Document:

<PAGE>

                                                                     EXHIBIT 4.1

                                                             [EXECUTION VERSION]

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                                  $250,000,000

                                    FIVE YEAR
                                CREDIT AGREEMENT

                            Dated as of July 26, 2004

                                      Among

                        WISCONSIN POWER AND LIGHT COMPANY
                                   as Borrower

                             THE BANKS NAMED HEREIN
                                    as Banks

                                       and

                       WACHOVIA BANK, NATIONAL ASSOCIATION
                   as Administrative Agent and LC Issuing Bank

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                                BARCLAYS BANK PLC
                                Syndication Agent

                          WACHOVIA CAPITAL MARKETS, LLC
                                       AND
                                BARCLAYS CAPITAL
                                Co-Lead Arrangers

                             BANK OF AMERICA, N.A.,
                                 BANK ONE, N.A.
                                      AND
                              WELLS FARGO BANK N.A.
                             Co-Documentation Agents

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<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                              <C>
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.....................................................................   1
         SECTION 1.01.       CERTAIN DEFINED TERMS.............................................................   1
         SECTION 1.02.       COMPUTATION OF TIME PERIODS.......................................................  15
         SECTION 1.03.       COMPUTATIONS OF OUTSTANDINGS......................................................  15
         SECTION 1.04.       ACCOUNTING TERMS..................................................................  15

ARTICLE II AMOUNTS AND TERMS OF THE EXTENSIONS OF CREDIT.......................................................  15
         SECTION 2.01.       THE ADVANCES......................................................................  15
         SECTION 2.02.       MAKING THE ADVANCES...............................................................  16
         SECTION 2.03.       LETTERS OF CREDIT.................................................................  17
         SECTION 2.04.       FEES..............................................................................  20
         SECTION 2.05.       CHANGES IN THE COMMITMENTS........................................................  20
         SECTION 2.06.       REPAYMENT OF ADVANCES.............................................................  20
         SECTION 2.07.       INTEREST ON ADVANCES..............................................................  20
         SECTION 2.08.       ADDITIONAL INTEREST ON EURODOLLAR RATE ADVANCES...................................  21
         SECTION 2.09.       INTEREST RATE DETERMINATION.......................................................  21
         SECTION 2.10.       VOLUNTARY CONVERSION OF ADVANCES..................................................  23
         SECTION 2.11.       OPTIONAL PREPAYMENTS OF ADVANCES..................................................  23
         SECTION 2.12.       INCREASED COSTS...................................................................  23
         SECTION 2.13.       ILLEGALITY........................................................................  24
         SECTION 2.14.       PAYMENTS AND COMPUTATIONS.........................................................  25
         SECTION 2.15.       NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS......................................  26
         SECTION 2.16.       TAXES.............................................................................  26
         SECTION 2.17.       SHARING OF PAYMENTS, ETC..........................................................  28

ARTICLE III CONDITIONS TO EXTENSIONS OF CREDIT.................................................................  28
         SECTION 3.01.       CONDITIONS PRECEDENT TO CLOSING...................................................  28
         SECTION 3.02.       CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT..................................  30
         SECTION 3.03.       CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT ON OR AFTER ANY TRIGGER DATE.........  31
         SECTION 3.04.       RELIANCE ON CERTIFICATES..........................................................  31

ARTICLE IV REPRESENTATIONS AND WARRANTIES......................................................................  32
         SECTION 4.01.       REPRESENTATIONS AND WARRANTIES OF THE BORROWER....................................  32

ARTICLE V COVENANTS OF THE BORROWER............................................................................  33
         SECTION 5.01.       AFFIRMATIVE COVENANTS.............................................................  33
         SECTION 5.02.       NEGATIVE COVENANTS................................................................  37

ARTICLE VI EVENTS OF DEFAULT...................................................................................  41
         SECTION 6.01.       EVENTS OF DEFAULT.................................................................  41
         SECTION 6.02.       CASH COLLATERAL ACCOUNT...........................................................  43
</TABLE>

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<PAGE>

<TABLE>
<S>                                                                                                              <C>
ARTICLE VII THE AGENT..........................................................................................  44
         SECTION 7.01.       AUTHORIZATION AND ACTION..........................................................  44
         SECTION 7.02.       AGENT'S RELIANCE, ETC.............................................................  44
         SECTION 7.03.       WACHOVIA AND AFFILIATES...........................................................  45
         SECTION 7.04.       LENDER CREDIT DECISION............................................................  45
         SECTION 7.05.       INDEMNIFICATION...................................................................  45
         SECTION 7.06.       SUCCESSOR AGENT...................................................................  46

ARTICLE VIII MISCELLANEOUS.....................................................................................  46
         SECTION 8.01.       AMENDMENTS, ETC...................................................................  46
         SECTION 8.02.       NOTICES, ETC......................................................................  47
         SECTION 8.03.       NO WAIVER; REMEDIES...............................................................  47
         SECTION 8.04.       COSTS, EXPENSES, TAXES AND INDEMNIFICATION........................................  47
         SECTION 8.05.       RIGHT OF SET-OFF..................................................................  49
         SECTION 8.06.       BINDING EFFECT....................................................................  49
         SECTION 8.07.       ASSIGNMENTS AND PARTICIPATIONS....................................................  49
         SECTION 8.08.       CONFIDENTIALITY...................................................................  53
         SECTION 8.09.       WAIVER OF JURY TRIAL..............................................................  54
         SECTION 8.10.       GOVERNING LAW.....................................................................  54
         SECTION 8.11.       RELATION OF THE PARTIES; NO BENEFICIARY...........................................  54
         SECTION 8.12.       EXECUTION IN COUNTERPARTS.........................................................  54
         SECTION 8.13.       ENTIRE AGREEMENT..................................................................  54
</TABLE>

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<PAGE>

EXHIBITS AND SCHEDULES

Exhibit 1.01                   -        Form of Note
Exhibit 2.02(a)                -        Form of Notice of Borrowing
Exhibit 2.03                   -        Form of Request for Issuance
Exhibit 2.10                   -        Form of Notice of Conversion
Exhibit 3.01(a)(viii)-1        -        Form of Opinion of Foley & Lardner LLP
Exhibit 3.01(a)(viii)-2        -        Form of Opinion of In-house Counsel
Exhibit 3.01(a)(viii)-3        -        Form of Opinion of King & Spalding LLP
Exhibit 8.07                   -        Form of Lender Assignment

Schedule I                     -        Commitment Schedule
Schedule II                    -        Existing Liens
Schedule III                   -        Existing Debt

                                       iii

<PAGE>

                           FIVE YEAR CREDIT AGREEMENT

                            Dated as of July 26, 2004

         THIS FIVE YEAR CREDIT AGREEMENT (this "AGREEMENT") is made by and
among:

         (i)      WISCONSIN POWER AND LIGHT COMPANY, a Wisconsin corporation
                  (the "BORROWER"),

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

         (iii)    WACHOVIA BANK, National Association ("WACHOVIA"), as
                  administrative agent (the "AGENT") for the Lenders hereunder
                  and as the issuer of Letters of Credit (as hereinafter
                  defined) (the "LC ISSUING BANK").

                             PRELIMINARY STATEMENTS

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

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

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

                                   ARTICLE I
                        DEFINITIONS AND ACCOUNTING TERMS

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

                  "ADMINISTRATIVE AGENCY AND ARRANGER FEE LETTER" means the
         letter agreement, dated June 29, 2004, among the Borrower, the Parent,
         IPL, Wachovia, Wachovia Capital Markets, LLC, Barclays Bank PLC and
         Barclays Capital.

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

                  "AFFECTED LENDER" has the meaning assigned to that term in
         Section 2.13.

<PAGE>

                  "AFFECTED LENDER ADVANCE" has the meaning assigned to that
         term in Section 2.13.

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

                  "ALTERNATE BASE RATE" means a fluctuating interest rate per
         annum as shall be in effect from time to time, which rate per annum
         shall at all times be equal to the higher of:

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

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

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

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

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

<TABLE>
<CAPTION>
                               LEVEL 1       LEVEL 2        LEVEL 3       LEVEL 4       LEVEL 5        LEVEL 6
                                            Reference                    Reference
                                             Ratings      Reference      Ratings        Ratings
                                            Less Than    Ratings Less    Less Than     Less Than
                              Reference    Level 1 But   Than Level 2   Level 3 But   Level 4 But
                              Rating At    At Least A-   But At Least    At Least      At Least
                             Least A By     By S&P or    BBB+ By S&P    BBB By S&P    BBB- By S&P     Reference
BASIS FOR                     S&P or A2       A3 By       or Baa1 By    or Baa2 By    or Baa3 By     Ratings Less
PRICING                      By Moody's      Moody's.      Moody's.       Moody's.      Moody's.     Than Level 5*
---------                    ----------    -----------   ------------   -----------   -----------    -------------
<S>                          <C>           <C>           <C>            <C>           <C>            <C>
Basis Points Per Annum
Eurodollar Rate                  27.5         37.5           47.5           57.5          87.5          115.0
Base Rate                         0            0              0              0             0              0
Utilized Eurodollar Rate         40.0         50.0           60.0           70.0         100.0          127.5
Utilized Base Rate               12.5         12.5           12.5           12.5          12.5           12.5
</TABLE>

                                        2

<PAGE>

                                                                    * or unrated

         The Applicable Margin will be based upon the Level that corresponds to
         the Reference Ratings at the time of determination, subject, however,
         to the following: if the Reference Ratings assigned by S&P and Moody's
         do not fall within the same Level on the grid above (i.e., a "split
         rating") and: (i) the difference consists of one Level, the Applicable
         Margin will be based upon the Level that corresponds to the higher of
         such Reference Ratings, or (ii) the difference consists of two or more
         Levels, the Applicable Margin will be based upon the Level that
         corresponds to a notional Reference Rating that falls at the midpoint
         between the actual Reference Ratings (or if no Reference Rating on the
         grid above corresponds to such midpoint, the next higher Reference
         Rating), unless, in the case of clause (i) or (ii) above, either
         Reference Rating is below BBB- (in the case of S&P) or Baa3 (in the
         case of Moody's) or the applicable debt securities are, or the Borrower
         is, as applicable, unrated, in which case the Applicable Margin will be
         based upon Level 6. Any change in the Applicable Margin resulting from
         a change in the Reference Ratings shall be effective, as to any
         Advance, as of the date on which the applicable rating agency announces
         the applicable change in ratings.

                  "APPLICABLE RATE" means:

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

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

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

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

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

                  "BASE RATE ADVANCE" means an Advance that bears interest as
         provided in Section 2.07(a).

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

                  "BORROWING" means a borrowing consisting of simultaneous
         Advances of the same Type, having the same Interest Period and ratably
         made or Converted on the same

                                       3

<PAGE>

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

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

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

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

                  "CASH COLLATERAL ACCOUNT" has the meaning assigned to that
         term in Section 6.02.

                                       4

<PAGE>

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

                  "CLOSING" means the day upon which each of the applicable
         conditions precedent enumerated in Section 3.01 shall be fulfilled to
         the satisfaction of, or waived with the consent of, the Lenders, the
         Agent, the LC Issuing Bank and the Borrower. All transactions
         contemplated by the Closing shall take place on a Business Day on or
         prior to July 26, 2004, at the offices of King & Spalding LLP, 1185
         Avenue of the Americas, New York, New York 10036, at 10:00 a.m. (New
         York City time), or such later Business Day as the parties hereto may
         mutually agree.

                  "CO-LEAD ARRANGERS" shall mean, collectively, Wachovia Capital
         Markets, LLC and Barclays Capital, the Investment Banking Division of
         Barclays Bank PLC.

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

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

                  "CONFIDENTIAL INFORMATION" has the meaning assigned to that
         term in Section 8.08.

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

                  "CONSOLIDATED DEBT" means, with respect to any Person, without
         duplication, at any date of determination, the aggregate Debt of such
         Person and its Consolidated Subsidiaries determined on a consolidated
         basis in accordance with GAAP, but shall not include Nonrecourse Debt
         of the Borrower or any of its Subsidiaries.

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

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

                                       5

<PAGE>

                  "DEBENTURE INDENTURE" means that certain Indenture, dated as
         of June 20, 1997, between the Borrower and Firstar Trust Company (n/k/a
         U.S. Bank National Association), as Trustee, as amended and
         supplemented from time to time.

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

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

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

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

                  "ELIGIBLE ASSIGNEE" means (i) a commercial bank or trust
         company organized under the laws of the United States, or any State
         thereof; (ii) a commercial bank organized under the laws of any other
         country that is a member of the OECD, or a political subdivision of any
         such country, provided that such bank is acting through a branch or
         agency located in the United States; (iii) the central bank of any
         country that is a member of the OECD; and (iv) any other commercial
         bank or other financial institution engaged generally in the business
         of extending credit or purchasing debt instruments; provided, however,
         that (A) any such Person shall also (1) have outstanding unsecured
         indebtedness that is rated A- or better by S&P or A3 or better by
         Moody's (or an equivalent rating by another nationally-recognized
         credit rating agency of similar standing if neither of such rating
         agencies is then in the business of rating unsecured

                                       6

<PAGE>

         indebtedness of entities engaged in such businesses) or (2) have
         combined capital and surplus (as established in its most recent report
         of condition to its primary regulator) of not less than $250,000,000
         (or its equivalent in foreign currency), and (B) any Person described
         in clause (ii), (iii) or (iv) above shall, on the date on which it is
         to become a Lender hereunder, (x) be entitled to receive payments
         hereunder without deduction or withholding of any United States Federal
         income taxes (as contemplated by Section 2.16) and (y) not be incurring
         any losses, costs or expenses of the type for which such Person could
         demand payment under Section 2.12.

