EXHIBIT 10.1
                                                                 EXECUTION COPY


===========================================================

                              Up to $650,000,000

                                    364-DAY
                               CREDIT AGREEMENT

                         Dated as of October 11, 2002

                                     Among

                          ALLIANT ENERGY CORPORATION
                                  as Borrower

                                      and

                            THE BANKS NAMED HEREIN
                                   as Banks

                                      and

                                 BANK ONE, NA
                  as Administrative Agent and LC Issuing Bank


===========================================================

                                CITIBANK, N.A.
                               Syndication Agent

                        BANC ONE CAPITAL MARKETS, INC.
                                      and
                           SALOMON SMITH BARNEY INC.
                               Co-Lead Arrangers

                      WACHOVIA BANK, NATIONAL ASSOCIATION
                              Documentation Agent


===========================================================

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                                              <C>
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS........................................................................1
         SECTION 1.01.  Certain Defined Terms.....................................................................1
         SECTION 1.02.  Computation of Time Periods..............................................................16
         SECTION 1.03.  Computations of Outstandings.............................................................17
         SECTION 1.04.  Accounting Terms.........................................................................17

ARTICLE II AMOUNTS AND TERMS OF THE EXTENSIONS OF CREDIT.........................................................17
         SECTION 2.01.  The Advances.............................................................................17
         SECTION 2.02.  Making the Advances......................................................................17
         SECTION 2.03.  Letters of Credit........................................................................18
         SECTION 2.04.  Fees 21
         SECTION 2.05.  Reduction of the Commitments; Commitment Increase........................................22
         SECTION 2.06.  Repayment of Advances....................................................................24
         SECTION 2.07.  Interest on Advances.....................................................................24
         SECTION 2.08.  Additional Interest on Eurodollar Rate Advances..........................................24
         SECTION 2.09.  Interest Rate Determination..............................................................25
         SECTION 2.10.  Voluntary Conversion of Advances.........................................................26
         SECTION 2.11.  Optional Prepayments of Advances.........................................................26
         SECTION 2.12.  Mandatory Prepayments....................................................................27
         SECTION 2.13.  Increased Costs..........................................................................27
         SECTION 2.14.  Illegality...............................................................................28
         SECTION 2.15.  Payments and Computations................................................................29
         SECTION 2.16.  Noteless Agreement; Evidence of Indebtedness.............................................30
         SECTION 2.17.  Taxes30
         SECTION 2.18.  Sharing of Payments, Etc.................................................................32
         SECTION 2.19.  Extension of Termination Date............................................................32

ARTICLE III CONDITIONS OF LENDING................................................................................33
         SECTION 3.01.  Conditions Precedent to Closing..........................................................33
         SECTION 3.02.  Conditions Precedent to Each Extension of Credit.........................................35
         SECTION 3.03.  Conditions Precedent to Each Extension of the Termination Date...........................35
         SECTION 3.04.  Reliance on Certificates.................................................................36

ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................36
         SECTION 4.01.  Representations and Warranties of the Borrower...........................................36

ARTICLE V COVENANTS OF THE BORROWER..............................................................................38
         SECTION 5.01.  Affirmative Covenants....................................................................38
         SECTION 5.02.  Negative Covenants.......................................................................42

ARTICLE VI EVENTS OF DEFAULT.....................................................................................47
         SECTION 6.01.  Events of Default........................................................................47
         SECTION 6.02.  Cash Collateral Account..................................................................49

ARTICLE VII THE AGENT............................................................................................50
         SECTION 7.01.  Authorization and Action.................................................................50
         SECTION 7.02.  Agent's Reliance, Etc....................................................................50
         SECTION 7.03.  Bank One and Affiliates..................................................................50
         SECTION 7.04.  Lender Credit Decision...................................................................51
         SECTION 7.05.  Indemnification..........................................................................51
         SECTION 7.06.  Successor Agent..........................................................................51

ARTICLE VIII MISCELLANEOUS.......................................................................................52
         SECTION 8.01.  Amendments, Etc..........................................................................52
         SECTION 8.02.  Notices, Etc.............................................................................52
         SECTION 8.03.  No Waiver; Remedies......................................................................53
         SECTION 8.04.  Costs, Expenses, Taxes and Indemnification...............................................53
         SECTION 8.05.  Right of Set-off.........................................................................54
         SECTION 8.06.  Binding Effect...........................................................................55
         SECTION 8.07.  Assignments and Participations...........................................................55
         SECTION 8.08.  Confidentiality..........................................................................59
         SECTION 8.09.  WAIVER OF JURY TRIAL.....................................................................59
         SECTION 8.10.  Governing Law............................................................................59
         SECTION 8.11.  Relation of the Parties; No Beneficiary..................................................60
         SECTION 8.12.  Execution in Counterparts................................................................60

</TABLE>

<PAGE>

EXHIBITS AND SCHEDULES

<TABLE>
<CAPTION>
<S>                                        <C>
Exhibit 1.01                   -        Form of Note
Exhibit 2.02(a)                -        Form of Notice of Borrowing
Exhibit 2.03                   -        Form of Request for Issuance
Exhibit 2.10                   -        Form of Notice of Conversion
Exhibit 3.01(a)(viii)-1        -        Form of Opinion of Foley & Lardner
Exhibit 3.01(a)(viii)-2        -        Form of Opinion of General Counsel
Exhibit 3.01(a)(viii)-3        -        Form of Opinion of King & Spalding
Exhibit 8.07                   -        Form of Lender Assignment

Schedule I                     -        Commitment Schedule
Schedule II                    -        Existing Liens
Schedule III                   -        List of Indentures

</TABLE>
<PAGE>

                           364-DAY CREDIT AGREEMENT

                         Dated as of October 11, 2002


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

(i)   ALLIANT ENERGY CORPORATION, a Wisconsin corporation (the "Borrower"),

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

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

                            PRELIMINARY STATEMENTS

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

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

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

                                   ARTICLE I
                       DEFINITIONS AND ACCOUNTING TERMS

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

           "Additional  Lender"  has  the  meaning  assigned  to  that  term in
      Section 2.05(g).

           "Advance"  means an advance by a Lender to the Borrower as part of a
      Borrowing  and  refers  to a  Base  Rate  Advance  or a  Eurodollar  Rate
      Advance, each of which shall be a "Type" of Advance.

           "AER" means Alliant Energy Resources, Inc., a Wisconsin corporation.

           "AER  Facilities"  means (i) the  $150,000,000  364-Day  Amended and
      Restated Credit Agreement,  and (ii) the $450,000,000  3-Year Amended and
      Restated  Credit  Agreement,  each  dated  as of  October  15,  2001,  as
      amended,  among AER,  the banks named  therein  and  Citibank,  N.A.,  as
      administrative agent.

           "Affected   Lender"  has  the  meaning  assigned  to  that  term  in
      Section 2.14.

           "Affected  Lender Advance" has the meaning  assigned to that term in
      Section 2.14.

           "Affiliate"  means,  with  respect to any Person,  any other  Person
      directly  or  indirectly  controlling  (including  but not limited to all
      directors  and officers of such Person),  controlled  by, or under direct
      or indirect  common  control with such  Person.  A Person shall be deemed
      to  control  another  entity  if  such  Person  possesses,   directly  or
      indirectly,  the power to direct or cause the direction of the management
      and  policies of such  entity,  whether  through the  ownership of voting
      securities, by contract, or otherwise.

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

(i)   the rate of  interest  announced  publicly  by Bank One or its  corporate
      parent,  Bank One  Corporation,  from time to time, as its corporate base
      rate or prime rate of interest; and

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

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

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

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

<TABLE>
<CAPTION>
         ======================= ============= ============= ============== ============= ============= ==============

                                   LEVEL 1       LEVEL 2        LEVEL 3       LEVEL 4       LEVEL 5        LEVEL 6
         BASIS FOR               Reference     Reference     Reference      Reference     Reference     Reference
         PRICING                 Ratings At    Ratings       Ratings Less   Ratings       Ratings       Ratings Less
                                 Least A By    Less Than     Than Level 2   Less Than     Less Than     Than Level 5*
                                 S&P's/A2 By   Level 1 But   But At Least   Level 3 But   Level 4 But
                                 Moody's.      At Least A-   BBB+ By        At Least      At Least
                                               By S&P's/A3   S&P's/Baa1     BBB By        BBB- By
                                               By Moody's.   By Moody's.    S&P's/Baa2    S&P's/Baa3
                                                                            By Moody's.   By Moody's.
         -------------------------------------------------------------------------------------------------------------
         <S>                         <C>           <C>           <C>            <C>          <C>             <C>
         Basis Points Per Annum
         ----------------------- ------------- ------------- -------------- ------------- ------------- --------------
         Eurodollar Rate             55.0          62.5          85.0           95.0         175.0          250.0
         ----------------------- ------------- ------------- -------------- ------------- ------------- --------------
         Base Rate                    0             0              0             0             0              0
         ----------------------- ------------- ------------- -------------- ------------- ------------- --------------
         Utilized Eurodollar         67.5          75.0          97.5          107.5         225.0          325.0
         Rate
         ----------------------- ------------- ------------- -------------- ------------- ------------- --------------
         Utilized Base Rate          12.5          12.5          12.5           12.5          50.0          75.0
         ======================= ============= ============= ============== ============= ============= ==============

</TABLE>
                                                                   * or unrated

      The Applicable  Margin will be based upon the Level  corresponding to the
      Reference  Ratings  at the  time  of  determination.  Any  change  in the
      Applicable  Margin resulting from a change in the Reference Ratings shall
      be  effective,  as to any  Advance,  as of the  Borrowing  date  for such
      Advance  following  the  date  on  which  the  applicable  rating  agency
      announces the applicable change in ratings.

           "Applicable Rate" means:

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

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

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

           "Available   Commitments"   means  the  aggregate  of  the  Lenders'
      Available Commitments hereunder.

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

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

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

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

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

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

           "Cash  Collateral  Account" has the meaning assigned to that term in
      Section 6.02(a).

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

           "Closing"   means  the  day  upon  which  each  of  the   applicable
      conditions  precedent  enumerated in  Section 3.01  shall be fulfilled to
      the  satisfaction  of, or waived with the consent  of, the  Lenders,  the
      Agent,   the  LC  Issuing  Bank  and  the  Borrower.   All   transactions
      contemplated  by the  Closing  shall take  place on a Business  Day on or
      prior to  October  11,  2002,  at the  offices of King &  Spalding,  1185
      Avenue of the Americas,  New York,  New York 10036,  at  10:00 a.m.  (New
      York City time),  or such later  Business  Day as the parties  hereto may
      mutually agree.

