Document:

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                                                                    EXHIBIT 10.4

                                                                  EXECUTION COPY

                           RECEIVABLES SALE AGREEMENT

                          Dated as of December 30, 2003

                                     Between

                     NORTHERN INDIANA PUBLIC SERVICE COMPANY

                                    as Seller

                                       and

                         NIPSCO RECEIVABLES CORPORATION

                                  as Purchaser

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                                TABLE OF CONTENT

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ARTICLE I.    DEFINITIONS.............................................................      1

    SECTION 1.01.   Certain Defined Terms.............................................      1
    SECTION 1.02.   Other Terms.......................................................      4
    SECTION 1.03.   Incorporation of Defined Terms....................................      4

ARTICLE II.   AMOUNTS AND TERMS OF PURCHASES AND CONTRIBUTIONS........................      4

    SECTION 2.01.   Facility..........................................................      4
    SECTION 2.02.   Making Purchases..................................................      4
    SECTION 2.03.   Collections.......................................................      5
    SECTION 2.04.   Settlement Procedures.............................................      6
    SECTION 2.05.   Payments and Computations, Etc....................................      6
    SECTION 2.06.   Contributions.....................................................      7
    SECTION 2.07.   Grant of Security Interest........................................      7

ARTICLE III.  CONDITIONS OF PURCHASES.................................................      7

    SECTION 3.01.   Conditions Precedent to Initial Purchase from the Seller..........      7
    SECTION 3.02.   Conditions Precedent to All Purchases.............................      7

ARTICLE IV.   REPRESENTATIONS AND WARRANTIES..........................................      8

    SECTION 4.01.   Representations and Warranties of the Seller......................      8

ARTICLE V.    COVENANTS...............................................................     11

    SECTION 5.01.   Covenants of the Seller...........................................     16
    SECTION 5.02.   Intent of the Seller and the Purchaser............................     17

ARTICLE VI.   ADMINISTRATION AND COLLECTION...........................................     17

    SECTION 6.01.   Designation of Servicer...........................................     17
    SECTION 6.02.   Certain Rights of the Purchaser...................................     18
    SECTION 6.03.   Rights and Remedies...............................................     18
    SECTION 6.04.   Transfer of Records to Purchaser..................................     19

ARTICLE VII.  EVENTS OF TERMINATION...................................................     19

    SECTION 7.01.   Events of Termination.............................................     19

ARTICLE VIII. INDEMNIFICATION.........................................................     21

    SECTION 8.01.   Indemnities by the Seller.........................................     21
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ARTICLE IX.   MISCELLANEOUS...........................................................     22

    SECTION 9.01.   Amendments, Etc...................................................     23
    SECTION 9.02.   Notices, Etc......................................................     23
    SECTION 9.03.   Binding Effect; Assignability.....................................     23
    SECTION 9.04.   Costs, Expenses and Taxes.........................................     24
    SECTION 9.05.   No Proceedings....................................................     24
    SECTION 9.06.   Confidentiality...................................................     24
    SECTION 9.07.   GOVERNING LAW.....................................................     24
    SECTION 9.08.   Third Party Beneficiary...........................................     24
    SECTION 9.09.   Subordination.....................................................     24
    SECTION 9.10.   Execution in Counterparts.........................................     25
    SECTION 9.11.   Integration; Survival of Termination..............................     25
    SECTION 9.12.   Consent to Jurisdiction...........................................     25
    SECTION 9.13.   WAIVER OF JURY TRIAL..............................................     26
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EXHIBITS and ANNEXES

EXHIBIT A   Blocked Account Banks
EXHIBIT B   Form of Promissory Note for Deferred Purchase Price
EXHIBIT C   Trade Names and Former Names

ANNEX A     Additional Representations and Warranties of the Seller

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                           RECEIVABLES SALES AGREEMENT

                          Dated as of December 30, 2003

                  NORTHERN INDIANA PUBLIC SERVICE COMPANY, an Indiana
corporation (the "Seller"), and NIPSCO RECEIVABLES CORPORATION, an Indiana
corporation (the "Purchaser"), agree as follows:

                  PRELIMINARY STATEMENTS. (1) Certain terms which are
capitalized and used throughout this Agreement (in addition to those defined
above) are defined in Article I of this Agreement.

                  (2)      The Seller has Receivables that it wishes to sell to
the Purchaser, and the Purchaser is prepared to purchase such Receivables on the
terms set forth herein.

                  (3)      The Seller may also wish to contribute Receivables to
the capital of the Purchaser on the terms set forth herein.

                  NOW, THEREFORE, the parties agree as follows:

                             ARTICLE I. DEFINITIONS

                  SECTION 1.01. Certain Defined Terms. 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):

                  "Agreement" means this Receivables Sales Agreement, as the
         same may be amended, restated, supplemented or otherwise modified from
         time to time.

                  "Closing Date" means December 30, 2003 or, if later, the first
         date on which the conditions precedent set forth in Section 3.01 are
         satisfied.

                  "Contributed Receivable" has the meaning specified in Section
         2.06.

                  "Deferred Purchase Price" means the portion of the Purchase
         Price of Purchased Receivables purchased on any Purchase Date exceeding
         the amount of the Purchase Price to be paid in cash, which portion when
         added to the cumulative amount of all previous Deferred Purchase Prices
         (after giving effect to any payments made on account thereof) shall not
         exceed at any time (i) 85% of the aggregate Outstanding Balance of the
         Transferred Receivables (other than Defaulted Receivables) minus (ii)
         the aggregate outstanding Capital (as defined in the Purchase
         Agreement). The obligations of the Purchaser in respect of the Deferred
         Purchase Price shall be evidenced by the Deferred Purchase Price Note.

                  "Deferred Purchase Price Note" has the meaning specified in
         Section 9.09.

                  "Discount" means, in respect of each Purchase, the Discount
         Rate multiplied by the Outstanding Balance of the Receivables that are
         the subject of such Purchase;

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         provided, however, the foregoing Discount may be revised prospectively
         by request of either of the parties hereto to reflect changes in recent
         experience with respect to write-offs, timing and cost of Collections
         and cost of funds, provided further that such revision is consented to
         by both of the parties (it being understood that each party agrees to
         duly consider such request but shall have no obligation to give such
         consent).

                  "Discount Rate" means a percentage calculated to provide the
         Purchaser with a reasonable return on its investment in the Receivables
         after taking account of (i) the time value of money based upon the
         anticipated dates of collection of the Receivables and the cost to the
         Purchaser of financing its investment in the Receivables during such
         period and (ii) the risk of nonpayment by the Obligors. On the Closing
         Date, the Discount Rate is .30%. The Seller and the Purchaser may agree
         from time to time to change the Discount Rate based on changes in one
         or more of the items affecting the calculation thereof, provided that
         any change to the Discount Rate shall take effect as of the
         commencement of a calendar month, shall apply only prospectively and
         shall not affect the Purchase Price payment in respect of Purchase
         which occurred during any calendar month ending prior to the calendar
         month during which the Seller and the Purchaser agree to make such
         change.

                  "Event of Termination" has the meaning specified in Section
         7.01.

                  "Facility" means the willingness of the Purchaser to make
         Purchases of Receivables from the Seller from time to time pursuant to
         the terms of this Agreement.

                  "Indemnified Amounts" has the meaning specified in Section
         8.01.

                  "Indemnified Parties" has the meaning specified in Section
         8.01.

                  "Material Adverse Effect" means a material adverse effect on
         (i) the ability of any Transaction Party to perform its obligations
         under any Transaction Document, (ii) the legality, validity or
         enforceability of this Agreement or any other Transaction Document,
         (iii) the Purchaser's interest in the Receivables generally or in any
         material portion of the Receivables, the Related Security or the
         Collections with respect thereto, or (iv) the collectibility of the
         Receivables generally or of any material portion of the Receivables.

                  "Purchase" means a purchase by the Purchaser of Receivables
         from the Seller pursuant to Article II.

                  "Purchase Agreement" means that certain Receivables Purchase
         Agreement, dated as of the date hereof, among the Purchaser, as seller,
         CAFCO, LLC, as Conduit Purchaser, Citibank, N.A. and Danske Bank A/S,
         Cayman Island Branch, as Bank Purchasers, Citicorp North America, Inc.,
         as Agent and the Seller, as servicer, as amended, restated or otherwise
         modified from time to time.

                  "Purchase Date" means each day on which a Purchase is made
         pursuant to Article II.

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                  "Purchase Price" means, for any Purchase, an amount equal to
         the Outstanding Balance of the Receivables that are the subject of such
         Purchase as set forth in the Seller's Receivables Trial Balance, minus
         the Discount for such Purchase.

                  "Purchased Receivable" means any Receivable which is purchased
         by the Purchaser pursuant to Section 2.02.

                  "Receivables Trial Balance" means, on any date, the Seller's
         accounts receivable trial balance (whether in the form of a computer
         printout, magnetic tape or diskette or other electronic or paper
         record) on such date, listing Obligors and the Receivables respectively
         owed by such Obligors on such date together with the aged Outstanding
         Balances of such Receivables, in form and substance satisfactory to the
         Purchaser.

                  "Related Security" means with respect to any Receivable:

                           (i)      all of the Seller's interest in any
                  merchandise or goods (including returned merchandise or
                  goods), if any, relating to any sale giving rise to such
                  Receivable;

                           (ii)     all security interests or liens and property
                  subject thereto from time to time purporting to secure payment
                  of such Receivable, whether pursuant to the Contract related
                  to such Receivable or otherwise, together with all financing
                  statements authorized by an Obligor describing any collateral
                  securing such Receivable;

                           (iii)    all guaranties, insurance and other
                  agreements or arrangements of whatever character from time to
                  time supporting or securing payment of such Receivable whether
                  pursuant to the Contract related to such Receivable or
                  otherwise;

                           (iv)     all other books, records and other
                  information (including, without limitation, computer programs,
                  tapes, discs, punch cards, data processing software and
                  related property and rights) relating to such Receivable and
                  the related Obligor; and

                           (v)      all of the Seller's right, title and
                  interest in and to all invoices or other agreements or
                  documents that evidence, secure or otherwise relate to such
                  Receivable.

                  "Transaction Party" means any of the Seller, the Purchaser or
         the Servicer.

                  "Senior Obligations" means all "Seller Obligations" (as
         defined in the Purchase Agreement).

                  "Settlement Date" means (i) the 18th day of each calendar
         month (or, if such day is not a Business Day, the next succeeding
         Business Day) and (ii) following the Termination Date, each other
         "Settlement Date" under and as defined in the Purchase Agreement.

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                  "Settlement Period" means each calendar month.

                  "Transferred Receivable" means a Purchased Receivable or a
         Contributed Receivable.

                  SECTION 1.02.Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles. All terms used in Article 9 of the UCC in the
State of New York, and not specifically defined herein, are used herein as
defined in such Article 9.

                  SECTION 1.03. Incorporation of Defined Terms. Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
such terms in the Purchase Agreement.

          ARTICLE II. AMOUNTS AND TERMS OF PURCHASES AND CONTRIBUTIONS

                  SECTION 2.01. Facility. On the terms and conditions
hereinafter set forth and without recourse to the Seller (except to the extent
specifically provided herein), the Seller hereby agrees to sell to the Purchaser
all Receivables originated or acquired by it from time to time and the Purchaser
hereby agrees to purchase from the Seller all such Receivables from time to
time, in each case during the period from the date hereof to the Termination
Date; provided that on the Closing Date, the Seller may, at its option, elect to
contribute Receivables to the Purchaser pursuant to Section 2.06 in lieu of a
sale of such Receivables.

                  SECTION 2.02. Making Purchases.

                  (a)      Initial Purchase. On the Closing Date, the Seller
shall (i) contribute to the Capital of the Purchaser Receivables having an
aggregate Outstanding Balance of $44,454,144 and (ii) sell to the Purchaser all
other Receivables outstanding as of the Closing Date. On the date of such
Purchase, the Purchaser shall, upon satisfaction of the applicable conditions
set forth in Article III, pay the Purchase Price for the Receivables sold to it
in the manner provided in Section 2.02(c).

                  (b)      Subsequent Purchases. On each Business Day following
the Closing Date until the Termination Date, the Seller shall sell to the
Purchaser and the Purchaser shall purchase from the Seller, upon satisfaction of
the applicable conditions set forth in Article III, all Receivables originated
or otherwise acquired by the Seller which have not previously been sold or
contributed to the Purchaser.

                  (c)      Payment of Purchase Price. With respect to any
Receivables coming into existence after the date hereof, the Purchaser shall pay
the Purchase Price therefor in the following manner:

                           (i)      first, by delivery of immediately available
         funds, to the extent of funds available to the Purchaser from (i) its
         subsequent sale of an interest in the Receivables under the Purchase
         Agreement, (ii) Collections arising from any Receivables previously
         sold to the Purchaser in which the Purchaser has retained an interest,
         or (iii) other cash on hand; and

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                           (ii)     second, by an increase in the Deferred
         Purchase Price (subject at all times to the limitations contained in
         the definition thereof).

The Seller is hereby authorized by the Purchaser to endorse on the schedule
attached to the Deferred Purchase Price Note an appropriate notation evidencing
the date and amount of each advance thereunder, as well as the date of each
payment with respect thereto, provided that the failure to make such notation
shall to affect any obligation of the Purchaser thereunder.

         Although the Purchase Price for each Receivable coming into existence
after the date hereof shall be due and payable in full by the Purchaser to the
Seller on the date such Receivable came into existence, and payment of such
Purchase Price shall be made as provided in this Section 2.02(c), final
settlement of the Purchase Price between the Purchaser to the Seller shall be
effected on a monthly basis on each Settlement Date with respect to all
Receivables coming into existence during the calendar month preceding such
Settlement Date and based on the information contained in the Monthly Report
delivered by the Servicer pursuant to the Purchase Agreement for the calendar
month then most recently ended. On each Settlement Date, the Purchaser and the
Seller shall cause a reconciliation to made in respect of all purchases that
shall have been made during the calendar month then most recently ended.
Although settlement shall be effected on Settlement Dates, increases or
decreases in the amount owing under the Deferred Purchase Price Note made
pursuant to this Section 2.02(c) shall be deemed to have occurred and shall be
effective as of the last Business Day of the calendar month to which such
settlement relates.

                  (d)      Ownership of Receivables and Related Security. On
each Purchase Date, after giving effect to the Purchase (and any contribution of
Receivables) on such date, the Purchaser shall own all Receivables originated or
otherwise acquired by the Seller on such date (including Receivables which have
been previously sold or contributed to the Purchaser hereunder). The Purchase or
contribution of any Receivable shall include all Related Security with respect
to such Receivable.

                  SECTION 2.03. Collections. (a) On each Deposit Date, the
Servicer shall apply all Collections released to the Purchaser pursuant to the
Purchase Agreement and all amounts paid by the Seller pursuant to Section
2.04(a) and 2.04(b) hereof (i) first, to pay the Purchase Price then owing by
the Purchaser hereunder on such date, (ii) second, if such date is a Settlement
Date, to pay the accrued and unpaid interest on the Deferred Purchase Price for
the most recently ended calendar month (as provided in Section 2.03(c)), and
(iii) third, to prepay in whole or in part the principal amount of the Deferred
Purchase Price. The Servicer shall, on or before each Settlement Date, deposit
into an account of the Purchaser or the Purchaser's assignee all remaining
Collections of Transferred Receivables (if any) then held by the Servicer (but
only to the extent such Collections have not been previously applied to purchase
new Receivables hereunder or to pay the Deferred Purchase Price).

                  (b)      In the event that the Seller believes that
collections which are not Collections of Transferred Receivables have been
deposited into an account of the Purchaser or the Purchaser's assignee, the
Seller shall so advise the Purchaser and, on the Business Day following such
identification to the Purchaser's reasonable satisfaction, the Purchaser shall
instruct the Servicer to remit such collections to the Seller.

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                  (c)      On each Settlement Date, the Purchaser shall, to the
extent Collections are available for such purpose under the Purchase Agreement
and are not required to pay the Purchase Price for any Receivables purchased
hereunder, pay to the Seller accrued interest on the Deferred Purchase Price;
provided that each such payment shall be made solely from (i) Collections of
Transferred Receivables after all other amounts then due from the Purchaser
under the Purchase Agreement have been paid in full and all amounts then
required to be set aside by the Purchaser or the Servicer under the Purchase
Agreement have been so set aside or (ii) excess cash flow from operations of the
Purchaser which is not required to be applied to the payment of any Senior
Obligations; and provided, further that no such payment shall be made at any
time when an Event of Termination shall have occurred and be continuing. At such
time following the Termination Date when all Senior Obligations shall have been
paid in full, the Purchaser shall apply, on each Deposit Date, all Collections
of Transferred Receivables received by the Purchaser pursuant to Section 2.03(a)
(and not previously distributed) first to the payment of accrued interest on the
Deferred Purchase Price, and then to the reduction of the principal amount of
the Deferred Purchase Price.

