are to be made in lawful money of theUnited States of America. If not sooner paid, the balance of the unpaid principal and all accruedand unpaid interest shall be due and payable on the Commitment Termination Date. Payments ofprincipal and/or interest shall be made as specified in the Credit Agreement.

This Note is one of the Notes referred to in, and is entitled to the benefits and furthersecurity of, the Credit Agreement. This Note is subject to the terms and conditions of the CreditAgreement including those which determine the interest rates, when payment of this Note may beaccelerated and all amounts hereunder declared immediately due and payable and when payments ofprincipal and interest may be made. The Borrower expressly waives demand, presentment, protest,notice of protest and notice of nonpayment or dishonor of this Note, and consents that the RequiredBanks may extend the time of payment or otherwise modify the terms of payment of any part of thewhole of the debt evidenced by this Note, at the request of any other person liable hereon, and suchconsent shall not alter nor diminish the liability of any Person. No delay or omission on the partof the Administrative Agent or the Banks in the exercise of any right or remedy shall operate as awaiver thereof, and no single or partial exercise by the Administrative Agent or the Banks of anyright or remedy shall preclude other or further exercise thereof or of any other right or remedy.The Borrower agrees to pay all costs of collection, including reasonable attorneys' fees in case theprincipal of this Note or any payment on the principal or any interest thereon is not paid at therespective maturity thereof and to pay all costs including reasonable attorneys' fees, regardless ofwhether suit be brought. All amounts payable under this Note shall be payable without relief fromvaluation and appraisement laws. Whenever used in this Note, the singular includes the plural andthe plural includes the singular, the masculine includes the feminine and the neuter, and the terms"Borrower", "Administrative Agent" and "Bank", are deemed to includethose Persons named in the first paragraph of this Note and their respective successors and assigns.Notwithstanding any provisions herein or in any instrument now or hereafter securing this Note, thetotal liability for payments in the nature of interest shall not exceed the limits imposed by theusury laws of any applicable jurisdiction. This Note shall be construed according to the laws of theState of Illinois applicable to contracts made and to be wholly performed in said State.

IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by its

duly authorized representative the day and year first above written.

INDIANAPOLIS POWER & LIGHT COMPANY

By:

Its:

EXHIBIT B

FACILITY B ADVANCE REQUEST

LaSalle Bank National Association,

as Administrative Agent

135 South LaSalle Street

Chicago, Illinois 60674-6387

This Advance Request is delivered to you pursuant to Section 2.2(B) of the Credit Agreement,dated as of May 16, 2006 (as the same may be amended or otherwise modified from time to time, the"Credit Agreement"), by and among Indianapolis Power & Light Company, an Indianacorporation (the "Borrower"), various financial institutions and LaSalle Bank NationalAssociation, as administrative agent (the "Administrative Agent"). Capitalized terms shallhave the meanings ascribed to them in the Credit Agreement. The undersigned certifies to you that itis the duly appointed and acting Trustee under the Bonds and that it is authorized to submit thisAdvance Request on behalf of the Borrower to provide liquidity support for the Bonds. Theundersigned on behalf of the Borrower hereby requests that an Advance be made in the aggregateprincipal amount of $__________ on _________, 20__. As an inducement to the Banks to make theAdvance hereby requested, the undersigned represents and warrants to the Banks that all proceeds ofthe Advance requested hereby will be used for the purposes permitted by the Credit Agreement. Pleasedisburse the proceeds of the Advance requested hereby on the date specified above as follows:[include disbursement instructions]. The undersigned agrees that none of the Administrative Agent,the Banks, nor any of their directors, officers, employees, agents or affiliates shall have anyliability to the undersigned or any holder of any Bonds arising out of the Credit Agreement. Withoutlimiting the generality of the foregoing, the undersigned acknowledges that it is not an assignee ofthe rights of the Borrower under the Credit Agreement nor is the undersigned an intended beneficiaryof the Credit Agreement. Accordingly, the undersigned has caused this Advance Request to be executedby its duly authorized officer this _____ day of __________, 20__.

