ex-4n


  

 Exhibit 4(n)
   

 REVOLVING
  CREDIT AGREEMENT  

 Dated
  as of December 18, 2002  

 among
   

 THE
  DAYTON POWER AND LIGHT COMPANY,  

 THE
  LENDERS FROM TIME TO TIME PARTY HERETO,  

 KEYBANK
  NATIONAL ASSOCIATION,  

 as Syndication
  Agent,

  and 


 BANK
  ONE, NA  

 as Administrative
  Agent  

 

  __________________________________________________________________

   

 

  ______

    

 BANC
  ONE CAPITAL MARKETS, INC. 

  as Lead Arranger and Sole Book Runner  

 

  __________________________________________________________________

   

 

  ______

    SIDLEY
  AUSTIN BROWN & WOOD  

  Bank One Plaza 
  

  10  South
  Dearborn Street  

  Chicago, Illinois 60603
   

  






 TABLE OF
  CONTENTS  

	 	 	 	 	Page	 
	 	 	 	 	
	 
	ARTICLE I	 	   DEFINITIONS	 	1	 
	 	 	 	 	 	 
	ARTICLE II	 	   THE
      CREDITS	 	12	 
	   2.1	 	Commitment	 	12	 
	   2.2	 	Required
      Payments; Termination	 	12	 
	   2.3	 	Ratable
      Loans	 	12	 
	   2.4	 	Types of
      Advances	 	12	 
	   2.5	 	Facility
      Fee; Utilization Fee; Reductions in Aggregate Commitment	 	12	 
	   2.6	 	Minimum
      Amount of Each Advance	 	13	 
	   2.7	 	Optional
      Principal Payments	 	13	 
	   2.8	 	Method
      of Selecting Types and Interest Periods for New Advances	 	13	 
	   2.9	 	Conversion
      and Continuation of Outstanding Advances	 	13	 
	   2.10	 	Changes
      in Interest Rate, etc	 	14	 
	   2.11	 	Rate Applicable
      After Default	 	14	 
	   2.12	 	Method
      of Payment	 	15	 
	   2.13	 	Noteless
      Agreement; Evidence of Indebtedness	 	15	 
	   2.14	 	Telephonic
      Notices	 	16	 
	   2.15	 	Interest
      Payment Dates; Interest and Fee Basis	 	16	 
	   2.16	 	Notification
      of Advances, Interest Rates, Prepayments and Commitment Reductions	 	16	 
	   2.17	 	Lending
      Installations	 	16	 
	   2.18	 	Non-Receipt
      of Funds by the Administrative Agent	 	17	 
	   2.19	 	Replacement
      of Lender	 	17	 
	ARTICLE III	   	   YIELD
      PROTECTION; TAXES	 	18	 
	   3.1	 	Yield Protection	 	18	 
	   3.2	 	Changes
      in Capital Adequacy Regulations	 	18	 
	   3.3	 	Availability
      of Types of Advances	 	19	 
	   3.4	 	Funding
      Indemnification	 	19	 
	   3.5	 	Taxes	 	19	 
	   3.6	 	Lender
      Statements; Survival of Indemnity	 	21	 
	ARTICLE IV	 	   CONDITIONS
      PRECEDENT	 	23	 
	   4.1	 	Initial
      Advance	 	24	 
	   4.2	 	Each Advance	 	24	 
	ARTICLE V	 	   REPRESENTATIONS
      AND WARRANTIES	 	25	 
	   5.1	 	Existence
      and Standing	 	25	 
	   5.2	 	Authorization
      and Validity	 	25	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	i
	 	 	 






	   5.3	 	No Conflict;
      Government Consent	 	25	 
	   5.4	   	Financial
      Statements	 	26	 
	   5.5	 	Material
      Adverse Change	 	26	 
	   5.6	 	Taxes	 	26	 
	   5.7	 	Litigation
      and Contingent Obligations	 	26	 
	   5.8	 	Subsidiaries	 	26	 
	   5.9	 	ERISA	 	27	 
	   5.10	 	Accuracy
      of Information	 	27	 
	   5.11	 	Regulation
      U	 	27	 
	   5.12	 	Material
      Agreements	 	27	 
	   5.13	 	Compliance
      With Laws	 	27	 
	   5.14	 	Ownership
      of Properties	 	27	 
	   5.15	 	Plan Assets;
      Prohibited Transactions	 	28	 
	   5.16	 	Environmental
      Matters	 	28	 
	   5.17	 	Investment
      Company Act	 	28	 
	   5.18	 	Public
      Utility Holding Company Act	 	28	 
	ARTICLE VI	 	   COVENANTS	 	28	 
	   6.1	 	Financial
      Reporting	 	28	 
	   6.2	 	Use of
      Proceeds	 	30	 
	   6.3	 	Notice
      of Default	 	30	 
	   6.4	 	Conduct
      of Business	 	30	 
	   6.5	 	Taxes	 	30	 
	   6.6	 	Insurance	 	30	 
	   6.7	 	Compliance
      with Laws	 	30	 
	   6.8	 	Maintenance
      of Properties	 	30	 
	   6.9	 	Inspection	 	31	 
	   6.10	 	Merger	 	31	 
	   6.11	 	Sale of
      Assets	 	31	 
	   6.12	 	Investments
      and Acquisitions	 	31	 
	   6.13	 	Liens	 	32	 
	   6.14	 	Dividends	 	33	 
	   6.15	 	Affiliates	 	33	 
	   6.16	 	Financial
      Covenants	 	33	 
	   6.17	 	Financial
      Contracts	 	33	 
	   6.18	 	Margin
      Stock	 	34	 
	ARTICLE VII	 	   DEFAULTS	 	34	 
	 	 	 	 	 	 
	ARTICLE VIII	 	   ACCELERATION,
      WAIVERS, AMENDMENTS AND REMEDIES	 	36	 
	   8.1	 	Acceleration	 	36	 
	   8.2	 	Amendments	 	37	 
	   8.3	 	Preservation
      of Rights	 	37	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	ii
	 






	ARTICLE IX	 	   GENERAL
      PROVISIONS	 	37	 
	   9.1	 	Survival
      of Representations	 	38	 
	   9.2	 	Headings	 	38	 
	   9.3	 	Entire
      Agreement	 	38	 
	   9.4	 	Several
      Obligations; Benefits of this Agreement	 	38	 
	   9.5	 	Expenses;
      Indemnification	 	38	 
	   9.6	 	Numbers
      of Documents	 	39	 
	   9.7	 	Accounting	 	39	 
	   9.8	 	Severability
      of Provisions	 	39	 
	   9.9	 	Nonliability
      of Lenders	 	39	 
	   9.10	 	Confidentiality	 	40	 
	   9.11	 	Nonreliance	 	40	 
	ARTICLE X	 	   THE
      ADMINISTRATIVE AGENT	 	40	 
	   10.1	 	Appointment;
      Nature of Relationship	 	40	 
	   10.2	 	Powers	 	41	 
	   10.3	 	General
      Immunity	 	41	 
	   10.4	 	No Responsibility
      for Loans, Recitals, etc	 	41	 
	   10.5	 	Action
      on Instructions of Lenders	 	41	 
	   10.6	 	Employment
      of Administrative Agents and Counsel	 	42	 
	   10.7	 	Reliance
      on Documents; Counsel	 	42	 
	   10.8	 	Administrative
      Agent’s Reimbursement and Indemnification	 	42	 
	   10.9	 	Notice
      of Default	 	43	 
	   10.10	 	Rights
      as a Lender	 	43	 
	   10.11	 	Lender
      Credit Decision	 	43	 
	   10.12	 	Successor
      Administrative Agent	 	43	 
	   10.13	 	Administrative
      Agent’s Fee	 	44	 
	   10.14	 	Delegation
      to Affiliates	 	44	 
	   10.15	 	Syndication
      Agent	 	44	 
	ARTICLE XI	   	   SETOFF;
      RATABLE PAYMENTS	 	44	 
	   11.1	 	Setoff	 	44	 
	   11.2	 	Ratable
      Payments	 	45	 
	ARTICLE XII	 	   BENEFIT
      OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS	 	45	 
	   12.1	 	Successors
      and Assigns	 	45	 
	   12.2	 	Participations	 	46	 
	   12.3	 	Assignments	 	47	 
	   12.4	 	Dissemination
      of Information	 	49	 
	   12.5	 	Tax Treatment	 	49	 
	ARTICLE
      XIII      NOTICES	 	49	 
	   13.1	 	Notices	 	49	 
	   13.2	 	Change
      of Address	 	49	 
	 	 	 	 	 	 
	iii







	ARTICLE XIV	   	   COUNTERPARTS	49
	 	 	 	 
	ARTICLE XV	 	   CHOICE
      OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL	50
	   15.1	CHOICE
      OF LAW	50
	   15.2	CONSENT
      TO JURISDICTION	50
	   15.3	WAIVER
      OF JURY TRIAL	50
	SCHEDULES	 	 	 
	Pricing
      Schedule	 
	Schedule I	-	Commitments	 
	Schedule 5.7	-	Litigation	 
	Schedule 5.8	-	Subsidiaries	 
	Schedule 6.13	-	Liens	 
	EXHIBITS	 	 	 
	Exhibit A -	Form
      of Opinion of Borrower’s Counsel	 
	Exhibit B -	Form
      of Compliance Certificate	 
	Exhibit C -	Form
      of Assignment and Assumption Agreement	 
	Exhibit D -	Form
      of Loan/Credit Related Money Transfer Instruction	 
	Exhibit E -	Form
      of Note	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	iv







 REVOLVING
  CREDIT AGREEMENT  

      This
  Revolving Credit Agreement, dated as of December 18, 2002, is among The Dayton
  Power and Light Company, an Ohio corporation (the “Borrower”), the
  lenders party hereto (the “Lenders”), KeyBank National
  Association, as Syndication Agent (the “Syndication Agent”), and Bank
  One, NA, as Administrative Agent (the “Administrative Agent”). The
  parties hereto agree as follows:  

 ARTICLE
  I  

 DEFINITIONS
   

      As
  used in this Agreement:  

      “Acquisition”
  means any transaction, or any series of related transactions, consummated on
  or after the date of this Agreement, by which the Borrower or any of its Subsidiaries
  (i) acquires any going business or all or substantially all of the assets of
  any firm, corporation or limited liability company, or division thereof, whether
  through purchase of assets, merger or otherwise or (ii) directly or indirectly
  acquires (in one transaction or as the most recent transaction in a series of
  transactions) at least a majority (in number of votes) of the securities of
  a corporation which have ordinary voting power for the election of directors
  (other than securities having such power only by reason of the happening of
  a contingency) or a majority (by percentage or voting power) of the outstanding
  ownership interests of a partnership or limited liability company.  

      “Advance”
  means a borrowing hereunder, (i) made by the Lenders on the same Borrowing Date,
  or (ii) converted or continued by the Lenders on the same date of conversion
  or continuation, consisting, in either case, of the aggregate amount of the
  several Loans of the same Type and, in the case of Eurodollar Loans, for the
  same Interest Period.  

      “Administrative
  Agent” means Bank One in its capacity as contractual representative of
  the Lenders pursuant to Article X, and not in its individual capacity as a Lender,
  and any successor Administrative Agent appointed pursuant to Article X. 


      “Affiliate”
  of any Person means any other Person directly or indirectly controlling, controlled
  by or under common control with such Person. A Person shall be deemed to control
  another Person if the controlling Person possesses, directly or indirectly,
  the power to direct or cause the direction of the management or policies of
  the controlled Person, whether through ownership of stock, by contract or otherwise.
   

      
  “Aggregate Commitment” means the aggregate of the Commitments of all
  the Lenders, as reduced from time to time pursuant to the terms hereof. 


      “Agreement”
  means this Revolving Credit Agreement, as it may be amended or modified and
  in effect from time to time.  

 1  






      “Agreement
  Accounting Principles” means generally accepted accounting principles as
  in effect from time to time, applied in a manner consistent with that used in
  preparing the financial statements referred to in Section 5.4.  

      “Alternate
  Base Rate” means, for any day, a rate of interest per annum equal to the
  higher of (i) the Prime Rate for such day and (ii) the sum of the Federal Funds
  Effective Rate for such day plus 1/2% per annum.  

      “Applicable
  Fee Rate” means, at any time, the percentage rate per annum at which Facility
  Fees are accruing on the Aggregate Commitment at such time as set forth in the
  Pricing Schedule.  

      “Applicable
  Margin” means (x) with respect to Eurodollar Advances at any time, the
  percentage rate per annum which is applicable at such time with respect to Eurodollar
  Advances as set forth in the Pricing Schedule, and (y) with respect to Floating
  Rate Advances at any time, the percentage rate per annum which is applicable
  at such time with respect to Floating Rate Advances as set forth in the Pricing
  Schedule.  

      “Applicable
  Utilization Fee Rate” means (i) at any time the Applicable Fee Rate is
  set at Level I, II, III or IV Status, 0.125% per annum, and (ii) at any time
  the Applicable Fee Rate is set at Level V Status, 0.25% per annum.  

      “Approved
  Fund” means any Fund that is administered or managed by (a) a Lender, (b)
  an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
  administers or manages a Lender.  

      “Arranger”
  means Banc One Capital Markets, Inc., a Delaware corporation, and its successors,
  in its capacity as Lead Arranger and Sole Book Runner.  

      “Article”
  means an article of this Agreement unless another document is specifically referenced.
   

      “Authorized
  Officer” means any of the President, Executive Vice President and Chief
  Operating Officer, Treasurer, any Group Vice President or any Vice President
  of the Borrower, acting singly.  

      “Bank
  One” means Bank One, NA, a national banking association having its principal
  office in Chicago, Illinois, in its individual capacity, and its successors.
   

      “Borrower”
  means The Dayton Power and Light Company, an Ohio corporation, and its successors
  and assigns.  

      “Borrowing Date”
  means a date on which an Advance is made hereunder.  

      “Borrowing Notice”
  is defined in Section 2.8.  

 2






      “Business
  Day” means (i) with respect to any borrowing, payment or rate selection
  of Eurodollar Advances, a day (other than a Saturday or Sunday) on which banks
  generally are open in Chicago and New York City for the conduct of substantially
  all of their commercial lending activities, interbank wire transfers can be
  made on the Fedwire system and dealings in United States dollars are carried
  on in the London interbank market and (ii) for all other purposes, a day (other
  than a Saturday or Sunday) on which banks generally are open in Chicago for
  the conduct of substantially all of their commercial lending activities and
  interbank wire transfers can be made on the Fedwire system.  

      “Capitalized
  Lease” of a Person means any lease of Property by such Person as lessee
  which would be capitalized on a balance sheet of such Person prepared in accordance
  with Agreement Accounting Principles.  

      “Capitalized
  Lease Obligations” of a Person means the amount of the obligations of such
  Person under Capitalized Leases which would be shown as a liability on a balance
  sheet of such Person prepared in accordance with Agreement Accounting Principles.
   

      “Change
  in Control” means (i) the acquisition by any Person, or two or more Persons
  acting in concert, of beneficial ownership (within the meaning of Rule 13d-3
  of the Securities and Exchange Commission under the Securities Exchange Act
  of 1934) of 20% or more of the outstanding shares of voting stock of DPL or
  (ii) DPL shall cease to own, free and clear of all Liens and other encumbrances
  and on a fully diluted basis, 100% of the outstanding shares of all classes
  of stock of the Borrower ordinarily having the right to vote at an election
  of directors, or any contingency shall occur that causes any class of stock
  of the Borrower, the shares of which are not owned by DPL, to have the right
  to vote at an election of directors.  

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

      “Commitment”
  means, for each Lender, the obligation of such Lender to make Loans not exceeding
  the amount set forth opposite such Lender’s name on Schedule I hereto or
  as set forth in any Notice of Assignment relating to any assignment that has
  become effective pursuant to Section 12.3.2, as such amount may be modified
  from time to time pursuant to the terms hereof.  

      “Consolidated
  Debt” means at any time the Debt of the Borrower and its Subsidiaries calculated
  on a consolidated basis as of such time.  

      “Consolidated
  EBIT” means, with reference to any period, Consolidated Net Income plus,
  to the extent deducted from revenues in determining Consolidated Net Income,
  (i) Consolidated Interest Expense, (ii) expense for income taxes paid or accrued,
  and (iii) extraordinary losses incurred other than in the ordinary course of
  business, minus, to the extent included in Consolidated Net Income, extraordinary
  gains realized other than in the ordinary course of business, all calculated
  for the Borrower and its Subsidiaries on a consolidated basis for such period.
   

 3





      “Consolidated
  Interest Expense” means, with reference to any period, the interest expense
  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
  Net Worth” means at any time the sum of consolidated stockholders’
  equity of the Borrower and its Subsidiaries calculated on a consolidated basis
  as of such time.  

      “Consolidated
  Tangible Assets” means at any time the consolidated total assets of the
  Borrower and its Subsidiaries calculated on a consolidated basis as of such
  time, but excluding therefrom goodwill, patents, patent applications, permits,
  trademarks, trade names, copyrights, licenses, franchises, experimental expense,
  organizational expense, unamortized debt discount and expense, the excess of
  cost of shares acquired over book value of related assets and such other assets
  as are properly classified as “intangible assets” in accordance with
  Agreement Accounting Principles.  

      “Consolidated
  Total Capitalization” means at any time the sum of Consolidated Debt and
  Consolidated Net Worth, each calculated at such time.  

      “Contingent
  Obligation” of a Person means any agreement, undertaking or arrangement
  by which such Person assumes, guarantees, endorses, contingently agrees to purchase
  or provide funds for the payment of, or otherwise becomes or is contingently
  liable upon, the obligation or liability of any other Person, or agrees to maintain
  the net worth or working capital or other financial condition of any other Person,
  or otherwise assures any creditor of such other Person against loss, including,
  without limitation, any comfort letter, operating agreement, take-or-pay contract
  or the obligations of any such Person as general partner of a partnership with
  respect to the liabilities of the partnership, provided, however, that
  the term “Contingent Obligations” shall not include the endorsement
  of instruments for collection or deposit in the ordinary course of business.
   

      “Contract”
  means any indenture, agreement (other than this Agreement), other contractual
  restriction, lease, instrument (other than Notes), certificate of incorporation
  or charter, or by-law.  

      “Conversion/Continuation
  Notice” is defined in Section 2.9.  

      “Controlled
  Group” means all members of a controlled group of corporations or other
  business entities and all trades or businesses (whether or not incorporated)
  under common control which, together with the Borrower or any of its Subsidiaries,
  are treated as a single employer under Section 414 of the Code.  

      “Debt”
  of a Person means such Person’s (i) obligations for borrowed money, (ii)
  obligations representing the deferred purchase price of Property or services
  (other than accounts payable arising in the ordinary course of such Person’s
  business payable on terms customary in the trade and accrued expenses arising
  in the ordinary course of business), (iii) obligations,  

 4






 whether or not assumed,
  secured by Liens or payable out of the proceeds or production from Property
  now or hereafter owned or acquired by such Person, (iv) obligations which are
  evidenced by bonds, debentures, notes, acceptances, or other instruments, (v)
  obligations of such Person to purchase securities or other Property arising
  out of or in connection with the sale of the same or substantially similar securities
  or Property, (vi) Capitalized Lease Obligations, (vii) non-contingent obligations
  to reimburse any other Person in respect of amounts paid under a Letter of Credit
  or similar instrument to the extent that such reimbursement obligations remain
  outstanding after they become non-contingent, (viii) all Debt of others constituting
  a Contingent Obligation of such Person, and (ix) any other obligation for borrowed
  money or other financial accommodation which in accordance with Agreement Accounting
  Principles would be shown as a liability on the consolidated balance sheet of
  such Person.  