                  SECTION 2.04. Settlement Procedures. (a) If on any day any
Transferred Receivable becomes (in whole or in part) a Diluted Receivable, the
Seller shall be deemed to have received on such day a Collection of such
Receivable in the amount of such Diluted Receivable. The Seller shall pay to the
Servicer on or prior to the next Settlement Date all amounts deemed to have been
received pursuant to this subsection.

                  (b)      Upon discovery by the Seller or the Purchaser of a
breach of any of the representations and warranties made by the Seller in
Section 4.01(j) with respect to any Transferred Receivable, such party shall
give prompt written notice thereof to the other party, as soon as practicable
and in any event within three Business Days following such discovery. The Seller
shall, upon not less than two Business Days' notice from the Purchaser or its
assignee or designee, repurchase such Transferred Receivable on the next
succeeding Settlement Date for a repurchase price equal to the Outstanding
Balance of such Transferred Receivable. Each repurchase of a Transferred
Receivable shall include the Related Security with respect to such Transferred
Receivable. The proceeds of any such repurchase shall be deemed to be a
Collection in respect of such Transferred Receivable. The Seller shall pay to
the Servicer on or prior to the next Settlement Date the repurchase price
required to be paid pursuant to this subsection.

                  (c)      Except as stated in subsection (a) or (b) of this
Section 2.04 or as otherwise required by law or the relevant Contract, or as
otherwise specified by such Obligor, all Collections from an Obligor of any
Transferred Receivable shall be applied to the Receivables of such Obligor in
the order of the age of such Receivables, starting with the oldest such
Receivable.

                  SECTION 2.05. Payments and Computations, Etc. (a) All amounts
to be paid or deposited by the Seller or the Servicer hereunder shall be paid or
deposited no later than 11:00 A.M. (New York City time) on the day when due in
same day funds to an account or accounts designated by the Purchaser from time
to time.

                  (b)      The Seller shall, to the extent permitted by law, pay
to the Purchaser interest on any amount not paid or deposited by the Seller
(whether as Servicer or otherwise)

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when due hereunder at an interest rate per annum equal to 2.00% per annum above
the Alternate Base Rate, payable on demand.

                  (c)      All computations of interest and all computations of
fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first but excluding the last day) elapsed.
Whenever any payment or deposit to be made hereunder shall be due on a day other
than a Business Day, such payment or deposit shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of such payment or deposit.

                  SECTION 2.06. Contribution. The Seller shall on the Closing
Date identify Receivables which it proposes to transfer to the Purchaser as a
capital contribution. On the date of such contribution and after giving effect
thereto, the Purchaser shall own all right, title and interest in and to the
Receivables so identified and contributed (collectively, the "Contributed
Receivables") and all Related Security with respect thereto. The foregoing
notwithstanding, on the date of the initial Purchase hereunder the Seller agrees
to contribute to the Purchaser all Receivables which are not included in such
initial Purchase.

                  SECTION 2.07. Grant of Security Interest. As collateral
security for the performance by the Seller of all the terms, covenants and
agreements on the part of the Seller (whether as Seller, Servicer or otherwise)
to be performed under this Agreement or any other Transaction Document,
including the punctual payment when due of all amounts payable by it hereunder
and thereunder, the Seller hereby assigns to the Purchaser and grants to the
Purchaser a first priority security interest in, all of the Seller's right,
title and interest (if any) in and to (A) all Receivables, whether now owned and
existing or hereafter acquired or arising, all Related Security and Collections
with respect thereto and all Blocked Accounts, and (B) to the extent not
included in the foregoing, all proceeds of any and all of the foregoing.

                      ARTICLE III. CONDITIONS OF PURCHASES

                  SECTION 3.01. Conditions Precedent to Initial Purchase from
the Seller. The initial Purchase of Receivables from the Seller hereunder is
subject to the conditions precedent that the Purchaser shall have received on or
before the date of such Purchase all of the instruments, documents, agreements
and opinions specified in Section 3.01 of the Purchase Agreement, each (unless
otherwise indicated therein) dated such date, in form and substance satisfactory
to the Purchaser.

                  SECTION 3.02. Conditions Precedent to All Purchases. The
Purchaser's obligation to make any Purchase (including the initial Purchase)
hereunder shall be subject to the further conditions precedent that:

                  (a)      the Seller shall have delivered to the Purchaser, if
         requested by the Purchaser, (i) the Seller's Receivables Trial Balance
         (which if in the form of an electronic record shall be compatible with
         the Purchaser's computer software) as of a date not more than 31 days
         prior to the date of such Purchase, and (ii) such additional
         information concerning such Receivables as may reasonably be requested
         by the Purchaser;

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                  (b)      with respect to any such Purchase, on or prior to the
         date of such Purchase, the Servicer shall have delivered to the
         Purchaser, all Monthly Reports required to be delivered hereunder and
         under the Purchase Agreement, each duly completed and containing
         information covering the most recently ended reporting period for which
         information is required pursuant to Section 6.02(g) of the Purchase
         Agreement and containing such additional information as may reasonably
         be requested by the Purchaser;

                  (c)      on the date of such Purchase the following statements
         shall be true (and the Seller, by accepting the Purchase Price for such
         Purchase, shall be deemed to have represented and warranted that):

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

                           (ii)     No event has occurred and is continuing, or
                  would result from such Purchase, that constitutes an Event of
                  Termination or an Involuntary Bankruptcy Event; and

                           (iii)    The "Termination Date" shall not have
                  occurred under (and as defined in) the Purchase Agreement; and

                  (d)      the Purchaser shall have received such other
         approvals, opinions or documents as the Purchaser may reasonably
         request.

         Notwithstanding the foregoing, unless otherwise specified by the
Purchaser (with the written consent of the Agent) in a written notice to the
Seller, each Purchase shall occur automatically on each day prior to the
Termination Date, with the result that the title to all Receivables shall vest
in the Purchaser automatically on the date each such Receivable arises and
without any further action of any kind by the Purchaser or the Seller, whether
or not the conditions precedent to such Purchase were in fact satisfied on such
date and notwithstanding any delay in making payment of the Purchase Price for
such Receivables (but without impairing the Purchaser's obligation to pay such
Purchase Price in accordance with the terms hereof).

                   ARTICLE IV. REPRESENTATIONS AND WARRANTIES

                  SECTION 4.01. Representations and Warranties of the Seller.
The Seller (both individually and in its capacity as Servicer) represents and
warrants as follows as of the date hereof and as of the date of each Purchase
hereunder:

                  (a)      The Seller is a corporation duly incorporated,
         validly existing and in good standing under the laws of Indiana, and is
         duly qualified to do business, and is in good standing, in every
         jurisdiction where the nature of its business requires it to be so
         qualified.

                  (b)      The execution, delivery and performance by the Seller
         of the Transaction Documents to which it is a party, including the
         Seller's sale and contribution of Receivables hereunder and the
         Seller's use of the proceeds of Purchases, (i) are within

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         the Seller's corporate powers, (ii) have been duly authorized by all
         necessary corporate action, (iii) do not contravene (1) the Seller's
         charter or by-laws, (2) any law, rule or regulation applicable to the
         Seller, (3) any contractual restriction binding on or affecting the
         Seller or its property or (4) any order, writ, judgment, award,
         injunction or decree binding on or affecting the Seller or its
         property, and (iv) do not result in or require the creation of any
         Adverse Claim upon or with respect to any of its properties (except for
         the transfer of the Seller's interest in the Transferred Receivables
         pursuant to this Agreement). Each of the Transaction Documents to which
         the Seller is named as a party has been duly executed and delivered by
         the Seller.

                  (c)      No authorization or approval or other action by, and
         no notice to or filing with, any governmental authority or regulatory
         body is required for the due execution, delivery and performance by the
         Seller of the Transaction Documents to which it is a party or any other
         document to be delivered by it thereunder except for those that have
         already been obtained or made and the filing of UCC financing
         statements which are referred to therein.

                  (d)      Each of the Transaction Documents to which the Seller
         is a party constitutes the legal, valid and binding obligation of the
         Seller enforceable against the Seller in accordance with its terms,
         except as such enforceability may be limited by bankruptcy, insolvency,
         reorganization or similar laws affecting the enforcement of creditors'
         rights generally and by principles of equity, regardless of whether
         such enforceability is considered in a proceeding in equity or at law.

                  (e)      Sales and contributions made pursuant to this
         Agreement will constitute a valid sale (or contribution), transfer, and
         assignment of the Transferred Receivables to the Purchaser, enforceable
         against creditors of, and purchasers from, the Seller. The Seller shall
         have no remaining property interest in any Transferred Receivable.

                  (f)      The consolidated balance sheets of the Seller and its
         Subsidiaries as of December 31, 2002, and the related statements of
         income and retained earnings of the Seller and its Subsidiaries as of
         and for the fiscal year then ended, certified by Deloitte & Touche LLP,
         independent public accountants, a copy of which has been furnished to
         the Purchaser, fairly present the financial condition of the Seller and
         its Subsidiaries as of such date and the results of the operations of
         the Seller and its Subsidiaries for the fiscal year ended on such date,
         all in accordance with generally accepted accounting principles
         consistently applied. Since December 31, 2002, there has been no
         material adverse change in the business, operations, property or
         financial condition of the Seller.

                  (g)      There is no pending or, to the best knowledge of the
         Seller, threatened action or proceeding affecting the Seller or any of
         its Subsidiaries before any court, governmental agency or arbitrator
         which (if adversely determined) would have a Material Adverse Effect,
         except as disclosed in the financial statements referred to in Section
         4.01(f).

                                       9
<PAGE>

                  (h)      No proceeds of any Purchase will be used for a
         purpose that violates or would be inconsistent with, Regulation T, U or
         X promulgated by the Board of Governors of the Federal Reserve System
         from time to time.

                  (i)      No transaction contemplated hereby requires
         compliance with any bulk sales act or similar law.

                  (j)      Each Transferred Receivable, together with the
         Related Security, is owned (immediately prior to its sale or
         contribution hereunder) by the Seller free and clear of any Adverse
         Claim (other than any Adverse Claim arising solely as the result of any
         action taken by the Purchaser). When the Purchaser makes a Purchase it
         shall acquire valid and perfected first priority ownership interest of
         each Purchased Receivable and the Related Security and Collections with
         respect thereto free and clear of any Adverse Claim (other than any
         Adverse Claim arising solely as the result of any action taken by the
         Purchaser), and no effective financing statement or other instrument
         similar in effect is filed in any recording office listing the Seller
         as debtor, covering any Receivable, any interest therein, the Related
         Security or Collections except such as may be filed in favor of
         Purchaser in accordance with this Agreement and assigned to the Agent
         in accordance with the Purchase Agreement.

                  (k)      Each Monthly Report, information, exhibit, financial
         statement, document, book, record or report furnished or to be
         furnished in writing at any time by any Transaction Party to the
         Purchaser in connection with this Agreement is or will be accurate in
         all material respects as of its date or (except as otherwise disclosed
         to the Purchaser at such time) as of the date so furnished, and no such
         Monthly Report, information, exhibit, financial statement, document,
         book, record or report contains or will contain any untrue statement of
         a material fact or omits or will omit to state a material fact
         necessary in order to make the statements contained therein, in the
         light of the circumstances under which they were made, not materially
         misleading.

                  (l)      The principal place of business and chief executive
         office of the Seller and the office where the Seller keeps its records
         concerning the Transferred Receivables are located at the address or
         addresses referred to in Section 5.01(b).

                  (m)      The names and addresses of all the Blocked Account
         Banks, together with the account numbers of the Blocked Accounts at
         such Blocked Account Banks, are specified in Exhibit A, as such may be
         updated from time to time pursuant to Section 5.01(g).

                  (n)      In the past five (5) years, the Seller has not used
         any company name, tradename or doing-business-as name other than the
         name in which it has executed this Agreement and the other names listed
         on Exhibit C. The Seller's organizational identification number is
         192445-018.

                  (o)      (i) The fair value of the property of the Seller is
         greater than the total amount of liabilities, including contingent
         liabilities, of the Seller, (ii) the present fair salable value of the
         assets of the Seller is not less than the amount that will be required
         to

                                       10
<PAGE>

         pay all probable liabilities of the Seller on its debts as they become
         absolute and matured, (iii) the Seller does not intend to, and does not
         believe that it will, incur debts or liabilities beyond the Seller's
         abilities to pay such debts and liabilities as they mature and (iv) the
         Seller is not engaged in a business or a transaction, and is not about
         to engage in a business or a transaction, for which the Seller's
         property would constitute unreasonably small capital.

                  (p)      The Seller shall have originated each Receivable in
         the ordinary course of its business.

                  (q)      Each Transferred Receivable included as an Eligible
         Receivable in the calculation of the Net Receivables Pool Balance on
         any Monthly Report satisfies the requirements of eligibility contained
         in the definition of "Eligible Receivable" in the Purchase Agreement as
         of the date of The information reported in such Monthly Report.

                  (r)      The transfers of Transferred Receivables by the
         Seller to the Purchaser pursuant to this Agreement, and all other
         transactions between the Seller and the Purchaser, have been and will
         be made in good faith and without intent to hinder, delay or defraud
         creditors of the Seller.

                  (s)      The Seller and its ERISA Affiliates are in
         compliance, in all material respects, with ERISA, and no Adverse Claim
         exists in favor of the Pension Benefit Guaranty Corporation on any of
         the Receivables.

                  (t)      The Seller believes that the Purchaser has adequate
         capitalization and liquidity to meet its financial obligations under
         the Transaction Documents without the need for capital contributions
         other than the initial capital contribution described in Section
         2.02(a).

                  (u)      Each of the representations and warranties set forth
         on Annex A are true and correct.

                              ARTICLE V. COVENANTS

                  SECTION 5.01. Covenants of the Seller. From the date hereof
until the first day following the Termination Date on which all of the
Transferred Receivables are either collected in full or are written off in
accordance with the applicable Credit and Collection Policy, the Seller (both
individually and in its capacity as Servicer) covenants and agrees as follows:

                  (a)      Compliance with Laws, Etc. The Seller will comply in
         all respects with all applicable laws, rules, regulations and orders
         and preserve and maintain its corporate existence, rights, franchises,
         qualifications and privileges except to the extent that the failure so
         to comply with such laws, rules and regulations or the failure so to
         preserve and maintain such rights, franchises, qualifications, and
         privileges would not reasonably be expected to have a Material Adverse
         Effect.

                  (b)      Offices, Records and Books of Account. The Seller
         will keep its principal place of business and chief executive office
         and the office where it keep its records

                                       11
<PAGE>

         concerning the Receivables at (i) the address of the Seller set forth
         under its name on the signature page to this Agreement, or (ii) upon 30
         days' prior written notice to the Purchaser at any other locations in
         jurisdictions where all actions reasonably requested by the Purchaser
         to protect and perfect the interest in the Transferred Receivables
         shall have been taken and completed. The Seller will maintain and
         implement administrative and operating procedures (including, without
         limitation, an ability to recreate records evidencing Receivables and
         related Contracts in the event of the destruction of the originals
         thereof), and keep and maintain all documents, books, records and other
         information reasonably necessary or advisable for the collection of all
         Receivables (including, without limitation, records adequate to permit
         the daily identification of each new Transferred Receivable and all
         Collections of and adjustments to each existing Transferred
         Receivable).

                  (c)      Performance and Compliance with Contracts and Credit
         and Collection Policy. The Seller will, at its expense, (i) timely and
         fully perform and comply in all material respects with all provisions,
         covenants and other promises required to be observed by it under the
         Contracts related to the Receivables, and (ii) timely and fully comply
         in all material respects with the Credit and Collection Policy in
         regard to each Receivable and the related Contracts.

                  (d)      Sales, Liens, Etc. Except for the sales and
         contributions of Receivables contemplated herein, the Seller will not
         sell, assign (by operation of law or otherwise) or otherwise dispose
         of, or create or suffer to exist any Adverse Claim upon or with respect
         to, any Receivable, Related Security, related Contract or Collections,
         or upon or with respect to any Blocked Account, or assign any right to
         receive income in respect thereof.

                  (e)      Extension or Amendment of Receivables and Contracts.
         The Seller will not extend, amend or otherwise modify the terms of any
         Receivable or amend, modify or waive any term or condition of any
         Contract related thereto except, in its capacity as Servicer, to the
         extent permitted under Section 6.02(c) of the Purchase Agreement.

                  (f)      Change in Business or Credit and Collection Policy.
         The Seller will not make any change in the character of its business or
         in any Credit and Collection Policy, except, for any such change that
         would not (i) impair the collectibility of any Receivables or (ii)
         otherwise be reasonably likely to have a Material Adverse Effect.