JPMORGAN TRUST COMPANY, NATIONAL

ASSOCIATION, not in its individual capacity, but

solely as trustee for the Bonds

By:

Its:

EXHIBIT C

FORM OF OPINION OF COUNSEL

May 16, 2006

The Administrative Agent and each Bank

which is a party to the Credit

Agreement referred to below

c/o LaSalle Bank National Association,

as Administrative Agent

135 South LaSalle Street

Chicago, IL 60603

Re: Credit Agreement

Ladies and Gentlemen:

We are counsel to Indianapolis Power & Light Company (the "Borrower") in connectionwith that certain Credit Agreement dated as of May 16, 2006 (the "Credit Agreement"),among the Borrower, LaSalle Bank National Association, as administrative agent (the"Administrative Agent"), and the various financial institutions party thereto("Banks"). Capitalized terms used but not defined herein have the meanings assigned tothem in the Credit Agreement. This opinion is being delivered to you pursuant to Section 4.2(B) ofthe Credit Agreement. In rendering the opinion set forth herein, we have reviewed the followingdocuments:

(A) The Credit Agreement;

(B) The Notes; and

(C) The officer's certificate, together with all exhibits thereto, dated the date hereof anddelivered by the Borrower to the Administrative Agent.

The documents identified in (A) and (B) above are hereinafter collectively referred to as the"Transaction Documents." As to any facts material to this opinion which we did nototherwise establish or verify, we relied upon statements and representations of officers and otherrepresentatives of the Borrower. In our examination, we have assumed the genuineness of allsignatures, the authenticity of all documents submitted to us as originals, the conformity tooriginal documents of all documents submitted to us as certified or photostatic copies, and theauthenticity of the originals of such copies. We have also assumed (i) the valid authorization,execution and delivery of the Transaction Documents by the parties thereto other than the Borrower,and (ii) that the Transaction Documents are legal, valid and binding obligations of the partiesthereto other than

the Borrower.

Based upon the foregoing, and subject to the qualifications set forth herein, we are of theopinion that:

1. The Borrower is a corporation duly organized and validly existing under the laws of the Stateof Indiana.

2. The Borrower has full power to execute and deliver the Transaction Documents and perform itsobligations under the Transaction Documents.

3. The execution, delivery and performance by the Borrower of the Transaction Documents have beenduly authorized by all necessary corporate action, and do not conflict with any provision of law(including, without limitation, the FPA and the IPSCA) or of the Articles of Incorporation or By-Laws of the Borrower, and, to our knowledge, do not conflict with or contravene any order issued bya regulatory authority (including, without limitation, the FERC Order and the IURC Order) bindingupon the Borrower.

4. Assuming the application of the internal laws of the State of Indiana to the TransactionDocuments (notwithstanding any contrary choice of law provisions contained therein or any contraryotherwise applicable choice of law principles), the Transaction Documents constitute legal, validand binding obligations of the Borrower, enforceable against the Borrower in accordance with theirrespective terms.

5. No authorization, consent, approval, license, exemption of or filing or registration with anycourt or governmental department, commission, board, bureau, agency or instrumentality is or will benecessary to the valid execution and delivery to the Banks or performance by the Borrower of theTransaction Documents, or for the enforceability of the Transaction Documents against the Borrower,other than the order of the FERC in Docket No. ES04-438-000 dated July 23, 2004 (the "FERCOrder") and the order of the IURC dated March 22, 2006 (Cause No. 42968) (the "IURCOrder"). Each of the FERC Order and the IURC Order is final, nonappealable and in full forceand effect and, to our knowledge, no proceedings to revoke or modify the FERC Order or the IURCOrder have been instituted or are pending.

6. The Borrower is not an "investment company" or a company "controlled" byan "investment company," within the meaning of the Investment Company Act of 1940, asamended. We hereby confirm to you that, other than litigation disclosed in the Borrower's filingswith the Securities and Exchange Commission, we are aware of no actions or proceedings against theBorrower pending or overtly threatened in writing before any court, governmental agency orarbitrator which (a) would affect the corporate existence of the Borrower or which would impair itscorporate powers, or (b) would have a material adverse effect on the Borrower's ability to carry outthe transactions contemplated by the Credit Agreement. The opinion set forth above is subject to thefollowing qualifications and limitations:

 (a) The enforceability of the Transaction Documents may be subject to or limited by bankruptcy,insolvency, reorganization, arrangement, fraudulent conveyance or transfer, moratorium or othersimilar laws and court decisions, now or hereafter in effect, relating to or affecting the rights ofcreditors generally.

(b) The enforceability of the Transaction Documents is subject to the applicability of, and maybe limited by, general principles of equity, including, without limitation, concepts of materiality,reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in equityor at law).