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

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

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

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

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

                                       7

<PAGE>

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

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

                  "EURODOLLAR RATE ADVANCE" means an Advance that bears interest
         as provided in Section 2.07(b).

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

                  "EVENTS OF DEFAULT" has the meaning assigned to that term in
         Section 6.01.

                  "EXISTING FACILITY" means the $200,000,000 364-Day Credit
         Agreement, dated as of September 30, 2003, as amended, among the
         Borrower, the banks named therein and Bank One, NA, as the
         administrative agent.

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

                                       8

<PAGE>

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

<TABLE>
<CAPTION>
                    LEVEL 1       LEVEL 2        LEVEL 3       LEVEL 4       LEVEL 5         LEVEL 6
                                 Reference                    Reference     Reference
                                  Ratings       Reference      Ratings       Ratings
                                 Less Than    Ratings Less    Less Than     Less Than
                   Reference    Level 1 But   Than Level 2   Level 3 But   Level 4 But
                   Ratings At   At Least A-   But At Least     At Least      At Least
                   Least A By    By S&P or    BBB+ By S&P     BBB By S&P   BBB- By S&P      Reference
BASIS FOR          S&P or A2      A3 By        or Baa1 By     or Baa2 By    or Baa3 By     Ratings Less
PRICING            By Moody's.    Moody's.       Moody's.       Moody's.     Moody's.      Than Level 5*
---------         -----------   -----------   ------------   -----------   -----------    --------------
<S>               <C>           <C>           <C>            <C>           <C>            <C>
Facility Fee         10.0          12.5           15.0           17.5          25.0             35.0
</TABLE>

                                                                    * or unrated

         The Facility Fee will be based upon the Level that corresponds to the
         Reference Ratings at the time of determination, subject, however, to
         the following: if the Reference Ratings assigned by S&P and Moody's do
         not fall within the same Level on the grid above (i.e., a "split
         rating") and: (i) the difference consists of one Level, the Facility
         Fee will be based upon the Level that corresponds to the higher of such
         Reference Ratings, or (ii) the difference consists of two or more
         Levels, the Facility Fee will be based upon the Level that corresponds
         to a notional Reference Rating that falls at the midpoint between the
         actual Reference Ratings (or if no Reference Rating on the grid above
         corresponds to such midpoint, the next higher Reference Rating),
         unless, in the case of clause (i) or (ii) above, either Reference
         Rating is below BBB- (in the case of S&P) or Baa3 (in the case of
         Moody's) or the applicable debt securities are, or the Borrower is, as
         applicable, unrated, in which case the Facility Fee will be based upon
         Level 6. Any change in the Facility Fee resulting from a change in the
         Reference Ratings shall be effective as of the date on which the
         applicable rating agency announces the applicable change in ratings.

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

                  "FIRST MORTGAGE BOND INDENTURE" means that certain Indenture
         of Mortgage or Deed of Trust dated August 1, 1941, between the Borrower
         and First Wisconsin Trust Company (n/k/a U.S. Bank National
         Association) and George B. Luhman (Frank Leslie, successor), as
         Trustees, as amended and supplemented from time to time. "GAAP" has the
         meaning assigned to that term in Section 1.04.

                                       9

<PAGE>

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

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

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

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

                   "INDEMNIFIED PERSON" has the meaning assigned to that term in
         Section 8.04(c).

                  "INDENTURES" means the Debenture Indenture and the First
         Mortgage Bond Indenture.

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

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

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

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

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

                                       10

<PAGE>

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

                  "LC ISSUING BANK" has the meaning assigned to that term in the
         preamble to this Agreement.

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

                  "LC PAYMENT NOTICE" is defined in Section 2.03(d).

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

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

                  "LETTER OF CREDIT" means letters of credit issued by the LC
         Issuing Bank pursuant to Section 2.03.

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

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

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

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

                  "MATERIAL ADVERSE CHANGE" means (i) a material adverse change
         in, or a material adverse effect upon, the operations, business,
         properties, liabilities (actual or contingent), condition (financial or
         otherwise) or prospects of the Borrower or the Borrower and its
         Subsidiaries taken as a whole; (ii) a material impairment of the
         ability of the Borrower to perform its obligations under any Loan
         Document to which it is a party; or (iii) a material adverse change
         upon the legality, validity, binding effect or enforceability against
         the Borrower of any Loan Document to which it is a party.

                                       11

<PAGE>

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

                   "MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined
         in Section 4001(a)(3) of ERISA, which is subject to Title IV of ERISA
         and to which the Parent or any ERISA Affiliate of the Parent is making
         or has an obligation to make contributions, or has within any of the
         preceding five plan years made or had an obligation to make
         contributions.

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

                  "NON-PERFORMING LENDER" has the meaning assigned to that term
         in Section 2.03(e).

                  "NONRECOURSE DEBT" means Debt of any Subsidiary of the
         Borrower (i) as to which (A) the Borrower provides no credit support of
         any kind (including any undertaking, agreement or instrument that would
         constitute Debt), (B) the Borrower is not directly or indirectly liable
         as a guarantor or otherwise, (C) the Borrower is not the lender or
         other type of creditor, or (D) the relevant legal documents do not
         provide that the lenders or other type of creditors with respect
         thereto will have any recourse to the stock or assets of the Borrower
         and (ii) no default with respect to which would permit, upon notice,
         lapse of time or both, any holder of any other Debt (other than the
         Advances and any Note) of the Borrower to declare a default on such
         other Debt or cause the payment thereof to be accelerated or payable
         prior to its stated maturity. For the avoidance of doubt, if the
         Borrower provides credit support that is limited in its drawable amount
         for any portion of Debt of any Subsidiary of the Borrower that would be
         considered Nonrecourse Debt but for the provision of such credit
         support, such Debt shall be considered Nonrecourse Debt to the extent
         that it is not so supported.

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

                  "NOTICE OF BORROWING" has the meaning assigned to that term in
         Section 2.02(a).

                  "NOTICE OF CONVERSION" has the meaning assigned to that term
         in Section 2.10.

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

                  "OTHER TAXES" has the meaning assigned to that term in Section
         2.16(b).

                                       12

<PAGE>

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

                  "PARENT" means Alliant Energy Corporation, a Wisconsin
         corporation.

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

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

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

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

                  "PSC ORDER" means the order of the Public Service Commission
         of Wisconsin (File No. 6680-SB-122), dated May 4, 2001.

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

                  "REFERENCE BANKS" means Wachovia, Barclays Bank PLC and any
         additional or substitute Lenders as may be selected from time to time
         to act as Reference Banks hereunder by the Agent.

                  "REFERENCE RATINGS" means the ratings assigned by S&P and
         Moody's to the senior unsecured non-credit-enhanced long term debt of
         the Borrower.

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

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

                  "REQUEST FOR ISSUANCE" means a request made pursuant to
         Section 2.03(a) in the form of Exhibit 2.03.

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

                  "SENIOR FINANCIAL OFFICER" means the President, the Chief
         Executive Officer, the Chief Financial Officer or the Treasurer of the
         Borrower.

                  "SIGNIFICANT SUBSIDIARY" means any Subsidiary of the Borrower
         that, on a consolidated basis with any of its Subsidiaries as of any
         date of determination, accounts

                                       13

<PAGE>

         for more than 20% of the consolidated assets (valued at book value) of
         the Borrower and its Subsidiaries.

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

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

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

                  "TAXES" has the meaning assigned to that term in Section
         2.16(a).

                  "TERMINATION DATE" means the earliest to occur of (i) any
         Trigger Date, if the Borrower has not received all Governmental
         Approvals required to be obtained in order for the term of this
         Agreement to extend past such date, (ii) July 26, 2009 and (iii) the
         date of termination or reduction in whole of the Commitments pursuant
         to Section 2.05 or 6.01.

                  "TRIGGER DATE" means (i) July 25, 2005, (ii) July 25, 2006,
         (iii) July 25, 2007 and (iv) July 25, 2008.

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

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

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

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

                                       14

<PAGE>

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

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

         SECTION 1.04. ACCOUNTING TERMS. Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to the Lenders hereunder shall be prepared, in accordance with
accounting principles generally accepted in the United States of America
("GAAP") applied on a consistent basis. With respect to (and only with respect
to) determining compliance with this Agreement, all calculations shall (except
as otherwise expressly provided herein) be made by application of GAAP applied
on a basis consistent with the most recent annual or quarterly financial
statements delivered pursuant to Section 5.01(h) (or prior to the delivery of
the first financial statements pursuant to Section 5.01(h), consistent with the
financial statements described in Section 4.01(f)); provided, however, if (i)
the Borrower shall object to determining such compliance on such basis at the
time of delivery of such financial statements due to any change in GAAP or the
rules promulgated with respect thereto or (ii) the Administrative Agent or the
Majority Lenders shall so object in writing within 30 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Borrower
to the Lenders as to which no such objection shall have been made.

                                   ARTICLE II
                  AMOUNTS AND TERMS OF THE EXTENSIONS OF CREDIT

         SECTION 2.01. THE ADVANCES.

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

                                       15

<PAGE>

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

         SECTION 2.02. MAKING THE ADVANCES.

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

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

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

                                       16

<PAGE>

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

         SECTION 2.03. LETTERS OF CREDIT.

         (a) Subject to the terms and conditions hereof, each Letter of Credit
shall be issued (or the stated maturity thereof extended or terms thereof
modified or amended) on not less than two Business Days' prior notice thereof by
delivery of a Request for Issuance to the Agent and the LC Issuing Bank
substantially in the form attached hereto in Exhibit 2.03. Each Request for
Issuance shall specify a statement of drawing conditions applicable to such
Letter of Credit, and if such Request for Issuance relates to an amendment or
modification of a Letter of Credit, it shall be accompanied by the consent of
the beneficiary of the Letter of Credit thereto. The expiry of such Letter of
Credit shall be no later than five Business Days' prior to the Termination Date.
Each Request for Issuance shall be irrevocable unless modified or rescinded by
the Borrower not less than one day prior to the proposed date of issuance (or
effectiveness) specified therein. Not later than 12:00 noon on the proposed date
of issuance (or effectiveness) specified in such Request for Issuance, and upon
fulfillment of the applicable conditions precedent and the other requirements
set forth herein, the LC Issuing Bank shall issue (or extend, amend or modify)
such Letter of Credit and provide notice and a copy thereof to the Agent, which
shall promptly furnish copies thereof to the Lenders.

         (b) No Letter of Credit shall be requested or issued hereunder if,
after the issuance thereof, the Outstanding Credits would exceed the total
Commitments.

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

         (d) If the LC Issuing Bank shall not have been reimbursed in full for
any payment made by the LC Issuing Bank under a Letter of Credit issued by the
LC Issuing Bank on the date of such payment, the LC Issuing Bank shall give the
Agent and each Lender prompt notice thereof (an "LC PAYMENT NOTICE") no later
than 12:00 noon on the Business Day immediately succeeding the date of such
payment by the LC Issuing Bank. Each Lender severally agrees to purchase a
participation in the reimbursement obligation of the Borrower to the LC Issuing
Bank by paying to the Agent for the account of the LC Issuing Bank an amount
equal to such Lender's Percentage of such unreimbursed amount paid by the LC
Issuing Bank, plus interest on such amount at a rate per annum equal to the
Federal Funds Rate from the date of the payment by the LC Issuing Bank to the
date of payment to the LC Issuing Bank by such Lender. Each such

                                       17
<PAGE>

payment by a Lender shall be made not later than 3:00 P.M. on the later to occur
of (i) the Business Day immediately following the date of such payment by the LC
Issuing Bank and (ii) the Business Day on which such Lender shall have received
an LC Payment Notice from the LC Issuing Bank. Each Lender's obligation to make
each such payment to the Agent for the account of the LC Issuing Bank shall be
several and shall not be affected by the occurrence or continuance of an Event
of Default or the failure of any other Lender to make any payment under this
Section 2.03(d) or the failure of the LC Issuing Bank to provide the LC Payment
Notice by 12:00 noon on the Business Day immediately succeeding the date of
payment under a Letter of Credit by the LC Issuing Bank. Each Lender further
agrees that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.

      (e) The failure of any Lender to make any payment to the Agent for the
account of the LC Issuing Bank in accordance with subsection (d) above shall not
relieve any other Lender of its obligation to make payment, but no Lender shall
be responsible for the failure of any other Lender. If any Lender (a
"NON-PERFORMING LENDER") shall fail to make any payment to the Agent for the
account of the LC Issuing Bank in accordance with subsection (d) above within
five Business Days after the LC Payment Notice relating thereto, then, for so
long as such failure shall continue, the LC Issuing Bank shall be deemed, for
purposes of Section 8.01 and Article VI hereof, to be a Lender owed a Borrowing
in an amount equal to the outstanding principal amount due and payable by such
Non-Performing Lender to the Agent for the account of the LC Issuing Bank
pursuant to subsection (d) above. Any Non-Performing Lender and the Borrower
(without waiving any claim against such Lender for such Lender's failure to
purchase a participation in the reimbursement obligations of the Borrower under
subsection (d) above) severally agree to pay to the Agent for the account of the
LC Issuing Bank forthwith on demand such amount, together with interest thereon
for each day from the date such Lender would have purchased its participation
had it complied with the requirements of subsection (d) above until the date
such amount is paid to the Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to Base Rate Advances and (ii) in the case
of such Lender, the rate applicable to Base Rate Advances plus 1%.

