Document:

REOFFER PURCHASE AGREEMENT

                  REOFFER PURCHASE AGREEMENT (the "Agreement"), dated as of
November 15, 2000, by and between Continental Airlines, Inc., a Delaware
corporation ("Continental"), 1992 Air, Inc., a Texas corporation ("1992 Air"),
Northwest Airlines Corporation, a Delaware corporation ("NAC"), Northwest
Airlines Holdings Corporation, a Delaware corporation ("NAHC"), and Air
Partners, L.P., a Texas partnership ("AP", and together with NAC and NAHC, the
"Northwest Parties").

                              W I T N E S S E T H:

                  WHEREAS, each of 1992 Air and the Northwest Parties is a party
to the Investment Agreement, dated as of January 25, 1998 (as amended, the
"Investment Agreement"), pursuant to which 1992 Air was granted certain rights
of offer and re-offer (the "Rights of Offer and Re-Offer") with respect to
certain shares of Class A Common Stock, par value $0.01 per share, of
Continental ("Continental A Stock") held by the Northwest Parties, as set forth
in Section 4.1(d) of the Investment Agreement;

                  WHEREAS, NAC, NAHC, AP, Northwest Airlines, Inc., a Minnesota
corporation ("NAI"), and Continental are entering into the Omnibus Agreement
dated as of the date hereof (the "Omnibus Agreement," and the transactions as
set forth therein, the "Northwest Transaction"), pursuant to which, among other
things, Continental will repurchase 6,685,279 shares of Continental A Stock
owned by NAC, NAHC and NAI for $450 million, and reclassify all remaining
outstanding Continental A Stock into Class B Common Stock, par value $0.01 per
share, of Continental ("Continental B Stock") at a ratio of 1.32 shares of
Continental B Stock per share of Continental A Stock; and

                  WHEREAS, in furtherance of the Northwest Transaction,
Continental desires to purchase from 1992 Air, and 1992 Air desires to sell to
Continental, the Rights of Offer and Re-Offer.

                  NOW, THEREFORE, in consideration of the rights and obligations
contained herein, and for other good and valuable consideration, the adequacy of
which is hereby acknowledged, the parties hereto agree as follows:

                  Section 1. Acquisition. In reliance upon the representations,
warranties, covenants and agreements contained herein and upon the terms and
subject to the conditions hereinafter set forth, at the Closing (as defined
below), 1992 Air shall sell, assign, transfer, convey and deliver to
Continental, and Continental shall purchase, acquire and accept from 1992 Air
the Rights of Offer and Re-Offer (the "Acquisition").

                  Section 2. Purchase Price.

                  (a) The aggregate purchase price for the Rights of Offer and
Re-Offer shall, at the election of Continental, be either:

                  (i) U.S. $10 million in cash (the "Cash Purchase Price"); or

                  (ii) that number of shares of Continental B Stock equal to the
         quotient of (x) U.S. $11 million, divided by (y) the Continental Share
         Value (the "Stock Purchase Price");

provided that if the Closing occurs on a date later than February 15, 2001 then
the Cash Purchase Price, if Continental elects to pay the Cash Purchase Price,
or the Stock Purchase Price, if Continental elects to pay the Stock Purchase
Price, shall be increased by an amount per annum equal to 7% of the Cash
Purchase Price or the Stock Purchase Price, as the case may be, calculated on
the basis of a 365-day year based on actual days elapsed from and including
February 16, 2001 through but excluding the Closing Date.

"Continental Share Value" shall be the volume weighted average of the closing
price of the Continental B Stock on the New York Stock Exchange (the "NYSE") for
the 20 Trading Days immediately preceding the third Business Day prior to the
Closing Date. "Trading Day" shall mean any day on which the NYSE is open for
trading. "Business Day" shall mean any day on which banking institutions in New
York, New York are not authorized or required to close.

                  (b) Election Notice. No later than the close of business on
the third Business Day prior to the Closing, Continental shall deliver to 1992
Air a notice (the "Election Notice"), irrevocably electing to pay either the
Cash Purchase Price or the Stock Purchase Price; provided that, if Continental
shall elect to pay the Stock Purchase Price, the Election Notice shall also set
forth the number of shares of Continental B Stock to be issued pursuant thereto
and the amount of cash, if any, in lieu of fractional shares. If Continental
shall fail to deliver a timely Election Notice, it shall be treated for all
purposes in this Agreement as if it had elected to pay the Cash Purchase Price.

                  Section 3. Payment at the Closing.

                  (a) Cash Payment. If, pursuant to the Election Notice,
Continental elects to pay the Cash Purchase Price, Continental shall pay and
deliver to 1992 Air (and/or its designee(s)) at the Closing the sum of the Cash
Purchase Price in immediately available funds by wire transfer or other means
acceptable to 1992 Air to such account or accounts as 1992 Air shall specify in
writing to Continental at least one Business Day prior to the Closing.

                  (b) Stock Payment.

                  (i) Stock Issuance. If, pursuant to the Election Notice,
         Continental elects to pay the Stock Purchase Price, Continental shall
         issue and deliver to 1992 Air (and/or its designee(s)) certificate(s)
         representing the shares of Continental B Stock constituting the Stock
         Purchase Price, in such denominations and to 1992 Air or to such other
         person or persons as 1992 Air shall specify in writing to Continental
         no later than the close of business on the second Business Day prior to
         the Closing (each such other person, a "Designee").

                  (ii) Fractional Shares. Notwithstanding any other provision
         hereof, no fractional shares of Continental B Stock will be issued in
         the Acquisition; instead Continental shall pay at the Closing, in cash,
         the product of such fractional share, multiplied by the Continental
         Share Value.

                  (iii) Anti-Dilution. In the event that Continental changes the
         number or classes of shares of Continental capital stock issued and
         outstanding prior to the Closing as a result of a stock split, stock
         dividend, recapitalization, subdivision, reclassification, combination,
         exchange of shares, or other similar transaction, other than the
         repurchase by Continental of the Repurchased Class A Shares and the
         Reclassification, each as provided for and defined in the Omnibus
         Agreement (a "Continental Capital Change"), appropriate adjustment
         shall be made to the Stock Purchase Price to preserve without
         diminution the rights of 1992 Air. If the record date for such a
         Continental Capital Change shall be prior to the Closing but the
         payment date or issue date, as applicable, therefor shall be subsequent
         to the Closing, Continental shall take such action as shall be required
         so that on such payment date or issue date, as applicable, 1992 Air
         (and/or its designee(s))shall be entitled to receive such additional
         Continental securities as it would have received as a result of such
         event if the record date therefor had been immediately after the
         Closing.

                  Section 4. Closing Matters.

                  (a) The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Vinson &
Elkins L.L.P. in Houston, Texas at the Effective Time, as such term is defined
in the Omnibus Agreement, or at such other location, time and date as the
parties hereto may mutually determine and set forth in writing (the "Closing
Date").

                  (b) Delivery at Closing. At the Closing, (i) Continental shall
deliver to 1992 Air (and/or its designees) by wire transfer, the funds in the
amount of the Cash Purchase Price, or, as the case may be, certificate(s)
representing the shares of Continental B Stock constituting the Stock Purchase
Price in such denominations and to 1992 Air or its Designee(s), as the case may
be, (ii) 1992 Air shall deliver to Continental a receipt acknowledging such
delivery, and (iii) the Acquisition shall become effective.

                  Section 5. Suspension of the Rights of Offer and Re-Offer. In
furtherance of the Acquisition and the Northwest Transaction, 1992 Air and each
of the Northwest Parties agrees that all rights, obligations and time periods
which are part of the Rights of Offer and Re-Offer and which are triggered or
otherwise implicated as a result of the Northwest Transaction shall be suspended
solely with respect to the Northwest Transaction. This suspension shall act only
with respect to the Northwest Transaction, and shall in no way impair or
prejudice the right of 1992 Air to exercise its Rights of Offer and Re-Offer in
any other respect or as to any other matter or transaction or at any other time
prior to Closing. This suspension shall cease immediately upon the earliest to
occur of (a) any breach of this Agreement by Continental or the Northwest
Parties, and (b) upon termination of this Agreement. Notwithstanding anything in
this Section 5 to the contrary, the parties hereto agree that upon the Closing
Continental will acquire all of the rights of offer and re-offer set forth in
Section 4.1(d) of the Investment Agreement, and immediately subsequent to the
Effective Time and without any additional consideration or any further action by
any party such rights of offer and reoffer shall terminate

                  Section 6. Representations and Warranties.

                  (a) Continental Representations and Warranties. Continental
represents and warrants to 1992 Air and each of the Northwest Parties as
follows, as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date:

                  (i) its execution, delivery and performance of this Agreement
         has been approved by its board of directors and does not violate its
         certificate of incorporation or by-laws or any material agreement to
         which it is a party;

                  (ii) this Agreement constitutes a valid and binding obligation
         of Continental, enforceable against Continental in accordance with its
         terms, subject to bankruptcy, insolvency, fraudulent conveyance,
         reorganization, moratorium and other similar laws relating to or
         affecting the enforcement of creditors' rights generally and legal
         principles of general applicability governing the availability of
         equitable remedies (whether considered in a proceeding in equity or at
         law or under applicable legal codes); and

                  (iii) if Continental shall elect to pay the Stock Purchase
         Price, all Continental B Stock to be issued pursuant to the
         Acquisition, when issued, will be duly authorized, validly issued,
         fully-paid and non-assessable, free and clear of any mortgage, lien,
         pledge, charges, security interest, restriction on voting or transfer
         or other encumbrance, subject to restrictions imposed by applicable
         securities laws, and will not have been issued in violation of or
         subject to any subscriptive or pre-emptive right.

                  (b) 1992 Air Representations and Warranties. 1992 Air
represents and warrants to Continental and each of the Northwest Parties as
follows, as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date:

                  (i) its execution, delivery and performance of this Agreement
         has been approved by all necessary corporate approvals and does not
         violate its constituent documents or any material agreement to which it
         is a party;

                  (ii) this Agreement constitutes a valid and binding obligation
         of 1992 Air, enforceable against 1992 Air in accordance with its terms,
         subject to bankruptcy, insolvency, fraudulent conveyance,
         reorganization, moratorium and other similar laws relating to or
         affecting the enforcement of creditors' rights generally and legal
         principles of general applicability governing the availability of
         equitable remedies (whether considered in a proceeding in equity or at
         law or under applicable legal codes);

                  (iii) if Continental shall elect to pay the Stock Purchase
         Price then 1992 Air is acquiring the Continental B Stock for its own
         account as principal for investment and not with a view to resale or
         distribution; 1992 Air is fully aware that such securities have not
         been registered under the Securities Act of 1933, as amended (the
         "Securities Act"), or under any applicable state securities laws and
         are being offered and sold in reliance on exemptions from the
         registration requirements of the Securities Act and that such
         securities may not be transferred sold or disposed of by 1992 Air
         absent registration under or exemption from the registration
         requirements of, the Securities Act; and 1992 Air is able to bear the
         economic risk of the investment and has such knowledge and experience
         in financial matters and knowledge of the business of Continental as to
         be capable of evaluating the merits and risks of a prospective
         investment; and

                  (iv) 1992 Air has not assigned, transferred, waived, impaired
         or otherwise encumbered the Rights of Offer and Re-Offer.

In the event that shares of Continental B Stock are to be delivered at the
Closing to Designees pursuant to Section 3(b) hereof, 1992 Air shall deliver to
Continental no later than the Closing representations and warranties of each
Designee similar in scope to the representations and warranties of 1992 Air in
Section (6)(b)(iii) hereof.

                  (c) Northwest Parties Representations and Warranties. Each of
the Northwest Parties represents and warrants to 1992 Air and Continental as
follows, as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date:

                  (i) its execution, delivery and performance of this Agreement
         has been approved by all necessary corporate approvals and does not
         violate its constituent documents or any material agreement to which it
         is a party; and

                  (ii) this Agreement constitutes a valid and binding obligation
         of such Northwest Party, enforceable against it in accordance with its
         terms, subject to bankruptcy, insolvency, fraudulent conveyance,
         reorganization, moratorium and other similar laws relating to or
         affecting the enforcement of creditors' rights generally and legal
         principles of general applicability governing the availability of
         equitable remedies (whether considered in a proceeding in equity or at
         law or under applicable legal codes).

                  Section 7. No Encumbrance. 1992 Air hereby covenants and
agrees, from and after the date hereof until the Closing or earlier termination
of this Agreement, not to assign, transfer, waive, impair or otherwise encumber
the Rights of Offer and Re-Offer without the prior written consent of
Continental.

                  Section 8. Omnibus Amendment. Continental shall notify 1992
Air in writing promptly upon the amendment, assignment, waiver, or other
modification of the Omnibus Agreement (without regard to whether such amendment,
assignment, waiver or other modification was effected pursuant to and in
accordance with the terms of the Omnibus Agreement) made without the prior
written consent of 1992 Air (an "Amendment").

                  Section 9. Termination.

                  (a) This Agreement may be terminated by 1992 Air anytime prior
to Closing following an Amendment made without the prior written consent of 1992
Air that has the effect of either directly or indirectly (i) reducing the
consideration payable to NW Parent and NW Holdings under Section 5.01(b)(ii) of
the Omnibus Agreement, (ii) reducing the number of shares of Class B Common
Stock deliverable to NW Parent and NW Holdings under Section 5.01(c)(iv) of the
Omnibus Agreement, (iii) adversely affecting the economic benefit of the
transactions contemplated by the Omnibus Agreement to the holders of Class A
Common Stock (specifically including 1992 Air and its Affiliates) other than the
Northwest Parties or their respective Affiliates (such term, when used in this
Agreement, having the meaning ascribed to such term in the Omnibus Agreement) or
(iv) reducing the consideration payable to 1992 Air under this Agreement.

                  (b) This Agreement shall automatically terminate upon the
termination of the Omnibus Agreement, if prior to the Effective Time.

                  (c) This Agreement may be terminated by the mutual consent of
the parties hereto.

                  (d) This Agreement may be terminated by 1992 Air, upon a
material breach of any representation, warranty, covenant or agreement on the
part of Continental set forth in this Agreement or if any representation or
warranty of Continental shall have become untrue, in either case which breach or
untruth could reasonably be expected to have a material adverse effect on the
ability of Continental to consummate the transactions contemplated by this
Agreement (a "Terminating Continental Breach"); provided, however, that, if such
Terminating Continental Breach is curable by Continental through the exercise of
its commercially reasonable efforts and for so long as Continental continues to
exercise such reasonable efforts, 1992 Air may not terminate this Agreement
under this Section 9(d);

                  (e) This Agreement may be terminated by Continental, upon a
material breach of any representation, warranty, covenant or agreement on the
part of 1992 Air or any of the Northwest Parties set forth in this Agreement or
if any representation or warranty of 1992 Air or any of the Northwest Parties
shall have become untrue, in either case which breach or untruth could
reasonably be expected to have a material adverse effect on the ability of 1992
Air or any of the Northwest Parties to consummate the transactions contemplated
by this Agreement (a "Terminating 1992 Air Breach"); provided, however, that, if
such Terminating 1992 Air Breach is curable by such breaching party through the
exercise of its commercially reasonable efforts and for so long as such party
continues to exercise such reasonable efforts, Continental may not terminate
this Agreement under this Section 9(e);

                  (f) Upon the termination of this Agreement in accordance with
the provisions of this Section 9, this Agreement, except for Section 10(c),
shall be null and void and of no further force and effect, and no party shall
have any liability or further obligation to any other party hereunder, except
that termination shall not relieve a party from liability for any willful breach
of this Agreement.

                  Section 10. Indemnification

                  (a) To the fullest extent permitted by Law, as such term is
defined in the Omnibus Agreement, subject to the terms of Sections 10(b) and
10(c), Continental will indemnify, defend and hold harmless 1992 Air and its
respective directors, officers, stockholders, partners, employees, agents,
representatives, successors, permitted transferees and permitted assigns, from
and against all out-of-pocket costs and expenses (including, without limitation,
reasonable legal fees and expenses incurred in connection with Claims (as
defined below)), including amounts paid to third parties (which shall be deemed
to include Continental and its Affiliates, other than the Northwest Parties, NAI
and 1992 Air and their respective Affiliates) in respect of settlements or
judgments resulting from or arising in connection with claims made by holders,
former holders, beneficial owners or former beneficial owners of Equity
Securities, as such term is defined in the Omnibus Agreement, of Continental
(other than the Northwest Parties, 1992 Air. and their respective Affiliates) in
their capacity as holders of such Equity Securities, or by, on behalf of or in
the name of Continental (each, a "Claim", and collectively, "Claims") based upon
or in connection with this Agreement or the Omnibus Agreement or the
transactions contemplated hereby or thereby; provided, however, that Continental
shall have no obligation to indemnify any party hereunder to the extent, but
only to the extent, the Claim relates to a breach by 1992 Air or its Affiliates
of this Agreement or any other agreement to which 1992 Air or its Affiliates is
a party.

                  (b) For purposes of this Section 10, the term "Indemnifying
Party" when used in connection with a particular Claim means Continental, which
is the person having an obligation to indemnify with respect to such Claim
pursuant to this Section 10, and the term "Indemnified Party" when used in
connection with a particular Claim means the person (whether one or more) having
the right to be indemnified with respect to such Claim pursuant to this Section
10. The following procedures will apply to the indemnification obligations set
forth in this Agreement:

                  (i) Promptly after receipt of written notice of a Claim
         involving a third party, the Indemnified Party against whom such Claim
         is asserted will give the Indemnifying Party written notice of any such
         Claim; provided, however, that any failure or delay in providing such
         notice to the Indemnifying Party will not relieve the Indemnifying
         Party of any obligations under this Section 10 except to the extent and
         only to the extent the Indemnifying Party was actually and materially
         prejudiced by such delay or failure. The Indemnifying Party will
         promptly designate counsel chosen by it and reasonably acceptable to
         the Indemnified Party to represent the Indemnified Party in connection
         with such Claim and the Indemnifying Party will pay all costs of
         investigation, litigation or arbitration incurred in connection with
         such Claim including, without limitation, fees and expenses of such
         counsel. The Indemnifying Party will have the right to undertake the
         defense, compromise or settlement of such Claim (subject to paragraph
         (ii) below), and the Indemnifying Party will not be liable for the fees
         or expenses of separate counsel for the Indemnified Party, unless the
         employment of such counsel shall have been authorized in writing by the
         Indemnifying Party in connection with the defense of such action or the
         Indemnifying Party shall not have employed counsel reasonably
         satisfactory to the Indemnified Party to have charge of the defense of
         such action or, based upon the written advice of counsel, the
         Indemnified Party shall have reasonably concluded that there may be
         defenses available to it that are different from those available to the
         Indemnifying Party or that a material conflict of interest or material
         potential conflict of interest exists (in which case the Indemnifying
         Party shall not have the right to direct the defense of such action on
         behalf of the Indemnified Party), in any of which cases the reasonable
         fees and expenses of counsel for the Indemnified Party shall be borne
         by the Indemnifying Party and paid as incurred (it being understood,
         however, that the Indemnifying Party shall not be liable for the
         expenses of more than one separate counsel (other than local counsel)
         in any one action or series of related actions in the same jurisdiction
         representing the Indemnified Parties who are parties to such action).
         The Indemnified Party will use its reasonable efforts to cooperate
         fully with respect to the defense of any Claim. If after the passage of
         a reasonable period of time after notice of any Claim, the Indemnifying
         Party has not initiated a defense against such Claim, the Indemnified
         Party will have the right, upon written notice to the Indemnifying
         Party, to undertake the defense, compromise or settlement of such Claim
         at any time prior to settlement, compromise or final determination
         thereof and any action so taken by the Indemnified Party with regard to
         such defense, compromise or settlement will be deemed to be within the
         protection afforded by this Agreement unless a court of competent
         jurisdiction makes a final determination that the Indemnified Party is
         not entitled to indemnification hereunder with respect to such Claim;
         provided, however, that any settlement of any such Claim shall require
         the prior written consent of the Indemnifying Party, which consent
         shall not be unreasonably withheld or delayed.