(c) We express no opinion with respect to (i) the availability of specific performance orequitable remedies, (ii) any provisions purporting to waive constitutional or statutory rightsgranted by the Indiana Rules of Trial Procedure, (iii) provisions purporting to be a selection of ajudicial forum or an expression of judicial jurisdiction, or

(iv) the enforceability of the Transaction Documents, in general, to the extent theAdministrative Agent and the Banks, as applicable, fail to act in good faith or in a commerciallyreasonable manner.

(d) Whenever we have stated that we have assumed any matter, it is intended to indicate that wehave assumed such matter without making any factual, legal or other inquiry or investigation, andwithout expressing any opinions or conclusions of any kind concerning such matter.

(e) Whenever any statement of this opinion letter is qualified by the phrase "to ourknowledge", "of which we are aware," or a phrase of similar import, such phrase isintended to mean the actual knowledge of information by the lawyers in our firm who have beenprincipally involved in negotiating the subject transaction, but does not include other informationthat might be revealed if there were to be undertaken a canvass of all lawyers in our firm, ageneral search of our files or any type of independent investigation. Moreover, we have notundertaken any independent investigation to determine the accuracy or completeness of such knowledgeand any limited inquiries by us should not be regarded as such an investigation.

(f) The only opinions intended to be provided herein are those which are expressly stated hereinand no opinions by implication are intended or given.

(g) We express no opinion with regard to any future modification, extension or renewal of any ofthe Transaction Documents. Any certificates obtained by us from officers of the Borrower withrespect to the opinions contained herein have been relied upon by us as to factual matters withoutindependent verification. 

This opinion letter addresses only the current Federal laws of the United States and the currentinternal laws of the State of Indiana (without giving any effect to any conflict of law principlesthereof) and we have not considered, and express no opinion on, the laws of any other jurisdiction.This opinion letter is dated and speaks as of the date of delivery. We have no obligation to adviseyou or any third party of changes in the law or fact that may hereafter occur or become effective,even though the legal analysis or legal conclusions contained in this opinion letter may be affectedby such changes. This opinion is solely for the benefit of the Administrative Agent and the Banks(and their permitted successors, assigns and participants) in connection with the transactionscontemplated by the Credit Agreement and may not be used or relied upon by any other person orentity for any purpose whatsoever without in each instance our prior and express writtenconsent.

Very truly yours,

 

 

EXHIBIT D

FORM OF ASSIGNMENT AGREEMENT

This Assignment Agreement (this "Assignment Agreement") between ________ (the"Assignor") and __________ (the "Assignee") is dated as of __________, 20__. Theparties hereto agree as follows:

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

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

3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the "EffectiveDate") shall be the later of the date specified in Item 5 of Schedule 1 or two Business Days(or such shorter period agreed to by the Administrative Agent) after a Notice of Assignmentsubstantially in the form of Exhibit I attached hereto has been delivered to the AdministrativeAgent. Such Notice of Assignment must include any consents required to be delivered to theAdministrative Agent by Section 10.8 of the Credit Agreement. In no event will the Effective Dateoccur if the payments required to be made by the Assignee to the Assignor on the Effective Dateunder Sections 4 and 5 hereof are not made on the proposed Effective Date. The Assignor will notifythe Assignee of the proposed Effective Date no later than the Business Day prior to the proposedEffective Date. As of the Effective Date, (a) the Assignee shall have the rights and obligations ofa Bank under the Financing Documents with respect to the rights and obligations assigned to theAssignee hereunder and (b) the Assignor shall relinquish its rights and be released from itscorresponding obligations under the Financing Documents with respect to the rights and obligationsassigned to the Assignee hereunder.