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

           "Commitment  Increase"  has the  meaning  assigned  to that  term in
      Section 2.05(g)

           "Commitments" means the total of the Lenders' Commitments hereunder.

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

           "Consenting  Lenders"  has the  meaning  assigned  to  that  term in
      Section 2.19(c).

           "Consolidated  Capital"  means,  with respect to any Person,  at any
      date of determination,  the sum of (i) Consolidated  Debt of such Person,
      (ii) consolidated  equity of the common  stockholders  of such Person and
      its   Consolidated   Subsidiaries,   (iii) consolidated   equity  of  the
      preference stockholders of such Person and its Consolidated  Subsidiaries
      and  (iv)  consolidated  equity  of the  preferred  stockholders  of such
      Person and its  Consolidated  Subsidiaries,  in each case  determined  at
      such  date  in  accordance  with  GAAP,  excluding,  however,  from  such
      calculation,  amounts  identified  as  "Accumulated  Other  Comprehensive
      Income  (Loss)" in the financial  statements of the Borrower set forth in
      the  Borrower's  Report on Form 10-K  or 10-Q,  as the case may be, filed
      most recently with the  Securities and Exchange  Commission  prior to the
      date of such determination.

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

           "Consolidated Net Worth" means, at any time of  determination,  with
      respect to any Person and its  Consolidated  Subsidiaries,  the net worth
      of such Person and such Person's Consolidated  Subsidiaries as determined
      in accordance with GAAP.

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

           "Continuing  Directors"  means the members of the Board of Directors
      of the  Borrower  on the date  hereof  and  each  other  director  of the
      Borrower,  if such other director's  nomination for election to the Board
      of  Directors of the  Borrower is  recommended  by a majority of the then
      Continuing Directors.

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

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

           "Debt  Event"  means,  on any date before  December  31,  2002,  the
      issuance or  incurrence  (i) by the Borrower of any Debt,  or (ii) by any
      Subsidiary  of the Borrower of any Debt in excess of  $15,000,000,  other
      than (A) Debt hereunder or under the Utility Facilities,  (B) Nonrecourse
      Debt,  in an aggregate  principal  amount not to exceed  $60,000,000,  in
      connection  with the purchase by the Borrower or any of its  Subsidiaries
      of a 309  mega-watt  natural gas fired  power plant in Neenah,  Wisconsin
      from Mirant  Corporation,  (C) Debt issued by any Foreign  Subsidiary  of
      the  Borrower,  so  long  as it is  not  Debt  of  the  Borrower  or  any
      Subsidiary  of the  Borrower  that is not a  Foreign  Subsidiary  and the
      proceeds of the issuance of such Debt is not  repatriated to the Borrower
      or any Subsidiary of the Borrower that is not a Foreign  Subsidiary,  (D)
      the  issuance  of  commercial  paper  by  the  Borrower  or  any  of  its
      Subsidiaries,  and (E) any  intercompany  Debt issued by the  Borrower to
      any of its  wholly-owned  Subsidiaries  or by any such  Subsidiary to the
      Borrower  or any of its  wholly-owned  Subsidiaries;  provided,  that the
      foregoing  shall  not be  deemed  to imply  that any such  Debt  Event is
      permitted under this Agreement.

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

           "Direct   Subsidiary"   means,  with  respect  to  any  Person,  any
      Subsidiary directly owned by such Person.

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

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

           "Eligible  Assignee"  means (i) a  commercial  bank or trust company
      organized  under the laws of the  United  States,  or any State  thereof;
      (ii) a  commercial  bank  organized  under the laws of any other  country
      that is a member  of the OECD,  or a  political  subdivision  of any such
      country,  provided  that such  bank is acting  through a branch or agency
      located in the United States;  (iii) the central bank of any country that
      is a member of the OECD;  and  (iv) any  other  commercial  bank or other
      financial  institution  engaged  generally  in the  business of extending
      credit or purchasing debt instruments;  provided,  however,  that (A) any
      such Person shall also (1) have outstanding  unsecured  indebtedness that
      is  rated  A- or  better  by  S&P  or A3 or  better  by  Moody's  (or  an
      equivalent rating by another  nationally-recognized  credit rating agency
      of similar  standing  if neither of such  rating  agencies is then in the
      business of rating  unsecured  indebtedness  of entities  engaged in such
      businesses) or (2) have  combined  capital and surplus (as established in
      its most recent  report of  condition  to its primary  regulator)  of not
      less than $250,000,000 (or its equivalent in foreign  currency),  (B) any
      Person  described in clause (ii),  (iii) or (iv) above shall, on the date
      on which it is to become a Lender  hereunder,  (x) be entitled to receive
      payments  hereunder without deduction or withholding of any United States
      Federal income taxes (as  contemplated  by  Section 2.17)  and (y) not be
      incurring  any  losses,  costs or  expenses  of the type for  which  such
      Person  could  demand  payment  under  Section 2.13,  and (C) any  Person
      described in clause  (ii),  (iii) or (iv) above  shall,  in addition,  be
      reasonably  acceptable to the Agent,  the LC Issuing Bank and, so long as
      no Event of Default shall have occurred and be continuing, the Borrower.

           "Equity  Event"  means,  on any date after the date  hereof  (a) the
      contribution  in cash of  capital  (x) to the  Borrower  by any Person or
      (y) to  any  Subsidiary  by any  Person  other  than  the  Borrower  or a
      Subsidiary of the Borrower,  or (b) any  issuance of Equity Interests (x)
      by the  Borrower  to any  Person or (y) by any  Subsidiary  to any Person
      other than the Borrower or a Subsidiary  of the  Borrower;  provided that
      the foregoing shall not include the issuance of Equity Interests  related
      to the Alliant Energy Corporation Shareowner Direct Plan.

           "Equity Interests" means, (a) with respect to a corporation,  shares
      of capital stock of such  corporation or any other  interest  convertible
      or  exchangeable  into any such interest,  (b) with  respect to a limited
      liability  company,  a  membership  interest  in such  company,  (c) with
      respect to a  partnership,  a partnership  interest in such  partnership,
      and  (d) with  respect to any other  Person,  an  interest in such Person
      analogous to interests described in clauses (a) through (c).

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

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

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

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

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

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

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

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

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

           "Existing  Facility"  means the  $300,000,000  364-Day  Amended  and
      Restated  Credit  Agreement,  dated as of  October 15,  2001,  among  the
      Borrower,  the banks named  therein  and Bank One, as the  administrative
      agent.

           "Extension of Credit" means (i) the  disbursement of the proceeds of
      any  Borrowing  and  (ii) the  issuance  of a  Letter  of  Credit  or the
      amendment  of any Letter of Credit  having the  effect of  extending  the
      stated   termination  date  thereof  or  increasing  the  maximum  amount
      available to be drawn thereunder.

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

<TABLE>
<CAPTION>
         ======================= ============= ============= ============== ============= ============= ==============

                                   LEVEL 1       LEVEL 2        LEVEL 3       LEVEL 4       LEVEL 5        LEVEL 6

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

         ----------------------- ------------- ------------- -------------- ------------- ------------- --------------
           <S>                       <C>           <C>           <C>            <C>           <C>           <C>
         Basis Points                10.0          12.5          15.0           17.5          50.0          50.0
         ======================= ============= ============= ============== ============= ============= ==============

</TABLE>
                                                                   * or unrated

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

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

           "Fee Letter" means the letter agreement,  dated  September 6,  2002,
      among the Borrower,  the Utilities,  Bank One, Banc One Capital  Markets,
      Inc., Citibank, N.A. and Salomon Smith Barney Inc.

           "Foreign  Subsidiary"  means any  Subsidiary of the Borrower that is
      organized under the law of any  jurisdiction  other than any state of the
      United States of America.

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

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

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

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

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

           "Increasing  Lender"  has  the  meaning  assigned  to  that  term in
      Section 2.05(g)

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

           "Interest  Coverage  Ratio" means,  as of any date, the ratio of (i)
      operating  income plus  depreciation and amortization of the Borrower for
      the  four  fiscal  quarters  ending  on such  date to (ii)  the  Interest
      Expense payable by the Borrower and its Consolidated  Subsidiaries during
      such period.

           "Interest  Expense"  means,  for any  Person  and  its  Consolidated
      Subsidiaries  and for any period,  all interest  expense  (including  all
      amortization of debt discount and expenses and reported  interest) on all
      Debt of such Person and its Consolidated Subsidiaries during such period.

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

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

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

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

           "IPL" means Interstate Power and Light Company, an Iowa corporation.

           "LC Fee" is defined in Section 2.04(b).

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

           "LC Outstandings"  means, on any date of  determination,  the sum of
      the undrawn stated amounts of all Letters of Credit that are  outstanding
      on  such  date  plus  the  aggregate   principal  amount  of  all  unpaid
      reimbursement  obligations  of the  Borrower on such date with respect to
      payments made by the LC Issuing Bank under Letters of Credit.

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

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

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

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

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

           "Loan Documents" means (i) this Agreement,  any Note issued pursuant
      to  Section 2.16,  the Fee Letter,  (ii) all  agreements,  documents  and
      instruments  in favor of the Agent,  the LC Issuing  Bank or the  Lenders
      (or the Agent on  behalf  of the LC  Issuing  Bank or the  Lenders),  and
      (iii) all other  agreements,  instruments  and documents now or hereafter
      executed and/or delivered pursuant hereto or thereto.

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

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

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

           "Moody's"  means Moody's  Investors  Service,  Inc. or any successor
      thereto.

           "Mortgage  Bond   Indentures"   means  the   indentures   listed  on
      Schedule III hereto.

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

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

           "Necessary   Approvals"   means  any   governmental  and  regulatory
      authorizations  and  approvals  not  obtained  by or  on  behalf  of  the
      Borrower  and  in  full  force  and  effect  on  the  date  hereof  which
      governmental and regulatory  authorizations and approvals are required to
      be  obtained in order for the  Borrower to legally and validly  incur and
      pay interest at each and every rate prescribed herein,  regardless of the
      Reference Ratings.

           "Non-Consenting  Lender"  has the  meaning  assigned to that term in
      Section 2.19(b).

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

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

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

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

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

           "Note"  means a  promissory  note  issued at the request of a Lender
      pursuant  to  Section 2.16,  in  substantially  the form of  Exhibit 1.01
      hereto,  evidencing  the aggregate  indebtedness  of the Borrower to such
      Lender resulting from the Advances made by such Lender.

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

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

           "OECD"  means  the   Organization   for  Economic   Cooperation  and
      Development.

           "Other   Taxes"   has  the   meaning   assigned   to  that  term  in
      Section 2.17(b).