                  (g)      Addition or Termination of Blocked Accounts; Change
         in Payment Instructions to Obligors. The Seller will not add or
         terminate any bank or bank account as a Blocked Account Bank or Blocked
         Account from those listed in Exhibit A to this Agreement, or make any
         change in its instructions to Obligors regarding payments to be made in
         respect of the Receivables or payments to be made to any Blocked
         Account Bank, unless the Purchaser shall have received notice of such
         addition, termination or change (including an updated Exhibit A) and a
         fully executed Blocked Account Agreement with respect to each new
         Blocked Account.

                  (h)      Deposits to Blocked Accounts. The Seller will
         instruct all Obligors to remit all their payments in respect of the
         Receivables to the Seller or to a Blocked

                                       12
<PAGE>

         Account. If the Seller shall receive any Collections directly, the
         Seller shall promptly (and in any event within one Business Day)
         deposit the same into a Blocked Account. The Seller will not permit any
         funds to be deposited into any Blocked Account other than Collections.

                  (i)      Marking of Records. At its expense, the Seller will
         mark its master data processing records evidencing Receivables with a
         legend evidencing that Transferred Receivables and the related
         Contracts have been sold in accordance with this Agreement.

                  (j)      Audits. The Seller will, from time to time during
         regular business hours as requested by the Purchaser or its assigns
         upon reasonable prior notice and at the Seller's expense, permit the
         Purchaser, or its agents, representatives or assigns, (i) to examine
         and make copies of and abstracts from all books, records and documents
         (including, without limitation, computer tapes and disks) in the
         possession or under the control of the Seller relating to Receivables
         and the Related Security, including, without limitation, the related
         Contracts, and (ii) to visit the offices and properties of the Seller
         for the purpose of examining such materials described in clause (i)
         above, and to discuss matters relating to Receivables and the Related
         Security or the Seller's performance under the Transaction Documents or
         under the Contracts with any of the officers or employees of the Seller
         having knowledge of such matters.

                  (k)      Further Assurances; Change in Name or Jurisdiction of
         Organization, Etc. (i) The Seller agrees from time to time, at its
         expense, promptly to execute and deliver all further instruments and
         documents, and to take all further actions, that may be necessary or
         desirable, or that the Purchaser or its assignee may reasonably
         request, to perfect, protect or more fully evidence the Purchaser's
         ownership of the Transferred Receivables and/or the Purchaser's
         security interest described in Section 2.07, or to enable the Purchaser
         or its assignee to exercise and enforce its respective rights and
         remedies under this Agreement. Without limiting the foregoing, the
         Seller will, upon the request of the Purchaser or its assignee, execute
         and file such financing or continuation statements, or amendments
         thereto, and such other instruments and documents, that may be
         necessary or desirable or that the Purchaser or its assignee may
         reasonably request to perfect, protect, evidence or maintain the
         priority of the Purchaser's ownership of such Receivables or such
         security interest.

                           (ii)     The Seller authorizes the Purchaser or its
         assignee to file financing or continuation statements, and amendments
         thereto and assignments thereof, relating to the Receivables and the
         Related Security, the related Contracts and the Collections with
         respect thereto and the collateral described in Section 2.07 without
         the signature of the Seller. A photocopy or other reproduction of this
         Agreement shall be sufficient as a financing statement where permitted
         by law.

                           (iii)    The Seller shall perform its obligations
         under the Contracts related to the Transferred Receivables to the same
         extent as if the Transferred Receivables had not been sold or
         transferred.

                                       13
<PAGE>

                           (iv)     The Seller shall not take any action to
         change its jurisdiction of incorporation unless (i) the Purchaser shall
         have received at least thirty (30) days advance written notice of such
         change and all action by Seller necessary or appropriate to perfect or
         maintain the perfection of the Purchaser's interest in the Receivables
         and the collateral described in Section 2.07 (including, without
         limitation, the filing of all financing statements and the taking of
         such other action as the Purchaser may request in connection with such
         change) shall have been duly taken and (ii) the new jurisdiction of
         incorporation is a State within the United States of America.

                           (v)      The Seller will not change its name,
         identity or corporate structure unless the Purchaser shall have
         received at least thirty (30) days advance written notice of such
         change or relocation and all action by Seller necessary or appropriate
         to perfect or maintain the perfection of the Purchaser's interest in
         the Receivables and the collateral described in Section 2.07
         (including, without limitation, the filing of all financing statements
         and the taking of such other action as the Purchaser may request in
         connection with such change) shall have been duly taken.

                  (l)      Reporting Requirements. The Seller will provide or
         cause to be provided to the Purchaser and the Agent the following:

                           (i)      a Form 10-K for the Seller as soon as (and
         if) available and in any event within 120 days after the end of each
         fiscal year of the Seller, which will include an audited consolidated
         balance sheet of the Seller and its Consolidated Subsidiaries as of the
         end of such fiscal year and the related audited consolidated statements
         of income, cash flows and changes in common stockholders' equity for
         such fiscal year, setting forth in each case in comparative form the
         figures for the previous fiscal year, all reported on in a manner
         acceptable to the United States Securities and Exchange Commission
         independent public accountants of nationally recognized standing;
         provided, however; that such Form 10-K need not be provided if it is
         available, within the above referenced time period, via the EDGAR
         system of the United States Securities and Exchange Commission
         ("EDGAR") on the Internet;

                           (ii)     a Form 10-Q for the Seller as soon as (and
         if) available and in any event within 60 days after the end of each of
         the first three quarters of each fiscal year of the Seller, which will
         include a consolidated balance sheet of the Seller and its Consolidated
         Subsidiaries, as of the end of such quarter and the related
         consolidated statement of income for such quarter and for the portion
         of the Seller's fiscal year ended at the end of such quarter, and the
         related consolidated statement of cash flows for the portion of the
         Seller's fiscal year ended at the end of such quarter, setting forth in
         each case in comparative form (A) for the consolidated balance sheet,
         the figures as of the end of the Seller's previous fiscal year, (B) for
         the consolidated statement of income, the figures for the corresponding
         quarter and the corresponding portion of the Seller's previous fiscal
         year and (C) for the consolidated statement of cash flows, the figures
         for the corresponding portion of the Seller's previous fiscal year; the
         delivery of such financial statements shall constitute a certification
         (subject to normal year-end adjustments) as to fairness of presentation
         and conformity with generally accepted accounting principles
         consistently applied; provided, however, that such Form 10-Q need

                                       14
<PAGE>

         not be provided if it is available, within the above referenced time
         periods, via EDGAR on the Internet;

                           (iii)    as soon as practicable and in any event
         within five Business Days after obtaining knowledge of the occurrence
         of each Event of Termination or Incipient Event of Termination, a
         statement of a Financial Officer of the Seller setting forth details of
         such Event of Termination or Incipient Event of Termination and the
         action that the Seller has taken and proposes to take with respect
         thereto;

                           (iv)     promptly after the same become publicly
         available, all reports that the Seller or any of its Affiliates files
         with the Securities and Exchange Commission or distributes to its
         shareholders; provided, however, that such reports need not be provided
         if they are available via EDGAR on the Internet;

                           (v)      promptly after the filing or receiving
         thereof, copies of all reports and notices that the Seller or any
         Affiliate files under ERISA with the Internal Revenue Service or the
         Pension Benefit Guaranty Corporation or the U.S. Department of Labor or
         that the Seller or any Affiliate receives from any of the foregoing or
         from any multiemployer plan (within the meaning of Section 4001(a)(3)
         of ERISA) to which the Seller or any Affiliate is or was, within the
         preceding five years, a contributing employer, in each case in respect
         of the assessment of withdrawal liability or an event or condition
         which could, in the aggregate, result in the imposition of liability on
         the Seller and/or any such Affiliate in excess of $50,000,000, other
         than the liability for payment of amounts required to satisfy a minimum
         funding requirement standard under Section 302 of ERISA, or an
         alternative minimum funding standard under Section 305 of ERISA,
         provided that such required funding amounts do not include any waived
         funding deficiency within the meaning of Section 305 of ERISA;

                           (vi)     at least thirty (30) days prior to any
         change in the name or jurisdiction of organization of any Transaction
         Party, a notice setting forth the new name or jurisdiction of
         organization, as applicable, and the effective date thereof;

                           (vii)    at the time of the delivery of the financial
         statements provided for in clause (i) of this paragraph, a certificate
         of a Financial Officer of the Seller to the effect that, to the best of
         such officer's knowledge, no Event of Termination or Incipient Event of
         Termination has occurred and is continuing or, if any Event of
         Termination or Incipient Event of Termination has occurred and is
         continuing, specifying the nature and extent thereof;

                           (viii)   promptly upon learning thereof, notice of
         any downgrade in the Debt Rating (or the withdrawal by either S&P or
         Moody's of a Debt Rating) of any Transaction Party, setting forth the
         Debt affected and the nature of such change (or withdrawal);

                           (ix)     promptly after the occurrence thereof,
         notice of any event or condition that has had, or could reasonably be
         expected to have, a Material Adverse Effect; and

                                       15
<PAGE>

                           (x)      such other information respecting the
         Transferred Receivables or the condition or operations, financial or
         otherwise, of the Seller as the Purchaser may from time to time
         reasonably request.

                  (m)      Separate Conduct of Business. The Seller will: (i)
         maintain separate corporate records and books of account from those of
         the Purchaser; (ii) conduct its business from an office separate from
         that of the Purchaser; (iii) ensure that all oral and written
         communications, including without limitation, letters, invoices,
         purchase orders, contracts, statements and applications, will not be
         made in the name of the Purchaser; (iv) have stationery and other
         business forms separate from those of the Purchaser; (v) not hold
         itself out as having agreed to pay, or as being liable for, the
         obligations of the Purchaser; (vi) not engage in any transaction with
         the Purchaser except as contemplated by this Agreement or as permitted
         by the Purchase Agreement; and (vii) continuously maintain as official
         records the resolutions, agreements and other instruments underlying
         the transactions contemplated by this Agreement.

                  (n)      Taxes. The Seller will pay when due any taxes payable
         in connection with the Receivables, exclusive of taxes on or measured
         by income or gross receipts of the Purchaser.

                  (o)      Treatment as Sales. The Seller shall not account for
         or treat (whether in financial statements or otherwise) the
         transactions contemplated by this Agreement in any manner other than as
         a sale, contribution and/or absolute conveyance of Receivables by the
         Seller to the Purchaser except on the face of its financial statements
         (but not the notes thereto) to the extent required by the principles of
         consolidated financial reporting in accordance with generally accepted
         accounting principles.

                  SECTION 5.02. Intent of the Seller and the Purchaser. The
Seller and the Purchaser have structured this Agreement with the intention that
each Purchase of Receivables hereunder be treated as a sale of such Receivables
by the Seller to the Purchaser for all purposes and the contribution of
Receivables hereunder shall be treated as an absolute transfer of such
Receivables by the Seller to the Purchaser for all purposes (except that, in
accordance with applicable tax principles, each purchase and contribution may be
ignored for tax reporting purposes). The Seller and the Purchaser shall record
each Purchase and contribution as a sale or purchase or capital contribution, as
the case may be, on its books and records, and reflect each Purchase and
contribution in its financial statements as a sale or purchase or capital
contribution, as the case may be. In the event that, contrary to the mutual
intent of the Seller and the Purchaser, any Purchase or contribution of
Receivables hereunder is not characterized as a sale or absolute transfer, the
Seller shall, effective as of the date hereof, be deemed to have granted (and
the Seller hereby does grant) to the Purchaser a first priority security
interest in and to any and all Receivables, the Related Security, the
Collections in respect thereof and the proceeds thereof to secure the repayment
of all amounts advanced to the Seller hereunder with accrued interest thereon,
and this Agreement shall be deemed to be a security agreement.

                                       16
<PAGE>

                   ARTICLE VI. ADMINISTRATION AND COLLECTION

                  SECTION 6.01. Designation of Servicer. Consistent with the
Purchaser's ownership interest in the Transferred Receivables, the Seller
acknowledges and agrees that the servicing, administration and collection of the
Transferred Receivables shall be the responsibility and right of the Purchaser.
The Purchaser has advised the Seller that the servicing, administration and
collection of the Transferred Receivables shall be conducted by the Person
designated as the Servicer pursuant to the Purchase Agreement from time to time.
The Purchaser has requested the Seller to, and the Seller has agreed that it
will, act as the initial Servicer. All references to the Seller hereunder shall
include the Seller in its capacity as Servicer under the Purchase Agreement
until a successor Servicer is appointed thereunder.

                  SECTION 6.02. Certain Rights of the Purchaser. (a) The
Purchaser may, at any time, direct the Obligors of Transferred Receivables and
any Person obligated on any Related Security, or any of them, that payment of
all amounts payable under any Transferred Receivable shall be made directly to
the Purchaser or its designee. The Seller hereby transfers to the Purchaser (and
its assigns and designees) the exclusive ownership and control of the Blocked
Accounts maintained by the Seller for the purpose of receiving Collections and
the Seller shall take any further action that the Purchaser may reasonably
request to effect or further evidence such transfer.

                  (b)      At any time following the designation of a Servicer
other than the Seller:

                           (i)      At the Purchaser's request and at the
         Seller's expense, the Seller shall give notice of the Purchaser's
         ownership to each Obligor of Transferred Receivables and direct that
         payments of all amounts payable under the Transferred Receivables be
         made directly to the Purchaser or its designee.

                           (ii)     At the Purchaser's request and at the
         Seller's expense, the Seller shall (A) assemble all of the documents,
         instruments and other records (including, without limitation, computer
         tapes and disks) that evidence or relate to the Receivables, and the
         related Contracts and Related Security, or that are otherwise necessary
         or desirable to collect the Receivables, and shall make the same
         available to the Purchaser at a place selected by the Purchaser or its
         designee, and (B) segregate all cash, checks and other instruments
         received by it from time to time constituting Collections of
         Receivables in a manner acceptable to the Purchaser and, promptly upon
         receipt, remit all such cash, checks and instruments, duly indorsed or
         with duly executed instruments of transfer, to the Purchaser or its
         designee.

                  (c)      The Seller authorizes each of the Purchaser and the
Agent, and hereby irrevocably appoints each of the Purchaser and the Agent as
its attorney-in-fact coupled with an interest, with full power of substitution
and with full authority in place of the Seller, following the occurrence and
during the continuation of a Servicer Default, to take any and all steps in the
Seller's name and on behalf of the Seller, that are necessary or desirable, in
the determination of the Purchaser or the Agent, to collect amounts due under
the Receivables, including, without limitation, endorsing the Seller's name on
checks and other instruments representing Collections of Receivables and
enforcing the Receivables and the Related Security and related Contracts.

                                       17
<PAGE>

                  (d)      Following the occurrence of an Event of Termination,
the Seller shall, upon the request of the Purchaser or the Agent (and if the
Seller fails to do so, the Purchaser or the Agent may itself) deliver a notice
to all applicable Obligors, in form and substance satisfactory to the Purchaser
and the Agent, stating that (i) the Transferred Receivables have been sold to
the Purchaser and (ii) effective immediately all payments on the Transferred
Receivables must be made without any setoff. Such notice shall be delivered by
the Seller as soon as practicable and in any event within three Business Days
after such written request by the Purchaser or the Agent. From and after the
date the Purchaser or the Agent requests the Seller to deliver such notice, (i)
the Seller shall require all payments by Obligors to be made without any setoff,
and shall make available to the Agent and the Purchaser such information as may
be required to determine whether such payments are being so made and (ii) the
Seller and the Purchaser shall, and shall cause each other Transaction Party to,
pay, or cause to be paid, when due all amounts owing by any Transaction Party to
any Obligor without any set off of such amounts against Receivables due from
such Obligor.

                  SECTION 6.03. Rights and Remedies. (a) If the Seller (as
Servicer or otherwise) fails to perform any of its obligations under this
Agreement, the Purchaser may (but shall not be required to) cause performance
of, such obligation, and the costs and expenses of the Purchaser reasonably
incurred in connection therewith shall be payable by the Seller.

                  (b)      The Seller (as Servicer or otherwise) shall perform
all of its obligations under the Contracts related to the Transferred
Receivables to the same extent as if the Seller had not sold or contributed
Receivables hereunder and the exercise by the Purchaser of its rights hereunder
shall not relieve the Seller (as Servicer or otherwise) from such obligations or
its obligations with respect to the Transferred Receivables or the related
Contracts. The Purchaser shall not have any obligation or liability with respect
to any Transferred Receivables or related Contracts, nor shall the Purchaser be
obligated to perform any of the obligations of the Seller (as Servicer or
otherwise) thereunder.