4. PAYMENT OBLIGATIONS. On and after the Effective Date, the Assignee shall be entitled toreceive from the Administrative Agent all payments of principal, interest and fees with respect tothe interest assigned hereby. The Assignee shall advance funds directly to the Administrative Agentwith respect to all Loans and reimbursement payments made on or after the Effective Date withrespect to the interest assigned hereby. [In consideration for the sale and assignment of Loanshereunder, (a) the Assignee shall pay the Assignor, on the Effective Date, an amount equal to theprincipal amount of the portion of all Base Rate Loans assigned to the Assignee hereunder, and (b)with respect to each LIBOR Loan made by the Assignor andassigned to the Assignee hereunder which isoutstanding on the Effective Date, (i) on the last day of the Interest Period therefor, or (ii) onsuch earlier date agreed to by the Assignor and the Assignee, or (iii) on the date on which any suchLIBOR Loan either becomes due (by acceleration or otherwise) or is prepaid (the date as described inthe foregoing clauses (i), (ii) or (iii) being hereinafter referred to as the "PaymentDate"), the Assignee shall pay the Assignor an amount equal to the principal amount of theportion of such LIBOR Loan assigned to the Assignee which is outstanding on the Payment Date. If theAssignor and the Assignee agree that the Payment Date for such LIBOR Loan shall be the EffectiveDate, they shall agree to the interest rate applicable to the portion of such Loan assignedhereunder for the period from the Effective Date to the end of the existing Interest Periodapplicable to such LIBOR Loan (the "Agreed Interest Rate") and any interest received bythe Assignee in excess of the Agreed Interest Rate shall be remitted to the Assignor. In the eventinterest for the period from the Effective Date to but not including the Payment Date is not paid bythe Borrower with respect to any LIBOR Loan sold by the Assignor to the Assignee hereunder, theAssignee shall pay to the Assignor interest for such period on the portion of such LIBOR Loan soldby the Assignor to the Assignee hereunder at the applicable rate provided by the Credit Agreement.In the event a prepayment of any LIBOR Loan which is existing on the Payment Date and assigned bythe Assignor to the Assignee hereunder occurs after the Payment Date but before the end of theInterest Period applicable to such LIBOR Loan, the Assignee shall remit to the Assignor the excessof the prepayment penalty paid with respect to the portion of such LIBOR Loan assigned to theAssignee hereunder over the amount which would have been paid if such prepayment penalty wascalculated based on the Agreed Interest Rate. The Assignee will also promptly remit to the Assignor(y) any principal payments received from the Administrative Agent with respect to LIBOR Loans priorto the Payment Date, and (z) any amounts of interest on Loans and fees received from theAdministrative Agent which relate to the portion of the Loans assigned to the Assignee hereunder forperiods prior to the Effective Date, in the case of Base Rate Loans or fees, or the Payment Date, inthe case of LIBOR Loans, and not previously paid by the Assignee to the Assignor.]* In the eventthat either party hereto receives any payment to which the other party hereto is entitled under thisAssignment Agreement, then the party receiving such amount shall promptly remit it to the otherparty hereto. *Each Assignor may insert its standard payment provisions in lieu of the payment termsincluded in this Exhibit.

5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor a fee on each day onwhich a payment of interest or facility fees is made under the Credit Agreement with respect to theamounts assigned to the Assignee hereunder (other than a payment of interest or facility fees forthe period prior to the Effective Date or, in the case of LIBOR Loans, the Payment Date, which theAssignee is obligated to deliver to the Assignor pursuant to Section 4 hereof). The amount of suchfee shall be the difference between (a) the interest or fee, as applicable, paid with respect to theamounts assigned to the Assignee hereunder, and (b) the interest or fee, as applicable, which wouldhave been paid with respect to the amounts assigned to the Assignee hereunder if each interest ratewas ___ of 1% less than the interest rate paid by the Borrower or if the facility fee was ___ of 1%less than the facility fee paid by the Borrower, as applicable. In addition, the Assignee agrees topay _____ % of the recordation fee required to be paid to the Administrative Agent in connectionwith this Assignment Agreement. 

6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S LIABILITY. The Assignorrepresents and warrants that it is the legal and beneficial owner of the interest being assigned byit hereunder and that such interest is free and clear of any adverse claim created by the Assignor.It is understood and agreed that the assignment and assumption hereunder are made without recourseto the Assignor and that the Assignor makes no other representation or warranty of any kind to theAssignee. Neither the Assignor nor any of its officers, directors, employees, agents or attorneysshall be responsible for (a) the due execution, legality, validity, enforceability, genuineness,sufficiency or collectibility of any Financing Document, including without limitation, documentsgranting the Assignor and the other Banks a security interest in assets of the Borrower or anyguarantor, (b) any representation, warranty or statement made in or in connection with any of theFinancing Documents, (c) the financial condition or creditworthiness of the Borrower or anyguarantor, (d) the performance of or compliance with any of the terms or provisions of any of theFinancing Documents, (e) inspecting any of the property, books or records of the Borrower, (f) thevalidity, enforceability, perfection, priority, condition, value or sufficiency of any collateralsecuring or purporting to secure the Loans or (g) any mistake, error of judgment, or action taken oromitted to be taken in connection with the Loans or the Financing Documents.

