Document:

Exhibit 10(c) Seasonal Credit Agreement dated as of 10/20/06 between the Company
      and Bank of America, N.A.

    EXHIBIT
      10(c)

     

    Execution
      Draft

     

     

    
      

      

    

     

    
      	
               

              SEASONAL
                CREDIT AGREEMENT

               

              DATED
                AS OF

               

              October
                20, 2006

               

               

              BETWEEN

               

               

              PEOPLES
                ENERGY CORPORATION,

               

              and

               

              BANK
                OF AMERICA, N.A.

              as
                Lender.

               

            

    

    

    
      

      

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

       

    

    
      TABLE
        OF CONTENTS

       

      
        	
                SECTION
                  1. DEFINITIONS;
                  INTERPRETATION.

              	
                1

              
	
                 

              	
                 Section
                  1.1 

              	
                Definitions

              	
                1

              
	
                 

              	
                 Section
                  1.2

              	
                Interpretation

              	
                7

              

      

       

      
        	
                 SECTION
                  2. THE
                  REVOLVING CREDIT.

              	
                7

              
	
                 

              	
                Section
                  2.1

              	
                The
                  Loan Commitment

              	
                7

              
	
                 

              	
                Section
                  2.2

              	
                [Reserved]

              	
                7

              
	
                 

              	
                Section
                  2.3

              	
                Applicable
                  Interest Rates

              	
                7

              
	
                 

              	
                Section
                  2.5

              	
                Minimum
                  Borrowing Amounts

              	
                9

              
	
                 

              	
                Section
                  2.6

              	
                Manner
                  of Borrowing Loans and Designating Interest Rates Applicable to
                  Loans

              	
                9

              
	
                 

              	
                Section
                  2.8

              	
                Interest
                  Periods

              	
                10

              
	
                 

              	
                Section
                  2.9

              	
                Maturity
                  of Loans

              	
                11

              
	
                 

              	
                Section
                  2.10

              	
                Prepayments

              	
                11

              
	
                 

              	
                Section
                  2.12

              	
                Default
                  Rate

              	
                11

              
	
                 

              	
                Section
                  2.13

              	
                Evidence
                  of Debt

              	
                12

              
	
                 

              	
                Section
                  2.14

              	
                Funding
                  Indemnity

              	
                12

              
	
                 

              	
                Section
                  2.15

              	
                Revolving
                  Credit Commitment Terminations

              	
                13

              
	
                 

              	
                Section
                  2.16

              	
                Regulation
                  D Compensation

              	
                13

              
	
                 

              	
                Section
                  2.17

              	
                Arbitrage
                  Compensation

              	
                13

              

      

       

      
        	
                SECTION
                  3. FEES.

              	
                13 

              
	
                 

              	
                Section
                  3.1

              	
                Fees.

              	
                13

              

      

       

      
        	
                SECTION
                  4. PLACE
                  AND APPLICATION OF PAYMENTS.

              	
                14 

              
	
                 

              	
                Section
                  4.1

              	
                Place
                  and Application of Payments

              	
                14

              

      

       

      
        	
                SECTION
                  5. REPRESENTATIONS
                  AND WARRANTIES.

              	
                14 

              
	
                 

              	
                Section
                  5.1

              	
                Corporate
                  Organization and Authority

              	
                15

              
	
                 

              	
                Section
                  5.2

              	
                Corporate
                  Authority and Validity of Obligations

              	
                15

              
	
                 

              	
                Section
                  5.3

              	
                Financial
                  Statements

              	
                15

              
	
                 

              	
                Section
                  5.4

              	
                Approvals

              	
                15

              
	
                 

              	
                Section
                  5.5

              	
                ERISA

              	
                15

              
	
                 

              	
                Section
                  5.6

              	
                Government
                  Regulation

              	
                16

              
	
                 

              	
                Section
                  5.7

              	
                Margin
                  Stock; Proceeds

              	
                16

              
	
                 

              	
                Section
                  5.8

              	
                Full
                  Disclosure

              	
                16

              

      

       

      
        	
                SECTION
                  6. CONDITIONS
                  PRECEDENT.

              	
                16 

              
	
                 

              	
                Section
                  6.1

              	
                Initial
                  Credit Event

              	
                16 

              
	
                 

              	
                Section
                  6.2

              	
                All
                  Credit Events

              	
                17 

              

      

       

      
        	
                SECTION
                  7. COVENANTS.

              	
                17 

              
	
                 

              	
                Section
                  7.1

              	
                Corporate
                  Existence

              	
                17 

              
	
                 

              	
                Section
                  7.2

              	
                ERISA

              	
                18 

              
	
                 

              	
                Section
                  7.3

              	
                Financial
                  Reports and Other Information

              	
                18 

              

      

       

      
        
          
            
            

            i

          

          
            
            

            
              

            

          

           

        

      

       

      
        	
                 

              	
                Section
                  7.5

              	
                Regulation
                  U; Proceeds

              	
                19 

              
	
                 

              	
                Section
                  7.6

              	
                Sales
                  of Assets

              	
                19 

              
	
                 

              	
                Section
                  7.7

              	
                Capital
                  Ratio

              	
                19 

              
	
                 

              	
                Section
                  7.8

              	
                Compliance
                  with Laws

              	
                19 

              
	
                 

              	
                Section
                  7.9

              	
                Mergers
                  and Consolidations

              	
                19 

              

      

       

      
        	
                SECTION
                  8. EVENTS
                  OF DEFAULT AND REMEDIES.

              	
                20 

              
	
                 

              	
                Section
                  8.1

              	
                Events
                  of Default

              	
                20

              
	
                 

              	
                Section
                  8.2

              	
                Non-Bankruptcy
                  Defaults

              	
                21

              
	
                 

              	
                Section
                  8.3

              	
                Bankruptcy
                  Defaults

              	
                22

              
	
                 

              	
                Section
                  8.4

              	
                Expenses

              	
                22

              

      

       

      
        	
                SECTION
                  9. CHANGE
                  IN CIRCUMSTANCES.

              	
                22

              
	
                 

              	
                Section
                  9.1

              	
                Change
                  of Law

              	
                22

              
	
                 

              	
                Section
                  9.2

              	
                Unavailability
                  of Deposits or Inability to Ascertain, or Inadequacy of,
                  LIBOR

              	
                22

              
	
                 

              	
                Section
                  9.3

              	
                Increased
                  Cost and Reduced Return

              	
                22

              
	
                 

              	
                Section
                  9.5

              	
                Lending
                  Offices

              	
                24

              
	
                 

              	
                Section
                  9.6

              	
                Discretion
                  of Lender as to Manner of Funding

              	
                24

              

      

       

      
        	
                SECTION
                  10. RESERVED.

              	
                24

              

      

       

      
        	
                SECTION
                  11. MISCELLANEOUS.

              	
                24

              
	
                 

              	
                Section
                  11.1

              	
                Withholding
                  Taxes

              	
                24

              
	
                 

              	
                Section
                  11.2

              	
                No
                  Waiver of Rights

              	
                25

              
	
                 

              	
                Section
                  11.3

              	
                Non-Business
                  Day

              	
                25

              
	
                 

              	
                Section
                  11.4

              	
                Documentary
                  Taxes

              	
                25

              
	
                 

              	
                Section
                  11.5

              	
                Survival
                  of Representations

              	
                25

              
	
                 

              	
                Section
                  11.6

              	
                Survival
                  of Indemnities

              	
                25

              
	
                 

              	
                Section
                  11.7

              	
                Set-Off

              	
                26

              
	
                 

              	
                Section
                  11.8

              	
                Notices

              	
                26

              
	
                 

              	
                Section
                  11.9

              	
                Counterparts

              	
                27

              
	
                 

              	
                Section
                  11.10

              	
                Successors
                  and Assigns

              	
                27

              
	
                 

              	
                Section
                  11.11

              	
                [Reserved].

              	
                27

              
	
                 

              	
                Section
                  11.12

              	
                Assignments,
                  Participations, Etc

              	
                27

              
	
                 

              	
                Section
                  11.13

              	
                Amendments

              	
                29

              
	
                 

              	
                Section
                  11.14

              	
                Headings

              	
                29

              
	
                 

              	
                Section
                  11.15

              	
                Legal
                  Fees, Other Costs and Indemnification

              	
                29

              
	
                 

              	
                Section
                  11.16

              	
                [Reserved].

              	
                30

              
	
                 

              	
                Section
                  11.17

              	
                Entire
                  Agreement

              	
                30

              
	
                 

              	
                Section
                  11.18

              	
                Construction

              	
                30

              
	
                 

              	
                Section
                  11.19

              	
                Governing
                  Law

              	
                30

              
	
                 

              	
                Section
                  11.20

              	
                SUBMISSION
                  TO JURISDICTION; WAIVER OF JURY TRIAL

              	
                30

              
	
                 

              	
                Section
                  11.21

              	
                Confidentiality

              	
                31

              
	
                 

              	
                Section
                  11.22

              	
                Patriot
                  Act

              	
                31

              

      

       

      
        
          
          

          ii

        

        
          
          

          
            

          

        

         

      

    CREDIT
      AGREEMENT

     

    This
      SEASONAL
      CREDIT AGREEMENT,
      dated as
      of October 20, 2006, is by and between PEOPLES ENERGY CORPORATION, an Illinois
      corporation (the “Borrower”),
      and
      BANK OF AMERICA, N.A., as lender (in such capacity, the “Lender”).
      

     

    WITNESSETH
      THAT:

     

    WHEREAS,
      the
      Borrower desires to obtain the commitment of the Lender to make available a
      seasonal revolving credit facility for loans (the “Revolving
      Credit”),
      as
      described herein; and

     

    WHEREAS,
      the
      Lender is willing to extend such commitments subject to all of the terms and
      conditions hereof and on the basis of the representations and warranties
      hereinafter set forth.

     

    NOW,
      THEREFORE,
      in
      consideration of the recitals set forth above and for other good and valuable
      consideration, the receipt and adequacy of which are hereby acknowledged, the
      parties hereto hereby agree as follows:

     

    SECTION
      1.  DEFINITIONS;
      INTERPRETATION.

     

    Section
      1.1  Definitions. 
      The following terms when used herein have the following meanings:

     

    “Affiliate”
means,
      as to any Person, any other Person which directly or indirectly controls, or
      is
      under common control with, or is controlled by, such Person. As used in this
      definition, “control”
      (including “controlled
      by”
and
      “under
      common control with”
and
      other cognates thereof,) means possession, directly or indirectly, of power
      to
      direct or cause the direction of management or policies of a Person (whether
      through ownership of securities or partnership or other ownership interests,
      by
      contract or otherwise), provided that, in any event for purposes of this
      definition: (i) any Person which owns directly or indirectly 5% or more of
      the
      securities having ordinary voting power for the election of directors or other
      governing body of a corporation or 5% or more of the partnership or other
      ownership interests of any other Person (other than as a limited partner of
      such
      other Person) will be deemed to control such corporation or other Person; and
      (ii) each director and executive officer of the Borrower or any Subsidiary
      shall
      be deemed an Affiliate of the Borrower and each Subsidiary.

     

    “Agreement”
means
      this Credit Agreement, including all Exhibits and Schedules hereto, as it may
      be
      amended, supplemented or otherwise modified from time to time in accordance
      with
      the terms hereof.

     

    “Applicable
      Margin”
means,
      at any time (i) with respect to Base Rate Loans, the Base Rate Margin; and
      (ii)
      with respect to LIBOR Loans, the LIBOR Margin.

     

    “Applicable
      Telerate Page”
is
      defined in Section 2.3(b) hereof.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Assignment
      and Assumption”
      means an
      assignment and assumption entered into by the Lender and an Eligible Assignee
      (with the consent of any party whose consent is required by
      Section 11.12(b)), in substantially any form approved by the
      Lender.

     

    “Authorized
      Representative”
means
      those persons shown on the list of employees provided by the Borrower pursuant
      to Section 6.1(e) hereof, or on any such updated list provided by the Borrower
      to the Lender, or any further or different employee of the Borrower so named
      by
      any officer of the Borrower in a written notice to the Lender.

     

    “Base
      Rate”
is
      defined in Section 2.3(a) hereof.

     

    “Base
      Rate Loan”
means
      a
      Loan bearing interest prior to maturity at a rate specified in Section 2.3(a)
      hereof.

     

    “Base
      Rate Margin”
means
      the percentage set forth in Schedule 1A hereto corresponding to the then
      applicable Credit Rating.

     

    “Borrower”
is
      defined in the preamble of this Agreement.

     

    “Borrowing”
means
      the total of Loans of a single type advanced, continued for an additional
      Interest Period, or converted from a different type into such type by the Lender
      on a single date and for a single Interest Period. A Borrowing is “advanced” on
      the day the Lender advances funds comprising such Borrowing to the Borrower,
      is
“continued” on the date a new Interest Period for the same type of Loans
      commences for such Borrowing, and is “converted” when such Borrowing is changed
      from one type of Loan to the other, all as requested by the Borrower pursuant
      to
      Section 2.5(a).

     

    “Business
      Day”
means
      any day other than a Saturday or Sunday on which Lender is not authorized or
      required to close in Chicago, Illinois and, if the applicable Business Day
      relates to the borrowing or payment of a LIBOR Loan, on which banks are dealing
      in U.S. Dollars in the interbank market in London, England.

     

    “Capital”
means,
      as of any date of determination thereof, without duplication, the sum of
      Consolidated Net Worth plus
      Indebtedness, excluding accumulated other comprehensive income/loss, as
      determined in accordance with generally accepted accounting principles
      consistently applied.

     

    “Capital
      Lease”
means
      at any date any lease of Property which, in accordance with GAAP, would be
      required to be capitalized on the balance sheet of the lessee.

     

    “Capital
      Ratio”
means,
      for any fiscal quarter of the Borrower, the ratio, rounded downwards to two
      decimal points, of the sum of Indebtedness for such fiscal quarter to the sum
      of
      Capital for such fiscal quarter.

     

    “Capitalized
      Lease Obligations”
means,
      for any Person, the amount of such Person’s liabilities under Capital Leases
      determined at any date in accordance with GAAP.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Commitment
      Fee Rate” means
      the
      percentage set forth on Schedule 1A hereto corresponding to the then applicable
      Credit Rating. 

     

    “Compliance
      Certificate”
means
      a
      certificate in the form of Exhibit A hereto.

     

    “Consolidated
      EBIT”
means,
      for any period, for the Borrower and its Consolidated Subsidiaries, (A) the
      sum
      of the amounts for such period of (i) consolidated net income, (ii) net income
      taxes in respect of such period (such amount to be a positive number in cases
      where net cash taxes are payable and zero in cases where a cash refund in
      respect of taxes paid is due), (iii) consolidated interest expense, and (iv)
      losses on sales of assets (excluding sales in the ordinary course of business)
      and other extraordinary losses less (B) the amount for such period of (i)
      interest income and (ii) gains on sales of assets (excluding sales in the
      ordinary course of business) and other extraordinary gains, all as determined
      on
      a consolidated basis in accordance with GAAP.

     

    “Consolidated Net
      Worth”
means,
      as of the date of any determination thereof, the amount reflected as
      shareholders equity upon a consolidated balance sheet of the Borrower and its
      Subsidiaries.

     

    “Contractual
      Obligation”
means,
      as to any Person, any provision of any security issued by such Person or of
      any
      agreement, instrument or undertaking to which such Person is a party or by
      which
      it or any of its Property is bound.

     

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

     

    “Credit
      Documents”
means
      this Agreement, the Note and all other documents, instrument and agreements
      executed and delivered by Borrower or any Affiliate thereof in connection with
      this Agreement.

     

    “Credit
      Event”
means
      the Borrowing of any Loan.

     

    “Credit
      Rating”
means,
      at any time, the long-term senior un-secured non-credit enhanced debt rating
      of
      the Borrower as determined by Standard & Poors’ Ratings Services and/or
      Moody’s Investors Service.

     

    “Default”
means
      any event or condition the occurrence of which would, with the passage of time
      or the giving of notice, or both, constitute an Event of Default.

     

    “EBIT”
means,
      for any period, for the Borrower or any of its Subsidiaries, (A) the sum of
      the
      amounts for such period of (i) net income, (ii) net income taxes in respect
      of
      such period (such amount to be a positive number in cases where net cash taxes
      are payable and zero in cases where a cash refund in respect of taxes paid
      is
      due), (iii) interest expense, and (iv) losses on sales of assets (excluding
      sales in the ordinary course of business) and other extraordinary losses less
      (B) the amount for such period of (i) interest income and (ii) gains on sales
      of
      assets (excluding sales in the ordinary course of business) and other
      extraordinary gains, all as determined in accordance with GAAP.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Effective
      Date”
means
      October 20, 2006.

     

    “Eligible
      Assignee”
      means
      (a) an Affiliate of the Lender, and (b) any other Person (other than a natural
      person) approved by (i) the Lender, and (ii) unless an Event of Default has
      occurred and is continuing, the Borrower (each such approval not to be
      unreasonably withheld or delayed); provided
      that
      notwithstanding the foregoing, “Eligible Assignee” shall not include the
      Borrower or any of the Borrower’s Affiliates or Subsidiaries. 

     

    “ERISA”
is
      defined in Section 5.5 hereof.

     

    “Event
      of Default”
means
      any of the events or circumstances specified in Section 8.1 hereof.

     

    “Existing
      Credit Agreement”
means
      that certain Credit Agreement dated as of June 13, 2006 by and among Borrower,
      Bank of America, N.A. as “Agent” thereunder, and the other financial
      institutions a party thereto (as may be amended, supplemented or modified from
      time to time).

     

    “Federal
      Funds Rate”
means
      the fluctuating interest rate per annum described in part (x) of clause (ii)
      of
      the definition of Base Rate set forth in Section 2.3(a) hereof.

     

    “GAAP”
means
      generally accepted accounting principles as in effect in the United States
      from
      time to time, applied by the Borrower and its Subsidiaries on a basis consistent
      with the preparation of the Borrower’s financial statements furnished to the
      Lender as described in Section 5.3 hereof.

     

    “Guarantee”
means,
      in respect of any Person, any obligation, contingent or otherwise, of such
      Person directly or indirectly guaranteeing any Indebtedness of another Person,
      including, without limitation, by means of an agreement to purchase or pay
      (or
      advance or supply funds for the purchase or payment of) such Indebtedness or
      to
      maintain financial covenants, or to assure the payment of such Indebtedness
      by
      an agreement to make payments in respect of goods or services regardless of
      whether delivered, or otherwise, provided, that the term “Guarantee” shall not
      include endorsements for deposit or collection in the ordinary course of
      business; and such term when used as a verb shall have a correlative
      meaning.

     

    “Indebtedness”
means,
      as to any Person, without duplication: (i) all obligations of such Person for
      borrowed money or evidenced by bonds, debentures, notes or similar instruments;
      (ii) all obligations of such Person for the deferred purchase price of property
      or services (other than in respect of trade accounts payable arising in the
      ordinary course of business, customer deposits, provisions for rate refunds
      (if
      any), deferred fuel expenses and obligations in respect of pensions and other
      post-retirement benefits and employee welfare plans); (iii) all Capitalized
      Lease Obligations of such Person; (iv) all Indebtedness of others secured by
      a
      Lien on any properties, assets or revenues of such Person (other than stock,
      partnership interests or other equity interests of the Borrower or any
      Subsidiaries in other entities) to the extent of the lesser of the value of
      the
      property subject to such Lien or the amount of such Indebtedness; (v) all
      Indebtedness of others Guaranteed by such Person; and (vi) all obligations
      of
      such Person, contingent or otherwise, in respect of any letters or credit
      (whether commercial or standby) or bankers’ acceptances.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Interest
      Period”
is
      defined in Section 2.6 hereof.

     

    “Lender”
is
      defined in the preamble of this Agreement and includes any successor
      thereto.

     

    “Lending
      Office”
is
      defined in Section 9.4 hereof.

     

    “LIBOR”
is
      defined in Section 2.3(b) hereof.

     

    “LIBOR
      Loan”
means
      a
      Loan bearing interest prior to maturity at the rate specified in Section 2.3(b)
      hereof.

     

    “LIBOR
      Margin”
means
      the percentage set forth in Schedule 1A hereto beside the then applicable Credit
      Rating.

     

    “LIBOR
      Reserve Percentage”
is
      defined in Section 2.3(b) hereof.

     

    “Lien”
means
      any interest in Property securing an obligation owed to, or a claim by, a Person
      other than the owner of the Property, whether such interest is based on the
      common law, statute or contract, including, but not limited to, the security
      interest lien arising from a mortgage, encumbrance, pledge, conditional sale,
      security agreement or trust receipt, or a lease, consignment or bailment for
      security purposes. For the purposes of this definition, a Person shall be deemed
      to be the owner of any Property which it has acquired or holds subject to a
      conditional sale agreement, Capital Lease or other arrangement pursuant to
      which
      title to the Property has been retained by or vested in some other Person for
      security purposes, and such retention of title shall constitute a
“Lien.”

     

    “Loan”
is
      defined in Section 2.1 hereof and, as so defined, includes a Base Rate Loan
      or
      LIBOR Loan, each of which is a “type” of Loan hereunder.

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (i) the business, financial position or results
      of
      operations of the Borrower, (ii) the ability of the Borrower to perform its
      obligations under the Credit Documents, (iii) the validity or enforceability
      of
      the obligations of the Borrower, (iv) the rights and remedies of the Lender
      against the Borrower or (v) the timely payment of the principal of and interest
      on the Loans or other amounts payable by the Borrower hereunder.

     

    “Non-Recourse
      Indebtedness”
means
      all Indebtedness of the Borrower that is non-recourse to the
      Borrower.

     

    “Note”
is
      defined in Section 2.10(a) hereof.

     

    “Obligations”
means
      all fees payable hereunder, all obligations of the Borrower to pay principal
      or
      interest on Loans and all other payment obligations of the Borrower arising
      under or in relation to any Credit Document.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    “Person”
means
      an individual, partnership, corporation, limited liability company, association,
      trust, unincorporated organization or any other entity or organization,
      including a government or any agency or political subdivision
      thereof.

     

    “Plan”
means
      at any time an employee pension benefit plan covered by Title IV of ERISA or
      subject to the minimum funding standards under Section 412 of the Code that
      is
      either (i) maintained by a member of the Controlled Group or (ii) maintained
      pursuant to a collective bargaining agreement or any other arrangement under
      which more than one employer makes contributions and to which a member of the
      Controlled Group is then making or accruing an obligation to make contributions
      or has within the preceding five plan years made contributions.

     

    “PBGC”
is
      defined in Section 5.5 hereof.

     

    “Property”
means
      any interest in any kind of property or asset, whether real, personal or mixed,
      or tangible or intangible, whether now owned or hereafter acquired.

     

    “Reference
      Bank”
means
      Bank of America, N.A. 

     

    “Revolving
      Credit Commitment”
is
      defined in Section 2.1 hereof.

     

    “SEC”
means
      the Securities and Exchange Commission.

     

    “Significant
      Subsidiary”
means
      a
      Subsidiary of the Borrower which meets any of the following
      conditions:

     

    (1) the
      book
      value of the Subsidiary’s assets exceeds twenty percent (20%) of the book value
      of the assets of the Borrower and its other Subsidiaries consolidated as of
      the
      end of the most recently completed fiscal quarter; or

     

    (2) the
      Subsidiary’s EBIT exceeds twenty percent (20%) of Consolidated EBIT as of the
      end of the most recently completed fiscal quarter and the twelve month period
      ending therewith.

     

    “SPC”
is
      defined in Section 11.12(g) hereof.

     

    “Subsidiary”
means,
      as to the Borrower, any corporation or other entity of which more than fifty
      percent (50%) of the outstanding stock or comparable equity interests having
      ordinary voting power for the election of the Board of Directors of such
      corporation or similar governing body in the case of a non-corporation
      (irrespective of whether or not, at the time, stock or other equity interests
      of
      any other class or classes of such corporation or other entity shall have or
      might have voting power by reason of the happening of any contingency) is at
      the
      time directly or indirectly owned by the Borrower or by one or more of its
      Subsidiaries.

     

    “Telerate
      Service”
means
      the Moneyline Telerate.

     

    “Termination
      Date”
means
      the earlier to occur of (i) March 31, 2007 and (ii) the consummation of the
      merger between a subsidiary of WPS Resources Corporation and Borrower as
      contemplated by that certain merger application filed with the Illinois Commerce
      Commission on or about August 2, 2006.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    “Unfunded
      Vested Liabilities”
means,
      with respect to any Plan at any time, the amount (if any) by which (i) the
      present value of all vested non-forfeitable accrued benefits under such Plan
      exceeds (ii) the fair market value of all Plan assets allocable to such
      benefits, all determined as of the then most recent valuation date for such
      Plan, but only to the extent that such excess represents a potential liability
      of a member of the Controlled Group to the PBGC or the Plan under Title IV
      of
      ERISA.

     

    “Upfront
      Fee”
is
      defined in Section 3.1(d).

     

    “U.S.
      Dollars”
and
      “$”
each
      means the lawful currency of the United States of America.

     

    “Utilization
      Fee Rate”
means
      the percentage set forth in Schedule 1A hereto corresponding to the then
      applicable Credit Rating.

     

    “Welfare
      Plan”
means
      a
“welfare plan”, as defined in Section 3(l) of ERISA.

     

    Section
      1.2  Interpretation.
       The foregoing definitions shall be equally applicable to both the singular
      and plural forms of the terms defined. All references to times of day in this
      Agreement shall be references to Chicago, Illinois time unless otherwise
      specifically provided. Where the character or amount of any asset or liability
      or item of income or expense is required to be determined or any consolidation
      or other accounting computation is required to be made for the purposes of
      this
      Agreement, the same shall be done in accordance with GAAP, to the extent
      applicable, except where such principles are inconsistent with the specific
      provisions of this Agreement.

     

    SECTION
      2.  THE
      REVOLVING CREDIT.

     

    Section
      2.1  The
      Loan Commitment.
       Subject to the terms and conditions hereof the Lender agrees to make a
      loan or loans (individually a “Loan”
and
      collectively “Loans”)
      to the
      Borrower from time to time on a revolving basis in an aggregate outstanding
      amount up to the TWENTY FIVE MILLION DOLLARS ($25,000,000)
      (such amount, as increased or reduced pursuant to Section 2.12 or changed as
      a
      result of one or more assignments under Section 11.12, the “Revolving
      Credit Commitment”)
      before
      the Termination Date, provided
      that the
      sum of the aggregate amount of Loans at any time outstanding shall not exceed
      the Revolving Credit Commitment in effect at such time. As provided in Section
      2.5(a) hereof, the Borrower may elect that each Borrowing of Loans be either
      Base Rate Loans or LIBOR Loans. Loans may be repaid and the principal amount
      thereof re-borrowed before the Termination Date, subject to all the terms and
      conditions hereof. 

     

    Section
      2.2  [Reserved]. 