      “Default” means
  an event described in Article VII.  

      “DPL” means
  DPL Inc., an Ohio corporation.  

      “Environmental
  Laws” means any and all federal, state, local and foreign statutes, laws,
  judicial decisions, regulations, ordinances, rules, judgments, orders, decrees,
  plans, injunctions, permits, concessions, grants, franchises, licenses, agreements
  and other governmental restrictions relating to (i) the protection of the environment,
  (ii) the effect of the environment on human health, (iii) emissions, discharges
  or releases of pollutants, contaminants, hazardous substances or wastes into
  surface water, ground water or land, or (iv) the manufacture, processing, distribution,
  use, treatment, storage, disposal, transport or handling of pollutants, contaminants,
  hazardous substances or wastes or the clean-up or other remediation thereof.
   

      “ERISA”
  means the Employee Retirement Income Security Act of 1974, as amended from time
  to time, and any rule or regulation issued thereunder.  

      “Eurodollar
  Advance” means an Advance which, except as otherwise provided in Section
  2.11, bears interest at the applicable Eurodollar Rate.  

      “Eurodollar
  Base Rate” means, with respect to a Eurodollar Advance for the relevant
  Interest Period, the applicable British Bankers’ Association LIBOR rate
  for deposits in U.S. dollars as reported by any generally recognized financial
  information service as of 11:00 a.m. (London time) two Business Days prior to
  the first day of such Interest Period, and having a maturity equal to such Interest
  Period, provided that, if no such British Bankers’ Association LIBOR
  rate is available to the Administrative Agent, the applicable Eurodollar Base
  Rate for the relevant Interest Period shall instead be the rate determined by
  the Administrative Agent to be the rate at which Bank One or one of its Affiliate
  banks offers to place deposits in U.S. dollars with first-class banks in the
  London interbank market at approximately 11:00 a.m. (London time) two Business
  Days prior to the first day of such Interest Period, in the approximate amount
  of Bank One’s relevant Eurodollar Loan and having a maturity equal to such
  Interest Period  

      “Eurodollar
  Loan” means a Loan which, except as otherwise provided in Section 2.11,
  bears interest at the applicable Eurodollar Rate.  

 5






      “Eurodollar
  Rate” means, with respect to a Eurodollar Advance for the relevant Interest
  Period, the sum of (i) the quotient of (a) the Eurodollar Base Rate applicable
  to such Interest Period, divided by (b) one minus the Reserve Requirement (expressed
  as a decimal) applicable to such Interest Period, plus (ii) the Applicable Margin.
  The Eurodollar Rate shall be rounded to the next higher multiple of 1/16 of
  1% if the rate is not such a multiple.  

      “Excluded
  Taxes” means, in the case of each Lender or applicable Lending Installation
  and the Administrative Agent, taxes imposed on its overall net income, and franchise
  taxes imposed on it, by (i) the United States of America or any political subdivision
  thereof or the jurisdiction or any political subdivision thereof under the laws
  of which such Lender or the Administrative Agent is incorporated or organized
  or (ii) the jurisdiction or any political subdivision thereof in which the Administrative
  Agent’s or such Lender’s principal executive office or such Lender’s
  applicable Lending Installation is located.  

      “Exhibit”
  refers to an exhibit to this Agreement, unless another document is specifically
  referenced.  

      “Facility Fee”
  is defined in Section 2.5(i).  

      “Facility
  Termination Date” means December 16, 2003 or any earlier date on which
  the Aggregate Commitment is reduced to zero or otherwise terminated pursuant
  to the terms hereof.  

      “Federal
  Funds Effective Rate” means, for any day, an interest rate per annum equal
  to the weighted average of the rates on overnight Federal funds transactions
  with members of the Federal Reserve System arranged by Federal funds brokers
  on such day, as published for such day (or, if such day is not a Business Day,
  for the immediately preceding Business Day) by the Federal Reserve Bank of New
  York, or, if such rate is not so published for any day which is a Business Day,
  the average of the quotations at approximately 10:00 a.m. (Chicago time) on
  such day on such transactions received by the Administrative Agent from three
  Federal funds brokers of recognized standing selected by the Administrative
  Agent in its sole discretion.  

      “Financial
  Contract” of a Person means (i) any exchange-traded or over-the-counter
  futures, forward, swap or option contract or other financial instrument with
  similar characteristics, or (ii) any agreements, devices or arrangements providing
  for payments related to fluctuations of interest rates, exchange rates, forward
  rates or commodity prices, including, but not limited to, interest rate swap
  or exchange agreements, forward currency exchange agreements, interest rate
  cap or collar protection agreements, forward rate currency or interest rate
  options.  

      “Floating
  Rate” means, for any day, a rate per annum equal to the Alternate Base
  Rate for such day plus the Applicable Margin, in each case changing when and
  as the Alternate Base Rate changes.  

      “Floating
  Rate Advance” means an Advance which, except as otherwise provided in Section
  2.11, bears interest at the Floating Rate.  

 6






      “Floating
  Rate Loan” means a Loan which, except as otherwise provided in Section
  2.11, bears interest at the Floating Rate.  

      “Fund”
  means any Person (other than a natural person) that is (or will be) engaged
  in making, purchasing, holding or otherwise investing in commercial loans and
  similar extensions of credit in the ordinary course of its business. 


      “Interest
  Coverage Ratio” means, with reference to any four fiscal quarter period,
  the ratio of (i) Consolidated EBIT to (ii) Consolidated Interest Expense. 


      “Interest
  Period” means, with respect to a Eurodollar Advance, a period of one, two,
  three or six months commencing on a Business Day selected by the Borrower pursuant
  to this Agreement. Such Interest Period shall end on the day which corresponds
  numerically to such date one, two, three or six months thereafter, provided,
  however, that if there is no such numerically corresponding day in such
  next, second, third or sixth succeeding month, such Interest Period shall end
  on the last Business Day of such next, second, third or sixth succeeding month.
  If an Interest Period would otherwise end on a day which is not a Business Day,
  such Interest Period shall end on the next succeeding Business Day, provided,
  however, that if said next succeeding Business Day falls in a new calendar
  month, such Interest Period shall end on the immediately preceding Business
  Day.  

      “Investment”
  of a Person means any loan, advance (other than commission, travel and similar
  advances to officers and employees made in the ordinary course of business),
  extension of credit (other than accounts receivable arising in the ordinary
  course of business on terms customary in the trade) or contribution of capital
  by such Person; stocks, bonds, mutual funds, partnership interests, notes, debentures
  or other securities owned by such Person; and any deposit accounts and certificate
  of deposit owned by such Person.  

      “Lenders”
  means the lending institutions listed on the signature pages of this Agreement
  and their respective successors and assigns.  

      “Lending
  Installation” means, with respect to a Lender or the Administrative Agent,
  any office, branch, subsidiary or affiliate of such Lender or the Administrative
  Agent.  

      “Letter
  of Credit” of a Person means a letter of credit or similar instrument which
  is issued upon the application of such Person or upon which such Person is an
  account party or for which such Person is in any way liable.  

      “Lien”
  means any lien (statutory or other), mortgage, pledge, hypothecation, assignment,
  deposit arrangement, encumbrance or preference, priority or other security agreement
  or preferential arrangement of any kind or nature whatsoever (including, without
  limitation, the interest of a vendor or lessor under any conditional sale, Capitalized
  Lease or other title retention agreement).  

      “Loan”
  means, with respect to a Lender, such Lender’s loan made pursuant to Article
  II (or any conversion or continuation thereof).  

 7






      “Loan
  Documents” means this Agreement and any Notes issued pursuant to Section
  2.13.  

      “Material
  Adverse Effect” means a material adverse effect on (i) the business, Property,
  condition (financial or otherwise), results of operations, or prospects of the
  Borrower and its Subsidiaries taken as a whole, (ii) the ability of the Borrower
  to perform its obligations under the Loan Documents, or (iii) the validity or
  enforceability of any of the Loan Documents or the rights or remedies of the
  Administrative Agent or the Lenders thereunder.  

      “Material Debt”
  is defined in Section 7.5.  

      “Moody’s”
  means Moody’s Investors Service, Inc.  

      “Multiemployer
  Plan” means a Plan maintained pursuant to a collective bargaining agreement
  or any other arrangement to which the Borrower or any member of the Controlled
  Group is a party to which more than one employer is obligated to make contributions.
   

      “Non-U.S. Lender”
  is defined in Section 3.5(iv).  

      “Note”
  means any promissory note issued at the request of a Lender pursuant to Section
  2.13 in the form of Exhibit E.  

      “Notice of Assignment”
  is defined in Section 12.3.2.  

      “Obligations”
  means all unpaid principal of and accrued and unpaid interest on the Loans,
  all accrued and unpaid fees and all expenses, reimbursements, indemnities and
  other obligations of the Borrower to the Lenders or to any Lender, the Administrative
  Agent or any indemnified party arising under the Loan Documents.  

      “Other Taxes”
  is defined in Section 3.5(ii).  

      “Participants”
  is defined in Section 12.2.1.  

      “Payment Date”
  means the last Business Day of each calendar quarter.  

      “PBGC”
  means the Pension Benefit Guaranty Corporation, or any successor thereto. 


      “Permitted
  Acquisition” means any Acquisition made by the Borrower or any of its Subsidiaries,
  provided that (i) as of the date of the consummation of such Acquisition,
  no Default or Unmatured Default shall have occurred and be continuing or would
  result from such Acquisition, and the representation and warranty contained
  in Section 5.11 shall be true both before and after giving effect to such Acquisition,
  (ii) such Acquisition is consummated on a non-hostile basis pursuant to a negotiated
  acquisition agreement approved by the board of directors or other applicable
  governing body of the seller or entity to be acquired, and no material challenge
  to such Acquisition shall be pending or threatened by any shareholder or director
  of the  

 8






 seller or entity to be
  acquired, and (iii) as of the date of the consummation of such Acquisition,
  all approvals required in connection therewith shall have been obtained. 


      “Permitted
  Restrictive Covenant” means (i) any covenant or restriction contained in
  this Agreement or (ii) any covenant or restriction in any Contract that is less
  burdensome than any covenant or restriction contained in this Agreement. 


      “Person”
  means any natural person, corporation, firm, joint venture, partnership, limited
  liability company, association, enterprise, trust or other entity or organization,
  or any government or political subdivision or any agency, department or instrumentality
  thereof.  

      “Plan”
  means an employee pension benefit plan which is covered by Title IV of ERISA
  or subject to the minimum funding standards under Section 412 of the Code as
  to which the Borrower or any member of the Controlled Group may have any liability.
   

      “Pricing Schedule”
  means the Schedule attached hereto identified as such.  

      “Prime
  Rate” means a rate per annum equal to the prime rate of interest announced
  from time to time by Bank One or its parent (which is not necessarily the lowest
  rate charged to any customer), changing when and as said prime rate changes.
   

      “Pro
  Rata Share” means, for each Lender, the ratio of such Lender’s Commitment
  to the Aggregate Commitment.  

      “Property”
  of a Person means any and all property, whether real, personal, tangible, intangible,
  or mixed, of such Person, or other assets owned, leased or operated by such
  Person.  

      “Purchasers”
  is defined in Section 12.3.1.  

      “Regulation
  D” means Regulation D of the Board of Governors of the Federal Reserve
  System as from time to time in effect and any successor thereto or other regulation
  or official interpretation of said Board of Governors relating to reserve requirements
  applicable to member banks of the Federal Reserve System.  

      “Regulation
  U” means Regulation U of the Board of Governors of the Federal Reserve
  System as from time to time in effect and any successor or other regulation
  or official interpretation of said Board of Governors relating to the extension
  of credit by banks for the purpose of purchasing or carrying margin stocks applicable
  to member banks of the Federal Reserve System.  

      “Reportable
  Event” means a reportable event as defined in Section 4043 of ERISA and
  the regulations issued under such section, with respect to a Plan, excluding,
  however, such events as to which the PBGC has by regulation waived the requirement
  of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence
  of such event, provided, however, that a failure to meet the minimum
  funding standard of Section 412 of the Code and of Section 302 of ERISA shall
  be a Reportable Event regardless of the issuance of any such waiver of the 


 9






 notice requirement in
  accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
   

      “Reports” is
  defined in Section 9.5.  

      “Required
  Lenders” means Lenders in the aggregate having at least 66-?% of the Aggregate
  Commitment or, if the Aggregate Commitment has been terminated, Lenders in the
  aggregate holding at least 66-?% of the aggregate unpaid principal amount of
  the outstanding Advances.  

      “Reserve
  Requirement” means, with respect to an Interest Period, the maximum aggregate
  reserve requirement (including all basic, supplemental, marginal and other reserves)
  which is imposed under Regulation D on Eurocurrency liabilities.  

      “S&P”
  means Standard and Poor’s Ratings Services, a division of The McGraw Hill
  Companies, Inc.  

      “Schedule”
  refers to a specific schedule to this Agreement, unless another document is
  specifically referenced.  

      “Section”
  means a numbered section of this Agreement, unless another document is specifically
  referenced.  

      “Single
  Employer Plan” means a Plan maintained by the Borrower or any member of
  the Controlled Group for employees of the Borrower or any member of the Controlled
  Group.  

      “Subsidiary”
  of a Person means (i) any corporation more than 50% of the outstanding securities
  having ordinary voting power of which shall at the time be owned or controlled,
  directly or indirectly, by such Person or by one or more of its Subsidiaries
  or by such Person and one or more of its Subsidiaries, or (ii) any partnership,
  limited liability company, association, joint venture or similar business organization
  more than 50% of the ownership interests having ordinary voting power of which
  shall at the time be so owned or controlled. Unless otherwise expressly provided,
  all references herein to a “Subsidiary” shall mean a Subsidiary of
  the Borrower.  

      “Substantial
  Portion” means, with respect to the Property of the Borrower and its Subsidiaries,
  Property which (i) represents more than 10% of the consolidated assets of the
  Borrower and its Subsidiaries as would be shown in the consolidated financial
  statements of the Borrower and its Subsidiaries as at the beginning of the twelve-month
  period ending with the month in which such determination is made, or (ii) is
  responsible for more than 10% of the consolidated net sales or of the consolidated
  net income of the Borrower and its Subsidiaries as reflected in the financial
  statements referred to in clause (i) above.  

      “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 excluding Excluded Taxes.  

 10






      “Transferee”
  is defined in Section 12.4.  

      “Type”
  means, with respect to any Advance, its nature as a Floating Rate Advance or
  a Eurodollar Advance, and with respect ot any Loan, its nature as a Floating
  Rate Loan or a Eurodollar Loan.  

      “Unfunded
  Liabilities” means the amount (if any) by which the present value of all
  vested and unvested accrued benefits under all Single Employer Plans exceeds
  the fair market value of all such Plan assets allocable to such benefits, all
  determined as of the then most recent valuation date for such Plans using PBGC
  actuarial assumptions for single employer plan terminations.  

      “Unmatured
  Default” means an event which but for the lapse of time or the giving of
  notice, or both, would constitute a Default.  

      “Utilization Fee”
  is defined in Section 2.5(ii).  

      “Wholly-Owned
  Subsidiary” of a Person means (i) any Subsidiary all of the outstanding
  voting securities of which shall at the time be owned or controlled, directly
  or indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such
  Person, or by such Person and one or more Wholly-Owned Subsidiaries of such
  Person, or (ii) any partnership, limited liability company, association, joint
  venture or similar business organization 100% of the ownership interests having
  ordinary voting power of which shall at the time be so owned or controlled.
   

      The
  foregoing definitions shall be equally applicable to both the singular and plural
  forms of the defined terms.  

 11






 ARTICLE
  II  

 THE
  CREDITS  

       2.1 Commitment.
  From and including the date of this Agreement and prior to the Facility Termination
  Date, each Lender severally agrees, on the terms and conditions set forth in
  this Agreement, to make Loans to the Borrower from time to time in amounts not
  to exceed in the aggregate at any one time outstanding the amount of its Commitment.
  Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow
  at any time prior to the Facility Termination Date. The Commitments to lend
  hereunder shall expire on the Facility Termination Date.  

       2.2 Required Payments;
  Termination. Any outstanding Advances and all other unpaid Obligations shall
  be paid in full by the Borrower on the Facility Termination Date.  

       2.3 Ratable Loans.
  Each Advance hereunder shall consist of Loans made from the several Lenders
  ratably in proportion to the ratio that their respective Commitments bear to
  the Aggregate Commitment.  

       2.4 Types of Advances.
  The Advances may be Floating Rate Advances or Eurodollar Advances, or a combination
  thereof, selected by the Borrower in accordance with Sections 2.8 and 2.9. 


       2.5 Facility Fee;
  Utilization Fee; Reductions in Aggregate Commitment. (i) The Borrower agrees
  to pay to the Administrative Agent for the account of each Lender a facility
  fee (the “Facility Fee”) at a per annum rate equal to the Applicable
  Fee Rate on such Lender’s Commitment (without regard to usage) from the
  date hereof to and including the Facility Termination Date, payable in arrears
  on each Payment Date hereafter and on the Facility Termination Date. 


       (ii) The Borrower hereby
  agrees to pay to the Administrative Agent for the ratable account of the Lenders
  a utilization fee (the “Utilization Fee”) for each day on which the
  aggregate outstanding principal amount of the Loans exceeds 33 1/3% of the then-current
  Aggregate Commitment. The Utilization Fee shall be at a rate equal to the Applicable
  Utilization Fee Rate on the aggregate outstanding principal amount of the Loans,
  shall be distributed to each Lender pro rata according to such Lender’s
  Pro Rata Share of the aggregate outstanding principal amount of the Loans, and
  shall be payable in arrears on each Payment Date hereafter and on the Facility
  Termination Date (or such earlier date on which the Aggregate Commitment shall
  terminate or be cancelled and all of the Loans shall be repaid) for any period
  then ending for which such fee shall not have been theretofore paid.


       (iii) The Borrower may
  permanently reduce the Aggregate Commitment in whole, or in part ratably among
  the Lenders in integral multiples of $10,000,000, upon at least three (3) Business
  Days’ written notice to the Administrative Agent, which notice shall specify
  the amount of any such reduction, provided, however, that the amount
  of the Aggregate Commitment may  

 12






	not
        be reduced below the aggregate principal amount of the outstanding Advances.
        All accrued Facility Fees shall be payable on the effective date of any
        termination of the obligations of the Lenders to make Loans hereunder.

         

	     2.6
        Minimum Amount of Each Advance. Each Eurodollar Advance shall be
        in the minimum amount of $5,000,000 (and in multiples of $1,000,000 if
        in excess thereof), and each Floating Rate Advance shall be in the minimum
        amount of $5,000,000 (and in multiples of $1,000,000 if in excess thereof),
        provided, however, that any Floating Rate Advance may be in the
        amount of the unused Aggregate Commitment.

         

	     2.7
        Optional Principal Payments. The Borrower may from time to time
        pay, without penalty or premium, all outstanding Floating Rate Advances,
        or, in a minimum aggregate amount of $5,000,000 or any integral multiple
        of $100,000 in excess thereof, any portion of the outstanding Floating
        Rate Advances upon one (1) Business Day’s prior written notice to
        the Administrative Agent. The Borrower may from time to time pay, subject
        to the payment of any funding indemnification amounts required by Section
        3.4 but without penalty or premium, all outstanding Eurodollar Advances,
        or, in a minimum aggregate amount of $5,000,000 or any integral multiple
        of $100,000 in excess thereof, any portion of the outstanding Eurodollar
        Advances upon three (3) Business Days’ prior notice to the Administrative
        Agent.