7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (a) confirms that it has received a copy of theCredit Agreement, together with copies of the financial statements requested by the Assignee andsuch other documents and information as it has deemed appropriate to make its own credit analysisand decision to enter into this Assignment Agreement, (b) agrees that it will, independently andwithout reliance upon the Administrative Agent, the Assignor or any other Bank and based on suchdocuments and information as it shall deem appropriate at the time, continue to make its own creditdecisions in taking or not taking action under the Financing Documents, (c) appoints and authorizesthe Administrative Agent to take such action as contractual representative on its behalf and toexercise such powers under the Financing Documents as are delegated to the Administrative Agent bythe terms thereof, together with such powers as are reasonably incidental thereto, (d) agrees thatit will perform in accordance with their terms all of the obligations which by the terms of theFinancing Documents are required to be performed by it as a Bank, (e) agrees that its paymentinstructions and notice instructions are as set forth in the attachment to Schedule 1, [and (f)attaches the forms prescribed by the Internal Revenue Service of the United States certifying thatthe Assignee is entitled to receive payments under the Financing Documents without deduction orwithholding of any United States federal income taxes].

8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor harmless against any and alllosses, costs and expenses (including, without limitation, reasonable attorneys' fees) andliabilities incurred by the Assignor in connection with or arising in any manner from the Assignee'snon-performance of the obligations assumed under this Assignment Agreement.

9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall have the right pursuantto Section 10.8 of the Credit Agreement to assign the rights which are assigned to the Assigneehereunder to any entity or person, provided that (a) any such subsequent assignment does not violateany of the terms and conditions of the Financing Documents or any law, rule, regulation, order,writ, judgment, injunction or decree and that any consent required  under the terms of the FinancingDocuments has been obtained and (b) unless the prior written consent of the Assignor is obtained,the Assignee is not thereby released from its obligations to the Assignor hereunder, if any remainunsatisfied, including, without limitation, its obligations under Sections 4, 5 and 8 hereof.

10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the Aggregate Commitment occursbetween the date of this Assignment Agreement and the Effective Date, the percentage interestspecified in Item 3 of Schedule 1 shall remain the same, but the dollar amount purchased shall berecalculated based on the reduced Aggregate Commitment.

11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice of Assignment embody theentire agreement and understanding between the parties hereto and supersede all prior agreements andunderstandings between the parties hereto relating to the subject matter hereof.

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

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

IN WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement by their dulyauthorized officers as of the date first above written.

"ASSIGNOR"

By:

Title:

"ASSIGNEE"

By:

Title:

SCHEDULE 1 to Assignment Agreement 

1. Description and Date of Credit Agreement: Credit Agreement, dated as of May 16, 2006 (as thesame may be amended or modified), among Indianapolis Power & Light Company, the Banks partiesthereto and LaSalle Bank National Association, as administrative agent

2. Date of Assignment Agreement: , 20__

3. Amounts (As of date of Item 2 above): Revolving Credit Loans

a. Total of Commitments (Loans)* under Credit Agreement:

$________________

b. Assignee's Percentage of each Facility purchased under the Assignment Agreement:** _____%

c. Amount of Assigned Share in each Facility purchased under the Assignment Agreement:$________________

4. Assignee's Aggregate (Loan Amount) Commitment Amount Purchased Hereunder:$________________

5. Proposed Effective Date: ________________ 

Accepted and Agreed:

[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]

By: By:

Title: Title:

* If a Commitment has been terminated, insert outstanding Loans in place of Commitment

** Percentage taken to 10 decimal places

Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT

Attach Assignor's Administrative Information Sheet, which must include notice address for theAssignor and the Assignee

EXHIBIT I

to Assignment Agreement

NOTICE OF ASSIGNMENT

, 20__

To: Indianapolis Power & Light Company

LaSalle Bank National Association, as Administrative Agent

From: [NAME OF ASSIGNOR] (the "Assignor")

[NAME OF ASSIGNEE] (the "Assignee")

1. We refer to the Credit Agreement (the "Credit Agreement") described in Item 1 ofSchedule 1 attached hereto ("Schedule 1"). Capitalized terms used herein and not otherwisedefined herein shall have the meanings attributed to them in the Credit Agreement.