     

    Section
      2.3  Applicable
      Interest Rates. 
       Section
      2.4  
      Base
      Rate Loans. 
      Each Base Rate Loan made or maintained by Lender shall bear interest during
      each
      Interest Period it is outstanding (computed (x) at all times the Base Rate
      is
      based on the rate described in clause (i) of the definition thereof, on the
      basis of a year of 365 or 366 days, as applicable, and actual days elapsed
      or
      (y) at all times the Base Rate is based on the rate described in clause (ii)
      of
      the definition thereof, on the basis of a year of 360 days and actual days
      elapsed) on the unpaid principal 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    amount
      thereof from the date such Loan is advanced, continued or created by conversion
      from a LIBOR Loan until maturity (whether by acceleration or otherwise) at
      a
      rate per annum equal to the sum of the Applicable Margin plus the Base Rate
      from
      time to time in effect, payable on the last day of its Interest Period and
      at
      maturity (whether by acceleration or otherwise).

     

    “Base
      Rate”
means
      for any day the greater of:

     

    i  the
      rate
      of interest announced by Bank of America, N.A. from time to time as its “Prime
      Commercial Lending Rate,” or equivalent, for U.S. Dollar loans as in effect on
      such day, with any change in the Base Rate resulting from a change in said
      prime
      rate to be effective as of the date of the relevant change in said “Prime
      Commercial Lending Rate”; and

     

    ii  the
      sum
      of (x) the rate determined by the Lender to be the prevailing rate per annum
      (rounded upwards, if necessary, to the nearest one hundred-thousandth of a
      percentage point) at approximately 10:00 a.m. (Chicago time) (or as soon
      thereafter as is practicable) on such day (or, if such day is not a Business
      Day, on the immediately preceding Business Day) for the purchase at face value
      of overnight Federal funds in an amount comparable to the principal amount
      owed
      to Bank of America, N.A. for which such rate is being determined, plus (y)
      one-half of one percent (0.50%).

     

    (b)  LIBOR
      Loans.
      Each
      LIBOR Loan made or maintained by Lender shall bear interest during each Interest
      Period it is outstanding (computed on the basis of a year of 360 days and actual
      days elapsed) on the unpaid principal amount thereof from the date such Loan
      is
      advanced, continued, or created by conversion from a Base Rate Loan until
      maturity (whether by acceleration or otherwise) at a rate per annum equal to
      the
      sum of the Applicable Margin plus the LIBOR applicable for such Interest Period,
      payable on the last day of the Interest Period and at maturity (whether by
      acceleration or otherwise).

     

    “LIBOR”
means,
      for an Interest Period for a Borrowing of LIBOR Loans, (a) the LIBOR Index
      Rate
      for such Interest Period, if such rate is available, and (b) if the LIBOR Index
      Rate cannot be determined, the arithmetic average of the rates of interest
      per
      annum (rounded upwards, if necessary, to the nearest one-sixteenth of one
      percent) at which deposits in U.S. Dollars in immediately available funds are
      offered to the Reference Bank at 11:00 a.m. (London, England time) two (2)
      Business Days before the beginning of such Interest Period by major banks in
      the
      interbank LIBOR market for delivery on the first day of and for a Period equal
      to such Interest Period in an amount equal or comparable to the principal amount
      of the LIBOR Loan scheduled to be made by the Reference Bank as part of such
      Borrowing.

     

    “LIBOR
      Index Rate”
means,
      for any Interest Period, the rate per annum (rounded upwards, if necessary,
      to
      the next higher one-sixteenth of one percent) for deposits in U.S. Dollars,
      for
      delivery on the first day of and for a period equal to such Interest Period
      in
      an amount equal or comparable to the principal amount of the LIBOR Loan
      scheduled to be made by Bank of America, N.A. as part of such Borrowing, which
      appears on the Applicable Telerate Page, as appropriate for such currency,
      as of
      11:00 a.m. (London, England time) on the day two (2) Business Days before the
      commencement of such Interest Period.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    “Applicable
      Telerate Page”
means
      the display page designated as “Page
      3750”
on
      the
      Telerate Service (or such other page as may replace such page, as appropriate,
      on that service or such other service as may be nominated by the British
      Bankers’ Association as the information vendor for the purpose of displaying
      British Bankers’ Association Interest Settlement Rates for deposits in U.S.
      Dollars).

     

    “LIBOR
      Reserve Percentage”
means
      for any Borrowing of LIBOR Loans from Lender, the daily average for the
      applicable Interest Period of the actual effective rate, expressed as a decimal,
      at which reserves (including, without limitation, any supplemental, marginal
      and
      emergency reserves) are maintained by Lender during such Interest Period
      pursuant to Regulation D of the Board of Governors of the Federal Reserve System
      (or any successor) on “LIBOR
      liabilities”,
      as
      defined in such Board’s Regulation D (or in respect of any other category of
      liabilities that includes deposits by reference to which the interest rate
      on
      LIBOR Loans is determined or any category of extensions of credit or other
      assets that include loans by non-United States offices of Lender to United
      States residents), subject to any amendments of such reserve requirement by
      such
      Board or its successor, taking into account any transitional adjustments
      thereto. For purposes of this definition, the LIBOR Loans shall be deemed to
      be
“LIBOR
      liabilities”
as
      defined in Regulation D without benefit or credit for any prorations, exemptions
      or offsets under Regulation D.

     

    (c)  Rate
      Determinations.
      The
      Lender shall determine each interest rate applicable to Obligations and the
      amount of all Obligations, and a determination thereof by the Lender shall
      be
      conclusive and binding except in the case of manifest error.

     

    Section
      2.5  Minimum
      Borrowing Amounts.
       Each Borrowing of Base Rate Loans shall be in an amount not less than
      $1,000,000 and in integral multiples of $500,000. Each Borrowing of LIBOR Loans
      shall be in an amount not less than $2,000,000 and in integral multiples of
      $1,000,000.

     

    Section
      2.6  Manner
      of Borrowing Loans and Designating Interest Rates Applicable to
      Loans.
       Section
      2.7 
      Notice
      to the Lender.
      The
      Borrower shall give notice to the Lender by no later than 10:00 a.m. (Chicago
      time) (i) at least two (2) Business Days before the date on which the Borrower
      requests the Lender to advance a Borrowing of LIBOR Loans and (ii) at least
      one
      (1) Business Day before the date on which the Borrower requests the Lender
      to
      advance a Borrowing of Base Rate Loans. The Loans included in each Borrowing
      shall bear interest initially at the type of rate specified in such notice
      of a
      new Borrowing. Thereafter, the Borrower may from time to time elect to change
      or
      continue the type of interest rate borne by each Borrowing or, subject to
      Section 2.4’s minimum amount requirement for each outstanding Borrowing, a
      portion thereof, as follows: (i) if such Borrowing is of LIBOR Loans, on the
      last day of the Interest Period applicable thereto, the Borrower may continue
      part or all of such Borrowing as LIBOR Loans for an Interest Period or Interest
      Periods specified by the Borrower or convert part or all of such Borrowing
      into
      Base Rate Loans, (ii) if such Borrowing is of Base Rate Loans, on any Business
      Day, the Borrower may convert all or part of such Borrowing into LIBOR Loans
      for
      an Interest Period or Interest Periods specified by the Borrower. The Borrower
      

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    shall
      give all such notices requesting the advance, continuation, or conversion of
      a
      Borrowing to the Lender by telephone or facsimile (which notice shall be
      irrevocable once given and, if by telephone, shall be promptly confirmed in
      writing). Notices of the continuation of a Borrowing of LIBOR Loans for an
      additional Interest Period or of the conversion of part or all of a Borrowing
      of
      LIBOR Loans into Base Rate Loans or of Base Rate Loans into LIBOR Loans must
      be
      given by no later than 10:00 a.m. (Chicago time) at least three (3) Business
      Days before the date of the requested continuation or conversion. All such
      notices concerning the advance, continuation, or conversion of a Borrowing
      shall
      specify the date of the requested advance, continuation or conversion of a
      Borrowing (which shall be a Business Day), the amount of the requested Borrowing
      to be advanced, continued, or converted, the type of Loans to comprise such
      new,
      continued or converted Borrowing and, if such Borrowing is to be comprised
      of
      LIBOR Loans, the Interest Period applicable thereto. The Borrower agrees that
      the Lender may rely on any such telephonic or facsimile notice given by any
      person it in good faith believes is an Authorized Representative without the
      necessity of independent investigation, and in the event any such notice by
      telephone conflicts with any written confirmation, such telephonic notice shall
      govern if the Lender has acted in reliance thereon. There may be no more than
      five different Interest Periods in effect at any one time, provided that for
      purposes of determining the number of Interest Periods in effect at any one
      time, all Base Rate Loans shall be deemed to have one and the same Interest
      Period.

     

    (a)  [Reserved]
      .

     

    (b)  Borrower’s
      Failure to Notify.
      Any
      outstanding Borrowing of Base Rate Loans shall, subject to Section 6.2 hereof,
      automatically be continued for an additional Interest Period on the last day
      of
      its then current Interest Period as a Base Rate Loan unless the Borrower has
      notified the Lender within the period required by Section 2.5(a) that it intends
      to convert such Borrowing into a Borrowing of LIBOR Loans or notifies the Lender
      within the period required by Section 2.8(a) that it intends to prepay such
      Borrowing. If the Borrower fails to give notice pursuant to Section 2.5(a)
      above
      of the continuation or conversion of any outstanding principal amount of a
      Borrowing of LIBOR Loans before the last day of its then current Interest Period
      within the period required by Section 2.5(a) and has not notified the Lender
      within the period required by Section 2.8(a) that it intends to prepay such
      Borrowing, such Borrowing shall automatically be converted into a Borrowing
      of
      Base Rate Loans, subject to Section 6.2 hereof. 

     

    Section
      2.8  Interest
      Periods.
       As provided in Section 2.5(a) hereof, at the time of each request to
      advance, continue, or create by conversion a Borrowing of LIBOR Loans, the
      Borrower shall select an Interest Period applicable to such Loans from among
      the
      available options. The term “Interest
      Period”
means
      the period commencing on the date a Borrowing of Loans is advanced, continued,
      or created by conversion and ending: (a) in the case of Base Rate Loans, on
      the
      last Business Day of the calendar quarter in which such Borrowing is advanced,
      continued, or created by conversion (or on the last day of the following
      calendar quarter if such Loan is advanced, continued or created by conversion
      on
      the last Business Day of a calendar quarter), and (b) in the case of LIBOR
      Loans, 1, 2 or 3 months thereafter; provided,
      however,
      that:

     

    (a)  any
      Interest Period for a Borrowing of Base Rate Loans that otherwise would end
      after the Termination Date shall end on the Termination Date; 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (b)  for
      any
      Borrowing of LIBOR Loans, the Borrower may not select an Interest Period that
      extends beyond the Termination Date;

     

    (c)  whenever
      the last day of any Interest Period would otherwise be a day that is not a
      Business Day, the last day of such Interest Period shall be extended to the
      next
      succeeding Business Day, provided that, if such extension would cause the last
      day of an Interest Period for a Borrowing of LIBOR Loans to occur in the
      following calendar month, the last day of such Interest Period shall be the
      immediately preceding Business Day; and

     

    (d)  for
      purposes of determining an Interest Period for a Borrowing of LIBOR Loans,
      a
      month means a period starting on one day in a calendar month and ending on
      the
      numerically corresponding day in the next calendar month; provided,
      however,
      that if
      there is no numerically corresponding day in the month in which such an Interest
      Period is to end or if such an Interest Period begins on the last Business
      Day
      of a calendar month, then such Interest Period shall end on the last Business
      Day of the calendar month in which such Interest Period is to end.

     

    Section
      2.9  Maturity
      of Loans.
       Unless an earlier maturity is provided for hereunder (whether by
      acceleration or otherwise), each Loan shall mature and become due and payable
      by
      the Borrower on the Termination Date. 

     

    Section
      2.10  Prepayments.
       Section
      2.11 
      The Borrower may prepay without premium or penalty and in whole or in part
      (but,
      if in part, then: (i) if such Borrowing is of Base Rate Loans, in an amount
      not
      less than $1,000,000 and integral multiples of $500,000 in excess thereof,
      (ii)
      if such Borrowing is of LIBOR Loans, in an amount not less than $2,000,000
      and
      integral multiples of $1,000,000 in excess thereof and (iii) in an amount such
      that the minimum amount required for a Borrowing pursuant to Section 2.4 hereof
      remains outstanding) any Borrowing of LIBOR Loans upon three Business Days’
prior notice to the Lender or, in the case of a Borrowing of Base Rate Loans,
      notice delivered to the Lender no later than 10:00 a.m. (Chicago time) on the
      date of prepayment, such prepayment to be made by the payment of the principal
      amount to be prepaid and accrued interest thereon to the date fixed for
      prepayment. In the case of LIBOR Loans, any amounts owing under Section 2.11
      hereof as a result of such prepayment shall be paid contemporaneously with
      such
      prepayment. Any amount paid or prepaid before the Termination Date may, subject
      to the terms and conditions of this Agreement, be borrowed, repaid and borrowed
      again.

     

    (a)  At
      any
      time that the Borrower becomes aware, or should have become aware (pursuant
      to
      Borrower’s ordinary business practices) that the aggregate amount of outstanding
      Loans shall at any time for any reason exceed the Revolving Credit Commitment
      then in effect, the Borrower shall, immediately notify the Lender of this
      determination. Within two (2) Business Days of the delivery of the notice
      described in the preceding sentence, the Borrower shall, without further notice
      or demand, pay the amount of such excess to the Lender as a prepayment of the
      Loans. Each such prepayment shall be accompanied by a payment of all accrued
      and
      unpaid interest on the Loans prepaid and shall be subject to Section
      2.11.

     

    Section
      2.12  Default
      Rate.
       If any payment of principal on any Loan or other Obligation is not made
      when due (whether by acceleration or otherwise), such Loan shall bear interest
      (computed on the basis of a year of 360 days and actual days elapsed or, if
      based on the rate described in clause (i) of the definition of Base Rate, on
      the
      basis of a year of 365 or 366 days, as applicable, and the actual number of
      days
      elapsed) from the date such payment was due until paid in full, payable on
      demand, at a rate per annum equal to:

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (a)  for
      any
      Base Rate Loan or Obligation other than a LIBOR Loan, the sum of two percent
      (2%) plus the Applicable Margin plus the Base Rate from time to time in effect;
      and

     

    (b)  for
      any
      LIBOR Loan, the sum of two percent (2%) plus the rate of interest in effect
      thereon at the time of such default until the end of the Interest Period
      applicable thereto and, thereafter, at a rate per annum equal to the sum of
      two
      percent (2%) plus the Applicable Margin plus the Base Rate from time to time
      in
      effect.

     

    Section
      2.13  Evidence
      of Debt. 
      (a)
       Lender shall maintain in accordance with its usual practice an account or
      accounts evidencing the indebtedness of the Borrower to Lender resulting from
      each Loan owing to Lender from time to time, including the amounts of principal
      and interest payable and paid to Lender from time to time hereunder in respect
      of Loans. The Borrower agrees that upon notice by Lender to the Borrower to
      the
      effect that a Note is required or appropriate in order for Lender to evidence
      (whether for purposes of pledge, enforcement or otherwise) the Loans owing
      to,
      or to be made by, Lender under the Credit Documents, the Borrower shall promptly
      execute and deliver to Lender a promissory note in the form of Exhibit A hereto
      (such promissory note is hereinafter referred to as the “Note”).
      

     

    Section
      2.14  Funding
      Indemnity.
       If Lender shall incur any loss, cost or expense (including, without
      limitation, any loss, cost or expense (excluding loss of margin) incurred by
      reason of the liquidation or re-employment of deposits or other funds acquired
      by Lender to fund or maintain any LIBOR Loan or the relending or reinvesting
      of
      such deposits or amounts paid or prepaid to Lender) as a result of:

     

    (a)  any
      payment (whether by acceleration or otherwise), prepayment or conversion of
      a
      LIBOR Loan on a date other than the last day of its Interest
      Period,

     

    (b)  any
      failure (because of a failure to meet the conditions of Section 6 or otherwise)
      by the Borrower to borrow or continue a LIBOR Loan, or to convert a Base Rate
      Loan into a LIBOR Loan, on the date specified in a notice given pursuant to
      Section 2.5(a) or established pursuant to Section 2.5(c) hereof,

     

    (c)  any
      failure by the Borrower to make any payment of principal on any LIBOR Loan
      when
      due (whether by acceleration or otherwise), or

     

    (d)  any
      acceleration of the maturity of a LIBOR Loan as a result of the occurrence
      of
      any Event of Default hereunder,

     

    then,
      upon the demand of Lender, the Borrower shall pay to Lender such amount as
      will
      reimburse Lender for such loss, cost or expense. If Lender makes such a claim
      for compensation, it shall provide to the Borrower a certificate executed by
      an
      officer of Lender setting forth the amount of such loss, cost or expense in
      reasonable detail (including an explanation of the basis for and the computation
      of such loss, cost or expense) and the amounts shown on such certificate if
      reasonably calculated shall be conclusive absent manifest error.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    Section
      2.15  Revolving
      Credit Commitment Terminations.
       The Borrower shall have the right at any time and from time to time, upon
      five (5) Business Days’ prior written notice to the Lender, to terminate the
      Revolving Credit Commitment without premium or penalty, in whole or in part,
      any
      partial termination to be in an amount not less than $2,000,000 and integral
      multiples of $1,000,000 in excess thereof, provided
      that the
      Revolving Credit Commitment may not be reduced to an amount less than the sum
      of
      the amount of all Loans then outstanding. Any termination of Revolving Credit
      Commitment pursuant to this Section 2.12 may not be reinstated.

     

    Section
      2.16  Regulation
      D Compensation.
       The Lender may require the Borrower to pay, contemporaneously with each
      payment of interest on the LIBOR Loans, additional interest on the related
      LIBOR
      Loans of Lender at a rate per annum equal to the excess of (i)(A) the applicable
      LIBOR rate (or other base rate determined pursuant to Section 2.9(b)) divided
      by
      (B) one minus the LIBOR Reserve Percentage over (ii) the rate specified in
      clause (i)(A). Any computation by Lender of such additional interest shall
      be
      conclusive absent manifest error. If the Lender requires payment of such
      additional interest (x) it shall notify the Borrower that it is subject to
      LIBOR
      reserves under Regulation D of the Board of Governors of the Federal Reserve
      System (or any successor regulation), in which case such additional interest
      on
      the LIBOR Loans of Lender shall be payable to Lender at the place indicated
      in
      such notice with respect to each Interest Period commencing at least five (5)
      Business Days after the giving of such notice and (y) shall notify the Borrower
      at least five (5) Business Days prior to each date on which interest is payable
      on the LIBOR Loans of the amount then due under this Section.

     

    Section
      2.17  Arbitrage
      Compensation.
       If at the time of the making of any Loan hereunder, the interest rate
      payable hereunder in respect of such Loan is less than the rate (as determined
      by the Lender in consultation with the Borrower) at which funds of comparable
      term and amount are generally available to the Borrower in the commercial paper
      market (the “CP
      Rate”)
      (an
“Arbitrage
      Condition”),
      the
      Borrower agrees to pay to the Lender arbitrage compensation on such Loan at
      a
      rate equal to the difference between the effective interest rate payable
      hereunder (inclusive of all fees) in respect of such Loan and the CP Rate as
      applied to such Loan. Such payments shall continue, at the time and in the
      manner set forth for payments of interest on such Loan, for as long as the
      Arbitrage Condition continues. Upon the termination of the Arbitrage Condition
      for any reason (as determined by the Lender in consultation with the Borrower),
      such payments shall no longer be due with respect to such Loan, even if a future
      Arbitrage Condition were to occur prior to repayment in full of such
      Loan.

     

    SECTION
      3.  FEES.

     

    Section
      3.1  Fees.

     

    (a)  Commitment
      Fee. 
      For the period from the Effective Date to and including the Termination Date,
      Borrower shall pay to the Lender a commitment fee accruing at a rate per annum
      equal to the Commitment Fee Rate on the average daily amount of the unused
      Revolving Credit Commitment. Such commitment fee is payable in arrears on
      December 31, 2006, on the last Business Day of each calendar quarter thereafter
      and on the Termination Date, unless the Revolving Credit Commitment are
      terminated in whole on an earlier date, in which event the fee for the period
      to
      but not including the date of such termination shall be paid in whole on the
      date of such termination.

     

    
      
        
        

      

      
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    (b)  [Reserved].

     

    (c)  Utilization
      Fee. 
      From and after the Effective Date, for any day on which the aggregate principal
      amount of Loans then outstanding exceeds fifty percent (50%) of the Revolving
      Credit Commitment then in effect, Borrower shall pay to the Lender a utilization
      fee accruing at a rate per annum equal to the Utilization Fee Rate on the
      aggregate amount of Loans outstanding on such date. Such fee is payable in
      arrears on the last Business Day of each calendar quarter and on the Termination
      Date, and if the Revolving Credit Commitment is terminated in whole prior to
      the
      Termination Date, the fee for the period to but not including the date of such
      termination shall be paid in whole on the date of such termination.

     

    (d)  Upfront
      Fee. 
      The Borrower shall pay to the Lender a fee (the “Upfront
      Fee”)
      in an
      amount equal to $6,250 representing two and one half basis points (0.025%)
      of
      the Revolving Credit Commitment. The Upfront Fee shall be non-refundable and
      shall be fully earned, due and payable in full on the Effective
      Date.

     

    (e)  [Reserved].
      

     

    (f)  [Reserved].
      

     

    (g)  Fee
      Calculations. 
      All fees payable under this Agreement shall be payable in U.S. Dollars and
      shall
      be computed on the basis of a year of 360 days, for the actual number of days
      elapsed. All determinations of the amount of fees owing hereunder (and the
      components thereof) shall be made by the Lender and shall be conclusive absent
      manifest error..

     

    SECTION
      4.  PLACE
      AND
      APPLICATION OF PAYMENTS.

     

    Section
      4.1  Place
      and Application of Payments.
       All payments of principal of and interest on the Loans, and of all other
      Obligations and other amounts payable by the Borrower under the Credit
      Documents, shall be made by the Borrower to the Lender by no later than 12:30
      p.m. (Chicago time) on the due date thereof at the principal office of the
      Lender in New York, New York, pursuant to the payment instructions set forth
      on
      Part A of Schedule 1 hereof (or such other location in the United States as
      the
      Lender may designate to the Borrower). Any payments received after such time
      shall be deemed to have been received by the Lender on the next Business Day.
      All such payments shall be made free and clear of, and without deduction for,
      any set-off, counterclaim, levy, or any other deduction of any kind in U.S.
      Dollars, in immediately available funds at the place of payment.

     

    SECTION
      5.  REPRESENTATIONS
      AND WARRANTIES.

     

    The
      Borrower hereby represents and warrants to the Lender as to itself and, where
      the following representations and warranties apply to Subsidiaries, as to each
      of its Subsidiaries, as follows:

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    Section
      5.1  Corporate
      Organization and Authority.
       The Borrower is duly organized and existing in good standing under the
      laws of the State of Illinois; has all necessary corporate power to carry on
      its
      present business; and is duly licensed or qualified and, in good standing in
      each jurisdiction in which the failure to be so licensed, qualified or in good
      standing would have a Material Adverse Effect.

     

    Section
      5.2  Corporate
      Authority and Validity of Obligations.
       The Borrower has full right and authority to enter into this Agreement and
      the other Credit Documents to which it is a party, to make the borrowings herein
      provided for, to issue its Notes in evidence thereof, and to perform all of
      its
      obligations under the Credit Documents to which it is a party. Each Credit
      Document to which it is a party has been duly authorized, executed and delivered
      by the Borrower and constitutes valid and binding obligations of the Borrower
      enforceable in accordance with its terms, except as such enforceability may
      be
      limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
      affecting the enforceability of creditors’ rights generally and by equitable
      principles of general applicability (regardless of whether such enforceability
      is considered in a proceeding in equity or at law). No Credit Document, nor
      the
      performance or observance by the Borrower of any of the matters or things
      therein provided for, contravenes any provision of law or any charter or by-law
      provision of the Borrower or any material Contractual Obligation of or affecting
      the Borrower or any of its Properties or results in or requires the creation
      or
      imposition of any Lien on any of the Properties or revenues of the
      Borrower.

     

    Section
      5.3  Financial
      Statements.
       All financial statements heretofore delivered to the Lender showing
      historical performance of the Borrower for each of the Borrower’s fiscal
      quarters and/or years ending on or before June 30, 2006, have been prepared
      in
      accordance with generally accepted accounting principles applied on a basis
      consistent, except as otherwise noted therein, with that of the previous fiscal
      year. Each of such financial statements fairly presents on a consolidated basis
      the financial condition of the Borrower and its Subsidiaries as of the dates
      thereof and the results of operations for the periods covered thereby. The
      Borrower and its Subsidiaries have no material contingent liabilities other
      than
      those disclosed in the financial statements or in comments or footnotes thereto,
      or in any report supplementary thereto, most recently furnished to the Lender
      as
      of the time such representation and warranty is made, including reports of
      the
      Borrower filed with the SEC from time to time. Since June 30, 2006 through
      the
      Effective Date, there has been no event or series of events which has resulted
      in a Material Adverse Effect.

     

    Section
      5.4  Approvals.
       No authorization, approval, consent, license, exemption, filing or
      registration with any court or governmental department, agency or
      instrumentality, nor any approval or consent of the stockholders of the Borrower
      or any Subsidiary or from any other Person, is necessary to the valid execution,
      delivery or performance by the Borrower or any Subsidiary of any Credit Document
      to which it is a party.

     

    Section
      5.5  ERISA.
       With respect to each Plan, the Borrower and each other member of the
      Controlled Group has fulfilled its obligations under the minimum funding
      standards of and is in compliance in all material respects with the Employee
      Retirement Income Security Act of 1974, as amended (“ERISA”),
      and
      with the Code to the extent applicable to it and has not incurred any liability
      to the Pension Benefit Guaranty Corporation (“PBGC”)
      or a
      Plan under Title IV of ERISA other than a liability to the PBGC for premiums
      under Section 4007 of ERISA. Neither the Borrower nor any Subsidiary has any
      contingent liabilities for any post-retirement benefits under a Welfare Plan,
      other than liability for continuation coverage described in Part 6 of Title
      I of
      ERISA.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    Section
      5.6  Government
      Regulation.
       Neither the Borrower nor any Subsidiary is an “investment
      company”
within
      the meaning of the Investment Company Act of 1940, as amended.

     

    Section
      5.7  Margin
      Stock; Proceeds.
       Neither the Borrower nor any Subsidiary is engaged principally, or as one
      of its primary activities, in the business of extending credit for the purpose
      of purchasing or carrying margin stock (“margin
      stock”
to
      have
      the same meaning herein as in Regulation U of the Board of Governors of the
      Federal Reserve System). The Borrower will not use the proceeds of any Loan
      in a
      manner that violates any provision of Regulation U or X of the Board of
      Governors of the Federal Reserve System. The Borrower is not subject to
      regulation under the Investment Company Act of 1940. In addition, the Borrower
      is not an “investment company” registered or required to be registered under the
      Investment Company Act of 1940. Proceeds of the Loans will only be used to
      backstop commercial paper issued by the Borrower and for general corporate
      purposes.

     

    Section
      5.8  Full
      Disclosure.
       All information heretofore furnished by the Borrower to the Lender for
      purposes of or in connection with the Credit Documents or any transaction
      contemplated thereby is, and all such information hereafter furnished by the
      Borrower to the Lender will be, to the best of the Borrower’s knowledge, after
      due inquiry, true and accurate in all material respects and not misleading
      on
      the date as of which such information is stated or certified.