                  (ii) Anything in this Section 10(b) to the contrary
         notwithstanding, the Indemnifying Party will not settle or compromise
         any Claim or consent to the entry of any judgment that does not include
         as an unconditional term thereof the giving by the claimant or
         plaintiff to the Indemnified Party a full, irrevocable and
         unconditional release from all liability in respect of such Claim;
         provided that if the terms of such settlement, compromise or judgment
         adversely affects any of the rights granted to such Indemnified Party
         herein, in any of the Ancillary Agreements, or in the Amended and
         Restated Certificate of Incorporation (such capitalized terms having
         the meaning ascribed to them in the Omnibus Agreement), the
         Indemnifying Party will not settle or compromise such Claim or consent
         to the entry of judgment without the written consent of the Indemnified
         Party, which consent shall not be unreasonably withheld or delayed. In
         the event that there is more than one Indemnified Party with respect to
         any Claim, any notice contemplated by this Section 10(b) to be given to
         the Indemnified Party will be deemed to be given for purposes hereof if
         it is given to any Indemnified Party. No Indemnifying Party shall be
         liable for any settlement of any Claim effected without its written
         consent (which consent shall not be unreasonably withheld), but if
         settled with its written consent, the Indemnifying Party agrees to
         indemnify and hold harmless any Indemnified Party from and against any
         loss or liability by reason of such settlement.

                  (c) No party to this Agreement nor any of their respective
Affiliates or representatives shall be liable to any other party hereto or any
of its Affiliates or representatives for claims for punitive, special,
exemplary, incidental, indirect or consequential damages connected with this
Agreement, regardless of whether a claim is based on contract, tort (including
negligence), strict liability, violation of any applicable deceptive trade
practices act or similar Law or any other legal or equitable principle.

                  Section 11. Registration Rights. If Continental shall elect to
pay the Stock Purchase Price, then within 90 days of the Closing, Continental
shall file and use its reasonable best efforts to cause to be effective an S-3
registration statement covering the resale of the Continental securities
constituting the Stock Purchase Price by 1992 Air, its Designees and its and
their transferees and shall use its reasonable best efforts to maintain the
effectiveness of such registration statement (subject to usual and customary
limitations, including reasonable blackouts) for a period of three years.

                  Section 12. Further Assurances. Each of the parties to this
Agreement will cooperate and use its reasonable efforts to take or cause to be
taken all reasonable actions, to cooperate reasonably with the other parties
hereto with respect to such actions, and to do or cause to be done all things
reasonably necessary or advisable to consummate and make effective the
transactions contemplated by this Agreement.

                  Section 13. General Release. 1992 Air, for itself and its
Affiliates, hereby, fully, finally, and forever releases, acquits, and
discharges, the Northwest Parties and Northwest Airlines, Inc., a Minnesota
corporation, and the Northwest Parties, for themselves and Northwest Airlines,
Inc., hereby, fully, finally, and forever releases, acquits, and discharges 1992
Air and its Affiliates from any and all theories of recovery of whatever nature,
whether known or now unknown, whether past, present or future, whether
contingent, prospective or matured, recognized by the law of any jurisdiction
and comprehensively includes, but is not limited to, all causes of action,
demands, claims, debts, obligations, liens, actions, liability, suits, and
judgments, whether based in contract or tort, whether arising in equity or under
the common law or any contract or under any statute or otherwise, relating to or
arising from this Agreement or the Omnibus Agreement or the transactions
contemplated hereby or thereby, other than claims against a party arising from
such party's breach of this Agreement or the Omnibus Agreement, and from any and
all declaratory or monetary elements of relief or recovery of whatsoever nature,
whether known or now unknown, recognized by the law of any jurisdiction
including, but not limited to, actual damages of every description (whether
direct, consequential, incidental or otherwise), such as economic loss, property
loss, or reputation loss; statutory, multiple, treble, punitive or exemplary
damages; attorneys' fees; prejudgment or post judgment or other interest;
equitable, declaratory or injunctive relief; expenses; and costs of court,
relating to or arising from this Agreement or the Omnibus Agreement or the
transactions contemplated hereby or thereby, other than those arising from such
party's breach of this Agreement or the Omnibus Agreement.

                  Section 14. Miscellaneous.

                  (a) Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Delaware (regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law).

                  (b) Jurisdiction. Any judicial proceeding brought against any
of the parties hereto with respect to this Agreement shall be brought in the
United States District Court for the District of Delaware irrespective of where
such party may be located at the time of such proceeding, and by execution and
delivery of this Agreement, each of the parties hereto hereby consents to the
exclusive jurisdiction of such court and waives any defense or opposition to
such jurisdiction.

                  (c) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to constitute an original, but
all of which together shall constitute one and the same document.

                  (d) Assignment; No Third-Party Beneficiaries; Amendment.
Neither this Agreement, nor any of the rights, interests or obligations shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party. This Agreement is binding
upon and for the sole benefit of the parties hereto and their respective
successors and permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other person any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.

                  (e) Waiver. Failure by any party to take action against
another in case of the others noncompliance with obligations or conditions set
forth in this Agreement shall not be interpreted as a waiver for a subsequent
noncompliance of the same or other obligations or conditions. No waiver shall be
deemed to have been made by any party of any of its rights under this Agreement
unless the same is in writing and is signed on its behalf by its authorized
representative. Any such waiver shall constitute a waiver only with respect to
the specific matter described in such writing and shall in no way impair the
rights of the party granting such waiver in any other respect or at any other
time.

                  (f) Interpretation. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". Any reference to
"herein" or "hereof" or similar terms shall refer to the agreement as a whole
rather than to the individual paragraph or section.

                  (g) Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as it is enforceable.

                  (h) Specific Performance. The parties hereby acknowledge and
agree that the failure of any party to this Agreement timely to perform its
agreements and covenants hereunder will cause substantial and irreparable injury
to the other parties to this Agreement for which damages, even if available,
will not be an adequate remedy. Accordingly, each of the parties hereto hereby
consents to the granting of equitable relief (including specific performance and
injunctive relief) by any court having jurisdiction over the matter to enforce
any party's obligations hereunder. The parties further agree to waive any
requirement for the securing or posting of any bond in connection with the
obtaining of any such equitable relief, and that this Section 14(h) is without
prejudice to any other rights that the parties hereto may have for any failure
to perform this Agreement. The parties further agree not to assert in any
proceeding that grounds for any equitable relief are not satisfied. The parties
acknowledge that because the obligations imposed on them in this Agreement are
special, unique and of an extraordinary character, the making available of
equitable remedies (including specific performance and injunctive relief) in
this Agreement was a condition to each party's entering into this Agreement.

                  (i) Notices. All notices, requests and other communications
hereunder to a party shall be in writing and shall be deemed given (x) upon
delivery if personally delivered or (y) three Business Days after being mailed
by registered or certified mail (return receipt requested) or (z) one Business
Day after being delivered by overnight courier or by facsimile (with
confirmation) to such party at its address or facsimile set forth below or such
other address or facsimile as such party may specify by notice to the parties
hereto.

                  If to Continental:

                  Continental Airlines Inc.
                  1600 Smith Street
                  Dept. HQSEO
                  Houston, Texas 77002
                  Attention: General Counsel and Chief Financial Officer
                  Facsimile: (713) 324-2687

                  If to 1992 Air:

                  1992 Air, Inc.
                  301 Commerce Street, Suite 3300
                  Fort Worth, Texas 76102
                  Attention: James J. O'Brien
                  Facsimile (817) 871-4013

                  If to the Northwest Parties:

                  Northwest Airlines Corporation
                  5101 Northwest Drive
                  St. Paul, Minnesota   55111
                  Attention:   General Counsel
                  Telephone:   (612) 727-6500
                  Telecopier:  (612) 726-7123

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

<PAGE>

                  IN WITNESS WHEREOF, this Agreement executed on behalf of the
parties hereto by their respective duly authorized officers, all as of the date
first above written.

                                       1992 AIR, INC., a Texas Corporation

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

                                       CONTINENTAL AIRLINES, INC.

                                       By:
                                           -------------------------------------
                                           Jeffery A. Smisek
                                           Executive Vice President, General
                                             Counsel and Secretary

                                       NORTHWEST AIRLINES CORPORATION

                                       By:
                                           -------------------------------------
                                           Douglas M. Steenland
                                           Executive Vice President, General
                                             Counsel and Secretary

                                       NORTHWEST AIRLINES HOLDINGS CORPORATION

                                       By:
                                           -------------------------------------
                                           Douglas M. Steenland
                                           Executive Vice President, General
                                             Counsel and Secretary

                                       AIR PARTNERS L.P.

                                       By NORTHWEST AIRLINES CORPORATION,
                                          its General Partner
                                           By:
                                           -------------------------------------
                                           Name:
                                           Title:

                 [Signature Page to Reoffer Purchase Agreement]$435,000,000

                                CREDIT AGREEMENT

                                   Arranged by

                   MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE,
                           FENNER & SMITH INCORPORATED

                            Dated as of June 29, 2000

                                      among

                              VECTREN CORPORATION,

                         VECTREN UTILITY HOLDINGS, INC.,

                                CERTAIN LENDERS,

                   MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE,
                          FENNER & SMITH INCORPORATED,

                  as Sole Lead Arranger and Syndication Agent,

                                    ABN AMRO,

                             as Documentation Agent,

                                       and

                           CREDIT SUISSE FIRST BOSTON,

                             as Administrative Agent

<PAGE>
                                TABLE OF CONTENTS

                                                                            Page

                                    ARTICLE I

                                   DEFINITIONS

DEFINITIONS ................................................................  1

                                   ARTICLE II

                                   THE CREDITS

2.1.     Commitment..........................................................13
2.2.     Required Payments; Termination......................................13
2.3.     Ratable Loans.......................................................13
2.4.     Types of Advances...................................................13
2.5.     Facility Fee; Utilization Fee; Reductions in Aggregate Commitment...13
2.6.     Minimum Amount of Each Advance......................................14
2.7.     Optional Principal Payments.........................................14
2.8.     Method of Selecting Types and Interest Periods for New Advances.....14
2.9.     Conversion and Continuation of Outstanding Advances.................15
2.10.    Interest Rates, etc.................................................15
2.11.    Rates Applicable After Default......................................16
2.12.    Method of Payment...................................................16
2.13.    Noteless Agreement; Evidence of Indebtedness........................16
2.14.    Telephonic Notices..................................................17
2.15.    Interest Payment Dates; Interest and Fee Basis......................17
2.16.    Notification of Advances, Interest Rates, Prepayments and
           Commitment Reductions.............................................18
2.17.    Lending Installations...............................................18
2.18.    Non-Receipt of Funds by the Administrative Agent....................18
2.19.    Term-out Option.....................................................19

                                   ARTICLE III

                             YIELD PROTECTION; TAXES

3.1.     Yield Protection....................................................19
3.2.     Changes in Capital Adequacy Regulations.............................20
3.3.     Availability of Types of Advances...................................20
3.4.     Funding Indemnification.............................................21
3.5.     Taxes...............................................................21
3.6.     Lender Statements; Survival of Indemnity............................23

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

4.1.     Initial Advance.....................................................24
4.2.     Each Advance........................................................25

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

5.1.     Existence and Standing..............................................26
5.2.     Authorization and Validity..........................................26
5.3.     No Conflict; Government Consent.....................................26
5.4.     Financial Statements................................................27
5.5.     Material Adverse Change.............................................27
5.6.     Taxes...............................................................27
5.7.     Litigation and Contingent Obligations...............................27
5.8.     ERISA...............................................................28
5.9.     Accuracy of Information.............................................28
5.10.    Regulation U........................................................29
5.11.    Material Agreements.................................................29
5.12.    Compliance With Laws................................................29
5.13.    Ownership of Properties.............................................29
5.14.    Plan Assets; Prohibited Transactions................................29
5.15.    Environmental Matters...............................................30
5.16.    Investment Company Act..............................................30
5.17.    Public Utility Holding Company Act..................................30
5.18.    Pari Passu Indebtedness.............................................30

                                   ARTICLE VI

                                    COVENANTS

6.1.     Financial Reporting.................................................30
6.2.     Use of Proceeds.....................................................31
6.3.     Notice of Default...................................................32
6.4.     Conduct of Business.................................................32
6.5.     Taxes...............................................................32
6.6.     Insurance...........................................................32
6.7.     Compliance with Laws................................................32
6.8.     Maintenance of Properties...........................................32
6.9.     Inspection..........................................................33
6.10.    Consolidations, Mergers and Sale of Assets..........................33
6.11.    Liens...............................................................34
6.12.    Transactions with Affiliates........................................35
6.13.    Maintenance of Indebtedness to Capitalization Ratio.................36
6.14.    Limitation on Certain Restrictions Affecting Subsidiaries...........36

                                   ARTICLE VII

                                    DEFAULTS

DEFAULTS ................................................................... 36

                                  ARTICLE VIII

                 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

8.1.     Acceleration........................................................38
8.2.     Amendments..........................................................38
8.3.     Preservation of Rights..............................................39

                                   ARTICLE IX

                               GENERAL PROVISIONS

9.1.     Survival of Representations.........................................40
9.2.     Governmental Regulation.............................................40
9.3.     Headings............................................................40
9.4.     Entire Agreement....................................................40
9.5.     Several Obligations; Benefits of This Agreement.....................40
9.6.     Expenses; Indemnification...........................................40
9.7.     Numbers of Documents................................................41
9.8.     Accounting..........................................................41
9.9.     Severability of Provisions..........................................41
9.10.    Nonliability of Lenders.............................................41
9.11.    Confidentiality.....................................................42
9.12.    Nonreliance.........................................................42
9.13.    Joint and Several Liability.........................................42

                                    ARTICLE X

                                   THE AGENTS

10.1.    Appointment; Nature of Relationship.................................43
10.2.    Powers..............................................................44
10.3.    General Immunity....................................................44
10.4.    No Responsibility for Loans, Recitals, etc..........................44
10.5.    Action on Instructions of Lenders...................................45
10.6.    Employment of Administrative Agents and Counsel.....................45
10.7.    Reliance on Documents; Counsel......................................45
10.8.    Administrative Agent's Reimbursement and Indemnification............45
10.9.    Notice of Default...................................................46
10.10.   Rights as a Lender..................................................46
10.11.   Lender Credit Decision..............................................46
10.12.   Successor Administrative Agent......................................47
10.13.   Administrative Agent's Fee..........................................48
10.14.   Delegation to Affiliates............................................48

                                   ARTICLE XI

                            SETOFF; RATABLE PAYMENTS

11.1.    Setoff..............................................................48
11.2.    Ratable Payments....................................................48

                                   ARTICLE XII

                BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

12.1.    Successors and Assigns..............................................49
12.2.    Participations......................................................49
         12.2.1.    Permitted Participants; Effect...........................49
         12.2.2.    Voting Rights............................................50
         12.2.3.    Benefit of Setoff........................................50
12.3.    Assignments.........................................................50
         12.3.1.    Permitted Assignments....................................50
         12.3.2.    Effect; Effective Date...................................51
12.4.    Pledges to Federal Reserve Bank.....................................52
12.5.    Dissemination of Information........................................52
12.6.    Tax Treatment.......................................................52
12.7.    Designation.........................................................53

                                  ARTICLE XIII

                                     NOTICES

NOTICES .....................................................................54

                                   ARTICLE XIV

                                  COUNTERPARTS

COUNTERPARTS ................................................................54

                                   ARTICLE XV

                            CHOICE OF LAW; CONSENT TO

                       JURISDICTION; WAIVER OF JURY TRIAL

15.1.    Choice of Law.......................................................54
15.2.    Consent to Jurisdiction.............................................55
15.3.    Waiver of Jury Trial................................................55

PRICING SCHEDULE............................................................P-1

SCHEDULE 1               LIENS..............................................S-1

SCHEDULE 2               ENCUMBRANCES AFFECTING SUBSIDIARIES................S-2

EXHIBIT A                FORM OF OPINION....................................A-1

EXHIBIT B                FORM OF COMPLIANCE CERTIFICATE.....................B-1

EXHIBIT C                FORM OF ASSIGNMENT AGREEMENT.......................C-1

EXHIBIT D                FORM OF LOAN/CREDIT-RELATED MONEY TRANSFER
                           INSTRUCTION......................................D-1

EXHIBIT E                FORM OF NOTE.......................................E-1

EXHIBIT F                FORM OF TAX REPRESENTATION CERTIFICATE.............F-1

<PAGE>

                                CREDIT AGREEMENT

                  This  Credit  Agreement  dated  as of June  29,  2000 is among
Vectren  Corporation,  Vectren Utility Holdings,  Inc., the Lenders party hereto
from time to time,  Merrill Lynch & Co., Merrill Lynch,  Pierce,  Fenner & Smith
Incorporated,  as Sole  Lead  Arranger  and  Syndication  Agent,  ABN  AMRO,  as
Documentation  Agent, and Credit Suisse First Boston, as  Administrative  Agent.
The parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

                  As used in this Agreement:

                  "Acquisition"  means the  acquisition  of certain  gas utility
assets of The Dayton Power and Light Company as  contemplated by the Acquisition
Agreement.

                  "Acquisition  Agreement"  means the Asset  Purchase  Agreement
dated as of December 14, 1999, among Indiana Energy,  Inc., The Dayton Power and
Light Company and Number-3 CHK, Inc. (subsequently named Vectren Energy of Ohio,
Inc.).

                  "Administrative  Agent" means Credit Suisse First  Boston,  in
its capacity as contractual representative of the Lenders pursuant to Article X,
and not in its individual capacity as a Lender, and any successor Administrative
Agent appointed pursuant to Article X.

                  "Advance"   means  a  borrowing   hereunder   (including   any
conversion or continuation  thereof)  consisting of the aggregate  amount of the
several  Loans made on the same  Borrowing  Date by the Lenders to a Borrower of
the same Type and, in the case of  Eurodollar  Advances,  for the same  Interest
Period.

                  "Affiliate"  of any Person means any other Person  directly or
indirectly controlling,  controlled by or under common control with such Person.
For  purposes  of  this  definition,   "control"  (including,  with  correlative
meanings,  the terms "controlled by" and "under common control with") shall mean
the  possession,  directly  or  indirectly,  of the power to direct or cause the
direction  of the  management  or  policies  of a Person,  whether  through  the
ownership of voting securities or by contract or otherwise.

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

                  "Agreement" means this credit agreement,  as it may be amended
or modified and in effect from time to time.

                  "Alternate  Base Rate" means,  for any day, a rate of interest
per annum  equal to the  higher of (i) the Prime  Rate for such day and (ii) the
sum of the Federal Funds Effective Rate for such day plus 0.5% per annum.

                  "Applicable  Facility  Fee  Rate"  means,  at  any  time,  the
percentage  rate per annum at which  facility fees are accruing on the Aggregate
Commitment as set forth in the Pricing Schedule.

                  "Applicable  Margin" means,  at any time, the percentage  rate
per annum which is applicable  at such time with respect to Eurodollar  Advances
or Floating Rate Advances, as applicable, as set forth in the Pricing Schedule.

                  "Applicable  Utilization  Fee Rate"  means,  at any time,  the
percentage rate per annum at which utilization fees are accruing on the Loans as
set forth in the Pricing Schedule.

                  "Approved  Fund"  means,  with respect to any Lender that is a
fund or commingled investment vehicle that invests in loans, any other fund that
invests in loans and is managed  or  advised by the same  investment  advisor as
such Lender or by an Affiliate of such investment advisor.

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

                  "Assignment Agreement"-- see Section 12.3.1.

                  "Authorized  Officer"  means  any of the  President,  any Vice
President, the chief financial officer, the Treasurer or any Assistant Treasurer
of Parent or VUHI, as the case may be, acting singly.

                  "Borrower" means either of Parent or VUHI.

                  "Borrowing  Date"  means a date on  which an  Advance  is made
hereunder  (excluding  the date of conversion of Loans to Term Loans pursuant to
Section 2.19).

                  "Borrowing Notice"-- see Section 2.8.

                  "Business  Day"  means  (i)  with  respect  to any  borrowing,
payment or rate selection of Eurodollar  Advances,  a day (other than a Saturday
or  Sunday)  on  which  banks  generally  are  open in New  York,  New  York and
Evansville,  Indiana for the conduct of  substantially  all of their  commercial
lending activities and on which dealings in United States dollars are carried on
in the London  interbank  market and (ii) for all other  purposes,  a day (other
than a Saturday or Sunday) on which banks  generally  are open in New York,  New
York and  Evansville,  Indiana  for the  conduct of  substantially  all of their
commercial lending activities.

                  "Capitalized Lease" of a Person means any lease of Property by
such Person as lessee  which  would be  capitalized  on a balance  sheet of such
Person prepared in accordance with GAAP.

                  "Capitalized  Lease  Obligations" of a Person means the amount
of the obligations of such Person under Capitalized  Leases which would be shown
as a liability on a balance  sheet of such Person  prepared in  accordance  with
GAAP.

                  "Change" -- see Section 3.2.