2. This Notice of Assignment (this "Notice") is given and delivered to [the Borrowerand] the Administrative Agent pursuant to Section 10.8 of the Credit Agreement.

3. The Assignor and the Assignee have entered into an Assignment Agreement, dated as of ________,20__ (the "Assignment"), pursuant to which, among other things, the Assignor has sold,assigned, delegated and transferred to the Assignee, and the Assignee has purchased, accepted andassumed from the Assignor the percentage interest specified in Item 3 of Schedule 1 of alloutstandings, rights and obligations under the Credit Agreement relating to the facilities listed inItem 3 of Schedule 1. The Effective Date of the Assignment shall be the later of the date specifiedin Item 5 of Schedule 1 or two Business Days (or such shorter period as agreed to by theAdministrative Agent) after this Notice of Assignment and any consents and fees required by Section10.8 of the Credit Agreement have been delivered to the Administrative Agent, provided that theEffective Date shall not occur if any condition precedent agreed to by the Assignor and the Assigneehas not been satisfied.

4. The Assignor and the Assignee hereby give to the Borrower and the Administrative Agent noticeof the assignment and delegation referred to herein. The Assignor will confer with theAdministrative Agent before the date specified in Item 5 of Schedule 1 to determine if theAssignment Agreement will become effective on such date pursuant to Section 3 hereof, and willconfer with the Administrative Agent to determine the Effective Date pursuant to Section 3 hereof ifit occurs thereafter. The Assignor shall notify the Administrative Agent if the Assignment Agreementdoes not become effective on any proposed Effective Date as a result of the failure to satisfy theconditions precedent agreed to by the Assignor and the Assignee. At the request of theAdministrative Agent, the Assignor will give the Administrative Agent written confirmation of thesatisfaction of the conditions precedent.

5. The Assignor or the Assignee shall pay to the Administrative Agent on or before the EffectiveDate the processing fee of $3,500 required by Section 10.8 of the Credit Agreement.

6. The Assignor and the Assignee request and direct that the Administrative Agent prepare andcause the Borrower to execute and deliver new Notes or, as appropriate, replacement notes, to theAssignor and the Assignee. The Assignor and, if applicable, the Assignee each agree to deliver tothe Administrative Agent the original Note received by it from the Borrower upon its receipt of anew Note in the appropriate amount.

7. The Assignee advises the Administrative Agent that notice and payment instructions are setforth in the attachment to Schedule 1.

8. The Assignee authorizes the Administrative Agent to act as its contractual representativeunder the Financing Documents in accordance with the terms thereof. The Assignee acknowledges thatthe Administrative Agent has no duty to supply information with respect to the Borrower or theFinancing Documents to the Assignee until the Assignee becomes a party to the Credit Agreement.*

*May be eliminated if Assignee is a party to the Credit Agreement prior to the EffectiveDate.

[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]

By: By:

Title: Title:

ACKNOWLEDGED [AND CONSENTED TO]

BY LASALLE BANK NATIONAL ASSOCIATION, as Administrative Agent

By:

Title:

BY INDIANAPOLIS POWER & LIGHT COMPANY

By:

Title:

[Attach photocopy of Schedule 1 to Assignment]

EXHIBIT E

FORM OF INCREASE REQUEST

__________________, 20

LaSalle Bank National Association, as Administrative Agent

under the Credit Agreement referred to below

Ladies/Gentlemen:

Please refer to the Credit Agreement dated as of May 16, 2006 among Indianapolis

Power & Light Company (the "Borrower"), various financial institutions and LaSalleBank

National Association, as Administrative Agent (as amended, modified, extended or restatedfrom

time to time, the "Credit Agreement"). Capitalized terms used but not defined hereinhave the respective meanings set forth in the Credit Agreement. In accordance with Section 2.21 ofthe Credit Agreement, the Borrower hereby requests an increase in the Aggregate Commitment forFacility A from $__________ to $__________. Such increase shall be made by [increasing theCommitment of ____________ from $________ to $________] [adding _____________ as a Facility A Bankunder the Credit Agreement with a Commitment of $____________] as set forth in the letter attachedhereto. Such increase shall be effective three Business Days after the date that the AdministrativeAgent accepts the letter attached hereto or such other date as is agreed among the Borrower, theAdministrative Agent and the [increasing] [new] Facility A Bank.