     

    SECTION
      6.  CONDITIONS
      PRECEDENT.

     

    The
      obligation of Lender to advance any Loan shall be subject to the following
      conditions precedent:

     

    Section
      6.1  Initial
      Credit Event.
       Before or concurrently with the Effective Date:

     

    (a)  The
      Lender shall have received the favorable written opinion of counsel to the
      Borrower in form and substance reasonably acceptable to the Lender;

     

    (b)  The
      Lender shall have received copies of (i) the Articles of Incorporation, together
      with all amendments and (ii) the Borrower’s bylaws (or comparable constituent
      documents) and any amendments thereto, certified in each instance by its
      Secretary or an Assistant Secretary;

     

    (c)  The
      Lender shall have received copies of resolutions of the Borrower’s Board of
      Directors authorizing the execution and delivery of the Credit Documents and
      the
      consummation of the transactions contemplated thereby together with specimen
      signatures of the persons authorized to execute such documents on the Borrower’s
      behalf, all certified in each instance by its Secretary or an Assistant
      Secretary;

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (d)  The
      Lender shall have received, if requested, an executed Note of the Borrower
      dated
      the date hereof and otherwise in compliance with the provisions of Section
      2.10(a) hereof;

     

    (e)  The
      Lender shall have received a duly executed original of (i) this Agreement,
      (ii)
      a list of the Borrower’s Authorized Representatives and (iii) such other
      documents as the Lender may reasonably request;

     

    (f)  The
      Lender shall have received a certificate by the chief financial officer of
      the
      Borrower, stating that on the Effective Date no Default or Event of Default
      has
      occurred and is continuing, and that all representations and warranties set
      forth herein are true and correct as of such date;

     

    (g)  The
      Lender shall have received evidence that Borrower is validly existing and in
      good standing under the laws of the jurisdiction of incorporation;

     

    (h)  The
      Lender shall have received payment of the Upfront Fee; and

     

    (i)  The
      Lender shall have received a duly executed Compliance Certificate containing
      information as of June 30, 2006. 

     

    Section
      6.2  All
      Credit Events.
       As of the time of each Credit Event hereunder:

     

    (a)  The
      Lender shall have received the notice required by Section 2.5
      hereof;

     

    (b)  Each
      of
      the representations and warranties set forth in Section 5 hereof (except the
      last sentence of Section 5.3) shall be and remain true and correct in all
      material respects as of said time, taking into account any amendments to such
      Section (including without limitation any amendments, modifications and updates
      to the Schedules referenced therein) made after the date of this Agreement
      in
      accordance with its provisions, except that if any such representation or
      warranty relates solely to an earlier date it need only remain true as of such
      date; and

     

    (c)  The
      Borrower shall be in full compliance with all of the terms and conditions
      hereof, and no Default or Event of Default shall have occurred and be continuing
      or would occur as a result of such Credit Event.

     

    Each
      request for a Borrowing consisting of an advance of a Loan hereunder shall
      be
      deemed to be a representation and warranty by the Borrower on the date of such
      Credit Event as to the facts specified in paragraphs (b) and (c) of this Section
      6.2. 

     

    SECTION
      7.  COVENANTS.

     

    The
      Borrower covenants and agrees that, so long as any Loan is outstanding
      hereunder, or any Revolving Credit Commitment is available to or in use by
      the
      Borrower hereunder, except to the extent compliance in any case is waived in
      writing by the Lender:

     

    Section
      7.1  Corporate
      Existence.
       Borrower
      shall preserve and maintain its corporate existence.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    Section
      7.2  ERISA.
       The Borrower will, and will cause each of its Subsidiaries to, promptly
      pay and discharge all obligations and liabilities arising under ERISA of a
      character which if unpaid or unperformed might result in the imposition of
      a
      Lien against any of its properties or assets and will promptly notify the Lender
      of (i) the occurrence of any reportable event (as defined in ERISA) affecting
      a
      Plan, other than any such event of which the PBGC has waived notice by
      regulation, (ii) receipt of any notice from PBGC of its intention to seek
      termination of any Plan or appointment of a trustee therefor, (iii) its or
      any
      of its Subsidiaries’ intention to terminate or withdraw from any Plan, and (iv)
      the occurrence of any event affecting any Plan which could result in the
      incurrence by the Borrower or any of its Subsidiaries of any material liability,
      fine or penalty, or any material increase in the contingent liability of the
      Borrower or any of its Subsidiaries under any post-retirement Welfare Plan
      benefit.

     

    Section
      7.3  Financial
      Reports and Other Information.
       (a)  The Borrower will maintain a system of accounting in accordance
      with GAAP and will furnish to the Lender and its duly authorized representatives
      such information respecting the business and financial condition of the Borrower
      as Lender may reasonably request; and without any request, the Borrower will
      furnish each of the following to the Lender: 

     

    i  within
      one hundred twenty (120) days after the end of its fiscal year ending September
      30, 2006, a copy of the Borrower’s financial statements for such fiscal year,
      including the consolidated balance sheet of the Borrower for such year and
      the
      related statement of income and statement of cash flow, as certified by
      independent public accountants of recognized national standing selected by
      the
      Borrower in accordance with GAAP with such accountants’ opinion to the effect
      that the financial statements have been prepared in accordance with GAAP and
      present fairly in all material respects in accordance with GAAP the consolidated
      financial position of the Borrower and its Subsidiaries as of the close of
      such
      fiscal year and the results of their operations and cash flows for the fiscal
      year then ended and that an examination of such accounts in connection with
      such
      financial statements has been made in accordance with generally accepted
      auditing standards and, accordingly, such examination included such tests of
      the
      accounting records and such other auditing procedures as were considered
      necessary in the circumstances;

     

    ii  within
      sixty (60) days after the end of each of the quarterly fiscal periods of the
      Borrower during the term hereof, a consolidated un-audited balance sheet of
      the
      Borrower, and the related statement of income and statement of cash flow, as
      of
      the close of such period, all of the foregoing prepared by the Borrower in
      reasonable detail in accordance with GAAP and certified by the Borrower’s chief
      financial officer as fairly presenting the financial condition as at the dates
      thereof and the results of operations for the periods covered thereby;
      and

     

    iii  within
      five (5) days after Borrower files a Form 8-K with the SEC, a copy of said
      form
      8-K. 

     

    (b)  Each
      financial statement furnished to the Lender pursuant to subsection (i) or (ii)
      of this Section 7.3 shall be accompanied by (A) a written certificate signed
      by
      the Borrower’s chief financial officer to the effect that no Default or Event of
      Default has occurred during the period covered by such statements or, if any
      such Default or Event of Default has occurred during such period, setting forth
      a description 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    of
      such
      Default or Event of Default and specifying the action, if any, taken by the
      Borrower to remedy the same, and (B) a Compliance Certificate in the form of
      Exhibit B hereto showing the Borrower’s compliance with the covenants set forth
      in Sections 7.5 and 7.6 hereof.

     

    (c)  The
      Borrower will promptly (and in any event within five Business Days after an
      officer of the Borrower has knowledge thereof) give notice to the Lender of
      the
      occurrence of any Default or Event of Default.

     

    Section
      7.4  Regulation
      U; Proceeds.
       The Borrower will not use any part of the proceeds of any of the
      Borrowings, directly or indirectly to purchase or carry any margin stock (as
      defined in Section 5.7 hereof) or to extend credit to others for the purpose
      of
      purchasing or carrying any such margin stock. The Borrower will only use
      proceeds of the Loans to backstop commercial paper issued by the Borrower and
      for general corporate purposes.

     

    Section
      7.5  Sales
      of Assets.
       The Borrower will not during the term of this Agreement sell, lease or
      otherwise dispose of more that (i) thirty-five percent (35%) of the consolidated
      fixed assets of the Borrower or (ii) fifteen percent (15%) of the consolidated
      "regulated assets" of the Borrower. For purposes of this Section 7.5(a) the
      amount of consolidated fixed assets shall be determined using the net book
      value
      of such assets at the time of such sale, lease or disposition.

     

    (a)  The
      Borrower will not sell, transfer or otherwise dispose of, or permit any
      Subsidiary to issue, sell, transfer or otherwise dispose of, more than twenty
      percent (20%) of any of its public utility Subsidiaries’ shares of stock of any
      class (including as “stock” for purposes of this Section, any warrants, rights
      or options to purchase or otherwise acquire stock or other Securities
      exchangeable for or convertible into stock).

     

    Section
      7.6  Capital
      Ratio.
       The Borrower will not at any time permit the Capital Ratio to exceed 0.65
      to 1.00.

     

    Section
      7.7  Compliance
      with Laws.
       Without limiting any of the other covenants of the Borrower in this
      Section 7, the Borrower will conduct its business, and otherwise be, in
      compliance with all applicable laws, regulations, ordinances and orders of
      any
      governmental or judicial authorities; provided,
      however,
      that
      the Borrower shall not be required to comply with any such law, regulation,
      ordinance or order if the failure to comply therewith could not reasonably
      be
      expected to have a Material Adverse Effect.

     

    Section
      7.8  Mergers
      and Consolidations.
       The Borrower will not, and will not permit any public utility Subsidiary,
      to consolidate with or be a party to merger with any other Person; provided,
      however,
      that
      the Borrower or any public utility Subsidiary of the Borrower may, upon prior
      notice to the Lender, enter into one or more mergers or acquisitions with any
      other Person so long as (a) in the case of the Borrower, the Borrower is the
      surviving entity and (b) in the case of a public utility Subsidiary of the
      Borrower, the Borrower will at all times continue to own at least 80% of the
      equity securities of such public utility Subsidiary. The Lender acknowledges
      that Borrower has entered into an agreement and plan of merger with a subsidiary
      of WPS Resources Corporation.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    SECTION
      8.  EVENTS
      OF
      DEFAULT AND REMEDIES.

     

    Section
      8.1  Events
      of Default.
       Any one or more of the following shall constitute an Event of
      Default:

     

    (a)  non-payment
      by Borrower (i) when due of the principal of any Loan or (ii) in the payment
      of
      fees, interest or of any other Obligation within five (5) days of the due
      date;

     

    (b)  default
      by the Borrower in the observance or performance of any covenant set forth
      in
      Section 7.1 with regard to the Borrower or (ii) Section 7.3(c), Section 7.4
      through 7.6 hereof;

     

    (c)  any
      default by the Borrower in the observance or performance of any provision
      hereof, or of any other Credit Document not mentioned in (a) or (b) above,
      which
      is not remedied within thirty (30) days after notice thereof shall have been
      given to the Borrower by the Lender, provided
      that,
      with respect only to Section 7.7, if Borrower (or its Subsidiary, as applicable)
      has made good faith efforts to cure such default, then the Borrower shall be
      afforded an additional period of time to cure such default, such additional
      cure
      period not to exceed thirty (30) days;

     

    (d)  failure
      to pay when due Indebtedness in an aggregate principal amount of $15,000,000
      or
      more of the Borrower, or (ii) default shall occur under one or more indentures,
      agreements or other instruments under which any Indebtedness of the Borrower
      in
      an aggregate principal amount of $15,000,000 or more and such default shall
      continue for a period of time sufficient to permit the holder or beneficiary
      of
      such Indebtedness (including, without limitation the Lender with respect to
      loans, credit facilities and other extensions of credit other than pursuant
      to
      this Agreement) or a trustee therefor to cause the acceleration of the maturity
      of any such Indebtedness or any mandatory unscheduled prepayment, purchase
      or
      funding;

     

    (e)  representation
      or warranty made herein or in any other Credit Document by the Borrower, or
      in
      any statement or certificate furnished pursuant hereto or pursuant to any other
      Credit Document by the Borrower, or in connection with any Credit Document,
      proves untrue in any material respect as of the date of the issuance or making,
      or deemed making or issuance, thereof;

     

    (f)  Borrower
      shall (i) have entered involuntarily against it an order for relief under the
      United States Bankruptcy Code, as amended, or any analogous action is taken
      under any other applicable law relating to bankruptcy or insolvency and such
      action continues un-discharged or is not dismissed or stayed for a period of
      sixty (60) days, (ii) fail to pay its debts generally as they become due and
      such failure to pay would constitute an Event of Default under Section 8.1(d)
      or
      admit in writing its inability to pay its debts generally as they become due,
      (iii) make an assignment for the benefit of creditors, (iv) apply for, seek,
      consent to, or acquiesce in, the appointment of a receiver, custodian,

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    trustee,
      examiner, liquidator or similar official for it or any substantial part of
      its
      Property, (v) institute any proceeding seeking to have entered against it an
      order for relief under the United States Bankruptcy Code, as amended, to
      adjudicate it insolvent, or seeking dissolution, winding up, liquidation,
      reorganization, arrangement, adjustment or composition of it or its debts under
      any law relating to bankruptcy, insolvency or reorganization or relief of
      debtors or fail to file an answer or other pleading denying the material
      allegations of any such proceeding filed against it, (vi) take any corporate
      action (such as the passage by its board of directors of a resolution) in
      furtherance of any matter described in parts (i)-(v) above, or (vii) fail to
      contest in good faith any appointment or proceeding described in Section 8.1(g)
      hereof;

     

    (g)  Custodian,
      receiver, trustee, examiner, liquidator or similar official shall be appointed
      for the Borrower or any of its Significant Subsidiaries, or any substantial
      part
      of any of their Property, or a proceeding described in Section 8.1(f)(v) shall
      be instituted against the Borrower, and such appointment continues un-discharged
      or such proceeding continues un-dismissed or un-stayed for a period of sixty
      (60) days;

     

    (h)  the
      Borrower shall fail within thirty (30) days to pay, bond or otherwise discharge
      any judgment or order for the payment of money in excess of $15,000,000 which
      is
      not stayed on appeal or otherwise being appropriately contested in good faith
      in
      a manner that stays execution thereon; 

     

    (i)  the
      Borrower or any other member of the Controlled Group shall fail to pay when
      due
      an amount or amounts which it shall have become liable, to pay to the PBGC
      or to
      a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or
      Plans
      having aggregate Unfunded Vested Liabilities in excess of $5,000,000
      (collectively, a “Material
      Plan”)
      shall
      be filed under Title IV of ERISA by the Borrower or any other member of the
      Controlled Group, any plan administrator or any combination of the foregoing;
      or
      the PBGC shall institute proceedings under Title IV of ERISA to terminate or
      to
      cause a trustee to be appointed to administer any Material Plan or a proceeding
      shall be instituted by a fiduciary of any Material Plan against the Borrower
      or
      any other member of the Controlled Group to enforce Section 515 or 4219(c)(5)
      of
      ERISA and such proceeding shall not have been dismissed within thirty (30)
      days
      thereafter; or a condition shall exist by reason of which the PBGC would be
      entitled to obtain a decree adjudicating that any Material Plan must be
      terminated; or

     

    (j)  any
      Event
      of Default under the Existing Credit Agreement, it being the express intent
      of
      the parties hereto that this Agreement shall benefit from the covenants and
      agreements contained in the Existing Credit Agreement.

     

    Section
      8.2  Non-Bankruptcy
      Defaults.
       When any Event of Default other than those described in subsections (f) or
      (g) of Section 8.1 hereof has occurred and is continuing, the Lender may: (a)
      terminate the remaining Revolving Credit Commitment and all other obligations
      of
      the Lender hereunder (other than the obligations of the Lender under section
      11.21 hereof) on the date stated in such notice (which may be the date thereof);
      and (b) declare the principal of and the accrued interest on the outstanding
      Note to be forthwith due and payable and thereupon the Note, including both
      principal and interest thereon, and all other Obligations, shall be and become
      immediately due and payable together with all other amounts payable under the
      Credit Documents without further demand, presentment, protest or notice of
      any
      kind. 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    Section
      8.3  Bankruptcy
      Defaults.
       When any Event of Default described in subsections (f) or (g) of Section
      8.1 hereof has occurred and is continuing, then the Note shall immediately
      become due and payable together with all other amounts payable under the Credit
      Documents without presentment, demand, protest or notice of any kind and the
      obligation of the Lender to extend further credit pursuant to any of the terms
      hereof shall immediately terminate.

     

    Section
      8.4  Expenses.
       The Borrower agrees to pay to the Lender and any other holder of the Note,
      all costs and expenses incurred or paid by the Lender or any such holder,
      including reasonable attorneys’ fees (including reasonable allocable fees of
      in-house counsel) and court costs, in connection with any Default or Event
      of
      Default by the Borrower hereunder or in connection with the enforcement of
      any
      of the Credit Documents.

     

    SECTION
      9.  CHANGE
      IN
      CIRCUMSTANCES.

     

    Section
      9.1  Change
      of Law.
       Notwithstanding any other provisions of this Agreement or the Note, if at
      any time after the date hereof any change in applicable law or regulation or
      in
      the interpretation thereof makes it unlawful for Lender to make or continue
      to
      maintain LIBOR Loans or to perform its obligations as contemplated hereby,
      Lender shall promptly give notice thereof to the Borrower and Lender’s
      obligations to make or maintain LIBOR Loans under this Agreement shall terminate
      until it is no longer unlawful for Lender to make or maintain LIBOR Loans.
      The
      Borrower shall prepay on demand the outstanding principal amount of any such
      affected LIBOR Loans, together with all interest accrued thereon at a rate
      per
      annum equal to the interest rate applicable to such Loan; provided,
      however,
      subject
      to all of the terms and conditions of this Agreement, the Borrower may then
      elect to borrow the principal amount of the affected LIBOR Loans from Lender
      by
      means of Base Rate Loans from Lender.

     

    Section
      9.2  Unavailability
      of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR.
       If on or prior to the first day of any Interest Period for any Borrowing
      of LIBOR Loans:

     

    (a)  the
      Lender determines that deposits in U.S. Dollars (in the applicable amounts)
      are
      not being offered to major banks in the LIBOR interbank market for such Interest
      Period, or that by reason of circumstances affecting the interbank LIBOR market
      adequate and reasonable means do not exist for ascertaining the applicable
      LIBOR, or

     

    (b)  Lender
      reasonably determines that LIBOR as reasonably determined by the Lender will
      not
      adequately and fairly reflect the cost to Lender of funding its LIBOR Loans
      or
      Loan for such Interest Period, then the Lender shall forthwith give notice
      thereof to the Borrower, whereupon until the Lender notifies the Borrower that
      the circumstances giving rise to such suspension no longer exist, the
      obligations of the Lender to make LIBOR Loans shall be suspended.

     

    Section
      9.3  Increased
      Cost and Reduced Return.
       Section
      9.4
      If, on
      or after the date hereof, the adoption of any applicable law, rule or
      regulation, or any change therein, or any change in the interpretation or
      administration thereof by any governmental authority, central bank or comparable
      agency charged with the interpretation or administration thereof, or compliance
      by Lender (or its Lending Office) with any request or directive (whether or
      not
      having the force of law but, if not having the force of law, compliance with
      which is customary in the relevant jurisdiction) of any such authority, central
      bank or comparable agency:

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    i  shall
      subject Lender (or its Lending Office) to any tax, duty or other charge with
      respect to its LIBOR Loans, its Notes or
      its
      participation in any thereof or its obligation to make Eurodollar Loans, or
      to
      participate therein, or
      shall
      change the basis of taxation of payments to Lender (or its Lending Office)
      of
      the principal of or interest on its LIBOR Loans, Letter(s) of Credit, or
      participations therein or any other amounts due under this Agreement in respect
      of its LIBOR Loans or its obligation to make LIBOR Loans, (except for changes
      in
      the rate of tax on the overall net income or profits of Lender or its Lending
      Office imposed by the jurisdiction in which Lender or its lending office is
      incorporated in which Lender’s principal executive office or Lending Office is
      located); or

     

    ii  shall
      impose, modify or deem applicable any reserve, special deposit or similar
      requirement (including, without limitation, any such requirement imposed by
      the
      Board of Governors of the Federal Reserve System, but excluding with respect
      to
      any LIBOR Loans any such requirement included in an applicable LIBOR Reserve
      Percentage) against assets of, deposits with or for the account of, or credit
      extended by, Lender (or its Lending Office) or shall impose on Lender (or its
      Lending Office) or on the interbank market any other condition affecting its
      LIBOR Loans, its Note, or
      its
      obligation to make Eurodollar Loans;

     

    and
      the
      result of any of the foregoing is to increase the cost to Lender (or its Lending
      Office) of making or maintaining any LIBOR Loan, or to reduce the amount of
      any
      sum received or receivable by Lender (or its Lending Office) under this
      Agreement or under its Note with respect thereto, by an amount deemed by Lender
      to be material, then, within fifteen (15) days after demand by Lender, the
      Borrower shall be obligated to pay to Lender such additional amount or amounts
      as will compensate Lender for such increased cost or reduction. In the event
      any
      law, rule, regulation or interpretation described above is revoked, declared
      invalid or inapplicable or is otherwise rescinded, and as a result thereof
      Lender is determined to be entitled to a refund from the applicable authority
      for any amount or amounts which were paid or reimbursed by Borrower to Lender
      hereunder, Lender shall refund such amount or amounts to Borrower without
      interest.

     

    (b)  If,
      after
      the date hereof, Lender shall have determined that the adoption of any
      applicable law, rule or regulation regarding capital adequacy, or any change
      therein (including, without limitation, any revision in the Final Risk-Based
      Capital Guidelines of the Board of Governors of the Federal Reserve System
      (12
      CFR Part 208, Appendix A; 12 CFR Part 225, Appendix A) or of the Office of
      the
      Comptroller of the Currency (12 CFR Part 3, Appendix A), or in any other
      applicable capital rules heretofore adopted and issued by any governmental
      authority), or any change in the interpretation or administration thereof by
      any
      governmental authority, central bank or comparable agency charged with the
      interpretation or administration thereof, or compliance by Lender (or its
      Lending Office) with any request or directive regarding capital adequacy
      (whether or not having the force of law but, if not having the force of law,
      compliance with which is customary in the applicable jurisdiction) of any such
      authority, central bank or comparable agency, has or would have the effect
      of
      reducing the rate of return on Lender’s capital, or on the capital of any
      corporation controlling Lender, as a consequence of its obligations hereunder
      to
      a level below that which Lender could have achieved but for such adoption,
      change or compliance (taking into consideration Lender’s policies with respect
      to capital adequacy) by an amount deemed by Lender to be material, then from
      time to time, within fifteen (15) days after demand by Lender, the Borrower
      shall pay to Lender such additional amount or amounts as will compensate Lender
      for such reduction.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (c)  If
      Lender
      determines to seek compensation under this Section 9.3, it shall notify the
      Borrower of the circumstances that entitle it to such compensation pursuant
      to
      this Section 9.3 and will designate a different Lending Office if such
      designation will avoid the need for, or reduce the amount of, such compensation
      and will not, in the sole judgment of Lender, be otherwise disadvantageous
      to
      Lender. A certificate of Lender claiming compensation under this Section 9.3
      and
      setting forth the additional amount or amounts to be paid to it hereunder shall
      be conclusive in the absence of manifest error. In determining such amount,
      Lender may use any reasonable averaging and attribution methods. Lender shall
      not be entitled to demand compensation under this Section 9.3 for any period
      more than 90 days prior to the day on which such demand is made; provided
      however,
      that
      the foregoing shall in no way limit the right of Lender to demand or receive
      such compensation to the extent that such compensation relates to the
      retroactive application of any law, regulation, guideline or request if such
      demand is made within 90 days after the implementation of such retroactive
      law,
      interpretation, guideline or request. A certificate as to the nature and amount
      of such increased cost, submitted to the Borrower and the Lender in good faith,
      shall be conclusive and binding for all purposes, absent manifest
      error.

     

    Section
      9.5  Lending
      Offices.
       The Lender may, at its option, elect to make Loans hereunder at the
      branch, office or affiliate specified on the appropriate signature page hereof
      or in the assignment agreement which any assignee bank executes pursuant to
      Section 11.12 hereof (each a “Lending Office”) for each type of Loan available
      hereunder or at such other of its branches, offices or affiliates as it may
      from
      time to time elect and designate in a written notice to the
      Borrower.

     

    Section
      9.6  Discretion
      of Lender as to Manner of Funding.
       Notwithstanding any other provision of this Agreement, the Lender shall be
      entitled to fund and maintain its funding of all or any part of its Loans in
      any
      manner it sees fit, it being understood, however, that for the purposes of
      this
      Agreement all determinations hereunder shall be made as if the Lender had
      actually funded and maintained each LIBOR Loan through the purchase of deposits
      in the LIBOR interbank market having a maturity corresponding to such Loan’s
      Interest Period and bearing an interest rate equal to LIBOR for such Interest
      Period.

     

    SECTION
      10.  RESERVED.

     

    SECTION
      11.  MISCELLANEOUS.

     

    Section
      11.1  Withholding
      Taxes.
       Subject to this Section 11.1, each payment by the Borrower under this
      Agreement or the other Credit Documents shall be made without withholding for
      or
      on account of any present or future taxes (other than overall net income taxes
      on the recipient). If any such withholding is so required, the Borrower shall
      make the withholding, pay the amount withheld to the appropriate governmental
      authority before penalties attach thereto or interest accrues thereon and
      forthwith pay such additional amount as may be 

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    necessary
      to ensure that the net amount actually received by the Lender free and clear
      of
      such taxes (including such taxes on such additional amount) is equal to the
      amount which the Lender would have received had such withholding not been made.
      If the Lender pays any amount in respect of any such taxes, penalties or
      interest the Borrower shall reimburse the Lender for that payment on demand.
      If
      the Borrower pays any such taxes, penalties or interest, it shall deliver
      official tax receipts evidencing that payment or certified copies thereof to
      the
      Lender on or before the thirtieth day after payment. If the Lender determines
      it
      has received or been granted a credit against or relief or remission for, or
      repayment of, any taxes paid or payable by it because of any taxes, penalties
      or
      interest paid by the Borrower and evidenced by such a tax receipt, Lender shall,
      to the extent it can do so without prejudice to the retention of the amount
      of
      such credit, relief, remission or repayment, pay to the Borrower such amount
      as
      Lender determines is attributable to such deduction or withholding and which
      will leave Lender (after such payment) in no better or worse position than
      it
      would have been in if the Borrower had not been required to make such deduction
      or withholding. Nothing in this Agreement shall interfere with the right of
      the
      Lender to arrange its tax affairs in whatever manner it thinks fit nor oblige
      the Lender to disclose any information relating to its tax affairs or any
      computations in connection with such taxes.

     

    Section
      11.2  No
      Waiver of Rights.
       No delay or failure on the part of the Lender or on the part of the holder
      or holders of the Note in the exercise of any power or right under any Credit
      Document shall operate as a waiver thereof, nor as an acquiescence in any
      default, nor shall any single or partial exercise thereof preclude any other
      or
      further exercise of any other power or right, and the rights and remedies
      hereunder of the Lender and/or the holder or holders of the Note are cumulative
      to, and not exclusive of, any rights or remedies which any of them would
      otherwise have.

     

    Section
      11.3  Non-Business
      Day. 
      If any payment of principal or interest on any Loan or of any other Obligation
      shall fall due on a day which is not a Business Day, interest or fees (as
      applicable) at the rate, if any, such Loan or other Obligation bears for the
      period prior to maturity shall continue to accrue on such Obligation from the
      stated due date thereof to and including the next succeeding Business Day,
      on
      which the same shall be payable.