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

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

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

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

                                       18
<PAGE>

      Agreement, the transactions contemplated hereby, thereby or by such Letter
      of Credit, or any unrelated transaction;

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

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

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

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

      (h) If any Letter of Credit contains a provision pursuant to which it is
deemed to be automatically renewed unless notice of termination of such Letter
of Credit is given by the LC Issuing Bank, the LC Issuing Bank shall timely give
notice of termination if (i) as of close of business on the seventeenth day
prior to the last day upon which the LC Issuing Bank's notice of termination may
be given to the beneficiaries of such Letter of Credit, the LC Issuing Bank has
received a notice of termination from the Borrower or a notice from the Agent
that the conditions

                                       19
<PAGE>

to issuance of such Letter of Credit have not been satisfied or (ii) the renewed
Letter of Credit would have a term not permitted by Section 2.03(a).

      SECTION 2.04. FEES.

      (a) The Borrower agrees to pay to the Agent for the account of each Lender
the Facility Fee, from the date hereof, in the case of each Bank, and from the
effective date specified in the Lender Assignment pursuant to which it became a
Lender, in the case of each other Lender, until the later of the Termination
Date and the date all Advances are paid in full, payable quarterly in arrears on
the last day of each March, June, September and December during the term of such
Lender's Commitment, commencing September 30, 2004, and on the later of the
Termination Date and the date all Advances are paid in full.

      (b) The Borrower shall pay to the Agent for the account of each Lender a
fee (the "LC FEE") on the average daily amount of the sum of the undrawn stated
amounts of all Letters of Credit outstanding on each such day, from the date
hereof until the later to occur of the Termination Date and the date on which no
Letters of Credit are outstanding, payable on the last day of each March, June,
September and December (commencing September 30, 2004) and such later date, at a
rate equal at all times to the Applicable Margin in effect from time to time for
Eurodollar Rate Advances. In addition, the Borrower shall pay to the LC Issuing
Bank such fees for the issuance and maintenance of Letters of Credit and for
drawings thereunder as may be separately agreed between the Borrower and the LC
Issuing Bank.

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

      SECTION 2.05. CHANGES IN THE COMMITMENTS.

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

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

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

      SECTION 2.06. REPAYMENT OF ADVANCES. The Borrower shall repay the
principal amount of each Advance made by each Lender no later than on the
Termination Date.

      SECTION 2.07. INTEREST ON ADVANCES. The Borrower shall pay interest on the
unpaid principal amount of each Advance owing to each Lender from the date of
such Advance until

                                       20
<PAGE>

such principal amount shall be paid in full, at the Applicable Rate for such
Advance (except as otherwise provided in this Section 2.07), payable as follows:

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

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

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

      SECTION 2.09. INTEREST RATE DETERMINATION.

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

      (b) The Agent shall give prompt notice to the Borrower and the Lenders of
the applicable interest rate determined by the Agent for purposes of Section
2.07(a) or (b), and the applicable

                                       21
<PAGE>

rate, if any, furnished by each Reference Bank for the purpose of determining
the applicable interest rate under Section 2.07(b).

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

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

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

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

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

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

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

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

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

                                       22
<PAGE>

(ii) the number of Lenders on such date, the Borrower shall have the right to
continue all such Advances as, or to Convert all such Advances into, Advances of
such Type having such Interest Period.

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

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

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

      SECTION 2.12. INCREASED COSTS.

      (a) If, due to either (i) the introduction of or any change (other than
any change by way of imposition or increase of reserve requirements, in the case
of Eurodollar Rate Advances, included in the Eurodollar Rate Reserve Percentage)
in or to the interpretation of any law or regulation or (ii) the compliance with
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in

                                       23
<PAGE>

the cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand
by such Lender (with a copy of such demand to the Agent), pay to the Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to the Borrower and the Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error, provided that
the determination thereof shall have been made by such Lender in good faith.

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

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

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

                                       24
<PAGE>

      SECTION 2.14. PAYMENTS AND COMPUTATIONS.

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

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

      (c) All computations of interest based on clause (i) of the definition of
"Alternate Base Rate" and of the Facility Fees shall be made by the Agent on the
basis of a year of 365 or 366 days, as the case may be, and all computations of
interest based on the Eurodollar Rate and the LC Fee and the Federal Funds Rate
shall be made by the Agent, and all computations of interest pursuant to Section
2.09 shall be made by a Lender, on the basis of a year of 360 days, in each case
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest or fees are payable. Each
determination by the Agent (or, in the case of Section 2.09, by a Lender) of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error, provided that such determination shall have been made by the
Agent or such Lender, as the case may be, in good faith.

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

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

                                       25
<PAGE>

      SECTION 2.15. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS.

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

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

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

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

      SECTION 2.16. TAXES.

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

                                       26
<PAGE>

(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.

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

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

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

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

      (f) Any Lender claiming any additional amounts payable pursuant to this
Section 2.16 shall use its best efforts (consistent with its internal policy and
legal and regulatory restrictions) to change the jurisdiction of its Applicable
Lending Office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that may thereafter

                                       27
<PAGE>

accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.

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

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

                                   ARTICLE III
                       CONDITIONS TO EXTENSIONS OF CREDIT

      SECTION 3.01. CONDITIONS PRECEDENT TO CLOSING. The Commitments of the
Lenders and the obligation of the LC Issuing Bank to issue Letters of Credit
shall not become effective unless the following conditions precedent shall have
been fulfilled:

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

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

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

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

                                       28
<PAGE>

      the Borrower with respect to this Agreement and the other Loan Documents,
      certified by the Secretary or an Assistant Secretary of the Borrower;

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

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

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

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

            (viii) favorable opinions of:

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

                  (B) In-house counsel of the Borrower, in substantially the
            form of Exhibit 3.01(a)(viii)-2 and as to such other matters as the
            Majority Lenders, through the Agent, may reasonably request; and

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

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

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

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

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

                                       29
<PAGE>

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

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

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

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

            (i)   the representations and warranties contained in Section 4.01
      (other than, in the case of any Borrowing the proceeds of which will be
      used exclusively to repurchase commercial paper issued by or on behalf of
      the Borrower, the representation and warranty set forth in Section 4.01(e)
      and, in the event of any such Borrowing, the Agent may require the
      Borrower to deliver to it information sufficient for the Agent to disburse
      the proceeds of such Borrowing directly to the holders of such commercial
      paper or to a paying agent therefor) are true and correct on and as of the
      date of such Extension of Credit, before and after giving effect to the
      application of the proceeds of any Borrowing made in connection therewith
      or the issuance or amendment of any Letter of Credit in connection
      therewith, as the case may be, as though made on and as of such date; and

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

      (b) the Agent shall have received all documentation and information
required by regulatory authorities under applicable "know your customer" and
anti-money laundering rules and regulations, including without limitation the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001));

      (c) prior to any Extension of Credit that would result in the outstanding
principal amount of short-term Debt of the Borrower to exceed $240 million, the
Borrower, shall have obtained an appropriate Governmental Approval and shall
have delivered copies of same, with appropriate

                                       30
<PAGE>

certifications and, if requested by the Agent, an opinion letter, regarding such
Governmental Approval to the Agent; and

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

      SECTION 3.03. CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT ON OR AFTER ANY
TRIGGER DATE.

      At any time on or after any Trigger Date, the obligation of (i) each
Lender to make an Advance on the occasion of each Borrowing (including the
initial Borrowing) that would cause the aggregate principal amount of Advances
outstanding hereunder to increase, and (ii) the LC Issuing Bank to issue any
Letter of Credit (including the initial Letter of Credit) or increase the stated
amount of any Letter of Credit or to extend the termination date thereof shall
be subject to the further conditions precedent that on or prior to the
applicable Trigger Date, the Agent shall have received the following, each dated
as of or prior to such Trigger Date, in form and substance satisfactory to the
LC Issuing Bank and Agent and with one copy for the LC Issuing Bank and each
Lender:

            (i)   A certificate of the Secretary or an Assistant Secretary of
      the Borrower certifying that attached thereto are true and correct copies
      of all Governmental Approvals required to be obtained in order for the
      term of this Agreement to extend past such Trigger Date, and that such
      Governmental Approvals have been issued and are in full force and effect;
      and

            (ii)  An opinion of counsel for the Borrower to the effect that no
      Governmental Approval is or will be required in connection with the
      performance by the Borrower, or the consummation by the Borrower of the
      transactions contemplated by, this Agreement between such Trigger Date and
      the next succeeding Trigger Date (if there is any succeeding Trigger
      Date), other than the Governmental Approvals described in clause (i)
      above, which have been duly issued and are final and in full force and
      effect.

It is understood that any certificate of the secretary or assistant secretary of
the Borrower and opinion letter delivered pursuant to clause (i) and (ii) may,
based upon their terms, suffice to satisfy this Section 3.03 with respect to
more than one Trigger Date.

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

                                       31
<PAGE>

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

      SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants as follows:

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

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

            (c)   No Governmental Approval is required in connection with the
      execution and delivery, and the performance by the Borrower of any Loan
      Document, other than (i) the PSC Order, which order is final and in full
      force and effect and not subject to appeal, rehearing, review or
      reconsideration and such Governmental Approval as may be necessary for the
      outstanding principal balance of the Extensions of Credit to be permitted
      to exceed $240 million and (ii) from any Trigger Date, additional
      Governmental Approvals required to be obtained for the term of this
      Agreement to extend past such Trigger Date.

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

            (e)   Since December 31, 2003, there has been no Material Adverse
      Change.

            (f)   The audited consolidated balance sheets of the Borrower and
      its Subsidiaries as at December 31, 2003, and the related audited
      consolidated statements of income of the Borrower and its Subsidiaries for
      the fiscal year then ended, and the unaudited consolidated balance sheets
      of the Borrower and its Subsidiaries as at March

                                       32
<PAGE>

      31, 2004, and the related unaudited consolidated statements of income for
      the three-month period then ended, copies of each of which have been
      furnished to each Bank, fairly present (subject, in the case of such
      balance sheets and statements of income for the three months ended March
      31, 2004, to year-end adjustments) the consolidated financial condition of
      the Borrower and its Subsidiaries as at such dates and the consolidated
      results of operations of the Borrower and its Subsidiaries for the periods
      ended on such dates, all in accordance, in all material respects, with
      GAAP.

            (g)   Except as disclosed in the Parent's Report on Form 10-K for
      the year ended December 31, 2003 and Report on Form 10-Q for the period
      ended March 31, 2004, there is no pending or threatened action or
      proceeding affecting the Borrower or any of its Subsidiaries or properties
      before any court, governmental agency or arbitrator, that might reasonably
      be expected to constitute a Material Adverse Change, and since December
      31, 2003 there have been no material adverse developments in any action or
      proceeding so disclosed.

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

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

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

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

                                   ARTICLE V
                            COVENANTS OF THE BORROWER

      SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any amount in respect of
this Agreement shall remain unpaid, any Lender shall have any Commitment or any
Letter of Credit

                                       33
<PAGE>

shall remain outstanding, the Borrower will, unless the Majority Lenders shall
otherwise consent in writing:

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

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

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

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

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

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

                                       34
<PAGE>

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

            (h)   Reporting Requirements. Furnish to each Lender:

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

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

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

                  (iv)  concurrently with the delivery of the financial
            statements referred to in clauses (ii) and (iii) above, a
            certificate signed by the principal executive officer and the
            principal financial officer of the Borrower (i) stating whether a
            Default or Event of Default has occurred and is continuing on the
            date of such certificate, and if a Default or an Event of Default
            has then occurred and is continuing, specifying the details thereof
            and the action that the Borrower has taken or proposes to take with
            respect thereto, (ii) setting forth in reasonable detail
            calculations demonstrating compliance with Section 5.02(h) and (iii)
            stating

                                       35
<PAGE>

            whether any change in GAAP or the application thereof has occurred
            since the date of the audited financial statements referred to in
            Section 4.01 and, if any change has occurred, specifying the effect
            of such change on the financial statements accompanying such
            certificate;

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

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

                  (vii) promptly after receipt thereof by the Borrower or any
            ERISA Affiliate of the Borrower from a Multiemployer Plan sponsor, a
            copy of each notice received by the Borrower or such ERISA Affiliate
            concerning the imposition or amount of withdrawal liability in an
            aggregate principal amount of at least $5,000,000 pursuant to
            Section 4202 of ERISA in respect of which the Borrower or such ERISA
            Affiliate is reasonably expected to be liable;

                  (viii) promptly after requested, such documents or
            governmental reports or filings relating to any Plan as the Agent or
            the LC Issuing Bank or any Lender through the Agent may from time to
            time reasonably request;

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

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

                  (xi)  promptly after requested, such other information
            respecting the business, properties, results of operations,
            prospects, revenues, condition or operations, financial or
            otherwise, of the Borrower or any of its Subsidiaries as

                                       36
<PAGE>

            the Agent or LC Issuing Bank or any Lender through the Agent may
            from time to time reasonably request.