                  "Change of Control" means either of the following events:

                  (a) any  Person or group  (within  the  meaning  of Rule 13d-5
         under  the  Securities  Exchange  Act of 1934 as in  effect on the date
         hereof (the "Act"))  shall become the  Beneficial  Owner (as defined in
         Rule  13d-3  under the Act) of 30% or more of the  voting  power of the
         capital stock or other equity  interests of Parent the holders of which
         are entitled under ordinary  circumstances  (irrespective of whether at
         the time the holders of such stock or other equity interests shall have
         or  might  have  voting  power  by  reason  of  the  happening  of  any
         contingency) to vote for the election of the directors of Parent; or

                  (b) a majority  of the  members of the Board of  Directors  of
         Parent shall cease to be Continuing Members.

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

                  "Commitment"  means,  for each Lender,  the obligation of such
Lender to make Loans not exceeding  the amount set forth  opposite its signature
below or as set forth in any Notice of  Assignment  relating  to any  assignment
that has become  effective  pursuant  to Section  12.3.2,  as such amount may be
modified from time to time pursuant to the terms hereof.

                  "Consolidated  Total  Capitalization"  means,  at any  date of
determination,  the sum of (a) Parent's  consolidated  shareholders' equity plus
(b) Consolidated Total Indebtedness.

                  "Consolidated  Total  Indebtedness"  means,  at  any  date  of
determination,  all then outstanding Indebtedness of Parent and its Subsidiaries
(excluding   Contingent   Obligations   except  to  the  extent  in  respect  of
Indebtedness   of  another  Person  and  excluding   undrawn  letter  of  credit
availability), determined on a consolidated basis in accordance with GAAP.

                  "Contingent  Obligation"  of a  Person  means  any  agreement,
undertaking or arrangement by which such Person assumes,  guarantees,  endorses,
contingently  agrees  to  purchase  or  provide  funds  for the  payment  of, or
otherwise becomes or is contingently liable upon, the obligation or liability of
any other  Person,  or agrees to  maintain  the net worth or working  capital or
other financial condition of any other Person, or otherwise assures any creditor
of such other Person against loss.

                  "Continuing  Member"  means a member of the Board of Directors
of Parent who either (a) was a member of Parent's Board of Directors on the date
of this  Agreement  and has been such  continuously  thereafter  or (b) became a
member of such Board of  Directors  after the date of this  Agreement  and whose
election or  nomination  for  election was approved by a vote of the majority of
the Continuing Members then members of Parent's Board of Directors.

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

                  "Conversion/Continuation Notice" -- see Section 2.9.

                  "Conversion Request" -- see Section 2.19.

                  "Default" means an event described in Article VII.

                  "Documentation  Agent"  means ABN  AMRO,  in its  capacity  as
documentation agent for the Lenders.

                  "Eligible  Person" means (i) a commercial bank organized under
the laws of the  United  States,  or any state  thereof,  and  having a combined
capital and surplus of at least $100.0 million; (ii) a commercial bank organized
under the laws of any other  country  that is a member of the  Organization  for
Economic Cooperation and Development (the "OECD"), or a political subdivision of
any such  country,  and  having  a  combined  capital  and  surplus  in a dollar
equivalent amount of at least $100.0 million; provided,  however, that such bank
is  acting  through a branch or agency  located  in the  country  in which it is
organized  or  another  country  that is also a  member  of the  OECD;  (iii) an
insurance  company,  mutual fund or other entity  which is regularly  engaged in
making,  purchasing or investing in loans or securities;  or any other financial
institution  organized  under the laws of the United States,  any state thereof,
any other country that is a member of the OECD or a political subdivision of any
such country with assets,  or assets under  management,  in a dollar  equivalent
amount of at least $100.0 million; (iv) any Affiliate of a Lender; (v) any other
entity  (other than a natural  person)  which is an  "accredited  investor"  (as
defined in  Regulation  D under the United  States  Securities  Act of 1933,  as
amended)  which  extends  credit  or  buys  loans  as one of its  businesses  or
investing activities including, but not limited to, insurance companies,  mutual
funds and investment  funds;  and (vi) any other entity consented to by the Sole
Lead  Arranger  and  Parent.  With  respect  to any  Lender  that  is a fund  or
commingled  investment  vehicle  that  invests  in  loans,  any  other  fund  or
commingled investment vehicle that invests in loans and is managed or advised by
the same investment advisor of such Lender or by an Affiliate of such investment
advisor shall be treated as a single Eligible Person.

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

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

                  "ERISA Entity" means Parent,  any Subsidiary and any member of
the Controlled Group.

                  "ERISA Event" means (a) any "reportable  event," as defined in
Section 4043 of ERISA or the regulations  issued  thereunder,  with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an  "accumulated  funding  deficiency" (as
defined in  Section  412 of the Code or  Section  302 of ERISA),  whether or not
waived, the failure to make by its due date a required installment under Section
412(m) of the Code with  respect to any Plan or the failure to make any required
contribution to a Multiemployer  Plan; (c) the filing pursuant to Section 412(d)
of the Code or  Section  303(d) of ERISA of an  application  for a waiver of the
minimum  funding  standard with respect to any Plan;  (d) the  incurrence by any
ERISA  Entity of any  liability  under  Title IV of ERISA  with  respect  to the
distress or  involuntary  termination  of any Plan; (e) the receipt by any ERISA
Entity  from the  PBGC or a plan  administrator  of any  notice  relating  to an
intention to terminate any Plan or to appoint a trustee to administer  any Plan,
or the occurrence of any event or condition  which could  reasonably be expected
to result in the  termination  of or the  appointment of a trustee to administer
any Plan;  (f) the  incurrence by any ERISA Entity of any liability with respect
to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; (g)
the  receipt  by  an  ERISA  Entity  of  any  notice,  or  the  receipt  by  any
Multiemployer  Plan  from  any  ERISA  Entity  of  any  notice,  concerning  the
imposition of withdrawal  liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization,  within the meaning of
Title IV of ERISA; (h) the imposition of a lien under Section 302(f) of ERISA or
Section  412(n) of the Code or the  posting  of a bond or other  security  under
Section 307 of ERISA or Section  401(a)(29)  of the Code in  connection  with an
amendment to a Plan; or (i) the occurrence of a nonexempt prohibited transaction
(within the meaning of Section  4975 of the Code or Section 406 of ERISA)  which
could result in liability to Parent or any Subsidiary.

                  "Eurodollar  Advance" means an Advance which bears interest at
the applicable Eurodollar Rate.

                  "Eurodollar  Base  Rate"  shall  mean,  with  respect  to  any
Eurodollar Advance for any Interest Period, the rate per annum determined by the
Administrative Agent at approximately 11:00 a.m. (London time) on the date which
is two Business Days prior to the beginning of such Interest Period by reference
to the British Bankers'  Association  Interest  Settlement Rates for deposits in
U.S. dollars (as set forth by any service selected by the  Administrative  Agent
which has been  nominated by the British  Bankers'  Association as an authorized
information  vendor for the purpose of displaying such rates) for a period equal
to such  Interest;  provided  that,  to the extent that an interest  rate is not
ascertainable  pursuant to the  foregoing  provisions  of this  definition,  the
"Eurodollar  Base Rate" shall be the interest  rate per annum  determined by the
Administrative  Agent to be the average of the rates per annum at which deposits
in U.S.  dollars  are  offered  for such  Interest  Period to major banks in the
London  interbank  market in  London,  England  by the  Administrative  Agent at
approximately  11:00 a.m.  (London  time) on the date which is two Business Days
prior to the  beginning  of such  Interest  Period.  Each  determination  by the
Administrative  Agent  pursuant to this  definition  shall be conclusive  absent
manifest error.

                  "Eurodollar  Loan"  means a Loan which  bears  interest at the
applicable Eurodollar Rate.

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

                  "Excluded  Taxes"  means,  in  the  case  of  each  Lender  or
applicable Lending  Installation and the Administrative  Agent, taxes imposed on
its  overall  net  income,  and  franchise  taxes  imposed  on it,  by  (i)  the
jurisdiction under the laws of which such Lender or the Administrative  Agent is
incorporated or organized or (ii) the  jurisdiction in which the  Administrative
Agent's or such Lender's principal  executive office or such Lender's applicable
Lending Installation is located.

                  "Exempt Lender"-- see Section 3.5(iv).

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

                  "Facility  Termination  Date"  means  June  28,  2001,  or any
earlier date on which the  Aggregate  Commitment is reduced to zero or otherwise
terminated pursuant to the terms hereof.

                  "Federal Funds Effective Rate" means, for any day, an interest
rate per annum equal to the weighted  average of the rates on overnight  Federal
funds  transactions  with  members of the  Federal  Reserve  System  arranged by
Federal funds brokers on such day, as published for such day (or, if such day is
not a Business Day, for the immediately  preceding  Business Day) by the Federal
Reserve Bank of New York or, if such rate is not so published  for any day which
is a Business  Day, the average of the  quotations at  approximately  11:00 a.m.
(New York time) on such day on such transactions  received by the Administrative
Agent from three Federal funds  brokers of recognized  standing  selected by the
Administrative Agent in its sole discretion.

                  "Fee  Letter"  means the fee letter  dated  December 16, 1999,
between Indiana Energy, Inc. and Merrill Lynch Capital Corporation.

                  "Floating Rate" means,  for any day, a rate per annum equal to
the sum of (i) the  Alternate  Base Rate for such day,  changing when and as the
Alternate Base Rate changes,  plus (ii) the Applicable  Margin for Floating Rate
Advances.

                  "Floating  Rate Advance" means an Advance which bears interest
at the applicable Floating Rate.

                  "GAAP" means  generally  accepted  accounting  principles  set
forth from time to time in the opinions  and  pronouncements  of the  Accounting
Principles Board and the American  Institute of Certified Public Accountants and
statements of the Financial Accounting Standards Board.

                  "Indebtedness" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such  Person's  business  payable on terms  customary  in the  trade),  (iii)
obligations,  whether or not  assumed,  secured  by Liens or payable  out of the
proceeds or production  from property now or hereafter owned or acquired by such
Person,  (iv)  obligations  which are evidenced by notes,  acceptances  or other
instruments,  (v)  obligations  of such Person to purchase  securities  or other
property  arising  out  of or in  connection  with  the  sale  of  the  same  or
substantially   similar   securities  or  property,   (vi)   Capitalized   Lease
Obligations, (vii) Contingent Obligations and (viii) all obligations, contingent
or otherwise,  with respect to the face amount of letters of credit  (whether or
not drawn) and bankers' acceptances issued for the account of such Person.

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

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

                  "Lending  Installation" means, with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or affiliate of such Lender
or the  Administrative  Agent listed on the signature  pages hereof or otherwise
selected by such Lender or the Administrative Agent pursuant to Section 2.17.

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

                  "Loan"  -- see  Section  2.1;  from  and  after  the  Facility
Termination  Date the  word  "Loan"  shall  refer to Term  Loans,  if any,  then
outstanding.

                  "Loan  Documents"  means this  Agreement  and any Notes issued
pursuant to Section 2.13(iv).

                  "Margin  Stock"  means  margin  stock  within  the  meaning of
Regulations T, U and X.

                  "Material  Adverse Effect" means a material  adverse effect on
(i) the business,  results of operation or financial condition of Parent and the
Subsidiaries  taken as a whole (after giving effect to the  Transactions),  (ii)
the  ability  of either  Borrower  to  perform  its  obligations  under the Loan
Documents or (iii) the validity or  enforceability  of any of the Loan Documents
or the rights or remedies of the Administrative Agent or the Lenders thereunder.

                  "Material Indebtedness"-- see Section 7.5.

                  "Moody's" means Moody's Investors Service, Inc.

                  "Moody's Rating"-- see Pricing Schedule.

                  "Multiemployer  Plan"  means a  multiemployer  plan within the
meaning of  Section  4001(a)(3)  of ERISA (i) to which any ERISA  Entity is then
making or accruing an obligation to make contributions,  or (ii) with respect to
which Parent or any Subsidiary could reasonably be expected to incur liability.

                  "Non-U.S. Lender"-- see Section 3.5(iv).

                  "Note"-- see Section 2.13(iv).

                  "Notice of Assignment" -- see Section 12.3.2.

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

                  "Other Taxes"-- see Section 3.5(ii).

                  "Parent" means Vectren  Corporation,  an Indiana  corporation,
and, to the extent permitted by this Agreement, its successors and assigns.

                  "Participants"-- see Section 12.2.1.

                  "Payment  Date"  means the last  Business  Day of each  March,
June, September and December.

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

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

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

                  "Pricing   Schedule"   means  the  Schedule   attached  hereto
identified as such.

                  "Prime Rate" means a rate per annum equal to the prime rate of
interest   announced  by  Credit   Suisse   First   Boston  (or  any   successor
Administrative  Agent) from time to time,  changing  when and as said prime rate
changes.

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

                  "Purchasers"-- see Section 12.3.1.

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

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

                  "Required  Lenders" means Lenders in the aggregate having more
than 50% of the Aggregate  Commitment  or, if the Aggregate  Commitment has been
terminated,  Lenders in the  aggregate  holding  more than 50% of the  aggregate
unpaid principal amount of the outstanding Loans.

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

                  "Risk-Based Capital Guidelines" -- see Section 3.2.

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

                  "S&P Rating" -- see Pricing Schedule.

                  "Schedule"  refers to a  schedule  to this  Agreement,  unless
another document is specifically referenced.

                  "SEC" means the  Securities  and Exchange  Commission  (or any
successor agency thereto).

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

                  "Sole Lead Arranger" means Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, and its successors.

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

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

                  "Syndication  Agent" means Merrill Lynch & Co., Merrill Lynch,
Pierce,  Fenner & Smith  Incorporated,  in its capacity as syndication agent for
the Lenders.

                  "Tax Representation Certificate"-- see Section 3.5(iv).

                  "Taxes"  means any and all  present or future  taxes,  duties,
levies, fees, imposts, deductions, charges or withholdings,  whether computed on
a  separate,  consolidated,  unitary,  combined  or other  basis and any and all
liabilities  (including  interest,  fines,  penalties  or additions to tax) with
respect to the foregoing, but excluding Excluded Taxes.

                  "Term Loans"-- see Section 2.19.

                  "'34 Act Reports"  means the periodic  reports of Parent filed
with the SEC on Forms 10-K, 10-Q and 8-K (or any successor forms thereto).

                  "Transactions"  means the  Acquisition,  the entering into and
borrowings  under  this  Agreement  and  other  transactions  entered  into  and
consummated in connection with the Acquisition.

                  "Transferee"-- see Section 12.4.

                  "Type"  means,  with respect to any  Advance,  its nature as a
Floating Rate Advance or a Eurodollar Advance.

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

                  "U.S. Lender"-- see Section 3.5(iv).

                  "VUHI"  means  Vectren  Utility  Holdings,  Inc.,  an  Indiana
corporation  and a  Wholly-Owned  Subsidiary  of  Parent,  and,  to  the  extent
permitted by this Agreement, its successors and assigns.

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

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

                                   ARTICLE II

                                   THE CREDITS

                  2.1. Commitment. From and including the date of this Agreement
and prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement,  to make loans (each a "Loan")
to the Borrowers  from time to time in amounts not to exceed in the aggregate at
any one time  outstanding  to the  Borrowers  collectively  the  amount  of such
Lender's Commitment. Subject to the terms of this Agreement, either Borrower may
borrow,  repay  and  reborrow  hereunder  at any  time  prior  to  the  Facility
Termination  Date.  Subject to Section 2.19,  the  Commitments to lend hereunder
shall expire on the Facility Termination Date.

                  2.2. Required Payments;  Termination. Any outstanding Advances
and all other unpaid  Obligations  shall be paid in full by the Borrowers on the
Facility  Termination  Date, except that all Term Loans shall be paid in full by
the Borrowers on the second anniversary of the date hereof.

                  2.3.  Ratable Loans.  Each Advance  hereunder shall consist of
Loans made from the  several  Lenders  ratably in  proportion  to the ratio that
their respective  Commitments bear to the Aggregate Commitment from time to time
(and with respect to Section 2.19, immediately prior to the Facility Termination
Date).

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

                  2.5.  Facility Fee;  Utilization Fee;  Reductions in Aggregate
Commitment.   The  Borrowers  agree,  jointly  and  severally,  to  pay  to  the
Administrative  Agent for the  account of each  Lender a  facility  fee at a per
annum  rate  equal to the  Applicable  Facility  Fee Rate on the  amount of such
Lender's  Commitment  from  the  date  hereof,  to and  including  the  Facility
Termination Date,  payable on each Payment Date and on the Facility  Termination
Date  or,  in the  case of Term  Loans,  on each  Payment  Date  and the date of
maturity of the Term Loans. The Borrowers agree,  jointly and severally,  to pay
to the Administrative  Agent for the account of each Lender a utilization fee at
a per annum rate equal to the Applicable  Utilization  Fee Rate of such Lender's
daily average outstanding Loans for so long as the average outstanding Loans are
greater than 33.3% of the Aggregate  Commitments (or, in the case of Term Loans,
on each date after the Facility Termination Date regardless of the percentage of
the commitments drawn at the Facility Termination Date), payable on each Payment
Date, the Facility  Termination Date and the date of maturity of the Term Loans.
The Borrowers may  permanently  reduce the Aggregate  Commitment in whole, or in
part ratably  among the Lenders in integral  multiples of  $10,000,000,  upon at
least three  Business Days' prior written  notice to the  Administrative  Agent,
which notice shall specify the amount of any such reduction;  provided, however,
that the  amount  of the  Aggregate  Commitment  may not be  reduced  below  the
aggregate  principal  amount of the outstanding  Advances.  All accrued facility
fees  and  utilization  fees  shall  be  payable  on the  effective  date of any
termination of the obligations of the Lenders to make Loans hereunder.

                  2.6. Minimum Amount of Each Advance.  Each Eurodollar  Advance
shall  be in  the  amount  of  $10,000,000  or a  higher  integral  multiple  of
$2,500,000,  and each Floating Rate Advance shall be in the amount of $2,500,000
or a higher integral multiple thereof.

                  2.7. Optional Principal Payments.  The Borrowers may from time
to time pay, without penalty or premium,  all outstanding Floating Rate Advances
or, in a minimum  aggregate  amount of $2,500,000 or a higher integral  multiple
thereof, any portion of the outstanding Floating Rate Advances upon one Business
Day's prior notice to the  Administrative  Agent. The Borrowers may from time to
time pay, subject to the payment of any funding indemnification amounts required
by Section  3.4 but  without  penalty or  premium,  any  outstanding  Eurodollar
Advance or, in a minimum  aggregate  amount of $10,000,000 or a higher  integral
multiple of $2,500,000,  any portion of an outstanding  Eurodollar  Advance upon
three Business Days' prior notice to the Administrative Agent.

                  2.8.  Method of Selecting  Types and Interest  Periods for New
Advances.  The Borrower  requesting  an Advance shall select the Type of Advance
and, in the case of each  Eurodollar  Advance,  the Interest  Period  applicable
thereto from time to time. The applicable Borrower shall give the Administrative
Agent irrevocable  notice (a "Borrowing  Notice") not later than 11:00 a.m. (New
York City time) on the  Borrowing  Date of each  Floating  Rate  Advance and not
later than  11:00  a.m.  (New York City time)  three  Business  Days  before the
Borrowing Date for each Eurodollar Advance, specifying:

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

                  (ii) the aggregate amount of such Advance,

                  (iii) the Type of Advance selected, and

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

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

                  2.9. Conversion and Continuation of Outstanding Advances. Each
Floating Rate Advance shall continue as a Floating Rate Advance unless and until
such Floating Rate Advance is converted  into a Eurodollar  Advance  pursuant to
this Section 2.9 or is repaid in accordance  with Section 2.7.  Each  Eurodollar
Advance  shall  continue  as a  Eurodollar  Advance  until  the end of the  then
applicable Interest Period therefor, at which time such Eurodollar Advance shall
be  automatically  converted  into a  Floating  Rate  Advance  unless  (x)  such
Eurodollar Advance is or was repaid in accordance with Section 2.7 or (y) either
Borrower  shall have given the  Administrative  Agent a  Conversion/Continuation
Notice (as defined below)  requesting  that, at the end of such Interest Period,
such Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest Period.  Subject to the terms of Section 2.6, either Borrower may elect
from time to time to convert all or any part of a Floating  Rate  Advance into a
Eurodollar  Advance.   Either  Borrower  shall  give  the  Administrative  Agent
irrevocable notice (a "Conversion/Continuation  Notice") of each conversion of a
Floating Rate Advance into a Eurodollar  Advance or continuation of a Eurodollar
Advance not later than 10:00 a.m.  (New York City time) at least three  Business
Days prior to the date of the requested conversion or continuation, specifying:

                  (i) the requested date, which shall be a Business Day, of such
         conversion or continuation,

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

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

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

                  2.11. Rates Applicable After Default. Notwithstanding anything
to the contrary  contained in Section 2.8 or 2.9,  during the  continuance  of a
Default or Unmatured  Default,  the Required  Lenders may, at their  option,  by
notice to the  Borrowers  (which  notice  may be  revoked  at the  option of the
Required  Lenders   notwithstanding  any  provision  of  Section  8.2  requiring
unanimous consent of the Lenders to changes in interest rates),  declare that no
Advance may be made as,  converted  into or continued  as a Eurodollar  Advance.
During the continuance of a Default,  the Required Lenders may, at their option,
by notice to the  Borrowers  (which  notice  may be revoked at the option of the
Required  Lenders   notwithstanding  any  provision  of  Section  8.2  requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each overdue  Eurodollar  Advance  shall bear  interest for the remainder of the
applicable  Interest  Period at the rate  otherwise  applicable to such Interest
Period plus 2% per annum, and (ii) each overdue Floating Rate Advance shall bear
interest at a rate per annum equal to the  Floating  Rate in effect from time to
time plus 2% per annum;  provided,  however,  that,  during the continuance of a
Default  under  Section 7.6 or 7.7, the interest  rates set forth in clauses (i)
and (ii) above shall be  applicable  to all  Advances  without  any  election or
action on the part of the Administrative Agent or any Lender.