     

    Section
      11.4  Documentary
      Taxes.
       The Borrower agrees that it will pay any documentary, stamp or similar
      taxes payable in respect to any Credit Document, including interest and
      penalties, in the event any such taxes are assessed, irrespective of when such
      assessment is made and whether or not any credit is then in use or available
      hereunder.

     

    Section
      11.5  Survival
      of Representations.
       All representations and warranties made herein or in certificates given
      pursuant hereto shall survive the execution and delivery of this Agreement
      and
      the other Credit Documents, and shall continue in full force and effect with
      respect to the date as of which they were made as long as any credit is in
      use
      or available hereunder.

     

    Section
      11.6  Survival
      of Indemnities.
       All indemnities and all other provisions relative to reimbursement to the
      Lender of amounts sufficient to protect the yield of the Lender with respect
      to
      the Loans, including, but not limited to, Section 2.11, Section 9.3 and Section
      11.15 hereof, shall survive the termination of this Agreement and the other
      Credit Documents and the payment of the Loans and all other
      Obligations.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    Section
      11.7  Set-Off.
       In addition to any rights now or hereafter granted under applicable law
      and not by way of limitation of any such rights, upon the occurrence of any
      Event of Default, Lender and each subsequent holder of the Note is hereby
      authorized by the Borrower at any time or from time to time, without notice
      to
      the Borrower or to any other Person, any such notice being hereby expressly
      waived, to set off and to appropriate and to apply any and all deposits (general
      or special, including, but not limited to, Indebtedness evidenced by
      certificates of deposit, whether matured or unmatured, and in whatever currency
      denominated) and any other Indebtedness at any time held or owing by the Lender
      or that subsequent holder to or for the credit or the account of the Borrower,
      whether or not matured, against and on account of the obligations and
      liabilities of the Borrower to the Lender or that subsequent holder under the
      Credit Documents, including, but not limited to, all claims of any nature or
      description arising out of or connected with the Credit Documents, irrespective
      of whether or not (a) the Lender or that subsequent holder shall have made
      any
      demand hereunder or (b) the principal of or the interest on the Loans or the
      Note and other amounts due hereunder shall have become due and payable pursuant
      to Section 8 and although said obligations and liabilities, or any of them,
      may
      be contingent or unmatured.

     

    Section
      11.8  Notices.
       Except as otherwise specified herein, all notices under the Credit
      Documents shall be in writing (including facsimile or other electronic
      communication) and shall be given to a party hereunder at its address or
      facsimile number set forth below or such other address or facsimile number
      as
      such party may hereafter specify by notice to the Lender and the Borrower,
      given
      by courier, by United States certified or registered mail, or by other
      telecommunication device capable of creating a written record of such notice
      and
      its receipt. Notices under the Credit Documents to the Lender and the Borrower
      shall be addressed to:

     

    
      	 	
              If
                to the Borrower:

            
	 	 
	 	
              Peoples
                Energy Corporation

              130
                East Randolph Drive

              Chicago,
                Illinois 60601

              Attention:
                Vice President, Finance

              Facsimile:
                312.373.4213

              Telephone:
                312.240.3818

            
	 	 
	 	
              If
                to the Lender: (Notices related to commitments, covenants or extensions
                of
                expiry/termination dates)

            
	 	 
	 	
              Bank
                of America, N.A.

              100
                Federal Street, MA5-100-09-08

              Boston,
                MA 02110

              Attention:
                Richard D. Hill, Jr./Dori J. Aleksandrowicz

              Facsimile:
                617-434-2160

              Telephone:
                617-434-4080 (Mr. Hill) 

              617-434-3358
                (Ms. Aleksandrowicz)

            

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    
      	 	
              Borrowing
                Requests and notices relating to Loans, Interest and
                Fees:

            
	 	 
	 	
              Bank
                of America, N.A.

              100
                Federal Street, MA5-100-09-02

              Boston,
                MA 02110

              Attention:
                Wun W. Wong

              Facsimile:
                617-310-2353

              Telephone:
                617-434-9341

              E-mail:
                wun.w.wong@bankofamerica.com

            
	 	 

    

    Each
      such
      notice, request or other communication shall be effective (i) if given by
      facsimile, when such facsimile is transmitted to the facsimile number specified
      in this Section 11.8 or on the signature pages hereof and a confirmation of
      receipt of such facsimile has been received by the sender, (ii) if given by
      courier, when delivered, (iii) if given by mail, three business days after
      such
      communication is deposited in the mail, registered with return receipt
      requested, addressed as aforesaid or (iv) if given by any other means, when
      delivered at the addresses specified in this Section 11.8; provided
      that
      any
      notice given pursuant to Section 2 hereof shall be effective only upon
      receipt.

     

    Section
      11.9  Counterparts.
       This Agreement may be executed in any number of counterpart signature
      pages, and by the different parties on different counterparts, each of which
      when executed shall be deemed an original but all such counterparts taken
      together shall constitute one and the same instrument. Delivery of an executed
      counterpart via facsimile or other electronic means shall for all purposes
      be
      deemed as effective as delivery of an original counterpart.

     

    Section
      11.10  Successors
      and Assigns.
       This Agreement shall be binding upon the Borrower and its successors and
      assigns, and shall inure to the benefit of each of the Lender and the benefit
      of
      their respective successors, and assigns, including any subsequent holder of
      any
      Note. The Borrower may not assign any of its rights or obligations under any
      Credit Document without the written consent of all of the Lender.

     

    Section
      11.11  [Reserved].

     

    Section
      11.12  Assignments,
      Participations, Etc.
      

     

    (a)  Successors
      and Assigns Generally  The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns permitted hereby,
      except that the Borrower may not assign or otherwise transfer any of its rights
      or obligations hereunder without the prior written consent of the Lender and
      Lender may not assign or otherwise transfer any of its rights or obligations
      hereunder except (i) to an Eligible Assignee in accordance with the
      provisions of paragraph (b) of this Section, (ii) by way of
      participation in accordance with the provisions of paragraph (d) of this
      Section or (iii) by way of pledge or assignment of a security interest
      subject to the restrictions of paragraph (f) of this Section (and any other
      attempted assignment or transfer by any party hereto shall be null and void).
      Nothing in this Agreement, expressed or implied, shall be construed to confer
      upon any Person (other than the parties hereto, their respective successors
      and
      assigns permitted hereby, Participants to the extent provided in
      paragraph (d) of this Section and, to the extent expressly contemplated
      hereby, the affiliates of each of the Lender and the Lender) any legal or
      equitable right, remedy or claim under or by reason of this Agreement.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    (b)  Assignments
      by Lender. The
      Lender may at any time assign to one or more Eligible Assignees its rights
      and
      obligations under this Agreement (including its Revolving Credit Commitment
      and
      the Loans at the time owing to it); provided
      that so
      long as no Event of Default has occurred and is continuing, any assignment
      of a
      Revolving Credit Commitment must be approved by the Borrower, which approval
      shall not be unreasonably withheld, unless the Person that is the proposed
      assignee is itself an Eligible Assignee. Subject to acceptance and recording
      thereof by the Lender pursuant to paragraph (c) of this Section, from and
      after the effective date specified in each Assignment and Assumption, the
      Eligible Assignee thereunder shall be a party to this Agreement and, to the
      extent of the interest assigned by such Assignment and Assumption, have the
      rights and obligations of Lender under this Agreement shall to the extent of
      the
      interest assigned by such Assignment and Assumption, be released from its
      obligations under this Agreement (and, in the case of an Assignment and
      Assumption covering all of the Lender’s rights and obligations under this
      Agreement, Lender shall cease to be a party hereto) but shall continue to be
      entitled to the benefits of Sections 9.3 and 11.1 with respect to facts and
      circumstances occurring prior to the effective date of such assignment. Any
      assignment or transfer by Lender of rights or obligations under this Agreement
      that does not comply with this paragraph shall be treated for purposes of this
      Agreement as a sale by Lender of a participation in such rights and obligations
      in accordance with paragraph (d) of this Section.

     

    (c)  Participations.
      Lender
      and/or any holder of the Note may at any time, without the consent of, or notice
      to, the Borrower, sell participations to any Person (other than a natural person
      or a Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a
“Participant”)
      in all
      or a portion of Lender’s or such holder’s rights and/or obligations under this
      Agreement (including all or a portion of its Revolving Credit Commitment and/or
      the Loans owing to it); provided
      that
      (i) Lender’s obligations under this Agreement shall remain unchanged,
      (ii) Lender shall remain solely responsible to the other parties hereto for
      the performance of such obligations and (iii) the Borrower shall continue
      to deal solely and directly with Lender in connection with Lender’s rights and
      obligations under this Agreement. Any
      agreement or instrument pursuant to which Lender sells such a participation
      shall provide that Lender shall retain the sole right to enforce this Agreement
      and to approve any amendment, modification or waiver of any provision of this
      Agreement; provided
      that
      such agreement or instrument may provide that Lender will not, without the
      consent of the Participant, agree to any amendment, modification or waiver
      of
      the type described in Section 11.13(i) that directly affects such Participant.
      Subject to paragraph (e) of this Section, the Borrower agrees that each
      Participant shall be entitled to the benefits of Section 2.11, Section 9.3
      and
      Section 11.7 to the same extent as if it were Lender and had acquired its
      interest by assignment pursuant to paragraph (b) of this Section. Lender
      shall keep a register, meeting the requirements of Treasury Regulation Section
      5f.103-1(c), of each participant, specifying such participant’s entitlement to
      payments of principal and interest with respect to such
      participation.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    (d)  Limitations
      upon Participant Rights. A
      Participant shall not be entitled to receive any greater payment under Section
      2.11, Section 9.3 or Section 11.7 than the Lender would have been entitled
      to
      receive with respect to the participation sold to such Participant, unless
      the
      sale of the participation to such Participant is made with the Borrower’s prior
      written consent.

     

    (e)  Certain
      Pledges. The
      Lender may at any time pledge or assign a security interest in all or any
      portion of its rights under this Agreement to secure obligations of the Lender,
      including without limitation any pledge or assignment to secure obligations
      to a
      Federal Reserve Bank; provided that no such pledge or assignment shall release
      Lender from any of its obligations hereunder or substitute any such pledgee
      or
      assignee for Lender as a party hereto.    Certain
      Funding Arrangements. Notwithstanding
      anything to the contrary contained herein, Lender may grant to a special purpose
      funding vehicle (a “SPC”),
      identified as such in writing from time to time by the Lender and the Borrower,
      the option to provide to the Borrower all or any part of any Loan that the
      Lender would otherwise be obligated to make to the Borrower pursuant to this
      Agreement; provided
      that (i)
      nothing herein shall constitute a commitment by any SPC to make any Loan, (ii)
      if an SPC elects not to exercise such option or otherwise fails to provide
      all
      or any part of such Loan, the Lender shall be obligated to make such Loan
      pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall
      utilize the Revolving Credit Commitment of the Lender to the same extent, and
      as
      if, such Loan were made by the Lender. Each party hereto hereby agrees that
      no
      SPC shall be liable for any indemnity or similar payment obligation under this
      Agreement (all liability for which shall remain with the Lender). In furtherance
      of the foregoing, each party hereto hereby agrees (which agreement shall survive
      the termination of this Agreement) that, prior to the date that is one year
      and
      one day after the payment in full of all outstanding commercial paper or other
      senior indebtedness of any SPC, it will not institute against, or join any
      other
      person in instituting against, such SPC any bankruptcy, reorganization,
      arrangement, insolvency or liquidation proceedings under the laws of the United
      States or any State thereof arising out of any claim relating to the Credit
      Documents. In addition, notwithstanding anything to the contrary contained
      in
      this Section 11.12(b), any SPC may (i) with notice to, but without the prior
      written consent of, the Borrower, assign all or a portion of its interests
      in
      any Loan to the Lender or to any financial institutions (consented to by the
      Borrower and Lender) providing liquidity and/or credit support to or for the
      account of such SPC to support the funding or maintenance of Loans and (ii)
      disclose on a confidential basis any non-public information relating to its
      Loans to any rating agency, commercial paper dealer or provider of any surety,
      guarantee or credit or liquidity enhancement to such SPC. This section may
      not
      be amended without the written consent of the SPC. 

     

    Section
      11.13  Amendments.
       Any provision of the Credit Documents may be amended or waived if, but
      only if, such amendment or waiver is in writing and is signed by the Borrower
      and the Lender.

     

    Section
      11.14  Headings.
       Section headings used in this Agreement are for reference only and shall
      not affect the construction of this Agreement.

     

    Section
      11.15  Legal
      Fees, Other Costs and Indemnification.
       The Borrower agrees to pay all reasonable costs and expenses of the Lender
      in connection with the preparation and negotiation of the Credit Documents,
      including without limitation, the reasonable fees and disbursements of counsel
      to the Lender in connection with the preparation and execution of the Credit
      Documents, and any amendment, 

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    waiver
      or
      consent related hereto, whether or not the transactions contemplated herein
      are
      consummated. The Borrower further agrees to indemnify the Lender and its
      directors, agents, officers and employees, against all losses, claims, damages,
      penalties, judgments, liabilities and expenses (including, without limitation,
      all reasonable expenses of litigation or preparation therefor, whether or not
      the indemnified Person is a party thereto) which any of them may incur or
      reasonably pay arising out of or relating to any Credit Document or any of
      the
      transactions contemplated thereby or the direct or indirect application or
      proposed application of the proceeds of any Loan, other than those which arise
      from the gross negligence or willful misconduct of the party claiming
      indemnification. The Borrower, upon demand by the Lender at any time, shall
      reimburse the Lender for any reasonable legal or other expenses (including
      reasonable allocable fees and expenses of in-house counsel) incurred in
      connection with investigating or defending against any of the foregoing except
      if the same is directly due to the gross negligence or willful misconduct of
      the
      party to be indemnified.

     

    Section
      11.16  [Reserved]. 

     

    Section
      11.17  Entire
      Agreement. 
      The Credit Documents constitute the entire understanding of the parties thereto
      with respect to the subject matter thereof and any prior or contemporaneous
      agreements, whether written or oral, with respect thereto are superseded
      thereby.

     

    Section
      11.18  Construction.
       The parties hereto acknowledge and agree that neither this Agreement nor
      the other Credit Documents shall be construed more favorably in favor of one
      than the other based upon which party drafted the same, it being acknowledged
      that all parties hereto contributed substantially to the negotiation of this
      Agreement and the other Credit Documents.

     

    Section
      11.19  Governing
      Law.
       This Agreement and the other Credit Documents, and the rights and duties
      of the parties hereto, shall be construed and determined in accordance with
      the
      internal laws of the State of Illinois.

     

    Section
      11.20  SUBMISSION
      TO JURISDICTION; WAIVER OF JURY TRIAL.
       THE BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
      STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS AND OF ANY ILLINOIS
      STATE COURT SITTING IN THE CITY OF CHICAGO FOR PURPOSES OF ALL LEGAL PROCEEDINGS
      ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR
      THE
      TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THE BORROWER IRREVOCABLY WAIVES,
      TO
      THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
      HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
      AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
      IN AN INCONVENIENT FORUM. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY AND ALL
      RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
      ANY
      CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    Section
      11.21  Confidentiality.
       The Lender shall hold all non-public information provided to it by
      Borrower pursuant to or in connection with this Agreement in accordance with
      its
      customary procedures for handling confidential information of this nature,
      but
      may make disclosure to any of its examiners, regulators, Affiliates, outside
      auditors, counsel and other professional advisors in connection with this
      Agreement or any other Credit Document or as reasonably required by any
      potential bona
      fide
      transferee, participant or assignee, or in connection with the exercise of
      remedies under a Credit Document, or to any nationally recognized rating agency
      that requires access to information about Lender’s investment portfolio in
      connection with ratings issued with respect to Lender, or as requested by any
      governmental agency or representative thereof or pursuant to legal process;
      provided,
      however,
      that
      unless specifically prohibited by applicable law or court order, the Lender
      shall use reasonable efforts to promptly notify Borrower of any request by
      any
      governmental agency or representative thereof (other than any such request
      in
      connection with an examination of the financial condition of the Lender by
      such
      governmental agency) for disclosure of any such non-public information and,
      where practicable, prior to disclosure of such information. Prior to any such
      disclosure pursuant to this Section 11.21, the Lender shall require any
      such bona
      fide transferee,
      participant and assignee receiving a disclosure of non-public information to
      agree, for the benefit of Borrower, in writing to be bound by this Section
      11.21; and to require such Person to require any other Person to whom such
      Person discloses such non-public information to be similarly bound by this
      Section 11.21. The Lender shall not be required to hold confidential any
      information that becomes public by any means other than as a result of a breach
      by it of its obligations under this Section 11.21. 

     

    Section
      11.22  Patriot
      Act.
       As required by federal law or the Lender or Lender’s polices and
      practices, the Lender may need to collect certain customer identification
      information and documentation in connection with opening or maintaining accounts
      or establishing or continuing to provide services.

     

    

    Balance
      of Page Intentionally Left Blank

    -
      Signature Page Follows -

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    In
      Witness Whereof, the parties hereto have caused this Seasonal Credit Agreement
      to be duly executed and delivered in Chicago, Illinois by their duly authorized
      officers as of the day and year first above written. 

    

    

    
      	 	
              PEOPLES
                ENERGY CORPORATION,
                an Illinois corporation, as Borrower

            
	 	 
	 	
              By: 
                 /s/ Douglas M. Ruschau

            
	 	
              Its:  
                Vice President & Treasurer

            
	 	 
	 	 

    

    

    
      	 	
              BANK
                OF AMERICA, N.A.,
                as Lender

            
	 	 
	 	
              By:  
                /s/ Richard D. Hill, Jr.

            
	 	
              Its:  
                Managing Director

            
	 	
              Title:
                _____________________

            
	 	 

    

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    REVOLVING
      NOTE

    
      
        	 $25,000,000	
                 October
                  20,
                  2006

              

      
         

     

    FOR
      VALUE RECEIVED,
      the
      undersigned, PEOPLES
      ENERGY CORPORATION,
      an
      Illinois corporation (the “Borrower”),
      promises to pay to the order of BANK
      OF AMERICA, N.A.
      (the
“Bank”)
      on the
      Termination Date of the hereinafter defined Credit Agreement, or such earlier
      date as provided in the Credit Agreement or this Note, at the principal office
      of the Bank in Chicago, Illinois, in U.S. Dollars in accordance with Section
      4.1
      of the Credit Agreement, the aggregate unpaid principal of all Loans made by
      the
      Bank to the Borrower pursuant to the Credit Agreement, together with interest
      on
      the principal amount of each Loan from time to time outstanding hereunder at
      the
      rates, and payable in the manner and on the dates, specified in the Credit
      Agreement.

     

    The
      Bank
      shall record on its books or records or on a schedule attached to this Note,
      which is a part hereof, each Loan made by it pursuant to the Credit Agreement,
      together with all payments of principal and interest and the principal balances
      from time to time outstanding hereon, whether the Loan is a Base Rate Loan
      or a
      LIBOR Loan and the interest rate and Interest Period applicable thereto,
      provided that prior to the transfer of this Note all such amounts shall be
      recorded on a schedule attached to this Note. The record thereof, whether shown
      on such books or records or on a schedule to this Note, shall be prima
      facie
      evidence
      of the same, provided, however, that the failure of the Bank to record any
      of
      the foregoing or any error in any such record shall not limit or otherwise
      affect the obligation of the Borrower to repay all Loans made to it pursuant
      to
      the Credit Agreement together with accrued interest thereon.

     

    This
      Note
      is the “Note” referred to in that certain Seasonal Credit Agreement dated as of
      October 20, 2006, by and between the Borrower and Bank of America, N.A. (the
      “Credit
      Agreement”),
      and
      this Note and the holder hereof are entitled to all the benefits provided for
      thereby or referred to therein, to which Credit Agreement reference is hereby
      made for a statement thereof. This Note may only be conveyed, transferred,
      assigned or otherwise negotiated to a holder in accordance with the terms of
      the
      Credit Agreement. All defined terms used in this Note, except terms otherwise
      defined herein, shall have the same meaning as in the Credit Agreement. This
      Note shall be governed by and construed in accordance with the internal laws
      of
      the State of Illinois.

     

    Prepayments
      may be made hereon and this Note may be declared due prior to the expressed
      maturity hereof, all in the events, on the terms and in the manner as provided
      for in the Credit Agreement.

     

    The
      Borrower hereby waives demand, presentment, protest or notice of any kind
      hereunder.

     

    
      	 	
              PEOPLES
                ENERGY CORPORATION,
                an Illinois corporation

            
	 	 
	 	
              By: 
                __________________________      

            
	 	
              Its: 
                __________________________      

            

    

    

    
      
        
          A
            -
            1

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      B

     

    COMPLIANCE
      CERTIFICATE

     

    This
      Compliance Certificate is furnished to Bank of America, N.A., as Lender pursuant
      to the Credit Agreement (the “Credit
      Agreement”)
      dated
      as of October 20, 2006, by and between Peoples Energy Corporation and Bank
      of
      America, N.A. Unless otherwise defined herein, the terms used in this Compliance
      Certificate have the meanings ascribed thereto in the Credit
      Agreement.

     

    THE
      UNDERSIGNED HEREBY CERTIFIES THAT:

     

    1.  I
      am the
      duly elected or appointed ___________________of Peoples Energy
      Corporation;

     

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

     

    3.  The
      examinations described in paragraph 2 did not disclose, and I have no knowledge
      of, the existence of any condition or event which constitutes a Default or
      an
      Event of Default during or at the end of the accounting period covered by the
      attached financial statements or as of the date of this Certificate, except
      as
      set forth below. Without limitation to the foregoing, except as noted below
      the
      Borrower is in compliance with 7.5 and Section 7.6 of the Credit Agreement;
      and

     

    4.  Schedule
      1 attached hereto sets forth (i) financial data and computations evidencing
      compliance with certain covenants of the Credit Agreement, all of which data
      and
      computations are true, complete and correct, and are made in accordance with
      the
      terms of the Credit Agreement, and (ii) the list of Subsidiaries in existence
      as
      of the date hereof.

     

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

     

    
      	 
	 
	 
	 

    

    The
      foregoing certifications, together with the list set forth in Schedule 1 hereto
      and the financial statements delivered with this Certificate in support hereof,
      are made and delivered this ___________day of __________, 20 __.

     

    
      	 	 

    

    

    
      
        
          B
            -
            1

          Credit
            Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    SCHEDULE
      1 TO COMPLIANCE CERTIFICATE

     

    Compliance
      Calculations for Credit Agreement

     

    CALCULATION
      AS OF ________ __,200_

     

    

    
      	
              Capital
                Ratio (Sec. 7.6)

            	 	 
	
              1. (a)
                consolidated Indebtedness

            	
              $  

            	 
	
              (b)
                less
                accumulated other comprehensive income/loss

            	
               

              $__________

            	 
	
              (c)
                net consolidated Indebtedness

            	
              $__________

            	 
	
              2. Consolidated
                Net Worth

            	
              $  

            	 
	
              3. Sum
                of Line 1(c) plus
                Line 2

            	
              $  

            	 
	
              4. Capital
                Ratio

            	
              _____ :1.00

            	
              (ratio
                of (A) Line 1(c) to (B) Line 3 not to exceed 0.65 to
                1.00)

            

    

    

     

    List
      of Subsidiaries

     

    
      	
              The
                Peoples Gas Light and Coke Company 

              Peoples
                Gas Light Exploration Company

              Peoples
                Gas Neighborhood Development Corporation

              North
                Shore Gas Company 

              North
                Shore Exploration Company

              Peoples
                District Energy Corporation 

              Peoples
                NGV Corp.  

              Peoples
                Energy Production Company 

              PEP
                Holding, LLC 

              Peoples
                Energy Canadian Holdings, Inc.

              Peoples
                Energy Production Company of Canada

              Peoples
                Energy Production Operating Company

              Peoples
                Energy Production Partners, L.P.

              Peoples
                Energy Production - Texas, L.P.

              EnerVest
                Energy, L.P. 

              Sierra
                1996-I Limited Partnership

              Peoples
                Energy Resources Company, LLC 

              Peoples
                Energy Wholesale Marketing, LLC

            	
              PERC
                Canada, Inc.

              Peoples
                Natural Gas Liquids, LLC

              PERC
                Holdings, LLC 

              PV
                Midstream Ventures, LLC 

              PERC
                Power, LLC 

              COB
                Energy Facility, LLC

              Peoples
                Calumet, LLC

              Calumet
                Power, LLC

              Peoples
                Elwood, LLC

              Elwood
                Energy, LLC 

              Peoples
                Elwood Expansion, LLC

              Elwood
                Expansion, LLC 

              Valencia
                Energy, LLC

              Peoples
                MW, LLC 

              Peoples
                Energy Services Corporation

              Peoples
                Energy Ventures, LLC 

              Peoples
                Energy Business Services, LLC

              Peoples
                Energy Home Services, LLC

              Peoples
                Energy Neighborhood Development, LLC

              Peoples
                Technology, LLC

            

    

    

    

    
      
        
           

          Credit
            Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    SCHEDULE
      1

     

    LENDER’S
      PAYMENT INFORMATION

     

     

    Loan
      Repayments, Interest, Fees:

    

    Bank
      of
      America, N.A.

    New
      York,
      N.Y.

    ABA
      #
      026009593

    A/C:
      Business Credit Services,/Middle Market-NE Team 3

    Account
      #
      1093600000591

    Reference:
      Peoples Energy

    

     

    
      
        
          Schedule
            1

          Credit
            Agreement

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      1A

     

    PRICING
      GRID

     

    (Basis
      Points)

     

     

    
      	
              S
                & P/ Moody’s Senior Un-Secured Rating 

            	
              A/
                A2 or higher

            	
              A-/
                A3 

            	
              BBB+/
                Baa1

            	
              BBB/
                Baa2

            	
              BBB-/
                Baa3

            	
              lower
                than BBB-/ Baa3

            
	
              Commitment
                Fee

            	
              6.0

            	
              7.0

            	
              8.0

            	
              10.0

            	
              12.5

            	
              20.0

            
	
              Base
                Rate Margin

            	
              0.0

            	
              0.0

            	
              0.0

            	
              0.0

            	
              0.0

            	
              0.0

            
	
              LIBOR
                Margin

            	
              25.0

            	
              30.0

            	
              40.0

            	
              50.0

            	
              62.5

            	
              87.5

            
	
              Utilization
                Fee (>50%)

            	
              10.0

            	
              10.0

            	
              12.5

            	
              12.5

            	
              12.5

            	
              12.5

            

    

    

    Any
      change in a Credit Rating of the Borrower (and if applicable, any change in
      fees
      or interest payable hereunder based on such Credit Rating), shall be effective
      as of the date such change is announced by the applicable rating
      agency.

     

    *
      If
      the Borrower is split-rated and the ratings differential is one level, the
      higher rating will apply. If the Borrower is split-rated and the ratings
      differential is two levels or more, the rating level one below the higher level
      will apply. If at any time the Borrower has no Moody’s rating or no Standard
& Poors’ rating, the “Lower than BBB-/Baa3” level will apply; provided,
      however, that in such event the Borrower may propose an alternative rating
      agency or mechanism in replacement thereof.