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

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

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

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

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

                  (ii)  Liens imposed by law, such as materialmen's, mechanics',
            carriers', workmen's and repairmen's liens and other similar Liens
            arising in the ordinary course of business securing obligations
            which are not overdue or which are being contested in good faith,
            provided that any such contested Lien securing an amount claimed in
            excess of $5,000,000 shall be fully bonded within 90 days after the
            imposition of such Lien;

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

                                       37
<PAGE>

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

                  (v)   Liens securing Debt permitted by Section 5.02(b)(i)(B)
            or (C);

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

                  (vii) Liens incurred in connection with the sales of assets
            permitted in subsection 5.02(f)(vii) of this Section;

                  (viii) Liens incurred by the Borrower or any of its
            Subsidiaries on assets of the Borrower and its Subsidiaries posted
            as collateral to secure Nonrecourse Debt or payments on contracts
            other than for borrowed money, in an aggregate principal amount not
            to exceed $100,000,000;

                  (ix)  Liens on nuclear fuel granted in connection with any
            financing arrangement for the purpose of purchasing or leasing such
            nuclear fuel; and

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

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

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

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

                                       38
<PAGE>

                  (B)   Debt issued pursuant to the Indentures;

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

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

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

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

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

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

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

                  (E)   other Debt set forth in Schedule III hereto;

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

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

                                       39
<PAGE>

      (d)   Transactions with Affiliates. Enter into, or permit any of its
Subsidiaries to enter into, any transaction with an Affiliate of the Borrower,
unless such transaction (i) is on terms no less favorable to the Borrower or
such Subsidiary, as the case may be, than if the transaction had been negotiated
in good faith on an arm's length basis with a Person that was not an Affiliate
of the Borrower, (ii) has been approved by the Securities and Exchange
Commission pursuant to, or is entered into otherwise in accordance with, PUHCA
or other applicable utility or utility holding company regulations or (iii) is
among wholly-owned Subsidiaries of the Borrower.

      (e)   Mergers, Etc.

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

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

      (f)   Sales, Etc., of Assets. Sell, lease, transfer, assign or otherwise
dispose of any of its assets, or permit any of its Subsidiaries to sell, lease,
transfer, assign or otherwise dispose of any of its assets, except (i) sales,
leases, transfers and assignments from one Subsidiary of the Borrower to another
such Subsidiary or to the Borrower, (ii) in any transaction in which the net
proceeds from such sale, lease, transfer, assignment or disposition are solely
Cash and Cash Equivalents and such proceeds are (A) applied solely as a
permanent reduction of the Commitments and prepayment of Advances pursuant to
Sections 2.05, 2.11 and 2.12, or (B) applied solely to pay or prepay Debt
(together with a permanent reduction of any commitments relating to such Debt)
incurred by the Borrower or any such Subsidiary in connection with the project
comprising such assets, (iii) in connection with a sale and leaseback
transaction, (iv) sales, leases, transfers and assignments of other assets
representing not in excess of 20% of the consolidated assets (valued at book
value) of the Borrower and its Subsidiaries in the aggregate from the date
hereof until the Termination Date in any single or series of transactions,
whether or not related, (v) sales, leases, transfers and assignments of worn out
or obsolete equipment no longer used and useful in the business of the Borrower
and its Subsidiaries,

                                       40
<PAGE>

      (vi) dispositions of the Kewaunee nuclear facility, and (vii) sales of
      contracts and accounts receivable by the Borrower and its Subsidiaries.

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

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

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

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

                                   ARTICLE VI
                                EVENTS OF DEFAULT

      SECTION 6.01. EVENTS OF DEFAULT. If any of the following events (each an
"EVENT OF DEFAULT") shall occur and be continuing after the applicable grace
period and notice requirement (if any):

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

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

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

                                       41
<PAGE>

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

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

      (f) The Borrower or any of its Subsidiaries shall fail to make any payment
in respect of any of its Debt other than Nonrecourse Debt, including any
interest or premium thereon (but excluding Debt hereunder) aggregating
$50,000,000 or more when due under documents related to such Debt (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) and
such failure shall continue after the applicable grace period, if any, specified
in any agreement or instrument relating to such Debt; or any other default under
any agreement or instrument relating to any such Debt, or any other event, shall
occur and shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment) prior to the stated
maturity thereof as a result of a default or other similar adverse event; or

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

      (h) Any judgment or order for the payment of money equal to or in excess
of $50,000,000 shall be rendered against the Borrower or any of its Subsidiaries
or their respective properties and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or

                                       42

<PAGE>

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

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

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

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

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

      SECTION 6.02. CASH COLLATERAL ACCOUNT. Notwithstanding anything to the
contrary contained herein, no notice given or declaration made by the Agent
pursuant to this Article VI shall affect (i) the obligation of the LC Issuing
Bank to make any payment under any Letter of Credit in accordance with the terms
of such Letter of Credit or (ii) the obligations of each Lender in respect of
each such Letter of Credit; provided, however, that if an Event of Default has
occurred and is continuing, the Agent shall at the request, or may with the
consent, of the Majority Lenders, upon notice to the Borrower, require the
Borrower to deposit with the Agent an amount in the cash collateral account (the
"CASH COLLATERAL ACCOUNT") described below equal

                                       43

<PAGE>

to the LC Outstandings on such date. Such Cash Collateral Account shall at all
times be free and clear of all rights or claims of third parties. The Cash
Collateral Account shall be maintained with the Agent in the name of, and under
the sole dominion and control of, the Agent, and amounts deposited in the Cash
Collateral Account shall bear interest at a rate equal to the rate generally
offered by Wachovia for deposits equal to the amount deposited by the Borrower
in the Cash Collateral Account, for a term to be determined by the Agent, in its
sole discretion. The Borrower hereby grants to the Agent for the benefit of the
LC Issuing Bank and the Lenders a Lien in and hereby assigns to the Agent for
the benefit of LC Issuing Bank and the Lenders all of its right, title and
interest in, the Cash Collateral Account and all funds from time to time on
deposit therein to secure its reimbursement obligations in respect of Letters of
Credit. If any drawings then outstanding or thereafter made are not reimbursed
in full immediately upon demand or, in the case of subsequent drawings, upon
being made, then, in any such event, the Agent may apply the amounts then on
deposit in the Cash Collateral Account, toward the payment in full of any of the
Obligations as and when such obligations shall become due and payable. Upon
payment in full, after the termination of the Letters of Credit, of all such
obligations, the Agent will repay and reassign to the Borrower any cash then in
the Cash Collateral Account and the Lien of the Agent on the Cash Collateral
Account and the funds therein shall automatically terminate.

                                   ARTICLE VII
                                    THE AGENT

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

      SECTION 7.02. AGENT'S RELIANCE, ETC. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
any other Loan Document, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the Agent:
(i) may treat the payee of any Note as the holder thereof until the Agent
receives and accepts a Lender Assignment entered into by the Lender which is the
payee of such

                                       44

<PAGE>

Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section
8.07; (ii) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement or any other Loan Document;
(iv) shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or any
other Loan Document on the part of the Borrower or to inspect the property
(including the books and records) of the Borrower; (v) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto; and (vi)
shall incur no liability under or in respect of this Agreement or any other Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telecopier, telegram, cable or telex) believed by it to
be genuine and signed or sent by the proper party or parties.

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

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

      SECTION 7.05. INDEMNIFICATION. The Lenders agree to indemnify the Agent
(to the extent not reimbursed by the Borrower), ratably according to (i) on or
before the Termination Date, the respective Percentages of the Lenders, or (ii)
after the Termination Date, the respective outstanding principal amounts of the
Advances, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement,
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Agent

                                       45

<PAGE>

promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
to the extent that the Agent is not reimbursed for such expenses by the
Borrower.

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

                                  ARTICLE VIII
                                  MISCELLANEOUS

      SECTION 8.01. AMENDMENTS, ETC. No amendment or waiver of any provision of
any Loan Document, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Majority Lenders and, in the case of any amendment, the Borrower, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders, do any of the
following: (a) waive, modify or eliminate any of the conditions specified in
Section 3.01, 3.02, 3.03 or 3.04, (b) increase or extend the Commitments of the
Lenders or subject the Lenders to any additional obligations, (c) reduce the
principal of, or interest on, the Advances, any Applicable Margin or any fees or
other amounts payable hereunder, (d) postpone any date fixed for any payment of
principal of, or interest on, the Advances or any fees or other amounts payable
hereunder, (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Lenders, which shall
be required for the Lenders or any of them to take any action hereunder, (f)
amend this Section 8.01, or (g) release any collateral for the obligations of
the Borrower hereunder; and provided, further, that no amendment, waiver or
consent shall affect the rights or duties of the Agent or the LC Issuing Bank
under this Agreement or any Note, unless such amendment, waiver or consent is in
writing

                                       46

<PAGE>

and signed by the Agent and the LC Issuing Bank, as the case may be, in addition
to the Lenders required above to take such action; and provided, further that
this Agreement may be amended and restated without the consent of any Lender,
the LC Issuing Bank or the Agent if, upon giving effect to such amendment and
restatement, such Lender, the LC Issuing Bank or the Agent, as the case may be,
shall no longer be a party to this Agreement (as so amended and restated) or
have any Commitment or other obligation hereunder or under any Letter of Credit
and shall have been paid in full all amounts payable hereunder to such Lender,
the LC Issuing Bank or the Agent, as the case may be.

      SECTION 8.02. NOTICES, ETC. All notices and other communications provided
for hereunder and under the other Loan Documents shall be in writing (including
telecopier, telegraphic, telex or cable communication) and mailed, telecopied,
telegraphed, telexed, cabled or delivered, if to the Borrower, at its address at
4902 North Biltmore Lane, Madison, Wisconsin 53718-2132 Attn: Treasurer, or P.O.
Box 77007, Madison, Wisconsin 53707-1007 Attn: Treasurer; if to any Bank, at its
Domestic Lending Office specified opposite its name on Schedule I hereto; if to
any other Lender, at its Domestic Lending Office specified in the Lender
Assignment pursuant to which it became a Lender; and if to the Agent, at its
address at One Wachovia Center, Wachovia Bank, National Association, 301 S.
College Street, NC-0760, Charlotte, North Carolina 28288-0760, Attention:
Lawrence P. Sullivan; or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telecopied, telegraphed, telexed
or cabled, be effective five days after being deposited in the mails, or when
delivered to the telegraph company, telecopied, confirmed by telex answerback or
delivered to the cable company, respectively, except that notices and
communications to the Agent pursuant to Article II or VII shall not be effective
until received by the Agent.

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

      SECTION 8.04. COSTS, EXPENSES, TAXES AND INDEMNIFICATION.

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

                                       47

<PAGE>

under this Section 8.04(a). In addition, the Borrower shall pay any and all
stamp and other taxes payable or determined to be payable in connection with the
execution and delivery of this Agreement and the other Loan Documents, and the
other documents and instruments to be delivered hereunder and thereunder, and
agrees to save the Agent, the LC Issuing Bank and each Lender harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes.

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

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

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

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

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

      (d) The Borrower's obligations under this Section 8.04 shall survive the
repayment of all amounts owing to the Lenders hereunder and the termination of
the Commitments. If and to the extent that the obligations of the Borrower under
this Section 8.04 are unenforceable for any

                                       48

<PAGE>

reason, the Borrower agrees to make the maximum contribution to the payment and
satisfaction thereof which is permissible under applicable law.

      SECTION 8.05. RIGHT OF SET-OFF.

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

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

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

      SECTION 8.07. ASSIGNMENTS AND PARTICIPATIONS.

      (a) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under the Loan Documents (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and the Note or Notes (if any) held by it); provided, however, that (i) each
such assignment shall be of a constant, and not a varying, percentage of all of
the assigning Lender's rights and obligations under the Loan Documents, (ii) the
amount of

                                       49

<PAGE>

the Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Lender Assignment with respect to
such assignment) shall in no event be less than the lesser of the amount of such
Lender's then remaining Commitment and $5,000,000 or any whole multiple of
$1,000,000 in excess thereof (except in the case of assignments between Lenders
at the time already parties hereto and between a Lender and an Affiliate of such
Lender), (iii) the Agent, the LC Issuing Bank and, so long as no Event of
Default shall have occurred and be continuing, the Borrower, shall have
consented to such assignment (in each case, which may not be unreasonably
withheld or delayed), and (iv) the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording in the Register, a
Lender Assignment, together with any Note or Notes (if any) subject to such
assignment and a processing and recordation fee of $3,500. Promptly following
its receipt of such Lender Assignment, Note or Notes (if any) and fee, the Agent
shall accept and record such Lender Assignment in the Register. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Lender Assignment, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Lender Assignment, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Lender Assignment, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of a Lender Assignment
covering all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto).
Notwithstanding anything to the contrary contained in this Agreement, any Lender
may at any time, with notice to the Borrower, the Agent and the LC Issuing Bank,
assign all or any portion of the Advances owing to it to any other Lender or any
Affiliate of a Lender. No such assignment, other than to an Eligible Assignee, a
Lender or an Affiliate of a Lender, shall release the assigning Lender from its
obligations hereunder.