                  (c)      The Seller shall cooperate with the Servicer in
collecting amounts due from Obligors in respect of the Transferred Receivables.

                  (d)      The Seller hereby grants to Servicer an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take or cause to be taken in the name of the Seller all steps necessary or
advisable to endorse, negotiate or otherwise realize on any Collections and any
checks, instruments or other proceeds of the Transferred Receivables held or
transmitted by the Seller or transmitted or received by the Purchaser (whether
or not from the Seller) in connection with any Transferred Receivable.

                  SECTION 6.04. Transfer of Records to Purchaser. Each Purchase
and contribution of Receivables hereunder shall include the transfer to the
Purchaser of all of the Seller's right and title to and interest in the records
relating to such Receivables and shall include an irrevocable non-exclusive
license to the use of the Seller's computer software system to access and create
such records. Such license shall be without royalty or payment of any kind, is
coupled with an interest, and shall be irrevocable until all of the Transferred
Receivables are either collected in full or become Defaulted Receivables. In
recognition of the Seller's need to have access to the records transferred to
the Purchaser hereunder, the Purchaser hereby grants to

                                       18
<PAGE>

the Seller an irrevocable license to access such records in connection with any
activity arising in the ordinary course of the Seller's business or in
performance of its duties as Servicer, provided that (i) the Seller shall not
disrupt or otherwise interfere with the Purchaser's use of and access to such
records during such license period, and (ii) the Seller consents to the
assignment and delivery of the records (including any information contained
therein relating to the Seller or its operations) to any assignees or
transferees of the Purchaser.

                       ARTICLE VII. EVENTS OF TERMINATION

                  SECTION 7.01. Events of Termination. If any of the following
events (each an "Event of Termination") shall occur and be continuing:

                  (a)      (i) The Servicer shall fail to perform or observe any
term, covenant or agreement under this Agreement (other than as referred to in
clause (ii) of this subsection (a)) and such failure shall remain unremedied for
three Business Days or (ii) any Transaction Party shall fail to make when due
any payment or deposit to be made by it under this Agreement or any other
Transaction Document; or

                  (b)      Any representation or warranty made or deemed made by
any Transaction Party (or any of their respective officers) under or in
connection with this Agreement or any other Transaction Document or any
certificate, report or other statement delivered by any Transaction Party
pursuant to this Agreement or any other Transaction Document shall prove to have
been incorrect or untrue in any material respect when made or deemed made or
delivered (unless such representation or warranty relates solely to one or more
specific Transferred Receivables and the Seller makes a deemed Collection
payment or repurchases such Receivable no later than the third Business Day
following the discovery of such breach of representation); or

                  (c)      Any Transaction Party shall fail to perform or
observe (i) any term, covenant or agreement contained in Section 5.01(a) of this
Agreement or (ii) any other term, covenant or agreement contained in this
Agreement or any other Transaction Document on its part to be performed or
observed and, solely in the case of this clause (ii), such failure shall remain
unremedied for 10 days after the first date on which such Transaction Party
receives written notice thereof from the Purchaser; or

                  (d)      (i) Any Transaction Party or any Consolidated
Subsidiary shall default beyond any applicable period of grace in any payment of
principal or interest on any indebtedness for any borrowed money for which such
Transaction Party or any Consolidated Subsidiary is liable in a principal amount
then outstanding of $25,000,000 or more or (ii) any other event of default
(other than a failure to pay principal or interest) shall occur under any
mortgage, indenture, agreement or instrument under which there may be issued, or
by which there may be secured or evidenced, any indebtedness for any borrowed
money for which any Transaction Party or any Consolidated Subsidiary is liable
in a principal amount then outstanding of $25,000,000 and either (A) the
occurrence of such event shall result in such indebtedness becoming or being
declared due and payable prior to the date on which it could otherwise become
due and payable or (B) the occurrence of such event shall permit the holders of
such indebtedness to declare such indebtedness to be due and payable prior to
the date on which it would otherwise become due and payable; or

                                       19
<PAGE>

                  (e)      Any Purchase or contribution of Receivables
hereunder, the Related Security and the Collections with respect thereto shall
for any reason cease to vest in the Purchaser valid and perfected ownership of
such Receivables, Related Security and Collections free and clear of any Adverse
Claim or the security interest created pursuant to Section 2.07 shall for any
reason cease to be a valid and perfected first priority security interest in the
collateral referred to in that Section; or

                  (f)      Any Transaction Party 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 a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Transaction
Party seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or 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, custodian or other similar
official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 45 days, or
any of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur; or any Transaction Party or any Material Subsidiary shall
take any corporate action to authorize any of the actions set forth above in
this subsection (f); or

                  (g)      There shall have occurred or shall exist any event or
condition which has had or will have a Material Adverse Effect; or

                  (h)      The Seller shall cease to own, directly or
indirectly, all of the outstanding membership interests of the Purchaser, free
and clear of any Adverse Claim; or

                  (i)      The Internal Revenue Service shall file notice of a
lien pursuant to Section 6323 of the IRC with regard to any of the assets of the
Purchaser or the Seller and such lien shall not have been released within five
Business Days, or the Pension Benefit Guaranty Corporation shall, or shall
indicate its intention to, file notice of a lien pursuant to Section 4068 of
ERISA with regard to any of the assets of the Purchaser, the Seller or any
Subsidiaries of the Seller; or

                  (j)      One or more judgments or decrees shall be entered
against any Transaction Party or any Consolidated Subsidiary involving in the
aggregate a liability (not paid or fully covered by insurance) of $5,000,000 or
more and all such judgments or decrees shall not have been vacated, dismissed,
discharged, bonded or stayed within 30 days from the entry thereof; or

then, and in any such event, the Purchaser may, by notice to the Seller, declare
the Termination Date to have occurred (in which case the Termination Date shall
be deemed to have occurred); provided that, automatically upon the occurrence of
any event (without any requirement for the giving of notice) described in
subsection (f) of this Section 7.01, the Termination Date shall occur, the
Seller (if it is then serving as the Servicer) shall cease to be the Servicer,
and the Agent or its designee shall become the Servicer. Upon any such
declaration or designation or upon such automatic termination, the Purchaser
shall have, in addition to the rights and remedies

                                       20
<PAGE>

under this Agreement, all other rights and remedies with respect to the
Receivables provided after default under the UCC and under other applicable law,
which rights and remedies shall be cumulative.

                         ARTICLE VIII. INDEMNIFICATION

                  SECTION 8.01. Indemnities by the Seller. Without limiting any
other rights that the Purchaser and its assigns (including without limitation,
the Agent, the "Purchasers" under the Purchase Agreement and their respective
Affiliates) (each, an "Indemnified Party") may have hereunder or under
applicable law, the Seller hereby agrees to indemnify each Indemnified Party
from and against any and all claims, losses and liabilities (including
reasonable attorneys' fees) (all of the foregoing being collectively referred to
as "Indemnified Amounts") arising out of or resulting from this Agreement or any
other Transaction Document or the acquisition by the Purchaser of any Receivable
excluding, however, Indemnified Amounts to the extent the same includes losses
in respect of Receivables that are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor. Without limiting
the generality of the foregoing indemnification, the Seller shall indemnify each
Indemnified Party for all Indemnified Amounts resulting from any of the
following:

                           (i)      the failure of any Transferred Receivable
         included as an Eligible Receivable in the calculation of the Net
         Receivables Pool Balance on any Monthly Report to satisfy the
         requirements of eligibility contained in the definition of "Eligible
         Receivable" as of the date of The information reported in such Monthly
         Report;

                           (ii)     any representation or warranty or statement
         made or deemed made by any Transaction Party (or any of their
         respective officers) under or in connection with this Agreement or any
         of the other Transaction Documents which shall have been incorrect in
         any respect when made;

                           (iii)    the failure by any Transaction Party to
         comply with any applicable law, rule or regulation with respect to any
         Receivable or the related Contract; or the failure of any Receivable or
         the related Contract to conform to any such applicable law, rule or
         regulation;

                           (iv)     the failure to vest in the Purchaser (a)
         absolute ownership of each Transferred Receivable and the Related
         Security and Collections in respect thereof, and (b) a first priority
         perfected security interest in all of the property described in Section
         2.07, in each case free and clear of any Adverse Claim;

                           (v)      the failure to have filed, or any delay in
         filing, financing statements or other similar instruments or documents
         under the UCC of any applicable jurisdiction or other applicable laws
         with respect to any Receivables and the Related Security and
         Collections in respect thereof, whether at the time of any Purchase or
         contribution or at any subsequent time;

                           (vi)     any dispute, claim or defense (other than
         discharge in bankruptcy) of an Obligor to the payment of any Receivable
         (including, without limitation, a defense based on such Receivable or
         the related Contract not being a legal, valid and binding

                                       21
<PAGE>

         obligation of such Obligor enforceable against it in accordance with
         its terms), or any other claim resulting from the sale of the
         merchandise, goods or services related to such Receivable or the
         furnishing or failure to furnish such merchandise, goods or services or
         relating to collection activities with respect to such Receivable;

                           (vii)    any failure of any Transaction Party to
         perform its duties or obligations in accordance with the provisions
         hereof and each other Transaction Document or to perform its duties or
         obligations under the Contracts or to timely and fully comply in all
         respects with the Seller's Credit and Collection Policy in regard to
         each Receivable and the related Contract;

                           (viii)   any products liability, environmental or
         other claim arising out of or in connection with merchandise, goods or
         services which are the subject of any Contract issued by the Seller or
         any Contract related thereto;

                           (ix)     the commingling of Collections of
         Transferred Receivables at any time with other funds;

                           (x)      any investigation, litigation or proceeding
         (actual or threatened) related to this Agreement or any other
         Transaction Document or the use of proceeds of purchases or the
         ownership of Transferred Receivables or in respect of any Receivable or
         Related Security or Contract;

                           (xi)     any failure of any Transaction Party to
         comply with its covenants contained in this Agreement or any other
         Transaction Document;

                           (xii)    any setoff with respect to any Receivable;

                           (xiii)   any claim brought by any Person other than
         an Indemnified Party arising from any activity by the Seller or any
         Affiliate of the Seller in servicing, administering or collecting any
         Receivable; or

                           (xiv)    the failure by any Transaction Party to pay
         when due any taxes, including, without limitation, sales, excise or
         personal property taxes.

                  Notwithstanding anything to the contrary in this Agreement,
solely for purposes of the Seller's indemnification obligations in this Article
VIII, any representation, warranty or covenant qualified by the occurrence or
non-occurrence of a Material Adverse Effect or similar concepts of materiality
shall be deemed to be not so qualified.

                           ARTICLE IX. MISCELLANEOUS

                  SECTION 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or consent to any departure by the Seller therefrom
shall be effective unless in a writing signed by the Purchaser and (so long as
the Purchase Agreement is in effect) the Agent (and, in the case of any
amendment, also signed by the Seller), and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of the Purchaser to exercise,
and no delay in

                                       22
<PAGE>

exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.

                  SECTION 9.02. Notices, Etc. All notices and other
communications hereunder shall, unless otherwise stated herein, be in writing
(which shall include facsimile communication) and be faxed or delivered, to each
party hereto, at its address set forth under its name on the signature pages
hereof or at such other address as shall be designated by such party in a
written notice to the other parties hereto. Notices and communications by
facsimile shall be effective when sent (and shall be followed by hard copy sent
by regular mail), and notices and communications sent by other means shall be
effective when received.

                  SECTION 9.03. Binding Effect; Assignability. (a) This
Agreement shall be binding upon and inure to the benefit of the Seller, the
Purchaser and their respective successors and assigns; provided, however, that
the Seller may not assign its rights or obligations hereunder or any interest
herein without the prior written consent of the Purchaser. The Purchaser may
assign all or any part of its rights and obligations hereunder without the
consent of the Seller. In connection with any sale or assignment by the
Purchaser of all or a portion of the Transferred Receivables, the buyer or
assignee, as the case may be, shall, to the extent of its purchase or
assignment, have all rights of the Purchaser under this Agreement (as if such
buyer or assignee, as the case may be, were the Purchaser hereunder) subject to
the terms of the agreement between the Purchaser and such buyer or assignee, as
the case may be.

                  (b)      This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms, and
shall remain in full force and effect until such time, after the Termination
Date, when all of the Transferred Receivables are either collected in full or
become Defaulted Receivables; provided, however, that rights and remedies with
respect to any breach of any representation and warranty made by the Seller
pursuant to Article IV and the provisions of Article VIII and Sections 9.04,
9.05 and 9.06 shall be continuing and shall survive any termination of this
Agreement.

                  SECTION 9.04. Costs, Expenses and Taxes. (a) In addition to
the rights of indemnification granted to the Purchaser pursuant to Article VIII
hereof, the Seller agrees to pay on demand all reasonable costs and expenses in
connection with the preparation, execution and delivery of this Agreement and
the other documents and agreements to be delivered hereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Purchaser with respect thereto and with respect to advising the Purchaser as to
its rights and remedies under this Agreement, and the Seller agrees to pay all
costs and expenses, if any (including reasonable counsel fees and expenses), in
connection with the enforcement of this Agreement and the other documents to be
delivered hereunder.

                  (b)      In addition, the Seller agrees to pay any and all
stamp and other taxes and fees payable in connection with the execution,
delivery, filing and recording of this Agreement or the other documents or
agreements to be delivered hereunder, and the Seller agrees to save each
Indemnified Party harmless from and against any liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.

                                       23
<PAGE>

                  SECTION 9.05. No Proceedings. The Seller hereby agrees that it
will not institute against the Purchaser any proceeding of the type referred to
in Section 7.01(f) so long as there shall not have elapsed one year plus one day
since the later of (i) the Termination Date and (ii) the date on which all of
the Transferred Receivables are either collected in full or are written off in
accordance with the applicable Credit and Collection Policy.

                  SECTION 9.06. Confidentiality. Each party hereto agrees to
maintain the confidentiality of this Agreement in communications with third
parties and otherwise; provided that this Agreement may be disclosed to (i) any
Person party to the Purchase Agreement, (ii) such party's legal counsel and
auditors and the Purchaser's assignees, if they agree in each case to hold it
confidential and (iii) to the extent required by applicable law or regulation or
by any court, regulatory body or agency having jurisdiction over such party; and
provided, further, that if the Purchaser requests the Bank Purchasers to extend
the "Scheduled Commitment Termination Date" under the Purchase Agreement and
part or all of the Bank Purchasers decline to grant such extension, then the
Purchaser may disclose this Agreement to other financial institutions for
purposes of securing a replacement bank or receivables purchase facility.
Notwithstanding any other provision herein, each party hereto (and each of their
employees, representatives or other agents) may disclose to any and all persons,
without limitation of any kind, the U.S. tax treatment and U.S. tax structure of
the Transaction Documents and all materials of any kind (including opinions or
other tax analyses) that are provided to such party relating to such U.S. tax
treatment and U.S. tax structure, other than any information for which
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.

                  SECTION 9.07. GOVERNING LAW. THIS AGREEMENT SHALL, IN
ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF THAT
WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO
THE EXTENT THAT, PURSUANT TO THE UCC OF THE STATE OF NEW YORK, THE PERFECTION
AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE PURCHASER'S OWNERSHIP OF
OR SECURITY INTEREST IN THE RECEIVABLES OR OTHER ASSETS ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

                  SECTION 9.08. Third Party Beneficiary. Each of the parties
hereto hereby acknowledges that the Purchaser may assign all or any portion of
its rights under this Agreement and that such assignees may (except as otherwise
agreed to by such assignees) further assign their rights under this Agreement,
and the Seller hereby consents to any such assignments. All such assignees,
including parties to the Purchase Agreement in the case of assignment to such
parties, shall be third party beneficiaries of, and shall be entitled to enforce
the Purchaser's rights and remedies under, this Agreement to the same extent as
if they were parties thereto, subject to the terms of their agreement with the
Purchaser.

                  SECTION 9.09. Subordination. (a) The Seller agrees that any
indebtedness, obligation or claim it may from time to time hold or otherwise
have (including, without limitation, any obligation or claim in respect of the
Deferred Purchase Price) against the

                                       24
<PAGE>

Purchaser or any assets or properties of the Purchaser, whether arising
hereunder or otherwise existing, shall be subordinate in right of payment to the
prior payment in full of all Senior Obligations; provided, however, that so long
as no Event of Termination has occurred and is continuing, Seller may accept
payments of any such obligations. In addition, the Seller acknowledges the
subordination provisions set forth in the promissory note evidencing the
Deferred Purchase Price (the "Deferred Purchase Price Note"), the form of which
is attached hereto as Exhibit B, and agrees to be bound thereby. The
subordination provisions contained herein and in such promissory note are for
the direct benefit of, and may be enforced by, each of the Persons to whom
Senior Obligations are owed.