                  2.12.  Method of  Payment.  All  payments  of the  Obligations
hereunder  shall  be  made,  without  setoff,  deduction  or  counterclaim,   in
immediately  available funds to the  Administrative  Agent at the Administrative
Agent's  address  specified  pursuant to Article  XIII,  or at any other Lending
Installation   of  the   Administrative   Agent  specified  in  writing  by  the
Administrative Agent to the Borrowers,  by noon (New York City time) on the date
when due and shall be applied  ratably  by the  Administrative  Agent  among the
Lenders.  Each payment delivered to the Administrative  Agent for the account of
any Lender  shall be  delivered  promptly  by the  Administrative  Agent to such
Lender in the same type of funds that the  Administrative  Agent received at its
address  specified  pursuant to Article XIII or at any Lending  Installation  of
such Lender  specified in a notice timely received by the  Administrative  Agent
from such Lender.

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

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

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

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

                  2.14.  Telephonic Notices. Each Borrower hereby authorizes the
Lenders and the  Administrative  Agent to extend,  convert or continue Advances,
effect selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Administrative  Agent or any Lender in
good faith  believes to be acting on behalf of either  Borrower.  Each  Borrower
agrees to deliver promptly to the  Administrative  Agent a written  confirmation
signed by an  Authorized  Officer,  if such  confirmation  is  requested  by the
Administrative  Agent or any Lender,  of each telephonic  notice. If the written
confirmation  differs  in any  material  respect  from the  action  taken by the
Administrative  Agent and the Lenders,  the records of the Administrative  Agent
and the Lenders shall govern absent manifest error.

                  2.15. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each  Floating  Rate Advance  shall be payable on each Payment  Date,
commencing  with the first  such date to occur  after  the date  hereof,  and at
maturity.  Interest  accrued on each Eurodollar  Advance shall be payable on the
last day of its applicable  Interest Period, on any date on which the Eurodollar
Advance is prepaid,  whether by  acceleration  or  otherwise,  and at  maturity.
Interest  accrued on each  Eurodollar  Advance having an Interest  Period longer
than three  months  shall  also be  payable on the last day of each  three-month
interval during such Interest  Period.  Interest,  facility fees and utilization
fees shall be calculated for actual days elapsed on the basis of a 360-day year.
Interest  shall be payable for the day an Advance is made but not for the day of
any payment on the amount  paid if payment is  received  prior to noon (New York
City time) at the place of payment.  If any payment of  principal of or interest
on an  Advance  shall  become  due on a day which is not a  Business  Day,  such
payment shall be made on the next succeeding  Business Day and, in the case of a
principal  payment,  such  extension  of time  shall be  included  in  computing
interest  in  connection  with such  payment  (subject  to the  provisos  in the
definition of "Interest Period").

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

                  2.17. Lending Installations. Each Lender may book its Loans at
any  Lending  Installation  selected  by such  Lender and may change its Lending
Installation  from time to time. All terms of this Agreement  shall apply to any
such Lending  Installation and the Loans and any Notes issued hereunder shall be
deemed  held  by  the  applicable   Lender  for  the  benefit  of  such  Lending
Installation. Each Lender may, by written notice to the Administrative Agent and
the  Borrowers  in  accordance  with  Article  XIII,  designate  replacement  or
additional Lending  Installations through which Loans will be made by it and for
whose account Loan payments are to be made.

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

                  2.19. Term-out Option. The Borrowers may, subject to the terms
and  conditions  set forth  below,  convert  on the  Facility  Termination  Date
outstanding Advances to term loans ("Term Loans") in an amount not to exceed 50%
of the Aggregate  Commitments then in effect. Term Loans shall mature and be due
and payable on the second  anniversary of the date hereof.  The effectiveness of
any conversion  pursuant to this Section 2.19 shall be subject to (a) no Default
or  Unmatured   Default  existing   immediately  after  giving  effect  to  such
conversion,  (b)  payment  by the  Borrowers  of a fee  to  each  Lender  on its
aggregate  principal  amount of Terms Loans equal to a percentage  of the amount
thereof to be mutually agreed to by the Borrowers and the Sole Lead Arranger not
fewer than 30 days prior to the Facility  Termination  Date, and (c) delivery by
the  Borrowers  of a  request  for  conversion  to the  Administrative  Agent (a
"Conversion  Request")  no more than 60 days and not fewer than 30 days prior to
the Facility Termination Date.

                                   ARTICLE III

                             YIELD PROTECTION; TAXES

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

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

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

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

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

                  3.2.  Changes in  Capital  Adequacy  Regulations.  If a Lender
determines  the amount of capital  required or expected to be maintained by such
Lender, any Lending  Installation of such Lender or any corporation  controlling
such Lender is increased as a result of a Change, then, within 15 days of demand
by such  Lender,  the  Borrowers  shall pay such Lender the amount  necessary to
compensate  for any  shortfall  in the rate of  return  on the  portion  of such
increased   capital  which  such  Lender  determines  is  attributable  to  this
Agreement,  its Loans or its  Commitment to make Loans  hereunder  (after taking
into account such Lender's policies as to capital adequacy).  "Change" means (i)
any change after the date of this Agreement in the Risk-Based Capital Guidelines
or  (ii)  any  adoption  of  or  change  in  any  other  law,   governmental  or
quasi-governmental  rule,  regulation,  policy,  guideline,   interpretation  or
directive  (whether  or not  having  the  force of law)  after  the date of this
Agreement  which  affects  the  amount of capital  required  or  expected  to be
maintained  by  any  Lender  or any  Lending  Installation  or  any  corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including  transition  rules,  and (ii) the  corresponding  capital  regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle  Committee on Banking  Regulation and  Supervisory
Practices  Entitled  "International  Convergence  of  Capital  Measurements  and
Capital  Standards,"  including  transition  rules,  and any  amendments to such
regulations adopted prior to the date of this Agreement.

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

                  3.4. Funding  Indemnification.  If any payment of a Eurodollar
Advance  occurs on a date which is not the last day of the  applicable  Interest
Period,  whether  because  of  acceleration,   prepayment  or  otherwise,  or  a
Eurodollar  Advance  is not made on the date  specified  by a  Borrower  for any
reason other than default by the Lenders,  the  Borrowers  will  indemnify  each
Lender  for any loss or cost  incurred  by it  resulting  therefrom,  including,
without  limitation,  any  loss or cost in  liquidating  or  employing  deposits
acquired to fund or maintain such Eurodollar Advance.

                  3.5.  Taxes.  (i) All payments by the  Borrowers to or for the
account of any Lender or the  Administrative  Agent  hereunder or under any Note
shall be made without  setoff,  counterclaim or other defense and free and clear
of,  and  without  deduction  or  withholding  for,  any and all  Taxes.  If the
Borrowers  shall be required  by law to deduct or withhold  any Taxes from or in
respect of any sum payable hereunder to any Lender or the Administrative  Agent,
(a) the sum payable  shall be  increased  as  necessary so that after making all
required  deductions  or  withholdings  (including  deductions  or  withholdings
applicable to additional sums payable under this Section 3.5) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such  deductions or  withholdings  been made, (b) the
Borrowers  shall make such deductions or  withholdings,  (c) the Borrowers shall
pay the full amount deducted or withheld to the relevant authority in accordance
with  applicable law and (d) the Borrowers  shall furnish to the  Administrative
Agent the original copy of a receipt  evidencing  payment thereof within 30 days
after such payment is made.

                 (ii) In addition, the Borrowers hereby agree to pay any present
or future stamp or  documentary  taxes and any other  excise or property  taxes,
charges or similar  levies which arise from any payment made  hereunder or under
any Note or from the execution,  delivery or registration  of, or otherwise with
respect to, this Agreement or any Note ("Other Taxes").

                (iii) The Borrowers hereby agree to indemnify the Administrative
Agent and each Lender for the full  amount of Taxes or Other  Taxes  (including,
without  limitation,  any Taxes or Other Taxes imposed on amounts  payable under
this  Section  3.5)  paid by the  Administrative  Agent or such  Lender  and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. Payments due under this indemnification shall be made within 30
days of the date the  Administrative  Agent or such Lender makes demand therefor
pursuant to Section 3.6.

                 (iv) Each Lender that is not a United States person (as defined
in Section  7701(a)(30) of the Code) (each a "Non-U.S.  Lender")  agrees that it
will, not more than ten Business Days after the date of this  Agreement,  or, in
the case of a Lender that is an assignee or transferee of an interest under this
Agreement  pursuant to Section  12.1 or 12.3 (unless the  respective  Lender was
already a Lender hereunder immediately prior to such assignment or transfer), on
the date of such  assignment  or  transfer to such  Lender,  (i) deliver to each
Borrower and to the  Administrative  Agent two duly  completed  copies of United
States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case
that such Lender is entitled to receive  payments under this  Agreement  without
deduction or  withholding  of any United States  federal  income taxes (or, with
respect to any assignee Lender, at least as extensive as the assigning  Lender),
or (ii) if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A)
of the Code and cannot deliver either  Internal  Revenue  Service Form W-8BEN or
W-8ECI pursuant to clause (i) above, (x) a certificate substantially in the form
of Exhibit F (any such certificate, a "Tax Representation  Certificate") and (y)
two accurate and complete  original  signed copies of Internal  Revenue  Service
Form W-8BEN certifying to such Lender's entitlement to a complete exemption from
United  States  withholding  tax with  respect to payments to be made under this
Agreement (or, with respect to any assignee Lender, at least as extensive as the
assigning  Lender).  At the  request of either  Borrower,  each Lender that is a
United  States  person (as such term is defined  in Section  7701(a)(30)  of the
Code) for U.S. federal income tax purposes (a "U.S. Lender"),  other than a U.S.
Lender that is a  corporation  or financial  institution  (an "Exempt  Lender"),
agrees to deliver to the Borrowers and to the  Administrative  Agent on or prior
to the  Closing  Date,  or in the case of a U.S.  Lender  that is not an  Exempt
Lender and that is an assignee or transferee of an interest under this Agreement
(unless the respective  Lender was already a Lender hereunder  immediately prior
to such  assignment or transfer),  on the date of such assignment or transfer to
such  Lender,  two  accurate and  complete  original  signed  copies of Internal
Revenue  Service  Form W-9 (or  successor  form) in  order to  demonstrate  such
Lender's  entitlement  to  a  complete  exemption  from  United  States  back-up
withholding tax with respect to payments to be made under this  Agreement.  Each
Non-U.S.  Lender  further  undertakes  to  deliver to each  Borrower  and to the
Administrative  Agent (x)  renewals or  additional  copies of such forms (or any
successor  forms) on or  before  the date that  such  form  expires  or  becomes
obsolete,  and (y) after the  occurrence of any event  requiring a change in the
most recent  forms so  delivered  by it,  such  additional  forms or  amendments
thereto as may be reasonably  requested by either Borrower or the Administrative
Agent. All forms or amendments described in the preceding sentence shall certify
that such Lender is entitled to receive  payments under this  Agreement  without
deduction or withholding  of any United States  federal income taxes,  unless an
event (including  without  limitation any change in treaty, law or regulation or
any change in the  interpretation or administration  thereof) has occurred prior
to the date on which any such delivery would otherwise be required which renders
all such  forms  inapplicable  or which  would  prevent  such  Lender  from duly
completing and delivering any such form or amendment with respect to it and such
Lender advises the Borrowers and the Administrative Agent that it is not capable
of receiving  payments  without any  deduction or  withholding  of United States
federal income tax.

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

                 (vi)  Any  Lender  that is  entitled  to an  exemption  from or
reduction of  withholding  tax with respect to payments  under this Agreement or
any Note  pursuant to the law of any relevant  jurisdiction  or any treaty shall
deliver to the Borrowers (with a copy to the Administrative  Agent), at the time
or times  prescribed  by applicable  law,  such properly  completed and executed
documentation  prescribed by  applicable  law as will permit such payments to be
made without withholding or at a reduced rate.

                  3.6. Lender Statements;  Survival of Indemnity.  To the extent
reasonably  possible and upon the request of either Borrower,  each Lender shall
designate an alternate Lending Installation with respect to its Eurodollar Loans
to reduce any liability of the Borrowers to such Lender under  Sections 3.1, 3.2
and 3.5 or to avoid the unavailability of Eurodollar Advances under Section 3.3,
so  long  as  such   designation  is  not,  in  the  judgment  of  such  Lender,
disadvantageous to such Lender. Each Lender shall deliver a written statement of
such Lender to the Borrowers (with a copy to the Administrative Agent) as to the
amount due, if any,  under Section 3.1, 3.2, 3.4 or 3.5. Such written  statement
shall set forth in  reasonable  detail the  calculations  upon which such Lender
determined  such  amount  and  shall be final,  conclusive  and  binding  on the
Borrowers in the absence of manifest  error.  Determination  of amounts  payable
under such Sections in connection  with a Eurodollar Loan shall be calculated as
though each Lender funded its Eurodollar  Loan through the purchase of a deposit
of the type and  maturity  corresponding  to the deposit  used as a reference in
determining the Eurodollar Rate applicable to such Loan, whether in fact that is
the case or not. Unless otherwise  provided herein,  the amount specified in the
written  statement of any Lender shall be payable on demand after receipt by the
Borrowers of such written  statement.  The  obligations  of the Borrowers  under
Sections  3.1,  3.2, 3.4 and 3.5 shall survive  payment of the  Obligations  and
termination of this Agreement.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

                  4.1.  Initial Advance.

                  The Lenders shall not be required to make the initial  Advance
hereunder unless the following conditions have been satisfied:

                  (a) The  Borrowers  shall  have  furnished  to the  Sole  Lead
         Arranger and the  Administrative  Agent, with sufficient copies for the
         Lenders, copies of the articles or certificate of incorporation of each
         Borrower, together with all amendments, and a certificate of existence,
         each  certified  by  the  appropriate   governmental   officer  in  its
         jurisdiction of incorporation;

                  (b) The  Borrowers  shall  have  furnished  to the  Sole  Lead
         Arranger and the  Administrative  Agent, with sufficient copies for the
         Lenders,  copies,  certified by the Secretary or Assistant Secretary of
         each Borrower,  of such Borrower's by-laws and of such Borrower's Board
         of Directors'  resolutions  and of  resolutions or actions of any other
         body authorizing the execution of the Loan Documents;

                  (c) The  Borrowers  shall  have  furnished  to the  Sole  Lead
         Arranger and the  Administrative  Agent, with sufficient copies for the
         Lenders,  an  incumbency  certificate,  executed  by the  Secretary  or
         Assistant Secretary of each Borrower,  which shall identify by name and
         title and bear the signatures of the Authorized  Officers and any other
         officers of such Borrower  authorized to sign the Loan Documents,  upon
         which  certificate  the  Administrative  Agent and the Lenders shall be
         entitled  to rely  until  informed  of any  change in  writing  by such
         Borrower;

                  (d) The  Borrowers  shall  have  furnished  to the  Sole  Lead
         Arranger and the  Administrative  Agent, with sufficient copies for the
         Lenders,  a written opinion of Borrowers'  counsel in substantially the
         form of Exhibit A;

                  (e) The  Borrowers  shall  have  furnished  to the  Sole  Lead
         Arranger and the  Administrative  Agent any Note  requested by a Lender
         pursuant to Section 2.13(iv);

                  (f) The  Borrowers  shall  have  furnished  to the  Sole  Lead
         Arranger  and  the   Administrative   Agent,   written  money  transfer
         instructions,  in substantially the form of Exhibit D, addressed to the
         Administrative  Agent  and  signed  by an  Authorized  Officer  of each
         Borrower,   together   with   such   other   related   money   transfer
         authorizations  as  the   Administrative   Agent  may  have  reasonably
         requested;

                  (g) Parent's long-term, senior unsecured,  non-credit-enhanced
         indebtedness  shall be rated no lower  than Baa1 by  Moody's or BBB+ by
         S&P;

                  (h) The Sole Lead Arranger shall be reasonably  satisfied with
         the corporate structure and pro forma  capitalization of Parent and the
         Subsidiaries   on  a  pro  forma  basis  after  giving  effect  to  the
         Transactions;

                  (i) The  Transactions  and the financing  therefor shall be in
         compliance  with all material  laws and  regulations,  or the Sole Lead
         Arranger  shall  have   determined  such  to  be  inapplicable  to  the
         Transactions;

                  (j)  Simultaneously  with the making of the initial  Advances,
         the Acquisition shall have been consummated in all material respects in
         accordance with the terms of the Acquisition Agreement;

                  (k) No law or regulation shall be applicable in the reasonable
         judgment of the Sole Lead Arranger that restrains,  prevents or imposes
         material  adverse   conditions  upon  any  material  component  of  the
         Transactions;

                  (l) There shall not have occurred or become known any Material
         Adverse  Effect or any  condition  or event  that could  reasonably  be
         expected to result in a Material  Adverse  Effect  since  December  31,
         1999;

                  (m) All requisite  governmental  authorities and third parties
         shall have  approved or  consented  to the  Transactions  to the extent
         required  (without the  imposition,  in the reasonable  judgment of the
         Sole  Lead  Arranger,   of  any  materially   burdensome  condition  or
         qualification),  and all  such  approvals  shall be in full  force  and
         effect,  and there shall be no governmental or judicial action,  actual
         or  threatened,  that  has or could  have a  reasonable  likelihood  of
         restraining, preventing or imposing materially burdensome conditions on
         any of the Transactions;

                  (n) All accrued fees and expenses  (including  the  reasonable
         fees and expenses of counsel to the Sole Lead  Arranger) of the Lenders
         and the Sole Lead  Arranger in connection  with this  Agreement and the
         Fee Letter shall have been paid; and

                  (o) The Sole Lead  Arranger  shall  have  received  such other
         legal  opinions,  corporate  documents  and  other  instruments  and/or
         certificates as it may reasonably request.

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

                  (i)    No Default or Unmatured Default exists; and

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

Each Borrowing  Notice shall  constitute a  representation  and warranty by each
Borrower  that the  conditions  contained in Sections  4.2(i) and (ii) have been
satisfied.  Any Lender may require a duly  completed  compliance  certificate in
substantially  the form of Exhibit B as a condition  to making an Advance.  This
Section  4.2 shall not apply to  conversions  or  continuations  of  outstanding
Advances.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

                  Each Borrower represents and warrants to the Lenders that:

                  5.1.  Existence and  Standing.  Each Borrower is a corporation
properly  organized and validly existing under the laws of the State of Indiana;
each Subsidiary is a corporation,  partnership or limited liability company duly
incorporated  or  organized,  as the case may be,  validly  existing and (to the
extent such concept  applies to such entity) in good standing  under the laws of
its jurisdiction of  incorporation  or organization;  and each Borrower and each
Subsidiary  has  all  requisite  authority  to  conduct  its  business  in  each
jurisdiction in which its business is conducted.