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

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

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

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

           "Plan" means a Single Employer Plan or a Multiple Employer Plan.

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

           "Reference  Banks"  means  Citibank,  N.A.  and  Bank  One,  and any
      additional or substitute  Lenders as may be selected from time to time to
      act as Reference Banks hereunder by the Agent and Citibank, N.A.

           "Reference  Ratings"  means the ratings  assigned  (i) by S&P to the
      Reference  Securities,  and (ii) by Moody's to the Reference  Securities,
      or  in  the  event  that  the  Borrower   has  no  Reference   Securities
      outstanding,  the issuer  rating  assigned by Moody's  for the  Borrower.
      For  purposes  of the  foregoing,  if the  ratings  assigned  by S&P  and
      Moody's,  respectively,  are not comparable  (i.e., a "split rating") by:
      (x) one level,  the level  corresponding to the lower of such two ratings
      shall control,  or (y) two or more levels, the level corresponding to the
      rating  one  level  above the lower of such two  ratings  shall  control,
      unless  either  rating is below BBB- or  unrated  (in the case of S&P) or
      Baa3 or unrated (in the case of Moody's),  in which case the lower of the
      two ratings shall control.

           "Reference  Securities"  means (i) until the earlier of (A) the date
      that  (x) S&P  has issued a rating for the  senior  unsecured  non-credit
      enhanced  long term debt of the Borrower and (y) Moody's has issued (1) a
      rating for the senior  unsecured  non-credit  enhanced  long term debt of
      the  Borrower or (2) an  issuer  rating for the  Borrower and (B) 90 days
      after the date hereof,  the senior  unsecured  credit enhanced  long-term
      debt of AER, and (ii) after  the earlier such date, the senior  unsecured
      non-credit enhanced long-term debt of the Borrower.

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

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

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

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

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

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

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

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

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

           "Taxes" has the meaning assigned to that term in Section 2.17(a).

           "Termination  Date"  means the earlier to occur of  (i) October  10,
      2003,  or such later date as to which the  Lenders  may from time to time
      agree  pursuant to  Section 2.19  and  (ii) the  date of  termination  or
      reduction in whole of the Commitments pursuant to Section 2.05 or 6.01.

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

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

           "Utilities" means, collectively, WPL and IPL.

           "Utility  Facilities"  means (i) the $200,000,000  Credit Agreement,
      dated the date hereof,  among IPL, the banks named  therein and Citibank,
      N.A.,  as  administrative   agent;  and  (ii)  the  $150,000,000   Credit
      Agreement,  dated the date hereof, among WPL, the banks named therein and
      Citibank, N.A., as administrative agent.

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

           "WPL"  means  Wisconsin   Power  and  Light  Company,   a  Wisconsin
      corporation.

           "WPL Facility" means the $150,000,000 Credit Agreement,  dated as of
      May 24,  2002,  among  WPL,  the banks  named  therein  and Bank One,  as
      administrative agent.

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

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

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

                                 ARTICLE II
                 AMOUNTS AND TERMS OF THE EXTENSIONS OF CREDIT

SECTION 2.01....The Advances.

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

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

SECTION 2.02....Making the Advances.

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

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

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

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

SECTION 2.03....Letters of Credit.

(a)   Subject to the terms and conditions  hereof,  each Letter of Credit shall
be issued (or the stated maturity  thereof  extended or terms thereof  modified
or  amended) on not less than three  Business  Days'  prior  notice  thereof by
delivery  of a  Request  for  Issuance  to  the  Agent  (which  shall  promptly
distribute  copies  thereof  to the  Lenders)  and the LC  Issuing  Bank.  Each
Request for  Issuance  shall  specify (i) the  date (which  shall be a Business
Day) of  issuance  of such  Letter of Credit (or the date of  effectiveness  of
such  extension,  modification or amendment) and the stated expiry date thereof
(which  shall  be  no  later  than  the  eighth   Business  Day  preceding  the
Termination  Date),  (ii) the  proposed  stated amount of such Letter of Credit
(which shall not be less than  $1,000,000),  (iii) the  name and address of the
beneficiary  of  such  Letter  of  Credit  and  (iv) a   statement  of  drawing
conditions  applicable  to such  Letter  of  Credit,  and if such  Request  for
Issuance  relates to an amendment  or  modification  of a Letter of Credit,  it
shall be  accompanied  by the  consent  of the  beneficiary  of the  Letter  of
Credit  thereto.   Each  Request  for  Issuance  shall  be  irrevocable  unless
modified  or  rescinded  by the  Borrower  not less than two days  prior to the
proposed  date of issuance  (or  effectiveness)  specified  therein.  Not later
than 12:00 noon on the proposed date of issuance (or  effectiveness)  specified
in  such  Request  for  Issuance,   and  upon  fulfillment  of  the  applicable
conditions  precedent  and the  other  requirements  set forth  herein,  the LC
Issuing  Bank shall  issue (or extend,  amend or modify)  such Letter of Credit
and  provide  notice  and a copy  thereof to the Agent,  which  shall  promptly
furnish copies thereof to the Lenders.

(b)   No Letter of Credit shall be requested or issued  hereunder if, after the
issuance  thereof,  (i) the  aggregate undrawn stated amounts of all Letters of
Credit outstanding would exceed  $75,000,000;  or (ii) the  Outstanding Credits
would exceed the total Commitments.

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

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

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

(f)   The payment  obligations of each Lender under  Section 2.03(d) and of the
Borrower  under this  Agreement  in respect of any payment  under any Letter of
Credit by the LC  Issuing  Bank shall be  unconditional  and  irrevocable,  and
shall be paid strictly in  accordance  with the terms of this  Agreement  under
all circumstances, including, without limitation, the following circumstances:

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

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

(iii) the  existence  of any claim,  set-off,  defense or other right which the
      Borrower  may  have  at  any  time  against  any   beneficiary,   or  any
      transferee,  of such  Letter of Credit (or any  Persons for whom any such
      beneficiary or any such  transferee may be acting),  the LC Issuing Bank,
      or any other  Person,  whether in  connection  with this  Agreement,  the
      transactions  contemplated  hereby,  thereby or by such Letter of Credit,
      or any unrelated transaction;

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

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

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

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

SECTION 2.04....Fees.

(a)   The  Borrower  agrees to pay to the Agent for the  account of each Lender
the Facility Fee from the date hereof,  in the case of each Bank,  and from the
effective date specified in the Lender  Assignment  pursuant to which it became
a  Lender,  in  the  case  of  each  other  Lender,  until  the  later  of  the
Termination  Date  and  the  date  all  Advances  are  paid  in  full,  payable
quarterly  in  arrears  on the  last  day of each  March,  June,  September and
December during the term of such Lender's  Commitment,  commencing December 31,
2002,  and on the later of the  Termination  Date and the date all Advances are
paid in full.

(b)   The Borrower  shall pay to the Agent for the account of each Lender a fee
(the "LC Fee") on the average  daily  amount of the sum of the  undrawn  stated
amounts of all Letters of Credit  outstanding  on each such day,  from the date
hereof  until the later to occur of the  Termination  Date and the date that no
Letters  of Credit  are  outstanding,  payable  on the last day of each  March,
June,  September  and December  (commencing  December 31,  2002) and such later
date,  at a rate  equal at all times to the  Applicable  Margin in effect  from
time to time for  Eurodollar  Rate  Advances.  In addition,  the Borrower shall
pay to the LC  Issuing  Bank  such fees for the  issuance  and  maintenance  of
Letters of Credit  and for  drawings  thereunder  as may be  separately  agreed
between the Borrower and the LC Issuing Bank.

(c)   In addition to the fees  provided for in  subsections (a)  and (b) above,
the Borrower  shall pay to the Agent,  for the account of the Agent,  such fees
as are provided for in the Fee Letter.

SECTION 2.05....Reduction of the Commitments; Commitment Increase.

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

(b)   On the date of any Debt Event,  the  Commitments  of the Lenders shall be
reduced  by   $100,000,000;   provided  that  the   aggregate   amount  of  the
Commitments of the Lenders shall not be reduced by an amount,  when  aggregated
with any other  reduction of Commitments of the Lenders under this  subsection,
greater  than   $115,750,000  plus  the  aggregate  amount  of  all  Commitment
Increases, if applicable.

(c)   On December 31, 2002, the  Commitments of the Lenders shall be reduced by
an amount equal to the difference  between (i) $115,750,000  plus the aggregate
amount  of all  Commitment  Increases,  if  applicable  and (ii) the  amount by
which the  Commitments  of the  Lenders  shall  have been  reduced on or before
such date pursuant to Section 2.05(b).

(d)   On the date of any Equity Event,  the Commitments of the Lenders shall be
reduced by the amount by which the  proceeds  of such  Equity  Event,  together
with  the  proceeds  of all  other  Equity  Events  before  such  date,  exceed
$300,000,000;  provided  that the  aggregate  amount of  reductions  under this
subsection shall in no event exceed $50,000,000.

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

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

(g)   (i) At any time  prior to the  earlier  of (A) any  Debt  Event,  and (B)
October 24,  2002,  the  Borrower  may  increase  the  aggregate  amount of the
Commitments  by an amount not  greater  than  $84,250,000  and to an amount not
greater than  $650,000,000  (any such  increase,  a  "Commitment  Increase") by
designating  either one or more of the existing  Lenders (each of which, in its
sole  discretion,  may  determine  whether  and to  what  degree  to  offer  to
participate  in such  Commitment  Increase) or one or more other banks or other
financial  institutions  reasonably  acceptable to the Agent and the LC Issuing
Bank  that at the  time  agree,  in the  case  of any  such  bank or  financial
institution  that  is  an  existing  Lender  to  increase  its  Commitment  (an
"Increasing  Lender")  and,  in the case of any other  such  bank or  financial
institution  (an  "Additional  Lender"),  to become a party to this  Agreement.
The  sum of  the  increases  in  the  Commitments  of  the  Increasing  Lenders
pursuant  to  this  subsection  (g)  plus  the  Commitments  of the  Additional
Lenders  upon  giving  effect  to  the  Commitment  Increase  shall  not in the
aggregate  exceed the amount of the  Commitment  Increase.  The Borrower  shall
provide  prompt  notice of any proposed  Commitment  Increase  pursuant to this
Section  2.05(g)  to the Agent,  which  shall  promptly  provide a copy of such
notice to the Lenders and the LC Issuing Bank.