                  (b)      Except as otherwise provided herein, the obligations
and liabilities of the Seller under this Agreement and the other Transaction
Documents (collectively, the "Seller Obligations") shall not be subject to
deduction of any kind or type, except by payment in full of the amount thereof
in accordance with the terms thereof. The Seller hereby waives any right it may
now or at any time hereafter have to set-off against any Seller Obligation any
obligation or liability from time to time owing by the Purchaser to the Seller
except as expressly set forth herein.

                  SECTION 9.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same agreement.

                  SECTION 9.11. Integration; Survival of Termination. This
Agreement and the other Transaction Documents executed by the parties hereto on
the date hereof contain the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof superceding all prior oral or written understandings.
Any provisions of this Agreement which are prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

                  SECTION 9.12. Consent to Jurisdiction. (a) Each party hereto
hereby irrevocably submits to the non-exclusive jurisdiction of any New York
State or Federal court sitting in New York City in any action or proceeding
arising out of or relating to this Agreement, and each party hereto hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such New York State court or, to the extent permitted
by law, in such Federal court. The parties hereto hereby irrevocably waive, to
the fullest extent they may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding. The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.

                  (b)      Each of the Seller and the Purchaser consents to the
service of any and all process in any such action or proceeding by the mailing
of copies of such process to it at its address specified in Section 9.02.
Nothing in this Section 9.12 shall affect the right of any other Transaction
Party to serve legal process in any manner permitted by law.

                                       25
<PAGE>

                  SECTION 9.13. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO ,
OR CONNECTED WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       26
<PAGE>

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

SELLER AND SERVICER:                   NORTHERN INDIANA PUBLIC SERVICE

                                       By: /s/ David J. Vadja
                                           Name: David J. Vadja
                                           Title: Vice President and Treasurer

                                           801 E. 86th Avenue
                                           Merrillville, IN 46410
                                           Attention: Treasurer
                                           Telecopier: (219) 647-6180

PURCHASER:                             NIPSCO RECEIVABLES CORPORATION

                                       By: /s/ David J. Vadja
                                           Name: David J. Vadja
                                           Title: Vice President and Treasurer

                                           801 E. 86th Avenue
                                           Merrillville, IN 46410
                                           Attention: Treasurer
                                           Telecopier: (219) 647-6180

                                       27
<PAGE>

                                     ANNEX A

             Additional Representations and Warranties of the Seller

1.       This Agreement creates a valid and continuing security interest (as
         defined in the applicable UCC) in the Receivables, the Related Security
         and Collections with respect thereto and the Blocked Accounts in favor
         of the Purchaser (and its assigns), which security interest is prior to
         all other Adverse Claims, and is enforceable as such against the
         creditors of and purchasers from the Seller.

2.       The Receivables constitute "accounts" within the meaning of the
         applicable UCC.

3.       The Seller owns and has good title to the Receivables, the Related
         Security and Collections with respect thereto and the Blocked Accounts,
         free and clear of any Adverse Claim, claim or encumbrance of any
         Person.

4.       The Seller has caused or will have caused, within ten days, the filing
         of all appropriate financing statements in the proper filing office in
         the appropriate jurisdictions under applicable law in order to perfect
         the security interest in the Receivables, the Related Security and
         Collections with respect thereto and the Blocked Accounts granted to
         the Purchaser (and its assigns), hereunder.

5.       Other than the security interest granted to the Purchaser (and its
         assigns) pursuant to this Agreement, the Seller has not pledged,
         assigned, sold, granted a security interest in, or otherwise conveyed
         any of the Receivables, the Related Security and Collections with
         respect thereto or the Blocked Accounts. The Seller has not authorized
         the filing of and is not aware of any financing statements against the
         Seller that include a description of collateral covering the
         Receivables, the Related Security and Collections with respect thereto
         or the Blocked Accounts other than any financing statement relating to
         the security interest granted to the Purchaser (and its assigns)
         hereunder or that has been terminated. The Seller is not aware of any
         judgment or tax lien filings against the Seller.<PAGE>

================================================================================
                                                                    EXHIBIT 10.5

                             JASPER COUNTY, INDIANA,

                                     Issuer

                                       AND

                    NORTHERN INDIANA PUBLIC SERVICE COMPANY,

                                     Company

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

                               FINANCING AGREEMENT

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

                          Dated as of December 1, 2003

         The amounts payable to Jasper County, Indiana (the "Issuer") (except
for amounts payable to, and certain rights and privileges of, the Issuer under
Sections 3.4, 4.2(f), 5.3, 5.9, 5.10, 6.3, 6.4 and 6.5 hereof and any rights of
the Issuer to receive any notices, certificates, requests, requisitions or
communication hereunder) and certain other rights of the Issuer under this
Financing Agreement have been pledged and assigned to National City Bank of
Indiana, as Trustee, under the Indenture of Trust dated as of December 1, 2003,
from the Issuer.

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

<PAGE>

                               FINANCING AGREEMENT

                                TABLE OF CONTENTS

             (This Table of Contents is not a part of this Agreement
                   and is only for convenience of reference.)

<TABLE>
<CAPTION>
SECTION                                              HEADING                                                     PAGE
<S>                                                                                                              <C>
ARTICLE I                DEFINITIONS...........................................................................    1

ARTICLE II               REPRESENTATIONS.......................................................................    6

       Section 2.1.      Representations and Covenants by the Issuer...........................................    6
       Section 2.2.      Representations and Covenants by the Company..........................................    7

ARTICLE III              ISSUANCE OF THE BONDS.................................................................    8

       Section 3.1.      Agreement to Issue Bonds; Application of Bond Proceeds................................    8
       Section 3.2.      Investments...........................................................................    8
       Section 3.3.      Arbitrage Covenant....................................................................    9
       Section 3.4.      Costs of Issuance.....................................................................    9

ARTICLE IV               LOAN AND PROVISIONS FOR REPAYMENT.....................................................    9

       Section 4.1.      Loan of Bond Proceeds.................................................................    9
       Section 4.2.      Loan Repayments and Other Amounts Payable.............................................   10
       Section 4.3.      No Defense or Set-Off.................................................................   12
       Section 4.4.      Payments Pledged and Assigned.........................................................   12
       Section 4.5.      Certain Payments to Paying Agent......................................................   13
       Section 4.6.      Payment of the Bonds and Other Amounts................................................   13

ARTICLE V                SPECIAL COVENANTS AND AGREEMENTS......................................................   13

       Section 5.1.      Company to Maintain its Corporate Existence; Conditions under Which
                             Exceptions Permitted..............................................................   13
       Section 5.2.      Financial Statements..................................................................   14
       Section 5.3.      Maintenance and Repair; Insurance; Taxes; Etc.........................................   14
       Section 5.4.      Recordation and Other Instruments.....................................................   14
       Section 5.5.      No Warranty by the Issuer.............................................................   14
       Section 5.6.      Agreement as to Ownership and Use of the Project......................................   15
       Section 5.7.      Company to Furnish Notice of Adjustments of Interest Rate Periods.....................   15
       Section 5.8.      Information Reporting.................................................................   15
       Section 5.9.      Limited Liability of Issuer...........................................................   15
       Section 5.10.     Tax Exempt Status of the Bonds........................................................   16
</TABLE>

                                      -i-

<PAGE>

<TABLE>
<S>                                                                                                               <C>
ARTICLE VI               EVENTS OF DEFAULT AND REMEDIES........................................................   16

       Section 6.1.      Events of Default Defined.............................................................   16
       Section 6.2.      Remedies on Default...................................................................   18
       Section 6.3.      No Remedy Exclusive...................................................................   18
       Section 6.4.      Agreement to Pay Fees and Expenses of Counsel.........................................   19
       Section 6.5.      No Additional Waiver Implied by One Waiver; Consents to Waivers.......................   19

ARTICLE VII              OPTION AND OBLIGATION OF COMPANY TO PREPAY............................................   19

       Section 7.1.      Option to Prepay......................................................................   19
       Section 7.2.      Obligation to Prepay..................................................................   20
       Section 7.3.      Notice of Prepayment; Amount to Be Prepaid............................................   20
       Section 7.4.      Cancellation at Expiration of Term....................................................   21

ARTICLE VIII             MISCELLANEOUS.........................................................................   21

       Section 8.1.      Notices...............................................................................   21
       Section 8.2.      Assignments...........................................................................   21
       Section 8.3.      Severability..........................................................................   21
       Section 8.4.      Execution in Counterparts.............................................................   22
       Section 8.5.      Amounts Remaining in Bond Fund........................................................   22
       Section 8.6.      Amendments, Changes and Modifications.................................................   22
       Section 8.7.      Governing Law.........................................................................   22
       Section 8.8.      Authorized Issuer and Company Representatives.........................................   22
       Section 8.9.      Amendments, Changes and Modifications of Reimbursement Agreements.....................   22
       Section 8.10.     Term of the Agreement.................................................................   23
       Section 8.11.     Insurer as Third Party Beneficiary....................................................   23
</TABLE>

                                      -ii-

<PAGE>

         THIS FINANCING AGREEMENT made and entered into as of the first day of
December, 2003, by and between JASPER COUNTY, INDIANA, a political subdivision
of the State of Indiana (hereinafter sometimes referred to as the "Issuer"), and
NORTHERN INDIANA PUBLIC SERVICE COMPANY, a corporation duly organized and
existing under the laws of the State of Indiana (hereinafter sometimes referred
to as the "Company"),

                              W I T N E S S E T H:

         In consideration of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows (provided, that in
the performance of the agreements of the Issuer herein contained, any obligation
it may thereby incur shall not constitute or give rise to a pecuniary liability
or a charge upon its general credit or against its taxing powers but shall be
payable solely out of the proceeds derived from this Financing Agreement and the
Bonds, as hereinafter defined):

                                    ARTICLE I

                                   DEFINITIONS

         The following terms shall have the meanings specified in this Article
unless the context requires otherwise. The singular shall include the plural and
the masculine shall include the feminine.

         "Act" means, collectively, Indiana Code Title 36, Article 7, Chapters
11.9 and 12, as supplemented and amended, and Indiana Code Title 5, Article 1,
Chapter 5, as supplemented and amended.

         "Act of Bankruptcy" means the filing of a petition in bankruptcy by or
against the Company or the Issuer under the United States Bankruptcy Code.

         "Administrative Expenses" means the reasonable and necessary expenses
(including the reasonable value of employee services and reasonable fees and
expenses of Counsel) incurred by the Issuer in connection with the Bonds, this
Agreement, the Indenture and any transaction or event contemplated by this
Agreement or the Indenture.

         "Agreement" means this Financing Agreement between the Issuer and the
Company, and all amendments and supplements hereto.

         "Authorized Company Representative" means any person who, at the time,
shall have been designated as such by a written certificate furnished to the
Issuer, the Remarketing Agent and the Trustee containing the specimen signature
of such person and signed on behalf of the Company by any officer of the
Company. Such certificate may designate an alternate or alternates.

<PAGE>

         "Authorized Issuer Representative" means any person at the time
designated to act on behalf of the Issuer by a written certificate furnished to
the Company and the Trustee containing the specimen signature of such person and
signed on behalf of the Issuer by one of its Commissioners or its County
Auditor. Such certificate may designate an alternate or alternates.

         "Bond" or "Bonds" means any one or more of the bonds authorized,
authenticated and delivered under the Indenture.

         "Bond Counsel" means nationally recognized municipal bond counsel
mutually acceptable to the Issuer, the Trustee and the Company.

         "Bond Fund" means the fund created by Section 702 of the Indenture.

         "Bondholder" or "Owner" or "owner of Bonds" means the Person or Persons
in whose name or names a Bond shall be registered on books of the Issuer kept by
the Registrar for that purpose in accordance with the terms of the Indenture.

         "Business Day" means a day on which banks located in the city or cities
in which the principal offices of the Trustee, the Paying Agent and the
Remarketing Agent are located, are not required or authorized to remain closed
and on which The New York Stock Exchange is not closed.

         "Code" means the United States Internal Revenue Code of 1986, as
amended, and regulations thereunder or under prior law applicable thereto.

         "Company" means Northern Indiana Public Service Company, an Indiana
corporation, and its successors and assigns and any surviving, resulting or
transferee corporation as permitted under Section 5.1 hereof.

         "Counsel" means an attorney at law or a firm of attorneys (who may be
an employee of or counsel to the Issuer or the Company or the Trustee) duly
admitted to the practice of law before the highest court of any state of the
United States of America or of the District of Columbia.

         "Extraordinary Services" and "Extraordinary Expenses" mean all services
rendered and all reasonable expenses (including reasonable fees and expenses of
Counsel) incurred under the Indenture and the Tax Agreement other than Ordinary
Services and Ordinary Expenses.

         "Force Majeure" means acts of God, strikes, lockouts or other
industrial disturbances; acts of public enemies; orders or restraints of any
kind of the governments of the United States or of the State, or any of their
departments, agencies or officials, or any other civil or military authority;
insurrections; riots; landslides; lightning; earthquakes; fires; tornadoes;
volcanoes; storms; droughts; floods; explosions, breakage, or malfunction or
accident to machinery, transmission lines, pipes or canals, even if resulting
from negligence; civil disturbances; or any other cause not reasonably within
the control of the Company.

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<PAGE>

         "Governing Body" means the County Council of the Issuer.

         The words "hereof," "herein," "hereunder" and other words of similar
import refer to this Agreement as a whole.

         "Indenture" means the Indenture of Trust relating to this Agreement
between the Issuer and National City Bank of Indiana, as Trustee, of even date
herewith, pursuant to which the Bonds are authorized to be issued, including any
indentures supplemental thereto or amendatory thereof.

         "Insurance Policy" means the financial guaranty insurance policy issued
by the Insurer insuring the payment when due of the principal of and interest on
the Bonds as provided therein.

         "Insurer" means Ambac Assurance Corporation, a Wisconsin-domiciled
stock insurance company, and its successors and assigns.

         "Issuer" means Jasper County, Indiana, a political subdivision of the
State of Indiana, and any successor body to the duties or functions of the
Issuer, and, for purposes of any exculpatory and indemnity provisions of this
Agreement and the Indenture, the term "Issuer" also includes the Jasper County
Economic Development Commission.

         "Loan Repayments" means the payments to be made by the Company pursuant
to Section 4.2 of the Agreement.

         "Moody's" means Moody's Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, its successors
and their assigns, and, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, "Moody's"
shall be deemed to refer to any other nationally recognized securities rating
agency designated by the Company, with notice to the Trustee and the Remarketing
Agent, if any.

         "Ordinance" means the Ordinance duly adopted and approved by the
Governing Body of the Issuer on September 16, 2003, authorizing the issuance and
sale of the Bonds and the execution of this Agreement and the Indenture.

         "Ordinary Services" and "Ordinary Expenses" mean those services
normally rendered and those expenses, including reasonable fees and expenses of
Counsel, normally incurred by a trustee or paying agent under instruments
similar to the Indenture.

         "Outstanding," "outstanding" or "Bonds Outstanding," in connection with
the Bonds means, as of the time in question, all Bonds authenticated and
delivered under the Indenture, except:

                  A.       Bonds theretofore cancelled or required to be
         cancelled under Section 210 or 712 of the Indenture;

                                      -3-
<PAGE>

                  B.       Bonds which are deemed to have been paid in
         accordance with Article IX of the Indenture; and

                  C.       Bonds (including Bonds which are deemed to have been
         purchased pursuant to Sections 401(e), 402(c), 403(f) and 404(d) of the
         Indenture) in substitution for which other Bonds have been
         authenticated and delivered pursuant to Article II of the Indenture.

In determining whether the Owners of a requisite aggregate principal amount of
outstanding Bonds have concurred in any request, demand, authorization,
direction, notice, consent or waiver under the provisions of the Indenture,
Bonds which are owned of record by the Company or any affiliate thereof or held
by the Trustee for the account of the Company shall be disregarded and deemed
not to be Outstanding under the Indenture for the purpose of any such
determination (except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Bonds which the Trustee knows to be so owned or
held shall be disregarded) unless all Bonds are owned by the Company or any
affiliate thereof and/or held by the Trustee for the account of the Company, in
which case such Bonds shall be considered outstanding for the purpose of such
determination. For the purpose of this definition, an "affiliate" of any
specified Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person and "control," when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

         "Person" means natural persons, firms, partnerships, associations,
limited liability companies, corporations, trusts and public bodies.

         "Prior Agreement" means the Financing Agreement dated as of July 1,
1991, entered into by and between the Issuer and the Company in connection with
the issuance of the Prior Bonds.

         "Prior Bonds" means the $55,000,000 aggregate principal amount of
Jasper County, Indiana Collateralized Pollution Control Refunding Revenue Bonds
(Northern Indiana Public Service Company Project) Series 1991, which were
previously issued on July 9, 1991 by the Issuer to refund obligations issued to
finance a portion of the cost of acquisition, construction and installation of
the Project and which Bonds are to be refunded with the proceeds of the Bonds.