                  5.2.  Authorization and Validity.  Each Borrower has the power
and  authority  and legal right to execute and deliver  this  Agreement  and the
Notes (if any) and to perform its  obligations  hereunder  and  thereunder.  The
execution and delivery by each Borrower of this Agreement and the Notes (if any)
and the performance of its  obligations  hereunder and thereunder have been duly
authorized by proper corporate proceedings. This Agreement constitutes, and when
duly executed and delivered any Note will constitute, a legal, valid and binding
obligation of each Borrower enforceable against each Borrower in accordance with
its terms, except as enforceability may be limited by bankruptcy,  insolvency or
similar laws affecting the enforcement of creditors' rights generally.

                  5.3. No Conflict;  Government  Consent.  Neither the execution
and  delivery  by  the  Borrowers  of  this  Agreement  or  any  Note,  nor  the
consummation of the transactions  contemplated  hereby,  nor compliance with the
provisions  hereof,  will violate (i) any law, rule,  regulation,  order,  writ,
judgment,  injunction,  decree  or  award  binding  on  either  Borrower  or any
Subsidiary or (ii) either Borrower's articles or certificate of incorporation or
by-laws or (iii) the  provisions  of any  indenture,  instrument or agreement to
which either  Borrower or any  Subsidiary is a party or is subject,  or by which
either  Borrower or any  Subsidiary,  or any of their  respective  Property,  is
bound,  or conflict  with or constitute a default  thereunder,  or result in, or
require,  the  creation or  imposition  of any Lien in, of or on any Property of
either  Borrower or any Subsidiary  pursuant to the terms of any such indenture,
instrument or agreement.  No order, consent,  adjudication,  approval,  license,
authorization  or validation of, or filing,  recording or registration  with, or
exemption by, or other action in respect of any  governmental  or public body or
authority,  or any  subdivision  thereof,  that  has not  been  obtained  by the
Borrowers  is required to be obtained by the  Borrowers in  connection  with the
execution and delivery of this Agreement or any Note, the borrowings  under this
Agreement,  the payment and  performance by the Borrowers of the  Obligations or
the legality,  validity,  binding effect or  enforceability of this Agreement or
any Note.

                  5.4. Financial Statements.  The December 31, 1999 consolidated
financial statements of Parent and its Subsidiaries  heretofore delivered to the
Lenders  were  prepared  in  accordance   with  GAAP  and  fairly   present  the
consolidated  financial  condition and operations of Parent and its Subsidiaries
at such date and the  consolidated  results of their  operations  for the period
then ended.

                  5.5.  Material Adverse Change.  Since December 31, 1999, there
has been no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of Parent and its  Subsidiaries  which could
reasonably be expected to have a Material Adverse Effect.

                  5.6. Taxes.  Each Borrower and its Subsidiaries have filed all
United States federal tax returns and all other tax returns,  statements,  forms
and  reports  for taxes  which are  required to be filed and have paid all taxes
which have become due or any assessment  received by such Borrower or any of its
Subsidiaries,  except such taxes,  if any, as are being  contested in good faith
and as to which adequate reserves have been provided in accordance with GAAP and
as to which no Lien exists.  No tax liens have been filed and no material claims
are being asserted or, to the knowledge of each Borrower,  threatened in writing
with respect to any such taxes. The charges,  accruals and reserves on the books
of each  Borrower  and  its  Subsidiaries  in  respect  of any  taxes  or  other
governmental charges are adequate.

                  5.7.  Litigation  and  Contingent  Obligations.  Except as set
forth in Parent's '34 Act Reports  filed prior to the date hereof,  (a) there is
no litigation,  arbitration,  governmental investigation,  proceeding or inquiry
pending or, to the best of the  knowledge of any of their  officers,  threatened
against or affecting either Borrower or any Subsidiary which could reasonably be
expected to have a Material Adverse Effect or which seeks to prevent,  enjoin or
delay the making of any Loan;  and (b) as of the date hereof,  the Borrowers and
its  Subsidiaries  have no material  contingent  obligations not provided for or
disclosed in the financial statements referred to in Section 5.4.

                  5.8.  ERISA.  No ERISA  Event has  occurred  or is  reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a  Material  Adverse  Effect.  The  present  value of all  accumulated
benefit  obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial  Accounting  Standards No. 87) did not, as of
the date of the most recent financial statements reflecting such amounts, exceed
the fair market value of the assets of all such  underfunded  Plans by an amount
that would be reasonably  likely to result in a Material  Adverse  Effect.  Each
ERISA Entity is in compliance with the presently applicable  provisions of ERISA
and the Code with  respect  to each Plan and all other  employee  benefit  plans
maintained or contributed to by the Borrowers or the Subsidiaries,  except where
failure to comply could not  reasonably  be expected to have a Material  Adverse
Effect.  Using actuarial  assumptions and  computation  methods  consistent with
subpart 1 of subtitle E of Title IV of ERISA,  the aggregate  liabilities of any
of either Borrower or any Subsidiary in the event of a complete  withdrawal from
a  Multiemployer  Plan,  as of the close of the most recent  fiscal year of each
Multiemployer  Plan from  which  any ERISA  Entity  is  reasonably  expected  to
withdraw,  would not  reasonably  be  expected  to result in a Material  Adverse
Effect.  Each Foreign Plan (as defined below) has been  maintained in compliance
with  the  requirements  of  any  and  all  applicable  laws,  statutes,  rules,
regulations  and orders,  except where failure to do so would not  reasonably be
expected  to result in a  Material  Adverse  Effect.  Neither  Borrower  nor any
Subsidiary  have incurred any liability in connection with the termination of or
withdrawal from any Foreign Plan that could  reasonably be expected to result in
a Material Adverse Effect.  For purposes  hereof,  "Foreign Plan" shall mean any
pension benefit plan, program, policy, arrangement or agreement that is required
to be funded and that is maintained or  contributed to by, or entered into with,
either Borrower or any Subsidiary with respect to employees employed outside the
United States.

                  5.9.  Accuracy  of  Information.   No  information,   exhibit,
financial  statement,  schedule or report  furnished  by either  Borrower or any
Subsidiary to the  Administrative  Agent or to any Lender in connection with the
negotiation,  preparation or delivery of, compliance with, the Loan Documents or
distributed in connection  with the syndication of the Commitments and Loans and
the Loan  Documents  themselves,  but in each case  excluding  all  projections,
whether  prior to or after the date of this  Agreement,  when  taken as a whole,
contain any material misstatement of fact or omitted to state a material fact or
any fact  necessary  to make the  statements  contained  therein not  materially
misleading. The projections and pro forma financial information furnished at any
time by the Borrowers or any Subsidiary to any Lender pursuant to this Agreement
have been prepared in good faith based on assumptions  believed by the Borrowers
to be reasonable at the time made, it being  recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results  during the period or periods  covered by such financial
information  may  differ  from the  projected  results  set forth  therein  by a
material amount and no Borrower or Subsidiary, however, makes any representation
as to the ability of either  Borrower or any  Subsidiary  to achieve the results
set forth in any such projections. Each Borrower and Subsidiary understands that
all such statements, representations and warranties shall be deemed to have been
relied upon by the Lenders as a material  inducement  to make each  extension of
credit hereunder.

                  5.10.  Regulation  U. Neither  Borrower nor any  Subsidiary is
engaged principally,  or as one of its important activities,  in the business of
extending credit for the purpose, whether immediate,  incidental or ultimate, of
buying or carrying Margin Stock.  Margin Stock  constitutes less than 25% of the
value of the assets (of Parent and its Subsidiaries  taken as a whole) which are
subject to any limitation on sale, pledge or other restriction hereunder.

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

                  5.12. Compliance With Laws. The Borrowers and the Subsidiaries
have complied  with all  applicable  statutes,  rules,  regulations,  orders and
restrictions  of any domestic or foreign  government or any  instrumentality  or
agency  thereof  having  jurisdiction  over  the  conduct  of  their  respective
businesses or the ownership of their respective  Property except for any failure
to comply with any of the  foregoing  which could not  reasonably be expected to
have a Material Adverse Effect.

                  5.13. Ownership of Properties. Except as set forth on Schedule
1, on the date of this Agreement,  the Borrowers and the Subsidiaries  will have
good title, free of all Liens other than those permitted by Section 6.11, to all
of the  Property  and assets  reflected  in Parent's  most  recent  consolidated
financial statements provided to the Administrative Agent as owned by Parent and
the Subsidiaries.

                  5.14. Plan Assets; Prohibited Transactions.Neither Borrower is
an entity  deemed to hold  "plan  assets"  within the  meaning of 29 C.F.R.  ss.
2510.3-101  of an employee  benefit  plan (as defined in Section  3(3) of ERISA)
which is subject to Title I of ERISA or any plan  (within the meaning of Section
4975 of the Code).

                  5.15.  Environmental Matters.  Except as set forth in Parent's
'34 Act  Reports  filed  prior  to the  date  hereof,  there  are no  risks  and
liabilities  accruing to either  Borrower due to  Environmental  Laws that could
reasonably be expected to have a Material Adverse Effect.

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

                  5.17. Public Utility Holding Company Act. Parent is a "holding
company"  within the meaning of the Public Utility  Holding Company Act of 1935,
as amended, but is exempt from registration  thereunder pursuant to Section 3(a)
thereof.

                  5.18. Pari Passu Indebtedness. The Indebtedness under the Loan
Documents ranks at least pari passu with all other unsecured Indebtedness of the
Borrowers.

                                   ARTICLE VI

                                    COVENANTS

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

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

                  (i) Within 90 days  after the close of each  fiscal  year,  an
         unqualified  audit report  certified by Arthur  Andersen LLP or another
         firm of independent  certified  public  accountants that is a member of
         the "Big Five",  prepared  in  accordance  with GAAP on a  consolidated
         basis for itself and its  Subsidiaries,  including balance sheets as of
         the end of such  period and  related  statements  of  income,  retained
         earnings  and cash  flows,  accompanied  by (a) any  management  letter
         prepared by said accountants, and (b) a certificate of said accountants
         that,  in the course of their  examination  necessary  for their  audit
         report,  they have  obtained no  knowledge  of any Default or Unmatured
         Default,  or if, in the  opinion of such  accountants,  any  Default or
         Unmatured Default shall exist, stating the nature and status thereof.

                 (ii)  Within  45  days  after  the  close  of the  first  three
         quarterly periods of each fiscal year, for itself and its Subsidiaries,
         either (i) consolidated and  consolidating  unaudited balance sheets as
         at the close of each such  period and  consolidated  and  consolidating
         profit  and  loss  and  reconciliation  of  surplus  statements  and  a
         statement  of cash  flows for the  period  from the  beginning  of such
         fiscal  year to the end of such  quarter,  all  certified  by its chief
         financial officer,  or (ii) if Parent is then a "registrant" within the
         meaning of Rule 1-01 of Regulation  S-X of the SEC and required to file
         a report on Form 10-Q with the SEC, a copy of  Parent's  report on Form
         10-Q for such quarterly period.

                (iii)  Together with the  financial  statements  required  under
         Sections 6.1(i) and (ii), a compliance certificate in substantially the
         form of  Exhibit  B,  signed  by each  Borrower's  Vice  President  and
         Treasurer  stating that no Default or Unmatured  Default exists,  or if
         any Default or Unmatured Default exists,  stating the nature and status
         thereof.

                 (iv)  Promptly,  upon the  occurrence  of any ERISA Event that,
         alone or together with any other ERISA Events that have occurred, could
         reasonably  be expected to result in liability of the Borrowers and the
         Subsidiaries in an aggregate  amount exceeding  $20,000,000,  a written
         notice  specifying the nature thereof,  what action the Borrowers,  the
         Subsidiaries or other ERISA Entity have taken, are taking or propose to
         take with  respect  thereto,  and,  when  known,  any  action  taken or
         threatened by the Internal Revenue Service,  Department of Labor,  PBGC
         or Multiemployer Plan sponsor with respect thereto.

                  (v) Upon request by the Administrative  Agent,  copies of: (i)
         each Schedule B (Actuarial Information) to the annual report (Form 5500
         Series)  filed by any ERISA  Entity with the Internal  Revenue  Service
         with  respect  to each  Plan  maintained  or  contributed  to by either
         Borrower or any Subsidiary;  (ii) the most recent  actuarial  valuation
         report for each Plan;  (iii) all notices  received by any ERISA  Entity
         from a Multiemployer Plan sponsor or any governmental agency concerning
         an ERISA Event;  and (iv) such other documents or governmental  reports
         or  filings  relating  to any Plan as the  Administrative  Agent  shall
         reasonably request.

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

                (vii)   Promptly  upon  the  filing   thereof,   copies  of  all
         registration statements and annual, quarterly, monthly or other regular
         reports which Parent files with the SEC.

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

                  6.2. Use of Proceeds. No part of the proceeds of any extension
of credit hereunder will be used directly or indirectly and whether immediately,
incidentally  or  ultimately  to purchase or carry any Margin Stock or to extend
credit to others for such purpose or to refund Indebtedness  originally incurred
for such purpose. Each Borrower will use the proceeds of the Advances made to it
for general corporate purposes  (including,  without limitation,  to finance the
Acquisition).

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

                  6.4.  Conduct of Business.  Each Borrower will, and will cause
each Subsidiary to, carry on and conduct its business in substantially  the same
fields of enterprise as it is presently conducted and do all things necessary to
remain duly incorporated or organized,  validly existing and (to the extent such
concept  applies to such  entity) in good  standing  as a domestic  corporation,
partnership or limited liability company in its jurisdiction of incorporation or
organization,  as the case may be,  and  maintain  all  requisite  authority  to
conduct its business in each jurisdiction in which its business is conducted.

                  6.5. Taxes. Each Borrower will, and will cause each Subsidiary
to, timely file United States  federal and applicable  foreign,  state and local
tax returns,  statements, forms and reports required by law and pay when due all
taxes,  assessments and  governmental  charges and levies upon it or its income,
profits or  Property,  except  those which are being  contested in good faith by
appropriate  proceedings and as to which adequate reserves have been provided in
accordance with GAAP.

                  6.6.  Insurance.  Each  Borrower  will,  and will  cause  each
Subsidiary to, maintain with financially sound and reputable insurance companies
insurance on all their  Property in such  amounts and covering  such risks as is
consistent with sound business  practice,  and each Borrower will furnish to any
Lender upon request full information as to the insurance carried.

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

                  6.8.  Maintenance of Properties.  Each Borrower will, and will
cause each Subsidiary to, do all things necessary to maintain, preserve, protect
and keep its Property in good repair, working order and condition,  and make all
necessary and proper  repairs,  renewals and  replacements  so that its business
carried on in connection therewith may be properly conducted at all times.

                  6.9.  Inspection.  Each  Borrower  will,  and will  cause each
Subsidiary  to,  permit  the  Administrative  Agent  and the  Lenders,  by their
respective representatives and agents, to inspect any of the Property, books and
financial  records of each  Borrower  and each  Subsidiary,  to examine and make
copies of the books of accounts and other financial records of each Borrower and
each  Subsidiary,  and to discuss the  affairs,  finances  and  accounts of each
Borrower and each  Subsidiary  with,  and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Administrative
Agent  or any  Lender  may  designate.  After  the  occurrence  and  during  the
continuance  of a  Default,  any  such  inspection  shall  be at the  Borrowers'
expense;  at all  other  times,  the  Borrowers  shall  not be liable to pay the
expenses  of the  Administrative  Agent or any  Lender in  connection  with such
inspections.

                  6.10.  Consolidations,  Mergers  and  Sale of  Assets.  (a) No
Borrower will, nor will it permit any  Subsidiary to, sell,  lease,  transfer or
otherwise  dispose of all or  substantially  all of the assets of Parent and its
Subsidiaries  taken as a whole  (whether by a single  transaction or a number of
related  transactions  and  whether  at one  time or over a  period  of time) or
consolidate with or merge into any Person or permit any Person to merge into it,
except

                  (i) Any  Subsidiary  of Parent may be merged  into  Parent (so
         long as Parent is the survivor).

                 (ii) Any Subsidiary of Parent may sell all or substantially all
         of its assets  to, or  consolidate  with or into,  Parent  (subject  to
         clause (iii) below) or any Wholly-Owned Subsidiary of Parent.

                (iii) Parent may sell all or substantially all of its assets to,
         or  consolidate  with or merge into, any other  corporation,  or permit
         another corporation to merge into it; provided,  however,  that (a) the
         surviving corporation,  if such surviving corporation is not of Parent,
         or  the  transferee  corporation  in  the  case  of a  sale  of  all or
         substantially  all of  Parent's  assets,  (1)  shall  be a  corporation
         organized  and existing  under the laws of the United States of America
         or a state thereof or the District of Columbia, and (2) shall expressly
         assume in writing the due and punctual  payment of the  Obligations and
         the due and  punctual  performance  of and  compliance  with all of the
         terms of this  Agreement and the Notes to be performed or complied with
         by Parent, (b) immediately before and after such merger,  consolidation
         or sale, there shall not exist any Default or Unmatured Default and (c)
         the  surviving  corporation  of such  merger or  consolidation,  or the
         transferee  corporation of the assets of Parent,  as  applicable,  has,
         both immediately before and after such merger, consolidation or sale, a
         Moody's Rating of Baa3 or better or an S&P Rating of BBB- or better.

                  (b) No Borrower  will,  nor will it permit any  Subsidiary to,
sell, lease,  transfer or otherwise dispose of (each, a "Disposition") less than
all or  substantially  of the assets of Parent and its  Subsidiaries  taken as a
whole (whether by a single  transaction or a number of related  transactions and
whether at one time or over a period of time), except

                  (i) Sales of Property and  services in the ordinary  course of
         business.

                 (ii)    The pledge of Property pursuant to Section 6.11.

                (iii)  Dispositions  by either  Borrower  to any  Subsidiary  of
         Parent or by any  Subsidiary  of Parent to any other  Subsidiary  or to
         either Borrower.

                 (iv)  Dispositions  of  used,  worn-out,  obsolete  or  surplus
         Property in the  ordinary  course of business  and the  abandonment  or
         other  Disposition of intellectual  property that is, in the reasonable
         judgment of either  Borrower,  no longer  economically  practicable  to
         maintain  or useful in the  conduct of the  business  of Parent and its
         Subsidiaries taken as a whole.

                  (v)  The  sale  or  discount   without  recourse  of  accounts
         receivable  or notes  receivable  arising  in the  ordinary  course  of
         business,  or the conversion or exchange of accounts receivable into or
         for notes  receivable,  in connection with the compromise or collection
         thereof.

                 (vi)  Dispositions  of Property  that,  together with all other
         Property  of Parent and its  Subsidiaries  previously  leased,  sold or
         disposed of (other than  inventory in the ordinary  course of business)
         as permitted by this Section 6.10 during the twelve-month period ending
         with the  month in which  any  such  lease,  sale or other  disposition
         occurs,  do not  constitute  a  Substantial  Portion of the Property of
         Parent and its Subsidiaries  taken as a whole (except that for purposes
         of this Section  6.10(b)(vi),  references to "10%" in the definition of
         Substantial Portion shall be deemed to be "20%").

                  6.11.  Liens.  No  Borrower  will,  nor  will  it  permit  any
Subsidiary  to,  create,  incur or  suffer  to exist  any Lien in,  of or on the
Property of either Borrower or any of its Subsidiaries, except:

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

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

                (iii) Liens  arising out of pledges or deposits  under  worker's
         compensation laws,  unemployment  insurance,  old age pensions or other
         social security or retirement benefits, or similar legislation;

                 (iv) Utility  easements,  building  restrictions and such other
         encumbrances  or  charges  against  real  property  as are of a  nature
         generally  existing with respect to  properties of a similar  character
         and which do not in any  material way affect the  marketability  of the
         same or interfere with the use thereof in the business of the Borrowers
         or the Subsidiaries;

                  (v)  Deposits  to  secure  the  performance  of  bids,   trade
         contracts   (other  than  for  borrowed   money),   leases,   statutory
         obligations,  surety  and  appeal  bonds,  performance  bonds and other
         obligations  of a like  nature  incurred  in  the  ordinary  course  of
         business by the Borrowers or any Subsidiary;

                  (vi)  Liens  existing  on the date  hereof  and  described  in
         Schedule 1;

                (vii) Judgment  Liens which secure payment of legal  obligations
         that would not constitute a Default under Section 7.9;

               (viii)  Liens  on  Property  acquired  by  either  Borrower  or a
         Subsidiary after the date hereof, existing on such Property at the time
         of  acquisition  thereof  (and not  created in  anticipation  thereof),
         provided  that in any such case no such Lien  shall  extend to or cover
         any other Property of such Borrower or such Subsidiary, as the case may
         be; and

                 (ix) Liens which would  otherwise  not be  permitted by clauses
         (i) through (viii) securing additional  Indebtedness of either Borrower
         or  a  Subsidiary;  provided  that  after  giving  effect  thereto  the
         aggregate unpaid principal amount of Indebtedness  (including,  without
         limitation,   Capitalized   Lease   Obligations)   of  Parent  and  the
         Subsidiaries  secured by such Liens permitted by this clause (ix) shall
         not exceed $75,000,000.