Very truly yours,

INDIANAPOLIS POWER & LIGHT COMPANY

By:

Name:

Title:

ANNEX I TO EXHIBIT E

_____, 20__

LaSalle Bank National Association, as Administrative Agent under the Credit Agreement referred tobelow Ladies/Gentlemen:

Please refer to the letter dated __________, 20__ from Indianapolis Power & Light Company(the "Borrower") requesting an increase in the Aggregate Commitment from $__________ to$__________ pursuant to Section 2.21 of the Credit Agreement dated as of May 16, 2006 among theBorrower, various financial institutions and LaSalle Bank National Association, as AdministrativeAgent (as amended, modified, extended or restated from time to time, the "CreditAgreement"). Capitalized terms used but not defined herein have the respective meanings setforth in the Credit Agreement. The undersigned hereby confirms that it has agreed to increase itsFacility A Commitment under the Credit Agreement from $__________ to $__________ effective on thedate which is three Business Days after the acceptance hereof by the Administrative Agent or on suchother date as may be agreed among the Borrower, the Administrative Agent and the undersigned.

Very truly yours,

[NAME OF INCREASING FACILITY A BANK]

By: ______________________________________

Title: _____________________________________

Accepted as of _________, 20__

LASALLE BANK NATIONAL ASSOCIATION,

as Administrative Agent, LC Issuer and Swing Line Bank

By:________________________________

Name:_____________________________

Title: ______________________________

ANNEX II TO EXHIBIT E

_____, 20__

LaSalle Bank National Association, as Administrative Agent

under the Credit Agreement referred to below

Ladies/Gentlemen:

Please refer to the letter dated __________, 20__ from Indianapolis Power & Light Company(the "Borrower") requesting an increase in the Aggregate Commitment from $__________ to$__________ pursuant to Section 2.21 of the Credit Agreement dated as of May 16, 2006 among theBorrower, various financial institutions and LaSalle Bank National Association, as AdministrativeAgent (as amended, modified, extended or restated from time to time, the "CreditAgreement"). Capitalized terms used but not defined herein have the respective meanings setforth in the Credit Agreement. The undersigned hereby confirms that it has agreed to become aFacility A Bank under the Credit Agreement with a Facility A Commitment of $__________ effective onthe date which is three Business Days after the acceptance hereof, and consent hereto, by theAdministrative Agent or on such other date as may be agreed among the Borrower, the AdministrativeAgent and the undersigned. The undersigned (a) acknowledges that it has received a copy of theCredit Agreement and the Schedules and Exhibits thereto, together with copies of the most recentfinancial statements delivered by the Borrower pursuant to the Credit Agreement, and such otherdocuments and information as it has deemed appropriate to make its own credit and legal analysis anddecision to become a Facility A Bank under the Credit Agreement; and (b) agrees that it will,independently and without reliance upon the Administrative Agent or any other Bank and based on suchdocuments and information as it shall deem appropriate at the time, continue to make its own creditand legal decisions in taking or not taking action under the Credit Agreement. The undersignedrepresents and warrants that (i) it is duly organized and existing and it has full power andauthority to take, and has taken, all action necessary to execute and deliver this letter and tobecome a Bank under the Credit Agreement; and (ii) no notices to, or consents, authorizations orapprovals of, any Person are required (other than any already given or obtained) for its dueexecution and delivery of this letter and the performance of its obligations as a Bank under theCredit Agreement. The undersigned agrees to execute and deliver such other instruments, and takesuch other actions, as the Administrative Agent may reasonably request in connection with thetransactions contemplated by this letter. The following administrative details apply to theundersigned:

(A) Notice Address:

Legal name: _________________________

Address: _________________________

_________________________

_________________________

Attention: ____________________________

Telephone: (___) ______________________

Facsimile: (___) _______________________

(B) Payment Instructions:

Account No.: _________________________

At: _________________________

_________________________

_________________________

Reference: _________________________

Attention: _________________________

The undersigned acknowledges and agrees that, on the date on which the undersigned becomes a Bankunder the Credit Agreement as set forth in the second paragraph hereof, the undersigned will bebound by the terms of the Credit Agreement as fully and to the same extent as if the undersignedwere an original Bank under the Credit Agreement.

Very truly yours,

[NAME OF NEW FACILITY A BANK]

By:_________________________

Title:________________________

Accepted as of

_________, 20__

LASALLE BANK NATIONAL ASSOCIATION,

as Administrative Agent, LC Issuer and Swing Line Bank

By:________________________________

Name:_____________________________

Title: _____________________________**************************