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

                                       50

<PAGE>

incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

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

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

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

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

      (g) If any Lender (or any bank, financial institution, or other entity to
which such Lender has sold a participation) shall (i) make any demand for
payment under Section 2.08 or 2.12 or (ii) give notice to the Agent pursuant to
Section 2.13, then within 30 days after any such demand or occurrence (if, but
only if, in the case of any demanded payment described in clause (i), such
demanded payment has been made by the Borrower), the Borrower may, with the
approval of the Agent and the LC Issuing Bank (which approval shall not be
unreasonably withheld), and provided that no Event of Default or Unmatured
Default shall then have occurred and be

                                       51

<PAGE>

continuing, demand that such Lender assign in accordance with this Section 8.07
to one or more Eligible Assignees designated by the Borrower all (but not less
than all) of such Lender's Commitment and the Advances owing to it within the
period ending on the later to occur of (x) the last day in the 30-day period
described above and (y) the last day of the longest of the then-current Interest
Periods for such Advances. If any such Eligible Assignee designated by the
Borrower shall fail to consummate such assignment on terms acceptable to such
Lender, or if the Borrower shall fail to designate any such Eligible Assignees
for all or part of such Lender's Commitment or Advances, then such demand by the
Borrower shall become ineffective; it being understood for purposes of this
subsection (g) that such assignment shall be conclusively deemed to be on terms
acceptable to such Lender, and such Lender shall be compelled to consummate such
assignment to an Eligible Assignee designated by the Borrower, if such Eligible
Assignee (1) shall agree to such assignment by entering into a Lender Assignment
with such Lender and (2) shall offer compensation to such Lender in an amount
equal to all amounts then owing by the Borrower to such Lender hereunder,
whether for principal, interest, fees, costs or expenses (other than the
demanded payment referred to above and payable by the Borrower as a condition to
the Borrower's right to demand such assignment), or otherwise.

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

      (i) Notwithstanding anything to the contrary contained herein, any Lender
(a "GRANTING LENDER") may grant to a special purpose funding vehicle (an "SPC")
of such Granting Lender identified as such in writing from time to time by the
Granting Lender to the Agent, the LC Issuing Bank and the Borrower, the option
to provide to the Borrower all or any part of any Advance that such Granting
Lender would otherwise be obligated to make to the Borrower pursuant to this
Agreement; provided that (i) nothing herein shall constitute a commitment by any
such SPC to make any Advance, (ii) if such SPC elects not to exercise such
option or otherwise fails to provide all or any part of such Advance, the
Granting Lender shall be obligated to make such Advance pursuant to the terms
hereof and (iii) no SPC or Granting Lender shall be entitled to receive any
greater amount pursuant to Section 2.12 or 8.04(b) than the Granting Lender
would have been entitled to receive had the Granting Lender not otherwise
granted such SPC the option to provide any Advance to the Borrower. The making
of an Advance by an SPC hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Advance were made by such Granting
Lender. Each party hereto hereby agrees that no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement for which a Lender
would otherwise be liable so long as, and to the extent that, the related
Granting Lender provides such indemnity or makes such payment. In furtherance of
the foregoing, each party hereto hereby agrees (which agreement shall survive
the termination of this Agreement) that, prior to the date that is one year and
one day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against or join any other
person in instituting against such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. Notwithstanding the foregoing, the Granting Lender
unconditionally agrees to indemnify the

                                       52

<PAGE>

Borrower, the LC Issuing Bank, the Agent and each Lender against all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
incurred by or asserted against the Borrower, the LC Issuing Bank, the Agent or
such Lender, as the case may be, in any way relating to or arising as a
consequence of any such forbearance or delay in the initiation of any such
proceeding against its SPC. Each party hereto hereby acknowledges and agrees
that no SPC shall have the rights of a Lender hereunder, such rights being
retained by the applicable Granting Lender. Accordingly, and without limiting
the foregoing, each party hereby further acknowledges and agrees that no SPC
shall have any voting rights hereunder and that the voting rights attributable
to any Advance made by an SPC shall be exercised only by the relevant Granting
Lender and that each Granting Lender shall serve as the administrative agent and
attorney-in-fact for its SPC and shall on behalf of its SPC receive any and all
payments made for the benefit of such SPC and take all actions hereunder to the
extent, if any, such SPC shall have any rights hereunder. In addition,
notwithstanding anything to the contrary contained in this Agreement any SPC may
(i) with notice to, but without the prior written consent of any other party
hereto, assign all or a portion of its interest in any Advances to the Granting
Lender and (ii) disclose on a confidential basis any information relating to its
Advances to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancement to such SPC. This Section
8.07(i) may not be amended without the prior written consent of each Granting
Lender, all or any part of whose Advance is being funded by an SPC at the time
of such amendment.

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

                                       53

<PAGE>

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

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

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

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

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

                             [Signatures to Follow]

                                       54

<PAGE>

                                                                             S-1

      Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.

                                      WISCONSIN POWER AND LIGHT COMPANY

                                      By: /s/ Thomas L. Hanson
                                          --------------------------------------
                                          Name: Thomas L. Hanson
                                          Title: Vice President and Treasurer

      [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]

<PAGE>

                                                                             S-2

                                      WACHOVIA BANK, National Association, as
                                      Agent, LC Issuing Bank and as Lender

                                      By: /s/ Dan Wolff
                                          --------------------------------------
                                          Name: Dan Wolff
                                          Title: Vice President

      [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]

<PAGE>

                                                                             S-3

                                      BARCLAYS BANK PLC, as a Lender

                                      By: /s/ Sydney G. Dennis
                                          --------------------------------------
                                          Name: Sydney G. Dennis
                                          Title: Director

      [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                             S-4

                                          ABN AMRO BANK, N.V., as a Lender

                                          By: /s/ R. Scott Donaldson
                                             -----------------------------------
                                             Name:  R. Scott Donaldson
                                             Title: Vice President

                                          By: /s/ Stephanie Casas
                                             -----------------------------------
                                             Name:  Stephanie Casas
                                             Title: Vice President

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                             S-5

                                          AUSTRALIA AND NEW ZEALAND BANKING
                                          GROUP LIMITED, as a Lender

                                          By:/s/ John W. Wade
                                             -----------------------------------
                                             Name:  John W. Wade
                                             Title: Director

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                             S-6

                                          ASSOCIATED BANK, National Association,
                                          as a Lender

                                          By:/s/ Barbara M. Conley
                                             -----------------------------------
                                             Name:  Barbara M. Conley
                                             Title: Senior Vice President

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                             S-7

                                          BANK OF AMERICA, N.A., as a Lender

                                          By:/s/ Michelle A. Schoenfeld
                                             ----------------------------------
                                             Name:  Michelle A. Schoenfeld
                                             Title: Principal

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                             S-8

                                          THE BANK OF NEW YORK, as a Lender

                                          By:/s/ Cynthia D. Howells
                                             -----------------------------------
                                             Name:  Cynthia D. Howells
                                             Title: Vice President

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                             S-9

                                          THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                          CHICAGO BRANCH, as a Lender

                                          By:/s/ Shinichiro Munechika
                                             -----------------------------------
                                             Name:  Shinichiro Munechika
                                             Title: Deputy General Manager

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                            S-10

                                          BANK ONE, NA as a Lender

                                          By:/s/ Jane Bek Keil
                                             -----------------------------------
                                             Name:  Jane Bek Keil
                                             Title: Director

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                            S-11

                                          CITIBANK N.A., as a Lender

                                          By:/s/ Robert J. Harrity, Jr.
                                             ----------------------------------
                                             Name:  Robert J. Harrity, Jr.
                                             Title: Managing Director

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                            S-12

                                          FIFTH THIRD BANK, as a Lender

                                          By:/s/ Kevin C. M. Jones
                                             -----------------------------------
                                             Name:  Kevin C. M. Jones
                                             Title: Vice President

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                            S-13

                                          KBC BANK N.V., as a Lender

                                          By:/s/ Jean-Pierre Diels
                                             -----------------------------------
                                             Name:  Jean-Pierre Diels
                                             Title: First Vice President

                                          By:/s/ Stefano Snozzi
                                             -----------------------------------
                                             Name:  Stefano Snozzi
                                             Title: First Vice President

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                            S-14

                                          KEYBANK NATIONAL ASSOCIATION, as a
                                          Lender

                                          By:/s/ Lawrence A. Mack
                                             -----------------------------------
                                             Name:  Lawrence A. Mack
                                             Title: Senior Vice President

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                            S-15

                                          LEHMAN BROTHERS BANK, FSB, as a Lender

                                          By:/s/ Gary T. Taylor
                                             -----------------------------------
                                             Name:  Gary T. Taylor
                                             Title: Vice President

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                            S-16

                                          MERRILL LYNCH BANK USA, as a Lender

                                          By:/s/ Louis Alder
                                             -----------------------------------
                                             Name:  Louis Alder
                                             Title: Director

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                            S-17

                                          MIZUHO CORPORATE BANK, LTD., as a
                                          Lender

                                          By:/s/ Mark Gronich
                                             -----------------------------------
                                             Name:  Mark Gronich
                                             Title: Senior Vice President

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                            S-18

                                          UBS LOAN FINANCE, LLC, as a Lender

                                          By:/s/ Doris Mesa
                                             -----------------------------------
                                             Name:  Doris Mesa
                                             Title: Associate Director, Banking
                                                    Products Services, US

                                          By:/s/ Joselin Fernandes
                                             -----------------------------------
                                             Name:  Joselin Fernandes
                                             Title: Associate Director, Banking
                                                    Products Services, US

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]
<PAGE>

                                                                            S-19

                                          WELLS FARGO BANK, National
                                          Association, as a Lender

                                          By:/s/ James D. Heinz
                                             -----------------------------------
                                             Name:  James D. Heinz
                                             Title: Senior Vice President

                                          By:/s/ Douglas A. Lindstrom
                                             -----------------------------------
                                             Name:  Douglas A. Lindstrom
                                             Title: Vice President

     [Signature Page to Wisconsin Power and Light Company Credit Agreement
                           Dated as of July 26, 2004]exv10w1

 

Exhibit 10-1

AMENDED AND RESTATED POWER PURCHASE AGREEMENT

As Amended and Restated as of April 30, 2004

Between

Exelon Generation Company, LLC

and

Commonwealth Edison Company

 

 

Table of Contents

	 	 	 	 	 
	1. Definitions and Interpretation
	 	 	1	 
	(a) Definitions
	 	 	1	 
	(b) Interpretation
	 	 	5	 
	(c) Titles and Headings
	 	 	5	 
	2. Term
	 	 	5	 
	(a) Term
	 	 	5	 
	(b) Provisions Surviving Termination
	 	 	5	 
	(c) Pricing Term
	 	 	5	 
	3. Products
	 	 	5	 
	(a) Electric Energy
	 	 	6	 
	(b) Capacity
	 	 	6	 
	(c) Ancillary Services
	 	 	6	 
	(d) Black Start Capability and Service
	 	 	6	 
	(e) Procurement
	 	 	6	 
	4. Transmission
	 	 	6	 
	(a) Network Transmission Service Procurement

	 	 	6	 
	(b) Fixed Transmission Rights
	 	 	6	 
	5. Operating Procedures
	 	 	7	 
	6. Deliveries and Title
	 	 	7	 
	7. Billing
	 	 	7	 
	(a) Invoices
	 	 	7	 
	(b) Disputes
	 	 	7	 
	(c) Offsetting Charges
	 	 	8	 
	(d) Records; Inspection
	 	 	8	 
	8. Compensation
	 	 	8	 
	(a) Energy
	 	 	8	 
	(b) Capacity
	 	 	9	 
	(c) Ancillary Services
	 	 	9	 
	(d) Black Start Service
	 	 	9	 
	(e) PJM Invoice
	 	 	10	 
	(f) Decommissioning Costs
	 	 	10	 
	9. Limitation of Liability
	 	 	10	 
	10. Assignment
	 	 	10	 

i

 

	 	 	 	 	 
	11. Default; Termination and Remedies
	 	 	11	 
	(a) ExGen’s Default
	 	 	11	 
	(b) ComEd’s Default
	 	 	11	 
	(c) Remedies and Remedies Cumulative
	 	 	12	 
	12. Representations and Warranties
	 	 	12	 
	(a) Representations and Warranties of ExGen
	 	 	12	 
	(b) Representations and Warranties of ComEd
	 	 	13	 
	13. Indemnification
	 	 	13	 
	14. Notices
	 	 	14	 
	15. Disagreements
	 	 	15	 
	(a) Administrative Committee Procedure
	 	 	15	 
	(b) Arbitration

	 	 	15	 
	
(c) Obligations to Pay Charges and Perform
	 	 	17	 
	(d) Preliminary Injunctive Relief
	 	 	17	 
	(e) Settlement Discussions
	 	 	17	 
	16.Governing Law
	 	 	17	 
	17.No Third Party Beneficiaries
	 	 	17	 
	18.Partial Invalidity
	 	 	17	 
	19.Waivers
	 	 	18	 
	20.WAIVER OF JURY TRIAL
	 	 	18	 
	21.Amendments
	 	 	18	 
	22.Entire Agreement and Amendments
	 	 	19	 

APPENDIX:

Appendix A: Prices from Effective Date through December 31, 2004

Appendix B: Prices from January 1, 2005 through December 31, 2005

Appendix C: Prices from January 1, 2006 through December 31, 2006

ii

 

AMENDED AND RESTATED POWER PURCHASE AGREEMENT

     THIS AMENDED AND RESTATED POWER PURCHASE AGREEMENT (this “Agreement”) is
entered into this 30th day of April, 2004 and will be effective as of the
Effective Date, as defined herein, between EXELON GENERATION COMPANY, LLC, a
Pennsylvania limited liability company (“ExGen”), and COMMONWEALTH EDISON
COMPANY, an Illinois corporation (“ComEd”), amends and restates the Power
Purchase Agreement dated January 1, 2001 (“Initial Agreement”) and amends and
restates and incorporates herein provisions of the Ancillary and Other Control
Area Services Resource Purchase Agreement entered into on or about January 1,
2001 (“Ancillary Agreement”);

W I T N E S S E T H:

     WHEREAS, ComEd desires to receive and purchase, and ExGen desires to
deliver and sell, electric energy, capacity and ancillary services as necessary
to meet ComEd’s requirements to serve its retail and wholesale customers as
provided for under the terms and conditions set forth herein; and

     WHEREAS, ComEd intends to become a member of PJM, to transfer functional
control of its transmission system to PJM and to participate in the PJM
Interchange Energy Market and certain other PJM markets; and

     WHEREAS, the parties desire to amend and restate the Initial Agreement and
the Ancillary Agreement to establish pricing, terms and conditions for the
purchase and sale of electric energy and related capacity and ancillary
services in 2005 and 2006 and to comply with the requirements of PJM.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, the parties hereto agree as follows:

1. Definitions and Interpretation

     (a) Definitions. As used in this Agreement, (i) the terms set forth below
in this Section 1(a) shall have the respective meanings so set forth and (ii)
the terms defined elsewhere in this Agreement shall have the meanings therein
so specified.