                  6.12. Transactions with Affiliates. No Borrower will, nor will
it permit any  Subsidiary  to, enter into any  transaction  (including,  without
limitation,  the purchase or sale of any Property or service)  with, or make any
payment  or  transfer  to,  any  Affiliate  (other  than  either  Borrower  or a
Wholly-Owned  Subsidiary) except in the ordinary course of business and pursuant
to the reasonable  requirements of such Borrower's or such Subsidiary's business
and upon fair and  reasonable  terms no less  favorable to such Borrower or such
Subsidiary  than such Borrower or such  Subsidiary  would obtain in a comparable
arm's-length transaction.

                  6.13.  Maintenance of  Indebtedness to  Capitalization  Ratio.
Parent will not at any time permit the ratio of Consolidated  Total Indebtedness
to Consolidated Total Capitalization to be greater than 0.65 to 1.

                  6.14.    Limitation   on   Certain   Restrictions    Affecting
Subsidiaries.   Neither  Borrower  shall,  directly  or  indirectly,  create  or
otherwise  cause or suffer to exist or become  effective  any direct or indirect
encumbrance  or restriction on the ability of any Subsidiary of such Borrower to
(a) pay dividends or make any other  distributions on such Subsidiary's  capital
stock or any other  interest or  participation  in its  profits  owned by either
Borrower,  or pay any  Indebtedness  or any  other  obligation  owed  to  either
Borrower,  (b) make investments in or to either Borrower, or (c) transfer any of
its  Property to either  Borrower,  except that each of the  following  shall be
permitted:  (i) any such  encumbrances or  restrictions  existing on the date of
this Agreement and described on Schedule 2 or existing under or by reason of (x)
applicable law or (y) the Loan Documents,  (ii)  restrictions on the transfer of
Property  subject to a Lien permitted  under Section 6.11,  and (iii)  customary
restrictions  on subletting  or  assignment  of any lease  governing a leasehold
interest of any Borrower.

                                   ARTICLE VII

                                    DEFAULTS

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

                  7.1. Any  representation or warranty made or deemed made by or
on behalf of either Borrower to the Lenders or the Administrative Agent under or
in connection with this Agreement or any Loan, or any certificate or information
delivered  in  connection  with this  Agreement,  shall be false in any material
respect on the date as of which made.

                  7.2.  Nonpayment  of  principal  of  any  Loan  when  due;  or
nonpayment of interest upon any Loan or of any facility fee or  utilization  fee
or other  obligation  under any of the Loan Documents within five days after the
same becomes due.

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

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

                  7.5.  Failure of either Borrower or any Subsidiary to pay when
due any Indebtedness (other than the Loans) aggregating in excess of $20,000,000
("Material  Indebtedness");  or default by either  Borrower or any Subsidiary in
the performance of any term,  provision or condition  contained in any agreement
or agreements under which any Material  Indebtedness was created or is governed,
or the  occurrence of any other event or the  existence of any other  condition,
the effect of which default or event or condition is to cause,  or to permit the
holder  or  holders  of such  Material  Indebtedness  to  cause,  such  Material
Indebtedness  to  become  due  prior to its  stated  maturity;  or any  Material
Indebtedness  of either  Borrower or any Subsidiary  shall be declared to be due
and payable or required to be prepaid or repurchased  (other than by a regularly
scheduled  payment) prior to the stated maturity thereof;  or either Borrower or
any  Subsidiary  shall not pay, or admit in writing its  inability  to pay,  its
debts generally as they become due.

                  7.6. Either Borrower or any Subsidiary shall (i) have an order
for relief entered with respect to it under the Federal  bankruptcy  laws as now
or hereafter in effect,  (ii) make an  assignment  for the benefit of creditors,
(iii) apply for, seek, consent to or acquiesce in the appointment of a receiver,
custodian,  trustee,  examiner,  liquidator  or similar  official  for it or any
Substantial  Portion of its Property,  (iv) institute any proceeding  seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to  adjudicate it a bankrupt or  insolvent,  or seeking  dissolution,
winding up, liquidation, reorganization,  arrangement, adjustment or composition
of it or  its  debts  under  any  law  relating  to  bankruptcy,  insolvency  or
reorganization  or relief of debtors or fail to file an answer or other pleading
denying the material  allegations of any such  proceeding  filed against it, (v)
take any corporate or other organizational  action to authorize or effect any of
the  foregoing  actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7.

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

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

                  7.9.  Either  Borrower or any Subsidiary  shall fail within 30
days to pay,  bond or otherwise  discharge any judgment or order for the payment
of money in excess of $20,000,000  (either singly or in the aggregate with other
such judgments),  which is not stayed on appeal or otherwise being appropriately
contested in good faith.

                  7.10.  Any Change of Control shall occur.

                                  ARTICLE VIII

                 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

                  8.1. Acceleration.  If any Default described in Section 7.6 or
7.7 occurs with respect to either  Borrower,  the  obligations of the Lenders to
make Loans  hereunder  (and to effect any  conversion  pursuant to Section 2.19)
shall  automatically  terminate and the Obligations shall immediately become due
and  payable  without any  election or action on the part of the  Administrative
Agent or any Lender.  If any other Default occurs,  the Required Lenders (or the
Administrative  Agent with the consent of the Required Lenders) may terminate or
suspend the obligations of the Lenders to make Loans  hereunder,  or declare the
Obligations  to be due and payable,  or both,  whereupon the  obligations of the
Lenders to make Loans  hereunder  shall  immediately  be terminated or suspended
and/or  the  Obligations  shall  become  immediately  due and  payable,  without
presentment,  demand,  protest or notice of any kind, all of which each Borrower
hereby expressly waives.

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

                  8.2.  Amendments.  Subject to the  provisions  of this Article
VIII,  the  Required  Lenders (or the  Administrative  Agent with the consent in
writing of the Required  Lenders) and the  Borrowers  may enter into  agreements
supplemental hereto for the purpose of adding or modifying any provisions to the
Loan  Documents  or  changing  in any manner  the  rights of the  Lenders or the
Borrowers hereunder or waiving any Default hereunder; provided, however, that no
such  supplemental  agreement  shall,  without the consent of (a) in the case of
clauses (i) and (iii), all Lenders directly  affected thereby and (b) in clauses
(ii), (iv), (v) and (vi) all of the Lenders:

                  (i) Increase the  commitment of any Lender or extend the final
         maturity  of any Loan,  forgive  all or any  portion  of the  principal
         amount  thereof,  or reduce the rate (including by virtue of any change
         to the Pricing  Schedule)  or extend the time of payment of interest or
         fees thereon.

                  (ii) Reduce the  percentage  specified  in the  definition  of
         Required Lenders.

                  (iii)  Extend the  Facility  Termination  Date,  or reduce the
         amount or extend the payment date for, the mandatory  payments required
         under  Section  2.2, or increase  the amount of the  Commitment  of any
         Lender hereunder,  or permit the Borrowers to assign their rights under
         this Agreement (except as permitted by Section 6.10(iii)).

                  (iv) Change the currency in which any Loan is payable;

                  (v) Amend this Section 8.2 or Section 11.2; or

                  (vi) Change any term or  provision  of Section 2.19 or Section
         9.13.

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

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

                                   ARTICLE IX

                               GENERAL PROVISIONS

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

                  9.2.  Governmental  Regulation.  Anything  contained  in  this
Agreement  to the  contrary  notwithstanding,  no Lender  shall be  obligated to
extend credit to either  Borrower in violation of any  limitation or prohibition
provided by any applicable statute or regulation.

                  9.3.  Headings.  Section  headings in this  Agreement  are for
convenience  of reference  only and shall not govern the  interpretation  of any
provision of this Agreement.

                  9.4. Entire  Agreement.  The Loan Documents  embody the entire
agreement and understanding  among the Borrowers,  the Administrative  Agent and
the Lenders and  supersede all prior  agreements  and  understandings  among the
Borrowers,  the  Administrative  Agent and the  Lenders  relating to the subject
matter thereof other than the fee letter described in Section 10.13.

                  9.5.  Several  Obligations;  Benefits of This  Agreement.  The
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the extent to which
the  Administrative  Agent is  authorized  to act as such).  The  failure of any
Lender to perform any of its  obligations  hereunder shall not relieve any other
Lender  from any of its  obligations  hereunder.  This  Agreement  shall  not be
construed  so as to confer any right or benefit  upon any Person  other than the
parties to this Agreement and their respective successors and assigns; provided,
however,  that the parties  hereto  expressly  agree that the Sole Lead Arranger
shall enjoy the benefits of the  provisions  of Sections  9.6, 9.10 and 10.11 to
the extent  specifically  set forth  therein and shall have the right to enforce
such  provisions  on its own behalf and in its own name to the same extent as if
it were a party to this Agreement.

                  9.6.  Expenses;  Indemnification.  (i)  The  Borrowers  agree,
jointly and severally,  to reimburse the Administrative  Agent and the Sole Lead
Arranger for any reasonable costs,  internal charges and out-of-pocket  expenses
(including  attorneys' fees and time charges of attorneys for the Administrative
Agent  and the Sole Lead  Arranger,  which  attorneys  may be  employees  of the
Administrative   Agent  and  all  local   counsel   deemed   necessary   by  the
Administrative  Agent) paid or incurred by the Administrative  Agent or the Sole
Lead  Arranger  in  connection  with the  preparation,  negotiation,  execution,
delivery,  syndication,  review, amendment,  modification, and administration of
the Loan  Documents  whether  or not any Loans  are made  hereunder  (and,  with
respect  to any  amendment  or  modification,  whether  or not  effective).  The
Borrowers  also agree,  jointly and severally,  to reimburse the  Administrative
Agent,  the Sole Lead Arranger and the Lenders for any costs,  internal  charges
and  out-of-pocket  expenses  (including  attorneys'  fees and time  charges  of
attorneys for the Administrative  Agent, the Sole Lead Arranger and the Lenders,
which  attorneys  may be employees of the  Administrative  Agent,  the Sole Lead
Arranger or the Lenders) paid or incurred by the Administrative  Agent, the Sole
Lead Arranger or any Lender in connection with the collection and enforcement of
the Loan Documents.

                  (ii)  The  Borrowers   hereby  further   agree,   jointly  and
severally,  to indemnify the Administrative  Agent, the Sole Lead Arranger,  the
Syndication Agent and each Lender, its directors, officers and employees against
all losses,  claims,  damages,  penalties,  judgments,  liabilities and expenses
(including,  without  limitation,  all  expenses of  litigation  or  preparation
therefor whether or not the  Administrative  Agent, the Sole Lead Arranger,  the
Syndication Agent or any Lender is a party thereto) which any of them may pay or
incur arising out of or relating to this  Agreement,  the other Loan  Documents,
the transactions  contemplated  hereby or the direct or indirect  application or
proposed  application of the proceeds of any Loan hereunder except to the extent
that  they  are  determined  in a final  non-appealable  judgment  by a court of
competent  jurisdiction  to have resulted  from the gross  negligence or willful
misconduct  of  the  party  seeking  indemnification.  The  obligations  of  the
Borrowers  under this Section 9.6 shall  survive the payment of the  Obligations
and termination of this Agreement.

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

                  9.8.  Accounting.  Except as provided to the contrary  herein,
all  accounting  terms  used  herein  shall be  interpreted  and all  accounting
determinations hereunder shall be made in accordance with GAAP.

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

                  9.10.  Nonliability of Lenders.  The relationship  between the
Borrowers  on the one hand and the Lenders and the  Administrative  Agent on the
other  hand  shall  be  solely  that  of  borrower  and  lender.   None  of  the
Administrative  Agent,  the Sole Lead  Arranger,  the  Syndication  Agent or any
Lender shall have any fiduciary  responsibility  to the  Borrowers.  None of the
Administrative  Agent,  the Sole Lead  Arranger  or any  Lender  undertakes  any
responsibility  to the Borrowers to review or inform the Borrowers of any matter
in connection  with any phase of the  Borrowers'  business or  operations.  Each
Borrower agrees that none of the Administrative Agent, the Sole Lead Arranger or
any Lender shall have  liability  to the  Borrowers  (whether  sounding in tort,
contract or  otherwise)  for losses  suffered by either  Borrower in  connection
with, arising out of or in any way related to the transactions  contemplated and
the  relationship  established by the Loan  Documents,  or any act,  omission or
event  occurring in  connection  therewith,  unless it is  determined in a final
non-appealable  judgment by a court of competent  jurisdiction  that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought.  None of the  Administrative  Agent, the Sole Lead Arranger,
the  Syndication  Agent or any Lender shall have any liability  with respect to,
and each  Borrower  hereby  waives,  releases  and  agrees  not to sue for,  any
special,  indirect  or  consequential  damages  suffered  by either  Borrower in
connection with,  arising out of, or in any way related to the Loan Documents or
the transactions contemplated thereby.

                  9.11.   Confidentiality.   Each  Lender  agrees  to  hold  any
confidential  information  which it may receive from either Borrower pursuant to
this Agreement in confidence, except for disclosure (i) to its Affiliates and to
other  Lenders  and  their  respective   Affiliates,   (ii)  to  legal  counsel,
accountants,  and other professional advisors to such Lender or to a Transferee,
(iii) to regulatory officials, (iv) to any Person as requested pursuant to or as
required by law,  regulation or legal  process,  (v) to any Person in connection
with any legal  proceeding to which such Lender is a party and (vi) permitted by
Section 12.4.

                  9.12.  Nonreliance.  Each Lender hereby  represents that it is
not  relying on or looking to any  Margin  Stock for the  repayment  of any Loan
provided for herein.

                  9.13.  Joint and Several  Liability.  (a) The Borrowers  shall
have joint and several  liability in respect of all  Obligations  hereunder  and
under any other Loan  Documents  to which  either  Borrower is a party,  without
regard to any  defense  (other than the  defense  that  payment in full has been
made),  set-off  or  counterclaim  which may at any time be  available  to or be
asserted by the other Borrower against the Lenders, or by any other circumstance
whatsoever  (with or without  notice to or  knowledge  of the  Borrowers)  which
constitutes,  or  might  be  construed  to  constitute,  an  equitable  or legal
discharge of the Borrowers' liability  hereunder,  in bankruptcy or in any other
instance,   and  the  Obligations  of  the  Borrowers  hereunder  shall  not  be
conditioned or contingent upon the pursuit by the Lenders or any other Person at
any time of any right or remedy  against  the  Borrowers  or  against  any other
Person  which  may be or  become  liable  in  respect  of all or any part of the
Obligations  or against any  guarantee  therefor or right of offset with respect
thereto. The Borrowers hereby acknowledge that this Agreement is the independent
and several obligation of each Borrower (regardless of which Borrower shall have
delivered a Notice of  Borrowing)  and may be  enforced  against  each  Borrower
separately, whether or not enforcement of any right or remedy hereunder has been
sought against the other Borrower.  Each Borrower hereby expressly waives,  with
respect to any of the Loans made to the other Borrower  hereunder and any of the
amounts  owing  hereunder  by such other  Borrower  in  respect  of such  Loans,
diligence,  presentment,  demand of payment, protest and all notices whatsoever,
and any  requirement  that the  Administrative  Agent or any Lender  exhaust any
right,  power or remedy or  proceeds  against  such  other  Borrower  under this
Agreement or any other  agreement or instrument  referred to herein,  or against
any other  Person  under any other  guarantee  of, or security  for, any of such
amounts owing hereunder.

                  (b)  Notwithstanding any other provisions of this Agreement or
the other Loan Documents,  the maximum  aggregate amount for which VUHI shall be
liable hereunder with respect to Loans to Parent and other Obligations of Parent
shall equal the greater of (i) 95% of the excess of the fair  saleable  value of
the property of VUHI over the total  liabilities of VUHI  (including the maximum
amount reasonably  expected to become due in respect of contingent  liabilities,
other than any such  contingent  liabilities  hereunder and under the other Loan
Documents),  such  excess  to be  determined  on the date  hereof or the date on
which,  from time to time,  enforcement  against  VUHI of its joint and  several
liability  hereunder  is  sought  by the  Administrative  Agent or a  Lender  or
realization  against  any of the  property  or assets of VUHI is effected by the
Administrative  Agent or a Lender,  whichever  is higher,  and (ii) the  maximum
aggregate  amount of Obligations  which does not render this Section 9.13, as it
relates to VUHI,  void or voidable under  applicable laws relating to fraudulent
conveyance  or fraudulent  transfer.  Subject to the  preceding  sentence,  each
Borrower understands, agrees and confirms that each Borrower shall be liable for
payment of  Obligations  when due and not for  collection  thereof and that each
Lender may, from time to time, enforce this provision against either Borrower up
to the full amount of the  Obligations  owed to such Lender  without  proceeding
against the other Borrower,  against any security for the  Obligations,  against
any guarantor or under any guarantee covering the Obligations.

                                    ARTICLE X

                                   THE AGENTS

                  10.1. Appointment; Nature of Relationship. Credit Suisse First
Boston  is hereby  appointed  by each of the  Lenders  as  Administrative  Agent
hereunder  and  under  each  other  Loan  Document,  and  each  of  the  Lenders
irrevocably  authorizes  the  Administrative  Agent  to act  as the  contractual
representative  of such  Lender with the rights and duties  expressly  set forth
herein and in the other Loan Documents.  The Administrative  Agent agrees to act
as such contractual representative upon the express conditions contained in this
Article X. Notwithstanding the use of the defined term  "Administrative  Agent,"
it is expressly  understood and agreed that the  Administrative  Agent shall not
have any fiduciary  responsibility  to any Lender by reason of this Agreement or
any other Loan  Document and that the  Administrative  Agent is merely acting as
the  contractual  representative  of the Lenders  with only those  duties as are
expressly  set forth in this  Agreement  and the other  Loan  Documents.  In its
capacity as the Lenders'  contractual  representative,  the Administrative Agent
(i)  does  not  hereby  assume  any  fiduciary  duty  to any  Lender,  (ii) is a
representative of the Lenders within the meaning of Section 9-105 of the Uniform
Commercial Code and (iii) is acting as an independent contractor, the rights and
duties of which are limited to those  expressly set forth in this  Agreement and
the other Loan  Documents.  Each of the Lenders hereby agrees to assert no claim
against the  Administrative  Agent on any agency  theory or any other  theory of
liability for breach of fiduciary  duty,  all of which claims each Lender hereby
waives. Each Lender hereby appoints Merrill Lynch & Co., Merrill Lynch,  Pierce,
Fenner & Smith  Incorporated as Syndication  Agent and ABN AMRO as Documentation
Agent.  Neither  the  Syndication  Agent  nor the  Documentation  Agent,  in its
capacity as such, shall have any rights, duties or responsibilities hereunder or
under any other Loan Document.

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

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

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

                  10.5.  Action on Instructions of Lenders.  The  Administrative
Agent shall in all cases be fully  protected in acting,  or in  refraining  from
acting,  hereunder and under any other Loan Document in accordance  with written
instructions  signed by the  Required  Lenders,  and such  instructions  and any
action taken or failure to act pursuant  thereto  shall be binding on all of the
Lenders.  The Lenders hereby acknowledge that the Administrative  Agent shall be
under  no duty to take  any  discretionary  action  permitted  to be taken by it
pursuant to the provisions of this  Agreement or any other Loan Document  unless
it  shall  be  requested  in  writing  to do so by  the  Required  Lenders.  The
Administrative Agent shall be fully justified in failing or refusing to take any
action  hereunder  and under any other Loan  Document  unless it shall  first be
indemnified  to its  satisfaction  by the Lenders  pro rata  against any and all
liability,  cost and expense that it may incur by reason of taking or continuing
to take any such action.