    

    

    
      
        
          Schedule
            1 - A

          Credit
            AgreementExhibit 10(d) Seasonal Credit Agreement dated as of 10/20/06 between the Company
      and JPMorgan Chase Bank

    EXHIBIT
      10(d)

     

    Execution
      Draft

     

     

    
      

      

    

     

    
      	
               

              SEASONAL
                CREDIT AGREEMENT

               

              DATED
                AS OF

               

              October
                20, 2006

               

               

              BETWEEN

               

               

              PEOPLES
                ENERGY CORPORATION,

               

              and

               

              JPMORGAN
                CHASE BANK, N.A.

              as
                Lender.

               

               

            

    

    

    
      

      

    

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

       

    

    

      TABLE
        OF CONTENTS

       

      
        	
                SECTION
                  1.  DEFINITIONS;
                  INTERPRETATION.

              	
                1

              
	
                 

              	
                 Section
                  1.1 

              	
                Definitions

              	
                1

              
	
                 

              	
                 Section
                  1.2

              	
                Interpretation

              	
                7

              

      

       

      
        	
                 SECTION
                  2.  THE
                  REVOLVING CREDIT.

              	
                7

              
	
                 

              	
                Section
                  2.1

              	
                The
                  Loan Commitment

              	
                7

              
	
                 

              	
                Section
                  2.2

              	
                [Reserved]

              	
                7

              
	
                 

              	
                Section
                  2.3

              	
                Applicable
                  Interest Rates

              	
                7

              
	
                 

              	
                Section
                  2.5

              	
                Minimum
                  Borrowing Amounts

              	
                9

              
	
                 

              	
                Section
                  2.6

              	
                Manner
                  of Borrowing Loans and Designating Interest Rates Applicable to
                  Loans

              	
                9

              
	
                 

              	
                Section
                  2.8

              	
                Interest
                  Periods

              	
                10

              
	
                 

              	
                Section
                  2.9

              	
                Maturity
                  of Loans

              	
                11

              
	
                 

              	
                Section
                  2.10

              	
                Prepayments

              	
                11

              
	
                 

              	
                Section
                  2.12

              	
                Default
                  Rate

              	
                11

              
	
                 

              	
                Section
                  2.13

              	
                Evidence
                  of Debt

              	
                12

              
	
                 

              	
                Section
                  2.14

              	
                Funding
                  Indemnity

              	
                12

              
	
                 

              	
                Section
                  2.15

              	
                Revolving
                  Credit Commitment Terminations

              	
                12

              
	
                 

              	
                Section
                  2.16

              	
                Regulation
                  D Compensation

              	
                13

              
	
                 

              	
                Section
                  2.17

              	
                Arbitrage
                  Compensation

              	
                13

              

      

       

      
        	
                SECTION
                  3.  FEES.

              	
                13 

              
	
                 

              	
                Section
                  3.1

              	
                Fees.

              	
                13

              

      

       

      
        	
                SECTION
                  4.  PLACE
                  AND APPLICATION OF PAYMENTS.

              	
                14 

              
	
                 

              	
                Section
                  4.1

              	
                Place
                  and Application of Payments

              	
                14

              

      

       

      
        	
                SECTION
                  5.  REPRESENTATIONS
                  AND WARRANTIES.

              	
                14 

              
	
                 

              	
                Section
                  5.1

              	
                Corporate
                  Organization and Authority

              	
                14

              
	
                 

              	
                Section
                  5.2

              	
                Corporate
                  Authority and Validity of Obligations

              	
                14

              
	
                 

              	
                Section
                  5.3

              	
                Financial
                  Statements

              	
                15

              
	
                 

              	
                Section
                  5.4

              	
                Approvals

              	
                15

              
	
                 

              	
                Section
                  5.5

              	
                ERISA

              	
                15

              
	
                 

              	
                Section
                  5.6

              	
                Government
                  Regulation

              	
                15

              
	
                 

              	
                Section
                  5.7

              	
                Margin
                  Stock; Proceeds

              	
                15

              
	
                 

              	
                Section
                  5.8

              	
                Full
                  Disclosure

              	
                16

              

      

       

      
        	
                SECTION
                  6.  CONDITIONS
                  PRECEDENT.

              	
                16 

              
	
                 

              	
                Section
                  6.1

              	
                Initial
                  Credit Event

              	
                16 

              
	
                 

              	
                Section
                  6.2

              	
                All
                  Credit Events

              	
                17 

              

      

       

      
        	
                SECTION
                  7.  COVENANTS.

              	
                17 

              
	
                 

              	
                Section
                  7.1

              	
                Corporate
                  Existence

              	
                17 

              
	
                 

              	
                Section
                  7.2

              	
                ERISA

              	
                17 

              
	
                 

              	
                Section
                  7.3

              	
                Financial
                  Reports and Other Information

              	
                17 

              

      

       

      

      
        
          i

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 

              	
                Section
                  7.5

              	
                Regulation
                  U; Proceeds

              	
                18 

              
	
                 

              	
                Section
                  7.6

              	
                Sales
                  of Assets

              	
                18 

              
	
                 

              	
                Section
                  7.7

              	
                Capital
                  Ratio

              	
                19 

              
	
                 

              	
                Section
                  7.8

              	
                Compliance
                  with Laws

              	
                19 

              
	
                 

              	
                Section
                  7.9

              	
                Mergers
                  and Consolidations

              	
                19 

              

      

       

      
        	
                SECTION
                  8.  EVENTS
                  OF DEFAULT AND REMEDIES.

              	
                19 

              
	
                 

              	
                Section
                  8.1

              	
                Events
                  of Default

              	
                19

              
	
                 

              	
                Section
                  8.2

              	
                Non-Bankruptcy
                  Defaults

              	
                21

              
	
                 

              	
                Section
                  8.3

              	
                Bankruptcy
                  Defaults

              	
                21

              
	
                 

              	
                Section
                  8.4

              	
                Expenses

              	
                21

              

      

       

      
        	
                SECTION
                  9.  CHANGE
                  IN CIRCUMSTANCES.

              	
                21

              
	
                 

              	
                Section
                  9.1

              	
                Change
                  of Law

              	
                21

              
	
                 

              	
                Section
                  9.2

              	
                Unavailability
                  of Deposits or Inability to Ascertain, or Inadequacy of,
                  LIBOR

              	
                22

              
	
                 

              	
                Section
                  9.3

              	
                Increased
                  Cost and Reduced Return

              	
                22

              
	
                 

              	
                Section
                  9.5

              	
                Lending
                  Offices

              	
                23

              
	
                 

              	
                Section
                  9.6

              	
                Discretion
                  of Lender as to Manner of Funding

              	
                24

              

      

       

      
        	
                SECTION
                  10.  RESERVED.

              	
                24

              

      

       

      
        	
                SECTION
                  11.  MISCELLANEOUS.

              	
                24

              
	
                 

              	
                Section
                  11.1

              	
                Withholding
                  Taxes

              	
                24

              
	
                 

              	
                Section
                  11.2

              	
                No
                  Waiver of Rights

              	
                24

              
	
                 

              	
                Section
                  11.3

              	
                Non-Business
                  Day

              	
                25

              
	
                 

              	
                Section
                  11.4

              	
                Documentary
                  Taxes

              	
                25

              
	
                 

              	
                Section
                  11.5

              	
                Survival
                  of Representations

              	
                25

              
	
                 

              	
                Section
                  11.6

              	
                Survival
                  of Indemnities

              	
                25

              
	
                 

              	
                Section
                  11.7

              	
                Set-Off

              	
                25

              
	
                 

              	
                Section
                  11.8

              	
                Notices

              	
                25

              
	
                 

              	
                Section
                  11.9

              	
                Counterparts

              	
                26

              
	
                 

              	
                Section
                  11.10

              	
                Successors
                  and Assigns

              	
                27

              
	
                 

              	
                Section
                  11.11

              	
                [Reserved].

              	
                27

              
	
                 

              	
                Section
                  11.12

              	
                Assignments,
                  Participations, Etc

              	
                27

              
	
                 

              	
                Section
                  11.13

              	
                Amendments

              	
                29

              
	
                 

              	
                Section
                  11.14

              	
                Headings

              	
                29

              
	
                 

              	
                Section
                  11.15

              	
                Legal
                  Fees, Other Costs and Indemnification

              	
                29

              
	
                 

              	
                Section
                  11.16

              	
                [Reserved].

              	
                29

              
	
                 

              	
                Section
                  11.17

              	
                Entire
                  Agreement

              	
                29

              
	
                 

              	
                Section
                  11.18

              	
                Construction

              	
                29

              
	
                 

              	
                Section
                  11.19

              	
                Governing
                  Law

              	
                29

              
	
                 

              	
                Section
                  11.20

              	
                SUBMISSION
                  TO JURISDICTION; WAIVER OF JURY TRIAL

              	
                30

              
	
                 

              	
                Section
                  11.21

              	
                Confidentiality

              	
                30

              
	
                 

              	
                Section
                  11.22

              	
                Patriot
                  Act

              	
                30

              

      

       

    

    
      
        ii

      

      
        
        

        
          

        

      

      
        
        

      

    

    CREDIT
      AGREEMENT

     

    This
      SEASONAL
      CREDIT AGREEMENT,
      dated as
      of October 20, 2006, is by and between PEOPLES ENERGY CORPORATION, an Illinois
      corporation (the “Borrower”),
      and
      JPMORGAN CHASE BANK, N.A., as lender (in such capacity, the “Lender”).
      

     

    WITNESSETH
      THAT:

     

    WHEREAS,
      the
      Borrower desires to obtain the commitment of the Lender to make available a
      seasonal revolving credit facility for loans (the “Revolving
      Credit”),
      as
      described herein; and

     

    WHEREAS,
      the
      Lender is willing to extend such commitments subject to all of the terms and
      conditions hereof and on the basis of the representations and warranties
      hereinafter set forth.

     

    NOW,
      THEREFORE,
      in
      consideration of the recitals set forth above and for other good and valuable
      consideration, the receipt and adequacy of which are hereby acknowledged, the
      parties hereto hereby agree as follows:

     

    SECTION
      1.  DEFINITIONS;
      INTERPRETATION.

     

    Section
      1.1  Definitions.
       The following terms when used herein have the following
      meanings:

     

    “Affiliate”
means,
      as to any Person, any other Person which directly or indirectly controls, or
      is
      under common control with, or is controlled by, such Person. As used in this
      definition, “control”
      (including “controlled
      by”
and
      “under
      common control with”
and
      other cognates thereof,) means possession, directly or indirectly, of power
      to
      direct or cause the direction of management or policies of a Person (whether
      through ownership of securities or partnership or other ownership interests,
      by
      contract or otherwise), provided that, in any event for purposes of this
      definition: (i) any Person which owns directly or indirectly 5% or more of
      the
      securities having ordinary voting power for the election of directors or other
      governing body of a corporation or 5% or more of the partnership or other
      ownership interests of any other Person (other than as a limited partner of
      such
      other Person) will be deemed to control such corporation or other Person; and
      (ii) each director and executive officer of the Borrower or any Subsidiary
      shall
      be deemed an Affiliate of the Borrower and each Subsidiary.

     

    “Agreement”
means
      this Credit Agreement, including all Exhibits and Schedules hereto, as it may
      be
      amended, supplemented or otherwise modified from time to time in accordance
      with
      the terms hereof.

     

    “Applicable
      Margin”
means,
      at any time (i) with respect to Base Rate Loans, the Base Rate Margin; and
      (ii)
      with respect to LIBOR Loans, the LIBOR Margin.

     

    “Applicable
      Telerate Page”
is
      defined in Section 2.3(b) hereof.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Assignment
      and Assumption”
      means an
      assignment and assumption entered into by the Lender and an Eligible Assignee
      (with the consent of any party whose consent is required by
      Section 11.12(b)), in substantially any form approved by the
      Lender.

     

    “Authorized
      Representative”
means
      those persons shown on the list of employees provided by the Borrower pursuant
      to Section 6.1(e) hereof, or on any such updated list provided by the Borrower
      to the Lender, or any further or different employee of the Borrower so named
      by
      any officer of the Borrower in a written notice to the Lender.

     

    “Base
      Rate”
is
      defined in Section 2.3(a) hereof.

     

    “Base
      Rate Loan”
means
      a
      Loan bearing interest prior to maturity at a rate specified in Section 2.3(a)
      hereof.

     

    “Base
      Rate Margin”
means
      the percentage set forth in Schedule 1A hereto corresponding to the then
      applicable Credit Rating.

     

    “Borrower”
is
      defined in the preamble of this Agreement.

     

    “Borrowing”
means
      the total of Loans of a single type advanced, continued for an additional
      Interest Period, or converted from a different type into such type by the Lender
      on a single date and for a single Interest Period. A Borrowing is “advanced” on
      the day the Lender advances funds comprising such Borrowing to the Borrower,
      is
“continued” on the date a new Interest Period for the same type of Loans
      commences for such Borrowing, and is “converted” when such Borrowing is changed
      from one type of Loan to the other, all as requested by the Borrower pursuant
      to
      Section 2.5(a).

     

    “Business
      Day”
means
      any day other than a Saturday or Sunday on which Lender is not authorized or
      required to close in Chicago, Illinois and, if the applicable Business Day
      relates to the borrowing or payment of a LIBOR Loan, on which banks are dealing
      in U.S. Dollars in the interbank market in London, England.

     

    “Capital”
means,
      as of any date of determination thereof, without duplication, the sum of
      Consolidated Net Worth plus
      Indebtedness, excluding accumulated other comprehensive income/loss, as
      determined in accordance with generally accepted accounting principles
      consistently applied.

     

    “Capital
      Lease”
means
      at any date any lease of Property which, in accordance with GAAP, would be
      required to be capitalized on the balance sheet of the lessee.

     

    “Capital
      Ratio”
means,
      for any fiscal quarter of the Borrower, the ratio, rounded downwards to two
      decimal points, of the sum of Indebtedness for such fiscal quarter to the sum
      of
      Capital for such fiscal quarter.

     

    “Capitalized
      Lease Obligations”
means,
      for any Person, the amount of such Person’s liabilities under Capital Leases
      determined at any date in accordance with GAAP.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Commitment
      Fee Rate” means
      the
      percentage set forth on Schedule 1A hereto corresponding to the then applicable
      Credit Rating. 

     

    “Compliance
      Certificate”
means
      a
      certificate in the form of Exhibit A hereto.

     

    “Consolidated
      EBIT”
means,
      for any period, for the Borrower and its Consolidated Subsidiaries, (A) the
      sum
      of the amounts for such period of (i) consolidated net income, (ii) net income
      taxes in respect of such period (such amount to be a positive number in cases
      where net cash taxes are payable and zero in cases where a cash refund in
      respect of taxes paid is due), (iii) consolidated interest expense, and (iv)
      losses on sales of assets (excluding sales in the ordinary course of business)
      and other extraordinary losses less (B) the amount for such period of (i)
      interest income and (ii) gains on sales of assets (excluding sales in the
      ordinary course of business) and other extraordinary gains, all as determined
      on
      a consolidated basis in accordance with GAAP.

     

    “Consolidated Net
      Worth”
means,
      as of the date of any determination thereof, the amount reflected as
      shareholders equity upon a consolidated balance sheet of the Borrower and its
      Subsidiaries.

     

    “Contractual
      Obligation”
means,
      as to any Person, any provision of any security issued by such Person or of
      any
      agreement, instrument or undertaking to which such Person is a party or by
      which
      it or any of its Property is bound.

     

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

     

    “Credit
      Documents”
means
      this Agreement, the Note and all other documents, instrument and agreements
      executed and delivered by Borrower or any Affiliate thereof in connection with
      this Agreement.

     

    “Credit
      Event”
means
      the Borrowing of any Loan.

     

    “Credit
      Rating”
means,
      at any time, the long-term senior un-secured non-credit enhanced debt rating
      of
      the Borrower as determined by Standard & Poors’ Ratings Services and/or
      Moody’s Investors Service.

     

    “Default”
means
      any event or condition the occurrence of which would, with the passage of time
      or the giving of notice, or both, constitute an Event of Default.

     

    “EBIT”
means,
      for any period, for the Borrower or any of its Subsidiaries, (A) the sum of
      the
      amounts for such period of (i) net income, (ii) net income taxes in respect
      of
      such period (such amount to be a positive number in cases where net cash taxes
      are payable and zero in cases where a cash refund in respect of taxes paid
      is
      due), (iii) interest expense, and (iv) losses on sales of assets (excluding
      sales in the ordinary course of business) and other extraordinary losses less
      (B) the amount for such period of (i) interest income and (ii) gains on sales
      of
      assets (excluding sales in the ordinary course of business) and other
      extraordinary gains, all as determined in accordance with GAAP.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Effective
      Date”
means
      October 20, 2006.

     

    “Eligible
      Assignee”
      means
      (a) an Affiliate of the Lender, and (b) any other Person (other than a natural
      person) approved by (i) the Lender, and (ii) unless an Event of Default has
      occurred and is continuing, the Borrower (each such approval not to be
      unreasonably withheld or delayed); provided
      that
      notwithstanding the foregoing, “Eligible Assignee” shall not include the
      Borrower or any of the Borrower’s Affiliates or Subsidiaries. 

     

    “ERISA”
is
      defined in Section 5.5 hereof.

     

    “Event
      of Default”
means
      any of the events or circumstances specified in Section 8.1 hereof.

     

    “Existing
      Credit Agreement”
means
      that certain Credit Agreement dated as of June 13, 2006 by and among Borrower,
      Bank of America, N.A. as “Agent” thereunder, and the other financial
      institutions a party thereto (as may be amended, supplemented or modified from
      time to time).

     

    “Federal
      Funds Rate”
means
      the fluctuating interest rate per annum described in part (x) of clause (ii)
      of
      the definition of Base Rate set forth in Section 2.3(a) hereof.

     

    “GAAP”
means
      generally accepted accounting principles as in effect in the United States
      from
      time to time, applied by the Borrower and its Subsidiaries on a basis consistent
      with the preparation of the Borrower’s financial statements furnished to the
      Lender as described in Section 5.3 hereof.

     

    “Guarantee”
means,
      in respect of any Person, any obligation, contingent or otherwise, of such
      Person directly or indirectly guaranteeing any Indebtedness of another Person,
      including, without limitation, by means of an agreement to purchase or pay
      (or
      advance or supply funds for the purchase or payment of) such Indebtedness or
      to
      maintain financial covenants, or to assure the payment of such Indebtedness
      by
      an agreement to make payments in respect of goods or services regardless of
      whether delivered, or otherwise, provided, that the term “Guarantee” shall not
      include endorsements for deposit or collection in the ordinary course of
      business; and such term when used as a verb shall have a correlative
      meaning.

     

    “Indebtedness”
means,
      as to any Person, without duplication: (i) all obligations of such Person for
      borrowed money or evidenced by bonds, debentures, notes or similar instruments;
      (ii) all obligations of such Person for the deferred purchase price of property
      or services (other than in respect of trade accounts payable arising in the
      ordinary course of business, customer deposits, provisions for rate refunds
      (if
      any), deferred fuel expenses and obligations in respect of pensions and other
      post-retirement benefits and employee welfare plans); (iii) all Capitalized
      Lease Obligations of such Person; (iv) all Indebtedness of others secured by
      a
      Lien on any properties, assets or revenues of such Person (other than stock,
      partnership interests or other equity interests of the Borrower or any
      Subsidiaries in other entities) to the extent of the lesser of the value of
      the
      property subject to such Lien or the amount of such Indebtedness; (v) all
      Indebtedness of others Guaranteed by such Person; and (vi) all obligations
      of
      such Person, contingent or otherwise, in respect of any letters or credit
      (whether commercial or standby) or bankers’ acceptances.

     

    “Interest
      Period”
is
      defined in Section 2.6 hereof.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Lender”
is
      defined in the preamble of this Agreement and includes any successor
      thereto.

     

    “Lending
      Office”
is
      defined in Section 9.4 hereof.

     

    “LIBOR”
is
      defined in Section 2.3(b) hereof.

     

    “LIBOR
      Loan”
means
      a
      Loan bearing interest prior to maturity at the rate specified in Section 2.3(b)
      hereof.

     

    “LIBOR
      Margin”
means
      the percentage set forth in Schedule 1A hereto beside the then applicable Credit
      Rating.

     

    “LIBOR
      Reserve Percentage”
is
      defined in Section 2.3(b) hereof.

     

    “Lien”
means
      any interest in Property securing an obligation owed to, or a claim by, a Person
      other than the owner of the Property, whether such interest is based on the
      common law, statute or contract, including, but not limited to, the security
      interest lien arising from a mortgage, encumbrance, pledge, conditional sale,
      security agreement or trust receipt, or a lease, consignment or bailment for
      security purposes. For the purposes of this definition, a Person shall be deemed
      to be the owner of any Property which it has acquired or holds subject to a
      conditional sale agreement, Capital Lease or other arrangement pursuant to
      which
      title to the Property has been retained by or vested in some other Person for
      security purposes, and such retention of title shall constitute a
“Lien.”

     

    “Loan”
is
      defined in Section 2.1 hereof and, as so defined, includes a Base Rate Loan
      or
      LIBOR Loan, each of which is a “type” of Loan hereunder.

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (i) the business, financial position or results
      of
      operations of the Borrower, (ii) the ability of the Borrower to perform its
      obligations under the Credit Documents, (iii) the validity or enforceability
      of
      the obligations of the Borrower, (iv) the rights and remedies of the Lender
      against the Borrower or (v) the timely payment of the principal of and interest
      on the Loans or other amounts payable by the Borrower hereunder.

     

    “Non-Recourse
      Indebtedness”
means
      all Indebtedness of the Borrower that is non-recourse to the
      Borrower.

     

    “Note”
is
      defined in Section 2.10(a) hereof.

     

    “Obligations”
means
      all fees payable hereunder, all obligations of the Borrower to pay principal
      or
      interest on Loans and all other payment obligations of the Borrower arising
      under or in relation to any Credit Document.

     

    “Person”
means
      an individual, partnership, corporation, limited liability company, association,
      trust, unincorporated organization or any other entity or organization,
      including a government or any agency or political subdivision
      thereof.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    “Plan”
means
      at any time an employee pension benefit plan covered by Title IV of ERISA or
      subject to the minimum funding standards under Section 412 of the Code that
      is
      either (i) maintained by a member of the Controlled Group or (ii) maintained
      pursuant to a collective bargaining agreement or any other arrangement under
      which more than one employer makes contributions and to which a member of the
      Controlled Group is then making or accruing an obligation to make contributions
      or has within the preceding five plan years made contributions.

     

    “PBGC”
is
      defined in Section 5.5 hereof.

     

    “Property”
means
      any interest in any kind of property or asset, whether real, personal or mixed,
      or tangible or intangible, whether now owned or hereafter acquired.

     

    “Reference
      Bank”
means
      JPMorgan Chase Bank, N.A. 

     

    “Revolving
      Credit Commitment”
is
      defined in Section 2.1 hereof.

     

    “SEC”
means
      the Securities and Exchange Commission.

     

    “Significant
      Subsidiary”
means
      a
      Subsidiary of the Borrower which meets any of the following
      conditions:

     

    (1) the
      book
      value of the Subsidiary’s assets exceeds twenty percent (20%) of the book value
      of the assets of the Borrower and its other Subsidiaries consolidated as of
      the
      end of the most recently completed fiscal quarter; or

     

    (2) the
      Subsidiary’s EBIT exceeds twenty percent (20%) of Consolidated EBIT as of the
      end of the most recently completed fiscal quarter and the twelve month period
      ending therewith.

     

    “SPC”
is
      defined in Section 11.12(g) hereof.

     

    “Subsidiary”
means,
      as to the Borrower, any corporation or other entity of which more than fifty
      percent (50%) of the outstanding stock or comparable equity interests having
      ordinary voting power for the election of the Board of Directors of such
      corporation or similar governing body in the case of a non-corporation
      (irrespective of whether or not, at the time, stock or other equity interests
      of
      any other class or classes of such corporation or other entity shall have or
      might have voting power by reason of the happening of any contingency) is at
      the
      time directly or indirectly owned by the Borrower or by one or more of its
      Subsidiaries.

     

    “Telerate
      Service”
means
      the Moneyline Telerate.

     

    “Termination
      Date”
means
      the earlier to occur of (i) March 31, 2007 and (ii) the consummation of the
      merger between a subsidiary of WPS Resources Corporation and Borrower as
      contemplated by that certain merger application filed with the Illinois Commerce
      Commission on or about August 2, 2006.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    “Unfunded
      Vested Liabilities”
means,
      with respect to any Plan at any time, the amount (if any) by which (i) the
      present value of all vested non-forfeitable accrued benefits under such Plan
      exceeds (ii) the fair market value of all Plan assets allocable to such
      benefits, all determined as of the then most recent valuation date for such
      Plan, but only to the extent that such excess represents a potential liability
      of a member of the Controlled Group to the PBGC or the Plan under Title IV
      of
      ERISA.

     

    “Upfront
      Fee”
is
      defined in Section 3.1(d).

     

    “U.S.
      Dollars”
and
      “$”
each
      means the lawful currency of the United States of America.

     

    “Utilization
      Fee Rate”
means
      the percentage set forth in Schedule 1A hereto corresponding to the then
      applicable Credit Rating.

     

    “Welfare
      Plan”
means
      a
“welfare plan”, as defined in Section 3(l) of ERISA.

     

    Section
      1.2  Interpretation.
       The foregoing definitions shall be equally applicable to both the singular
      and plural forms of the terms defined. All references to times of day in this
      Agreement shall be references to Chicago, Illinois time unless otherwise
      specifically provided. Where the character or amount of any asset or liability
      or item of income or expense is required to be determined or any consolidation
      or other accounting computation is required to be made for the purposes of
      this
      Agreement, the same shall be done in accordance with GAAP, to the extent
      applicable, except where such principles are inconsistent with the specific
      provisions of this Agreement.

     

    SECTION
      2.  THE
      REVOLVING CREDIT.

     

    Section
      2.1  The
      Loan Commitment.
       Subject to the terms and conditions hereof the Lender agrees to make a
      loan or loans (individually a “Loan”
and
      collectively “Loans”)
      to the
      Borrower from time to time on a revolving basis in an aggregate outstanding
      amount up to the TWENTY FIVE MILLION DOLLARS ($25,000,000)
      (such amount, as increased or reduced pursuant to Section 2.12 or changed as
      a
      result of one or more assignments under Section 11.12, the “Revolving
      Credit Commitment”)
      before
      the Termination Date, provided
      that the
      sum of the aggregate amount of Loans at any time outstanding shall not exceed
      the Revolving Credit Commitment in effect at such time. As provided in Section
      2.5(a) hereof, the Borrower may elect that each Borrowing of Loans be either
      Base Rate Loans or LIBOR Loans. Loans may be repaid and the principal amount
      thereof re-borrowed before the Termination Date, subject to all the terms and
      conditions hereof. 

     

    Section
      2.2  [Reserved]. 

     

    Section
      2.3  Applicable
      Interest Rates. 
       Section
      2.4   Base
      Rate Loans. 
      Each Base Rate Loan made or maintained by Lender shall bear interest during
      each
      Interest Period it is outstanding (computed (x) at all times the Base Rate
      is
      based on the rate described in clause (i) of the definition thereof, on the
      basis of a year of 365 or 366 days, as applicable, and actual days elapsed
      or
      (y) at all times the Base Rate is based on the rate described in clause (ii)
      of
      the definition thereof, on the basis of a year of 360 days and actual days
      elapsed) on the unpaid principal amount thereof from the date such Loan is
      advanced, continued or created by conversion from a LIBOR Loan until maturity
      (whether by acceleration or otherwise) at a rate per annum equal to the sum
      of
      the Applicable Margin plus the Base Rate from time to time in effect, payable
      on
      the last day of its Interest Period and at maturity (whether by acceleration
      or
      otherwise).