         

	     2.8
        Method of Selecting Types and Interest Periods for New Advances.
        The Borrower shall select the Type of Advance and, in the case of each
        Eurodollar Advance, the Interest Period applicable thereto from time to
        time. The Borrower shall give the Administrative Agent irrevocable notice
        (a “Borrowing Notice”) not later than 10:00 a.m. (Chicago time)
        at least one (1) Business
        Day before the Borrowing Date of each Floating Rate Advance and three
        (3) Business Days before the Borrowing Date for each Eurodollar Advance,
        specifying:

         

	
	(i)

          
	the
        Borrowing Date, which shall be a Business Day, of such Advance,

         

	
	(ii)

          
	the
        aggregate amount of such Advance,

         

	
	(iii)

          
	the
        Type of Advance selected, and

         

	
	(iv)

          
	in
        the case of each Eurodollar Advance, the Interest Period applicable thereto.

         

	Not
        later than noon (Chicago time) on each Borrowing Date, each Lender shall
        make available its Loan or Loans in funds immediately available in Chicago
        to the Administrative Agent at its address specified pursuant to Article
        XIII. The Administrative Agent will make the funds so received from the
        Lenders available to the Borrower at the Administrative Agent’s aforesaid
        address.

         

	     2.9
        Conversion and Continuation of Outstanding Advances. Floating Rate Advances
        shall continue as Floating Rate Advances unless and until such Floating
        Rate Advances are converted into Eurodollar Advances pursuant to this
        Section 2.9 or are repaid in accordance with Section 2.7. Each Eurodollar
        Advance shall continue as a Eurodollar Advance until the end of the then
        applicable Interest Period therefor, at which time such Eurodollar Advance
        shall be automatically

         

	13

         







	converted
        into a Floating Rate Advance unless (x) such Eurodollar Advance is or
        was repaid in accordance with Section 2.7 or (y) the Borrower shall have
        given the Administrative Agent a Conversion/Continuation Notice (as defined
        below) requesting that, at the end of such Interest Period, such Eurodollar
        Advance continue as a Eurodollar Advance for the same or another Interest
        Period. Subject to the terms of Section 2.6, the Borrower may elect from
        time to time to convert all or any part of a Floating Rate Advance into
        a Eurodollar Advance. The Borrower shall give the Administrative Agent
        irrevocable notice (a “Conversion/Continuation Notice”) of each
        conversion of a Floating Rate Advance into a Eurodollar Advance or continuation
        of a Eurodollar Advance not later than 10:00 a.m. (Chicago time) 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 or continuation,

         

	
	(ii)

          
	the
        aggregate amount and Type of the Advance which is to be converted or continued,
        and

         

	
	(iii)

          
	the
        amount of such Advance which is to be converted into or continued as a
        Eurodollar Advance and the duration of the Interest Period applicable
        thereto.

         

	     2.10
        Changes in Interest Rate, etc. Each Floating Rate Advance shall bear interest
        on the outstanding principal amount thereof, for each day from and including
        the date such Advance is made or is automatically converted from a Eurodollar
        Advance into a Floating Rate Advance pursuant to Section 2.9, to but excluding
        the date it is paid or is converted into a Eurodollar Advance pursuant
        to Section 2.9 hereof, at a rate per annum equal to the Floating Rate
        for such day. Changes in the rate of interest on that portion of any Advance
        maintained as a Floating Rate Advance will take effect simultaneously
        with each change in the Alternate Base Rate. Each Eurodollar Advance shall
        bear interest on the outstanding principal amount thereof from and including
        the first day of the Interest Period applicable thereto to (but not including)
        the last day of such Interest Period at the Eurodollar Rate determined
        by the Administrative Agent as applicable to such Eurodollar Advance based
        upon the Borrower’s selections under Sections 2.8 and 2.9 and otherwise
        in accordance with the terms hereof. No Interest Period may end after
        the Facility Termination Date.

         

	     2.11
        Rate Applicable After Default. Notwithstanding anything to the contrary
        contained in Section 2.8 or 2.9, during the continuance of a Default or
        Unmatured Default the Required Lenders may, at their option, by notice
        to the Borrower (which notice may be revoked at the option of the Required
        Lenders notwithstanding any provision of Section 8.2 requiring unanimous
        consent of the Lenders to changes in interest rates), declare that no
        Advance may be made as, converted into or continued as a Eurodollar Advance.
        During the continuance of a Default the Required Lenders may, at their
        option, by notice to the Borrower (which notice may be revoked at the
        option of the Required Lenders notwithstanding any provision of Section
        8.2 requiring unanimous consent of the Lenders to changes in interest
        rates), declare that (i) each Eurodollar Advance shall bear interest for
        the remainder of the applicable Interest Period at the rate otherwise
        applicable to such Interest Period plus 2% per annum and (ii) each Floating
        Rate Advance shall bear interest at a rate per annum equal to the Floating
        Rate in effect from time to

         

	14

         







 time plus 2% per
  annum; provided, that, during the continuance of a Default under
  Section 7.6 or 7.7, the interest rates set forth in clauses (i) and (ii) above
  shall be applicable to all Advances without any election or action on the part
  of the Administrative Agent or any Lender; and provided further,
  that the Applicable Margin shall be deemed to be set at Level V Status when
  determining such interest rates.  

       2.12 Method of Payment.
  All payments of the Obligations hereunder shall be made, without setoff, deduction,
  or counterclaim, in immediately available funds to the Administrative Agent
  at the Administrative Agent’s address specified pursuant to Article XIII,
  or at any other Lending Installation of the Administrative Agent specified in
  writing by the Administrative Agent to the Borrower, by noon (local time) on
  the date when due and shall be applied ratably by the Administrative Agent among
  the Lenders. Each payment delivered to the Administrative Agent for the account
  of any Lender shall be delivered promptly by the Administrative Agent to such
  Lender in the same type of funds that the Administrative Agent received at its
  address specified pursuant to Article XIII or at any Lending Installation specified
  in a notice received by the Administrative Agent from such Lender. The Administrative
  Agent is hereby authorized to charge the account of the Borrower maintained
  with Bank One for each payment of principal, interest and fees as it becomes
  due hereunder.  

       2.13 Noteless Agreement;
  Evidence of Indebtedness. (i) Each Lender shall maintain in accordance with
  its usual practice an account or accounts evidencing the indebtedness of the
  Borrower to such Lender resulting from each Loan made by such Lender from time
  to time, including the amounts of principal and interest payable and paid to
  such Lender from time to time hereunder.  

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

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

       (iv) Any Lender may request
  that its Loans be evidenced by a promissory note (a “Note”). In such
  event, the Borrower shall prepare, execute and deliver to such Lender a Note
  payable to the order of such Lender in the form of Exhibit E. Thereafter, the
  Loans evidenced by such Note and interest thereon shall at all times (including
  after any assignment pursuant to Section 12.3) be represented by one or more
  Notes payable to the order of the payee named therein or any assignee pursuant
  to Section 12.3, except to the extent that any such Lender or assignee subsequently
  returns any such Note for cancellation and requests that such Loans once again
  be evidenced as described in paragraphs (i) and (ii) above.  

 15






       2.14 Telephonic Notices.
  The Borrower hereby authorizes the Lenders and the Administrative Agent to extend,
  convert or continue Advances, effect selections of Types of Advances and to
  transfer funds based on telephonic notices made by any person or persons the
  Administrative Agent or any Lender in good faith believes to be acting on behalf
  of the Borrower, it being understood that the foregoing authorization is specifically
  intended to allow Borrowing Notices and Conversion/Continuation Notices to be
  given telephonically. The Borrower agrees to deliver promptly to the Administrative
  Agent a written confirmation, if such confirmation is requested by the Administrative
  Agent or any Lender, of each telephonic notice signed by an Authorized Officer.
  If the written confirmation differs in any material respect from the action
  taken by the Administrative Agent and the Lenders, the records of the Administrative
  Agent and the Lenders shall govern absent manifest error.  

       2.15 Interest Payment
  Dates; Interest and Fee Basis. Interest accrued on each Floating Rate Advance
  shall be payable on each Payment Date, commencing with the first such date to
  occur after the date hereof, on any date on which such Floating Rate Advance
  is prepaid, whether due to acceleration or otherwise, and at maturity. Interest
  accrued on that portion of the outstanding principal amount of any Floating
  Rate Advance converted into a Eurodollar Advance on a day other than a Payment
  Date shall be payable on the date of conversion. Interest accrued on each Eurodollar
  Advance shall be payable on the last day of its applicable Interest Period,
  on any date on which the Eurodollar Advance is prepaid, whether by acceleration
  or otherwise, and at maturity. Interest accrued on each Eurodollar Advance having
  an Interest Period longer than three months shall also be payable on the last
  day of each three-month interval during such Interest Period. Interest on Eurodollar
  Advances and Facility Fees and Utilization Fees shall be calculated for actual
  days elapsed on the basis of a 360-day year, and interest on Floating Rate Advances
  shall be calculated for actual days elapsed on the basis of a 365/366-day year.
  Interest shall be payable for the day an Advance is made but not for the day
  of any payment on the amount paid if payment is received prior to noon (local
  time) at the place of payment. If any payment of principal of or interest on
  an Advance, any fees or any other amounts payable to the Administrative Agent
  or any Lender hereunder shall become due on a day which is not a Business Day,
  such payment shall be made on the next succeeding Business Day and, in the case
  of a principal payment, such extension of time shall be included in computing
  interest in connection with such payment.  

       2.16 Notification
  of Advances, Interest Rates, Prepayments and Commitment Reductions. Promptly
  after receipt thereof, the Administrative Agent will notify each Lender of the
  contents of each Aggregate Commitment reduction notice, Borrowing Notice, Conversion/Continuation
  Notice, and repayment notice received by it hereunder. The Administrative Agent
  will notify each Lender of the interest rate applicable to each Eurodollar Advance
  promptly upon determination of such interest rate and will give each Lender
  prompt notice of each change in the Alternate Base Rate.  

       2.17 Lending Installations.
  Each Lender may book its Loans at any Lending Installation selected by such
  Lender and may change its Lending Installation from time to time. All terms
  of this Agreement shall apply to any such Lending Installation and the Loans
  and any Notes issued  

 16






 hereunder shall be deemed
  held by each Lender for the benefit of any such Lending Installation. Each Lender
  may, by written notice to the Administrative Agent and the Borrower in accordance
  with Article XIII, designate replacement or additional Lending Installations
  through which Loans will be made by it and for whose account Loan payments are
  to be made.  

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

       2.19 Replacement of
  Lender. If the Borrower is required pursuant to Section 3.1, 3.2 or 3.5
  to make any additional payment to any Lender or if any Lender’s obligation
  to make or continue, or to convert Floating Rate Advances into, Eurodollar Advances
  shall be suspended pursuant to Section 3.3 (any Lender so affected an “Affected
  Lender”), the Borrower may elect, if such amounts continue to be charged
  or such suspension is still effective, to replace such Affected Lender as a
  Lender party to this Agreement, provided that no Default or Unmatured
  Default shall have occurred and be continuing at the time of such replacement,
  and provided further that, concurrently with such replacement, (i) another
  bank or other entity which is reasonably satisfactory to the Borrower and the
  Administrative Agent shall agree, as of such date, to purchase for cash the
  Advances and other Obligations due to the Affected Lender pursuant to an assignment
  substantially in the form of Exhibit C and to become a Lender for all purposes
  under this Agreement and to assume all obligations of the Affected Lender to
  be terminated as of such date and to comply with the requirements of Section
  12.3 applicable to assignments, and (ii) the Borrower shall pay to such Affected
  Lender in same day funds on the day of such replacement (A) all interest, fees
  and other amounts then accrued but unpaid to such Affected Lender by the Borrower
  hereunder to and including the date of termination, including without limitation
  payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B)
  an amount, if any, equal to the payment which would have been due to such Lender
  on the day of such replacement under Section 3.4 had the Loans of such Affected
  Lender been prepaid on such date rather than sold to the replacement Lender.
   

 17






 ARTICLE
  III  

 YIELD
  PROTECTION; TAXES  

       3.1 Yield Protection.
  If, on or after the date of this Agreement, the adoption of any law or any governmental
  or quasi-governmental rule, regulation, policy, guideline or directive (whether
  or not having the force of law), or any change in any such law, rule, regulation,
  policy, guideline or directive or in the interpretation or administration thereof
  by any governmental or quasi-governmental authority, central bank or comparable
  agency charged with the interpretation or administration thereof, or compliance
  by any Lender or applicable Lending Installation with any request or directive
  (whether or not having the force of law) of any such authority, central bank
  or comparable agency:  

       (i) subjects any Lender
  or any applicable Lending Installation to any Taxes, or changes the basis of
  taxation of payments (other than with respect to Excluded Taxes) to any Lender
  in respect of its Eurodollar Loans, or  

       (ii) imposes or increases
  or deems applicable any reserve, assessment, insurance charge, special deposit
  or similar requirement against assets of, deposits with or for the account of,
  or credit extended by, any Lender or any applicable Lending Installation (other
  than reserves and assessments taken into account in determining the interest
  rate applicable to Eurodollar Advances), or  

       (iii) imposes any other
  condition the result of which is to increase the cost to any Lender or any applicable
  Lending Installation of making, funding or maintaining its Eurodollar Loans
  or reduces any amount receivable by any Lender or any applicable Lending Installation
  in connection with its Eurodollar Loans, or requires any Lender or any applicable
  Lending Installation to make any payment calculated by reference to the amount
  of Eurodollar Loans held or interest received by it, by an amount deemed material
  by such Lender,  

 and the result of any
  of the foregoing is to increase the cost to such Lender or applicable Lending
  Installation of making or maintaining its Eurodollar Loans or Commitment or
  to reduce the return received by such Lender or applicable Lending Installation
  in connection with such Eurodollar Loans or Commitment, then, within 15 days
  of demand by such Lender, the Borrower shall pay such Lender such additional
  amount or amounts as will compensate such Lender for such increased cost or
  reduction in amount received.  

       3.2 Changes in Capital
  Adequacy Regulations. If a Lender determines the amount of capital required
  or expected to be maintained by such Lender, any Lending Installation of such
  Lender or any corporation controlling such Lender is increased as a result of
  a Change (as defined below), then, within 15 days of demand by such Lender,
  the Borrower shall pay such Lender the amount necessary to compensate for any
  shortfall in the rate of return on the portion of such increased capital which
  such Lender determines is attributable to this Agreement, its Loans or its Commitment
  to make Loans hereunder (after taking into account such Lender’s policies
  as to capital adequacy). “Change” means (i) any change after the date
  of this Agreement in the Risk-Based Capital Guidelines (as defined below) or
  (ii) any adoption of, change in, or  

 18






 change in the interpretation
  or administration of any other law, governmental or quasi-governmental rule,
  regulation, policy, guideline, interpretation, or directive (whether or not
  having the force of law) after the date of this Agreement which affects the
  amount of capital required or expected to be maintained by any Lender or any
  Lending Installation or any corporation controlling any Lender. “Risk-Based
  Capital Guidelines” means (i) the risk-based capital guidelines in effect
  in the United States on the date of this Agreement, including transition rules,
  and (ii) the corresponding capital regulations promulgated by regulatory authorities
  outside the United States implementing the July 1988 report of the Basle Committee
  on Banking Regulation and Supervisory Practices Entitled “International
  Convergence of Capital Measurements and Capital Standards,” including transition
  rules, and any amendments to such regulations adopted prior to the date of this
  Agreement.  

       3.3 Availability of
  Types of Advances. If any Lender determines that the making or maintenance
  of its Eurodollar Loans at a suitable Lending Installation would violate any
  applicable law, rule, regulation, or directive, whether or not having the force
  of law, or if the Required Lenders determine that (i) deposits of a type and
  maturity appropriate to match fund Eurodollar Advances are not available or
  (ii) the interest rate applicable to Eurodollar Advances does not accurately
  reflect the cost of making or maintaining Eurodollar Advances, then for so long
  as any such circumstances exist the Administrative Agent shall suspend the availability
  of Eurodollar Advances and require any affected Eurodollar Advances to be repaid
  or converted to Floating Rate Advances, subject to the payment of any funding
  indemnification amounts required by Section 3.4.  

       3.4 Funding Indemnification.
  If any payment of a Eurodollar Advance occurs on a date which is not the last
  day of the applicable Interest Period, whether because of acceleration, prepayment
  or otherwise (including, without limitation, prepayments required by Section
  3.3), or a Eurodollar Advance is not made on the date specified by the Borrower
  for any reason other than default by the Lenders, the Borrower will indemnify
  each Lender for any reasonable 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 Eurodollar Advance.  

       3.5 Taxes. (i)
  All payments by the Borrower to or for the account of any Lender or the Administrative
  Agent hereunder or under any Note shall be made free and clear of and without
  deduction for any and all Taxes. If the Borrower shall be required by law to
  deduct any Taxes from or in respect of any sum payable hereunder to any Lender
  or the Administrative Agent, (a) the sum payable shall be increased as necessary
  so that after making all required deductions (including deductions applicable
  to additional sums payable under this Section 3.5) such Lender or the Administrative
  Agent (as the case may 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 to the relevant
  authority in accordance with applicable law and (d) the Borrower shall furnish
  to the Administrative Agent the original copy of a receipt evidencing payment
  thereof within 30 days after such payment is made.  

       (ii) In addition, the
  Borrower hereby agrees to pay any present or future stamp or documentary taxes
  and any other excise or property taxes, charges or similar levies which arise
   

 19






 from any payment made
  hereunder or under any Note or from the execution or delivery of, or otherwise
  with respect to, this Agreement or any Note (“Other Taxes”). 


       (iii) The Borrower hereby
  agrees to indemnify the Administrative Agent and each Lender for the full amount
  of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
  imposed on amounts payable under this Section 3.5) paid by the Administrative
  Agent or such Lender as a result of its Commitment, any Loans made by it hereunder,
  or otherwise in connection with its participation in this Agreement and any
  liability (including 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 Administrative Agent or such Lender makes demand
  therefor pursuant to Section 3.6.  

       (iv) Each Lender that
  is not incorporated under the laws of the United States of America or a state
  thereof (each a “Non-U.S. Lender”) agrees that it will, not more than
  ten Business Days after the date of this Agreement, (i) deliver to each of the
  Borrower and the Administrative Agent two duly completed copies of United States
  Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that
  such Lender is entitled to receive payments under this Agreement without deduction
  or withholding of any United States federal income taxes, and (ii) deliver to
  each of the Borrower and the Administrative Agent a United States Internal Revenue
  Form W-8 or W-9, as the case may be, and certify that it is entitled to an exemption
  from United States backup withholding tax. Each Non-U.S. Lender further undertakes
  to deliver to each of the Borrower and the Administrative Agent (x) renewals
  or additional copies of such form (or any successor form) on or before the date
  that such form expires or becomes obsolete, and (y) after the occurrence of
  any event requiring a change in the most recent forms so delivered by it, such
  additional forms or amendments thereto as may be reasonably requested by the
  Borrower or the Administrative Agent. All forms or amendments described in the
  preceding sentence shall certify that such Lender is entitled to receive payments
  under this Agreement without deduction or withholding of any United States federal
  income taxes, unless an event (including without limitation any change
  in treaty, law or regulation) has occurred prior to the date on which any such
  delivery would otherwise be required which renders all such forms inapplicable
  or which would prevent such Lender from duly completing and delivering any such
  form or amendment with respect to it and such Lender advises the Borrower and
  the Administrative Agent that it is not capable of receiving payments without
  any deduction or withholding of United States federal income tax.  