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

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

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

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

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

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

                  10.12.  Successor  Administrative  Agent.  The  Administrative
Agent may resign at any time by giving written notice thereof to the Lenders and
the  Borrowers,  such  resignation  to be effective  upon the  appointment  of a
successor Administrative Agent or, if no successor Administrative Agent has been
appointed,  forty-five days after the retiring Administrative Agent gives notice
of its intention to resign. The Administrative  Agent may be removed at any time
with or without cause by written  notice  received by the  Administrative  Agent
from the Required Lenders, such removal to be effective on the date specified by
the Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint,  on behalf of the Borrowers and the Lenders,  a
successor  Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders within thirty days after the resigning
Administrative  Agent's  giving  notice of its  intention  to  resign,  then the
resigning  Administrative  Agent may appoint, on behalf of the Borrowers and the
Lenders,  a  successor   Administrative  Agent.   Notwithstanding  the  previous
sentence,  the  Administrative  Agent may at any time without the consent of the
Borrowers  or any Lender,  appoint any of its  Affiliates  which is a commercial
bank as a successor  Administrative Agent hereunder. If the Administrative Agent
has  resigned or been  removed and no  successor  Administrative  Agent has been
appointed,  the Lenders may perform all the duties of the  Administrative  Agent
hereunder,  and  the  Borrowers  shall  make  all  payments  in  respect  of the
Obligations  to the  applicable  Lender  and for all other  purposes  shall deal
directly with the Lenders. No successor  Administrative Agent shall be deemed to
be appointed  hereunder until such successor  Administrative  Agent has accepted
the appointment.  Any such successor  Administrative Agent shall be a commercial
bank having  capital and retained  earnings of at least  $100,000,000.  Upon the
acceptance of any appointment as  Administrative  Agent hereunder by a successor
Administrative  Agent,  such  successor  Administrative  Agent  shall  thereupon
succeed to and become vested with all the rights, powers,  privileges and duties
of the resigning or removed  Administrative Agent. Upon the effectiveness of the
resignation  or removal of the  Administrative  Agent,  the resigning or removed
Administrative  Agent  shall be  discharged  from  its  duties  and  obligations
hereunder  and  under  the  Loan  Documents.  After  the  effectiveness  of  the
resignation  or removal  of an  Administrative  Agent,  the  provisions  of this
Article X shall continue in effect for the benefit of such Administrative  Agent
in respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the  Administrative  Agent by merger,  or the
Administrative Agent assigns its duties and obligations to an Affiliate pursuant
to this  Section  10.12,  then the term "Prime  Rate" as used in this  Agreement
shall mean the prime rate,  base rate,  corporate  base rate or other  analogous
rate of the new Administrative Agent.

                  10.13.   Administrative  Agent's  Fee.  The  Borrowers  agree,
jointly and severally,  to pay to the Administrative Agent, for its own account,
the fees agreed to by Parent and the Administrative Agent from time to time.

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

                                   ARTICLE XI

                            SETOFF; RATABLE PAYMENTS

                  11.1.  Setoff. In addition to, and without  limitation of, any
rights  of  the  Lenders  under  applicable  law,  if  either  Borrower  becomes
insolvent,  however  evidenced,  or any  Default  occurs,  any and all  deposits
(including all account balances, whether provisional or final and whether or not
collected or available) and any other  Indebtedness at any time held or owing by
any Lender or any Affiliate of any Lender to or for the credit or account of the
Borrowers may be offset and applied toward the payment of the Obligations  owing
to such Lender,  whether or not the Obligations,  or any part hereof, shall then
be due.

                  11.2. Ratable Payments. Each of the Lenders agrees that if any
Lender,  whether by voluntary  payment,  by realization  upon  security,  by the
exercise  of the right to setoff or  banker's  lien,  by  counterclaim  or cross
action,  by the  enforcement of any right under the Loan Documents or otherwise,
has payment made to it upon any amount hereunder  (other than payments  received
pursuant to Section 3.1,  3.2, 3.4 or 3.5) which is applicable to the payment of
principal  of or interest on the Loans or fees the sum of which with  respect to
the related sum or sums  received  by other  Lenders is in a greater  proportion
than the total of such  amounts  then owed and due to such  Lender  bears to the
total of such amounts then owed and due to all of the Lenders  immediately prior
to such receipt,  such Lender agrees, to purchase for cash,  without recourse or
warranty,  a portion of the Loans  held by the other  Lenders so that after such
purchase  each  Lender  will hold its  ratable  proportion  of Loans,  provided,
however,  that  if all or any  portion  of  such  excess  amount  is  thereafter
recovered  from such Lender,  such purchase  shall be rescinded and the purchase
price  restored to the extent of such  recovery,  but without  interest.  If any
Lender,  whether in connection  with setoff or amounts which might be subject to
setoff or otherwise, receives collateral or other protection for its Obligations
or such amounts  which may be subject to setoff,  such Lender  agrees,  promptly
upon demand,  to take such action  necessary  such that all Lenders share in the
benefits of such  collateral  ratably in proportion to their Loans.  In case any
such payment is distributed by legal process, or otherwise,  appropriate further
adjustments shall be made. Each Borrower consents to the foregoing arrangements.

                                   ARTICLE XII

                BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

                  12.1.  Successors and Assigns. The terms and provisions of the
Loan  Documents  shall be binding upon and inure to the benefit of the Borrowers
and the Lenders and their respective successors and assigns, except that (i) the
Borrowers  shall not have the right to assign their rights or obligations  under
the Loan  Documents  (except as  provided  in Section  6.10(iii)),  and (ii) any
assignment  by any  Lender  must  be  made  in  compliance  with  Section  12.3.
Notwithstanding  clause  (ii)  above,  any Lender may at any time,  without  the
consent of the Borrowers or the Administrative  Agent, assign all or any portion
of its  rights  under this  Agreement  and any Note to a Federal  Reserve  Bank;
provided,  however,  that no such  assignment  to a Federal  Reserve  Bank shall
release the transferor Lender from its obligations hereunder. The Administrative
Agent may treat the Person  which  made any Loan or which  holds any Note as the
owner thereof for all purposes hereof unless and until such Person complies with
Section 12.3 in the case of an  assignment  thereof or, in the case of any other
transfer,  a written  notice of the  transfer  is filed with the  Administrative
Agent.  Any assignee or  transferee of the rights to any Loan or any Note agrees
by  acceptance  of such  transfer or assignment to be bound by all the terms and
provisions  of the Loan  Documents.  Any  request,  authority  or consent of any
Person,  who at the time of making  such  request or giving  such  authority  or
consent is the owner of the rights to any Loan  (whether  or not a Note has been
issued in evidence  thereof),  shall be conclusive and binding on any subsequent
holder, transferee or assignee of the rights to such Loan.

                  12.2.  Participations.

                           12.2.1.  Permitted  Participants;  Effect. Any Lender
         may, in the  ordinary  course of its business  and in  accordance  with
         applicable  law, at any time sell or agree to sell to one or more banks
         or other Persons (each, a "Participant") participating interests in all
         or any part of any Loan  owing to such  Lender,  any Note  held by such
         Lender,  any  Commitment  of such Lender or any other  interest of such
         Lender under the Loan  Documents,  in which each  Participant  shall be
         entitled to the rights and  benefits of the  provisions  of Article III
         (provided,  however,  that no Participant  shall be entitled to receive
         any greater amount  pursuant to Article III than the transferor  Lender
         would have been  entitled  to  receive in respect of the  participation
         effected by such transferor Lender had no participation  occurred) with
         respect to its participation in such Loans, Notes and Commitments as if
         such  Participant  were a "Lender" for  purposes of Article  III,  but,
         except as  otherwise  provided  in Section  12.2.3,  shall not have any
         other rights or benefits  under any Loan  Document  (the  Participant's
         rights against such Lender in respect of such participation to be those
         set forth in the  agreements  executed  by such  Lender in favor of the
         Participant).  All  amounts  payable by either  Borrower  to any Lender
         under Article III in respect of Loans,  Notes and its Commitments shall
         be no greater  than the amount  that would have  applied if such Lender
         had not sold or agreed to sell any  participation in such Loans,  Notes
         and Commitments,  and as if such Lender were funding each of such Loan,
         Notes and Commitments in the same way that it is funding the portion of
         such Loan, Notes and Commitments in which no  participations  have been
         sold.

                           12.2.2.  Voting  Rights.  In no event  shall a Lender
         that  sells a  participation  agree  with  the  Participant  to take or
         refrain  from  taking  any  action  hereunder  or under any other  Loan
         Document,  except that such Lender may agree with the Participant  that
         it will not,  without  the  consent  of the  Participant,  agree to any
         modification or amendment set forth in clauses (i), (iii), (iv), (v) or
         (vi) of the proviso to Section 8.2 to the extent such Lender's  consent
         is required therefor.

                           12.2.3.  Benefit of Setoff. Each Borrower agrees that
         each  Participant  shall be deemed to have the right of setoff provided
         in Section  11.1 in respect of its  participating  interest  in amounts
         owing under the Loan  Documents  to the same extent as if the amount of
         its participating  interest were owing directly to it as a Lender under
         the Loan Documents; provided that each Lender shall retain the right of
         setoff  provided  in  Section  11.1  with  respect  to  the  amount  of
         participating interests sold to each Participant.  The Lenders agree to
         share with each Participant,  and each  Participant,  by exercising the
         right of setoff  provided  in Section  11.1,  agrees to share with each
         Lender,  any amount  received  pursuant to the exercise of its right of
         setoff, such amounts to be shared in accordance with Section 11.2 as if
         each Participant were a Lender.

                  12.3.  Assignments.

                           12.3.1. Permitted Assignments. Any Lender may, in the
         ordinary  course of its business and in accordance with applicable law,
         at any  time  assign  (which  may  be  non-pro  rata  among  Loans  and
         Commitments) to one or more Eligible  Persons (each, a "Purchaser") all
         or any part of its rights and obligations under the Loan Documents only
         with the consent (which shall not be unreasonably withheld,  delayed or
         conditioned)  of  each  Borrower,   the  Sole  Lead  Arranger  and  the
         Administrative Agent; provided,  however, that (i) no consent of either
         Borrower,  the Sole Lead Arranger or the Administrative  Agent shall be
         required  in the  case  of any  assignment  to  another  Lender  or any
         Lender's  Affiliate  or an Approved  Fund of any Lender (in which case,
         the assignee and assignor  Lenders shall give notice of the  assignment
         to the  Sole  Lead  Arranger  and the  Administrative  Agent);  (ii) no
         consent   of  either   Borrower,   the  Sole  Lead   Arranger   or  the
         Administrative  Agent  need  be  obtained  if any  Default  shall  have
         occurred  and be  continuing;  (iii) each  assignment,  other than to a
         Lender or any Lender's  Affiliate or an Approved Fund of any Lender and
         other than any assignment  effected by the Sole Lead Arranger or any of
         its Affiliates in connection  with the  syndication of the  Commitments
         and/or Loans or otherwise,  shall not reduce the  assignor's  Loans and
         Commitments to less than $5.0 million  (unless  reduced to $0 or unless
         each Borrower and the Sole Lead Arranger  otherwise  consent) and shall
         be in an  aggregate  amount  of  at  least  $5.0  million  (unless  the
         assignor's  Loans and  Commitments  are  reduced  to $0 or unless  each
         Borrower and the Sole Lead Arranger  otherwise  consent) and (iv) in no
         event may any such  assignment be made to either Borrower or any of its
         Affiliates  without consent of all Lenders unless the Purchaser  agrees
         in writing that its Loans or Notes shall not be deemed  outstanding for
         any  matter  under  Section  8.2 or any other  vote or  consent  of the
         Lenders  under the Loan  Documents  of the Loans or  Commitments.  Each
         assignment shall be made pursuant to an agreement  substantially in the
         form of Exhibit C or such other  form as shall be  consented  to by the
         Sole Lead Arranger (an "Assignment Agreement").

                           12.3.2. Effect;  Effective Date. Upon (i) delivery to
         the  Administrative  Agent of a notice of assignment,  substantially in
         the form attached as Exhibit I to Exhibit C (a "Notice of Assignment"),
         together with any consents required by Section 12.3.1, and (ii) for any
         assignment by Persons other than Merrill Lynch Capital  Corporation and
         its Affiliates, payment of a $3,500 fee to the Administrative Agent for
         processing such  assignment,  such assignment shall become effective on
         the  effective  date  specified  in  such  Notice  of  Assignment.  The
         Assignment Agreement shall contain a representation by the Purchaser to
         the effect that none of the consideration  used to make the purchase of
         the Commitment and Loans under the applicable  assignment agreement are
         "plan  assets" as defined under ERISA and that the rights and interests
         of the  Purchaser  in and  under the Loan  Documents  will not be "plan
         assets" under ERISA.

                           On and after the effective  date of such  assignment,
         such  Purchaser  shall  for all  purposes  be a  Lender  party  to this
         Agreement and any other Loan  Document  executed by or on behalf of the
         Lenders and shall have all the rights and obligations of a Lender under
         the Loan Documents,  to the same extent as if it were an original party
         hereto, and no further consent or action by the Borrowers,  the Lenders
         or the Administrative Agent shall be required to release the transferor
         Lender with respect to the  percentage of the Aggregate  Commitment and
         Loans  assigned  to  such  Purchaser.  Upon  the  consummation  of  any
         assignment  to  a  Purchaser  pursuant  to  this  Section  12.3.2,  the
         transferor Lender, the Administrative Agent and the Borrowers shall, if
         the  transferor  Lender  or the  Purchaser  desires  that its  Loans be
         evidenced by Notes, make appropriate arrangements so that new Notes or,
         as appropriate,  replacement Notes are issued to such transferor Lender
         and new Notes or, as appropriate, replacement Notes, are issued to such
         Purchaser,   in  each  case  in  principal  amounts   reflecting  their
         respective Commitments, as adjusted pursuant to such assignment.

                  12.4.  Pledges to Federal  Reserve  Bank.  In  addition to the
assignments and participations  permitted under the foregoing provisions of this
Article  XII, any Lender may assign and pledge all or any part of its rights and
obligations  under the Loan Documents to any United States Federal  Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank and, in the case of a Lender that is a fund that invests in bank loans, any
such Lender may assign or pledge all or any part of rights and obligations under
the Loan Documents to any holders of obligations owed, or securities  issued, by
such fund, as security for such  obligations  or  securities,  or to any trustee
for, or any other representative of, such holders,  without notice to or consent
of the  Borrowers,  the  Administrative  Agent or the Sole  Lead  Arranger.  Any
transfer  as a result of the  foreclosure  on such  pledge  shall be  subject to
Section 12.3.  No such  assignment  shall release the assigning  Lender from its
obligations hereunder.

                  12.5.  Dissemination of Information.  A Lender may furnish any
information  concerning the Borrowers and the  Subsidiaries in the possession of
such  Lender  from  time  to  time  to  assignees  and  participants  (including
prospective assignees and participants) subject,  however, to and so long as the
recipient agrees to be bound by the provisions of Section 9.11. In addition, the
Sole Lead Arranger may furnish any information  concerning the Borrowers and the
Subsidiaries  in the Sole Lead  Arranger's  possession to any of its Affiliates,
subject,  however,  to the  provisions  of Section  9.11.  The  Borrower and the
Subsidiaries  shall assist the Sole Lead Arranger and any Lender in effectuating
any assignment or participation  pursuant to this Article XII (including  during
syndication) in whatever manner the Sole Lead Arranger or such Lender reasonably
deems necessary.

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

                  12.7.  Designation.   (a)  Notwithstanding   anything  to  the
contrary contained herein, any Lender (a "Designating  Lender") may grant to one
or more special purpose funding vehicles (each, an "SPV"), identified as such in
writing from time to time by the Designating Lender to the Administrative  Agent
and Parent,  the option to provide to the  Borrowers all or any part of any Loan
that  such  Designating  Lender  would  otherwise  be  obligated  to make to the
Borrowers  pursuant to this  Agreement;  provided that (i) nothing  herein shall
constitute a commitment  by any SPV to make any Loan,  (ii) if an SPV elects not
to exercise  such option or  otherwise  fails to provide all or any part of such
Loan,  the  Designating  Lender shall be obligated to make such Loan pursuant to
the terms hereof,  and (iii) the Designating  Lender shall remain liable for any
indemnity or other payment obligation with respect to its Commitment  hereunder.
The making of a Loan by an SPV  hereunder  shall  utilize the  Commitment of the
Designating  Lender to the same  extent,  and as if, such Loan were made by such
Designating Lender.

                  (b) As to any Loans or portion  thereof  made by it,  each SPV
shall have all the rights  that a Lender  making  such Loans or portion  thereof
would have had under this Agreement; provided, however, that each SPV shall have
granted to its Designating  Lender an irrevocable power of attorney,  to deliver
and receive all  communications  and notices under this  Agreement and any other
Loan  Documents and to exercise on such SPV's  behalf,  all of such SPV's voting
rights under this  Agreement.  No additional  Note shall be required to evidence
the Loans or portion thereof made by an SPV; and the related  Designating Lender
shall be  deemed  to hold its Note as agent  for such SPV to the  extent  of the
Loans or portion  thereof funded by such SPV. In addition,  any payments for the
account  of any SPV  shall be paid to its  Designating  Lender as agent for such
SPV.

                  (c) Each  party  hereto  hereby  agrees  that no SPV  shall be
liable for any  indemnity  or payment  under this  Agreement  for which a Lender
would  otherwise be liable.  In furtherance of the foregoing,  each party hereto
hereby agrees (which agreements 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 SPV, it
will not institute  against,  or join any other person in  instituting  against,
such SPV any bankruptcy, reorganization,  arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof.

                  (d) In  addition,  notwithstanding  anything  to the  contrary
contained in this Section 12.7 or otherwise in this  Agreement,  any SPV may (i)
at  any  time  and  without  paying  any  processing  fee  therefor,  assign  or
participate  all or a portion of its  interest  in any Loans to the  Designating
Lender  or to any  financial  institutions  providing  liquidity  and/or  credit
support to or for the account of such SPV 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  enhancements to such SPV. This
Section 12.7 may not be amended  without the written  consent of any Designating
Lender affected thereby.

                                  ARTICLE XIII

                                     NOTICES

                  Except as otherwise  permitted by Section 2.13 with respect to
borrowing notices,  all notices,  requests and other communications to any party
hereunder  shall be in writing  (including  electronic  transmission,  facsimile
transmission  or similar  writing) and shall be given to such party:  (x) at its
address or  facsimile  number set forth on the  signature  pages and (y) at such
other address or facsimile number as it may hereafter specify for the purpose by
notice to the other  parties in accordance  with the  provisions of this Article
XIII. Each such notice, request or other communication shall be effective (i) if
given by  facsimile  transmission,  when  transmitted  to the  facsimile  number
specified in this Section and confirmation of receipt is received, (ii) if given
by mail, 72 hours after such  communication is deposited in the mails with first
class postage  prepaid,  addressed as aforesaid,  or (iii) if given by any other
means, when delivered (or, in the case of electronic transmission,  received) at
the  address   specified  in  this   Section;   provided  that  notices  to  the
Administrative Agent under Article II shall not be effective until received.

                                   ARTICLE XIV

                                  COUNTERPARTS

                  This Agreement may be executed in any number of  counterparts,
all of which taken  together  shall  constitute  one  agreement,  and any of the
parties hereto may execute this Agreement by signing any such counterpart.  This
Agreement  shall be effective  when it has been executed by the  Borrowers,  the
Administrative  Agent, the Sole Lead Arranger and the Lenders and each party has
notified the Administrative Agent by facsimile transmission or telephone that it
has taken such action.