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    “Base
      Rate”
means
      for any day the greater of:

     

    i  the
      rate
      of interest announced by JPMorgan Chase Bank, N.A. from time to time as its
      “Prime Commercial Lending Rate,” or equivalent, for U.S. Dollar loans as in
      effect on such day, with any change in the Base Rate resulting from a change
      in
      said prime rate to be effective as of the date of the relevant change in said
      “Prime Commercial Lending Rate”; and

     

    ii  the
      sum
      of (x) the rate determined by the Lender to be the prevailing rate per annum
      (rounded upwards, if necessary, to the nearest one hundred-thousandth of a
      percentage point) at approximately 10:00 a.m. (Chicago time) (or as soon
      thereafter as is practicable) on such day (or, if such day is not a Business
      Day, on the immediately preceding Business Day) for the purchase at face value
      of overnight Federal funds in an amount comparable to the principal amount
      owed
      to JPMorgan Chase Bank, N.A. for which such rate is being determined, plus
      (y)
      one-half of one percent (0.50%).

     

    (b)  LIBOR
      Loans.
      Each
      LIBOR Loan made or maintained by Lender shall bear interest during each Interest
      Period it is outstanding (computed on the basis of a year of 360 days and actual
      days elapsed) on the unpaid principal amount thereof from the date such Loan
      is
      advanced, continued, or created by conversion from a Base Rate Loan until
      maturity (whether by acceleration or otherwise) at a rate per annum equal to
      the
      sum of the Applicable Margin plus the LIBOR applicable for such Interest Period,
      payable on the last day of the Interest Period and at maturity (whether by
      acceleration or otherwise).

     

    “LIBOR”
means,
      for an Interest Period for a Borrowing of LIBOR Loans, (a) the LIBOR Index
      Rate
      for such Interest Period, if such rate is available, and (b) if the LIBOR Index
      Rate cannot be determined, the arithmetic average of the rates of interest
      per
      annum (rounded upwards, if necessary, to the nearest one-sixteenth of one
      percent) at which deposits in U.S. Dollars in immediately available funds are
      offered to the Reference Bank at 11:00 a.m. (London, England time) two (2)
      Business Days before the beginning of such Interest Period by major banks in
      the
      interbank LIBOR market for delivery on the first day of and for a Period equal
      to such Interest Period in an amount equal or comparable to the principal amount
      of the LIBOR Loan scheduled to be made by the Reference Bank as part of such
      Borrowing.

     

    “LIBOR
      Index Rate”
means,
      for any Interest Period, the rate per annum (rounded upwards, if necessary,
      to
      the next higher one-sixteenth of one percent) for deposits in U.S. Dollars,
      for
      delivery on the first day of and for a period equal to such Interest Period
      in
      an amount equal or comparable to the principal amount of the LIBOR Loan
      scheduled to be made by JPMorgan Chase Bank, N.A. as part of such Borrowing,
      which appears on the Applicable Telerate Page, as appropriate for such currency,
      as of 11:00 a.m. (London, England time) on the day two (2) Business Days before
      the commencement of such Interest Period.

     

    “Applicable
      Telerate Page”
means
      the display page designated as “Page
      3750”
on
      the
      Telerate Service (or such other page as may replace such page, as appropriate,
      on that service or such other service as may be nominated by the British
      Bankers’ Association as the information vendor for the purpose of displaying
      British Bankers’ Association Interest Settlement Rates for deposits in U.S.
      Dollars).

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    “LIBOR
      Reserve Percentage”
means
      for any Borrowing of LIBOR Loans from Lender, the daily average for the
      applicable Interest Period of the actual effective rate, expressed as a decimal,
      at which reserves (including, without limitation, any supplemental, marginal
      and
      emergency reserves) are maintained by Lender during such Interest Period
      pursuant to Regulation D of the Board of Governors of the Federal Reserve System
      (or any successor) on “LIBOR
      liabilities”,
      as
      defined in such Board’s Regulation D (or in respect of any other category of
      liabilities that includes deposits by reference to which the interest rate
      on
      LIBOR Loans is determined or any category of extensions of credit or other
      assets that include loans by non-United States offices of Lender to United
      States residents), subject to any amendments of such reserve requirement by
      such
      Board or its successor, taking into account any transitional adjustments
      thereto. For purposes of this definition, the LIBOR Loans shall be deemed to
      be
“LIBOR
      liabilities”
as
      defined in Regulation D without benefit or credit for any prorations, exemptions
      or offsets under Regulation D.

     

    (c)  Rate
      Determinations.
      The
      Lender shall determine each interest rate applicable to Obligations and the
      amount of all Obligations, and a determination thereof by the Lender shall
      be
      conclusive and binding except in the case of manifest error.

     

    Section
      2.5  Minimum
      Borrowing Amounts.
       Each Borrowing of Base Rate Loans shall be in an amount not less than
      $1,000,000 and in integral multiples of $500,000. Each Borrowing of LIBOR Loans
      shall be in an amount not less than $2,000,000 and in integral multiples of
      $1,000,000.

     

    Section
      2.6  Manner
      of Borrowing Loans and Designating Interest Rates Applicable to
      Loans. 
       Section
      2.7 
      Notice
      to the Lender. 
      The Borrower shall give notice to the Lender by no later than 10:00 a.m.
      (Chicago time) (i) at least two (2) Business Days before the date on which
      the
      Borrower requests the Lender to advance a Borrowing of LIBOR Loans and (ii)
      at
      least one (1) Business Day before the date on which the Borrower requests the
      Lender to advance a Borrowing of Base Rate Loans. The Loans included in each
      Borrowing shall bear interest initially at the type of rate specified in such
      notice of a new Borrowing. Thereafter, the Borrower may from time to time elect
      to change or continue the type of interest rate borne by each Borrowing or,
      subject to Section 2.4’s minimum amount requirement for each outstanding
      Borrowing, a portion thereof, as follows: (i) if such Borrowing is of LIBOR
      Loans, on the last day of the Interest Period applicable thereto, the Borrower
      may continue part or all of such Borrowing as LIBOR Loans for an Interest Period
      or Interest Periods specified by the Borrower or convert part or all of such
      Borrowing into Base Rate Loans, (ii) if such Borrowing is of Base Rate Loans,
      on
      any Business Day, the Borrower may convert all or part of such Borrowing into
      LIBOR Loans for an Interest Period or Interest Periods specified by the
      Borrower. The Borrower shall give all such notices requesting the advance,
      continuation, or conversion of a Borrowing to the Lender by telephone or
      facsimile (which notice shall be irrevocable once given and, if by telephone,
      shall be promptly confirmed in writing). Notices of the continuation of a
      Borrowing of LIBOR Loans for an additional Interest Period or of the conversion
      of part or all of a Borrowing of LIBOR Loans into Base Rate Loans or of Base
      Rate Loans into LIBOR Loans must be given by no later than 10:00 a.m. (Chicago
      time) at least three (3) Business Days before the date of the requested
      continuation or conversion. All such notices concerning the advance,
      continuation, or conversion of a Borrowing shall specify the date of the
      requested advance, continuation or conversion of a Borrowing (which shall be
      a

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    Business
      Day), the amount of the requested Borrowing to be advanced, continued, or
      converted, the type of Loans to comprise such new, continued or converted
      Borrowing and, if such Borrowing is to be comprised of LIBOR Loans, the Interest
      Period applicable thereto. The Borrower agrees that the Lender may rely on
      any
      such telephonic or facsimile notice given by any person it in good faith
      believes is an Authorized Representative without the necessity of independent
      investigation, and in the event any such notice by telephone conflicts with
      any
      written confirmation, such telephonic notice shall govern if the Lender has
      acted in reliance thereon. There may be no more than five different Interest
      Periods in effect at any one time, provided that for purposes of determining
      the
      number of Interest Periods in effect at any one time, all Base Rate Loans shall
      be deemed to have one and the same Interest Period.

     

    (a)  [Reserved]
      .

     

    (b)  Borrower’s
      Failure to Notify.
      Any
      outstanding Borrowing of Base Rate Loans shall, subject to Section 6.2 hereof,
      automatically be continued for an additional Interest Period on the last day
      of
      its then current Interest Period as a Base Rate Loan unless the Borrower has
      notified the Lender within the period required by Section 2.5(a) that it intends
      to convert such Borrowing into a Borrowing of LIBOR Loans or notifies the Lender
      within the period required by Section 2.8(a) that it intends to prepay such
      Borrowing. If the Borrower fails to give notice pursuant to Section 2.5(a)
      above
      of the continuation or conversion of any outstanding principal amount of a
      Borrowing of LIBOR Loans before the last day of its then current Interest Period
      within the period required by Section 2.5(a) and has not notified the Lender
      within the period required by Section 2.8(a) that it intends to prepay such
      Borrowing, such Borrowing shall automatically be converted into a Borrowing
      of
      Base Rate Loans, subject to Section 6.2 hereof. 

     

    Section
      2.8  Interest
      Periods. 
      As provided in Section 2.5(a) hereof, at the time of each request to advance,
      continue, or create by conversion a Borrowing of LIBOR Loans, the Borrower
      shall
      select an Interest Period applicable to such Loans from among the available
      options. The term “Interest
      Period”
means
      the period commencing on the date a Borrowing of Loans is advanced, continued,
      or created by conversion and ending: (a) in the case of Base Rate Loans, on
      the
      last Business Day of the calendar quarter in which such Borrowing is advanced,
      continued, or created by conversion (or on the last day of the following
      calendar quarter if such Loan is advanced, continued or created by conversion
      on
      the last Business Day of a calendar quarter), and (b) in the case of LIBOR
      Loans, 1, 2 or 3 months thereafter; provided,
      however,
      that:

     

    (a)  any
      Interest Period for a Borrowing of Base Rate Loans that otherwise would end
      after the Termination Date shall end on the Termination Date; 

     

    (b)  for
      any
      Borrowing of LIBOR Loans, the Borrower may not select an Interest Period that
      extends beyond the Termination Date;

     

    (c)  whenever
      the last day of any Interest Period would otherwise be a day that is not a
      Business Day, the last day of such Interest Period shall be extended to the
      next
      succeeding Business Day, provided that, if such extension would cause the last
      day of an Interest Period for a Borrowing of LIBOR Loans to occur in the
      following calendar month, the last day of such Interest Period shall be the
      immediately preceding Business Day; and

     

    
      
        
        

      

      
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    (d)  for
      purposes of determining an Interest Period for a Borrowing of LIBOR Loans,
      a
      month means a period starting on one day in a calendar month and ending on
      the
      numerically corresponding day in the next calendar month; provided,
      however,
      that if
      there is no numerically corresponding day in the month in which such an Interest
      Period is to end or if such an Interest Period begins on the last Business
      Day
      of a calendar month, then such Interest Period shall end on the last Business
      Day of the calendar month in which such Interest Period is to end.

     

    Section
      2.9  Maturity
      of Loans. 
      Unless an earlier maturity is provided for hereunder (whether by acceleration
      or
      otherwise), each Loan shall mature and become due and payable by the Borrower
      on
      the Termination Date. 

     

    Section
      2.10  Prepayments.  
      Section
      2.11 
      The Borrower may prepay without premium or penalty and in whole or in part
      (but,
      if in part, then: (i) if such Borrowing is of Base Rate Loans, in an amount
      not
      less than $1,000,000 and integral multiples of $500,000 in excess thereof,
      (ii)
      if such Borrowing is of LIBOR Loans, in an amount not less than $2,000,000
      and
      integral multiples of $1,000,000 in excess thereof and (iii) in an amount such
      that the minimum amount required for a Borrowing pursuant to Section 2.4 hereof
      remains outstanding) any Borrowing of LIBOR Loans upon three Business Days’
prior notice to the Lender or, in the case of a Borrowing of Base Rate Loans,
      notice delivered to the Lender no later than 10:00 a.m. (Chicago time) on the
      date of prepayment, such prepayment to be made by the payment of the principal
      amount to be prepaid and accrued interest thereon to the date fixed for
      prepayment. In the case of LIBOR Loans, any amounts owing under Section 2.11
      hereof as a result of such prepayment shall be paid contemporaneously with
      such
      prepayment. Any amount paid or prepaid before the Termination Date may, subject
      to the terms and conditions of this Agreement, be borrowed, repaid and borrowed
      again.

     

    (a)  At
      any
      time that the Borrower becomes aware, or should have become aware (pursuant
      to
      Borrower’s ordinary business practices) that the aggregate amount of outstanding
      Loans shall at any time for any reason exceed the Revolving Credit Commitment
      then in effect, the Borrower shall, immediately notify the Lender of this
      determination. Within two (2) Business Days of the delivery of the notice
      described in the preceding sentence, the Borrower shall, without further notice
      or demand, pay the amount of such excess to the Lender as a prepayment of the
      Loans. Each such prepayment shall be accompanied by a payment of all accrued
      and
      unpaid interest on the Loans prepaid and shall be subject to Section
      2.11.

     

    Section
      2.12  Default
      Rate. 
      If any payment of principal on any Loan or other Obligation is not made when
      due
      (whether by acceleration or otherwise), such Loan shall bear interest (computed
      on the basis of a year of 360 days and actual days elapsed or, if based on
      the
      rate described in clause (i) of the definition of Base Rate, on the basis of
      a
      year of 365 or 366 days, as applicable, and the actual number of days elapsed)
      from the date such payment was due until paid in full, payable on demand, at
      a
      rate per annum equal to:

     

    (a)  for
      any
      Base Rate Loan or Obligation other than a LIBOR Loan, the sum of two percent
      (2%) plus the Applicable Margin plus the Base Rate from time to time in effect;
      and

     

    (b)  for
      any
      LIBOR Loan, the sum of two percent (2%) plus the rate of interest in effect
      thereon at the time of such default until the end of the Interest Period
      applicable thereto and, thereafter, at a rate per annum equal to the sum of
      two
      percent (2%) plus the Applicable Margin plus the Base Rate from time to time
      in
      effect.

     

    
      
        
        

      

      
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    Section
      2.13  Evidence
      of Debt.
       (a)
       Lender shall maintain in accordance with its usual practice an account or
      accounts evidencing the indebtedness of the Borrower to Lender resulting from
      each Loan owing to Lender from time to time, including the amounts of principal
      and interest payable and paid to Lender from time to time hereunder in respect
      of Loans. The Borrower agrees that upon notice by Lender to the Borrower to
      the
      effect that a Note is required or appropriate in order for Lender to evidence
      (whether for purposes of pledge, enforcement or otherwise) the Loans owing
      to,
      or to be made by, Lender under the Credit Documents, the Borrower shall promptly
      execute and deliver to Lender a promissory note in the form of Exhibit A hereto
      (such promissory note is hereinafter referred to as the “Note”).
      

     

    Section
      2.14  Funding
      Indemnity. 
      If Lender shall incur any loss, cost or expense (including, without limitation,
      any loss, cost or expense (excluding loss of margin) incurred by reason of
      the
      liquidation or re-employment of deposits or other funds acquired by Lender
      to
      fund or maintain any LIBOR Loan or the relending or reinvesting of such deposits
      or amounts paid or prepaid to Lender) as a result of:

     

    (a)  any
      payment (whether by acceleration or otherwise), prepayment or conversion of
      a
      LIBOR Loan on a date other than the last day of its Interest
      Period,

     

    (b)  any
      failure (because of a failure to meet the conditions of Section 6 or otherwise)
      by the Borrower to borrow or continue a LIBOR Loan, or to convert a Base Rate
      Loan into a LIBOR Loan, on the date specified in a notice given pursuant to
      Section 2.5(a) or established pursuant to Section 2.5(c) hereof,

     

    (c)  any
      failure by the Borrower to make any payment of principal on any LIBOR Loan
      when
      due (whether by acceleration or otherwise), or

     

    (d)  any
      acceleration of the maturity of a LIBOR Loan as a result of the occurrence
      of
      any Event of Default hereunder,

     

    then,
      upon the demand of Lender, the Borrower shall pay to Lender such amount as
      will
      reimburse Lender for such loss, cost or expense. If Lender makes such a claim
      for compensation, it shall provide to the Borrower a certificate executed by
      an
      officer of Lender setting forth the amount of such loss, cost or expense in
      reasonable detail (including an explanation of the basis for and the computation
      of such loss, cost or expense) and the amounts shown on such certificate if
      reasonably calculated shall be conclusive absent manifest error.

     

    Section
      2.15  Revolving
      Credit Commitment Terminations. 
      The Borrower shall have the right at any time and from time to time, upon five
      (5) Business Days’ prior written notice to the Lender, to terminate the
      Revolving Credit Commitment without premium or penalty, in whole or in part,
      any
      partial termination to be in an amount not less than $2,000,000 and integral
      multiples of $1,000,000 in excess thereof, provided
      that the
      Revolving Credit Commitment may not be reduced to an amount less than the sum
      of
      the amount of all Loans then outstanding. Any termination of Revolving Credit
      Commitment pursuant to this Section 2.12 may not be reinstated.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    Section
      2.16  Regulation
      D Compensation.
       The Lender may require the Borrower to pay, contemporaneously with each
      payment of interest on the LIBOR Loans, additional interest on the related
      LIBOR
      Loans of Lender at a rate per annum equal to the excess of (i)(A) the applicable
      LIBOR rate (or other base rate determined pursuant to Section 2.9(b)) divided
      by
      (B) one minus the LIBOR Reserve Percentage over (ii) the rate specified in
      clause (i)(A). Any computation by Lender of such additional interest shall
      be
      conclusive absent manifest error. If the Lender requires payment of such
      additional interest (x) it shall notify the Borrower that it is subject to
      LIBOR
      reserves under Regulation D of the Board of Governors of the Federal Reserve
      System (or any successor regulation), in which case such additional interest
      on
      the LIBOR Loans of Lender shall be payable to Lender at the place indicated
      in
      such notice with respect to each Interest Period commencing at least five (5)
      Business Days after the giving of such notice and (y) shall notify the Borrower
      at least five (5) Business Days prior to each date on which interest is payable
      on the LIBOR Loans of the amount then due under this Section.

     

    Section
      2.17  Arbitrage
      Compensation. 
      If at the time of the making of any Loan hereunder, the interest rate payable
      hereunder in respect of such Loan is less than the rate (as determined by the
      Lender in consultation with the Borrower) at which funds of comparable term
      and
      amount are generally available to the Borrower in the commercial paper market
      (the “CP
      Rate”)
      (an
“Arbitrage
      Condition”),
      the
      Borrower agrees to pay to the Lender arbitrage compensation on such Loan at
      a
      rate equal to the difference between the effective interest rate payable
      hereunder (inclusive of all fees) in respect of such Loan and the CP Rate as
      applied to such Loan. Such payments shall continue, at the time and in the
      manner set forth for payments of interest on such Loan, for as long as the
      Arbitrage Condition continues. Upon the termination of the Arbitrage Condition
      for any reason (as determined by the Lender in consultation with the Borrower),
      such payments shall no longer be due with respect to such Loan, even if a future
      Arbitrage Condition were to occur prior to repayment in full of such
      Loan.

     

    SECTION
      3.  FEES.

     

    Section
      3.1  Fees.

     

    (a)  Commitment
      Fee.
      For the
      period from the Effective Date to and including the Termination Date, Borrower
      shall pay to the Lender a commitment fee accruing at a rate per annum equal
      to
      the Commitment Fee Rate on the average daily amount of the unused Revolving
      Credit Commitment. Such commitment fee is payable in arrears on December 31,
      2006, on the last Business Day of each calendar quarter thereafter and on the
      Termination Date, unless the Revolving Credit Commitment are terminated in
      whole
      on an earlier date, in which event the fee for the period to but not including
      the date of such termination shall be paid in whole on the date of such
      termination.

     

    (b)  [Reserved].

     

    (c)  Utilization
      Fee. 
      From and after the Effective Date, for any day on which the aggregate principal
      amount of Loans then outstanding exceeds fifty percent (50%) of the Revolving
      Credit Commitment then in effect, Borrower shall pay to the Lender a utilization
      fee accruing at a rate per annum equal to the Utilization Fee Rate on the
      aggregate amount of Loans outstanding on such date. Such fee is payable in
      arrears on the last Business Day of each calendar quarter and on the Termination
      Date, and if the Revolving Credit Commitment is terminated in whole prior to
      the
      Termination Date, the fee for the period to but not including the date of such
      termination shall be paid in whole on the date of such termination.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (d)  Upfront
      Fee.
      The
      Borrower shall pay to the Lender a fee (the “Upfront
      Fee”)
      in an
      amount equal to $6,250 representing two and one half basis points (0.025%)
      of
      the Revolving Credit Commitment. The Upfront Fee shall be non-refundable and
      shall be fully earned, due and payable in full on the Effective
      Date.

     

    (e)  [Reserved].
      

     

    (f)  [Reserved].
      

     

    (g)  Fee
      Calculations.
      All
      fees payable under this Agreement shall be payable in U.S. Dollars and shall
      be
      computed on the basis of a year of 360 days, for the actual number of days
      elapsed. All determinations of the amount of fees owing hereunder (and the
      components thereof) shall be made by the Lender and shall be conclusive absent
      manifest error..

     

    SECTION
      4.  PLACE
      AND
      APPLICATION OF PAYMENTS.

     

    Section
      4.1  Place
      and Application of Payments. 
      All payments of principal of and interest on the Loans, and of all other
      Obligations and other amounts payable by the Borrower under the Credit
      Documents, shall be made by the Borrower to the Lender by no later than 12:30
      p.m. (Chicago time) on the due date thereof at the principal office of the
      Lender in New York, New York, pursuant to the payment instructions set forth
      on
      Part A of Schedule 1 hereof (or such other location in the United States as
      the
      Lender may designate to the Borrower). Any payments received after such time
      shall be deemed to have been received by the Lender on the next Business Day.
      All such payments shall be made free and clear of, and without deduction for,
      any set-off, counterclaim, levy, or any other deduction of any kind in U.S.
      Dollars, in immediately available funds at the place of payment.

     

    SECTION
      5.  REPRESENTATIONS
      AND WARRANTIES.

     

    The
      Borrower hereby represents and warrants to the Lender as to itself and, where
      the following representations and warranties apply to Subsidiaries, as to each
      of its Subsidiaries, as follows:

     

    Section
      5.1  Corporate
      Organization and Authority. 
      The Borrower is duly organized and existing in good standing under the laws
      of
      the State of Illinois; has all necessary corporate power to carry on its present
      business; and is duly licensed or qualified and, in good standing in each
      jurisdiction in which the failure to be so licensed, qualified or in good
      standing would have a Material Adverse Effect.

     

    Section
      5.2  Corporate
      Authority and Validity of Obligations.
       The Borrower has full right and authority to enter into this Agreement and
      the other Credit Documents to which it is a party, to make the borrowings herein
      provided for, to issue its Notes in evidence thereof, and to perform all of
      its
      obligations under the Credit Documents to which it is a party. Each Credit
      Document to which it is a party has been duly authorized, executed and delivered
      by the Borrower and constitutes valid and binding obligations of the Borrower
      enforceable in accordance with its terms, except as such enforceability may
      be
      limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
      

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    affecting
      the enforceability of creditors’ rights generally and by equitable principles of
      general applicability (regardless of whether such enforceability is considered
      in a proceeding in equity or at law). No Credit Document, nor the performance
      or
      observance by the Borrower of any of the matters or things therein provided
      for,
      contravenes any provision of law or any charter or by-law provision of the
      Borrower or any material Contractual Obligation of or affecting the Borrower
      or
      any of its Properties or results in or requires the creation or imposition
      of
      any Lien on any of the Properties or revenues of the Borrower.

     

    Section
      5.3  Financial
      Statements. 
      All financial statements heretofore delivered to the Lender showing historical
      performance of the Borrower for each of the Borrower’s fiscal quarters and/or
      years ending on or before June 30, 2006, have been prepared in accordance with
      generally accepted accounting principles applied on a basis consistent, except
      as otherwise noted therein, with that of the previous fiscal year. Each of
      such
      financial statements fairly presents on a consolidated basis the financial
      condition of the Borrower and its Subsidiaries as of the dates thereof and
      the
      results of operations for the periods covered thereby. The Borrower and its
      Subsidiaries have no material contingent liabilities other than those disclosed
      in the financial statements or in comments or footnotes thereto, or in any
      report supplementary thereto, most recently furnished to the Lender as of the
      time such representation and warranty is made, including reports of the Borrower
      filed with the SEC from time to time. Since June 30, 2006 through the Effective
      Date, there has been no event or series of events which has resulted in a
      Material Adverse Effect.

     

    Section
      5.4  Approvals. 
      No authorization, approval, consent, license, exemption, filing or registration
      with any court or governmental department, agency or instrumentality, nor any
      approval or consent of the stockholders of the Borrower or any Subsidiary or
      from any other Person, is necessary to the valid execution, delivery or
      performance by the Borrower or any Subsidiary of any Credit Document to which
      it
      is a party.

     

    Section
      5.5  ERISA. 
      With respect to each Plan, the Borrower and each other member of the Controlled
      Group has fulfilled its obligations under the minimum funding standards of
      and
      is in compliance in all material respects with the Employee Retirement Income
      Security Act of 1974, as amended (“ERISA”),
      and
      with the Code to the extent applicable to it and has not incurred any liability
      to the Pension Benefit Guaranty Corporation (“PBGC”)
      or a
      Plan under Title IV of ERISA other than a liability to the PBGC for premiums
      under Section 4007 of ERISA. Neither the Borrower nor any Subsidiary has any
      contingent liabilities for any post-retirement benefits under a Welfare Plan,
      other than liability for continuation coverage described in Part 6 of Title
      I of
      ERISA.

     

    Section
      5.6  Government
      Regulation. 
      Neither the Borrower nor any Subsidiary is an “investment
      company”
within
      the meaning of the Investment Company Act of 1940, as amended.

     

    Section
      5.7  Margin
      Stock; Proceeds. 
      Neither the Borrower nor any Subsidiary is engaged principally, or as one of
      its
      primary activities, in the business of extending credit for the purpose of
      purchasing or carrying margin stock (“margin
      stock”
to
      have
      the same meaning herein as in Regulation U of the Board of Governors of the
      Federal Reserve System). The Borrower will not use the proceeds of any Loan
      in a
      manner that violates any provision of Regulation U or X of the Board of
      Governors of the Federal Reserve System. The Borrower is not subject to
      regulation under the Investment Company Act of 1940. In addition, the Borrower
      is not an “investment company” registered or required to be registered under the
      Investment Company Act of 1940. Proceeds of the Loans will only be used to
      backstop commercial paper issued by the Borrower and for general corporate
      purposes.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    Section
      5.8  Full
      Disclosure. 
      All information heretofore furnished by the Borrower to the Lender for purposes
      of or in connection with the Credit Documents or any transaction contemplated
      thereby is, and all such information hereafter furnished by the Borrower to
      the
      Lender will be, to the best of the Borrower’s knowledge, after due inquiry, true
      and accurate in all material respects and not misleading on the date as of
      which
      such information is stated or certified.