     “Ancillary Services” has the meaning specified in the PJM OATT.

     “Bankruptcy” means any case, action or proceeding under any
bankruptcy, reorganization, debt arrangement, insolvency or receivership
law or any dissolution or liquidation proceeding commenced by or against
a Person and, if such case, action or proceeding is not commenced by such
Person, such case or proceeding shall be consented to or acquiesced in by
such Person or shall result in an order for relief or shall remain
undismissed for 90 days.

     “Black
Start Service” has the meaning specified in the PJM OATT.

1

 

     “Business Day” means each weekday (Monday through Friday), excluding
NERC defined holidays.

     “Capacity” means Capacity Credits or Capacity Resources or a
combination thereof.

     “Capacity Credits” has the meaning specified in the Reliability
Assurance Agreement.

     “Capacity Resources” has the meaning specified in the Reliability
Assurance Agreement.

     “Change of Law” means the adoption, promulgation, modification or
reinterpretation by a Governmental Authority of any law, rule,
regulation, ordinance, order or other Requirement of Law that occurs
subsequent to the date of execution of this Agreement.

     “ComEd Event of Default” has the meaning specified in Section 11(b).

     “Concluding Term” means the period from January 1, 2005 through
December 31, 2006.

     “CPT” means Central Prevailing Time.

     “Day 2” means the moment at which the ComEd control area is
integrated into the PJM Interchange Energy Market.

     “Default Rate” means (i) the “Prime Rate” as published from time to
time in the “Money Rates” section of The Wall Street Journal plus (ii)
1.0% (100 basis points) per annum.

     “Delivery Point” means the “ComEd Zone” as defined by PJM.

     “Effective Date” means the date on which Day 2 occurs.

     “Electric Energy” means three-phase, sixty-cycle alternating current
electric energy, expressed in megawatt hours.

     “Electric Energy Prices” has the meaning specified in Appendix A.

     “ExGen Event of Default” has the meaning specified in Section 11(a).

     “FERC” means the Federal Energy Regulatory Commission.

2

 

     “FTRs” means Fixed Transmission Rights as defined by PJM, or any
product that either replaces FTRs or is in addition to FTRs, used to
mitigate congestion risk.

     “Governmental Authority” means any foreign, federal, state, local or
other governmental authority or regulatory agency, commission,
department, or other governmental subdivision, court, tribunal or body.

     “HEP” means ComEd’s retail Rate HEP, Hourly Energy Pricing, as on
file with the Illinois Commerce Commission.

     “ICC” means the Illinois Commerce Commission.

     “Initial Term” means the period from the Effective Date through
December 31, 2004.

     “MEP” means ComEd’s retail Rate MEP, Monthly Energy Pricing, as may
be on file with the Illinois Commerce Commission.

     “MVEC”
means Market Value Energy Charges as determined in accordance
with ComEd’s Rate CTC-Customer Transition Charge, Rider CTC-MY-Customer
Transition Charge Multi-Year and Rider PPO-Power Purchase Option (Market
Index) as on file or as may be filed with the Illinois Commerce
Commission.

     “NERC” means the North American Electric Reliability Council, its
successor or the Regional Reliability Council of NERC to which ComEd is a
member.

     “Network Transmission Service” means Network Integration
Transmission Service, or any successor service, as defined by the PJM
OATT or any successor tariff under which service is provided over the
ComEd transmission system.

     “Off-Peak Period” means any time that is not an On-Peak Period or a
Partial-Peak Period.

     “On-Peak Period” means, with respect to each Business Day, the time
from Hour Ending 0700 CPT through Hour Ending 2200 CPT.

     “Partial-Peak Period” means, with respect to each day that is not a
Business Day, the time from Hour Ending 0700 CPT through Hour Ending 2200
CPT.

3

 

     “Party” shall mean each, and “Parties” shall mean all, of ExGen and
its successors and permitted assigns and ComEd and its successors and
permitted assigns.

     “Person” means any natural person, corporation, partnership, firm,
association, trust, unincorporated organization, Governmental Authority
or any other entity whether acting in an individual, fiduciary or other
capacity.

     “PJM” means PJM Interconnection L.L.C., a Delaware limited liability
company.

     “PJM OATT” means the PJM Open Access Transmission Tariff, or its
successor.

     “Prudent Utility Practices” means any of the practices, methods and
acts engaged in or approved by a significant portion of the electric
utility industry in the United States of America during the relevant time
period, or any of the practices, methods or acts which, in the exercise
of reasonable judgment in light of the facts known at the time the
decision was made, could have been expected to accomplish the desired
result at a reasonable cost consistent with good business practices,
reliability, safety and expedition. “Prudent Utility Practices” is not
intended to be limited to the optimum practice, method or act to the
exclusion of all others, but rather to be acceptable practices, methods
or acts generally accepted in the electric utility industry in the United
States of America.

     “Reliability Assurance Agreement” means the PJM Reliability
Assurance Agreement applicable to ComEd.

     “Requirement of Law” means any foreign, federal, state and local
laws, statutes, regulations, rules, codes or ordinances enacted, adopted,
issued or promulgated by any federal, state, local or other governmental
authority or regulatory body (including those pertaining to electrical,
building, zoning, environmental and occupational safety and health
requirements) or an applicable tariff filed with any federal, state,
local or other governmental authority or regulatory body.

     “Taxes” means all federal, state, local, foreign and other net
income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, withholding, payroll, employment, excise, property,
customs, duties or other taxes, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to
tax or additional amount with respect thereto.

     “Term” has the meaning specified in Section 2.

4

 

     (b) Interpretation. In this Agreement, unless a clear contrary intention
appears: (i) the singular includes the plural and vice versa; (ii) reference
to any Person includes such Person’s successors and assigns but, in the case of
a Party, only if such successors and assigns are permitted by this Agreement,
and reference to a Person in a particular capacity excludes such Person in any
other capacity or individually; (iii) reference to any gender includes each
other gender; (iv) reference to any agreement (including this Agreement),
document, instrument or tariff means such agreement, document, instrument or
tariff as amended or modified and in effect from time to time in accordance
with the terms thereof and, if applicable, the terms hereof; (v) reference to
any Requirement of Law means such Requirement of Law as amended, modified,
codified or reenacted, in whole or in part, and in effect from time to time,
including, if applicable, rules and regulations promulgated thereunder; (vi)
reference to any Section means such Section of this Agreement, and references
in any Section or definition to any clause means such clause of such Section or
definition; (vii) “hereunder”, “hereof”, “hereto” and words of similar import
shall be deemed references to this Agreement as a whole and not to any
particular Section or other provision hereof or thereof; (viii) “including”
(and with correlative meaning “include”) means including without limiting the
generality of any description preceding such term; and (ix) relative to the
determination of any period of time, “from” means “from and including”, “to”
means “to but excluding” and “through” means “through and including”.

     (c) Titles and Headings. Section and Appendix titles and headings in this
Agreement are inserted for convenience of reference only and are not intended
to be a part of, or to affect the meaning or interpretation of, this Agreement.

2. Term

     (a) Term. This Agreement shall have a term (the “Term”) commencing on the
Effective Date and ending on December 31, 2006, unless terminated earlier as
provided in Section 11(c).

     (b) Provisions Surviving Termination. The provisions of Sections 7(d)
(Records; Inspection), 9 (Limitation of Liability), 11 (Default, Termination
and Remedies), 13 (Indemnification) and 15 (Disagreements) shall survive any
termination of this Agreement.

     (c) Pricing Term. The Parties agree that the pricing herein shall not set
a binding precedent for the prices established with respect to any power and
energy services procured by ComEd to meet its retail and wholesale load serving
obligations after 2006, nor shall this Agreement bind the Parties to transact
for similar arrangements with each other subsequent to 2006.

3. Product

     For the Term, ExGen shall provide to ComEd, and ComEd shall purchase from
ExGen, Electric Energy, Capacity, Ancillary Services and Black Start Service as

5

 

provided for herein. The Parties agree that ExGen will only be excused
from its obligations to provide such products to ComEd if so directed by PJM,
or the system operator equivalent, or any authorized Governmental Authority due
to system emergencies.

     (a) Electric Energy. ExGen will sell and deliver at the Delivery Point,
and ComEd will accept and purchase, an amount of Electric Energy as required
for ComEd to fulfill its obligation to provide Electric Energy to its retail
and wholesale customers (after taking into account deliveries from other
Persons of Electric Energy that ComEd is required to accept under any
Requirement of Law).

     (b) Capacity. ExGen will sell and make available, and ComEd will accept
and purchase, the amount of Capacity necessary for ComEd to fulfill its
Capacity obligation as defined by PJM to meet its retail and wholesale load
obligations (after taking into account deliveries from other Persons of
Capacity that ComEd is required to accept under any Requirement of Law).

     (c) Ancillary Services. ComEd will purchase directly from PJM all
Ancillary Services determined by PJM to be necessary in order for ComEd to meet
its retail and wholesale load obligations, unless otherwise directed by ExGen,
which retains the right to cause ComEd to purchase such services, in whole or
in part, from ExGen or any other third party, including PJM.

     (d) Black Start Service. ComEd will purchase directly from PJM all Black
Start Service determined by PJM to be necessary in order for ComEd to meet its
retail and wholesale load obligations, unless otherwise directed by ExGen,
which retains the right to cause ComEd to purchase such services, in whole or
in part, from ExGen or any other third party, including PJM.

     (e) Procurement. ExGen will fulfill its obligations to ComEd under this
Agreement through a supply portfolio that includes, but will not be limited to,
owned, contracted and market resources. ExGen, at its own discretion, will
determine the composition of this supply portfolio.

4. Transmission

     (a) Network Transmission Service Procurement. ComEd shall procure any
Network Transmission Service required to fulfill its retail and wholesale load
obligations.

     (b) Fixed Transmission Rights. ComEd will assign to ExGen, in accordance
with PJM procedures, any FTRs obtained by ComEd, including but not limited to,
FTRs obtained as a result of ComEd’s retail and wholesale obligations, ComEd’s
Network Transmission Service position and ExGen’s Capacity Resources. If FTRs
are not assignable, ExGen will act as ComEd’s agent regarding the disposition
of FTRs. In either case, ExGen will manage the designation and the use of these
FTRs for ComEd. ExGen will receive all the financial benefits and pay all the
associated costs, including the

6

 

distribution of excess transmission congestion charges, associated with the
ownership of these FTRs.

5. Operating Procedures

     ComEd and ExGen will jointly develop operating procedures and processes
(“Operating Procedures”) that will cover the protocol under which the Parties
will perform their respective obligations under this Agreement. Such procedures
and processes will include, but will not be limited to: (1) forecasting and
scheduling, (2) utilization of ComEd’s curtailable load resources, (3) network
resource designation, (4) billing, (5) procedures for bidding in generation and
load into PJM and (6) mutual support for providing information as may be
required to PJM, NERC or any Governmental Authority, as required or considered
necessary by ExGen or ComEd.

6. Deliveries and Title

     ExGen shall deliver Electric Energy, and other products where applicable,
to ComEd and title to such Electric Energy and other products shall pass to
ComEd at the Delivery Point.

7. Billing

     (a) Invoices.

     (i) Within ten days after the end of each calendar month, ExGen
shall render an invoice to ComEd setting forth (a) all amounts due to
ExGen pursuant to this Agreement for the immediately preceding calendar
month and all amounts remaining unpaid from previous calendar months and
(b) the amount, if any, by which the amount set forth pursuant to clause
(a) has been reduced as a result of an offset calculated in accordance
with Section 7(c). Failure by ExGen to render an invoice within such
ten-day period shall not preclude ExGen from subsequently rendering an
invoice for the relevant calendar month.

     (ii) ComEd shall pay any balance set forth in any such invoice by
wire transfer of immediately available funds to the account specified in
the invoice within ten days after receipt of the invoice, subject to the
provisions of Section 7(b).