           (ii) Any  Commitment  Increase  shall become  effective upon (A) the
      receipt  by  the  Agent  of  (1)  an  agreement  in  form  and  substance
      satisfactory  to the Agent signed by the  Borrower,  the LC Issuing Bank,
      each Increasing Lender and each Additional Lender,  setting forth the new
      Commitment  of each such Lender and setting  forth the  agreement of each
      Additional  Lender to become a party to this Agreement and to be bound by
      all the  terms and  provisions  hereof  binding  upon  each  Lender,  (2)
      certified  copies of the  Governmental  Approvals  and such  opinions  of
      counsel for the Borrower with respect to the  Commitment  Increase as the
      Agent may  reasonably  request,  and (3) a  certificate  (the  statements
      contained  in which  shall be true) of a duly  authorized  officer of the
      Borrower  stating  that  both  before  and  after  giving  effect to such
      Commitment  Increase  (x)  no  Event  of  Default  has  occurred  and  is
      continuing,  (y) all  representations and warranties made by the Borrower
      in this Agreement are true and correct in all material respects,  and (z)
      all  Governmental  Approvals have been obtained and are in full force and
      effect,  and (B) the  funding by each  Increasing  Lender and  Additional
      Lender of the  Advance(s)  to be made by each such  Lender  described  in
      paragraph (iii) below.

           (iii)Upon  the  effective  date  of any  Commitment  Increase,  each
      Increasing  Lender and each Additional  Lender shall provide funds to the
      Agent in the manner  described  in Section 2.02 in an amount equal to the
      product of (x) the  aggregate  principal  amount of Advances  outstanding
      hereunder,  expressed as a percentage of the Commitments (calculated,  in
      each case,  immediately  prior to such Commitment  Increase) and (y) such
      Lender's  portion of the  Commitment  Increase.  The funds so provided by
      any  Lender  shall be deemed to be an Advance  or  Advances  made by such
      Lender on the date of such  Commitment  Increase,  with  such  Advance(s)
      being  (A) in an  amount  equal  to the  product  of  (x)  the  aggregate
      outstanding   principal   amount  of  Advances   outstanding   hereunder,
      expressed as a percentage of the Commitments  (calculated,  in each case,
      immediately  prior to such  Commitment  Increase)  and (y) such  Lender's
      portion  of the  Commitment  Increase  and (B) of the  same  Type(s)  and
      having the same  Interest  Period(s)  as each  Advance  described  in the
      preceding  clause (A), such that after giving  effect to such  Commitment
      Increase and the Advances made on the date of such  Commitment  Increase,
      each Borrowing  outstanding  hereunder  shall consist of Advances made by
      the  Lenders  ratably in  accordance  with  their pro rata  shares of the
      Commitments.

           (iv) Notwithstanding   any   provision   contained   herein  to  the
      contrary,  from and after  the date of any  Commitment  Increase  and the
      making of any Advances on such date  pursuant to  paragraph  (iii) above,
      all calculations and payments of interest on the Advances  comprising any
      Borrowing  shall take into account the actual  Commitment  of each Lender
      and the principal amount  outstanding of each Advance made by such Lender
      during the relevant period of time.

SECTION 2.06....Repayment of Advances.  The Borrower  shall repay the principal
amount of each Advance made by each Lender on the Termination Date.

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

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

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

SECTION 2.08....Additional  Interest on Eurodollar Rate Advances.  The Borrower
shall pay to Agent for the account of each Lender any costs  actually  incurred
by such Lender with respect to Eurodollar  Rate Advances that are  attributable
to such Lender's  compliance with  regulations of the Board of Governors of the
Federal  Reserve System  requiring the  maintenance of reserves with respect to
liabilities  or assets  consisting  of or including  Eurocurrency  Liabilities.
Such costs  shall be paid to the Agent for the  account  of such  Lender in the
form of additional  interest on the unpaid  principal amount of each Eurodollar
Rate  Advance  of  such  Lender,  from  the  date of such  Advance  until  such
principal  amount is paid in full,  at an interest  rate per annum equal at all
times to the remainder  obtained by  subtracting  (i) the  Eurodollar  Rate for
the Interest  Period for such  Advance from (ii) the rate  obtained by dividing
such  Eurodollar  Rate by a  percentage  equal  to 100%  minus  the  Eurodollar
Reserve  Percentage  of such Lender for such Interest  Period,  payable on each
date on which  interest is payable on such Advance.  Such  additional  interest
shall be  determined  by such Lender and notified to the  Borrower  through the
Agent. A certificate as to the amount of such  additional  interest,  submitted
to the Borrower and the Agent by such Lender,  shall be conclusive  and binding
for all  purposes,  absent  manifest  error,  provided  that the  determination
thereof shall have been made by such Lender in good faith.

SECTION 2.09....Interest Rate Determination.

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 2.11....Optional  Prepayments  of Advances.  The Borrower  may, upon at
least three  Business  Days' notice to the Agent  stating the proposed date and
aggregate  principal amount of the prepayment,  and if such notice is given the
Borrower  shall,  prepay for the ratable account of the Lenders the outstanding
principal  amounts of the  Advances  comprising  part of the same  Borrowing in
whole or ratably in part,  together  with accrued  interest to the date of such
prepayment  on the  principal  amount  prepaid;  provided,  however,  that each
partial  prepayment  shall be in an  aggregate  principal  amount not less than
$1,000,000 (or, if lower,  the principal  amount  outstanding  hereunder on the
date of such  prepayment)  or an  integral  multiple  of  $1,000,000  in excess
thereof.  In the case of any such  prepayment  of a  Eurodollar  Rate  Advance,
the Borrower  shall be obligated  to reimburse  the Lenders in respect  thereof
pursuant to  Section 8.04(b).  Except as provided in this  Section 2.11  and in
Section 2.12,  the Borrower shall have no right to prepay any principal  amount
of any Advances.

SECTION 2.12....Mandatory Prepayments.

(a)   On the date of any termination or reduction of the  Commitments  pursuant
to  Section 2.05,  the  Borrower  shall pay or prepay so much of the  principal
amount  outstanding  under  this  Agreement  and/or  deposit  funds in the Cash
Collateral  Account in respect of LC Outstandings  pursuant to Section 6.02 for
the ratable  accounts of the  Lenders as shall be  necessary  in order that the
Outstanding  Credits (after giving effect to such prepayment)  minus the amount
held  in  the  Cash  Collateral  Account  after  giving  effect  to  such  cash
collateralization  will not  exceed the amount of  Commitments  following  such
termination  or reduction,  together with  (A) accrued  interest to the date of
such  prepayment on the principal  amount repaid or prepaid and (B) in the case
of prepayments of Eurodollar  Rate Advances,  any amount payable to the Lenders
pursuant to Section 8.04(b).

(b)   All  prepayments  of  Advances  required  to be  made  pursuant  to  this
Section 2.12   shall  be  applied   (without   reference   to  minimum   dollar
requirements)  to outstanding  Base Rate Advances up to the full amount thereof
before they are applied to Eurodollar Rate Advances.

(c)   In lieu of prepaying  any  Eurodollar  Rate Advance  under any  provision
(other than  Sections 2.14 and 6.01) of this Agreement,  the Borrower may, upon
notice to the Agent,  deliver such funds to the Agent to be held as  additional
cash  collateral  securing the obligations  hereunder.  The Agent shall deposit
all amounts  delivered  to it in a  non-interest-bearing  special  purpose cash
collateral account,  to be governed by a cash collateral  agreement in form and
substance  satisfactory  to the  Borrower  and the Agent,  and shall  apply all
such  amounts in such  account  against  such  Advances  on the last day of the
Interest  Period  therefor.  The Agent shall promptly notify the Lenders of any
election by the  Borrower to deliver  funds to the Agent under this  subsection
(c).

(d)   Notwithstanding  the  foregoing,  if at any time the Necessary  Approvals
shall not have been  obtained  and (i) the  Reference  Rating is below  BBB- in
the  case  of S&P or  below  Baa3 in the  case  of  Moody's,  or  unrated,  the
Borrower  shall prepay all of the  outstanding  principal  amounts of Advances,
together  with  accrued  interest  to  the  date  of  such  prepayment  on  the
principal amount prepaid (provided,  however,  that the rate of interest on the
principal  amount  prepaid shall not exceed the maximum  amount then  permitted
under  applicable  regulatory  approvals).   In  the  case  of  prepayments  of
Eurodollar  Rate Advances  pursuant to this  subsection,  the Borrower shall be
obligated   to   reimburse   the  Lenders  in  respect   thereof   pursuant  to
Section 8.04(b) on the date of such prepayment.

SECTION 2.13....Increased Costs.

(a)   If, due to either (i) the  introduction  of or any change (other than any
change by way of  imposition or increase of reserve  requirements,  in the case
of  Eurodollar   Rate  Advances,   included  in  the  Eurodollar  Rate  Reserve
Percentage)  in or to the  interpretation  of any law or regulation or (ii) the
compliance  with  any  guideline  or  request  from any  central  bank or other
governmental  authority  (whether or not having the force of law),  there shall
be any  increase  in the cost to any  Lender  of  agreeing  to make or  making,
funding or maintaining  Eurodollar Rate Advances,  then the Borrower shall from
time to time,  upon  demand by such  Lender  (with a copy of such demand to the
Agent),  pay to the Agent for the  account of such  Lender  additional  amounts
sufficient to  compensate  such Lender for such  increased  cost. A certificate
as to the amount of such  increased  cost,  submitted  to the  Borrower and the
Agent by such  Lender,  shall  be  conclusive  and  binding  for all  purposes,
absent  manifest  error,  provided  that the  determination  thereof shall have
been made by such Lender in good faith.

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

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

SECTION 2.14....Illegality.   Notwithstanding   any  other  provision  of  this
Agreement to the contrary,  if any Lender (the "Affected  Lender") shall notify
the Agent and the  Borrower  that the  introduction  of or any  change in or to
the  interpretation of any law or regulation makes it unlawful,  or any central
bank or other  governmental  authority  asserts  that it is  unlawful,  for the
Affected  Lender or its Eurodollar  Lending  Office to perform its  obligations
hereunder to make  Eurodollar  Rate Advances or to fund or maintain  Eurodollar
Rate Advances  hereunder,  all Eurodollar  Rate Advances of the Affected Lender
shall,  on the fifth  Business  Day  following  such notice  from the  Affected
Lender,  automatically  be Converted  into a like number of Base Rate Advances,
each  in the  amount  of  the  corresponding  Eurodollar  Rate  Advance  of the
Affected Lender being so Converted (each such Advance,  as so Converted,  being
an "Affected  Lender  Advance"),  and the obligation of the Affected  Lender to
make,  maintain,  or Convert  Advances  into  Eurodollar  Rate  Advances  shall
thereupon  be  suspended  until the Agent  shall  notify the  Borrower  and the
Lenders that the  circumstances  causing such  suspension no longer  exist,  or
the  Affected  Lender  has  been  replaced  pursuant  to  Section 8.07(g).  For
purposes of any prepayment  under this Agreement,  each Affected Lender Advance
shall  be  deemed  to  continue  to be  part  of  the  same  Borrowing  as  the
Eurodollar  Rate  Advances  to  which  it  corresponded  at  the  time  of  the
Conversion of such Affected Lender Advance pursuant to this Section 2.14.