     

    SECTION
      6.  CONDITIONS
      PRECEDENT.

     

    The
      obligation of Lender to advance any Loan shall be subject to the following
      conditions precedent:

     

    Section
      6.1  Initial
      Credit Event. 
      Before or concurrently with the Effective Date:

     

    (a)  The
      Lender shall have received the favorable written opinion of counsel to the
      Borrower in form and substance reasonably acceptable to the Lender;

     

    (b)  The
      Lender shall have received copies of (i) the Articles of Incorporation, together
      with all amendments and (ii) the Borrower’s bylaws (or comparable constituent
      documents) and any amendments thereto, certified in each instance by its
      Secretary or an Assistant Secretary;

     

    (c)  The
      Lender shall have received copies of resolutions of the Borrower’s Board of
      Directors authorizing the execution and delivery of the Credit Documents and
      the
      consummation of the transactions contemplated thereby together with specimen
      signatures of the persons authorized to execute such documents on the Borrower’s
      behalf, all certified in each instance by its Secretary or an Assistant
      Secretary;

     

    (d)  The
      Lender shall have received, if requested, an executed Note of the Borrower
      dated
      the date hereof and otherwise in compliance with the provisions of Section
      2.10(a) hereof;

     

    (e)  The
      Lender shall have received a duly executed original of (i) this Agreement,
      (ii)
      a list of the Borrower’s Authorized Representatives and (iii) such other
      documents as the Lender may reasonably request;

     

    (f)  The
      Lender shall have received a certificate by the chief financial officer of
      the
      Borrower, stating that on the Effective Date no Default or Event of Default
      has
      occurred and is continuing, and that all representations and warranties set
      forth herein are true and correct as of such date;

     

    (g)  The
      Lender shall have received evidence that Borrower is validly existing and in
      good standing under the laws of the jurisdiction of incorporation;

     

    (h)  The
      Lender shall have received payment of the Upfront Fee; and

     

    
      
        
        

      

      
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    (i)  The
      Lender shall have received a duly executed Compliance Certificate containing
      information as of June 30, 2006. 

     

    Section
      6.2  All
      Credit Events. 
      As of the time of each Credit Event hereunder:

     

    (a)  The
      Lender shall have received the notice required by Section 2.5
      hereof;

     

    (b)  Each
      of
      the representations and warranties set forth in Section 5 hereof (except the
      last sentence of Section 5.3) shall be and remain true and correct in all
      material respects as of said time, taking into account any amendments to such
      Section (including without limitation any amendments, modifications and updates
      to the Schedules referenced therein) made after the date of this Agreement
      in
      accordance with its provisions, except that if any such representation or
      warranty relates solely to an earlier date it need only remain true as of such
      date; and

     

    (c)  The
      Borrower shall be in full compliance with all of the terms and conditions
      hereof, and no Default or Event of Default shall have occurred and be continuing
      or would occur as a result of such Credit Event.

     

    Each
      request for a Borrowing consisting of an advance of a Loan hereunder shall
      be
      deemed to be a representation and warranty by the Borrower on the date of such
      Credit Event as to the facts specified in paragraphs (b) and (c) of this Section
      6.2. 

     

    SECTION
      7.  COVENANTS.

     

    The
      Borrower covenants and agrees that, so long as any Loan is outstanding
      hereunder, or any Revolving Credit Commitment is available to or in use by
      the
      Borrower hereunder, except to the extent compliance in any case is waived in
      writing by the Lender:

     

    Section
      7.1  Corporate
      Existence. 
      Borrower shall preserve and maintain its corporate existence.

     

    Section
      7.2  ERISA. 
      The Borrower will, and will cause each of its Subsidiaries to, promptly pay
      and
      discharge all obligations and liabilities arising under ERISA of a character
      which if unpaid or unperformed might result in the imposition of a Lien against
      any of its properties or assets and will promptly notify the Lender of (i)
      the
      occurrence of any reportable event (as defined in ERISA) affecting a Plan,
      other
      than any such event of which the PBGC has waived notice by regulation, (ii)
      receipt of any notice from PBGC of its intention to seek termination of any
      Plan
      or appointment of a trustee therefor, (iii) its or any of its Subsidiaries’
intention to terminate or withdraw from any Plan, and (iv) the occurrence of
      any
      event affecting any Plan which could result in the incurrence by the Borrower
      or
      any of its Subsidiaries of any material liability, fine or penalty, or any
      material increase in the contingent liability of the Borrower or any of its
      Subsidiaries under any post-retirement Welfare Plan benefit.

     

    Section
      7.3  Financial
      Reports and Other Information.
       (a)  The Borrower will maintain a system of accounting in accordance
      with GAAP and will furnish to the Lender and its duly authorized representatives
      such information respecting the business and financial condition of the Borrower
      as Lender may reasonably request; and without any request, the Borrower will
      furnish each of the following to the Lender: 

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    i  within
      one hundred twenty (120) days after the end of its fiscal year ending September
      30, 2006, a copy of the Borrower’s financial statements for such fiscal year,
      including the consolidated balance sheet of the Borrower for such year and
      the
      related statement of income and statement of cash flow, as certified by
      independent public accountants of recognized national standing selected by
      the
      Borrower in accordance with GAAP with such accountants’ opinion to the effect
      that the financial statements have been prepared in accordance with GAAP and
      present fairly in all material respects in accordance with GAAP the consolidated
      financial position of the Borrower and its Subsidiaries as of the close of
      such
      fiscal year and the results of their operations and cash flows for the fiscal
      year then ended and that an examination of such accounts in connection with
      such
      financial statements has been made in accordance with generally accepted
      auditing standards and, accordingly, such examination included such tests of
      the
      accounting records and such other auditing procedures as were considered
      necessary in the circumstances;

     

    ii  within
      sixty (60) days after the end of each of the quarterly fiscal periods of the
      Borrower during the term hereof, a consolidated un-audited balance sheet of
      the
      Borrower, and the related statement of income and statement of cash flow, as
      of
      the close of such period, all of the foregoing prepared by the Borrower in
      reasonable detail in accordance with GAAP and certified by the Borrower’s chief
      financial officer as fairly presenting the financial condition as at the dates
      thereof and the results of operations for the periods covered thereby;
      and

     

    iii  within
      five (5) days after Borrower files a Form 8-K with the SEC, a copy of said
      form
      8-K. 

     

    (b)  Each
      financial statement furnished to the Lender pursuant to subsection (i) or (ii)
      of this Section 7.3 shall be accompanied by (A) a written certificate signed
      by
      the Borrower’s chief financial officer to the effect that no Default or Event of
      Default has occurred during the period covered by such statements or, if any
      such Default or Event of Default has occurred during such period, setting forth
      a description of such Default or Event of Default and specifying the action,
      if
      any, taken by the Borrower to remedy the same, and (B) a Compliance Certificate
      in the form of Exhibit B hereto showing the Borrower’s compliance with the
      covenants set forth in Sections 7.5 and 7.8 hereof.

     

    (c)  The
      Borrower will promptly (and in any event within five Business Days after an
      officer of the Borrower has knowledge thereof) give notice to the Lender of
      the
      occurrence of any Default or Event of Default.

     

    Section
      7.4  Regulation
      U; Proceeds. 
      The Borrower will not use any part of the proceeds of any of the Borrowings,
      directly or indirectly to purchase or carry any margin stock (as defined in
      Section 5.7 hereof) or to extend credit to others for the purpose of purchasing
      or carrying any such margin stock. The Borrower will only use proceeds of the
      Loans to backstop commercial paper issued by the Borrower and for general
      corporate purposes.

     

    Section
      7.5  Sales
      of
      Assets.  The
      Borrower will not during the term of this Agreement sell, lease or otherwise
      dispose of more that (i) thirty-five percent (35%) of the consolidated fixed
      assets of the Borrower or (ii) fifteen percent (15%) of the consolidated
      "regulated assets" of the Borrower. For purposes of this Section 7.5(a) the
      amount of consolidated fixed assets shall be determined using the net book
      value
      of such assets at the time of such sale, lease or disposition.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (b)  The
      Borrower will not sell, transfer or otherwise dispose of, or permit any
      Subsidiary to issue, sell, transfer or otherwise dispose of, more than twenty
      percent (20%) of any of its public utility Subsidiaries’ shares of stock of any
      class (including as “stock” for purposes of this Section, any warrants, rights
      or options to purchase or otherwise acquire stock or other Securities
      exchangeable for or convertible into stock).

     

    Section
      7.6  Capital
      Ratio. 
      The Borrower will not at any time permit the Capital Ratio to exceed 0.65 to
      1.00.

     

    Section
      7.7  Compliance
      with Laws. 
      Without limiting any of the other covenants of the Borrower in this Section
      7,
      the Borrower will conduct its business, and otherwise be, in compliance with
      all
      applicable laws, regulations, ordinances and orders of any governmental or
      judicial authorities; provided,
      however,
      that
      the Borrower shall not be required to comply with any such law, regulation,
      ordinance or order if the failure to comply therewith could not reasonably
      be
      expected to have a Material Adverse Effect.

     

    Section
      7.8  Mergers
      and Consolidations. 
      The Borrower will not, and will not permit any public utility Subsidiary, to
      consolidate with or be a party to merger with any other Person; provided,
      however,
      that
      the Borrower or any public utility Subsidiary of the Borrower may, upon prior
      notice to the Lender, enter into one or more mergers or acquisitions with any
      other Person so long as (a) in the case of the Borrower, the Borrower is the
      surviving entity and (b) in the case of a public utility Subsidiary of the
      Borrower, the Borrower will at all times continue to own at least 80% of the
      equity securities of such public utility Subsidiary. The Lender acknowledges
      that Borrower has entered into an agreement and plan of merger with a subsidiary
      of WPS Resources Corporation.

     

    SECTION
      8.  EVENTS
      OF
      DEFAULT AND REMEDIES.

     

    Section
      8.1  Events
      of Default. 
      Any one or more of the following shall constitute an Event of
      Default:

     

    (a)  non-payment
      by Borrower (i) when due of the principal of any Loan or (ii) in the payment
      of
      fees, interest or of any other Obligation within five (5) days of the due
      date;

     

    (b)  default
      by the Borrower in the observance or performance of any covenant set forth
      in
      Section 7.1 with regard to the Borrower or (ii) Section 7.3(c), Section 7.4
      through 7.6 hereof;

     

    (c)  any
      default by the Borrower in the observance or performance of any provision
      hereof, or of any other Credit Document not mentioned in (a) or (b) above,
      which
      is not remedied within thirty (30) days after notice thereof shall have been
      given to the Borrower by the Lender, provided
      that,
      with respect only to Section 7.7, if Borrower (or its Subsidiary, as applicable)
      has made good faith efforts to cure such default, then the Borrower shall be
      afforded an additional period of time to cure such default, such additional
      cure
      period not to exceed thirty (30) days;

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (d)  failure
      to pay when due Indebtedness in an aggregate principal amount of $15,000,000
      or
      more of the Borrower, or (ii) default shall occur under one or more indentures,
      agreements or other instruments under which any Indebtedness of the Borrower
      in
      an aggregate principal amount of $15,000,000 or more and such default shall
      continue for a period of time sufficient to permit the holder or beneficiary
      of
      such Indebtedness (including, without limitation the Lender with respect to
      loans, credit facilities and other extensions of credit other than pursuant
      to
      this Agreement) or a trustee therefor to cause the acceleration of the maturity
      of any such Indebtedness or any mandatory unscheduled prepayment, purchase
      or
      funding;

     

    (e)  representation
      or warranty made herein or in any other Credit Document by the Borrower, or
      in
      any statement or certificate furnished pursuant hereto or pursuant to any other
      Credit Document by the Borrower, or in connection with any Credit Document,
      proves untrue in any material respect as of the date of the issuance or making,
      or deemed making or issuance, thereof;

     

    (f)  Borrower
      shall (i) have entered involuntarily against it an order for relief under the
      United States Bankruptcy Code, as amended, or any analogous action is taken
      under any other applicable law relating to bankruptcy or insolvency and such
      action continues un-discharged or is not dismissed or stayed for a period of
      sixty (60) days, (ii) fail to pay its debts generally as they become due and
      such failure to pay would constitute an Event of Default under Section 8.1(d)
      or
      admit in writing its inability to pay its debts generally as they become due,
      (iii) make an assignment for the benefit of creditors, (iv) apply for, seek,
      consent to, or acquiesce in, the appointment of a receiver, custodian, trustee,
      examiner, liquidator or similar official for it or any substantial part of
      its
      Property, (v) institute any proceeding seeking to have entered against it an
      order for relief under the United States Bankruptcy Code, as amended, to
      adjudicate it insolvent, or seeking dissolution, winding up, liquidation,
      reorganization, arrangement, adjustment or composition of it or its debts under
      any law relating to bankruptcy, insolvency or reorganization or relief of
      debtors or fail to file an answer or other pleading denying the material
      allegations of any such proceeding filed against it, (vi) take any corporate
      action (such as the passage by its board of directors of a resolution) in
      furtherance of any matter described in parts (i)-(v) above, or (vii) fail to
      contest in good faith any appointment or proceeding described in Section 8.1(g)
      hereof;

     

    (g)  Custodian,
      receiver, trustee, examiner, liquidator or similar official shall be appointed
      for the Borrower or any of its Significant Subsidiaries, or any substantial
      part
      of any of their Property, or a proceeding described in Section 8.1(f)(v) shall
      be instituted against the Borrower, and such appointment continues un-discharged
      or such proceeding continues un-dismissed or un-stayed for a period of sixty
      (60) days;

     

    (h)  the
      Borrower shall fail within thirty (30) days to pay, bond or otherwise discharge
      any judgment or order for the payment of money in excess of $15,000,000 which
      is
      not stayed on appeal or otherwise being appropriately contested in good faith
      in
      a manner that stays execution thereon; 

     

    (i)  the
      Borrower or any other member of the Controlled Group shall fail to pay when
      due
      an amount or amounts which it shall have become liable, to pay to the PBGC
      or to
      a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or
      Plans
      having aggregate Unfunded Vested Liabilities in excess of $5,000,000
      (collectively, a “Material
      Plan”)
      shall
      be filed under Title IV of ERISA by the Borrower or 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    any
      other
      member of the Controlled Group, any plan administrator or any combination of
      the
      foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
      to
      terminate or to cause a trustee to be appointed to administer any Material
      Plan
      or a proceeding shall be instituted by a fiduciary of any Material Plan against
      the Borrower or any other member of the Controlled Group to enforce Section
      515
      or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed within
      thirty (30) days thereafter; or a condition shall exist by reason of which
      the
      PBGC would be entitled to obtain a decree adjudicating that any Material Plan
      must be terminated; or

     

    (j)  any
      Event
      of Default under the Existing Credit Agreement, it being the express intent
      of
      the parties hereto that this Agreement shall benefit from the covenants and
      agreements contained in the Existing Credit Agreement.

     

    Section
      8.2  Non-Bankruptcy
      Defaults. 
      When any Event of Default other than those described in subsections (f) or
      (g)
      of Section 8.1 hereof has occurred and is continuing, the Lender may: (a)
      terminate the remaining Revolving Credit Commitment and all other obligations
      of
      the Lender hereunder (other than the obligations of the Lender under section
      11.21 hereof) on the date stated in such notice (which may be the date thereof);
      and (b) declare the principal of and the accrued interest on the outstanding
      Note to be forthwith due and payable and thereupon the Note, including both
      principal and interest thereon, and all other Obligations, shall be and become
      immediately due and payable together with all other amounts payable under the
      Credit Documents without further demand, presentment, protest or notice of
      any
      kind. 

     

    Section
      8.3  Bankruptcy
      Defaults. 
      When any Event of Default described in subsections (f) or (g) of Section 8.1
      hereof has occurred and is continuing, then the Note shall immediately become
      due and payable together with all other amounts payable under the Credit
      Documents without presentment, demand, protest or notice of any kind and the
      obligation of the Lender to extend further credit pursuant to any of the terms
      hereof shall immediately terminate.

     

    Section
      8.4  Expenses. 
      The Borrower agrees to pay to the Lender and any other holder of the Note,
      all
      costs and expenses incurred or paid by the Lender or any such holder, including
      reasonable attorneys’ fees (including reasonable allocable fees of in-house
      counsel) and court costs, in connection with any Default or Event of Default
      by
      the Borrower hereunder or in connection with the enforcement of any of the
      Credit Documents.

     

    SECTION
      9.  CHANGE
      IN
      CIRCUMSTANCES.

     

    Section
      9.1  Change
      of Law. 
      Notwithstanding any other provisions of this Agreement or the Note, if at any
      time after the date hereof any change in applicable law or regulation or in
      the
      interpretation thereof makes it unlawful for Lender to make or continue to
      maintain LIBOR Loans or to perform its obligations as contemplated hereby,
      Lender shall promptly give notice thereof to the Borrower and Lender’s
      obligations to make or maintain LIBOR Loans under this Agreement shall terminate
      until it is no longer unlawful for Lender to make or maintain LIBOR Loans.
      The
      Borrower shall prepay on demand the outstanding principal amount of any such
      affected LIBOR Loans, together with all interest accrued thereon at a rate
      per
      annum equal to the interest rate applicable to such Loan; provided,
      however,
      subject
      to all of the terms and conditions of this Agreement, the Borrower may then
      elect to borrow the principal amount of the affected LIBOR Loans from Lender
      by
      means of Base Rate Loans from Lender.

     

    
      
        
        

      

      
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    Section
      9.2  Unavailability
      of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR.
       If on or prior to the first day of any Interest Period for any Borrowing
      of LIBOR Loans:

     

    (a)  the
      Lender determines that deposits in U.S. Dollars (in the applicable amounts)
      are
      not being offered to major banks in the LIBOR interbank market for such Interest
      Period, or that by reason of circumstances affecting the interbank LIBOR market
      adequate and reasonable means do not exist for ascertaining the applicable
      LIBOR, or

     

    (b)  Lender
      reasonably determines that LIBOR as reasonably determined by the Lender will
      not
      adequately and fairly reflect the cost to Lender of funding its LIBOR Loans
      or
      Loan for such Interest Period, then the Lender shall forthwith give notice
      thereof to the Borrower, whereupon until the Lender notifies the Borrower that
      the circumstances giving rise to such suspension no longer exist, the
      obligations of the Lender to make LIBOR Loans shall be suspended.

     

    Section
      9.3  Increased
      Cost and Reduced Return.  
      Section
      9.4   
      If, on or after the date hereof, the adoption of any applicable law, rule or
      regulation, or any change therein, or any change in the interpretation or
      administration thereof by any governmental authority, central bank or comparable
      agency charged with the interpretation or administration thereof, or compliance
      by Lender (or its Lending Office) with any request or directive (whether or
      not
      having the force of law but, if not having the force of law, compliance with
      which is customary in the relevant jurisdiction) of any such authority, central
      bank or comparable agency:

     

    i  shall
      subject Lender (or its Lending Office) to any tax, duty or other charge with
      respect to its LIBOR Loans, its Notes or
      its
      participation in any thereof or its obligation to make Eurodollar Loans, or
      to
      participate therein, or
      shall
      change the basis of taxation of payments to Lender (or its Lending Office)
      of
      the principal of or interest on its LIBOR Loans, Letter(s) of Credit, or
      participations therein or any other amounts due under this Agreement in respect
      of its LIBOR Loans or its obligation to make LIBOR Loans, (except for changes
      in
      the rate of tax on the overall net income or profits of Lender or its Lending
      Office imposed by the jurisdiction in which Lender or its lending office is
      incorporated in which Lender’s principal executive office or Lending Office is
      located); or

     

    ii  shall
      impose, modify or deem applicable any reserve, special deposit or similar
      requirement (including, without limitation, any such requirement imposed by
      the
      Board of Governors of the Federal Reserve System, but excluding with respect
      to
      any LIBOR Loans any such requirement included in an applicable LIBOR Reserve
      Percentage) against assets of, deposits with or for the account of, or credit
      extended by, Lender (or its Lending Office) or shall impose on Lender (or its
      Lending Office) or on the interbank market any other condition affecting its
      LIBOR Loans, its Note, or
      its
      obligation to make Eurodollar Loans;

     

    and
      the
      result of any of the foregoing is to increase the cost to Lender (or its Lending
      Office) of making or maintaining any LIBOR Loan, or to reduce the amount of
      any
      sum received or receivable by Lender (or its Lending Office) under this
      Agreement or under its Note with respect thereto, by an amount deemed by Lender
      to be material, then, within fifteen (15) days after demand by Lender, the
      Borrower shall be obligated 

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    to
      pay to
      Lender such additional amount or amounts as will compensate Lender for such
      increased cost or reduction. In the event any law, rule, regulation or
      interpretation described above is revoked, declared invalid or inapplicable
      or
      is otherwise rescinded, and as a result thereof Lender is determined to be
      entitled to a refund from the applicable authority for any amount or amounts
      which were paid or reimbursed by Borrower to Lender hereunder, Lender shall
      refund such amount or amounts to Borrower without interest.

     

    (b)  If,
      after
      the date hereof, Lender shall have determined that the adoption of any
      applicable law, rule or regulation regarding capital adequacy, or any change
      therein (including, without limitation, any revision in the Final Risk-Based
      Capital Guidelines of the Board of Governors of the Federal Reserve System
      (12
      CFR Part 208, Appendix A; 12 CFR Part 225, Appendix A) or of the Office of
      the
      Comptroller of the Currency (12 CFR Part 3, Appendix A), or in any other
      applicable capital rules heretofore adopted and issued by any governmental
      authority), or any change in the interpretation or administration thereof by
      any
      governmental authority, central bank or comparable agency charged with the
      interpretation or administration thereof, or compliance by Lender (or its
      Lending Office) with any request or directive regarding capital adequacy
      (whether or not having the force of law but, if not having the force of law,
      compliance with which is customary in the applicable jurisdiction) of any such
      authority, central bank or comparable agency, has or would have the effect
      of
      reducing the rate of return on Lender’s capital, or on the capital of any
      corporation controlling Lender, as a consequence of its obligations hereunder
      to
      a level below that which Lender could have achieved but for such adoption,
      change or compliance (taking into consideration Lender’s policies with respect
      to capital adequacy) by an amount deemed by Lender to be material, then from
      time to time, within fifteen (15) days after demand by Lender, the Borrower
      shall pay to Lender such additional amount or amounts as will compensate Lender
      for such reduction.

     

    (c)  If
      Lender
      determines to seek compensation under this Section 9.3, it shall notify the
      Borrower of the circumstances that entitle it to such compensation pursuant
      to
      this Section 9.3 and will designate a different Lending Office if such
      designation will avoid the need for, or reduce the amount of, such compensation
      and will not, in the sole judgment of Lender, be otherwise disadvantageous
      to
      Lender. A certificate of Lender claiming compensation under this Section 9.3
      and
      setting forth the additional amount or amounts to be paid to it hereunder shall
      be conclusive in the absence of manifest error. In determining such amount,
      Lender may use any reasonable averaging and attribution methods. Lender shall
      not be entitled to demand compensation under this Section 9.3 for any period
      more than 90 days prior to the day on which such demand is made; provided
      however,
      that
      the foregoing shall in no way limit the right of Lender to demand or receive
      such compensation to the extent that such compensation relates to the
      retroactive application of any law, regulation, guideline or request if such
      demand is made within 90 days after the implementation of such retroactive
      law,
      interpretation, guideline or request. A certificate as to the nature and amount
      of such increased cost, submitted to the Borrower and the Lender in good faith,
      shall be conclusive and binding for all purposes, absent manifest
      error.

     

    Section
      9.5  Lending
      Offices. 
      The Lender may, at its option, elect to make Loans hereunder at the branch,
      office or affiliate specified on the appropriate signature page hereof or in
      the
      assignment agreement which any assignee bank executes pursuant to Section 11.12
      hereof (each a “Lending Office”) for each type of Loan available hereunder or at
      such other of its branches, offices or affiliates as it may from time to time
      elect and designate in a written notice to the Borrower.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    Section
      9.6  Discretion
      of Lender as to Manner of Funding. 
      Notwithstanding any other provision of this Agreement, the Lender shall be
      entitled to fund and maintain its funding of all or any part of its Loans in
      any
      manner it sees fit, it being understood, however, that for the purposes of
      this
      Agreement all determinations hereunder shall be made as if the Lender had
      actually funded and maintained each LIBOR Loan through the purchase of deposits
      in the LIBOR interbank market having a maturity corresponding to such Loan’s
      Interest Period and bearing an interest rate equal to LIBOR for such Interest
      Period.

     

    SECTION
      10.  RESERVED.

     

    SECTION
      11.  MISCELLANEOUS.

     

    Section
      11.1  Withholding
      Taxes. 
      Subject to this Section 11.1, each payment by the Borrower under this Agreement
      or the other Credit Documents shall be made without withholding for or on
      account of any present or future taxes (other than overall net income taxes
      on
      the recipient). If any such withholding is so required, the Borrower shall
      make
      the withholding, pay the amount withheld to the appropriate governmental
      authority before penalties attach thereto or interest accrues thereon and
      forthwith pay such additional amount as may be necessary to ensure that the
      net
      amount actually received by the Lender free and clear of such taxes (including
      such taxes on such additional amount) is equal to the amount which the Lender
      would have received had such withholding not been made. If the Lender pays
      any
      amount in respect of any such taxes, penalties or interest the Borrower shall
      reimburse the Lender for that payment on demand. If the Borrower pays any such
      taxes, penalties or interest, it shall deliver official tax receipts evidencing
      that payment or certified copies thereof to the Lender on or before the
      thirtieth day after payment. If the Lender determines it has received or been
      granted a credit against or relief or remission for, or repayment of, any taxes
      paid or payable by it because of any taxes, penalties or interest paid by the
      Borrower and evidenced by such a tax receipt, Lender shall, to the extent it
      can
      do so without prejudice to the retention of the amount of such credit, relief,
      remission or repayment, pay to the Borrower such amount as Lender determines
      is
      attributable to such deduction or withholding and which will leave Lender (after
      such payment) in no better or worse position than it would have been in if
      the
      Borrower had not been required to make such deduction or withholding. Nothing
      in
      this Agreement shall interfere with the right of the Lender to arrange its
      tax
      affairs in whatever manner it thinks fit nor oblige the Lender to disclose
      any
      information relating to its tax affairs or any computations in connection with
      such taxes.

     

    Section
      11.2  No
      Waiver of Rights. 
      No delay or failure on the part of the Lender or on the part of the holder
      or
      holders of the Note in the exercise of any power or right under any Credit
      Document shall operate as a waiver thereof, nor as an acquiescence in any
      default, nor shall any single or partial exercise thereof preclude any other
      or
      further exercise of any other power or right, and the rights and remedies
      hereunder of the Lender and/or the holder or holders of the Note are cumulative
      to, and not exclusive of, any rights or remedies which any of them would
      otherwise have.

     

    
      
        
        

      

      
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    Section
      11.3  Non-Business
      Day. 
      If any payment of principal or interest on any Loan or of any other Obligation
      shall fall due on a day which is not a Business Day, interest or fees (as
      applicable) at the rate, if any, such Loan or other Obligation bears for the
      period prior to maturity shall continue to accrue on such Obligation from the
      stated due date thereof to and including the next succeeding Business Day,
      on
      which the same shall be payable.