         "Prior Indenture" means the Indenture of Trust securing the Prior Bonds
between the Issuer and National City Bank of Indiana, successor to Merchants
National Bank & Trust Company of Indianapolis, as trustee, and dated as of July
1, 1991.

         "Prior Trustee" means the trustee under the Prior Indenture.

         "Project" means certain air and water pollution control, and sewage and
solid waste disposal facilities at Units 17 and 18 of the Company's Rollin M.
Schahfer Generating Station

                                      -4-
<PAGE>

located in Jasper County, Indiana and owned by the Company, as described in
Exhibit A to the Prior Agreement.

         "Project and Refunding Certificate" means the Company's certificate
delivered concurrently with the issuance of the Bonds with respect to certain
facts which are within the knowledge of the Company to enable Bond Counsel to
determine whether interest on the Bonds is subject to income taxation under
applicable provisions of the Code.

         "Recording Officer" means the County Auditor of the Issuer.

         "Registrar" means the Paying Agent as provided in Section 204 of the
Indenture.

         "Reimbursement Agreement" means the Insurance Agreement dated as of
December __, 2003, by and between the Company and the Insurer, and any and all
modifications, amendments and supplements thereto.

         "Remarketing Agent" means the remarketing agent appointed in accordance
with Section 1301 of the Indenture and any permitted successor thereto.

         "Revenues" means the amounts pledged under the Indenture to the payment
of principal of, premium, if any, and interest on the Bonds, consisting of the
following: (i) all amounts payable from time to time by the Company in respect
of the indebtedness under this Agreement, and all receipts of the Trustee
credited under the provisions of the Indenture against said amounts payable,
(ii) any portion of the net proceeds of the Bonds deposited with the Trustee
under Section 703 of the Indenture and (iii) any amounts paid into the Bond
Fund, including income on investments. Revenues shall not include any amounts
payable by the Company to the Issuer pursuant to Sections 4.2(g), 5.3 and 6.4 of
this Agreement.

         "S&P" means Standard & Poor's [Ratings Services], a Division of The
McGraw-Hill Companies, Inc., a corporation organized and existing under the laws
of the State of New York, its successors and their assigns, and if such
corporation shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "S&P" shall be deemed to refer to any
other nationally recognized securities rating agency designated by the Company,
with notice to the Trustee and the Remarketing Agent, if any.

         "State" means the State of Indiana.

         "Trust Estate" means the property conveyed to the Trustee pursuant to
the Granting Clauses of the Indenture.

         "Trustee" means National City Bank of Indiana, the trustee named in the
Indenture, and any successor Trustee pursuant to Section 1106 or 1109 of the
Indenture at the time serving as successor Trustee thereunder.

         All other terms used herein which are defined in the Indenture shall
have the same meanings assigned them in the Indenture unless the context
otherwise requires.

                                      -5-
<PAGE>

                                   ARTICLE II

                                 REPRESENTATIONS

         Section 2.1. Representations and Covenants by the Issuer. The Issuer
makes the following representations and covenants as the basis for the
undertakings on its part herein contained:

                  (a)      The Issuer is a duly organized and existing political
         subdivision of the State.

                  (b)      The Issuer has issued and there are now outstanding
         and unpaid under the Prior Indenture the Prior Bonds in an aggregate
         principal amount of $55,000,000.

                  (c)      The Prior Agreement and Prior Indenture are in full
         force and effect, without amendment or supplement thereto.

                  (d)      No event has occurred and is continuing under the
         provisions of the Prior Agreement or Prior Indenture which event now
         constitutes, or with the lapse of time or the giving of notice, or
         both, would constitute an event of default under any of such prior
         documents.

                  (e)      To provide for the refunding of the Prior Bonds, the
         Issuer proposes to issue the Bonds in the amount and having the terms
         and conditions specified in Article II of the Indenture.

                  (f)      The Bonds are to be issued under and secured by the
         Indenture, pursuant to which certain of the Issuer's interests in this
         Agreement and the respective Revenues derived by the Issuer pursuant to
         this Agreement will be pledged and assigned to the Trustee as security
         for payment of the principal of, premium, if any, and interest on the
         Bonds.

                  (g)      The Governing Body of the Issuer has found that the
         refunding of the Prior Bonds will further the public purposes of the
         Act.

                  (h)      Simultaneously with the execution and delivery of
         this Agreement and the Indenture and the issuance of the Bonds, there
         have been deposited with the Prior Trustee the net proceeds of the
         Bonds (other than accrued interest thereon, if any), which will be used
         to pay the principal of the outstanding and unpaid Prior Bonds.

                  (i)      The Issuer has not assigned and will not assign its
         interest in this Agreement other than to secure the Bonds.

                  (j)      No member of the Board of Commissioners or of the
         County Council of the Issuer, nor any other officer or member of the
         Issuer and its Economic Development

                                      -6-
<PAGE>

         Commission, has any interest, financial, employment or other, in the
         Company or in the transactions contemplated hereby.

                  (k)      Neither the execution and delivery of this Agreement,
         the consummation of the transactions contemplated hereby, nor the
         fulfillment of or compliance with the terms and conditions of this
         Agreement conflicts with or results in a breach of the terms,
         conditions or provisions of any restriction or any agreement or
         instrument to which the Issuer is now a party or by which it is bound,
         or constitutes a default under any of the foregoing.

                  (l)      When executed by the Board of Commissioners of the
         Issuer, this Agreement will constitute a valid, binding and enforceable
         obligation of the Issuer.

         Section 2.2. Representations and Covenants by the Company. The Company
makes the following representations and covenants as the basis for the
undertakings on its part herein contained:

                  (a)      The Company is a corporation duly incorporated under
         the laws of the State and is validly existing in that State, is
         qualified to do business as a foreign corporation in all other states
         and jurisdictions wherein the nature of the business transacted by the
         Company or the nature of the property owned or leased by it makes such
         licensing or qualification necessary, has power to enter into and by
         proper corporate action has been duly authorized to execute and deliver
         this Agreement.

                  (b)      Neither the execution and delivery of this Agreement,
         the consummation of the transactions contemplated hereby, nor the
         fulfillment of or compliance with the terms and conditions of this
         Agreement, conflicts with or results in a breach of any of the terms,
         conditions or provisions of any corporate restriction or any agreement
         or instrument to which the Company is now a party or by which it is
         bound, or constitutes a default under any of the foregoing, or results
         in the creation or imposition of any lien, charge or encumbrance
         whatsoever upon any of the property or assets of the Company under the
         terms of any instrument or agreement other than the Indenture.

                  (c)      There have been issued and there are now outstanding
         and unpaid under the Prior Indenture the Prior Bonds in an aggregate
         principal amount of $55,000,000.

                  (d)      The Prior Agreement and Prior Indenture are in full
         force and effect, without amendment or supplement thereto.

                  (e)      No event has occurred and is continuing under the
         provisions of the Prior Agreement or Prior Indenture which event now
         constitutes, or with the lapse of time or the giving of notice, or
         both, would constitute an event of default under such prior documents.

                  (f)      There will be deposited with the Prior Trustee moneys
         and securities, including the net proceeds of the Bonds, in amounts
         sufficient to pay the principal of,

                                      -7-
<PAGE>

         premium and accrued interest on all of the outstanding and unpaid Prior
         Bonds on the dates fixed for redemption.

                  (g)      The statements, information and descriptions
         contained in the Project and Refunding Certificate, as of the date
         hereof and at the time of the delivery of the Bonds to the initial
         purchasers thereof, are and will be true, correct and complete, do not
         and will not contain any untrue statement or misleading statement of a
         material fact, and do not and will not omit to state a material fact
         required to be stated therein or necessary to make the statements,
         information and descriptions contained therein, in the light of the
         circumstances under which they were made, not misleading, and the
         estimates and the assumptions contained in the Project and Refunding
         Certificate, as of the date hereof and at the time of the delivery of
         the Bonds to the initial purchasers thereof, are and will be reasonable
         and based on the best information available to the Company.

                  (h)      All authorizations, approvals, licenses, permits,
         consents and orders of any governmental authority, legislative body,
         board, agency or commission having jurisdiction of the matter which are
         required for the due authorization of, which would constitute a
         condition precedent to, or the absence of which would materially
         adversely affect the due performance by the Company of its obligations
         under, this Agreement and the consummation of the transactions
         contemplated hereby have been duly obtained or will be obtained on or
         before the date of issuance of the Bonds except for such
         authorizations, approvals, licenses, permits, consents and orders as
         may be required under the Blue Sky or securities laws of any state in
         connection with the offering and sale of the Bonds.

                                   ARTICLE III

                              ISSUANCE OF THE BONDS

         Section 3.1. Agreement to Issue Bonds; Application of Bond Proceeds. In
order to provide funds to lend to the Company to refund the Prior Bonds, the
Issuer agrees that it will issue under the Indenture, sell and cause to be
delivered to the initial purchasers thereof, its Bonds in an aggregate principal
amount of $55,000,000, bearing interest and maturing as set forth in the
Indenture. Upon receipt of the net proceeds the Issuer will (a) deposit in the
Bond Fund sums equal to the accrued interest on the Bonds, if any, required to
be so deposited pursuant to Section 703 of the Indenture and (b) cause, in
accordance with Article IV of the Prior Indenture, the remainder of the proceeds
of the Bonds, to be used to pay to the owners of the Prior Bonds that portion of
the principal of the Prior Bonds to be retired thereby and cancelled by the
Prior Trustee upon the redemption thereof, on the dates fixed for redemption of
the Prior Bonds. The Company covenants that on or prior to the date of issuance
of the Bonds, such additional amounts as may be required to redeem the Prior
Bonds will be deposited with the Prior Trustee pursuant to the Prior Indenture
for such purpose.

         Section 3.2. Investments. Any moneys held as a part of the Bond Fund
shall be invested or reinvested by the Trustee at the written direction of an
Authorized Company Representative as

                                      -8-
<PAGE>

to specific investments, to the extent permitted by law and in particular by the
Act, and consented to in writing by the Insurer. In the absence of specific
instructions, the Trustee shall invest such moneys in the Armada Money Market
Treasury Fund (so long as such fund is rated AAAm-G, AAAm or AAm by S&P) or
other money market fund (so long as such fund is rated AAAm-G, AAAm or AAm by
S&P) that invests exclusively in short-term U.S. Treasury obligations including
repurchase agreements collateralized by such treasury obligations and
when-issued securities, U. S. Treasury bills, notes and other securities issued
or backed by the U. S. Government.

         The investments so purchased shall be held by the Trustee and shall be
deemed at all times a part of the Bond Fund and the interest accruing thereon
and any profit realized therefrom shall be credited to such fund, and any losses
resulting from such investment shall be charged to such fund and paid by the
Company.

         The Company shall not direct the Trustee to make any investments or
reinvestments other than those specified in the Act or otherwise permitted by
law. In making any such investments, the Trustee may rely on directions
delivered to it pursuant to this Section, and the Trustee shall be relieved of
all liability with respect to making such investments in accordance with such
directions. The Company agrees that to the extent any moneys in the Bond Fund
represent moneys held for the payment of the principal of Bonds which have
become due at maturity or on a redemption date and the premium, if any, on such
Bonds or interest due on Bonds in all cases where Bonds have not been presented
for payment and paid or such interest is unclaimed, or to the extent any moneys
are held by the Trustee for the payment of the purchase price of Bonds which
have not been presented for payment, such moneys shall not be invested.

         Section 3.3. Arbitrage Covenant. The Company covenants that none of the
proceeds of the Bonds or the payments to be made under this Agreement, or any
other funds which may be deemed to be proceeds of the Bonds pursuant to Section
148(a) of the Code, will be invested or used in such a way, and that no actions
will be taken or not taken, to violate or fail to comply with the Tax Agreement
and the applicable accounting, segregation, reporting and rebate requirements,
if any, of Section 148 of the Code and any regulations promulgated or proposed
thereunder.

         Section 3.4. Costs of Issuance. The Company covenants and agrees to pay
all costs incurred in connection with the issuance of the Bonds and the Issuer
shall have no obligation with respect to such costs.

                                   ARTICLE IV

                        LOAN AND PROVISIONS FOR REPAYMENT

         Section 4.1. Loan of Bond Proceeds. (a) The Issuer agrees, upon the
terms and conditions in this Agreement, to lend to the Company the gross
proceeds received by the Issuer from the sale of the Bonds in order to refund
the Prior Bonds and the Company agrees to apply the gross proceeds of such loan
to the refunding of the Prior Bonds.

                                      -9-
<PAGE>

         (b)      The Issuer and the Company expressly reserve the right to
enter into, to the extent permitted by law, an agreement or agreements other
than this Agreement, with respect to the issuance by the Issuer, under an
indenture or indentures other than the Indenture, of obligations to provide
additional funds to refund all or any principal amount of the Bonds, or any
combination thereof.

         (c)      Concurrently with the authentication and delivery by the
Issuer of the Bonds, the Company agrees to deliver the Insurance Policy and
agrees to pay all payments when due thereunder.

         Section 4.2. Loan Repayments and Other Amounts Payable. (a) On the
Business Day prior to each date provided in or pursuant to the Indenture for the
payment of principal (whether at maturity or upon redemption or acceleration)
of, premium, if any, and/or interest on the Bonds, until the principal of,
premium, if any, and interest on the Bonds shall have been fully paid or
provision for the payment thereof shall have been made in accordance with the
Indenture, the Company shall pay to the Trustee in immediately available funds,
for deposit in the Bond Fund, as a repayment installment of the loans of the
proceeds of the Bonds pursuant to Section 4.1 hereof, sums equal to the amounts
payable on such interest payment or redemption or acceleration or maturity dates
as principal (whether at maturity or upon redemption or acceleration), premium,
if any, and interest upon the Bonds as provided in the Indenture.

         Each repayment installment paid pursuant to this Section 4.2(a) shall
at all times be sufficient to pay the total amount of interest and principal
(whether at maturity or upon redemption or acceleration) and premium, if any,
payable on such interest payment or redemption or acceleration or maturity date,
as the case may be; provided that the Excess Amount (as hereinafter defined)
held by the Trustee in the Bond Fund on any such payment date shall be credited
against the payment due on such date; and provided further that, subject to the
provisions of the next succeeding sentence, if at any time the amount held by
the Trustee in the Bond Fund should be sufficient (and remain sufficient) to pay
at the times required the principal of, interest and premium, if any, on the
Bonds then remaining unpaid, the Company shall not be obligated to make any
further installment payments under this Section 4.2(a). Notwithstanding the
provisions of the preceding sentence, if on any date the Excess Amount held by
the Trustee in the Bond Fund is insufficient to make the then required payments
of principal (whether at maturity or upon redemption or acceleration), interest
and premium, if any, on the Bonds due on such date, the Company shall forthwith
pay such deficiency as a repayment installment hereunder. The term "Excess
Amount" as of any date shall mean the amount in the Bond Fund on such date in
excess of the amount required for payment of the principal of the Bonds which
have matured at maturity or on a redemption date and the premium, if any, on
such Bonds and interest due on Bonds in all cases where Bonds have not been
presented for payment and paid or such interest is unclaimed.

         (b)      In the event that for any reason moneys in the Bond Fund on
any Interest Payment Date or on any payment date of the Bonds (whether at
maturity, by redemption or acceleration or otherwise) are insufficient to pay
the principal of, premium, if any, or interest due on the Bonds on such date and
to the extent the Company has not made payment pursuant hereto, the Company
shall pay, and hereby unconditionally agrees to pay, to the Trustee for the
account of the Issuer

                                      -10-
<PAGE>

for deposit into the Bond Fund, until the principal of, premium, if any, and
interest on the Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture, in funds
immediately available to the Trustee (i) such sum as shall be necessary,
together with other moneys in the account available for the purpose, to pay the
amount payable on any such date as interest on the Bonds, as provided in the
Indenture and (ii) such sum as shall be necessary, together with other moneys in
the account available for the purpose, to pay the amount payable on any such
date as principal and premium, if any, on the Bonds as provided in the
Indenture. Each payment due under this subsection (c) shall at all times be
sufficient, together with any Excess Amount in the Bond Fund available for the
purpose, to pay the total amount of interest or interest and principal (whether
at stated maturity or by redemption or acceleration) and premium, if any,
payable on any such date with respect to the Bonds.