     (b) Disputes. Within ten days after receiving an invoice pursuant to
Section 7(a), ComEd may by written notice to ExGen dispute, in good faith, any
amount set forth in such invoice, provided that ComEd shall pay all undisputed
amounts in accordance with Section 7(a)(ii). If the dispute relates to any
charge payable by ComEd to ExGen hereunder, and such dispute its not resolved
by the Parties within five days of the receipt of written notice by ExGen, then
the dispute shall be resolved as provided in Section 15. If the dispute (or
any portion thereof) is resolved against ComEd, ComEd shall within three days
of the date of such resolution pay to ExGen amounts corresponding to such

7

 

portion of the dispute which has been resolved against ComEd plus interest on
such amounts from the date payable pursuant to Section 7(a) through the date
paid at the Default Rate.

     (c) Offsetting Charges. Each Party shall have the right to set-off
against amounts payable to the other Party (i) any amounts paid by such Party
for, or on behalf of, such other Party, (ii) any amounts due such Party from
such other Party, whether under this Agreement or otherwise, and (iii) any
overpayment by such Party to such other Party which is either undisputed by
such other Party or which has been determined to constitute an overpayment in
accordance with Section 7(b).

     (d) Records; Inspection.

     (i) Each Party shall keep and maintain all records as may be
necessary or useful in performing or verifying any calculations or
charges made pursuant to this Agreement, or in verifying such Party’s
performance hereunder. All such records shall be retained by each Party
for at least three calendar years following the calendar year in which
such records were created. Each Party shall make such records available
to the other Party for inspection and copying at the other Party’s
expense, upon reasonable notice during such Party’s regular business
hours. Each Party and its agents, including auditors, shall have the
right, upon thirty days written notice prior to the end of an applicable
three calendar year period to request copies of such records. Each Party
shall provide such copies, at the other Party’s expense, within thirty
days of receipt of such notice or shall make such records available to
the other Party and its agents, including auditors, in accordance with
the foregoing provisions of this Section.

     (ii) Each Party (and its representative(s)) shall have the right, at
its sole expense, upon reasonable notice and during normal working hours,
to examine the records of the other Party to the extent reasonably
necessary to verify the accuracy of any statement, charge or computation
relating to charges under this Agreement.

8. Compensation

     (a) Energy

     (i) During the Initial Term for Electric Energy sold to ComEd under
this Agreement for Peak, Partial-Peak and Off-Peak Periods, ComEd shall
pay ExGen in each month an amount equal to the product of the number of
megawatt-hours delivered to ComEd during each such period multiplied by
the respective price per megawatt hour for each such period in the
applicable calendar month as shown in Appendix A.

     (ii) In respect of each calendar month during the Concluding Term,
ComEd shall pay ExGen for Electric Energy sold to ComEd under this
Agreement

8

 

to meet ComEd’s obligations to serve its retail and wholesale
customers, except for such customers taking service under the retail
Rates HEP or MEP, an amount established consistent with “the through the
transition period” Multi-Year MVECs established on or about April 1, 2003
for 2005 and 2006, including all adders in accordance with Rider
CTC-MY-Customer Transition Charge-Multi-Year, as on file with the ICC.
The price will reflect delivery at the Delivery Point. Initially
determined prices are shown in Appendixes B and C. Prices may be further
adjusted to ensure consistency between the prices herein and the MVEC
prices in the event such MVEC prices are further adjusted to reflect
requirements imposed by PJM or as part of FERC’s standard market design
that result in costs or credits not represented in the MVEC methodology.
Such MVEC prices shall be the basis to set monthly On-Peak, Partial-Peak
and Off-Peak Energy Prices for the Concluding Term in this Agreement. For
Electric Energy required to serve ComEd customers taking service under
Rates HEP and MEP or their successor tariffs during the Concluding Term,
Electric Energy prices equal to the energy prices found in those tariffs,
including any administrative adders, adjusted as necessary for receipt at
the Delivery Point, shall apply.

     (b) Capacity

     (i) The charges for Capacity provided by ExGen to ComEd during the
Initial Term are contained within the Electric Energy Prices in Appendix
A.

     (ii) ComEd shall pay ExGen a price for Capacity during the
Concluding Term equal to the 2005 and 2006 price for Capacity as
reflected in the capacity adjustments made to the through the transition
period multi-year MVEC established on or about April 1, 2003.

     (c) Ancillary Services.

     (i) Charges for Ancillary Services provided by ExGen, excluding
Black Start Service, to ComEd during the Initial Term are contained
within the Electric Energy Prices in Appendix A.

     (ii) For Ancillary Services provided to ComEd directly from ExGen
during the Concluding Term, ComEd shall pay ExGen for such Ancillary
Services at the price as determined by PJM, whether such charges are
based on tariff or market rates.

     (d) Black Start Service.

     (i) Notwithstanding ComEd’s limited authority to purchase Black
Start Service directly from PJM pursuant to Section 3(d) herein, ComEd
shall pay to ExGen $35,976.67 monthly for Black Start Service during the
Initial Term. ExGen shall reimburse ComEd for Black Start Service
payments made directly to PJM and ComEd shall receive such reimbursements
as an adjustment to ExGen’s invoices in accordance with Section 8(e)(i).

9

 

     (ii) For Black Start Service provided to ComEd directly from ExGen
during the Concluding Term, ComEd shall pay ExGen the price as determined
by PJM, whether such charges are based on tariff or market rates.

     (e) PJM Invoices

     (i) During the Initial Term, ComEd shall be responsible for amounts
invoiced directly by PJM to ComEd. In the event ComEd’s invoice from PJM
includes charges or credits for services or products that are related to
ComEd’s Capacity, Electric Energy, Ancillary Service or Black Start
Service consumption from or supply to PJM (e.g., Congestion, Spot Market
Energy, Capacity Credit Market, and Reconciliation), ComEd shall pay such
charges and receive such credits. ExGen’s invoice to ComEd shall include
adjustments to reflect ComEd’s payment or receipt of such charges and
credits.

     (ii) During the Concluding Term, ComEd shall be responsible for
amounts invoiced from PJM directly to ComEd. In the event ComEd’s
invoice from PJM includes charges or credits for services or products
that are related to ComEd’s Capacity and Electric Energy consumption from
or supply to PJM (e.g., Congestion, Spot Market Energy, Capacity Credit
Market, and Reconciliation), ComEd shall pay such charges and receive
such credits. ExGen’s invoice to ComEd shall include adjustments to
reflect ComEd’s payment and receipt of such charges or credits.

     (f) Decommissioning Costs. The prices set forth in this Section 8 do not
include any recovery of Illinois jurisdictional decommissioning costs.

9. Limitation of Liability

     In no event or under any circumstances shall either Party (including such
Party’s affiliates and such Party’s and such affiliates’ respective directors,
officers, employees and agents) be liable to the other Party (including such
Party’s affiliates and such Party’s and such affiliate’s respective directors,
officers, employees and agents) for any special, incidental, exemplary,
indirect, punitive or consequential damages or damages in the nature of lost
profits, whether such loss is based on contract, warranty or tort (including
intentional acts, errors or omissions, negligence, indemnity, strict liability
or otherwise). A Party’s liability under this Agreement shall be limited to
direct, actual damages, and all other damages at law or in equity are waived.

10. Assignment

     Neither Party may assign its rights or obligations under this Agreement
without the prior written consent of the other Party, which shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, a Party shall
have the right to assign its rights

10

 

and obligations hereunder without the consent of the other Party to any
affiliate of such Party.

11. Default; Termination and Remedies.

     (a) ExGen’s Default. The occurrence and continuation of any of the
following events or circumstances at any time during the Term, except to the
extent caused by, or resulting from, an act or omission of ComEd in breach of
this Agreement, shall constitute an event of default by ExGen (“ExGen Event of
Default”):

     (i) ExGen fails to pay any sum due from it hereunder on the due date
thereof and such failure is not remedied within 10 Business Days after
receipt of written notice thereof from ComEd;

     (ii) ExGen’s Bankruptcy; or

     (iii) ExGen fails in any material respect to perform or comply with
any other obligation in this Agreement on its part to be observed or
performed which failure materially and adversely affects ComEd, and if
reasonably capable of remedy, is not remedied within 60 days after ComEd
has given written notice to ExGen of such failure and requiring its
remedy; provided, however, that if such remedy cannot reasonably be cured
within such period of 60 days, such failure shall not constitute a ExGen
Event of Default if ExGen has promptly commenced and is diligently
proceeding to cure such default.

     (b) ComEd’s Default. The occurrence and continuation of any of the
following events or circumstances at any time during the Term, except to the
extent caused by, or resulting from, an act or omission of ExGen in breach of
this Agreement, shall constitute an event of default by ComEd (“ComEd Event of
Default”):

     (i) ComEd fails to pay any amount due from it pursuant to Section 9
hereof on the due date thereof and such failure is not remedied within 10
Business Days after receipt of written notice thereof from ExGen;

     (ii) ComEd’s Bankruptcy; or

	(iii)	 	ComEd fails in any material respect to perform
or comply with any other obligation in this Agreement on its
part to be observed or performed which failure materially and
adversely affects ExGen, and if reasonably capable of remedy,
is not remedied within 60 days after ExGen has given written
notice to ComEd of such failure and requiring its remedy;
provided, however, that if such remedy cannot reasonably be
cured within such period of 60 days, such failure shall not
constitute a ComEd Event of Default if ComEd has promptly
commenced and is diligently proceeding to cure such default.

11

 

     (c) Remedies and Remedies Cumulative. Upon the occurrence and during the
continuation of a ExGen Event of Default, ComEd may at its discretion (i)
terminate this Agreement upon 30 days prior written notice to ExGen and (ii)
exercise any other rights and remedies available to it at law or in equity.
Upon the occurrence and during the continuation of a ComEd Event of Default,
ExGen may seek money damages from ComEd but may not terminate this Agreement

12. Representations and Warranties

     (a) Representations and Warranties of ExGen. ExGen hereby makes the
following representations and warranties to ComEd:

     (i) ExGen is a limited liability company duly organized and validly
existing under the laws of the Commonwealth of Pennsylvania and has the
legal power and authority to own its properties, to carry on its business
as now being conducted and to enter into this Agreement and carry out the
transactions contemplated hereby and perform and carry out all covenants
and obligations on its part to be performed under and pursuant to this
Agreement.

     (ii) The execution, delivery and performance by ExGen of this
Agreement have been duly authorized by all necessary corporate action.

     (iii) The execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby and the fulfillment of and
compliance with the provisions of this Agreement, do not and will not
conflict with or constitute a breach of or a default under, any of the
terms, conditions or provisions of any legal requirements, or any
organizational documents, agreement, deed of trust, mortgage, loan
agreement, other evidence of indebtedness or any other agreement or
instrument to which ExGen is a party or by which it or any of its
property is bound, or result in a breach of or a default under any of the
foregoing.

     (iv) This Agreement constitutes the legal, valid and binding
obligation of ExGen enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement
of creditors’ rights generally or by general equitable principles,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.

     (v) There is no pending, or to the knowledge of ExGen, threatened
action or proceeding affecting ExGen before any Governmental Authority,
which purports to affect the legality, validity or enforceability of this
Agreement.

     (vi) ExGen has all necessary approvals from Governmental Authorities
for it to perform its obligations under this Agreement.

12

 

     (b) Representations and Warranties of ComEd. ComEd hereby makes the
following representations and warranties to ExGen:

     (i) ComEd is a corporation duly organized, validly existing and in
good standing under the laws of the State of Illinois and has the legal
power and authority to own its properties, to carry on its business as
now being conducted and to enter into this Agreement and carry out the
transactions contemplated hereby and perform and carry out all covenants
and obligations on its part to be performed under and pursuant to this
Agreement.

     (ii) The execution, delivery and performance by ComEd of this
Agreement have been duly authorized by all necessary corporate action.

     (iii) The execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby and the fulfillment of and
compliance with the provisions of this Agreement do not and will not
conflict with or constitute a breach of or a default under, any of the
terms, conditions or provisions of any legal requirements, or its
articles of incorporation or bylaws, or any deed of trust, mortgage, loan
agreement, other evidence of indebtedness or any other agreement or
instrument to which ComEd is a party or by which it or any of its
property is bound, or result in a breach of or a default under any of the
foregoing.

     (iv) This Agreement constitutes the legal, valid and binding
obligation of ComEd enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement
of creditors’ rights generally or by general equitable principles,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.

     (v) There is no pending, or to the knowledge of ComEd, threatened
action or proceeding affecting ComEd before any Governmental Authority,
which purports to affect the legality, validity or enforceability of this
Agreement.

     (vi) ComEd has all necessary approvals from Governmental Authorities
for it to perform its obligations under this Agreement.

13. Indemnification

     Each Party shall indemnify and hold harmless the other Party, and its
officers, directors, agents and employees, from and against any and all claims,
demands, actions, losses, liabilities, expenses (including reasonable legal
fees and expenses), suits and proceedings of any nature whatsoever for personal
injury, death or property damage to each other’s property or facilities or
personal injury, death or property damage to third parties caused by the
negligence or willful misconduct of the indemnifying Party that

13

 

arise out of or are in any manner connected with the performance of this
Agreement, except to the extent such injury or damage is attributable to the
negligence or willful misconduct of, or breach of this Agreement by, the Party
seeking indemnification hereunder. Title, and all risk relating to, all
Electric Energy purchased by ComEd under this Agreement shall pass to ComEd at
the applicable Delivery Point. ComEd shall indemnify ExGen for liability from
Electric Energy once sold and delivered as set forth in Section 6(a); and ExGen
shall indemnify ComEd for liability from Electric Energy prior to its delivery.