     

    Section
      11.4  Documentary
      Taxes. 
      The Borrower agrees that it will pay any documentary, stamp or similar taxes
      payable in respect to any Credit Document, including interest and penalties,
      in
      the event any such taxes are assessed, irrespective of when such assessment
      is
      made and whether or not any credit is then in use or available
      hereunder.

     

    Section
      11.5  Survival
      of Representations. 
      All representations and warranties made herein or in certificates given pursuant
      hereto shall survive the execution and delivery of this Agreement and the other
      Credit Documents, and shall continue in full force and effect with respect
      to
      the date as of which they were made as long as any credit is in use or available
      hereunder.

     

    Section
      11.6  Survival
      of Indemnities. 
      All indemnities and all other provisions relative to reimbursement to the Lender
      of amounts sufficient to protect the yield of the Lender with respect to the
      Loans, including, but not limited to, Section 2.11, Section 9.3 and Section
      11.15 hereof, shall survive the termination of this Agreement and the other
      Credit Documents and the payment of the Loans and all other
      Obligations.

     

    Section
      11.7  Set-Off. 
      In addition to any rights now or hereafter granted under applicable law and
      not
      by way of limitation of any such rights, upon the occurrence of any Event of
      Default, Lender and each subsequent holder of the Note is hereby authorized
      by
      the Borrower at any time or from time to time, without notice to the Borrower
      or
      to any other Person, any such notice being hereby expressly waived, to set
      off
      and to appropriate and to apply any and all deposits (general or special,
      including, but not limited to, Indebtedness evidenced by certificates of
      deposit, whether matured or unmatured, and in whatever currency denominated)
      and
      any other Indebtedness at any time held or owing by the Lender or that
      subsequent holder to or for the credit or the account of the Borrower, whether
      or not matured, against and on account of the obligations and liabilities of
      the
      Borrower to the Lender or that subsequent holder under the Credit Documents,
      including, but not limited to, all claims of any nature or description arising
      out of or connected with the Credit Documents, irrespective of whether or not
      (a) the Lender or that subsequent holder shall have made any demand hereunder
      or
      (b) the principal of or the interest on the Loans or the Note and other amounts
      due hereunder shall have become due and payable pursuant to Section 8 and
      although said obligations and liabilities, or any of them, may be contingent
      or
      unmatured.

     

    Section
      11.8  Notices. 
      Except as otherwise specified herein, all notices under the Credit Documents
      shall be in writing (including facsimile or other electronic communication)
      and
      shall be given to a party hereunder at its address or facsimile number set
      forth
      below or such other address or facsimile number as such party may hereafter
      specify by notice to the Lender and the Borrower, given by courier, by United
      States certified or registered mail, or by other telecommunication device
      capable of creating a written record of such notice and its receipt. Notices
      under the Credit Documents to the Lender and the Borrower shall be addressed
      to:

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    
      	
              If
                to the Borrower:

            
	 
	
              Peoples
                Energy Corporation

              130
                East Randolph Drive

              Chicago,
                Illinois 60601

              Attention:
                Vice President, Finance

              Facsimile:
                312.373.4213

              Telephone:
                312.240.3818

            
	 
	
              If
                to the Lender: (Notices related to commitments, covenants or extensions
                of
                expiry/termination dates)

            
	 
	
              JPMorgan
                Chase Bank, N.A.

              227
                West Monroe Street, 28th
                Floor

              Mail
                Code IL1-0530

              Chicago,
                IL 60606

              Attn:
                Gabe Simon

              E-Mail:
                gabriel.j.simon@chase.com

              FAX: 312-541-3376

            
	 
	
              Borrowing
                Requests and notices relating to Loans, Interest and
                Fees:

            
	 
	
              JPMorgan
                Chase Bank, N.A.

              10
                S. Dearborn St., 19th
                Flr.

              Mail
                Code IL1-0010

              Chicago,
                IL 60603

              Attn:
                Kerry Sroczynski

              Facsimile:
                (312) 385-7096

              E-mail:
                kerry.j.sroczynski@jpmchase.com

            
	 

    

    Each
      such
      notice, request or other communication shall be effective (i) if given by
      facsimile, when such facsimile is transmitted to the facsimile number specified
      in this Section 11.8 or on the signature pages hereof and a confirmation of
      receipt of such facsimile has been received by the sender, (ii) if given by
      courier, when delivered, (iii) if given by mail, three business days after
      such
      communication is deposited in the mail, registered with return receipt
      requested, addressed as aforesaid or (iv) if given by any other means, when
      delivered at the addresses specified in this Section 11.8; provided
      that
      any
      notice given pursuant to Section 2 hereof shall be effective only upon
      receipt.

     

    Section
      11.9  Counterparts. 
      This Agreement may be executed in any number of counterpart signature pages,
      and
      by the different parties on different counterparts, each of which when executed
      shall be deemed an original but all such counterparts taken together shall
      constitute one and the same instrument. Delivery of an executed counterpart
      via
      facsimile or other electronic means shall for all purposes be deemed as
      effective as delivery of an original counterpart.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    Section
      11.10  Successors
      and Assigns. 
      This Agreement shall be binding upon the Borrower and its successors and
      assigns, and shall inure to the benefit of each of the Lender and the benefit
      of
      their respective successors, and assigns, including any subsequent holder of
      any
      Note. The Borrower may not assign any of its rights or obligations under any
      Credit Document without the written consent of all of the Lender.

     

    Section
      11.11  [Reserved].

     

    Section
      11.12  Assignments,
      Participations, Etc. 
      Successors
      and Assigns Generally  The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns permitted hereby,
      except that the Borrower may not assign or otherwise transfer any of its rights
      or obligations hereunder without the prior written consent of the Lender and
      Lender may not assign or otherwise transfer any of its rights or obligations
      hereunder except (i) to an Eligible Assignee in accordance with the
      provisions of paragraph (b) of this Section, (ii) by way of
      participation in accordance with the provisions of paragraph (d) of this
      Section or (iii) by way of pledge or assignment of a security interest
      subject to the restrictions of paragraph (f) of this Section (and any other
      attempted assignment or transfer by any party hereto shall be null and void).
      Nothing in this Agreement, expressed or implied, shall be construed to confer
      upon any Person (other than the parties hereto, their respective successors
      and
      assigns permitted hereby, Participants to the extent provided in
      paragraph (d) of this Section and, to the extent expressly contemplated
      hereby, the affiliates of each of the Lender and the Lender) any legal or
      equitable right, remedy or claim under or by reason of this Agreement.

     

    (a)  Assignments
      by Lender. The
      Lender may at any time assign to one or more Eligible Assignees its rights
      and
      obligations under this Agreement (including its Revolving Credit Commitment
      and
      the Loans at the time owing to it); provided
      that so
      long as no Event of Default has occurred and is continuing, any assignment
      of a
      Revolving Credit Commitment must be approved by the Borrower, which approval
      shall not be unreasonably withheld, unless the Person that is the proposed
      assignee is itself an Eligible Assignee. Subject to acceptance and recording
      thereof by the Lender pursuant to paragraph (c) of this Section, from and
      after the effective date specified in each Assignment and Assumption, the
      Eligible Assignee thereunder shall be a party to this Agreement and, to the
      extent of the interest assigned by such Assignment and Assumption, have the
      rights and obligations of Lender under this Agreement shall to the extent of
      the
      interest assigned by such Assignment and Assumption, be released from its
      obligations under this Agreement (and, in the case of an Assignment and
      Assumption covering all of the Lender’s rights and obligations under this
      Agreement, Lender shall cease to be a party hereto) but shall continue to be
      entitled to the benefits of Sections 9.3 and 11.1 with respect to facts and
      circumstances occurring prior to the effective date of such assignment. Any
      assignment or transfer by Lender of rights or obligations under this Agreement
      that does not comply with this paragraph shall be treated for purposes of this
      Agreement as a sale by Lender of a participation in such rights and obligations
      in accordance with paragraph (d) of this Section.

     

    (b)  Participations.
      Lender
      and/or any holder of the Note may at any time, without the consent of, or notice
      to, the Borrower, sell participations to any Person (other than a natural person
      or a Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a
“Participant”)
      in all
      or a portion of Lender’s or such holder’s rights and/or obligations under this
      Agreement (including all or a portion of its Revolving Credit Commitment and/or
      the Loans owing to it); provided
      that
      (i) Lender’s obligations under this Agreement shall remain unchanged,
      (ii) Lender shall remain solely responsible to the other parties hereto for
      the performance of such obligations and (iii) the Borrower shall continue
      to deal solely and directly with Lender in connection with Lender’s rights and
      obligations under this Agreement. 

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    Any
      agreement or instrument pursuant to which Lender sells such a participation
      shall provide that Lender shall retain the sole right to enforce this Agreement
      and to approve any amendment, modification or waiver of any provision of this
      Agreement; provided
      that
      such agreement or instrument may provide that Lender will not, without the
      consent of the Participant, agree to any amendment, modification or waiver
      of
      the type described in Section 11.13(i) that directly affects such Participant.
      Subject to paragraph (e) of this Section, the Borrower agrees that each
      Participant shall be entitled to the benefits of Section 2.11, Section 9.3
      and
      Section 11.7 to the same extent as if it were Lender and had acquired its
      interest by assignment pursuant to paragraph (b) of this Section. Lender
      shall keep a register, meeting the requirements of Treasury Regulation Section
      5f.103-1(c), of each participant, specifying such participant’s entitlement to
      payments of principal and interest with respect to such
      participation.

     

    (c)  Limitations
      upon Participant Rights. A
      Participant shall not be entitled to receive any greater payment under Section
      2.11, Section 9.3 or Section 11.7 than the Lender would have been entitled
      to
      receive with respect to the participation sold to such Participant, unless
      the
      sale of the participation to such Participant is made with the Borrower’s prior
      written consent.

     

    (d)  Certain
      Pledges. The
      Lender may at any time pledge or assign a security interest in all or any
      portion of its rights under this Agreement to secure obligations of the Lender,
      including without limitation any pledge or assignment to secure obligations
      to a
      Federal Reserve Bank; provided that no such pledge or assignment shall release
      Lender from any of its obligations hereunder or substitute any such pledgee
      or
      assignee for Lender as a party hereto.  Certain
      Funding Arrangements.  Notwithstanding
      anything to the contrary contained herein, Lender may grant to a special purpose
      funding vehicle (a “SPC”),
      identified as such in writing from time to time by the Lender and the Borrower,
      the option to provide to the Borrower all or any part of any Loan that the
      Lender would otherwise be obligated to make to the Borrower pursuant to this
      Agreement; provided
      that (i)
      nothing herein shall constitute a commitment by any SPC to make any Loan, (ii)
      if an SPC elects not to exercise such option or otherwise fails to provide
      all
      or any part of such Loan, the Lender shall be obligated to make such Loan
      pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall
      utilize the Revolving Credit Commitment of the Lender to the same extent, and
      as
      if, such Loan were made by the Lender. Each party hereto hereby agrees that
      no
      SPC shall be liable for any indemnity or similar payment obligation under this
      Agreement (all liability for which shall remain with the Lender). In furtherance
      of the foregoing, each party hereto hereby agrees (which agreement shall survive
      the termination of this Agreement) that, prior to the date that is one year
      and
      one day after the payment in full of all outstanding commercial paper or other
      senior indebtedness of any SPC, it will not institute against, or join any
      other
      person in instituting against, such SPC any bankruptcy, reorganization,
      arrangement, insolvency or liquidation proceedings under the laws of the United
      States or any State thereof arising out of any claim relating to the Credit
      Documents. In addition, notwithstanding 

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    anything
      to the contrary contained in this Section 11.12(b), any SPC may (i) with notice
      to, but without the prior written consent of, the Borrower, assign all or a
      portion of its interests in any Loan to the Lender or to any financial
      institutions (consented to by the Borrower and Lender) providing liquidity
      and/or credit support to or for the account of such SPC to support the funding
      or maintenance of Loans and (ii) disclose on a confidential basis any non-public
      information relating to its Loans to any rating agency, commercial paper dealer
      or provider of any surety, guarantee or credit or liquidity enhancement to
      such
      SPC. This section may not be amended without the written consent of the SPC.
      

     

    Section
      11.13  Amendments. 
      Any provision of the Credit Documents may be amended or waived if, but only
      if,
      such amendment or waiver is in writing and is signed by the Borrower and the
      Lender.

     

    Section
      11.14  Headings. 
      Section headings used in this Agreement are for reference only and shall not
      affect the construction of this Agreement.

     

    Section
      11.15  Legal
      Fees, Other Costs and Indemnification. 
      The Borrower agrees to pay all reasonable costs and expenses of the Lender
      in
      connection with the preparation and negotiation of the Credit Documents,
      including without limitation, the reasonable fees and disbursements of counsel
      to the Lender in connection with the preparation and execution of the Credit
      Documents, and any amendment, waiver or consent related hereto, whether or
      not
      the transactions contemplated herein are consummated. The Borrower further
      agrees to indemnify the Lender and its directors, agents, officers and
      employees, against all losses, claims, damages, penalties, judgments,
      liabilities and expenses (including, without limitation, all reasonable expenses
      of litigation or preparation therefor, whether or not the indemnified Person
      is
      a party thereto) which any of them may incur or reasonably pay arising out
      of or
      relating to any Credit Document or any of the transactions contemplated thereby
      or the direct or indirect application or proposed application of the proceeds
      of
      any Loan, other than those which arise from the gross negligence or willful
      misconduct of the party claiming indemnification. The Borrower, upon demand
      by
      the Lender at any time, shall reimburse the Lender for any reasonable legal
      or
      other expenses (including reasonable allocable fees and expenses of in-house
      counsel) incurred in connection with investigating or defending against any
      of
      the foregoing except if the same is directly due to the gross negligence or
      willful misconduct of the party to be indemnified.

     

    Section
      11.16  [Reserved]. 

     

    Section
      11.17  Entire
      Agreement. 
      The Credit Documents constitute the entire understanding of the parties thereto
      with respect to the subject matter thereof and any prior or contemporaneous
      agreements, whether written or oral, with respect thereto are superseded
      thereby.

     

    Section
      11.18  Construction. 
      The parties hereto acknowledge and agree that neither this Agreement nor the
      other Credit Documents shall be construed more favorably in favor of one than
      the other based upon which party drafted the same, it being acknowledged that
      all parties hereto contributed substantially to the negotiation of this
      Agreement and the other Credit Documents.

     

    Section
      11.19  Governing
      Law. 
      This Agreement and the other Credit Documents, and the rights and duties of
      the
      parties hereto, shall be construed and determined in accordance with the
      internal laws of the State of Illinois.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    Section
      11.20  SUBMISSION
      TO JURISDICTION; WAIVER OF JURY TRIAL.  
      THE BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
      STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS AND OF ANY ILLINOIS
      STATE COURT SITTING IN THE CITY OF CHICAGO FOR PURPOSES OF ALL LEGAL PROCEEDINGS
      ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR
      THE
      TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THE BORROWER IRREVOCABLY WAIVES,
      TO
      THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
      HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
      AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
      IN AN INCONVENIENT FORUM. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY AND ALL
      RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
      ANY
      CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.

     

    Section
      11.21  Confidentiality. 
      The Lender shall hold all non-public information provided to it by Borrower
      pursuant to or in connection with this Agreement in accordance with its
      customary procedures for handling confidential information of this nature,
      but
      may make disclosure to any of its examiners, regulators, Affiliates, outside
      auditors, counsel and other professional advisors in connection with this
      Agreement or any other Credit Document or as reasonably required by any
      potential bona
      fide
      transferee, participant or assignee, or in connection with the exercise of
      remedies under a Credit Document, or to any nationally recognized rating agency
      that requires access to information about Lender’s investment portfolio in
      connection with ratings issued with respect to Lender, or as requested by any
      governmental agency or representative thereof or pursuant to legal process;
      provided,
      however,
      that
      unless specifically prohibited by applicable law or court order, the Lender
      shall use reasonable efforts to promptly notify Borrower of any request by
      any
      governmental agency or representative thereof (other than any such request
      in
      connection with an examination of the financial condition of the Lender by
      such
      governmental agency) for disclosure of any such non-public information and,
      where practicable, prior to disclosure of such information. Prior to any such
      disclosure pursuant to this Section 11.21, the Lender shall require any
      such bona
      fide transferee,
      participant and assignee receiving a disclosure of non-public information to
      agree, for the benefit of Borrower, in writing to be bound by this Section
      11.21; and to require such Person to require any other Person to whom such
      Person discloses such non-public information to be similarly bound by this
      Section 11.21. The Lender shall not be required to hold confidential any
      information that becomes public by any means other than as a result of a breach
      by it of its obligations under this Section 11.21. 

     

    Section
      11.22  Patriot
      Act. 
      As required by federal law or the Lender or Lender’s polices and practices, the
      Lender may need to collect certain customer identification information and
      documentation in connection with opening or maintaining accounts or establishing
      or continuing to provide services.

     

    

    Balance
      of Page Intentionally Left Blank

    -
      Signature Page Follows -

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    In
      Witness Whereof, the parties hereto have caused this Seasonal Credit Agreement
      to be duly executed and delivered in Chicago, Illinois by their duly authorized
      officers as of the day and year first above written. 

    

    

    
      	 	
              PEOPLES
                ENERGY CORPORATION,
                an Illinois corporation, as Borrower

            
	 	 
	 	
              By:  
                /s/ Douglas M. Ruschau

            
	 	
              Its:  
                Vice President & Treasurer

            
	 	 
	 	 

    

    

    
      	 	
              JPMORGAN
                CHASE BANK, N.A.,
                as Lender

            
	 	 
	 	
              By:  
                /s/ Gabriel J. Simon

            
	 	
              Its:  
                Assistant Vice President

            
	 	
              Title: 
                ________________________

            
	 	 

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    REVOLVING
      NOTE

    
      
        	 $25,000,000	
                 October
                  20,
                  2006

              

      

    

     

    FOR
      VALUE RECEIVED,
      the
      undersigned, PEOPLES
      ENERGY CORPORATION,
      an
      Illinois corporation (the “Borrower”),
      promises to pay to the order of JPMORGAN
      CHASE BANK, N.A.
      (the
“Bank”)
      on the
      Termination Date of the hereinafter defined Credit Agreement, or such earlier
      date as provided in the Credit Agreement or this Note, at the principal office
      of the Bank in Chicago, Illinois, in U.S. Dollars in accordance with Section
      4.1
      of the Credit Agreement, the aggregate unpaid principal of all Loans made by
      the
      Bank to the Borrower pursuant to the Credit Agreement, together with interest
      on
      the principal amount of each Loan from time to time outstanding hereunder at
      the
      rates, and payable in the manner and on the dates, specified in the Credit
      Agreement.

     

    The
      Bank
      shall record on its books or records or on a schedule attached to this Note,
      which is a part hereof, each Loan made by it pursuant to the Credit Agreement,
      together with all payments of principal and interest and the principal balances
      from time to time outstanding hereon, whether the Loan is a Base Rate Loan
      or a
      LIBOR Loan and the interest rate and Interest Period applicable thereto,
      provided that prior to the transfer of this Note all such amounts shall be
      recorded on a schedule attached to this Note. The record thereof, whether shown
      on such books or records or on a schedule to this Note, shall be prima
      facie
      evidence
      of the same, provided, however, that the failure of the Bank to record any
      of
      the foregoing or any error in any such record shall not limit or otherwise
      affect the obligation of the Borrower to repay all Loans made to it pursuant
      to
      the Credit Agreement together with accrued interest thereon.

     

    This
      Note
      is the “Note” referred to in that certain Seasonal Credit Agreement dated as of
      October 20, 2006, by and between the Borrower and JPMorgan Chase Bank, N.A.
      (the
“Credit
      Agreement”),
      and
      this Note and the holder hereof are entitled to all the benefits provided for
      thereby or referred to therein, to which Credit Agreement reference is hereby
      made for a statement thereof. This Note may only be conveyed, transferred,
      assigned or otherwise negotiated to a holder in accordance with the terms of
      the
      Credit Agreement. All defined terms used in this Note, except terms otherwise
      defined herein, shall have the same meaning as in the Credit Agreement. This
      Note shall be governed by and construed in accordance with the internal laws
      of
      the State of Illinois.

     

    Prepayments
      may be made hereon and this Note may be declared due prior to the expressed
      maturity hereof, all in the events, on the terms and in the manner as provided
      for in the Credit Agreement.

     

    The
      Borrower hereby waives demand, presentment, protest or notice of any kind
      hereunder.

     

    
      	 	
              PEOPLES
                ENERGY CORPORATION,
                an Illinois corporation

            
	 	 
	 	
              By: 
                _________________________________

            
	 	
              Its: 
                _________________________________

            

    

    

    
      
        
          A
            -
            1

          Credit
            Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      B

     

    COMPLIANCE
      CERTIFICATE

     

    This
      Compliance Certificate is furnished to JPMorgan Chase Bank, N.A., as Lender
      pursuant to the Credit Agreement (the “Credit
      Agreement”)
      dated
      as of October 20, 2006, by and between Peoples Energy Corporation and JPMorgan
      Chase Bank, N.A. Unless otherwise defined herein, the terms used in this
      Compliance Certificate have the meanings ascribed thereto in the Credit
      Agreement.

     

    THE
      UNDERSIGNED HEREBY CERTIFIES THAT:

     

    1.  I
      am the
      duly elected or appointed ___________________of Peoples Energy
      Corporation;

     

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

     

    3.  The
      examinations described in paragraph 2 did not disclose, and I have no knowledge
      of, the existence of any condition or event which constitutes a Default or
      an
      Event of Default during or at the end of the accounting period covered by the
      attached financial statements or as of the date of this Certificate, except
      as
      set forth below. Without limitation to the foregoing, except as noted below
      the
      Borrower is in compliance with 7.5 and Section 7.6 of the Credit Agreement;
      and

     

    4.  Schedule
      1 attached hereto sets forth (i) financial data and computations evidencing
      compliance with certain covenants of the Credit Agreement, all of which data
      and
      computations are true, complete and correct, and are made in accordance with
      the
      terms of the Credit Agreement, and (ii) the list of Subsidiaries in existence
      as
      of the date hereof.

     

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

     

    
      	 
	 
	 
	 

    

    The
      foregoing certifications, together with the list set forth in Schedule 1 hereto
      and the financial statements delivered with this Certificate in support hereof,
      are made and delivered this ___________day of __________, 20 __.

     

    
      	 	 

    

    

    
      
        
          B
            -
            1

          Credit
            Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    SCHEDULE
      1 TO COMPLIANCE CERTIFICATE

     

    Compliance
      Calculations for Credit Agreement

     

    CALCULATION
      AS OF ________ __,200_

     

    

    
      	
              Capital
                Ratio (Sec. 7.6)

            	 	 
	
              1. (a)
                consolidated Indebtedness

            	
              $  

            	 
	
              (b)
                less
                accumulated other comprehensive income/loss

            	
               

              $__________

            	 
	
              (c)
                net consolidated Indebtedness

            	
              $__________

            	 
	
              2. Consolidated
                Net Worth

            	
              $  

            	 
	
              3. Sum
                of Line 1(c) plus
                Line 2

            	
              $  

            	 
	
              4. Capital
                Ratio

            	
               ____:1.00

            	
              (ratio
                of (A) Line 1(c) to (B) Line 3 not to exceed 0.65 to
                1.00)

            

    

    

     

    List
      of Subsidiaries

     

    
      	
              The
                Peoples Gas Light and Coke Company 

              Peoples
                Gas Light Exploration Company

              Peoples
                Gas Neighborhood Development Corporation

              North
                Shore Gas Company 

              North
                Shore Exploration Company

              Peoples
                District Energy Corporation 

              Peoples
                NGV Corp.  

              Peoples
                Energy Production Company 

              PEP
                Holding, LLC 

              Peoples
                Energy Canadian Holdings, Inc.

              Peoples
                Energy Production Company of Canada

              Peoples
                Energy Production Operating Company

              Peoples
                Energy Production Partners, L.P.

              Peoples
                Energy Production - Texas, L.P.

              EnerVest
                Energy, L.P. 

              Sierra
                1996-I Limited Partnership

              Peoples
                Energy Resources Company, LLC 

              Peoples
                Energy Wholesale Marketing, LLC

            	
              PERC
                Canada, Inc.

              Peoples
                Natural Gas Liquids, LLC

              PERC
                Holdings, LLC 

              PV
                Midstream Ventures, LLC 

              PERC
                Power, LLC 

              COB
                Energy Facility, LLC

              Peoples
                Calumet, LLC

              Calumet
                Power, LLC

              Peoples
                Elwood, LLC

              Elwood
                Energy, LLC 

              Peoples
                Elwood Expansion, LLC

              Elwood
                Expansion, LLC 

              Valencia
                Energy, LLC

              Peoples
                MW, LLC 

              Peoples
                Energy Services Corporation

              Peoples
                Energy Ventures, LLC 

              Peoples
                Energy Business Services, LLC

              Peoples
                Energy Home Services, LLC

              Peoples
                Energy Neighborhood Development, LLC

              Peoples
                Technology, LLC

            

    

    

    

    
      
        
           

          Credit
            Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    SCHEDULE
      1

     

    LENDER’S
      PAYMENT INFORMATION

     

    

    

    Loan
      Repayments, Interest, Fees:

    

    JPMorgan
      Chase Bank, N.A.

    Chicago,
      IL

    ABA
      #
      021000021

    Account
      Name: Loan Processing DP

    Account
      #
      9008109962

    Reference:
      Peoples Energy Corporation

    Attn:
      Kerry Scroczynski

     

     

     

    
 

    

    
      
        
          Schedule
            1

          Credit
            Agreement

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      1A

     

    PRICING
      GRID

     

    (Basis
      Points)

     

     

    
      	
              S
                & P/ Moody’s Senior Un-Secured Rating 

            	
              A/
                A2 or higher

            	
              A-/
                A3 

            	
              BBB+/
                Baa1

            	
              BBB/
                Baa2

            	
              BBB-/
                Baa3

            	
              lower
                than BBB-/ Baa3

            
	
              Commitment
                Fee

            	
              6.0

            	
              7.0

            	
              8.0

            	
              10.0

            	
              12.5

            	
              20.0

            
	
              Base
                Rate Margin

            	
              0.0

            	
              0.0

            	
              0.0

            	
              0.0

            	
              0.0

            	
              0.0

            
	
              LIBOR
                Margin

            	
              25.0

            	
              30.0

            	
              40.0

            	
              50.0

            	
              62.5

            	
              87.5

            
	
              Utilization
                Fee (>50%)

            	
              10.0

            	
              10.0

            	
              12.5

            	
              12.5

            	
              12.5

            	
              12.5

            

    

    

    Any
      change in a Credit Rating of the Borrower (and if applicable, any change in
      fees
      or interest payable hereunder based on such Credit Rating), shall be effective
      as of the date such change is announced by the applicable rating
      agency.

     

    *
      If
      the Borrower is split-rated and the ratings differential is one level, the
      higher rating will apply. If the Borrower is split-rated and the ratings
      differential is two levels or more, the rating level one below the higher level
      will apply. If at any time the Borrower has no Moody’s rating or no Standard
& Poors’ rating, the “Lower than BBB-/Baa3” level will apply; provided,
      however, that in such event the Borrower may propose an alternative rating
      agency or mechanism in replacement thereof.

    

    

    
      
        
          Schedule
            1 - A

          Credit
            Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]