         (c)      The Company agrees to pay to the Trustee (i) an amount equal
to the annual fee of the Trustee for the Ordinary Services rendered by it and an
amount equal to the Ordinary Expenses incurred by it under the Indenture, as and
when the same become due, and (ii) the reasonable fees, charges and expenses of
the Paying Agent, as Registrar, and as paying agent, as and when the same become
due, and (iii) the reasonable fees, charges and expenses of the Trustee for
reasonable Extraordinary Services and Extraordinary Expenses, as and when the
same become due. In the event the Company should fail to make any of the
payments required in this Subsection, the item or installment so in default
shall continue as an obligation of the Company until the amount in default shall
have been fully paid.

         The Company agrees that the Trustee, its officers, agents, servants and
employees, shall not be liable for, and agrees that it will at all times
indemnify and hold harmless the Trustee, its officers, agents, servants and
employees against, and pay all expenses of the Trustee, its officers, agents,
servants and employees, relating to, any lawsuit, proceeding or claim resulting
from any action or omission taken or made by or on behalf of the Trustee, its
officers, agents, servants and employees pursuant to this Agreement or the
Indenture that may be occasioned by any cause (other than the negligence or
willful misconduct of the Trustee, its officers, agents, servants and
employees). In case any action shall be brought against the Trustee in respect
of which indemnity may be sought against the Company, the Trustee shall promptly
notify the Company in writing and the Company shall be entitled to assume
control of the defense thereof, including the employment of Counsel and the
payment of all expenses. The Trustee shall have the right to employ separate
Counsel in any such action and participate in the defense thereof, but the fees
and expenses of such Counsel shall be paid by the Trustee unless the employment
of such Counsel has been authorized by the Company. The Company shall not be
liable for any settlement of any such action without its consent, but if any
such action is settled with the consent of the Company or if there be final
judgment for the plaintiff in any such action, the Company agrees to indemnify
and hold harmless the Trustee from and against any loss or liability by reason
of such settlement or final judgment.

         (d)      The Company agrees to pay to the Remarketing Agent and the
Paying Agent, respectively, the reasonable fees, charges and expenses of such
Remarketing Agent and Paying Agent.

                                      -11-
<PAGE>

         (e)      In the event the Company shall fail to make any of the
payments required in this Article IV with respect to any Bonds, the payment so
in default shall continue as an obligation of the Company until the amount in
default shall have been fully paid and the Company will pay interest on any
overdue principal and, to the extent permitted by law, on overdue interest, at
the rate of interest borne by the Bonds on the date on which such principal or
interest became due and payable.

         (f)      The Company agrees to indemnify and hold harmless the Issuer
and any member, officer, official or employee of the Issuer against any and all
losses, costs, charges, expenses, judgments and liabilities created by or
arising out of this Agreement or the Indenture or otherwise incurred in
connection with the issuance or remarketing of the Bonds. The Issuer may submit
to the Company periodic statements, not more frequently than monthly, for its
Administrative Expenses and the Company shall make payment to the Issuer of the
full amount of each such statement within 30 days after the Company receives
such statement, provided that the Company within such 30 day period may in
writing and in good faith specifically protest all or any portion of the amounts
included in such statement and in such event the Company shall not be obligated
to make payment to the Issuer of the amount which has been protested in such
manner until 10 days after such protest shall have been resolved either by
agreement between the Issuer and the Company or by an appropriate tribunal. In
the event the Company should fail to make any of the payments required in this
Subsection when the Company is obligated to do so, the item or installment so in
default shall continue as an obligation of the Company until the amount in
default shall have been fully paid, and the Company agrees to pay the same with
interest thereon to the extent permitted by law at a rate 1% above the rate of
interest then charged by the Trustee on 90 day commercial loans to its prime
commercial borrowers until paid.

         Section 4.3. No Defense or Set-Off. The obligation of the Company to
make the payments pursuant to this Agreement shall be absolute and unconditional
without defense or set-off by reason of any default by the Issuer under this
Agreement or under any other agreement between the Company and the Issuer or for
any other reason, it being the intention of the parties that the payments
required hereunder will be paid in full when due without any delay or diminution
whatsoever.

         Section 4.4. Payments Pledged and Assigned. It is understood and agreed
that all payments required to be made by the Company pursuant to Section 4.2
hereof (except payments made to the Trustee pursuant to Sections 4.2(c) and 6.4
hereof and payments to be made to the Remarketing Agent and the Paying Agent
pursuant to Section 4.2(d) hereof and payments to be made to the Issuer pursuant
to Sections 3.4, 4.2(f), 5.3 and 6.4 hereof) and certain rights of the Issuer
hereunder are pledged and assigned to the Trustee by the Indenture. The Company
consents to such pledge and assignment. The Issuer hereby directs the Company
and the Company hereby agrees to pay or cause to be paid to the Trustee all said
amounts required to be paid by or for the account of the Company pursuant to
Section 4.2 hereof (except payments to be made to the Remarketing Agent and the
Paying Agent pursuant to Section 4.2(d) hereof and payments to be made to the
Issuer pursuant to Sections 3.4, 4.2(f), 5.3 and 6.4 hereof). The Project will
not constitute any part of the security for the Bonds.

                                      -12-
<PAGE>

         Section 4.5. Certain Payments to Paying Agent. The Company shall pay to
the Paying Agent amounts equal to the amounts to be paid by the Paying Agent
pursuant to Sections 401(e), 402(c), 403(f) and 404(d) of the Indenture in
respect of Outstanding Bonds, such amounts to be paid by the Company to the
Paying Agent on the dates such payments pursuant to Sections 401(e), 402(c),
403(f) and 404(d) of the Indenture are to be made.

         Section 4.6. Payment of the Bonds and Other Amounts. The Bonds shall be
payable from payments made by the Company to the Trustee under Section 4.2(a)
and Article VII hereof. Payments of principal of, premium, if any, or interest
on the Bonds with moneys in the Bond Fund constituting proceeds from the sale of
such Bonds or earnings on investments made under the provisions of the Indenture
shall be credited against the obligation to pay required by Section 4.2(a)
hereof.

         Whenever any Bonds are redeemable in whole or in part at the option of
the Company, the Trustee, on behalf of the Issuer, shall redeem the same upon
the request of the Company in compliance with the Indenture and such redemption
shall constitute payment of amounts required by Section 4.2(a) and Article VII
hereof equal to the redemption price of such Bonds.

         Whenever payment or provision therefor has been made in respect of the
principal of, premium, if any, or interest on, all or any portion of the Bonds
in accordance with the Indenture (whether at maturity or upon redemption or
acceleration or upon provision for payment in accordance with Article IX of the
Indenture), payments shall be deemed paid to the extent such payment or
provision therefor has been made and is considered to be a payment of principal
or premium, if any, or interest on such Bonds. If such Bonds are thereby deemed
paid in full, the Trustee shall notify the Company and the Issuer that such
payment requirement has been satisfied. Subject to the foregoing, or unless the
Company is entitled to a credit under this Agreement or the Indenture, all
payments shall be in the full amount required by Section 4.2(a) and Article VII
hereof.

                                    ARTICLE V

                        SPECIAL COVENANTS AND AGREEMENTS

         Section 5.1. Company to Maintain its Corporate Existence; Conditions
under Which Exceptions Permitted. Unless the provisions of Sections 7.1, 7.2 or
7.3 hereof are applicable and the Company elects or is obligated to prepay
amounts due thereunder in whole as provided therein, the Company agrees that
during the term of this Agreement, it will maintain its corporate existence in
the State, will not dissolve or otherwise dispose of all or substantially all of
its assets and will not consolidate with or merge into another corporation
unless the acquirer of its assets or the corporation with which it shall
consolidate or into which it shall merge shall be a corporation organized under
the laws of one of the states of the United States of America, is qualified to
do business in the State, shall have a net worth immediately subsequent to such
acquisition, consolidation or merger at least equal to that of the Company
immediately prior to such acquisition, consolidation or merger and shall assume
in writing all of the obligations of the Company under this Agreement and the
Trustee and the Issuer shall receive an opinion of

                                      -13-
<PAGE>

Counsel to the effect that such disposition, consolidation or merger complies
with this Agreement.

         Section 5.2. Financial Statements. (a) So long as any of the Bonds are
Outstanding and the Company files annual and periodic reports with the United
States Securities and Exchange Commission, the Company shall furnish, a copy of
its most recent Form 10-K Annual Report and Form 10-Q Quarterly Report filed
with United States Securities and Exchange Commission to the Trustee, to the
Insurer and to the owner, or any beneficial owner, of any Bond who shall have
requested the same in writing. The Trustee shall have no responsibility with
respect to such reports, including the review of the contents thereof, except to
make them available for reasonable examination by the owner of any Bond upon
request. Each Form 10-K Annual Report shall be accompanied by a certificate of
the regular independent certified public accountants of the Company that the
financial statements therein have been prepared in accordance with generally
accepted accounting principles.

         (b)      In the event that the Company no longer files annual and
periodic reports with the United States Securities and Exchange Commission, and
so long as any of the Bonds are outstanding, the Company shall furnish to the
Trustee, to the Insurer and to the owner or any beneficial owner of any Bond who
shall have requested the same in writing a copy of its most recent audited
annual financial statements, accompanied by a certificate of the regular
independent certified public accountants of the Company that such financial
statements have been prepared in accordance with generally accepted accounting
principles, and a copy of its most recent unaudited quarterly financial
statements, if any. The Trustee shall have no responsibility with respect to
such financial statements, including the review of the contents thereof, except
to make them available for reasonable examination by the owner of any Bond upon
request.

         Section 5.3. Maintenance and Repair; Insurance; Taxes; Etc. The Company
shall maintain or cause to be maintained the Project in good repair and keep it
properly insured and shall pay or cause to be paid all costs thereof. The
Company shall pay or cause to be paid all taxes, special assessments, and all
governmental, utility and other charges with respect to the Project.

         Section 5.4. Recordation and Other Instruments. The Company shall cause
such security agreements, financing statements and all supplements thereto and
other instruments as may be required from time to time to be kept, to be
recorded and filed in such manner and in such places as may be required by law
in order to fully preserve, protect and perfect the security of the Owners of
the Bonds and the rights of the Trustee, and to perfect the security interest
created by the Indenture. The Company agrees to abide by the provisions of
Section 604 of the Indenture to the extent applicable to the Company.

         Section 5.5. No Warranty by the Issuer. The Issuer makes no warranty,
either express or implied, as to the Project or that it will be suitable for the
purposes of the Company or needs of the Company.

                                      -14-
<PAGE>

         Section 5.6. Agreement as to Ownership and Use of the Project. The
Issuer and the Company agree that title to the Project shall be in and remain in
the Company, and that such Project shall be the sole property of the Company, in
which the Issuer shall have no interest.

         Section 5.7. Company to Furnish Notice of Adjustments of Interest Rate
Periods. The Company is hereby granted the option to designate from time to time
changes in the type of Interest Rate borne by the Bonds in the manner and to the
extent set forth in Article III of the Indenture. In the event the Company
elects to exercise any such option, the Company agrees that it shall cause
notices of such changes to be given to the Issuer, the Trustee, the Paying Agent
and the Remarketing Agent in accordance with Article III of the Indenture.

         Section 5.8. Information Reporting. The Issuer covenants and agrees
that, upon the direction of the Company or Bond Counsel, it will mail or cause
to be mailed to the Secretary of the Treasury (or his designee as prescribed by
regulation, currently the Internal Revenue Service Center, Ogden, Utah 84201) a
statement setting forth the information required by Section 149(e) of the Code,
which statement shall be in the form of the Information Reporting Statement
(Form 8038) of the Internal Revenue Service (or any successor form).

         Section 5.9. Limited Liability of Issuer. Any obligation or liability
of the Issuer created by or arising out of this Agreement or otherwise incurred
in connection with the issuance of the Bonds (including without limitation any
liability created by or arising out of the representations, warranties or
covenants set forth herein or otherwise) shall not impose a debt or pecuniary
liability upon the Issuer or the State or any political subdivision thereof, or
a charge upon the general credit or taxing powers of any of the foregoing, but
shall be payable solely out of the Revenues or other amounts payable by the
Company to the Issuer hereunder or otherwise (including without limitation any
amounts derived from indemnifications given by the Company).

         Neither the issuance of the Bonds nor the delivery of this Agreement
shall, directly or indirectly or contingently, obligate the Issuer or the State
or any political subdivision thereof to levy any form of taxation therefor or to
make any appropriation for their payment. Nothing in the Bonds or in the
Indenture or this Agreement or the proceedings of the Issuer authorizing the
Bonds or in the Act or in any other related document shall be construed to
authorize the Issuer to create a debt of the Issuer or the State or any
political subdivision thereof within the meaning of any constitutional or
statutory provision of the State. The principal of, premium, if any, and
interest on the Bonds shall be payable solely from the funds pledged for their
payment in accordance with the Indenture and available therefor under this
Agreement and the Insurance Policy. Neither the State nor any political
subdivision thereof shall in any event be liable for the payment of the
principal of, premium, if any, or interest on the Bonds or for the performance
of any pledge, obligation or agreement of any kind whatsoever which may be
undertaken by the Issuer. No breach of any such pledge, obligation or agreement
may impose any pecuniary liability upon the Issuer or the State or any political
subdivision thereof, or any charge upon the general credit or against the taxing
power of the Issuer or the State or any political subdivision thereof.

                                      -15-
<PAGE>

         Section 5.10. Tax Exempt Status of the Bonds. The Company hereby
covenants for the benefit of the Owners of the Bonds and the Issuer that it (a)
has not taken, and will not take or permit to be taken on its behalf, any action
which would adversely affect the exclusion of interest on the Bonds from gross
income of the recipients thereof for federal income tax purposes and (b) will
take, or cause to be taken, such actions as may, from time to time, be required
under applicable law or regulation to continue to cause the interest on the
Bonds to be so excluded. The Company hereby acknowledges that in the event of an
examination by the Internal Revenue Service of the exclusion of interest on the
Bonds from the gross income of the Owners thereof for federal income tax
purposes under current regulations, the Internal Revenue Service will treat the
Issuer as the "taxpayer" in such examination. The Company and the Issuer each
agree that it will respond in a commercially reasonable manner to any inquiries
from the Internal Revenue Service in connection with such an examination. The
Issuer hereby covenants that it will cooperate with the Company, at the
Company's expense and at its direction, in connection with such examination.

         The Company covenants and agrees to comply with the Tax Agreement and
to notify the Trustee and the Issuer of the occurrence of any event of which the
Company has notice and which event would require the Company to prepay the Bonds
in accordance with Section 7.2 hereof.

                                   ARTICLE VI

                         EVENTS OF DEFAULT AND REMEDIES

         Section 6.1. Events of Default Defined. The following shall be "events
of default" under this Agreement with respect to the Bonds and the terms "event
of default" or "default" shall mean, whenever they are used in this Agreement,
any one or more of the following events:

                  (a)      Failure by the Company to pay when due any amounts
         required to be paid under Section 4.2(a) hereof or any amount required
         to be paid under Section 4.2(c) hereof, which failure results in an
         event of default under subparagraphs (a) or (b) of Section 1001 of the
         Indenture; or

                  (b)      Failure by the Company to pay or cause to be paid any
         payment required to be paid under Section 4.5 hereof, which failure
         results in an event of default under subparagraph (e) of Section 1001
         of the Indenture; or

                  (c)      Any material breach by the Company of a
         representation or warranty made in this Agreement or failure by the
         Company to observe and perform any covenant, condition or agreement on
         its part to be observed or performed in this Agreement, other than as
         referred to in (a) and (b) above, for a period of 60 days after written
         notice, specifying such failure and requesting that it be remedied, and
         stating that such notice is a "Notice of Default" hereunder, given to
         the Company by the Trustee or to the Company and the Trustee by the
         Issuer, unless the Issuer, the Insurer and the Trustee shall agree in
         writing to an extension of such time prior to its expiration; provided,
         however, if the

                                      -16-
<PAGE>

         failure stated in the notice cannot be corrected within the applicable
         period, the Issuer, the Insurer and the Trustee will not unreasonably
         withhold their consent to an extension of such time if corrective
         action is instituted within the applicable period and diligently
         pursued until the failure is corrected and the fact of such
         non-correction, corrective action or diligent pursuit is evidenced to
         the Trustee by a certificate of an Authorized Company Representative;
         or

                  (d)      A proceeding or case shall be commenced, without the
         application or consent of the Company, in any court of competent
         jurisdiction seeking (i) liquidation, reorganization, dissolution,
         winding-up or composition or adjustment of debts, (ii) the appointment
         of a trustee, receiver, custodian, liquidator or the like of the
         Company or of all or any substantial part of its assets, or (iii)
         similar relief under any law relating to bankruptcy, insolvency,
         reorganization, winding-up or composition or adjustment of debts, and
         such proceeding or cause shall continue undismissed, or an order,
         judgment, or decree approving or ordering any of the foregoing shall be
         entered and shall continue in effect for a period of 90 days; or an
         order for relief against the Company shall be entered against the
         Company in an involuntary case under the United States Bankruptcy Code
         (as now or hereafter in effect) or other applicable law; or

                  (e)      The Company shall admit in writing its inability to
         pay its debts generally as they become due or shall file a petition in
         voluntary bankruptcy or shall make any general assignment for the
         benefit of its creditors, or shall consent to the appointment of a
         receiver or trustee of all or substantially all of its property, or
         shall commence a voluntary case under the United States Bankruptcy Code
         (as now or hereafter in effect), or shall file in any court of
         competent jurisdiction a petition seeking to take advantage of any
         other law relating to bankruptcy, insolvency, reorganization,
         winding-up or composition or adjustment of debts, or shall fail to
         controvert in a timely or appropriate manner, or acquiesce in writing
         to, any petition filed against it in an involuntary case under such
         United States Bankruptcy Code or other applicable law; or

                  (f)      Dissolution or liquidation of the Company; provided
         that the term "dissolution or liquidation of the Company" shall not be
         construed to include the cessation of the corporate existence of the
         Company resulting either from a merger or consolidation of the Company
         into or with another corporation or a dissolution or liquidation of the
         Company following a transfer of all or substantially all of its assets
         as an entirety, under the conditions permitting such actions contained
         in Section 5.1 hereof; or

                  (g)      The occurrence of an "event of default" under the
         Indenture.