SECTION 2.15....Payments and Computations.

(a)   The Borrower  shall make each payment  hereunder not later than 1:00 p.m.
on the day when due in  Dollars  to the  Agent at its  address  referred  to in
Section 8.02  in same day funds.  The Agent will promptly  thereafter  cause to
be  distributed  like funds relating to the payment of principal or interest or
fees  ratably  (other than  amounts  payable  pursuant to  Section 2.08,  2.17,
2.19(c)  or  8.04(b))  to the  Lenders  for the  account  of  their  respective
Applicable  Lending  Offices,  and like funds  relating  to the  payment of any
other  amount  payable  to any  Lender to such  Lender  for the  account of its
Applicable  Lending  Office,  in each case to be applied in accordance with the
terms  of this  Agreement.  Upon its  acceptance  of a  Lender  Assignment  and
recording of the  information  contained  therein in the  Register  pursuant to
Section 8.07(d),  from and after the  effective  date  specified in such Lender
Assignment,  the Agent  shall  make all  payments  hereunder  in respect of the
interest  assigned thereby to the Lender assignee  thereunder,  and the parties
to such  Lender  Assignment  shall  make all  appropriate  adjustments  in such
payments for periods prior to such effective date directly between themselves.

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

(c)   All  computations  of interest  based on clause (i) of the  definition of
"Alternate  Base Rate" and of the  Facility  Fees shall be made by the Agent on
the  basis  of a year  of 365  or  366  days,  as the  case  may  be,  and  all
computations  of  interest  based on the  Eurodollar  Rate,  the LC Fee and the
Federal  Funds  Rate  shall  be made by the  Agent,  and  all  computations  of
interest  pursuant to Section 2.08  shall be made by a Lender,  on the basis of
a year of 360 days, in each case for the actual number of days  (including  the
first day but  excluding  the last day)  occurring in the period for which such
interest  or fees are  payable.  Each  determination  by the Agent (or,  in the
case of  Section 2.08,  by a Lender) of an  interest  rate  hereunder  shall be
conclusive and binding for all purposes,  absent manifest error,  provided that
such  determination  shall have been made by the Agent or such  Lender,  as the
case may be, in good faith.

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

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

SECTION 2.16....Noteless Agreement; Evidence of Indebtedness.

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

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

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

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

SECTION 2.17....Taxes.

(a)   Any and all payments by the Borrower  hereunder  and under the other Loan
Documents  shall be made, in accordance  with  Section 2.15,  free and clear of
and  without  deduction  for any and  all  present  or  future  taxes,  levies,
imposts,  deductions,   charges  or  withholdings,  and  all  liabilities  with
respect  thereto,  excluding,  in the case of each Lender,  the LC Issuing Bank
and the Agent,  taxes  imposed on its  overall net income and  franchise  taxes
imposed on it by any jurisdiction,  unless such Lender,  the LC Issuing Bank or
the Agent (as the case may be) would not have had such  taxes  imposed on it by
such  jurisdiction but for such Lender's,  the LC Issuing Bank's or the Agent's
(as the case may be) having  entered into this  Agreement,  having  consummated
the  transactions  contemplated  hereby  or  having  received  payments  by the
Borrower  hereunder or under the other Loan  Documents  (all such  non-excluded
taxes,  levies,  imposts,  deductions,  charges,  withholdings  and liabilities
being  hereinafter  referred to as "Taxes").  If the Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable  hereunder  or
under any  other  Loan  Document  to any  Lender,  the LC  Issuing  Bank or the
Agent,  (i) the sum payable  shall be  increased  as may be  necessary  so that
after  making all  required  deductions  (including  deductions  applicable  to
additional sums payable under this  Section 2.17)  such Lender,  the LC Issuing
Bank or the Agent (as the case may be)  receives an amount  equal to the sum it
would have received had no such deductions been made,  (ii) the  Borrower shall
make  such  deductions  and  (iii) the  Borrower  shall  pay  the  full  amount
deducted to the relevant  taxation  authority or other  authority in accordance
with applicable law.

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

(c)   The Borrower  will  indemnify  each  Lender,  the LC Issuing Bank and the
Agent  for the  full  amount  of  Taxes  or  Other  Taxes  (including,  without
limitation,  any Taxes or Other Taxes  imposed by any  jurisdiction  on amounts
payable under this  Section 2.17)  paid by such Lender,  the LC Issuing Bank or
the  Agent  (as  the  case  may be) and  any  liability  (including  penalties,
interest and expenses)  arising  therefrom or with respect thereto,  whether or
not such  Taxes  or Other  Taxes  were  correctly  or  legally  asserted.  This
indemnification  shall be made  within 30 days from the date such Lender or the
Agent  (as the case may be)  makes  written  demand  therefor.  Nothing  herein
shall  preclude  the right of the  Borrower  to contest any such Taxes or Other
Taxes so paid,  and the  Lenders in  question or the Agent (as the case may be)
will,  following  notice from, and at the expense of, the Borrower,  reasonably
cooperate with the Borrower to preserve the  Borrower's  rights to contest such
Taxes or Other Taxes.

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

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

(f)   Any Lender  claiming  any  additional  amounts  payable  pursuant to this
Section 2.17  shall use its best efforts  (consistent  with its internal policy
and legal  and  regulatory  restrictions)  to change  the  jurisdiction  of its
Applicable  Lending  Office if the making of such a change would avoid the need
for, or reduce the amount of, any such  additional  amounts that may thereafter
accrue and would not, in the reasonable  judgment of such Lender,  be otherwise
disadvantageous to such Lender.

(g)   Without  prejudice to the survival of any other agreement of the Borrower
hereunder,  the  agreements and  obligations of the Borrower  contained in this
Section 2.17  shall  survive  the  payment in full of  principal  and  interest
hereunder.

SECTION 2.18....Sharing  of  Payments,  Etc.  If any  Lender  shall  obtain any
payment (whether voluntary,  involuntary,  through the exercise of any right of
set-off,  or  otherwise)  on account  of the  Advances  made by it (other  than
pursuant  to  Section 2.08,  2.13,  2.17,  2.19(c) or 8.04(b)) or on account of
the  Borrower's  reimbursement  obligations  in respect of LC  Outstandings  in
excess  of its  ratable  share  of  payments  obtained  by all the  Lenders  on
account of the Advances or on account of such reimbursement  obligations,  such
Lender shall forthwith  purchase from the other Lenders such  participations in
the  Advances  made by them  and  such  reimbursement  obligations  as shall be
necessary to cause such  purchasing  Lender to share the excess payment ratably
with  each of  them;  provided,  however,  that if all or any  portion  of such
excess  payment is  thereafter  recovered  from such  purchasing  Lender,  such
purchase  from each Lender  shall be  rescinded  and such Lender shall repay to
the  purchasing  Lender  the  purchase  price to the  extent of such  recovery,
together  with an amount equal to such  Lender's  ratable  share  (according to
the  proportion  of  (i) the  amount of such  Lender's  required  repayment  to
(ii) the total amount so recovered from the purchasing  Lender) of any interest
or other  amount  paid or  payable by the  purchasing  Lender in respect of the
total amount so  recovered.  The Borrower  agrees that any Lender so purchasing
a participation  from another Lender pursuant to this  Section 2.18 may, to the
fullest  extent   permitted  by  law,   exercise  all  its  rights  of  payment
(including  the right of set-off) with respect to such  participation  as fully
as if such  Lender were the direct  creditor  of the  Borrower in the amount of
such participation.

SECTION 2.19....Extension of Termination Date.

(a)   At least  30 but not  more  than  60 days  prior  to the then  applicable
Termination  Date,  the Borrower  may, by  delivering a written  request to the
Agent (each such  request  being  irrevocable),  request  that the  Termination
Date be extended for an additional  period of 364 days,  commencing on the then
applicable  Termination  Date.  Upon  receipt  of any such  notice,  the  Agent
shall promptly communicate such request to the Lenders.

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

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

                                  ARTICLE III
                             CONDITIONS OF LENDING

SECTION 3.01....Conditions   Precedent  to  Closing.  The  Commitments  of  the
Lenders shall not become  effective unless the following  conditions  precedent
shall have been fulfilled:

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

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

(ii)  each Note requested by a Lender pursuant to  Section 2.16  payable to the
      order of each such Lender, duly completed and executed by the Borrower;

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

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

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

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

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

(viii)favorable opinions of:

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

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

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

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

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

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

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

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

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

SECTION 3.02....Conditions   Precedent  to  Each   Extension  of  Credit.   The
obligation  of  (i) each  Lender to make an  Advance  on the  occasion  of each
Borrowing  (including  the initial  Borrowing)  that would cause the  aggregate
principal  amount of Advances  outstanding  hereunder  to increase and (ii) the
LC  Issuing  Bank to  issue  any  Letter  of  Credit  shall be  subject  to the
conditions precedent that, on the date of such Extension of Credit:

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

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

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

(iii) if the  Reference  Rating is below  BBB- in the case of S&P or below Baa3
      in the  case of  Moody's,  or  unrated  the  Borrower  has  received  all
      Necessary  Approvals to permit payment of interest at the rate applicable
      to such Borrowing; and

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

SECTION 3.03....Conditions  Precedent  to  Each  Extension  of the  Termination
Date.  In the  event  that the  Borrower  shall  request  an  extension  of the
Termination  Date pursuant to  Section 2.19,  such extension  shall take effect
on the then applicable  Termination  Date,  subject to the  satisfaction of the
following  conditions  precedent on or prior to such date,  together  with such
other   conditions   precedent  as  the  Consenting   Lenders  may  require  in
connection with such extension:

(a)   the Agent shall have  prepared  and  delivered  to the  Borrower and each
Lender  (including  each new bank and other  financial  institution  to which a
Non-Consenting    Lender's   Commitment   has   been   assigned   pursuant   to
Section 8.07(g)  hereof) a revised  Schedule I that reflects the Commitments of
each Lender;

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

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

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

(ii)  favorable opinions of:

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

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

(d)   the Agent shall have received such other  documents and legal opinions in
respect  of any  aspect or  consequence  of the  transactions  contemplated  by
Section 2.19  as  the  Agent  shall  reasonably  request,  including,   without
limitation,  copies of the resolutions,  in form and substance  satisfactory to
the  Agent,  of  the  Board  of  Directors  of  the  Borrower  authorizing  the
extension of the Termination Date; and

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

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

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

SECTION 3.04....Reliance  on  Certificates.  The Lenders and the Agent shall be
entitled to rely  conclusively  upon the  certificates  delivered  from time to
time by officers of the  Borrower as to the names,  incumbency,  authority  and
signatures  of the  respective  Persons  named  therein  until such time as the
Agent may receive a replacement  certificate,  in form acceptable to the Agent,
from an officer of such Person  identified to the Agent as having  authority to
deliver such  certificate,  setting forth the names and true  signatures of the
officers and other  representatives  of such Person  thereafter  authorized  to
act on behalf of such Person.