       (v) For any period during
  which a Non-U.S. Lender 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 the interpretation or administration
  thereof by any governmental authority, occurring subsequent to the date on which
  a form originally was required to be provided), such Non-U.S. Lender shall not
  be entitled to indemnification under this Section 3.5 with respect to Taxes
  imposed by the United States or any political subdivision thereof; provided
  that, should a Non-U.S. Lender which is otherwise exempt from or subject to
  a reduced rate of withholding tax become subject to Taxes because of its failure
  to deliver a form required under clause (iv), above, the Borrower shall take
  such steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S.
  Lender to recover such Taxes.  

 20






       (vi) Any Lender that
  is entitled to an exemption from or reduction of withholding tax with respect
  to payments under this Agreement or any Note pursuant to the law of any relevant
  jurisdiction or any treaty shall deliver to the Borrower (with a copy to the
  Administrative Agent), at the time or times prescribed by applicable law, such
  properly completed and executed documentation prescribed by applicable law as
  will permit such payments to be made without withholding or at a reduced rate.
  For any period during which any Lender has failed to provide the Borrower with
  such documentation, such Lender shall not be entitled to indemnification under
  this Section 3.5 with respect to withholding tax to the extent that such exemption
  or reduction would otherwise have been available.  

       (vii) If the U.S. Internal
  Revenue Service or any other governmental authority of the United States or
  any other country or any political subdivision thereof asserts a claim that
  the Administrative Agent did not properly withhold tax from amounts paid to
  or for the account of any Lender (because the appropriate form was not delivered
  or properly completed, because such Lender failed to notify the Administrative
  Agent of a change in circumstances which rendered its exemption from withholding
  ineffective, or for any other reason), such Lender 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 payable to the Administrative
  Agent under this subsection, together with all costs and expenses related thereto
  (including attorneys fees and time charges of attorneys for the Administrative
  Agent, which attorneys may be employees of the Administrative Agent). The obligations
  of the Lenders under this Section 3.5(vii) shall survive the payment of the
  Obligations and termination of this Agreement.  

       (viii) If the Borrower
  is required to pay additional amounts to any Lender or the Administrative Agent
  pursuant to this Section 3.5, then such Lender shall use reasonable efforts
  (consistent with legal and regulatory restrictions) to change the jurisdiction
  of its Lending Installation or take other appropriate action so as to eliminate
  any such additional payment by the Borrower which may thereafter accrue, if
  such change or other action in the judgment of such Lender is not otherwise
  disadvantageous to such Lender.  

       3.6 Lender Statements;
  Survival of Indemnity. To the extent reasonably possible, each Lender shall
  designate an alternate Lending Installation with respect to its Eurodollar Loans
  to reduce any liability of the Borrower to such Lender under Sections 3.1, 3.2
  and 3.5 or to avoid the unavailability of Eurodollar Advances under Section
  3.3, so long as such designation is not, in the judgment of such Lender, disadvantageous
  to such Lender. Each Lender shall use reasonable efforts to give prompt written
  notice to the Borrower upon becoming aware of the existence of any circumstances
  that would give rise to a claim for compensation by such Lender under Section
  3.1, 3.2 or 3.5 or that would result in the unavailability of Eurodollar Advances
  under Section 3.3, but the failure to give such notice shall not affect any
  of such Lender’s rights hereunder. In determining the amount of compensation
  under Section 3.1, 3.2 or 3.5, each Lender shall act in good faith, and any
  demand for compensation under Section 3.1, 3.2 or 3.5 shall be limited to increased
  costs, reductions in amounts received and reduced returns incurred within 180
  days of the date of such demand. Each Lender shall deliver a written statement
  of  

 21






 such Lender to the Borrower
  (with a copy to the Administrative Agent) as to the amount due, if any, under
  Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable
  detail the calculations upon which such Lender determined such amount and shall
  be final, conclusive and binding on the Borrower in the absence of manifest
  error. Determination of amounts payable under such Sections in connection with
  a Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
  Loan through the purchase of a deposit of the type and maturity corresponding
  to the deposit used as a reference in determining the Eurodollar Rate applicable
  to such Loan, whether in fact that is the case or not. Unless otherwise provided
  herein, the amount specified in the written statement of any Lender shall be
  payable on demand after receipt by the Borrower of such written statement. The
  obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive
  payment of the Obligations and termination of this Agreement.  

 22






 ARTICLE
  IV  

 CONDITIONS
  PRECEDENT  

 23






       4.1 Initial Advance.
  The Lenders shall not be required to make the initial Advance hereunder unless
  the Borrower has furnished to the Administrative Agent with sufficient copies
  for the Lenders:  

       (i) Copies of the articles
  of incorporation of the Borrower, together with all amendments, and a certificate
  of good standing, each certified by the appropriate governmental officer in
  its jurisdiction of incorporation.  

       (ii) Copies, certified
  by the Secretary or Assistant Secretary of the Borrower, of its Code of Regulations
  and of its Board of Directors’ resolutions and of resolutions or actions
  of any other body authorizing the execution of the Loan Documents to which the
  Borrower is a party.  

       (iii) An incumbency certificate,
  executed by the Secretary or Assistant Secretary of the Borrower, which shall
  identify by name and title and bear the signatures of the Authorized Officers
  and any other officers of the Borrower authorized to sign the Loan Documents
  to which the Borrower is a party, upon which certificate the Administrative
  Agent and the Lenders shall be entitled to rely until informed of any change
  in writing by the Borrower.  

       (iv) A certificate, signed
  by an Authorized Officer of the Borrower, stating that on the initial Borrowing
  Date no Default or Unmatured Default has occurred and is continuing. 


       (v) A written opinion
  of the Borrower’s general counsel addressed to the Lenders in substantially
  the form of Exhibit A.  

       (vi) Any Notes requested
  by a Lender pursuant to Section 2.13 payable to the order of each such requesting
  Lender.  

       (vii) Written money transfer
  instructions, in substantially the form of Exhibit D, addressed to the Administrative
  Agent and signed by an Authorized Officer, together with such other related
  money transfer authorizations as the Administrative Agent may have reasonably
  requested.  

       (viii) Evidence of the
  termination of the Revolving Credit Agreement, dated as of December 21, 2001
  by and among DPL, the lenders party thereto, and Bank One, NA, as administrative
  agent thereunder, and evidence of the repayment in full of all Debt and other
  obligations thereunder.  

       (ix) Such other documents
  as any Lender or its counsel may have reasonably requested.  

       4.2 Each Advance.
  The Lenders shall not be required to make any Advance unless on the applicable
  Borrowing Date:  

       (i) There exists no Default
  or Unmatured Default.  

 24






       (ii) The representations
  and warranties contained in Article V are true and correct as of such Borrowing
  Date except to the extent any such representation or warranty is stated to relate
  solely to an earlier date, in which case such representation or warranty shall
  have been true and correct on and as of such earlier date.  

      Each
  Borrowing Notice with respect to each such Advance shall constitute a representation
  and warranty by the Borrower that the conditions contained in Sections 4.2(i)
  and (ii) have been satisfied.  

 ARTICLE
  V  

 REPRESENTATIONS
  AND WARRANTIES  

      The Borrower represents
  and warrants to the Lenders that:  

       5.1 Existence and
  Standing. The Borrower is a corporation organized under the laws of the
  State of Ohio. Each of the Borrower’s Subsidiaries is a corporation, partnership
  or limited liability company duly and properly incorporated or organized, as
  the case may be under the laws of its jurisdiction of incorporation or organization.
  Each of the Borrower and its Subsidiaries is validly existing and (to the extent
  such concept applies to such entity) in good standing under the laws of its
  jurisdiction of incorporation or organization and has all requisite authority
  to conduct its business in each jurisdiction in which its business is conducted,
  except to the extent that the failure to have such authority could not reasonably
  be expected to have a Material Adverse Effect.  

       5.2 Authorization
  and Validity. The Borrower has the corporate power and authority and legal
  right to execute and deliver the Loan Documents and to perform its obligations
  thereunder. The execution and delivery by the Borrower of the Loan Documents
  and the performance of its obligations thereunder have been duly authorized
  by proper corporate proceedings, and the Loan Documents to which the Borrower
  is a party constitute legal, valid and binding obligations of the Borrower enforceable
  against the Borrower in accordance with their terms, except as enforceability
  may be limited by bankruptcy, insolvency or similar laws affecting the enforcement
  of creditors’ rights generally.  

       5.3 No Conflict; Government
  Consent. Neither the execution and delivery by the Borrower of the Loan
  Documents, nor the consummation of the transactions therein contemplated, nor
  compliance with the provisions thereof will violate (i) any law, rule, regulation,
  order, writ, judgment, injunction, decree or award binding on the Borrower or
  any of its Subsidiaries or (ii) the Borrower’s or any Subsidiary’s
  articles or certificate of incorporation, partnership agreement, certificate
  of partnership, articles or certificate of organization, code of regulations,
  by-laws, or operating or other management agreement, as the case may be, or
  (iii) the provisions of any indenture, instrument or agreement to which the
  Borrower or any of its Subsidiaries is a party or is subject, or by which it,
  or its Property, is bound, or conflict with or constitute a default thereunder,
  or result in, or require, the creation or imposition of any Lien in, 


 25






 of or on the Property
  of the Borrower or a Subsidiary pursuant to the terms of any such indenture,
  instrument or agreement. No order, consent, adjudication, approval, license,
  authorization, or validation of, or filing, recording or registration with,
  or exemption by, or other action in respect of any governmental or public body
  or authority, or any subdivision thereof, which has not been obtained by the
  Borrower or any of its Subsidiaries, is required to be obtained by the Borrower
  or any of its Subsidiaries in connection with the execution and delivery of
  the Loan Documents, the borrowings under this Agreement, the payment and performance
  by the Borrower of the Obligations or the legality, validity, binding effect
  or enforceability of any of the Loan Documents.  

       5.4 Financial Statements.
  The December 31, 2001, March 31, 2002, June 30, 2002 and September 30, 2002
  consolidated financial statements of the Borrower and its Subsidiaries heretofore
  delivered to the Lenders were prepared in accordance with generally accepted
  accounting principles in effect on the dates such statements were prepared and
  fairly present the consolidated financial condition and operations of the Borrower
  and its Subsidiaries at such dates and the consolidated results of their operations
  for the periods then ended, subject, in the case of the March 31, 2002, June
  30, 2002 and September 30, 2002 financial statements, to normal year-end adjustments.
   

       5.5 Material Adverse
  Change. Since September 30, 2002, there has been no change in the business,
  Property, condition (financial or otherwise), prospects or results of operations
  of the Borrower and its Subsidiaries which could reasonably be expected to have
  a Material Adverse Effect.  

       5.6 Taxes. The
  Borrower and its Subsidiaries have filed all United States federal tax returns
  and all other material tax returns which are required to be filed and have paid
  all United States federal income taxes and all other material taxes due pursuant
  to said returns or pursuant to any assessment received by the Borrower or any
  of its Subsidiaries, except such taxes, if any, as are being contested in good
  faith and as to which adequate reserves have been provided in accordance with
  Agreement Accounting Principles. The United States income tax returns of the
  Borrower and its Subsidiaries have been audited by the Internal Revenue Service
  through the fiscal year ended December 31, 1998. The charges, accruals and reserves
  on the books of the Borrower and its Subsidiaries in respect of any taxes or
  other governmental charges are adequate.  

       5.7 Litigation and
  Contingent Obligations. Except as set forth on Schedule 5.7, there is no
  litigation, arbitration, governmental investigation, proceeding or inquiry pending
  or, to the knowledge of any of their officers, threatened against or affecting
  the Borrower or any of its Subsidiaries which could reasonably be expected to
  have a Material Adverse Effect or which seeks to prevent, enjoin or delay the
  making of any Loans. On the date of this Agreement, other than any liability
  incident to any litigation, arbitration or proceeding which could not reasonably
  be expected to have a Material Adverse Effect, the Borrower has no material
  Contingent Obligations not provided for or disclosed in the financial statements
  referred to in Section 5.4.  

       5.8 Subsidiaries.
  Schedule 5.8 contains an accurate list of all Subsidiaries of the Borrower as
  of the date of this Agreement, setting forth their respective jurisdictions
  of organization and  

 26






 the percentage of their
  respective capital stock or other ownership interests owned by the Borrower
  or other Subsidiaries. All of the issued and outstanding shares of capital stock
  or other ownership interests of such Subsidiaries have been (to the extent such
  concepts are relevant with respect to such ownership interests) duly authorized
  and issued and are fully paid and non-assessable.  

       5.9 ERISA. The
  Unfunded Liabilities of all Single Employer Plans do not in the aggregate exceed
  $0 as of the date hereof. Each Plan complies in all material respects with all
  applicable requirements of law and regulations, no Reportable Event has occurred
  with respect to any Plan, neither the Borrower nor any other member of the Controlled
  Group has withdrawn from any Plan or initiated steps to do so, and no steps
  have been taken to reorganize or terminate any Plan.  

       5.10 Accuracy of Information.
  No information, exhibit or report furnished by the Borrower or any of its Subsidiaries
  to the Administrative Agent or to any Lender in connection with the negotiation
  of, or compliance with, the Loan Documents contained, as of the date so furnished,
  any material misstatement of fact or omitted to state a material fact or any
  fact necessary to make the statements contained therein not misleading. 


       5.11 Regulation U.
  Margin stock (as defined in Regulation U) constitutes less than 25% of the value
  of those assets of the Borrower and its Subsidiaries which are subject to any
  limitation on sale, pledge, or other restriction hereunder.  

       5.12 Material Agreements.
  Neither the Borrower nor any Subsidiary is a party to any agreement or instrument
  or subject to any charter or other corporate restriction which could reasonably
  be expected to have a Material Adverse Effect. Neither the Borrower nor any
  Subsidiary is in default in the performance, observance or fulfillment of any
  of the obligations, covenants or conditions contained in any agreement to which
  it is a party, which default could reasonably be expected to have a Material
  Adverse Effect.  

       5.13 Compliance With
  Laws. The Borrower and its Subsidiaries have complied in all material respects
  with all applicable statutes, rules, regulations, orders and restrictions of
  any domestic or foreign government or any instrumentality or agency thereof
  having jurisdiction over the conduct of their respective businesses or the ownership
  of their respective Property.  

       5.14 Ownership of
  Properties. On the date of this Agreement, the Borrower and its Subsidiaries
  have good title, free of all Liens other than those set forth on Schedule 6.13
  or otherwise permitted by Section 6.13, to all of the Property and assets reflected
  in the Borrower’s consolidated financial statements as of September 30,
  2002 provided to the Administrative Agent as owned by the Borrower and its Subsidiaries,
  other than such Property or assets sold or otherwise disposed of in the ordinary
  course of business since the date of such consolidated financial statements,
  except for such defects in title as could not reasonably be expected, individually
  or in the aggregate, to have a Material Adverse Effect.  

 27






       5.15 Plan Assets;
  Prohibited Transactions. The Borrower is not an entity deemed to hold “plan
  assets” within the meaning of 29 C.F.R. § 2510.3-101 of an employee
  benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title
  I of ERISA or any plan (within the meaning of Section 4975 of the Code), and
  neither the execution of this Agreement nor the making of Loans hereunder gives
  rise to a prohibited transaction within the meaning of Section 406 of ERISA
  or Section 4975 of the Code.  

       5.16 Environmental
  Matters. In the ordinary course of its business, the officers of the Borrower
  consider the effect of Environmental Laws on the business of the Borrower and
  its Subsidiaries, in the course of which they identify and evaluate potential
  risks and liabilities accruing to the Borrower due to Environmental Laws. On
  the basis of this consideration, the Borrower has concluded that Environmental
  Laws cannot reasonably be expected to have a Material Adverse Effect. Neither
  the Borrower nor any Subsidiary has received any notice to the effect that its
  operations are not in material compliance with any of the requirements of applicable
  Environmental Laws or are the subject of any federal or state investigation
  evaluating whether any remedial action is needed to respond to a release of
  any toxic or hazardous waste or substance into the environment, which non-compliance
  or remedial action could reasonably be expected to have a Material Adverse Effect.
   

       5.17 Investment Company
  Act. Neither the Borrower nor any Subsidiary is an “investment company”
  or a company “controlled” by an “investment company”, within
  the meaning of the Investment Company Act of 1940, as amended.  

       5.18 Public Utility
  Holding Company Act. Neither the Borrower nor any Subsidiary is a “holding
  company” within the meaning of the Public Utility Holding Company Act of
  1935, as amended.  

 ARTICLE
  VI  

 COVENANTS
   

      During
  the term of this Agreement, unless the Required Lenders shall otherwise consent
  in writing:  

       6.1 Financial Reporting.
  The Borrower will maintain, for itself and each Subsidiary, a system of accounting
  established and administered in accordance with generally accepted accounting
  principles, and furnish to the Lenders:  

       (i) Within 90 days after
  the close of each of its fiscal years, an unqualified (except for qualifications
  relating to changes in accounting principles or practices reflecting changes
  in generally accepted accounting principles and required or approved by the
  Borrower’s independent certified public accountants) audit report certified
  by independent certified public accountants of recognized international standing,
  prepared in accordance with Agreement Accounting Principles on a consolidated
  and consolidating basis (consolidating statements need not be certified by such
  accountants) for itself and its Subsidiaries, including balance sheets as of
   

 28






 the end of such period,
  related profit and loss and reconciliation of surplus statements, and a statement
  of cash flows, accompanied by a certificate of said accountants that, in the
  course of their examination necessary for their certification of the foregoing,
  they have obtained no knowledge of any Default or Unmatured Default, or if,
  in the opinion of such accountants, any Default or Unmatured Default shall exist,
  stating the nature and status thereof.  

       (ii) Within 45 days after
  the close of the first three quarterly periods of each of its fiscal years,
  for itself and its Subsidiaries, consolidated and consolidating unaudited balance
  sheets as at the close of each such period and consolidated and consolidating
  profit and loss and reconciliation of surplus statements and a statement of
  cash flows for the period from the beginning of such fiscal year to the end
  of such quarter, all certified by an Authorized Officer, prepared in accordance
  with Agreement Accounting Principles, subject to normal year-end adjustments.
   

       (iii) Together with the
  financial statements required under Sections 6.1(i) and (ii), a compliance certificate
  in substantially the form of Exhibit B signed by an Authorized Officer showing
  the calculations necessary to determine compliance with Section 6.16 of this
  Agreement and stating that no Default or Unmatured Default exists, or if any
  Default or Unmatured Default exists, stating the nature and status thereof.
   

       (iv) Within 270 days
  after the close of each fiscal year, a statement of the Unfunded Liabilities
  of each Single Employer Plan, certified as correct by an actuary enrolled under
  ERISA.  

       (v) As soon as possible
  and in any event within 10 days after the Borrower knows that any Reportable
  Event has occurred with respect to any Plan, a statement, signed by an Authorized
  Officer of the Borrower, describing said Reportable Event and the action which
  the Borrower proposes to take with respect thereto.  

       (vi) As soon as possible
  and in any event within 10 days after receipt by the Borrower, a copy of (a)
  any notice or claim to the effect that the Borrower or any of its Subsidiaries
  is or may be liable to any Person as a result of the release by the Borrower,
  any of its Subsidiaries, or any other Person of any toxic or hazardous waste
  or substance into the environment, and (b) any notice alleging any violation
  of any federal, state or local environmental, health or safety law or regulation
  by the Borrower or any of its Subsidiaries, which, in either case, could reasonably
  be expected to have a Material Adverse Effect.  

       (vii) Promptly upon the
  furnishing thereof to the shareholders of the Borrower, copies of all financial
  statements, reports and proxy statements so furnished.  

       (viii) Promptly upon
  the filing thereof, copies of all registration statements and annual, quarterly,
  monthly or other regular reports which the Borrower or any of its Subsidiaries
  files with the Securities and Exchange Commission.  