14. Notices

     Unless otherwise provided in this Agreement, any notice, consent or other
communication required to be made under this Agreement shall be in writing and
shall be sent by facsimile transmission, delivered or sent to the address set
forth below or such other address as the receiving Party may from time to time
designate by written notice:

     If to ComEd, to:

Commonwealth Edison Company

One Financial Place

440 S. LaSalle Street

Suite 3300

Chicago, Illinois 60605

Attention: President

Facsimile No.: (312) 394-5219

Confirmation No.: (312) 394-3735

     with a copy to:

Commonwealth Edison Company

One Financial Place

440 South LaSalle Street

Suite 3300

Chicago, Illinois 60605

Attention: Vice President, Energy Acquisition

Facsimile: (312) 394-5219

Confirmation: (312) 394-3735

14

 

     If to ExGen, to:

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention: Chief Executive Officer and President

Facsimile: (630) 657-4321

Confirmation: (630) 657-3750

     with a copy to:

Exelon Generation Company, LLC

300 Exelon Way

Kennett Square, PA 19348

Attention: President, Exelon Power Team

Facsimile: (610) 765-6633

Confirmation: (610) 765-6600

All notices shall be effective when received.

15. Disagreements

     (a) Administrative Committee Procedure. Except to the extent otherwise
provided in Section 7(b), if any disagreement arises on matters concerning this
Agreement, the disagreement shall be referred to one representative of each
Party, who shall attempt to timely resolve the disagreement. If such
representatives can resolve the disagreement, such resolution shall be reported
in writing to and shall be binding upon the Parties. If such representatives
cannot resolve the disagreement within a reasonable time, or a Party fails to
appoint a representative within 10 days of written notice of the existence of a
disagreement, then the matter shall proceed to arbitration as provided in
Section 15(b).

     (b) Arbitration. If pursuant to Section 15(a), the Parties are unable to
resolve a disagreement arising on a matter pertaining to this Agreement, such
disagreement shall be settled by arbitration in Chicago, Illinois. The
arbitration shall be governed by the United States Arbitration Act (9 U.S.C. §1
et seq.), and any award issued pursuant to such arbitration may be enforced in
any court of competent jurisdiction. This agreement to arbitrate and any other
agreement or consent to arbitrate entered into in accordance herewith will be
specifically enforceable under the prevailing arbitration law of any court
having jurisdiction. Notice of demand for arbitration must be filed in writing
with the other Party to this Agreement. Arbitration shall be conducted as
follows:

     (i) Either Party may give the other Party written notice in
sufficient detail of the disagreement and the specific provision of this
Agreement under which the disagreement arose. The demand for arbitration
must be made within a reasonable time after the disagreement has arisen.
In no event may the demand

15

 

for arbitration be made if the institution of legal or equitable
proceedings based on such disagreement is barred by the applicable
statute of limitations. Any arbitration related to this Agreement may be
consolidated with any other arbitration proceedings related to this
Agreement.

     (ii) The Parties shall attempt to agree on a person with special
knowledge and expertise with respect to the matter at issue to serve as
arbitrator. If the Parties cannot agree on an arbitrator within ten
days, each shall then appoint one person to serve as an arbitrator and
the two thus appointed shall select a third arbitrator with such special
knowledge and expertise to serve as Chairman of the panel of arbitrators;
and such three arbitrators shall determine all matters by majority vote;
provided, however, if the two arbitrators appointed by the Parties are
unable to agree upon the appointment of the third arbitrator within five
days after their appointment, both shall give written notice of such
failure to agree to the Parties, and, if the Parties fail to agree upon
the selection of such third arbitrator within five days thereafter, then
either of the Parties upon written notice to the other may require
appointment from, and pursuant to the rules of, the Chicago office of the
American Arbitration Association for commercial arbitration. Prior to
appointment, each arbitrator shall agree to conduct such arbitration in
accordance with the terms of this Agreement.

     (iii) The Parties shall have sixty days from the appointment of the
arbitrator(s) to perform discovery and present evidence and argument to
the arbitrator(s). During that period, the arbitrator(s) shall be
available to receive and consider all such evidence as is relevant and,
within reasonable limits due to the restricted time period, to hear as
much argument as is feasible, giving a fair allocation of time to each
Party to the arbitration. The arbitrator(s) shall use all reasonable
means to expedite discovery and to sanction noncompliance with reasonable
discovery requests or any discovery order. The arbitrator(s) shall not
consider any evidence or argument not presented during such period and
shall not extend such period except by the written consent of both
Parties. At the conclusion of such period, the arbitrator(s) shall have
forty-five calendar days to reach a determination. To the extent not in
conflict with the procedures set forth herein, which shall govern, such
arbitration shall be held in accordance with the prevailing rules of the
Chicago office of the American Arbitration Association for commercial
arbitration.

     (iv) The arbitrator(s) shall have the right only to interpret and
apply the terms and conditions of this Agreement and to order any remedy
allowed by this Agreement, but may not change any term or condition of
this Agreement, deprive either Party of any right or remedy expressly
provided hereunder, or provide any right or remedy that has been
expressly excluded hereunder.

     (v) The arbitrator(s) shall give a written decision to the Parties
stating their findings of fact and conclusions of law, and shall furnish
to each Party a copy thereof signed by him (them) within five calendar
days from the date of their

16

 

determination. The arbitrator’s(s’) decision shall be final and binding
upon the Parties.

     (vi) Each Party shall pay the cost of the arbitrator(s) with respect
to those issues as to which they do not prevail, as determined by the
arbitrator(s).

     (c) Obligations to Pay Charges and Perform. If a disagreement should
arise on any matter which is not resolved as provided in Section 15(a), then,
pending the resolution of the disagreement by arbitration as provided in
Section 15(b), ExGen shall continue to provide Electric Energy in a manner
consistent with the applicable provisions of this Agreement and ComEd shall
continue to pay all charges and perform all other obligations required in
accordance with the applicable provisions of this Agreement.

     (d) Preliminary Injunctive Relief. Nothing in this Section 16 shall
preclude, or be construed to preclude, the resort by either Party to a court of
competent jurisdiction solely for the purposes of securing a temporary or
preliminary injunction to preserve the status quo or avoid irreparable harm
pending arbitration pursuant to this Section 16.

     (e) Settlement Discussions. The Parties agree that no statements of
position or offers of settlement made in the course of the dispute process
described in this Section 16 will be offered into evidence for any purpose in
any litigation or arbitration between the Parties, nor will any such statements
or offers of settlement be used in any manner against either Party in any such
litigation or arbitration. Further, no such statements or offers of settlement
shall constitute an admission or waiver of rights by either Party in connection
with any such litigation or arbitration. At the request of either Party, any
such statements and offers of settlement, and all copies thereof, shall be
promptly returned to the Party providing the same.

16. Governing Law

     Except as provided in Section 15, this Agreement shall be construed in
accordance with, and governed by, the laws of the state of Illinois without
regard to its conflicts of laws provisions.

17. No Third Party Beneficiaries

     This Agreement is intended to be solely for the benefit of the Parties and
their successors and permitted assigns and is not intended to and shall not
confer any rights or benefits on any third party not a signatory hereto. The
Parties’ successors and permitted transferees shall be bound by the provisions
of this Agreement.

18. Partial Invalidity

     Wherever possible, each provision hereof shall be interpreted in such
manner as to be effective and valid under applicable law, but in case any one
or more of the provisions contained herein shall, for any reason, be held to be
invalid, illegal or

17

 

unenforceable in any respect, such provision shall be ineffective to the
extent, but only to the extent, of such invalidity, illegality or
unenforceability without invalidating the remainder of such invalid, illegal or
unenforceable provision or provisions or any other provisions hereof, unless
such a construction would be unreasonable. In the event that such a
construction would be unreasonable or would deprive a Party of a material
benefit under this Agreement, the Parties shall seek to amend this Agreement to
remove the invalid provision and otherwise provide the benefit unless
prohibited by any Requirement of Law.

19. Waivers

     The failure of either Party hereto to enforce at any time any provision of
this Agreement shall not be construed to be a waiver of such provision, nor in
any way to affect the validity of this Agreement or any part hereof or the
right of a Party thereafter to enforce each and every such provision. A waiver
under this Agreement must be in writing and state that it is a waiver. No
waiver of any breach of this Agreement shall be held to constitute a waiver of
any other or subsequent breach.

20. WAIVER OF JURY TRIAL.

     The Parties hereby knowingly, voluntarily and intentionally waive any
rights they may have to a trial by jury in respect of any litigation based
hereon or arising out of, under or in connection with this Agreement or any
course of conduct, course of dealing, statements (whether oral or written) or
actions of the Parties. This provision is a material inducement for each of
the Parties to enter into this Agreement.

21. Amendments

     The Parties recognize the difficulty of anticipating and documenting all
circumstances or events which may be inconsistent with certain assumptions on
which this Agreement is based or which may affect the ability of either or both
of the Parties to accomplish the purposes of this Agreement. Upon the
occurrence of any such circumstance or event, including but not limited to
changes in technology that suggest or require for reasons of cost, reliability
or prudence, or a Change of Law that requires, changes to or supplementation of
the provisions of this Agreement, representatives of the Parties shall meet to
discuss possible amendments to this Agreement and, if necessary to carry out
the purposes and intent to this Agreement in light of such circumstance or
event, the Parties shall amend, modify or supplement this Agreement. Such
amendments, modifications or supplements shall be in writing and signed by an
authorized representative of each Party.

18

 

22. Entire Agreement and Amendments

     This Agreement supersedes all previous representations, understandings,
negotiations and agreements either written or oral between the Parties or their
representatives with respect to the supply and delivery of Electric Energy and
constitutes the entire agreement of the Parties with respect thereto.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth at the beginning of this Agreement.

	 	 	 	 	 
	 	 	COMMONWEALTH EDISON COMPANY
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	 	 	Name: Arlene A. Juracek
	

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	EXELON GENERATION COMPANY, LLC
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	 	 	Name: Ian McLean
	

	 	 	 	Title: Senior Vice President

19

 

APPENDIX A

Prices from Effective Date through December 31, 2004

Electric Energy Prices ($/MWH)

	 	 	 	 	 	 	 
	 	 	 	 	Off-Peak	 	Partial Peak
	 	 	Peak Prices	 	Prices	 	Prices
	Month
	 	(5x16)
	 	(7x8)
	 	(2x16)

	January
	 	$40.00	 	$17.00	 	$17.00
	February
	 	$35.50	 	$17.00	 	$17.00
	March
	 	$35.50	 	$17.00	 	$17.00
	April
	 	$35.50	 	$17.00	 	$17.00
	May
	 	$35.50	 	$17.00	 	$17.00
	June
	 	$43.50	 	$17.00	 	$17.00
	July
	 	$68.00	 	$17.00	 	$17.00
	August
	 	$68.00	 	$17.00	 	$17.00
	September
	 	$43.50	 	$17.00	 	$17.00
	October
	 	$35.50	 	$17.00	 	$17.00
	November
	 	$35.50	 	$17.00	 	$17.00
	December
	 	$40.00	 	$17.00	 	$17.00

1

 

APPENDIX B

Preliminary Prices from January 1, 2005 through December 31, 2005

Electric Energy Prices ($/MWH)

	 	 	 	 	 	 	 
	 	 	 	 	Off-Peak	 	Partial Peak
	 	 	Peak Prices	 	Prices	 	Prices
	Month
	 	(5x16)
	 	(7x8)
	 	(2x16)

	January
	 	$45.15	 	$23.19	 	$30.79
	February
	 	$44.39	 	$25.81	 	$26.66
	March
	 	$41.75	 	$31.45	 	$37.69
	April
	 	$43.77	 	$22.93	 	$29.76
	May
	 	$47.23	 	$21.91	 	$26.41
	June
	 	$48.02	 	$20.85	 	$32.93
	July
	 	$50.67	 	$24.00	 	$38.79
	August
	 	$49.37	 	$20.76	 	$39.27
	September
	 	$37.28	 	$17.87	 	$30.41
	October
	 	$36.80	 	$20.68	 	$25.05
	November
	 	$38.35	 	$21.87	 	$24.86
	December
	 	$38.19	 	$20.77	 	$27.83

These prices are subject to further adjustment to ensure consistancy between these prices and the MVEC

energy prices, and for the addition of capacity charges as may be required.

2

 

APPENDIX C

Preliminary Prices from January 1, 2006 through December 31, 2006

Electric Energy Prices ($/MWH)

	 	 	 	 	 	 	 
	 	 	 	 	Off-Peak	 	Partial Peak
	 	 	Peak Prices	 	Prices	 	Prices
	Month
	 	(5x16)
	 	(7x8)
	 	(2x16)

	January
	 	$42.82	 	$23.40	 	$31.07
	February
	 	$42.09	 	$26.04	 	$26.89
	March
	 	$37.08	 	$31.74	 	$38.04
	April
	 	$38.86	 	$23.13	 	$30.03
	May
	 	$41.88	 	$22.10	 	$26.64
	June
	 	$42.58	 	$21.02	 	$33.23
	July
	 	$50.47	 	$24.21	 	$39.15
	August
	 	$49.18	 	$20.94	 	$39.64
	September
	 	$33.17	 	$18.02	 	$30.69
	October
	 	$32.73	 	$20.85	 	$25.26
	November
	 	$34.11	 	$22.06	 	$25.08
	December
	 	$33.97	 	$20.94	 	$28.08

These prices are subject to further adjustment to ensure consistancy between these prices and the MVEC

energy prices, and for the addition of capacity charges as may be required.

3

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