                                  ARTICLE IV
                        REPRESENTATIONS AND WARRANTIES

SECTION 4.01....Representations  and  Warranties of the Borrower.  The Borrower
represents and warrants as follows:

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

(b)   The  execution,   delivery  and  performance  by  the  Borrower  of  this
      Agreement and the other Loan  Documents to which it is or will be a party
      are within the Borrower's  corporate powers, have been duly authorized by
      all  necessary  corporate  action,  and do not and  will  not  contravene
      (i) the Borrower's  charter or by-laws,  (ii) any law, or (iii) any legal
      or  contractual  restriction  binding on or affecting the  Borrower;  and
      such  execution,  delivery and  performance do not and will not result in
      or require the  creation  of any Lien  (other  than  pursuant to the Loan
      Documents) upon or with respect to any of its properties.

(c)   No  Governmental  Approval is required in connection  with the execution,
      delivery or performance by the Borrower of any Loan Document,  other than
      Release  No.  27542,  70-10052,  issued by the  Securities  and  Exchange
      Commission  on June 21,  2002,  which  release is final and in full force
      and  effect   and  not   subject   to   appeal,   rehearing,   review  or
      reconsideration.

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

(e)   Since December 31, 2001, there has been no Material Adverse Change.

(f)   The  audited   consolidated  balance  sheets  of  the  Borrower  and  its
      Subsidiaries   as  at   December 31,   2001,  and  the  related   audited
      consolidated,   and,  with  respect  to  the   Borrower,   consolidating,
      statements of income of the Borrower and its  Subsidiaries for the fiscal
      year then ended,  and the unaudited  consolidated  balance  sheets of the
      Borrower  and  its  Subsidiaries  as at June  30,  2002  and the  related
      unaudited  consolidated  statements  of income for the  six-month  period
      then  ended,  copies of each of which have been  furnished  to each Bank,
      fairly  present  (subject,  in  the  case  of  such  balance  sheets  and
      statements  of income for the six months ended June 30, 2002, to year-end
      adjustments)  the  consolidated  financial  condition of the Borrower and
      its  Subsidiaries  as at such  dates  and  the  consolidated  results  of
      operations of the Borrower and its  Subsidiaries for the periods ended on
      such dates, all in accordance, in all material respects, with GAAP.

(g)   Except as  disclosed in the  Borrower's  Report on Form 10-K for the year
      ended  December 31,  2001 and  Report on Form 10-Q for the  period  ended
      June 30, 2002,  there is no pending or  threatened  action or  proceeding
      affecting the Borrower or any of its  Subsidiaries  or properties  before
      any court,  governmental  agency or arbitrator,  that might reasonably be
      expected to constitute a Material Adverse Change;  and since December 31,
      2001 there have been no material  adverse  developments  in any action or
      proceeding so disclosed.

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

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

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

(k)   The Borrower is not an "investment  company" or a company "controlled" by
      an "investment  company",  within the meaning of the  Investment  Company
      Act of 1940, as amended.

                                  ARTICLE V
                           COVENANTS OF THE BORROWER

SECTION 5.01....Affirmative  Covenants.  So long as any  amount in  respect  of
this  Agreement  shall remain  unpaid,  any Lender shall have any Commitment or
any Letter of Credit shall remain  outstanding,  the Borrower will,  unless the
Majority Lenders shall otherwise consent in writing:

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

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

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

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

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

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

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

(h)   Reporting Requirements.  Furnish to each Lender:

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

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

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

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

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

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

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

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

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

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

(xi)  promptly and in any event within two Business Days after receipt  thereof
           by the Borrower, copies of each Necessary Approval; and

(xii) promptly and in any event within two Business Days after receipt  thereof
           by the Borrower, copies of each Necessary Approval.

(i)   Use of Proceeds.  Use the proceeds of the Advances  hereunder  solely for
      the  Borrower's   general  corporate   purposes   (including   supporting
      commercial paper issued by the Borrower),  and not to finance any Hostile
      Acquisition.

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

SECTION 5.02....Negative  Covenants.  So long as any  amount in respect of this
Agreement  shall remain  unpaid,  any Lender shall have any  Commitment  or any
Letter of Credit shall remain  outstanding,  the Borrower will not, without the
written consent of the Majority Lenders:

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

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

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

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

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

(v)   Liens  on the  capital  stock  of any  of the  Borrower's  single-purpose
           Subsidiaries  or  any  such   Subsidiary's   assets  to  secure  the
           repayment  of  project   financing  or  Nonrecourse  Debt  for  such
           Subsidiary;

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

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

(viii)Liens created pursuant to the Mortgage Bond Indentures;

(ix)  Liens on the  ownership  interests  in, and the  assets  of, any  Foreign
           Subsidiary to secure not more than $250 million aggregate  principal
           amount  of  Debt of any  Foreign  Subsidiary;  provided  that in the
           event any such Debt is not  denominated in Dollars,  the calculation
           of the  Dollar  equivalent  amount of such Debt  shall be made as of
           the date of the incurrence of such Lien securing such Debt;

(x)   Liens in favor of Citibank,  N.A., as agent under the Utility  Facilities
           to secure the  obligations  of the respective  Utilities  under such
           agreements; and

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

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

(i)   Debt hereunder and under the other Loan Documents;

(ii)  unsecured  Debt  owing  to the  Utilities;  provided,  however,  that the
           aggregate  amount of all such Debt owing to any  Utility at any time
           shall not exceed the amount that such Utility could,  in conformance
           with applicable law, dividend to the Borrower at such time;  further
           provided,  however,  that  the  foregoing  shall  not  restrict  the
           Borrower's  ability to incur  unsecured Debt owing to any Utility in
           connection with the cash management  program of the Borrower and the
           Utilities known as the "Utility Money Pool"; and

(iii) other  Debt  that is  pari  passu  with,  or  subordinate  to,  the  Debt
           hereunder,   provided  that  the  Borrower  is  in  compliance  with
           Section 5.02(h).

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

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

(e)   Mergers, Etc.

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

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

(f)   Sales,  Etc.,  of Assets.  Sell,  lease,  transfer,  assign or  otherwise
      dispose of any of its assets,  or permit any of its Subsidiaries to sell,
      lease,  transfer,  assign  or  otherwise  dispose  of any of its  assets,
      except (i) sales,  leases,  transfers and assignments from one Subsidiary
      of the Borrower to another such  Subsidiary,  (ii) in any  transaction in
      which the  proceeds  from  such  sale,  lease,  transfer,  assignment  or
      disposition  are solely Cash and Cash  Equivalents  and such proceeds are
      (A)  applied  solely as a  permanent  reduction  of the  Commitments  and
      prepayment  of Advances  pursuant  to  Sections 2.05,  2.11 and 2.12,  or
      (B) applied  solely  to pay or prepay  Debt  (together  with a  permanent
      reduction  of any  commitments  relating  to such Debt)  incurred  by the
      Borrower  or  any  such   Subsidiary  in  connection   with  the  project
      comprising  such assets,  (iii) in  connection  with a sale and leaseback
      transaction  entered into by any Subsidiary of the Borrower,  (iv) sales,
      leases,  transfers and  assignments of other assets  representing  not in
      excess of 5% of the  consolidated  assets  (valued at book  value) of the
      Borrower   and   its   Subsidiaries   in   the   aggregate   during   any
      12-calendar-month  period  in  any  single  or  series  of  transactions,
      whether or not related  and sales,  leases,  transfers and assignments of
      worn out or obsolete  equipment no longer used and useful in the business
      of  the  Borrower  and  its   Subsidiaries,   (v)   dispositions  of  the
      transmission   assets   of  IPL  and  its   Subsidiaries   to   TRANSlink
      Transmission Company or to any other Regional  Transmission  Organization
      authorized by the Federal Energy Regulatory Commission,  and (vi) sale or
      capital  contribution of nuclear  generation assets to Nuclear Management
      Company LLC;  provided in each case that no Unmatured Default or Event of
      Default  shall  have  occurred  and be  continuing  after  giving  effect
      thereto;  provided  further that the Borrower or any of its  Subsidiaries
      may, pursuant to Section 5.02(a)(ix),  pledge its ownership interests in,
      and the assets of, any  Foreign  Subsidiary  to secure not more than $250
      million  aggregate  principal  amount  of Debt  incurred  by any  Foreign
      Subsidiary;  provided  further  that in the  event  any such  Debt is not
      denominated in Dollars,  the calculation of the Dollar  equivalent amount
      of such  Debt  shall be made as of the date of the  pledge  of  assets or
      ownership interests, as the case may be, securing such Debt.

(g)   Maintenance  of  Ownership of  Significant  Subsidiaries.  Sell,  assign,
      transfer,  pledge or otherwise  dispose of any shares of capital stock of
      any of its Significant  Subsidiaries  or any warrants,  rights or options
      to  acquire  such  capital  stock,  or  permit  any  of  its  Significant
      Subsidiaries  to issue,  sell or  otherwise  dispose of any shares of its
      capital  stock or the capital stock of any other of its  Subsidiaries  or
      any  warrants,  rights or options to acquire such capital  stock,  except
      (and  only  to the  extent)  as may be  necessary  to  give  effect  to a
      transaction  permitted  by  subsection  (e)  above.  Notwithstanding  the
      foregoing,  the  Borrower  or any of its  Subsidiaries  may,  pursuant to
      Section  5.02(a)(ix),  pledge its ownership  interests in, and the assets
      of,  any  Foreign  Subsidiary  to  secure  not  more  than  $250  million
      aggregate  principal  amount of Debt incurred by any Foreign  Subsidiary;
      provided that in the event any such Debt is not  denominated  in Dollars,
      the  calculation  of the Dollar  equivalent  amount of such Debt shall be
      made as of the date of the pledge of assets or  ownership  interests,  as
      the case may be, securing such Debt.