 29






       (ix) Such other information
  (including non-financial information) as the Administrative Agent or any Lender
  may from time to time reasonably request.  

       6.2 Use of Proceeds.
  The Borrower will, and, when applicable, will cause each Subsidiary to, use
  the proceeds of the Advances for general corporate purposes, including, without
  limitation, as liquidity support for the Borrower’s commercial paper program.
  The Borrower will not, nor will it permit any Subsidiary to, use any of the
  proceeds of the Advances to purchase or carry any “margin stock” (as
  defined in Regulation U) in any manner that would violate, or cause any Lender
  to be in violation of, Regulation U.  

       6.3 Notice of Default.
  The Borrower will, and will cause each Subsidiary to, give prompt notice in
  writing to the Lenders of the occurrence of any Default or Unmatured Default
  and of any other development, financial or otherwise, which could reasonably
  be expected to have a Material Adverse Effect.  

       6.4 Conduct of Business.
  The Borrower will, and will cause each Subsidiary to, do all things necessary
  to remain duly incorporated, validly existing and in good standing as a domestic
  corporation in its jurisdiction of incorporation, and the Borrower will, and
  will cause each Subsidiary to, maintain all requisite authority to conduct its
  business in each jurisdiction in which its business is conducted, except to
  the extent that the failure to maintain such authority could not reasonably
  be expected to have a Material Adverse Effect.  

       6.5 Taxes. The
  Borrower will, and will cause each Subsidiary to, timely file complete and correct
  United States federal and applicable material foreign, state and local tax returns
  required by law and pay when due all federal income taxes and all other material
  taxes, assessments and governmental charges and levies upon it or its income,
  profits or Property, except those which are being contested in good faith by
  appropriate proceedings and with respect to which adequate reserves have been
  set aside in accordance with Agreement Accounting Principles.  

       6.6 Insurance.
  The Borrower will, and will cause each Subsidiary to, maintain with financially
  sound and reputable insurance companies insurance on all their Property in such
  amounts and covering such risks as is consistent with sound business practice
  (after giving effect to customary amounts of self-insurance), and the Borrower
  will furnish to any Lender upon request full information as to the insurance
  carried.  

       6.7 Compliance with
  Laws. The Borrower will, and will cause each Subsidiary to, comply in all
  material respects with all laws, rules, regulations, orders, writs, judgments,
  injunctions, decrees or awards to which it may be subject including, without
  limitation, all Environmental Laws.  

       6.8 Maintenance of
  Properties. The Borrower will, and will cause each Subsidiary to, do all
  things necessary to maintain, preserve, protect and keep its material Property
  in accordance with the standard of care typical in the industries in which the
  Borrower and its Subsidiaries operate.  

 30






	     6.9
        Inspection. The Borrower will, and will cause each Subsidiary to, permit
        or, in the case of properties, books, records or Persons not within its
        immediate control, promptly take such actions as are reasonably practicable
        in order to permit, representatives (whether or not officers or employees)
        of the Administrative Agent or any Lender, from time to time, as often
        as may be reasonably requested, but only during normal business hours,
        upon two Business Days’ notice, to (i) visit and inspect any properties
        of the Borrower and each of its Subsidiaries, (ii) inspect and make extracts
        from their books and records, including but not limited to management
        letters prepared by the Borrower’s independent accountants, and (iii)
        discuss with their principal officers, and their independent accountants,
        their respective businesses, assets, liabilities, financial conditions,
        results of operations and business prospects. If a Default shall have
        occurred and be continuing, all reasonable out-of-pocket costs and expenses
        incurred in connection with the foregoing shall be borne by, or promptly
        on demand by any Lender be reimbursed by, the Borrower.

         

	     6.10
        Merger. The Borrower will not, nor will it permit any Subsidiary to, merge
        or consolidate with or into any other Person, except that, if after giving
        effect thereto no Default or Unmatured Default would exist, this Section
        6.10 shall not apply to (i) any merger or consolidation of the Borrower
        with any one or more Persons, provided, however, that the Borrower
        shall be the continuing Person in any such merger or consolidation and
        (ii) any merger or consolidation of a Subsidiary of the Borrower with
        any one or more Persons, provided, however, that the continuing
        Person in any such merger or consolidation shall be a Subsidiary of the
        Borrower.

         

	     6.11
        Sale of Assets. The Borrower will not, nor will it permit any Subsidiary
        to, lease, sell or otherwise dispose of its Property to any other Person,
        except:

         

	
	(i)

          
	Sales
        of inventory in the ordinary course of business.

         

	
	(ii)

          
	Leases,
        sales or other dispositions of its Property that, together with all other
        Property of the Borrower and its Subsidiaries previously leased, sold
        or disposed of (other than inventory in the ordinary course of business)
        as permitted by this Section during the twelve-month period ending with
        the month in which any such lease, sale or other disposition occurs, do
        not constitute a Substantial Portion of the Property of the Borrower and
        its Subsidiaries.

         

	     6.12
        Investments and Acquisitions. The Borrower will not, nor will it permit
        any Subsidiary to, make or suffer to exist any Investments (including
        without limitation, loans and advances to, and other Investments in, Subsidiaries),
        or commitments therefor, or to make any Acquisition of any Person, except:

         

	
	(i)

          
	Investments
        in customary cash equivalents in a manner substantially consistent with
        the Borrower’s policies and practices as of the date of this Agreement.

         

	
	(ii)

          
	Existing
        Investments as of September 30, 2002.

         

	31

         







	 	(iii)

        	Investments
        by the Borrower in its Subsidiaries.

         

	 	(iv)

        	Permitted
        Acquisitions.

         

	     6.13
      Liens. The Borrower will not, nor will it permit any Subsidiary to, create,
      incur, or suffer to exist any Lien in, of or on the Property of the Borrower
      or any of its Subsidiaries, except:

       
	 	(i)

        	Liens
        for taxes, assessments or governmental charges or levies on its Property
        if the same shall not at the time be delinquent or thereafter can be paid
        without penalty, or are being contested in good faith and by appropriate
        proceedings and for which adequate reserves in accordance with Agreement
        Accounting Principles shall have been set aside on its books.

         

	 	(ii)

        	Liens
        imposed by law, such as carriers’, warehousemen’s and mechanics’
        liens and other similar liens arising in the ordinary course of business
        which secure payment of obligations not more than 60 days past due or
        which are being contested in good faith by appropriate proceedings and
        for which adequate reserves shall have been set aside on its books.

         

	 	(iii)

        	Liens
        arising out of pledges or deposits under worker’s compensation laws,
        unemployment insurance, old age pensions, or other social security or
        retirement benefits, or similar legislation.

         

	 	(iv)

        	Easements,
        restrictions, rights of way, encroachments and such other encumbrances
        or charges against real property which do not in any material way interfere
        with the use thereof in the business of the Borrower or its Subsidiaries.

         

	 	(v)

        	Liens
        existing on the date hereof and described in Schedule 6.13 and any Lien
        constituting a renewal, extension or replacement of any such scheduled
        Lien, but only, in the case of each such renewal, extension or replacement
        Lien, if (A) the principal amount of the obligation secured by such Lien
        does not exceed the principal amount of the obligation so secured at the
        time of the extension, renewal or replacement plus any premium incurred
        in the refinancing of such obligation, (B) the obligation secured by such
        Lien bears interest at a rate per annum that is commercially reasonable
        at the time such obligation is incurred and (C) such renewal, extension
        or replacement Lien is limited to all or a part of the property or asset
        that was subject to the Lien extended, renewed or replaced and to fixed
        improvements thereafter erected on such property or asset.

         

	 	(vi)

        	Liens
        on Property of the Borrower (A) securing the Borrower’s First Mortgage
        Bonds issued pursuant to the Indenture dated as of October 1, 1935, as
        amended and supplemented, between the Borrower and The Bank of New York
        or (B) in connection with collateralized pollution control bonds.

         

	32

         







	
	
(vii)

          
	Liens
        incurred in the ordinary course of business securing the performance of
        bids, trade contracts, leases (other than Capitalized Leases), statutory
        obligations, security or appeal bonds and other similar obligations, and
        judgment liens to the extent enforcement thereof is effectively stayed,
        provided that full provision for the payment of all such obligations
        shall have been made on the books of the Borrower or such Subsidiary as
        may be required by Agreement Accounting Principles.

         

	

	
(viii) 

          
	Bankers’
        liens and rights of setoff arising by operation of law and contractual
        rights of setoff.

         

	
	
(ix)

          
	Liens
        existing on any Property at the time such Property is acquired or on any
        Property of any entity at the time such entity becomes, or is merged into,
        a Subsidiary of the Borrower, and in either case not created in anticipation
        of such event, and purchase money Liens incurred to finance the acquisition
        of Property, provided that the aggregate principal amount of Debt
        outstanding at any time incurred or assumed pursuant to this clause (ix)
        shall not exceed an amount equal to 5% of Consolidated Tangible Assets
        at such time.

         

	     6.14
        Dividends. The Borrower shall not permit any of its Subsidiaries to enter
        into any Contract or otherwise create or cause or permit to exist or become
        effective any consensual restriction, limiting the ability (whether by
        covenant, event of default or otherwise) of such Subsidiary to (i) pay
        dividends or make any other distributions on shares of its capital stock
        held by the Borrower or any other Subsidiary or (ii) pay any obligation
        owed to the Borrower or any other Subsidiary, provided, however, that
        this Section 6.14 shall not apply to Permitted Restrictive Covenants.

         

	     6.15
        Affiliates. The Borrower will not, and will not permit any Subsidiary
        to, enter into any transaction (including, without limitation, the purchase
        or sale of any Property or service) with, or make any payment or transfer
        to, any Affiliate except upon fair and reasonable terms no less favorable
        to the Borrower or such Subsidiary than the Borrower or such Subsidiary
        would obtain in a comparable arms-length transaction.

         

	     6.16
        Financial Covenants.

         

	
	
(a)

          
	The
        Borrower shall not permit Consolidated Debt to exceed 55.0% of Consolidated
        Total Capitalization.

         

	
	
(b)

          
	The
        Borrower shall not permit the Interest Coverage Ratio, determined as of
        the end of each of its fiscal quarters for the four fiscal quarter period
        then ended, to be less than 2.00 to 1.

         

	     6.17
        Financial Contracts. The Borrower shall not, and shall not permit any
        Subsidiary to, enter into any Financial Contract other than Financial
        Contracts pursuant to which the Borrower or such Subsidiary has hedged
        its reasonably estimated interest rate, foreign currency or commodity
        exposure, and not for speculative purposes.

         

	33

         







       6.18 Margin Stock.
  The Borrower shall not permit margin stock (as defined in Regulation U) to constitute
  25% or more of the value of those assets of the Borrower and its Subsidiaries
  which are subject to any limitation on sale, pledge or other restriction hereunder.
   

 ARTICLE
  VII  

 DEFAULTS
   

      The occurrence of any
  one or more of the following events shall constitute a Default:  

      7.1
  Any representation or warranty made or deemed made by or on behalf of the Borrower
  or any of its Subsidiaries to the Lenders or the Administrative Agent under
  or in connection with this Agreement, any Loan, or any certificate or document
  delivered in connection with this Agreement or any other Loan Document shall
  be materially false on the date as of which made.  

      7.2
  Nonpayment of principal of any Loan when due, or nonpayment of interest upon
  any Loan or of any fee or other payment obligations under any of the Loan Documents
  within five days after the same becomes due.  

      7.3
  The breach by the Borrower of any of the terms or provisions of Section 6.2,
  6.10, 6.11, 6.12, 6.13, 6.14, 6.15, or 6.16.  

      7.4
  The breach by the Borrower (other than a breach which constitutes a Default
  under another Section of this Article VII) of any of the terms or provisions
  of this Agreement which is not remedied within thirty (30) days after written
  notice from the Administrative Agent or any Lender.  

      7.5
  Failure of the Borrower or any of its Subsidiaries to pay when due any Debt
  aggregating in excess of $10,000,000 (“Material Debt”); or the default
  by the Borrower or any of its Subsidiaries in the performance (beyond the applicable
  grace period with respect thereto, if any) of any term, provision or condition
  contained in any agreement under which any such Material Debt was created or
  is governed, or any other event shall occur or condition exist, the effect of
  which default or event is to cause, or to permit the holder or holders of such
  Material Debt to cause, such Material Debt to become due prior to its stated
  maturity; or any Material Debt of the Borrower or any of its Subsidiaries shall
  be declared to be due and payable or required to be prepaid or repurchased (other
  than by a regularly scheduled payment) prior to the stated maturity thereof;
  or the Borrower or any of its Subsidiaries shall not pay, or admit in writing
  its inability to pay, its debts generally as they become due.  

      7.6
  The Borrower or any of its Subsidiaries shall (i) have an order for relief entered
  with respect to it under the Federal bankruptcy laws as now or hereafter in
  effect, (ii) make an assignment for the benefit of creditors, (iii) apply for,
  seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
  trustee, examiner, liquidator or similar official for it or any  

 34





 Substantial Portion of
  its Property, (iv) institute any proceeding seeking an order for relief under
  the Federal bankruptcy laws as now or hereafter in effect or seeking to adjudicate
  it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
  reorganization, arrangement, adjustment or composition of it or its debts under
  any law relating to bankruptcy, insolvency or reorganization or relief of debtors
  or fail to file an answer or other pleading denying the material allegations
  of any such proceeding filed against it, (v) take any corporate or partnership
  action to authorize or effect any of the foregoing actions set forth in this
  Section 7.6 or (vi) fail to contest in good faith any appointment or proceeding
  described in Section 7.7.  

      7.7
  Without the application, approval or consent of the Borrower or any of its Subsidiaries,
  a receiver, trustee, examiner, liquidator or similar official shall be appointed
  for the Borrower or any of its Subsidiaries or any Substantial Portion of its
  Property, or a proceeding described in Section 7.6(iv) shall be instituted against
  the Borrower or any of its Subsidiaries and such appointment continues undischarged
  or such proceeding continues undismissed or unstayed for a period of 60 consecutive
  days.  

      7.8
  Any court, government or governmental agency shall condemn, seize or otherwise
  appropriate, or take custody or control of, all or any portion of the Property
  of the Borrower and its Subsidiaries which, when taken together with all other
  Property of the Borrower and its Subsidiaries so condemned, seized, appropriated,
  or taken custody or control of, during the twelve-month period ending with the
  month in which any such action occurs, constitutes a Substantial Portion. 


      7.9
  The Borrower or any of its Subsidiaries shall fail within 30 days to pay, bond
  or otherwise discharge one or more (i) judgments or orders for the payment of
  money (to the extent not covered by independent third-party insurance as to
  which the insurer does not dispute coverage) in excess of $10,000,000 (or the
  equivalent thereof in currencies other than U.S. Dollars) in the aggregate,
  or (ii) nonmonetary judgments or orders which, individually or in the aggregate,
  could reasonably be expected to have a Material Adverse Effect, which judgment(s),
  in any such case, is/are not stayed on appeal or otherwise being appropriately
  contested in good faith.  

      7.10
  The Unfunded Liabilities of all Single Employer Plans shall exceed in the aggregate
  $20,000,000 or any Reportable Event shall occur in connection with any Plan.
   

      7.11
  The Borrower or any other member of the Controlled Group shall have been notified
  by the sponsor of a Multiemployer Plan that it has incurred withdrawal liability
  to such Multiemployer Plan in an amount which, when aggregated with all other
  amounts required to be paid to Multiemployer Plans by the Borrower or any other
  member of the Controlled Group as withdrawal liability (determined as of the
  date of such notification), exceeds $10,000,000 or requires payments exceeding
  $10,000,000 per annum.  

      7.12
  The Borrower or any other member of the Controlled Group shall have been notified
  by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization
  or is being terminated, within the meaning of Title IV of ERISA, if as a result
  of such reorganization or termination the aggregate annual contributions of
  the Borrower and the  

 35






 other members of the Controlled
  Group (taken as a whole) to all Multiemployer Plans which are then in reorganization
  or being terminated have been or will be increased over the amounts contributed
  to such Multiemployer Plans for the respective plan years of each such Multiemployer
  Plan immediately preceding the plan year in which the reorganization or termination
  occurs by an amount exceeding $10,000,000.  

      7.13
  The Borrower or any of its Subsidiaries shall (i) be the subject of any proceeding
  or investigation pertaining to the release by the Borrower, any of its Subsidiaries
  or any other Person of any toxic or hazardous waste or substance into the environment,
  or (ii) violate any Environmental Law, which, in the case of an event described
  in clause (i) or clause (ii), could reasonably be expected to have a Material
  Adverse Effect.  

      7.14 Any Change in Control
  shall occur.  

      7.15
  The representations and warranties set forth in Section 5.15 shall at any time
  not be true and correct.  

 ARTICLE
  VIII  

 ACCELERATION,
  WAIVERS, AMENDMENTS AND REMEDIES  

       8.1 Acceleration.
  If any Default described in Section 7.6 or 7.7 occurs with respect to the Borrower,
  the obligations of the Lenders to make Loans hereunder shall automatically terminate
  and the Obligations shall immediately become due and payable without any election
  or action on the part of the Administrative Agent or any Lender. If any other
  Default occurs, the Required Lenders (or the Administrative Agent with the consent
  of the Required Lenders) may terminate or suspend the obligations of the Lenders
  to make Loans hereunder, or declare the Obligations to be due and payable, or
  both, whereupon the Obligations shall become immediately due and payable, without
  presentment, demand, protest or notice of any kind, all of which the Borrower
  hereby expressly waives.  

      If,
  within 30 days after acceleration of the maturity of the Obligations or termination
  of the obligations of the Lenders to make Loans hereunder as a result of any
  Default (other than any Default as described in Section 7.6 or 7.7 with respect
  to the Borrower) and before any judgment or decree for the payment of the Obligations
  due shall have been obtained or entered, the Required Lenders (in their sole
  discretion) shall so direct, the Administrative Agent shall, by notice to the
  Borrower, rescind and annul such acceleration and/or termination.  

 36






	     8.2
        Amendments. Subject to the provisions of this Article VIII, the
        Required Lenders (or the Administrative Agent with the consent in writing
        of the Required Lenders) and the Borrower may enter into agreements supplemental
        hereto for the purpose of adding or modifying any provisions to the Loan
        Documents or changing in any manner the rights of the Lenders or the Borrower
        hereunder or waiving any Default hereunder; provided, however, that
        no such supplemental agreement shall, without the consent of all of the
        Lenders:

         

	
	(i)

          
	     Extend
        the final maturity of any Loan or postpone any regularly scheduled payment
        of principal of any Loan or forgive all or any portion of the principal
        amount thereof, or reduce the rate or extend the time of payment of interest
        or fees thereon.

         

	
	(ii)

          
	Reduce
        the percentage specified in the definition of Required Lenders.

         

	
	(iii)

          
	Extend
        the Facility Termination Date, or reduce the amount or extend the payment
        date for, the mandatory payments required under Section 2.2, or increase
        the amount of the Aggregate Commitment or of the Commitment of any Lender
        hereunder, or permit the Borrower to assign its rights under this Agreement.

         

	
	(iv)

          
	Amend
        this Section 8.2.

         

	
	(v)

          
	No
        amendment of any provision of this Agreement relating to the Administrative
        Agent shall be effective without the written consent of the Administrative
        Agent. The Administrative Agent may waive payment of the fee required
        under Section 12.3.2 without obtaining the consent of any other party
        to this Agreement.