         The foregoing provisions of Section 6.1(c) are subject to the following
limitations: If by reason of Force Majeure the Company is unable in whole or in
part to carry out its agreements on its part herein contained other than the
obligations on the part of the Company contained in Article IV and Section 5.3
hereof the Company shall not be deemed in default during the continuance of such
inability. The Company agrees, however, to remedy with all reasonable dispatch
the cause or causes preventing the Company from carrying out its agreements;
provided

                                      -17-
<PAGE>

that the settlement of strikes, lockouts and other industrial disturbances shall
be entirely within the discretion of the Company and the Company shall not be
required to make settlement of strikes, lockouts and other industrial
disturbances by acceding to the demands of the opposing party or parties when
such course is in the sole judgment of the Company unfavorable to the Company.

         Section 6.2. Remedies on Default. Whenever any event of default
referred to in Section 6.1 hereof shall have happened and be continuing, the
Trustee, as assignee of the Issuer:

                  (a)      shall, by notice in writing to the Company declare
         the unpaid indebtedness under Section 4.2(a) hereof to be due and
         payable immediately, if concurrently with or prior to such notice the
         unpaid principal amount of the Bonds shall have been declared to be due
         and payable, and upon any such declaration the same (being an amount
         sufficient, together with other moneys available therefor in the Bond
         Fund, to pay the unpaid principal of, premium, if any, and interest
         accrued on the Bonds) shall become and shall be immediately due and
         payable; and

                  (b)      may take whatever action at law or in equity may
         appear necessary or desirable to collect the payments and other amounts
         then due and thereafter to become due hereunder or to enforce
         performance and observance of any obligation, agreement or covenant of
         the Company under this Agreement.

         Any amounts collected pursuant to action taken under this Section 6.2
shall be paid into the Bond Fund (unless otherwise provided in this Agreement)
and applied in accordance with the provisions of the Indenture. No action taken
pursuant to this Section 6.2 shall relieve the Company from the Company's
obligations pursuant to Section 4.2 or 4.6 hereof.

         No recourse shall be had for any claim based on this Agreement against
any officer, director or stockholder, past, present or future, of the Company as
such, either directly or through the Company, under any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or by
any legal or equitable proceeding or otherwise.

         Nothing herein contained shall be construed to prevent the Issuer from
enforcing directly any of its rights under Sections 3.4, 4.2(f), 5.3, 5.9, 5.10,
6.3, 6.4 and 6.5 hereof.

         Section 6.3. No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Issuer or the Trustee is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Agreement or now
or hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Issuer or the Trustee to exercise any remedy
reserved to it in this Article, it shall not be necessary to give any notice,
other than such notice as may be herein expressly required. Such rights and
remedies as are given the Issuer hereunder shall also extend to the Trustee, and
the Owners of the

                                      -18-
<PAGE>

Bonds, subject to the provisions of the Indenture, shall be entitled to the
benefit of all covenants and agreements herein contained.

         Section 6.4. Agreement to Pay Fees and Expenses of Counsel. In the
event the Company should default under any of the provisions of this Agreement
and the Issuer, the Paying Agent or the Trustee should employ Counsel or incur
other expenses for the collection of the indebtedness hereunder or the
enforcement of performance or observance of any obligation or agreement on the
part of the Company herein contained, the Company agrees that it will on demand
therefor pay to the Trustee, the Paying Agent, the Issuer or, if so directed by
the Issuer, to the Counsel for the Issuer, the reasonable fees and expenses of
such Counsel and such other expenses (to the extent reasonable) so incurred by
or on behalf of the Issuer, the Paying Agent or the Trustee.

         Section 6.5. No Additional Waiver Implied by One Waiver; Consents to
Waivers. In the event any agreement contained in this Agreement should be
breached by either party and thereafter waived by the other party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to
waive any other breach hereunder. No waiver shall be effective unless in writing
and signed by the party making the waiver. The Issuer shall have no power to
waive any default hereunder by the Company without the consent of both the
Trustee and the Insurer to such waiver. The Trustee and the Insurer acting
jointly shall have power to waive any default by the Company hereunder, except a
default under Section 3.4, 4.2(f), 5.3, 5.9, 5.10, 6.3 or 6.4, without the prior
written concurrence of the Issuer. Notwithstanding the foregoing, if, after the
acceleration of the maturity of the outstanding Bonds by the Trustee pursuant to
Section 1002 of the Indenture, (i) all arrears of principal of and interest on
the outstanding Bonds and interest on overdue principal and (to the extent
permitted by law) on overdue installments of interest at the rate of interest
borne by the Bonds on the date on which such principal or interest became due
and payable and the premium, if any, on all Bonds then Outstanding which have
become due and payable otherwise than by acceleration, and all other sums
payable under the Indenture, except the principal of and the interest on such
Bonds which by such acceleration shall have become due and payable, shall have
been paid, (ii) all other things shall have been performed in respect of which
there was a default, (iii) there shall have been paid the reasonable fees and
expenses of the Trustee and of the Owners of such Bonds, including reasonable
attorneys' fees and expenses paid or incurred and (iv) such event of default
under the Indenture shall be waived in accordance with Section 1009 of the
Indenture with the consequence that such acceleration under Section 1002 of the
Indenture is rescinded, then the Company's default hereunder shall be deemed to
have been waived and its consequences rescinded and no further action or consent
by the Trustee or the Issuer or the Insurer shall be required.

                                   ARTICLE VII

                   OPTION AND OBLIGATION OF COMPANY TO PREPAY

         Section 7.1. Option to Prepay. The Company shall have, and is hereby
granted, the option to prepay the payments due hereunder in whole or in part at
any time or from time to time (a) to provide for the redemption of all or a
portion of the Bonds pursuant to the provisions of

                                      -19-
<PAGE>

Section 501(a) of the Indenture, (b) to provide for the extraordinary optional
redemption of all or a portion of the Bonds pursuant to the provisions of
Section 501(b) of the Indenture, or (c) to provide for the defeasance of the
Bonds pursuant to Article IX of the Indenture. In the event the Company elects
to provide for the redemption of Bonds as permitted by this Section, the Company
shall notify and instruct the Trustee in accordance with Section 7.3 hereof to
redeem all or any portion of the Bonds in advance of maturity.

         Section 7.2. Obligation to Prepay. In the event the Bonds or portions
thereof become subject to special mandatory redemption pursuant to Section
501(c) of the Indenture, the Company covenants and agrees to prepay the amounts
due and to become due hereunder in an amount sufficient to redeem such Bonds or
portions thereof on the applicable redemption dates of the Bonds, which
redemption shall occur not later than 180 days after the occurrence of a
Determination of Taxability.

         Section 7.3. Notice of Prepayment; Amount to Be Prepaid. (a) Unless
otherwise provided in Section 7.1 or 7.2 hereof, following either (i) the
exercise of the options granted to the Company in Section 7.1 hereof, or (ii)
the occurrence of the event described in Section 7.2 hereof, the Company shall
give at least forty-five (45) days written notice to the Issuer, to the Insurer,
to the Trustee, to the Paying Agent and to the Remarketing Agent, if any of the
Bonds shall then be unpaid or provision for payment shall not have been made in
accordance with the provisions of the Indenture. On the date fixed for
redemption of the Bonds or portions thereof, there shall be deposited with the
Trustee from payments by the Company as required by Section 7.1 or 7.2 hereof,
as appropriate, for payment into the Bond Fund the amount required in subsection
(b) of this Section. The notice shall provide for the date of the application of
the prepayment made by the Company hereunder to the redemption of the Bonds or
portions thereof in whole or in part pursuant to call for redemption, shall
specify the redemption date and shall be given to the Trustee, the Paying Agent,
the Issuer and the Remarketing Agent in accordance with the provisions of the
Indenture for the redemption of Bonds or portions thereof.

         (b)      The prepayment payable by the Company hereunder upon either
(i) the exercise of the options granted to the Company in Section 7.1 hereof, or
(ii) the occurrence of the event specified in Section 7.2 shall be, to the
extent applicable and except as otherwise provided in Article V of the
Indenture, the sum of the following:

                  (1)      the amount of money which, when added to the amount
         on deposit in the Bond Fund prior to the prepayment being made and
         available for such purpose, will be sufficient to provide all funds
         necessary to redeem the Bonds or portions thereof designated in the
         notice specified in subsection (a) of this Section to be redeemed on
         the date set forth in the notice, including, without limitation,
         principal, premium, if any, and all interest to accrue to said
         redemption date and redemption expenses; plus

                  (2)      in the event all of the Bonds are to be redeemed, an
         amount of money equal to all Administrative Expenses and the Trustee's,
         Remarketing Agent's and Paying Agent's fees and expenses under the
         Indenture accrued and to accrue until the final payment and redemption
         of the Bonds.

                                      -20-
<PAGE>

         (c)      Any prepayment made pursuant to Section 7.1 or 7.2 hereof
shall be deposited into the Bond Fund. No prepayment or investment of the
proceeds thereof shall be made which shall cause the Bonds to be "arbitrage
bonds" within the meaning of Section 148(a) of the Code.

         Section 7.4. Cancellation at Expiration of Term. At the acceleration,
termination or expiration of the term of this Agreement and following full
payment of the Bonds or provision for payment thereof and of all other fees and
charges having been made in accordance with the provisions of this Agreement and
the Indenture, the Issuer shall deliver to the Company any documents and take or
cause the Trustee to take such actions as may be necessary to effectuate the
cancellation and evidence the termination of this Agreement.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         Section 8.1. Notices. All notices, certificates or other communications
shall be sufficiently given in writing and shall be deemed given on the day on
which the same have been sent by confirmed, facsimile transmission or when
mailed by first class mail, postage prepaid, or by certified mail, postage
prepaid, addressed as follows: if to the Issuer, at Rensselaer, Indiana 47978,
Facsimile No.: 219-866-4940, Telephone No.: 219-866-4930, Attention: County
Auditor; if to the Company, at 801 East 86th Avenue, Merrillville, Indiana
46410, Facsimile No. 219-647-6180, Telephone No.: 219-647-5520, Attention:
Treasurer; if to the Trustee, at 101 W. Washington, Suite 655 South,
Indianapolis, Indiana 46255, Facsimile No. 317-267-7658, Telephone No.:
317-267-8872, Attention: Corporate Trust Department; if to the Paying Agent, at
101 W. Washington, Suite 655 South, Indianapolis, Indiana 46255, Facsimile No.
317-267-7658, Telephone No.: 317-267-8872, Attention: Corporate Trust
Department; if to the Insurer, at One State Street Plaza, New York, New York
10004, Facsimile No.: (212) 797-5725, Telephone No. (212) 668-0340, Attention:
Global Utilities Surveillance Department; and, if to the Remarketing Agent, at
1221 Avenue of the Americas, New York, New York 10020, Facsimile No.
212-296-2771, Telephone No. 212-296-7612, Attention: Municipal Note Trading
Desk. A duplicate copy of each notice, certificate or other communication given
hereunder by either the Issuer or the Company to the other shall also be given
to the Trustee. The Issuer, the Company, the Trustee, the Paying Agent and the
Remarketing Agent may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other
communications shall be sent.

         Section 8.2. Assignments. This Agreement may not be assigned by either
party without consent of the other and the Insurer, except that the Issuer shall
assign to the Trustee its rights under this Agreement (except under Sections
3.4, 4.2(f), 5.3, 5.9, 5.10, 6.3, 6.4 and 6.5 hereof) as provided by Section 4.4
hereof, and the Company may assign its rights under this Agreement to any
transferee or any surviving or resulting corporation as provided by Section 5.1
hereof.

         Section 8.3. Severability. If any provision of this Agreement shall be
held or deemed to be or shall, in fact, be illegal, inoperative or
unenforceable, the same shall not affect any other

                                      -21-
<PAGE>

provision or provisions herein contained or render the same invalid,
inoperative, or unenforceable to any extent whatever.

         Section 8.4. Execution in Counterparts. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.

         Section 8.5. Amounts Remaining in Bond Fund. It is agreed by the
parties hereto that after payment in full of (i) the Bonds (or provision for
payment thereof having been made in accordance with the provisions of the
Indenture), (ii) the fees, charges and expenses of the Trustee related to the
Bonds in accordance with the Indenture, (iii) the Administrative Expenses
related to the Bonds, (iv) the fees and expenses of the Remarketing Agent, the
Paying Agent and the Issuer related to the Bonds and (v) all other amounts
required to be paid under this Agreement and the Indenture, any amounts
remaining in the Bond Fund shall belong to and be paid to the Company by the
Trustee[; provided, that if there remain reimbursement obligations of the
Company under the Reimbursement Agreement, such moneys remaining in the Bond
Fund shall be paid by the Trustee to the Insurer upon written direction of the
Insurer].

         Section 8.6. Amendments, Changes and Modifications. This Agreement may
be amended, changed, modified, altered or terminated only by written instrument
executed by the Issuer and the Company, and only if the written consent of the
Trustee and the Insurer thereto is obtained. Subject to the written consent of
the Trustee and the Insurer, the Issuer and the Company agree to enter into such
amendments, changes and modifications to this Agreement (i) as may be required
by the provisions of this Agreement or the Indenture, (ii) for the purpose of
curing any ambiguity, formal defect or omission in this Agreement or in
connection with any other change therein provided no such action is to the
prejudice of the Trustee or the Owners of the Bonds, (iii) to describe more
fully or to amplify or correct the description of any property pledged by this
Agreement or intended so to be or (iv) to preserve the exemption from federal
income taxes of interest on the Bonds, or any of them.

         Section 8.7. Governing Law. This Agreement shall be governed
exclusively by and construed in accordance with the applicable laws of the
State.

         Section 8.8. Authorized Issuer and Company Representatives. Whenever
under the provisions of this Agreement the approval of the Issuer or the Company
is required to take some action at the request of the other, such approval of
such request shall be given for the Issuer by the Authorized Issuer
Representative and for the Company by the Authorized Company Representative, and
the other party hereto and the Trustee shall be authorized to act on any such
approval or request and neither party hereto shall have any complaint against
the other or against the Trustee as a result of any such action taken.

         Section 8.9. Amendments, Changes and Modifications of Reimbursement
Agreements. The Company hereby agrees and undertakes to promptly furnish or
cause to be promptly furnished to the Trustee a copy of any amendment, change or
modification of the Reimbursement Agreement.

                                      -22-
<PAGE>

         Section 8.10. Term of the Agreement. This Agreement shall be in full
force and effect from its date to and including such date as all of the Bonds
issued under the Indenture shall have been fully paid or retired (or provision
for such payment shall have been made as provided in the Indenture), provided
that all representations and certifications by the Company as to all matters
affecting the tax-exempt status of the Bonds and the covenants of the Company in
Sections 4.2(c) and 4.2(f) shall survive the termination of this Agreement.

         Section 8.11. Insurer as Third Party Beneficiary. The Insurer is a
third-party beneficiary to this Agreement.

                                      -23-
<PAGE>

         IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.

                                         BOARD OF COMMISSIONERS OF JASPER
                                            COUNTY, INDIANA

                                         By: /s/ Richard E. Maxwell

                                         By: /s/ Gary A. Green

                                         By: /s/ Willis Petterson

(SEAL)

Attest:

By: /s/ Rita J. Steele
        County Auditor

                                         NORTHERN INDIANA PUBLIC SERVICE COMPANY

                                         By: /s/ David J. Vajda
                                             Title: Treasurer

                                      -24-

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