(h)   Capitalization  Ratio.  Permit  the  ratio  of  Consolidated  Debt of the
      Borrower to Consolidated Capital of the Borrower to exceed .65 to 1.00.

(i)   Consolidated Net Worth.  Permit,  at any time, its Consolidated Net Worth
      to be less than $1,400,000,000.

(j)   Interest  Coverage  Ratio.  Permit,  as of the  last  day of each  fiscal
      quarter of the  Borrower,  the  Interest  Coverage  Ratio to be less than
      2.50 to 1.00.

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

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

                                  ARTICLE VI
                               EVENTS OF DEFAULT

SECTION 6.01....Events of  Default.  If any of the  following  events  (each an
"Event of Default")  shall occur and be continuing  after the applicable  grace
period and notice requirement (if any):

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

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

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

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

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

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

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

(h)   Any  judgment  or order for the payment of money equal to or in excess of
$25,000,000  shall  be  rendered  against  the  Borrower  or any of its  Direct
Subsidiaries   (including,   without   limitation,   the  Utilities)  or  their
respective  properties and either  (i) enforcement  proceedings shall have been
commenced by any creditor upon such  judgment or order or  (ii) there  shall be
any period of  30 consecutive  days during which a stay of  enforcement of such
judgment or order,  by reason of a pending  appeal or  otherwise,  shall not be
in effect; or

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

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

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

(l)   (i) The Borrower  shall cease to own 100% of the common equity  interests
of either of the Utilities;  (ii) any  Person or "group" (within the meaning of
Section 13(d)  or 14(d) of the  Securities  Exchange Act  of 1934,  as amended)
shall  either  (A) acquire  beneficial  ownership  of  more  than  50%  of  any
outstanding  class of  common  stock of the  Borrower  having  ordinary  voting
power in the  election of directors  of the  Borrower or  (B) obtain  the power
(whether or not exercised) to elect a majority of the  Borrower's  directors or
(iii) the  Board of Directors  of the Borrower  shall not consist of a majority
of Continuing Directors.

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

SECTION 6.02....Cash Collateral Account.

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

(b)   In addition,  at any time the Borrower is required  under Section 2.12 or
2.19(c) to cash collateralize any of the LC Amounts  outstanding,  the Borrower
shall deposit such amount in the Cash  Collateral  Account.  If, at any time no
Event of Default  has  occurred  and is  continuing  and the cash on deposit in
the Cash Collateral  Account shall exceed the LC  Outstandings,  then the Agent
will  repay  and  reassign  to the  Borrower  cash in an  amount  equal to such
excess, and the Lien of the Agent on such cash shall automatically terminate.

                                  ARTICLE VII
                                   THE AGENT

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

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

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

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

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

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

                                 ARTICLE VIII
                                 MISCELLANEOUS

SECTION 8.01....Amendments,  Etc. No  amendment  or waiver of any  provision of
any Loan  Document,  nor consent to any  departure by the  Borrower  therefrom,
shall in any  event  be  effective  unless  the same  shall be in  writing  and
signed  by the  Majority  Lenders  and,  in the  case  of  any  amendment,  the
Borrower,  and then  such  waiver or  consent  shall be  effective  only in the
specific  instance  and for the  specific  purpose for which  given;  provided,
however,  that no  amendment,  waiver or consent  shall,  unless in writing and
signed  by all the  Lenders,  do any of the  following:  (a) waive,  modify  or
eliminate  any of the  conditions  specified  in  Section 3.01,  3.02 or  3.03,
(b) increase  or extend the  Commitments of the Lenders (other than pursuant to
Section  2.05(g))  or  subject  the  Lenders  to  any  additional  obligations,
(c) reduce  the  principal  of, or interest on, the  Advances,  any  Applicable
Margin or any fees or other amounts payable  hereunder,  (d) postpone  any date
fixed for any  payment of  principal  of, or interest  on, the  Advances or any
fees or other  amounts  payable  hereunder,  (e) change  the  percentage of the
Commitments or of the aggregate  unpaid  principal  amount of the Advances,  or
the number of Lenders,  which shall be required  for the Lenders or any of them
to take any action  hereunder,  (f) amend this  Section 8.01 or (g) release any
collateral  for  the  obligations  of the  Borrower  hereunder;  and  provided,
further,  that no  amendment,  waiver or consent  shall,  unless in writing and
signed by the Agent in  addition  to the  Lenders  required  above to take such
action,  affect the rights or duties of the Agent under this  Agreement  or any
Note;  and  provided,  further that this  Agreement may be amended and restated
without the consent of any  Lender,  the LC Issuing  Bank or the Agent if, upon
giving effect to such amendment and  restatement,  such Lender,  the LC Issuing
Bank or the  Agent,  as the case may be,  shall  no  longer  be a party to this
Agreement  (as so  amended  and  restated)  or have  any  Commitment  or  other
obligation  hereunder  or under any  Letter of Credit  and shall have been paid
in full all amounts  payable  hereunder to such Lender,  the LC Issuing Bank or
the Agent, as the case may be.

SECTION 8.02....Notices,  Etc.  All notices and other  communications  provided
for  hereunder  and  under  the  other  Loan  Documents  shall  be  in  writing
(including telecopier,  telegraphic,  telex or cable communication) and mailed,
telecopied,  telegraphed,  telexed, cabled or delivered, if to the Borrower, at
its address at 4902 North Biltmore Lane,  Madison,  Wisconsin  53718-2132 Attn:
Treasurer,  or P.O. Box 77007,  Madison,  Wisconsin 53707-1007 Attn: Treasurer;
if to any Bank, at its Domestic Lending Office  specified  opposite its name on
Schedule I  hereto;  if to any other  Lender,  at its Domestic  Lending  Office
specified in the Lender  Assignment  pursuant to which it became a Lender;  and
if to the Agent, at its address at 1 Bank One Plaza,  Chicago,  Illinois 60670,
Attention:  Robert G.  Bussa;  or, as to each party,  at such other  address as
shall be  designated  by such party in a written  notice to the other  parties.
All  such  notices  and   communications   shall,   when  mailed,   telecopied,
telegraphed,  telexed or cabled,  be effective five days after being  deposited
in  the  mails,  or  when  delivered  to  the  telegraph  company,  telecopied,
confirmed   by  telex   answerback   or   delivered   to  the  cable   company,
respectively,  except that notices and  communications to the Agent pursuant to
Article II or VII shall not be effective until received by the Agent.

SECTION 8.03....No Waiver;  Remedies.  No  failure  on the part of any  Lender,
the LC Issuing Bank or the Agent to exercise,  and no delay in exercising,  any
right  hereunder  or under any Note  shall  operate  as a waiver  thereof;  nor
shall any single or partial  exercise of any such right  preclude  any other or
further  exercise  thereof or the  exercise of any other  right.  The  remedies
herein  provided are cumulative  and not exclusive of any remedies  provided by
law.

SECTION 8.04....Costs, Expenses, Taxes and Indemnification.

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

(b)   If any payment of principal of, or  Conversion  of, any  Eurodollar  Rate
Advance  is made  other  than on the last day of the  Interest  Period for such
Advance as a result of a payment or  Conversion  pursuant  to  Section 2.09(f),
2.10,  2.11,  2.12 or 2.14 or  acceleration  of the  maturity  of the  Advances
pursuant to  Section 6.01  or for any other reason,  the Borrower  shall,  upon
demand by any  Lender or the LC  Issuing  Bank  (with a copy of such  demand to
the  Agent),  pay to the Agent for the account of such Lender or the LC Issuing
Bank,  as the case may be, any amounts  required to  compensate  such Lender or
the LC Issuing Bank for any additional  losses,  costs or expenses which it may
reasonably  incur  as a  result  of  such  payment  or  Conversion,  including,
without  limitation,  any  loss,  cost or  expense  incurred  by  reason of the
liquidation or  reemployment  of deposits or other funds acquired by any Lender
to fund or maintain such Advance.

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

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

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

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

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

SECTION 8.05....Right of Set-off.

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

(b)   The Borrower agrees that it shall have no right of set-off,  deduction or
counterclaim   in  respect  of  its   obligations   hereunder,   and  that  the
obligations  of the  Lenders  hereunder  are  several  and not  joint.  Nothing
contained  herein  shall   constitute  a   relinquishment   or  waiver  of  the
Borrower's  rights to any independent  claim that the Borrower may have against
the Agent,  the LC Issuing Bank or any Lender for the  Agent's,  the LC Issuing
Bank's  or such  Lender's,  as the  case may be,  gross  negligence  or  wilful
misconduct;  provided  that no Lender  shall be liable  for the  conduct of the
Agent,  the LC Issuing  Bank or any other  Lender;  provided  further  that the
Agent  shall not be liable  for the  conduct  of any  Lender or the LC  Issuing
Bank,  and the LC  Issuing  Bank  shall not be liable  for the  conduct  of any
Lender or the Agent.

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

SECTION 8.07....Assignments and Participations.

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

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

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

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

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

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

(g)   If any Lender (or any bank,  financial  institution,  or other  entity to
which  such  Lender has sold a  participation)  shall  (i) make  any demand for
payment under  Section 2.08 or 2.13,  (ii) give notice to the Agent pursuant to
Section 2.14  or  (iii) determine   not  to  extend  the  Termination  Date  in
response to any request by the Borrower  pursuant to Section 2.19,  then (A) in
the case of any demand made under  clause (i)  above,  or the occurrence of the
event described in clause (ii)  above,  within 30 days after any such demand or
occurrence (if, but only if, in the case of any demanded  payment  described in
clause (i),  such demanded  payment has been made by the Borrower),  and (B) in
the case of the occurrence of the event  described in  clause (iii)  above,  at
any time prior to the  then-scheduled  Termination Date, the Borrower may, with
the  approval of the Agent and the LC Issuing  Bank (which  approval  shall not
be unreasonably  withheld),  and provided that no Event of Default or Unmatured
Default  shall then have  occurred and be  continuing,  demand that such Lender
assign in accordance with this  Section 8.07 to one or more Eligible  Assignees
designated  by the  Borrower  all  (but  not less  than  all) of such  Lender's
Commitment  and the  Advances  owing to it  within  the  period  ending  on the
latest to occur of (x) the last day in the period  described in  clause (A)  or
(B)  above,  as  applicable,  and  (y) the  last  day  of  the  longest  of the
then-current   Interest  Periods  for  such  Advances.  If  any  such  Eligible
Assignee  designated by the Borrower shall fail to consummate  such  assignment
on  terms  acceptable  to  such  Lender,  or if  the  Borrower  shall  fail  to
designate  any  such  Eligible  Assignees  for all or  part  of  such  Lender's
Commitment  or  Advances,  then  such  demand  by  the  Borrower  shall  become
ineffective;  it being  understood  for  purposes of this  subsection (g)  that
such  assignment  shall be  conclusively  deemed to be on terms  acceptable  to
such Lender,  and such Lender shall be compelled to consummate  such assignment
to an Eligible Assignee  designated by the Borrower,  if such Eligible Assignee
(1) shall  agree to such  assignment by entering into a Lender  Assignment with
such  Lender  and  (2) shall  offer  compensation  to such  Lender in an amount
equal to all  amounts  then owing by the  Borrower  to such  Lender  hereunder,
whether  for  principal,  interest,  fees,  costs or  expenses  (other than the
demanded  payment  referred to above and payable by the Borrower as a condition
to the Borrower's right to demand such assignment), or otherwise.