         

	     8.3
        Preservation of Rights. No delay or omission of the Lenders or
        the Administrative Agent to exercise any right under the Loan Documents
        shall impair such right or be construed to be a waiver of any Default
        or an acquiescence therein, and the making of a Loan notwithstanding the
        existence of a Default or the inability of the Borrower to satisfy the
        conditions precedent to such Loan shall not constitute any waiver or acquiescence.
        Any single or partial exercise of any such right shall not preclude other
        or further exercise thereof or the exercise of any other right, and no
        waiver, amendment or other variation of the terms, conditions or provisions
        of the Loan Documents whatsoever shall be valid unless in writing signed
        by the Lenders required pursuant to Section 8.2, and then only to the
        extent in such writing specifically set forth. All remedies contained
        in the Loan Documents or by law afforded shall be cumulative and all shall
        be available to the Administrative Agent and the Lenders until the Obligations
        have been paid in full.

         

	     ARTICLE
        IX

         

	     GENERAL
        PROVISIONS

         

	37

         







       9.1 Survival of Representations.
  All representations and warranties of the Borrower contained in this Agreement
  shall survive the making of the Loans herein contemplated.  

       9.2 Headings.
  Section headings in the Loan Documents are for convenience of reference only,
  and shall not govern the interpretation of any of the provisions of the Loan
  Documents.  

       9.3 Entire Agreement.
  The Loan Documents embody the entire agreement and understanding among the Borrower,
  the Administrative Agent and the Lenders and supersede all prior agreements
  and understandings among the Borrower, the Administrative Agent and the Lenders
  relating to the subject matter thereof other than the fee letter described in
  Section 10.13, which shall survive and remain in full force and effect during
  the term of this Agreement.  

       9.4 Several Obligations;
  Benefits of this Agreement. The respective obligations of the Lenders hereunder
  are several and not joint and no Lender shall be the partner or Administrative
  Agent of any other (except to the extent to which the Administrative Agent is
  authorized to act as such). The failure of any Lender to perform any of its
  obligations hereunder shall not relieve any other Lender from any of its obligations
  hereunder. This Agreement shall not be construed so as to confer any right or
  benefit upon any Person other than the parties to this Agreement and their respective
  successors and assigns, provided, however, that the parties hereto expressly
  agree that the Arranger shall enjoy the benefits of the provisions of Sections
  9.5, 9.9 and 10.11 to the extent specifically set forth therein and shall have
  the right to enforce such provisions on its own behalf and in its own name to
  the same extent as if it were a party to this Agreement.  

       9.5 Expenses; Indemnification.
  (i) The Borrower shall reimburse the Administrative Agent and the Arranger for
  any reasonable out-of-pocket costs and expenses (including attorneys’ fees
  and time charges of attorneys for the Administrative Agent, which attorneys
  may be employees of the Administrative Agent) paid or incurred by the Administrative
  Agent or the Arranger in connection with the preparation, negotiation, execution,
  delivery, syndication, distribution (including, without limitation, via the
  internet), review, amendment, modification, and administration of the Loan Documents.
  The Borrower also agrees to reimburse the Administrative Agent, the Arranger
  and the Lenders for any reasonable out-of-pocket costs and expenses (including
  attorneys’ fees and time charges of attorneys for the Administrative Agent,
  the Arranger and the Lenders, which attorneys may be employees of the Administrative
  Agent, the Arranger or the Lenders) paid or incurred by the Administrative Agent,
  the Arranger or any Lender in connection with the collection and enforcement
  of the Loan Documents. Expenses being reimbursed by the Borrower under this
  Section include, without limitation, costs and expenses incurred in connection
  with the Reports described in the following sentence. The Borrower acknowledges
  that from time to time Bank One may prepare and may distribute to the Lenders
  (but shall have no obligation or duty to prepare or to distribute to the Lenders)
  certain audit reports (the “Reports”) pertaining to the Borrower’s
  assets for internal use by Bank One from information furnished to it by or on
  behalf of the Borrower, after Bank One has exercised its rights of inspection
  pursuant to this Agreement.  

       (ii) The Borrower hereby
  further agrees to indemnify the Administrative Agent, the Arranger, each Lender,
  their respective affiliates, and each of their directors, officers and 


 38





 employees against all
  losses, claims, damages, penalties, judgments, liabilities and expenses (including,
  without limitation, all expenses of litigation or preparation therefor whether
  or not the Administrative Agent, the Arranger, any Lender or any affiliate is
  a party thereto) (collectively, “Claims”) which any of them may pay
  or incur arising out of or relating to this Agreement, the other Loan Documents,
  the transactions contemplated hereby or the direct or indirect application or
  proposed application of the proceeds of any Loan hereunder, except to the extent
  that they (A) are determined in a final non-appealable judgment by a court of
  competent jurisdiction to have resulted from the gross negligence or willful
  misconduct of the party seeking indemnification or (B) arise from a dispute
  between any Lenders or between any Lender and the Administrative Agent. No party
  entitled to indemnification hereunder shall enter into a settlement or other
  compromise or consent to a judgment with respect to any Claim without the prior
  written consent of the Borrower (which consent shall not be unreasonably withheld
  or delayed). The entering into of any such settlement or compromise or consent
  without the Borrower’s prior written consent (unless the withholding of
  such consent by the Borrower requested by such party shall have been unreasonable)
  shall constitute a waiver by such party of its rights of indemnification hereunder
  in respect of such matter. The obligations of the Borrower under this Section
  9.5 shall survive the termination of this Agreement.  

       9.6 Numbers of Documents.
  All statements, notices, closing documents, and requests hereunder shall be
  furnished to the Administrative Agent with sufficient counterparts so that the
  Administrative Agent may furnish one to each of the Lenders.  

       9.7 Accounting.
  Except as provided to the contrary herein, all accounting terms used herein
  shall be interpreted and all accounting determinations hereunder shall be made
  in accordance with Agreement Accounting Principles, except that any calculation
  or determination which is to be made on a consolidated basis shall be made for
  the Borrower and all its Subsidiaries, including those Subsidiaries, if any,
  which are unconsolidated on the Borrower’s audited financial statements.
   

       9.8 Severability of
  Provisions. Any provision in any Loan Document that is held to be inoperative,
  unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction,
  be inoperative, unenforceable, or invalid without affecting the remaining provisions
  in that jurisdiction or the operation, enforceability, or validity of that provision
  in any other jurisdiction, and to this end the provisions of all Loan Documents
  are declared to be severable.  

       9.9 Nonliability of
  Lenders. The relationship between the Borrower on the one hand and the Lenders
  and the Administrative Agent on the other hand shall be solely that of borrower
  and lender. Neither the Administrative Agent, the Arranger nor any Lender shall
  have any fiduciary responsibilities to the Borrower. Neither the Administrative
  Agent, the Arranger nor any Lender undertakes any responsibility to the Borrower
  to review or inform the Borrower of any matter in connection with any phase
  of the Borrower’s business or operations. The Borrower agrees that neither
  the Administrative Agent, the Arranger nor any Lender shall have liability to
  the Borrower (whether sounding in tort, contract or otherwise) for losses suffered
  by the Borrower in connection with, arising out of, or in any way related to,
  the transactions contemplated and the relationship established by the Loan Documents,
  or any act, omission or event occurring in  

 39






 connection therewith,
  unless it is determined in a final non-appealable judgment by a court of competent
  jurisdiction that such losses resulted from the gross negligence or willful
  misconduct of the party from which recovery is sought. Neither the Administrative
  Agent, the Arranger nor any Lender shall have any liability with respect to,
  and the Borrower hereby waives, releases and agrees not to sue for, any special,
  indirect, consequential or punitive damages suffered by the Borrower in connection
  with, arising out of, or in any way related to the Loan Documents or the transactions
  contemplated thereby.  

       9.10 Confidentiality.
  Each Lender and the Administrative Agent agree to hold any confidential information
  which it may receive from the Borrower or any of its Subsidiaries pursuant to
  this Agreement in confidence, not to use any of such confidential information
  for any purpose other than as may be reasonably required in connection with
  its participation in the transactions contemplated hereby and not to disclose
  any of such confidential information to any other Person, except for disclosure
  (i) to its Affiliates and to other Lenders and their respective Affiliates,
  (ii) to legal counsel, accountants, and other professional advisors to such
  Lender or to a Transferee, (iii) to regulatory officials, (iv) to any Person
  as required by law, regulation, or legal process, (v) to any Person in connection
  with any legal proceeding in connection with this Agreement to which such Lender
  is a party, (vi) to such Lender’s direct or indirect contractual counterparties
  in swap agreements in connection with this Agreement or to legal counsel, accountants
  and other professional advisors to such counterparties, and (vii) permitted
  by Section 12.4; provided, however, that the Person to whom any such
  confidential information is disclosed pursuant to the foregoing clauses (i),
  (ii), (vi) or (vii) shall be subject to the confidentiality obligations in favor
  of the Borrower and its Subsidiaries set forth in this Section 9.10. 


       9.11 Nonreliance.
  Each Lender hereby represents that it is not relying on or looking to any margin
  stock (as defined in Regulation U of the Board of Governors of the Federal Reserve
  System) for the repayment of the Loans provided for herein.  

 ARTICLE
  X  

 THE
  ADMINISTRATIVE AGENT  

       10.1 Appointment;
  Nature of Relationship. Bank One, NA is hereby appointed by each of the
  Lenders as its contractual representative (herein referred to as the “Administrative
  Agent”) hereunder and under each other Loan Document, and each of the Lenders
  irrevocably authorizes the Administrative Agent to act as the contractual representative
  of such Lender with the rights and duties expressly set forth herein and in
  the other Loan Documents. The Administrative Agent agrees to act as such contractual
  representative upon the express conditions contained in this Article X. Notwithstanding
  the use of the defined term “Administrative Agent,” it is expressly
  understood and agreed that the Administrative Agent shall not have any fiduciary
  responsibilities to any Lender by reason of this Agreement or any other Loan
  Document and that the Administrative Agent is merely acting as the contractual
  representative of the Lenders with only those duties as are expressly set forth
  in this Agreement and the other Loan Documents. In its capacity as the Lenders’
  contractual representative, the Administrative Agent (i) does not hereby assume
  any fiduciary duties to any of the Lenders, (ii) is a “representative”
  of the Lenders  

 40






 within the meaning of
  the term “secured party” as defined in the Illinois Uniform Commercial
  Code and (iii) is acting as an independent contractor, the rights and duties
  of which are limited to those expressly set forth in this Agreement and the
  other Loan Documents. Each of the Lenders hereby agrees to assert no claim against
  the Administrative Agent on any agency theory or any other theory of liability
  for breach of fiduciary duty, all of which claims each Lender hereby waives.
   

       10.2 Powers. The
  Administrative Agent shall have and may exercise such powers under the Loan
  Documents as are specifically delegated to the Administrative Agent by the terms
  of each thereof, together with such powers as are reasonably incidental thereto.
  The Administrative Agent shall have no implied duties to the Lenders, or any
  obligation to the Lenders to take any action thereunder except any action specifically
  provided by the Loan Documents to be taken by the Administrative Agent. 


       10.3 General Immunity.
  Neither the Administrative Agent nor any of its directors, officers, agents
  or employees shall be liable to the Borrower, the Lenders or any Lender for
  any action taken or omitted to be taken by it or them hereunder or under any
  other Loan Document or in connection herewith or therewith except to the extent
  such action or inaction is determined in a final non-appealable judgment by
  a court of competent jurisdiction to have arisen from the gross negligence or
  willful misconduct of such Person.  

       10.4 No Responsibility
  for Loans, Recitals, etc. Neither the Administrative Agent nor any of its
  directors, officers, agents or employees shall be responsible for or have any
  duty to ascertain, inquire into, or verify (a) any statement, warranty or representation
  made in connection with any Loan Document or any borrowing hereunder; (b) the
  performance or observance of any of the covenants or agreements of any obligor
  under any Loan Document, including, without limitation, any agreement by an
  obligor to furnish information directly to each Lender; (c) the satisfaction
  of any condition specified in Article IV, except receipt of items required to
  be delivered solely to the Administrative Agent; (d) the existence or possible
  existence of any Default or Unmatured Default; (e) the validity, enforceability,
  effectiveness, sufficiency or genuineness of any Loan Document or any other
  instrument or writing furnished in connection therewith; (f) the value, sufficiency,
  creation, perfection or priority of any Lien in any collateral security; or
  (g) the financial condition of the Borrower or any guarantor of any of the Obligations
  or of any of the Borrower’s or any such guarantor’s respective Subsidiaries.
  The Administrative Agent shall have no duty to disclose to the Lenders information
  that is not required to be furnished by the Borrower to the Administrative Agent
  at such time, but is voluntarily furnished by the Borrower to the Administrative
  Agent (either in its capacity as Administrative Agent or in its individual capacity).
   

       10.5 Action on Instructions
  of Lenders. The Administrative Agent shall in all cases be fully protected
  in acting, or in refraining from acting, hereunder and under any other Loan
  Document in accordance with written instructions signed by the Required Lenders,
  and such instructions and any action taken or failure to act pursuant thereto
  shall be binding on all of the Lenders. The Lenders hereby acknowledge that
  the Administrative Agent shall be under no duty to take any discretionary action
  permitted to be taken by it pursuant to the provisions of this Agreement or
   

 41






 any other Loan Document
  unless it shall be requested in writing to do so by the Required Lenders. The
  Administrative Agent shall be fully justified in failing or refusing to take
  any action hereunder and under any other Loan Document unless it shall first
  be indemnified to its satisfaction by the Lenders pro rata against any and all
  liability, cost and expense that it may incur by reason of taking or continuing
  to take any such action.  

       10.6 Employment of
  Administrative Agents and Counsel. The Administrative Agent may execute
  any of its duties as Administrative Agent hereunder and under any other Loan
  Document by or through employees, agents, and attorneys-in-fact and shall not
  be answerable to the Lenders, except as to money or securities received by it
  or its authorized agents, for the default or misconduct of any such agents or
  attorneys-in-fact selected by it with reasonable care. The Administrative Agent
  shall be entitled to advice of counsel concerning the contractual arrangement
  between the Administrative Agent and the Lenders and all matters pertaining
  to the Administrative Agent’s duties hereunder and under any other Loan
  Document.  

       10.7 Reliance on Documents;
  Counsel. The Administrative Agent shall be entitled to rely upon any Note,
  notice, consent, certificate, affidavit, letter, telegram, statement, paper
  or document believed by it to be genuine and correct and to have been signed
  or sent by the proper person or persons, and, in respect to legal matters, upon
  the opinion of counsel selected by the Administrative Agent, which counsel may
  be employees of the Administrative Agent.  

       10.8 Administrative
  Agent’s Reimbursement and Indemnification. The Lenders agree to reimburse
  and indemnify the Administrative Agent ratably in proportion to their respective
  Commitments (or, if the Commitments have been terminated, in proportion to their
  Commitments immediately prior to such termination) (i) for any amounts not reimbursed
  by the Borrower for which the Administrative Agent is entitled to reimbursement
  by the Borrower under the Loan Documents, (ii) for any other expenses incurred
  by the Administrative Agent on behalf of the Lenders, in connection with the
  preparation, execution, delivery, administration and enforcement of the Loan
  Documents (including, without limitation, for any such expenses incurred by
  the Administrative Agent in connection with any dispute between the Administrative
  Agent and any Lender or between two or more of the Lenders) and (iii) for any
  liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
  costs, expenses or disbursements of any kind and nature whatsoever which may
  be imposed on, incurred by or asserted against the Administrative Agent in any
  way relating to or arising out of the Loan Documents or any other document delivered
  in connection therewith or the transactions contemplated thereby (including,
  without limitation, for any such amounts incurred by or asserted against the
  Administrative Agent in connection with any dispute between the Administrative
  Agent and any Lender or between two or more of the Lenders), or the enforcement
  of any of the terms of the Loan Documents or of any such other documents, provided
  that (i) no Lender shall be liable for any of the foregoing to the extent any
  of the foregoing is found in a final non-appealable judgment by a court of competent
  jurisdiction to have resulted from the gross negligence or willful misconduct
  of the Administrative Agent and (ii) any indemnification required pursuant to
  Section 3.5(vii) shall, notwithstanding the provisions of this Section 10.8,
  be paid by the relevant Lender in accordance with the provisions  

 42






 thereof. The obligations
  of the Lenders under this Section 10.8 shall survive payment of the Obligations
  and termination of this Agreement.  

       10.9 Notice of Default.
  The Administrative Agent shall not be deemed to have knowledge or notice of
  the occurrence of any Default or Unmatured Default hereunder unless the Administrative
  Agent has received written notice from a Lender or the Borrower referring to
  this Agreement describing such Default or Unmatured Default and stating that
  such notice is a “notice of default”. In the event that the Administrative
  Agent receives such a notice, the Administrative Agent shall give prompt notice
  thereof to the Lenders.  

       10.10
  Rights as a Lender. In the event the Administrative Agent is a Lender,
  the  Administrative
  Agent shall have the same rights and powers hereunder and under any other Loan
  Document with respect to its Commitment and its Loans as any Lender and may
  exercise the same as though it were not the Administrative Agent, and the term
  “Lender” or “Lenders” shall, at any time when the Administrative
  Agent is a Lender, unless the context otherwise indicates, include the Administrative
  Agent in its individual capacity. The Administrative Agent and its Affiliates
  may accept deposits from, lend money to, and generally engage in any kind of
  trust, debt, equity or other transaction, in addition to those contemplated
  by this Agreement or any other Loan Document, with the Borrower or any of its
  Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby
  from engaging with any other Person.  

       10.11 Lender Credit
  Decision. Each Lender acknowledges that it has, independently and without
  reliance upon the Administrative Agent, the Arranger or any other Lender and
  based on the financial statements prepared by the Borrower and such other documents
  and information as it has deemed appropriate, made its own credit analysis and
  decision to enter into this Agreement and the other Loan Documents. Each Lender
  also acknowledges that it will, independently and without reliance upon the
  Administrative Agent, the Arranger or any other Lender and based on such documents
  and information as it shall deem appropriate at the time, continue to make its
  own credit decisions in taking or not taking action under this Agreement and
  the other Loan Documents.  

       10.12 Successor Administrative
  Agent. The Administrative Agent may resign at any time by giving written
  notice thereof to the Lenders and the Borrower, such resignation to be effective
  upon the appointment of a successor Administrative Agent or, if no successor
  Administrative Agent has been appointed, forty-five days after the retiring
  Administrative Agent gives notice of its intention to resign. The Administrative
  Agent may be removed at any time with or without cause by written notice received
  by the Administrative Agent from the Required Lenders, such removal to be effective
  on the date specified by the Required Lenders. Upon any such resignation or
  removal, the Required Lenders shall have the right to appoint, on behalf of
  the Lenders, a successor Administrative Agent. If no successor Administrative
  Agent shall have been so appointed by the Required Lenders within thirty days
  after the resigning Administrative Agent’s giving notice of its intention
  to resign, then the resigning Administrative Agent may appoint, on behalf of
  the Lenders, a successor Administrative Agent. Notwithstanding the previous
  sentence, the Administrative Agent may at any time without the consent of the
  Borrower or any Lender, appoint any of its Affiliates which is a commercial
  bank as a successor  

 43






 Administrative
  Agent hereunder. If the Administrative Agent has resigned or been removed and
  no successor Administrative Agent has been appointed, the Lenders may perform
  all the duties of the Administrative Agent hereunder and the Borrower shall
  make all payments in respect of the Obligations to the applicable Lender and
  for all other purposes shall deal directly with the Lenders. No successor Administrative
  Agent shall be deemed to be appointed hereunder until such successor Administrative
  Agent has accepted the appointment. Any such successor Administrative Agent
  shall be a commercial bank having capital and retained earnings of at least
  $100,000,000. Upon the acceptance of any appointment as Administrative Agent
  hereunder by a successor Administrative Agent, such successor Administrative
  Agent shall thereupon succeed to and become vested with all the rights, powers,
  privileges and duties of the resigning or removed Administrative Agent. Upon
  the effectiveness of the resignation or removal of the Administrative
  Agent, the resigning or removed Administrative Agent shall be discharged from
  its duties and obligations hereunder and under the Loan Documents. After the
  effectiveness of the resignation or removal of an Administrative Agent, the
  provisions of this Article X shall continue in effect for the benefit of such
  Administrative Agent in respect of any actions taken or omitted to be taken
  by it while it was acting as the Administrative Agent hereunder and under the
  other Loan Documents. In the event that there is a successor to the Administrative
  Agent by merger, or the Administrative Agent assigns its duties and obligations
  to an Affiliate pursuant to this Section 10.12, then the term “Prime Rate”
  as used in this Agreement shall mean the prime rate, base rate or other analogous
  rate of the new Administrative Agent.  

       10.13 Administrative
  Agent’s Fee. The Borrower agrees to pay to the Administrative Agent,
  for its own account, the fees agreed to by the Borrower and the Administrative
  Agent pursuant to that certain letter agreement dated November 15, 2002, or
  as otherwise agreed from time to time.  

       10.14 Delegation to
  Affiliates. The Borrower and the Lenders agree that the Administrative Agent
  may delegate any of its duties under this Agreement to any of its Affiliates.
  Any such Affiliate (and such Affiliate’s directors, officers, agents and
  employees) which performs duties in connection with this Agreement shall be
  entitled to the same benefits of the indemnification, waiver and other protective
  provisions to which the Administrative Agent is entitled under Articles IX and
  X.  

       10.15 Syndication
  Agent. No Lender identified herein as the “Syndication Agent”
  shall have any right, duty, obligation, power, liability, or responsibility
  hereunder other than those applicable to any Person in its capacity as a Lender
  hereunder.  

 ARTICLE
  XI  

 SETOFF;
  RATABLE PAYMENTS  

       11.1 Setoff. In
  addition to, and without limitation of, any rights of the Lenders under applicable
  law, if the Borrower becomes insolvent, however evidenced, or any Default occurs,
  any and all deposits (including all account balances, whether provisional or
  final and whether or  

 44






 not collected or available)
  and any other Debt at any time held or owing by any Lender or any Affiliate
  of any Lender to or for the credit or account of the Borrower may be offset
  and applied toward the payment of the Obligations owing to such Lender, whether
  or not the Obligations, or any part thereof, shall then be due.  

       11.2 Ratable Payments.
  If any Lender, whether by setoff or otherwise, has payment made to it upon its
  Loans (other than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5)
  in a greater proportion than that received by any other Lender, such Lender
  agrees, promptly upon demand, to purchase a portion of the Loans held by the
  other Lenders so that after such purchase each Lender will hold its ratable
  proportion of Loans. If any Lender, whether in connection with setoff or amounts
  which might be subject to setoff or otherwise, receives collateral or other
  protection for its Obligations or such amounts which may be subject to setoff,
  such Lender agrees, promptly upon demand, to take such action necessary such
  that all Lenders share in the benefits of such collateral ratably in proportion
  to their Loans. In case any such payment is disturbed by legal process, or otherwise,
  appropriate further adjustments shall be made.  

 ARTICLE
  XII  

 BENEFIT
  OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS  

       12.1 Successors and
  Assigns. The terms and provisions of the Loan Documents shall be binding
  upon and inure to the benefit of the Borrower and the Lenders and their respective
  successors and assigns permitted hereby, except that (i) the Borrower shall
  not have the right to assign its rights or obligations under the Loan Documents
  without the prior written consent of each Lender, (ii) any assignment by any
  Lender must be made in compliance with Section 12.3, and (iii) any transfer
  by Participation must be made in compliance with Section 12.2. Any attempted
  assignment or transfer by any party not made in compliance with this Section
  12.1 shall be null and void, unless such attempted assignment or transfer is
  treated as a participation in accordance with Section 12.3.2. The parties to
  this Agreement acknowledge that clause (ii) of this Section 12.1 relates only
  to absolute assignments and this Section 12.1 does not prohibit assignments
  creating security interests, including, without limitation, (x) any pledge or
  assignment by any Lender of all or any portion of its rights under this Agreement
  and any Note to a Federal Reserve Bank or (y) in the case of a Lender which
  is a Fund, any pledge or assignment of all or any portion of its rights under
  this Agreement and any Note to its trustee in support of its obligations to
  its trustee; provided, however, that no such pledge or assignment
  creating a security interest shall release the transferor Lender from its obligations
  hereunder unless and until the parties thereto have complied with the provisions
  of Section 12.3. The Administrative Agent may treat the Person which made any
  Loan or which holds any Note as the owner thereof for all purposes hereof unless
  and until such Person complies with Section 12.3; provided, however, that the
  Administrative Agent may in its discretion (but shall not be required to) follow
  instructions from the Person which made any Loan or which holds any Note to
  direct payments relating to such Loan or Note to another Person. Any assignee
  of the rights to any Loan or any Note agrees by acceptance of such assignment
  to be bound by all the terms and provisions of the Loan Documents. Any request,
  authority or consent of any Person, who at the time of making  

 45






 such request or giving
  such authority or consent is the owner of the rights to any Loan (whether or
  not a Note has been issued in evidence thereof), shall be conclusive and binding
  on any subsequent holder or assignee of the rights to such Loan.  

   12.2 Participations.
   

       12.2.1 Permitted Participants;
  Effect. Any Lender may at any time sell to one or more banks or other entities
  (“Participants”) participating interests in any Loan owing to such
  Lender, any Note held by such Lender, any Commitment of such Lender or any other
  interest of such Lender under the Loan Documents. In the event of any such sale
  by a Lender of participating interests to a Participant, such Lender’s
  obligations under the Loan Documents shall remain unchanged, such Lender shall
  remain solely responsible to the other parties hereto for the performance of
  such obligations, such Lender shall remain the owner of its Loans and the holder
  of any Note issued to it in evidence thereof for all purposes under the Loan
  Documents, all amounts payable by the Borrower under this Agreement shall be
  determined as if such Lender had not sold such participating interests, and
  the Borrower and the Administrative Agent shall continue to deal solely and
  directly with such Lender in connection with such Lender’s rights and obligations
  under the Loan Documents.  

       12.2.2 Voting Rights.
  Each Lender shall retain the sole right to approve, without the consent of any
  Participant, any amendment, modification or waiver of any provision of the Loan
  Documents other than any amendment, modification or waiver with respect to any
  Loan or Commitment in which such Participant has an interest which forgives
  principal, interest or fees or reduces the interest rate or fees payable with
  respect to any such Loan or Commitment, extends the Facility Termination Date,
  or postpones any date fixed for any regularly-scheduled payment of principal
  of, or interest or fees on, any such Loan or Commitment.  

       12.2.3 Benefit of
  Setoff. The Borrower agrees that each Participant shall be deemed to have
  the right of setoff provided in Section 11.1 in respect of its participating
  interest in amounts owing under the Loan Documents to the same extent as if
  the amount of its participating interest were owing directly to it as a Lender
  under the Loan Documents, provided that each Lender shall retain the right of
  setoff provided in Section 11.1 with respect to the amount of participating
  interests sold to each Participant. The Lenders agree to share with each Participant,
  and each Participant, by exercising the right of setoff provided in Section
  11.1, agrees to share with each Lender, any amount received pursuant to the
  exercise of its right of setoff, such amounts to be shared in accordance with
  Section 11.2 as if each Participant were a Lender. The Borrower further agrees
  that each Participant shall be entitled to the benefits of Sections 3.1, 3.2,
  3.4 and 3.5 to the same extent as if it were a Lender and had acquired its interest
  by assignment pursuant to Section 12.3, provided that (i) a Participant shall
  not be entitled to receive any greater payment under Section 3.1, 3.2 or 3.5
  than the Lender who sold the participating interest to such Participant would
  have received had it retained such interest for its own account, unless the
  sale of such interest to such Participant is made with the prior written consent
  of the Borrower, and (ii) any Participant not incorporated under the laws of
  the United States of America or any State thereof agrees to comply with the
  provisions of Section 3.5 to the same extent as if it were a Lender. 


 46






   12.3 Assignments.
   

       12.3.1 Permitted Assignments.
  Any Lender may at any time assign to one or more banks or other entities (“Purchasers”)
  all or any part of its rights and obligations under the Loan Documents. Such
  assignment shall be substantially in the form of Exhibit C or in such other
  form as may be agreed to by the parties thereto. Each such assignment with respect
  to a Purchaser which is not a Lender or an Affiliate of a Lender or an Approved
  Fund shall either be in an amount equal to the entire applicable Commitment
  and Loans of the assigning Lender or (unless each of the Borrower and the Agent
  otherwise consents) be in an aggregate amount not less than $5,000,000. The
  amount of the assignment shall be based on the Commitment or outstanding Loans
  (if the Commitment has been terminated) subject to the assignment, determined
  as of the date of such assignment or as of the “Trade Date,” if the
  “Trade Date” is specified in the assignment.  

       12.3.2 Consents.
  The consent of the Borrower shall be required prior to an assignment becoming
  effective unless the Purchaser is a Lender, an Affiliate of a Lender or an Approved
  Fund, provided that the consent of the Borrower shall not be required if a Default
  has occurred and is continuing. The consent of the Administrative Agent shall
  be required prior to an assignment becoming effective unless the Purchaser is
  a Lender, an Affiliate of a Lender or an Approved Fund. Any consent required
  under this Section 12.3.2 shall not be unreasonably withheld or delayed. 


       12.3.3 Effect; Effective
  Date. Upon (i) delivery to the Administrative Agent of an assignment, together
  with any consents required by Sections 12.3.1 and 12.3.2, and (ii) payment of
  a $4,000 fee to the Administrative Agent for processing such assignment (unless
  such fee is waived by the Administrative Agent), such assignment shall become
  effective on the effective date specified in such assignment. The assignment
  shall contain a representation by the Purchaser to the effect that none of the
  consideration used to make the purchase of the Commitment and Loans under the
  applicable assignment agreement constitutes “plan assets” as defined
  under ERISA and that the rights and interests of the Purchaser in and under
  the Loan Documents will not be “plan assets” under ERISA. On and after
  the effective date of such assignment, such Purchaser shall for all purposes
  be a Lender party to this Agreement and any other Loan Document executed by
  or on behalf of the Lenders and shall have all the rights and obligations of
  a Lender under the Loan Documents, to the same extent as if it were an original
  party thereto, and the transferor Lender shall be released with respect to the
  Commitment and Loans assigned to such Purchaser without any further consent
  or action by the Borrower, the Lenders or the Administrative Agent. In the case
  of an assignment covering all of the assigning Lender’s rights and obligations
  under this Agreement, such Lender shall cease to be a Lender hereunder but shall
  continue to be entitled to the benefits of, and subject to, those provisions
  of this Agreement and the other Loan Documents which survive payment of the
  Obligations and termination of the applicable agreement. Any assignment or transfer
  by a Lender of rights or obligations under this Agreement that does not comply
  with this Section 12.3 shall be treated for purposes of this Agreement as a
  sale by such Lender of a participation in such rights and obligations in accordance
  with Section 12.2. Upon the consummation of any assignment to a  

 47






 Purchaser pursuant to
  this Section 12.3.3, the transferor Lender, the Administrative Agent and the
  Borrower shall, if the transferor Lender or the Purchaser desires that its Loans
  be evidenced by Notes, make appropriate arrangements so that new Notes or, as
  appropriate, replacement Notes are issued to such transferor Lender and new
  Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in
  each case in principal amounts reflecting their respective Commitments, as adjusted
  pursuant to such assignment.  

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

       12.3.5 Special Purpose
  Funding Vehicles. Notwithstanding anything to the contrary contained herein,
  any Lender (a “Granting Lender”) may grant to a special purpose funding
  vehicle (an “SPC”), identified as such in writing from time to time
  by the Granting Lender to the Administrative Agent and the Borrower, the option
  to provide to the Borrower all or any part of any Loan that such Granting Lender
  would otherwise be obligated to make to the Borrower pursuant to this Agreement;
  provided that (i) nothing herein shall constitute a commitment by any SPC to
  make any Loan, (ii) if an SPC elects not to exercise such option or otherwise
  fails to provide all or any part of such Loan, the Granting Lender shall be
  obligated to make such Loan pursuant to the terms hereof. The making of a Loan
  by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
  same extent, and as if, such Loan were made by such Granting Lender. Each party
  hereto hereby agrees that no SPC shall be liable for any indemnity or similar
  payment obligation under this Agreement (all liability for which shall remain
  with the Granting Lender). In furtherance of the foregoing, each party hereto
  hereby agrees (which agreement shall survive the termination of this Agreement)
  that, prior to the date that is one year and one day after the payment in full
  of all outstanding commercial paper or other senior indebtedness of any SPC,
  it will not institute against, or join any other person in instituting against,
  such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
  proceedings under the laws of the United States or any State thereof. In addition,
  notwithstanding anything to the contrary contained in this Section 12.3.3, any
  SPC may (i) with notice to, but without the prior written consent of, the Borrower
  and the Administrative Agent and without paying any processing fee therefor,
  assign all or a portion of its interests in any Loans to the Granting Lender
  or to any financial institutions (consented to by the Borrower and Administrative
  Agent) providing liquidity and/or credit support to or for the account of such
  SPC to support the funding or maintenance of Loans and (ii) disclose on a confidential
  basis any non-public information relating to its Loans to any rating agency,
  commercial paper dealer or provider of any surety, guarantee or credit or liquidity
  enhancement to such SPC. This Section 12.3.3 may not be amended without the
  written consent of the SPC.  

 48






       12.4 Dissemination
  of Information. The Borrower authorizes each Lender to disclose to any Participant
  or Purchaser or any other Person acquiring an interest in the Loan Documents
  by operation of law (each a “Transferee”) and any prospective Transferee
  any and all information in such Lender’s possession concerning the creditworthiness
  of the Borrower and its Subsidiaries, including without limitation any information
  contained in any Reports; provided that each Transferee and prospective Transferee
  agrees to be bound by Section 9.10 of this Agreement.  

       12.5 Tax Treatment.
  If any interest in any Loan Document is transferred to any Transferee which
  is organized under the laws of any jurisdiction other than the United States
  or any State thereof, the transferor Lender shall cause such Transferee, concurrently
  with the effectiveness of such transfer, to comply with the provisions of Section
  3.5(iv).  

 ARTICLE
  XIII  

 NOTICES
   

       13.1 Notices.
  Except as otherwise permitted by Section 2.08 with respect to borrowing notices,
  all notices, requests and other communications to any party hereunder shall
  be in writing (including electronic transmission, facsimile transmission or
  similar writing) and shall be given to such party: (x) in the case of the Borrower
  or the Administrative Agent, at its address or facsimile number set forth on
  the signature pages hereof, (y) in the case of any Lender, at its address or
  facsimile number set forth in its completed administrative questionnaire as
  delivered to the Administrative Agent, or (z) in the case of any party, at such
  other address or facsimile number as such party may hereafter specify for the
  purpose by notice to the Administrative Agent and the Borrower in accordance
  with the provisions of this Section 13.1. Each such notice, request or other
  communication shall be effective (i) if given by facsimile transmission, when
  transmitted to the facsimile number specified in this Section and confirmation
  of receipt is received, (ii) if given by mail, 72 hours after such communication
  is deposited in the mails with first class postage prepaid, addressed as aforesaid,
  or (iii) if given by any other means, when delivered (or, in the case of electronic
  transmission, received) at the address specified in this Section; provided
  that notices to the Administrative Agent under Article II shall not be effective
  until received.  

       13.2 Change of Address.
  The Borrower and the Administrative Agent may each change the address for service
  of notice upon it by a notice in writing to the other parties hereto. Any Lender
  may change the address for service of notice upon it by notice in writing to
  the Borrower and the Administrative Agent.  

 ARTICLE
  XIV  

 COUNTERPARTS
   

      This
  Agreement may be executed in any number of counterparts, all of which taken
  together shall constitute one agreement, and any of the parties hereto may execute
  this Agreement by signing any such counterpart. This Agreement shall be effective
  when it has been  

 49






 executed by the Borrower,
  the Administrative Agent and the Lenders and each party has notified the Administrative
  Agent by facsimile transmission or telephone that it has taken such action.
   

 ARTICLE
  XV  

 CHOICE
  OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL  

       15.1
  CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
  EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL
  LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ, BUT OTHERWISE
  WITHOUT  REGARD TO
  THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT
  TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.  

       15.2
  CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
  NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT
  SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
  TO ANY LOAN  DOCUMENTS
  AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
  ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
  WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
  SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
  INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE
  AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS
  OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
  ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT
  OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING
  OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY
  IN A COURT IN CHICAGO, ILLINOIS OR THE CITY IN WHICH THE CHIEF EXECUTIVE OFFICE
  OF THE ADMINISTRATIVE AGENT OR SUCH LENDER OR AFFILIATE, AS THE CASE MAY BE,
  IS LOCATED.  

       15.3
  WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH
  LENDER HEREBY WAIVE 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, OR CONNECTED WITH ANY LOAN DOCUMENT OR
  THE  RELATIONSHIP
  ESTABLISHED THEREUNDER.  

 [Signature
  pages follow]  

 50





     IN WITNESS WHEREOF,
  the Borrower, the Lenders and the Administrative Agent have executed this Revolving
  Credit Agreement as of the date first above written.  

  

	 	THE DAYTON
      POWER AND LIGHT 

      COMPANY
	 	 	 
	 	By: 	 
	 	 	

	 	 	Name:
	 	 	Title: 
	 	 	 
	 	Address:

      Attention:

      Telephone:

      Facsimile: 


 51





	 	 BANK
        ONE, NA, individually and as 

        Administrative Agent

	 	 	 
	 	By: 	 
	 	 	

	 	 	Name: Sharon
      Webb 
	 	 	Title:   Associate
      Director  
	 	 	 


	 	Address:	1
      Bank One Plaza

      Suite IL1-0363

      Chicago, IL 60670
	 	Attention:	 Sean
      Drinan
	 	Telephone:  	 312-732-5085
       
	 	Facsimile:
      	 312-732-3055
       


 52





	 	 KEYBANK
        NATIONAL ASSOCIATION,

	 	individually
      and as Syndication Agent 
	 	 	 
	 	By: 	 
	 	 	

	 	 	Name:
	 	 	Title:  
    
	 	 	 


53





	 	 FIFTH
        THIRD BANK, WESTERN OHIO

	 	 
	 	By: 	 
	 	 	

	 	 	Name:
	 	 	Title:  
    
	 	 	 


 54





	 	 LASALLE
        BANK NATIONAL ASSOCIATION

	 	 
	 	By: 	 
	 	 	

	 	 	Name:
	 	 	Title:  
    
	 	 	 


 55





	 	 NATIONAL
        CITY BANK

	 	 
	 	By: 	 
	 	 	

	 	 	Name:
	 	 	Title:  
    
	 	 	 


56





	 	 UNION
        BANK OF CALIFORNIA, N.A.