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

(i)   Notwithstanding  anything to the contrary contained herein, any Lender (a
"Granting  Lender") may grant to a special  purpose  funding vehicle (an "SPC")
of such  Granting  Lender  identified  as such in writing  from time to time by
the Granting  Lender to the Agent,  the LC Issuing Bank and the  Borrower,  the
option to  provide to the  Borrower  all or any part of any  Advance  that such
Granting Lender would  otherwise be obligated to make to the Borrower  pursuant
to this  Agreement;  provided  that  (i)  nothing  herein  shall  constitute  a
commitment  by any such SPC to make any  Advance,  (ii) if such SPC  elects not
to exercise  such option or otherwise  fails to provide all or any part of such
Advance,  the Granting Lender shall be obligated to make such Advance  pursuant
to the terms  hereof and (iii) no SPC or Granting  Lender  shall be entitled to
receive  any  greater  amount  pursuant  to  Section 2.13  or 8.04(b)  than the
Granting  Lender would have been  entitled to receive had the  Granting  Lender
not  otherwise  granted  such SPC the  option to  provide  any  Advance  to the
Borrower.  The making of an  Advance  by an SPC  hereunder  shall  utilize  the
Commitment of the Granting  Lender to the same extent,  and as if, such Advance
were made by such  Granting  Lender.  Each party hereto  hereby  agrees that no
SPC shall be liable for any  indemnity  or  similar  payment  obligation  under
this  Agreement  for which a Lender  would  otherwise be liable so long as, and
to the extent that,  the related  Granting  Lender  provides such  indemnity or
makes  such  payment.  In  furtherance  of the  foregoing,  each  party  hereto
hereby  agrees  (which   agreement   shall  survive  the  termination  of  this
Agreement)  that,  prior to the date  that is one  year and one day  after  the
payment  in  full  of  all  outstanding   commercial   paper  or  other  senior
indebtedness  of any  SPC,  it will not  institute  against  or join any  other
person  in  instituting  against  such  SPC  any  bankruptcy,   reorganization,
arrangement,  insolvency  or  liquidation  proceedings  under  the  laws of the
United  States  or  any  State  thereof.  Notwithstanding  the  foregoing,  the
Granting  Lender  unconditionally  agrees to  indemnify  the  Borrower,  the LC
Issuing Bank, the Agent and each Lender against all  liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits, costs,  expenses or
disbursements  of any kind or nature  whatsoever  which may be  incurred  by or
asserted  against the Borrower,  the LC Issuing Bank, the Agent or such Lender,
as the case may be, in any way relating to or arising as a  consequence  of any
such  forbearance  or delay in the  initiation of any such  proceeding  against
its SPC.  Each party hereto  hereby  acknowledges  and agrees that no SPC shall
have the  rights of a Lender  hereunder,  such  rights  being  retained  by the
applicable  Granting Lender.  Accordingly,  and without limiting the foregoing,
each party hereby  further  acknowledges  and agrees that no SPC shall have any
voting  rights  hereunder  and  that  the  voting  rights  attributable  to any
Advance  made  by an SPC  shall  be  exercised  only by the  relevant  Granting
Lender and that each Granting  Lender shall serve as the  administrative  agent
and  attorney-in-fact  for its SPC and shall on behalf of its SPC  receive  any
and all  payments  made  for the  benefit  of such  SPC and  take  all  actions
hereunder  to the  extent,  if any,  such SPC shall have any rights  hereunder.
In  addition,  notwithstanding  anything  to the  contrary  contained  in  this
Agreement  any SPC may (i) with  notice  to,  but  without  the  prior  written
consent of any other party  hereto,  assign all or a portion of its interest in
any Advances to the Granting  Lender and (ii) disclose on a confidential  basis
any  information  relating  to its  Advances to any rating  agency,  commercial
paper  dealer or  provider  of any  surety,  guarantee  or credit or  liquidity
enhancement to such SPC. This  Section 8.07(i)  may not be amended  without the
prior  written  consent  of each  Granting  Lender,  all or any  part of  whose
Advance is being funded by an SPC at the time of such amendment.

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

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

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

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

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

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


<PAGE>


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


                               ALLIANT ENERGY CORPORATION


                               By
                                 --------------------------------
                                 Name:
                                 Title:



                               BANK ONE, NA,
                               as Agent, LC Issuing Bank and as Lender


                               By
                                 -----------------------------------
                                 Name:
                                 Title:


<PAGE>

                               CITIBANK, N.A.


                               By
                                 -----------------------------------
                                  Name:
                                  Title:

<PAGE>


                                                                     SCHEDULE I

                          ALLIANT ENERGY CORPORATION
         364-Day Credit Agreement, dated as of October 11, 2002, among
       Alliant Energy Corporation, as Borrower, the Banks named therein
         and Bank One, NA, as Administrative Agent and LC Issuing Bank



<TABLE>
<CAPTION>
Name of Lender                 Commitment         Domestic Lending Office          Eurodollar Lending Office
--------------                 ----------         -----------------------          -------------------------
<S>                                 <C>                  <C>                              <C>
Bank One, NA                    $61,779,961.78    1 Bank One Plaza, Suite 0363     Same as Domestic Lending
                                                  Chicago, Illinois  60670-0363    Office
                                                  Attention:  Robert G. Bussa

Citibank, N.A.                  $61,779,961.78    Two Pennsway, Ste. 200           Same as Domestic Lending
                                                  New Castle, Delaware  19720      Office
                                                  Attention: Bank Loan
                                                  Syndications

Wachovia Bank, National         $61,779,961.78    191 Peachtree Street, NE,        Same as Domestic Lending
Association                                       27th Floor                       Office
                                                  Atlanta, Georgia  30303

Barclays Bank PLC               $40,156,975.16    200 Park Avenue                  Same as Domestic Lending
                                                  New York, New York  10166        Office

The Bank of Tokyo               $40,156,975.16    227 West Monroe Street           Same as Domestic Lending
Mitsubishi, Ltd.                                  Suite 2300                       Office
Chicago Branch                                    Chicago, Illinois  60606

Wells Fargo Bank, National      $40,156,975.17    201 Third Street                 Same as Domestic Lending
Association                                       San Francisco, California        Office
                                                  94103

ABN AMRO Bank N.V.              $40,156,975.16    135 South LaSalle Street         Same as Domestic Lending
                                                  Chicago, Illinois  60603         Office

Bank of America, N.A.           $40,156,975.16    901 Main Street                  Same as Domestic Lending
                                                  Dallas, Texas  75202             Office

FleetBoston                     $30,889,980.89    100 Federal Street               Same as Domestic Lending
                                                  Mail Stop MA DE 10008A           Office
                                                  Boston, Massachusetts  02110

National Australia Bank         $30,889,980.89    200 Park Avenue, 34th Floor      Same as Domestic Lending
                                                  New York, New York  10166        Office

Merrill Lynch Bank USA          $18,533,988.54    15 West South Temple, Suite 300  Same as Domestic Lending
                                                  Salt Lake City, Utah  84101      Office

JP Morgan Chase                 $17,452,839.20    1 Chase Manhattan Plaza          Same as Domestic Lending
                                                  New York, New York  10081        Office

U.S. Bank National              $15,444,990.44    777 East Wisconsin Avenue        Same as Domestic Lending
Association                                       MK-WI-TGCB                       Office
                                                  Milwaukee, Wisconsin  53202

Australia and New Zealand       $15,444,990.44    1177 Avenue of the Americas      Same as Domestic Lending
Banking Group                                     New York, New York  10036        Office

KBC Bank, NV                    $15,444,990.44    125 West 55th Street             Same as Domestic Lending
                                                  New York, New York  10019        Office

CoBank, ACB                     $15,444,990.44    5500 South Quebec Street         Same as Domestic Lending
                                                  Greenwood Village, CO  80111     Office

BNP Paribas                     $15,444,990.44    919 Third Avenue                 Same as Domestic Lending
                                                  New York, New York  10022        Office

American Trust & Savings Bank    $4,633,497.13    P.O. Box 938                     Same as Domestic Lending
                                                  Dubuque, Iowa  52004             Office


TOTAL                           $565,750,000.00

</TABLE>

<PAGE>


                                                                    SCHEDULE II

                                EXISTING LIENS

Liens in favor of wholly-owned Subsidiaries.



<PAGE>

                                                                   SCHEDULE III


                              LIST OF INDENTURES


Wisconsin Power and Light Company to First Wisconsin Trust Company and George
B. Luhman, as Trustees
Indenture, dated August 1, 1941, and the indentures supplemental thereto

Iowa Electric Light and Power Company to The First National Bank of Chicago,
Trustee Indenture of Mortgage and Deed of Trust, dated as of September 1,
1993, and the indentures supplemental thereto

Iowa Electric Light and Power Company to The First National Bank of Chicago,
Trustee Indenture of Mortgage and Deed of Trust, dated as of August 1, 1940,
and the indentures supplemental thereto

Iowa Southern Utilities Company to The Northern Trust Company and Harold H.
Rockwell, Trustees
Indenture or Deed of Trust, dated as of February 1, 1923, and the indentures
supplemental thereto

Interstate Power Company to The Chase National Bank of the City of New York,
Carl E. Buckley, Trustee
Indenture, dated as of January 1, 1948, and the indentures supplemental
thereto

Wisconsin Power and Light Company to Firstar Trust Company, Trustee
Indenture, dated as of June 20, 1997

IES Utilities Inc. to The First National Bank of Chicago, Trustee
Indenture, dated as of December 1, 1995

IES Utilities Inc. to The First National Bank of Chicago, Trustee
Indenture, dated as of August 1, 1997

Alliant Energy Resources, Inc. (and Alliant Energy Corporation, as Guarantor)
to Firstar Bank, N.A., Trustee
Indenture, dated as of November 4, 1999, and the indentures supplemental
thereto