	 	 
	 	By: 	 
	 	 	

	 	 	Name:
	 	 	Title:  
    
	 	 	 


57






 PRICING
  SCHEDULE 

	

	APPLICABLE	LEVEL
      I	 	LEVEL
      II	 	LEVEL
      III	 	LEVEL
      IV	 	LEVEL
      V
	MARGIN	STATUS	 	STATUS	 	STATUS	 	STATUS	 	STATUS
	

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Eurodollar
      Rate	0.75	%   	   	0.85	%   	   	0.95	%   	   	1.175	%   	   	2.00	%   
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Alternate
      Base	0	%	 	0	%	 	0	%	 	0	%	 	0	%
	Rate	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	STATUS	LEVEL
      I	 	LEVEL
      II	 	LEVEL
      III	 	LEVEL
      IV	 	LEVEL
      V
	 	STATUS	 	STATUS	 	STATUS	 	STATUS	 	STATUS
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable
      Fee	0.125	%	 	0.15	%	 	0.175	%	 	0.20	%	 	0.25	%
	Rate	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	



 

      For
  purposes of this Schedule, the following terms have the following meanings,
  subject to the final paragraph of this Schedule:  

      “Level
  I Status” exists at any date if, on such date, the Borrower’s Moody’s
  Rating is A3 or better or the Borrower’s S&P Rating is A- or
  better.  

      “Level
  II Status” exists at any date if, on such date, (i) the Borrower has not
  qualified for Level I Status and (ii) the Borrower’s Moody’s Rating
  is Baa1 or better or the Borrower’s S&P Rating is BBB+ or better.
   

      “Level
  III Status” exists at any date if, on such date, (i) the Borrower has not
  qualified for Level I Status or Level II Status and (ii) the Borrower’s
  Moody’s Rating is Baa2 or better or the Borrower’s S&P
  Rating is BBB or better.  

      “Level
  IV Status” exists at any date if, on such date, (i) the Borrower has not
  qualified for Level I Status, Level II Status or Level III Status and (ii) the
  Borrower’s Moody’s Rating is Baa3 or better and the Borrower’s
  S&P Rating is BBB- or better.  

      “Level
  V Status” exists at any date if, on such date, the Borrower has not qualified
  for Level I Status, Level II Status, Level III Status or Level IV Status. 


      “Moody’s
  Rating” means, at any time, the rating issued by Moody’s Investors
  Service, Inc. and then in effect with respect to the Borrower’s senior
  unsecured long-term debt securities or issuer rating without third-party credit
  enhancement.  

      “S&P
  Rating” means, at any time, the rating issued by Standard and Poor’s
  Rating Services, a division of The McGraw Hill Companies, Inc., and then in
  effect with respect to the Borrower’s senior unsecured long-term debt securities
  or Corporate Credit Rating without third-party credit enhancement.  

 58






      “Status”
  means Level I Status, Level II Status, Level III Status, Level IV Status or
  Level V Status.  

      The
  Applicable Margin and Applicable Fee Rate shall be determined in accordance
  with the foregoing table based on the Borrower’s Status as determined from
  its then-current Moody’s and S&P Ratings. The credit rating in effect
  on any date for the purposes of this Schedule is that in effect at the close
  of business on such date. If at any time the Borrower has no Moody’s Rating
  or no S&P Rating, Level V Status shall exist.  

      If
  the Borrower is split-rated and the ratings differential is one level, the better
  rating will apply. If the Borrower is split-rated and the ratings differential
  is two levels or more, the intermediate rating at the midpoint will apply. If
  there is no midpoint, the higher of the intermediate ratings will apply. If
  at any time the Borrower’s Moody’s Rating is below Baa3 or the Borrower’s
  S&P Rating is below BBB-, the lower rating will apply.  

 59






 SCHEDULE
  I  

 COMMITMENTS
  

	Lender	Commitments
	 	 
	Bank
      One, NA	$	28,790,322.59
	KeyBank
      National Association	$	27,096,774.19
	Fifth
      Third Bank, Western Ohio	$	15,241,935.48
	LaSalle
      Bank National Association	$	13,548,387.10
	National
      City Bank	$	10,161,290.32
	Union
      Bank of California, N.A.	$	10,161,290.32
	 	 

	            Total	$	105,000,000.00


  

 60






 SCHEDULE
  5.7  

 LITIGATION
  AND CONTINGENT OBLIGATIONS 

 SECTION
  6.13  

 LIENS 


 None.  

 61






 EXHIBIT
  A  

 FORM OF
  OPINION  

 (Attached)
   

 62






	     EXHIBIT
        B

         

	     COMPLIANCE
        CERTIFICATE

         

	To:
        The Lenders party to the

               Credit Agreement described below

         

	     This
        Compliance Certificate is furnished pursuant to that certain Revolving
        Credit Agreement dated as of December 18, 2002 (as amended, modified,
        renewed or extended from time to time, the “Agreement”) among
        The Dayton Power and Light Company (the “Borrower”), the lenders
        party thereto, KeyBank National Association, as Syndication Agent, and
        Bank One, NA, as Administrative Agent for the Lenders. Unless otherwise
        defined herein, capitalized terms used in this Compliance Certificate
        have the meanings ascribed thereto in the Agreement.

         

	     THE
        UNDERSIGNED HEREBY CERTIFIES THAT:

         

	
	1.

          
	I
        am the duly elected ______________________________ of the Borrower;

         

	
	2.

          
	     I
        have reviewed the terms of the Agreement and I have made, or have caused
        to be made under my supervision, a detailed review of the transactions
        and conditions of the Borrower and its Subsidiaries during the accounting
        period covered by the attached financial statements;

         

	
	3.

          
	     The
        examinations described in paragraph 2 did not disclose, and I have no
        knowledge of, the existence of any condition or event which constitutes
        a Default or Unmatured Default during or at the end of the accounting
        period covered by the attached financial statements or as of the date
        of this Certificate, except as set forth below; and

         

	
	4.

          
	     Schedule
        I attached hereto sets forth financial data and computations evidencing
        the Borrower’s compliance with Section 6.16 of the Agreement, all
        of which data and computations are true, complete and correct.

         

	     Described
        on the attached Annex I are the exceptions, if any, to paragraph 3 by
        listing, in detail, the nature of the condition or event, the period during
        which it has existed and the action which the Borrower has taken, is taking,
        or proposes to take with respect to each such condition or event.

         

	     The
        foregoing certifications, together with the computations set forth in
        Schedule I hereto and the financial statements delivered with this Certificate
        in support hereof, are made and delivered this ____ day of _________,
        ____.

         

	63

         







 SCHEDULE
  I TO COMPLIANCE CERTIFICATE  

 Compliance
  as of _________, ____ with

  

  Provisions of ____ and ____ of 

the Agreement
   

 64






	     EXHIBIT
        C

         

	     ASSIGNMENT
        AND ASSUMPTION AGREEMENT

         

	     This
        Assignment and Assumption (the “Assignment and Assumption”)
        is dated as of the Effective Date set forth below and is entered into
        by and between [Insert name of Assignor] (the “Assignor”)
        and [Insert name of Assignee] (the “Assignee”). Capitalized
        terms used but not defined herein shall have the meanings given to them
        in the Credit Agreement identified below (as amended, the “Credit
        Agreement”), receipt of a copy of which is hereby acknowledged by
        the Assignee. The Terms and Conditions set forth in Annex 1 attached hereto
        are hereby agreed to and incorporated herein by reference and made a part
        of this Assignment and Assumption as if set forth herein in full.

         

	     For
        an agreed consideration, the Assignor hereby irrevocably sells and assigns
        to the Assignee, and the Assignee hereby irrevocably purchases and assumes
        from the Assignor, subject to and in accordance with the Standard Terms
        and Conditions and the Credit Agreement, as of the Effective Date inserted
        by the Agent as contemplated below, the interest in and to all of the
        Assignor’s rights and obligations in its capacity as a Lender under
        the Credit Agreement and any other documents or instruments delivered
        pursuant thereto that represents the amount and percentage interest identified
        below of all of the Assignor’s outstanding rights and obligations
        under the respective facilities identified below (including without limitation
        any letters of credit, guaranties and swingline loans included in such
        facilities and, to the extent permitted to be assigned under applicable
        law, all claims (including without limitation contract claims, tort claims,
        malpractice claims, statutory claims and all other claims at law or in
        equity), suits, causes of action and any other right of the Assignor against
        any Person whether known or unknown arising under or in connection with
        the Credit Agreement, any other documents or instruments delivered pursuant
        thereto or the loan transactions governed thereby) (the “Assigned
        Interest”). Such sale and assignment is without recourse to the Assignor
        and, except as expressly provided in this Assignment and Assumption, without
        representation or warranty by the Assignor.

         

	1.

          
	Assignor:_________________________________________

         

	2.

          
	Assignee:
        _________________________________________ [and is an Affiliate/Approved
        Fund of Assignor](1)

         

	3.

          
	Borrower:
        The Dayton Power and Light Company

         

	4.

          
	Agent:
        Bank One, NA, as the administrative agent under the Credit Agreement.

         

	    
      

      (1) Select as applicable.

       
	65

         







  

	 5.  Credit
        Agreement:      
	The
        $105,000,000 Revolving Credit Agreement dated as of December
        18, 2002 among The Dayton Power and Light Company, the Lenders party thereto,
        KeyBank National Association, as Syndication Agent,
        and Bank One, NA, as Administrative Agent. 



 6. Assigned Interest:
   

	

	 Facility Assigned
       	      	Aggregate Amount
      of

      Commitment/Loans for

      all Lenders*	 	Amount of

      Commitment/Loans

      Assigned*	 	Percentage
      Assigned of

      Commitment/Loans(2)
	

	 Revolving Credit

      Commitment 	 	$__________	      	$__________	      	 _______%
	



	 	 
	7.  Trade
      Date:      	 _________________________________________________________________
      (3) 


Effective Date: ____________,
  20__ [TO BE INSERTED BY AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION
  OF TRANSFER BY THE AGENT.] 

  The terms set forth
  in this Assignment and Assumption are hereby agreed to: 

  

	 	ASSIGNOR

      [NAME OF ASSIGNOR] 
	 	 	 
	 	By:	 
	 	 	

	 	 	 Title:

      
	 	ASSIGNEE

      [NAME OF ASSIGNEE] 
	 	 	 
	 	By: 	 
	 	 	

	 	 	 Title:

      




*Amount to be adjusted by
the counterparties to take into account any payments or prepayments made between
the Trade Date and the Effective Date.



(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.



(3) Insert if satisfaction of minimum amounts is to be determined as of the
Trade Date.


  

 66





	[Consented
      to and](4) Accepted:   	 
	 	 	 
	BANK ONE,
      NA, as Administrative Agent	 
	 	 	 
	By: 	 	 
	 	
	 
	 	Title:  
    	 
	 	 	 
	 	 	 
	[Consented
      to:](5) 	 
	 	 	 
	THE DAYTON
      POWER AND LIGHT COMPANY	 
	 	 	 
	By: 	 	 
	 	
	 
	 	Title:  
    	 




(4) To
be added only if the consent of the Administrative Agent is required by the terms
of the Credit
Agreement. 
 (5)
  To be added only if the consent of the Borrower is required by the terms of
  the Credit Agreement. 

 

 67






 ANNEX
  1  

 TERMS
  AND CONDITIONS FOR 

  ASSIGNMENT AND ASSUMPTION  

      1. Representations
  and Warranties.  

      1.1
  Assignor. The Assignor represents and warrants that (i) it is the legal
  and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
  free and clear of any lien, encumbrance or other adverse claim and (iii) it
  has full power and authority, and has taken all action necessary, to execute
  and deliver this Assignment and Assumption and to consummate the transactions
  contemplated hereby. Neither the Assignor nor any of its officers, directors,
  employees, agents or attorneys shall be responsible for (i) any statements,
  warranties or representations made in or in connection with the Credit Agreement
  or any other Loan Document, (ii) the execution, legality, validity, enforceability,
  genuineness, sufficiency, perfection, priority, collectibility, or value of
  the Loan Documents or any collateral thereunder, (iii) the financial condition
  of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated
  in respect of any Loan Document, (iv) the performance or observance by the Borrower,
  any of its Subsidiaries or Affiliates or any other Person of any of their respective
  obligations under any Loan Document, (v) inspecting any of the property, books
  or records of the Borrower, or any guarantor, or (vi) any mistake, error of
  judgment, or action taken or omitted to be taken in connection with the Loans
  or the Loan Documents.  

      1.2.
  Assignee. The Assignee (a) represents and warrants that (i) it has full
  power and authority, and has taken all action necessary, to execute and deliver
  this Assignment and Assumption and to consummate the transactions contemplated
  hereby and to become a Lender under the Credit Agreement, (ii) from and after
  the Effective Date, it shall be bound by the provisions of the Credit Agreement
  as a Lender thereunder and, to the extent of the Assigned Interest, shall have
  the obligations of a Lender thereunder, (iii) agrees that its payment instructions
  and notice instructions are as set forth in Schedule 1 to this Assignment and
  Assumption, (iv) confirms that none of the funds, monies, assets or other consideration
  being used to make the purchase and assumption hereunder are “plan assets”
  as defined under ERISA and that its rights, benefits and interests in and under
  the Loan Documents will not be “plan assets” under ERISA, (v) agrees
  to indemnify and hold the Assignor harmless against all losses, costs and expenses
  (including, without limitation, reasonable attorneys’ fees) and liabilities
  incurred by the Assignor in connection with or arising in any manner from the
  Assignee’s non-performance of the obligations assumed under this Assignment
  and Assumption, (vi) it has received a copy of the Credit Agreement, together
  with copies of financial statements and such other documents and information
  as it has deemed appropriate to make its own credit analysis and decision to
  enter into this Assignment and Assumption and to purchase the Assigned Interest
  on the basis of which it has made such analysis and decision independently and
  without reliance on the Administrative Agent or any other Lender, and (vii)
  attached as Schedule 1 to this Assignment and Assumption is any documentation
  required to be delivered by the Assignee with respect to its tax status pursuant
  to the terms of the Credit Agreement, duly completed and executed by the Assignee
  and (b) agrees that (i) it will, independently and without reliance on the Administrative
  Agent, the Assignor or any other Lender, and based on such documents and information
  as it shall deem appropriate at the time, continue to make its own credit decisions
  in taking or not taking action under the Loan Documents, and (ii) it will perform
  in accordance with  

 68






 their terms all of the
  obligations which by the terms of the Loan Documents are required to be performed
  by it as a Lender.  

      2.
  Payments. The Assignee shall pay the Assignor, on the Effective Date,
  the amount agreed to by the Assignor and the Assignee. From and after the Effective
  Date, the Agent shall make all payments in respect of the Assigned Interest
  (including payments of principal, interest, fees and other amounts) to the Assignor
  for amounts which have accrued to but excluding the Effective Date and to the
  Assignee for amounts which have accrued from and after the Effective Date. 


      3.
  General Provisions. This Assignment and Assumption shall be binding upon,
  and inure to the benefit of, the parties hereto and their respective successors
  and assigns. This Assignment and Assumption may be executed in any number of
  counterparts, which together shall constitute one instrument. Delivery of an
  executed counterpart of a signature page of this Assignment and Assumption by
  telecopy shall be effective as delivery of a manually executed counterpart of
  this Assignment and Assumption. This Assignment and Assumption shall be governed
  by, and construed in accordance with, the law of the State of Illinois. 


 69






 ADMINISTRATIVE
  QUESTIONNAIRE  

 (Schedule
  to be supplied by Closing Unit or Trading Documentation Unit)  

 (For Forms
  for Primary Syndication call Peterine Svoboda at 312-732-8844)

  (For Forms after Primary Syndication call Jim Bartz at 312-732-1242) 


 70







 US AND
  NON-US TAX INFORMATION REPORTING REQUIREMENTS  

 (Schedule
  to be supplied by Closing Unit or Trading Documentation Unit)  

 (For Forms
  for Primary Syndication call Peterine Svoboda at 312-732-8844)

  (For Forms after Primary Syndication call Jim Bartz at 312-732-1242) 


 71






 EXHIBIT
  D  

 LOAN/CREDIT
  RELATED MONEY TRANSFER INSTRUCTION  

  

	To: 	Bank One, NA, as Administrative
      Agent (the “Administrative Agent”) under the Credit Agreement
      described below. 
	 	 
	Re:	Revolving
        Credit Agreement, dated as of December 18, 2002 (as the same may be amended
        or modified, the “Credit Agreement”), among The Dayton Power
        and Light Company (the “Borrower”), the Lenders named therein,
        KeyBank National Association, as Syndication Agent,
        and the Administrative Agent. Capitalized terms used herein and not otherwise
        defined herein shall have the meanings assigned thereto in the Credit
        Agreement.  



      The
  Administrative Agent is specifically authorized and directed to act upon the
  following standing money transfer instructions with respect to the proceeds
  of Advances or other extensions of credit from time to time until receipt by
  the Administrative Agent of a specific written revocation of such instructions
  by the Borrower, provided, however, that the Administrative Agent may
  otherwise transfer funds as hereafter directed in writing by the Borrower in
  accordance with Section 13.1 of the Credit Agreement or based on any telephonic
  notice made in accordance with Section 2.14 of the Credit Agreement.

	Facility
      Identification Number(s)	 	 
	 	 	

	Customer/Account
      Name	 	 
	 	 	

	Transfer
      Funds To	 	 
	 	 	

	For
      Account No:	 	 
	 	 	

	Reference/Attention
      To	 	 
	 	 	

	Authorized
      Officer (Customer Representative):      	Date  	 
	 	 	



	 	 	 
	
	 	

	(Please
      Print)	 	Signature
	 	 	 
	 	 	 
	Bank Officer
      Name	Date 	 
	 	 	

	 	 	 
	
	 	

	(Please
      Print)	 	Signature
	 	 	 
	(Deliver
      Completed Form to Credit Support Staff For Immediate Processing)


  

 72






 EXHIBIT
  E  

 NOTE 


  

	$ ____________________

      	[DATE]
                 


       THE
  DAYTON POWER AND LIGHT COMPANY, an Ohio corporation (the “Borrower”),
  promises to pay to the order of ____________________________________ (the “Lender”)
  the lesser of the principal sum of ______________________________

  Dollars ($ _______________ ) or the aggregate unpaid principal amount of all
  Loans made by the Lender to the Borrower pursuant to Article II of the Agreement
  (as hereinafter defined), in immediately available funds at the main office
  Bank One, NA, in Chicago, Illinois, as Administrative Agent, together with interest
  on the unpaid principal amount hereof at the rates and on the dates set forth
  in the Agreement. The Borrower shall pay the principal of and accrued and unpaid
  interest on the Loans in full on the Facility Termination Date.  

      The
  Lender shall, and is hereby authorized to, record on the schedule attached hereto,
  or to otherwise record in accordance with its usual practice, the date and amount
  of each Loan and the date and amount of each principal payment hereunder. 


      This
  Note is one of the Notes issued pursuant to, and is entitled to the benefits
  of, the Revolving Credit Agreement dated as of December 18, 2002 (which, as
  it may be amended or modified and in effect from time to time, is herein called
  the “Agreement”), among the Borrower, the lenders party thereto, including
  the Lender, KeyBank National Association, as Syndication Agent, and Bank
  One, NA, as Administrative Agent, to which Agreement reference is hereby made
  for a statement of the terms and conditions governing this Note, including the
  terms and conditions under which this Note may be prepaid or its maturity date
  accelerated. Capitalized terms used herein and not otherwise defined herein
  are used with the meanings attributed to them in the Agreement.

	
	 
	 	 
	 	 
	THE DAYTON
      POWER AND LIGHT COMPANY	 
	 	 	 
	By: 	 	 
	 	
	 
	 	Name:	 
	 	Title:	 
	 	 	 


 73







 SCHEDULE
  OF LOANS AND PAYMENTS OF PRINCIPAL  

 TO 


 NOTE OF
  THE DAYTON POWER AND LIGHT COMPANY,  

 DATED ___________,
  ___________

   

	Date	Principal

      Amount of Loan	Maturity
      of

      Interest Period	Principal

      Amount Paid	Unpaid

      Balance