                                   ARTICLE XV

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

                  15.1.  CHOICE OF LAW.  THIS  AGREEMENT  SHALL BE  CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

                  15.2.   CONSENT  TO   JURISDICTION.   EACH   BORROWER   HEREBY
IRREVOCABLY  SUBMITS TO THE  NON-EXCLUSIVE  JURISDICTION  OF ANY  UNITED  STATES
FEDERAL OR NEW YORK STATE COURT  SITTING IN NEW YORK  COUNTY,  THE COURTS OF THE
UNITED  STATES OF AMERICA FOR THE SOUTHERN  DISTRICT OF NEW YORK,  AND APPELLATE
COURTS FROM ANY THEREOF IN ANY ACTION OR  PROCEEDING  ARISING OUT OF OR RELATING
TO ANY LOAN  DOCUMENTS,  AND EACH BORROWER  HEREBY  IRREVOCABLY  AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR  PROCEEDING  MAY BE HEARD AND  DETERMINED IN
ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH SUIT,  ACTION OR PROCEEDING  BROUGHT IN SUCH A COURT
OR THAT SUCH COURT IS AN  INCONVENIENT  FORUM.  NOTHING  HEREIN  SHALL LIMIT THE
RIGHT OF THE  ADMINISTRATIVE  AGENT OR ANY LENDER TO BRING  PROCEEDINGS  AGAINST
EITHER BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING
BY  EITHER  BORROWER  AGAINST  THE  ADMINISTRATIVE  AGENT OR ANY  LENDER  OR ANY
AFFILIATE  OF THE  ADMINISTRATIVE  AGENT OR ANY LENDER  INVOLVING,  DIRECTLY  OR
INDIRECTLY,  ANY MATTER IN ANY WAY ARISING OUT OF,  RELATED TO OR CONNECTED WITH
ANY LOAN  DOCUMENT  SHALL BE BROUGHT  ONLY IN A COURT IN NEW YORK  COUNTY.  EACH
BORROWER  AGREES THAT SERVICE OF PROCESS IN ANY SUCH  PROCEEDING MAY BE EFFECTED
BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY  SUBSTANTIALLY
SIMILAR  FORM OF MAIL),  POSTAGE  PREPAID,  TO THE  BORROWERS AT THE ADDRESS SET
FORTH ON THE  SIGNATURE  PAGE  HERETO  OR AT SUCH  OTHER  ADDRESS  OF WHICH  THE
ADMINISTRATIVE  AGENT  SHALL  HAVE  BEEN  NOTIFIED  PURSUANT  THERETO;  AND EACH
BORROWER  AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER  PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN
ANY OTHER JURISDICTION.

                  15.3. WAIVER OF JURY TRIAL. EACH BORROWER,  THE ADMINISTRATIVE
AGENT AND EACH  LENDER  HEREBY  WAIVE TRIAL BY JURY IN ANY  JUDICIAL  PROCEEDING
INVOLVING,  DIRECTLY  OR  INDIRECTLY,  ANY  MATTER  (WHETHER  SOUNDING  IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,  RELATED TO OR CONNECTED  WITH
ANY LOAN DOCUMENT, THE TRANSACTIONS OR THE RELATIONSHIPS ESTABLISHED THEREUNDER.

                            [Signature Pages Follow]

<PAGE>

                                       S-1

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

                                   VECTREN CORPORATION

                                   By: /s/ Timothy L. Burke
                                      ----------------------------------------
                                      Name:  Timothy L. Burke
                                      Title: Vice President & Treasurer

                                   VECTREN UTILITY HOLDINGS, INC.

                                   By: /s/ Timothy L. Burke
                                      ----------------------------------------
                                      Name:   Timothy L. Burke
                                      Title:  Vice President & Treasurer
                                            20 N.W. Fourth Street
                                            P.O. Box 3606
                                            Evansville, Indiana  47735-3606

                                             Attention:  Jerome A. Benkert, Jr.
                                             Telephone:  (812) 491-4207
                                             Fax:  (812)

<PAGE>
                                   MERRILL LYNCH & CO., MERRILL LYNCH,
                                   PIERCE, FENNER & SMITH INCORPORATED,
                                     as Sole Lead Arranger and Syndication Agent

                                   By: /s/ Christopher K. Stout
                                      ----------------------------------------
                                      Name:  Christopher K. Stout
                                      Title: Director

<PAGE>

                                      S-2

Commitment;
----------

$33,000,000                        MERRILL LYNCH CAPITAL CORPORATION,
                                     as a Lender

                                   By: /s/ Christopher K. Stout
                                      ----------------------------------------
                                      Name:  Christopher K. Stout
                                      Title: VP
                                             250 Vesey Street
                                             World Financial Center
                                             North Tower
                                             New York, New York  10281

                                             Attention:  Christopher K. Stout
                                             Telephone:  (212) 449-0982
                                             Fax: (212) 449-7750

<PAGE>

                                      S-3

Commitment;
----------

$30,500,000                        CREDIT SUISSE FIRST BOSTON, as a Lender and
                                       as Administrative Agent

                                   By: /s/ James P. Moran
                                      ----------------------------------------
                                      Name:  James P. Moran
                                      Title: Director

                                   By: /s/ David L. Sawyer
                                      ----------------------------------------
                                      Name:  David L. Sawyer
                                      Title: Vice President

                                                Attention:  James Moran
                                                Telephone:  (212) 325-9176
                                                Fax:  (212) 325-8615

<PAGE>

                                      S-4

Commitment;
----------

$30,500,000                        ABN AMRO, BANK, N.V. as a Lender and as
                                   Documentation Agent

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

                                   By: /s/ David B. Bryant
                                      ----------------------------------------
                                      Name:     David B. Bryant
                                      Title:   Senior Vice President &
                                               Managing Director

                                                Attention:  Kenneth Keck
                                                Telephone:  (312) 992-5134
                                                Fax:  (312) 992-5111

<PAGE>

                                      S-5

Commitment;
----------

$22,000,000                        BANCA COMMERCIALE ITALIANA, NEW YORK BRANCH,
                                   as Lender

                                   By: /s/ Charles Dougherty
                                      ----------------------------------------
                                      Name:  C. Dougherty
                                      Title: VP

                                   By: /s/ E. Bermant
                                      ----------------------------------------
                                      Name: E. Bermant
                                      Title:  FVP/Deputy Manager

                                               Attention:  Charles Dougherty
                                               Telephone:  (212) 607-3656
                                               Fax:  (212) 809-2124

<PAGE>

                                      S-6

Commitment;
----------

$27,500,000                        BANCA NAZIONALE DEL LAVORO S.P.A., NEW
                                   YORK BRANCH, as Lender

                                   By: /s/ Roberto Mancone
                                      ----------------------------------------
                                      Name:   Roberto Mancone
                                      Title:  Senior Loan Officer

                                   By: /s/ Leonardo Valentini
                                      ----------------------------------------
                                      Name:  Leonardo Valentini
                                      Title: First Vice President

                                               Attention:  Giulio Giovine
                                               Telephone:  (212) 314-0217
                                               Fax:  (212) 765-2978

<PAGE>

                                      S-7

Commitment;
----------

$22,000,000                        BANCO DI NAPOLI S.P.A., as Lender

                                   By: /s/ Vito Spada
                                      ----------------------------------------
                                      Name:     Vito Spada
                                      Title: Executive Vice President

                                   By: /s/ Claude P. Mapes
                                      ----------------------------------------
                                      Name:     Claude P. Mapes
                                      Title: First Vice President

                                                  Attention:  Franco Dimario
                                                  Telephone:  (212) 872-2415
                                                  Fax: (212) 755-1389

<PAGE>

                                      S-8

Commitment;
----------

$27,500,000                        THE BANK OF NEW YORK, as Lender

                                   By: /s/ Ian K. Stewart
                                      ----------------------------------------
                                      Name:     Ian K. Stewart
                                      Title: Senior Vice President

                                           Attention:  Lisa Williams
                                           Telephone:  (212) 635-7889
                                           Fax: (212) 635-7923

<PAGE>

                                      S-9

Commitment;
----------

$28,500,000                        BANK ONE, INDIANA, NA, as Lender

                                   By: /s/ Randall K. Stephens
                                      ----------------------------------------
                                      Name:     Randall K. Stephens
                                      Title:    Managing Director

                                             Attention:   Randall Stephens
                                             Telephone:  (317) 321-7789
                                             Fax: (317) 266-6042

<PAGE>

                                      S-10

Commitment;
----------

$27,500,000                        THE FUJI BANK LIMITED, as Lender

                                   By: /s/ Peter L. Chinnici
                                      ----------------------------------------
                                      Name:     Peter L. Chinnici
                                      Title:    Senior Vice President and
                                                Group Head

                                                  Attention:  Richard Dunning
                                                  Telephone:  (312) 621-9485
                                                  Fax: (312) 621-3386

<PAGE>

                                      S-11

Commitment;
----------

$27,500,000                        THE INDUSTRIAL BANK OF JAPAN, LIMITED,
                                   as Lender

                                   By: /s/ Walter R. Wolff
                                      ----------------------------------------
                                      Name:  Walter R. Wolff
                                      Title: Joint General Manager

                                                Attention:  Agnes Aberin
                                                Telephone:  (212) 282-4061
                                                Fax: (212) 282-4480

<PAGE>

                                      S-12

Commitment;
----------

$27,500,000                        KBC BANK, N.V., as Lender

                                   By: /s/ Raymond F. Murray
                                      ----------------------------------------
                                      Name:   Raymond F. Murray
                                      Title:  First Vice President

                                   By: /s/ Robert Snauffer
                                      ----------------------------------------
                                      Name:   Robert Snauffer
                                      Title:  First Vice President

                                               Attention:  John Thierfelder
                                               Telephone:  (212) 341-0727
                                               Fax: (212) 541-0793

<PAGE>

                                      S-13

Commitment;
----------

$27,500,000                        KEYBANK NATIONAL ASSOCIATION, as Lender

                                   By: /s/ Sherrie Manson
                                      ----------------------------------------
                                      Name:     Sherrie Manson
                                      Title:    Vice President

                                                 Attention:  Sherrie Manson
                                                 Telephone:  (216) 689-3443
                                                 Fax: (216) 689-4981

<PAGE>

                                      S-14

Commitment;
----------

$22,000,000                        NATIONAL CITY BANK OF INDIANA, as Lender

                                   By: /s/ William E. Kennedy
                                      ----------------------------------------
                                      Name:     William E. Kennedy
                                      Title:    Vice President

                                                 Attention:  William E. Kennedy
                                                 Telephone:  (317) 267-7066
                                                 Fax: (317) 267-6249

<PAGE>

                                      S-15

Commitment;
----------

$10,000,000                        INTEGRA BANK, N.A., as Lender

                                   By: /s/ Gene Dawson
                                      ----------------------------------------
                                      Name:     Gene Dawson
                                      Title:    Vice President

                                                 Attention:   Gene Dawson
                                                 Telephone:  (812) 464-9787
                                                 Fax: (812) 464-9691

<PAGE>

                                      S-16

Commitment;
----------

$27,500,000                        NORINCHUKIN BANK, as Lender

                                   By: /s/ Yoshiro Niiro
                                      ----------------------------------------
                                      Name:     Yoshiro Niiro
                                      Title:

                                                 Attention:  Sophia Tsororos
                                                 Telephone:  (212) 949-7188
                                                 Fax: (212) 808-4188

<PAGE>

                                      S-17

Commitment;
----------

$22,000,000                        OLD NATIONAL BANK, as Lender

                                   By: /s/ Darren Spainhoward
                                      ----------------------------------------
                                      Name:     Darren Spainhoward
                                      Title:

                                                 Attention:  Jeryl Lynn Hope
                                                 Telephone:  (812) 461-9399
                                                 Fax: (812) 464-1262

<PAGE>

                                      S-18

Commitment;
----------

$22,000,000                        UNION PLANTERS BANK, NATIONAL ASSOCIATION,
                                   as Lender

                                   By: /s/ Jay D. Richards
                                      ----------------------------------------
                                      Name:     Jay D. Richards
                                      Title:    Vice President

                                                Attention:  Vicki Payne
                                                Telephone:  (317) 221-6077
                                                Fax: (317) 221-6120

<PAGE>
<TABLE>
<CAPTION>

                                            PRICING SCHEDULE
------------------------------------------------------------------------------------------------------------------------

                                         Level I     Level II      Level III      Level IV      Level V      Level VI
               Pricing                   Status       Status        Status         Status       Status        Status
-------------------------------------- ------------ ------------ -------------- ------------- ------------ -------------
<S>                                      <C>          <C>           <C>           <C>           <C>          <C>
Applicable Margin for Eurodollar         0.270%       0.300%        0.450%        0.600%        0.700%       0.800%
    Advances
-------------------------------------- ------------ ------------ -------------- ------------- ------------ -------------
Applicable Margin for Floating           0.00%        0.00%         0.00%         0.00%         0.00%        0.00%
    Rate Advances
-------------------------------------- ------------ ------------ -------------- ------------- ------------ -------------
Applicable Facility Fee Rate             0.080%       0.100%        0.125%        0.150%        0.175%       0.200%
-------------------------------------- ------------ ------------ -------------- ------------- ------------ -------------
Applicable Utilization Fee Rate          0.100%       0.100%        0.125%        0.125%        0.250%       0.250%
-------------------------------------- ------------ ------------ -------------- ------------- ------------ -------------
</TABLE>

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

                  "Level I Status" exists at any date if, on such date, Parent's
Moody's Rating is A2 or better or Parent's S&P Rating is A or better.

                  "Level II Status"  exists at any date,  if, on such date,  (i)
Parent has not qualified for Level I Status and (ii) Parent's  Moody's Rating is
A3 or better or Parent's S&P Rating is A- or better.

                  "Level III  Status"  exists at any date if, on such date,  (i)
Parent has not qualified for Level I Status or Level II Status and (ii) Parent's
Moody's Rating is Baal or better or Parent's S&P Rating is BBB+ or better.

                  "Level IV  Status"  exists at any date if, on such  date,  (i)
Parent has not qualified for Level I Status, Level II Status or Level III Status
and (ii) Parent's Moody's Rating is Baa2 or better or Parent's S&P Rating is BBB
or better.

                  "Level V  Status"  exists  at any date  if,  on such  date (i)
Parent has not qualified for Level I status,  Level II status,  Level III status
or Level IV  status  and (ii)  Parent's  Moody's  Rating  is Baa3 or  better  or
Parent's S&P Rating is BBB- or better.

                  "Level VI Status" exists at any date if, on such date,  Parent
has not qualified for Level I Status,  Level II Status,  Level III Status, Level
IV Status or Level V Status.

                  "Moody's  Rating" means, at any time, the credit rating issued
by  Moody's  and then in  effect  with  respect  to  Parent's  senior  unsecured
long-term debt securities without third-party credit enhancement.

                  "S&P Rating"  means,  at any time, the credit rating issued by
S&P and then in effect with respect to Parent's senior unsecured  long-term debt
securities without third-party credit enhancement.

                  "Status" means either Level I Status,  Level II Status,  Level
III Status, Level IV Status, Level V Status or Level VI Status.

                  The Applicable  Margin and Applicable  Facility Fee Rate shall
be determined in accordance with the foregoing table based on Parent's Status as
determined from its then current  Moody's and S&P Ratings.  The credit rating in
effect on any date for the  purposes  of this  Schedule is that in effect at the
close of business on such date.  If at any time Parent has no Moody's  Rating or
no S&P Rating,  Level VI Status shall exist.  If Parent is split-rated  and as a
result the  Moody's  Rating or the S&P Rating  falls in any Level that is two or
more Levels below the other (i.e.  the Moody's  Rating is in Level I and the S&P
Rating is in Level IV),  then Parent  shall be deemed to have the Status that is
in the Level one below the higher Level (i.e.  as in the example  above,  Parent
would be in Level II Status).

<PAGE>
                                   SCHEDULE 1

                                      LIENS
                          (See Sections 5.13 and 6.11)

<PAGE>

                                   SCHEDULE 2

                       ENCUMBRANCES AFFECTING SUBSIDIARIES
                               (See Section 6.14)

<PAGE>

                                                                       EXHIBIT A

                                [FORM OF OPINION]

The Administrative  Agent and the  Lenders  who are
      parties  to the Credit Agreement described below.

Ladies and Gentlemen:

                  We have acted as special counsel for Vectren  Corporation,  an
Indiana corporation ("Parent"),  and Vectren Utility Holdings,  Inc., an Indiana
corporation and a Wholly-Owned Subsidiary ("VUHI" and, together with Parent, the
"Borrowers"),  in  connection  with the  execution  and  delivery  of the Credit
Agreement  dated  as of  June [ ],  2000  (the  "Credit  Agreement")  among  the
Borrowers,  the Lenders party thereto from time to time, Merrill Lynch,  Pierce,
Fenner & Smith  Incorporated  as Sole Lead Arranger and Syndication  Agent,  ABN
AMRO as  Documentation  Agent and Credit  Suisse First Boston as  Administrative
Agent.  This  opinion  letter  is being  provided  to you  pursuant  to  Section
4.1(a)(v) of the Credit  Agreement.  All capitalized  terms used in this opinion
letter and not otherwise defined shall have the meanings ascribed to them in the
Credit Agreement.

                  For the purpose of  rendering  this  opinion  letter,  we have
examined  (i) the  Credit  Agreement  and the  Notes  (hereinafter  collectively
referred to as the "Loan Documents"); (ii) the corporate proceedings pursuant to
which the Loan Documents were approved and  authorized;  and (iii) such records,
certificates and other documents and such questions of law as we have considered
necessary or  appropriate  for the purpose of  rendering  the opinions set forth
below.

                  For purposes of rendering this opinion  letter,  we have, with
your consent and without investigation, assumed:

                  (a) the  genuineness  of the  signatures of all persons (other
         than the Borrowers) signing the Loan Documents;

                  (b) the authority of the persons  executing the Loan Documents
         on behalf of the parties thereto (other than the Borrowers);

                  (c)  the  authenticity  of all  documents  submitted  to us as
         originals;

                  (d) the accuracy and  completeness of all corporate and public
         documents and records made available to us;

                  (e) the  conformity  to  authentic  original  documents of all
         documents  submitted  to  us as  certified,  conformed  or  photostatic
         copies;

                  (f) the  due  authorization,  execution  and  delivery  of the
         Credit Agreement by the parties thereto (other than the Borrowers); and

                  (g) that the Credit  Agreement is binding upon all the parties
         thereto (other than the Borrowers) and that all parties  thereto (other
         than  the  Borrowers)  will  act  in  accordance  with  the  terms  and
         provisions thereof.

                  In addition, we have assumed that:

                  (i)  all   decisional   authorities,   statutes,   rules   and
         regulations  comprising  the  applicable  law for which we are assuming
         responsibility are published or otherwise generally accessible, in each
         case in a manner generally available to lawyers practicing in the State
         of Indiana; and

                 (ii) routine procedural matters,  such as service of process or
         qualification to do business in the jurisdiction,  will be satisfied by
         the party seeking to enforce any of the Loan Documents.

                  Based upon the  foregoing,  and subject to the  qualifications
stated herein, we are of the opinion that:

                  1. Each Borrower and each  Subsidiary  is a  corporation  duly
organized and validly  existing under the laws of the State of Indiana.  Neither
Borrower  nor any  Subsidiary  is required to be qualified to do business in any
state other than Indiana.

                  2. The  execution  and  delivery by each  Borrower of the Loan
Documents and the  performance  by each Borrower of its  obligations  thereunder
have been duly  authorized by proper  corporate  proceedings on the part of each
Borrower and will not

                  (a) require any consent of either Borrower's shareholders; or

                  (b) violate (i) either Borrower's or any Subsidiary's articles
         of incorporation or by-laws,  (ii) any law, rule, regulation or, to our
         knowledge,  any  order,  writ,  judgment,  injunction,  decree or award
         binding on either Borrower or any  Subsidiary,  or (iii) the provisions
         of any indenture,  instrument or agreement to which either  Borrower or
         any of its  Subsidiaries  is a party or is subject,  or by which it, or
         its  Property,  is bound,  or  conflict  with or  constitute  a default
         thereunder.

                  3. The Loan Documents have been duly executed and delivered by
each  Borrower  and  constitute  legal,  valid and binding  obligations  of each
Borrower  enforceable  against  such  Borrower in  accordance  with their terms,
except to the  extent the  enforcement  thereof  may be  limited by  bankruptcy,
insolvency  or similar laws  affecting  the  enforcement  of  creditors'  rights
generally  and  subject  also  to the  availability  of  equitable  remedies  if
equitable remedies are sought.

                  4. Except as set forth in the '34 Act  Reports  filed prior to
the  date   hereof,   there   is  no   litigation,   arbitration,   governmental
investigation,  proceeding or inquiry  pending or, to our knowledge,  threatened
against either Borrower or any Subsidiary which, if adversely determined,  could
reasonably be expected to have a Material Adverse Effect.

                  5.  No  order,  consent,   adjudication,   approval,  license,
authorization  or validation of, or filing,  recording or registration  with, or
exemption by, or other action in respect of any  governmental  or public body or
authority,  or any  subdivision  thereof,  which  has not been  obtained  by the
Borrowers  or any of their  Subsidiaries  is  required  to be obtained by either
Borrower  or any of its  Subsidiaries  in  connection  with  the  execution  and
delivery of the Loan Documents,  the borrowings under the Agreement, the payment
and performance by each Borrower of the Obligations, or the legality,  validity,
binding effect or enforceability of any of the Loan Documents.

                  Our  opinions  are  subject  to  the  following   assumptions,
qualifications and limitations:

                  A. Whenever any statement in this opinion  letter is qualified
by the phrase "to our  knowledge,"  such  phrase is  intended to mean the actual
knowledge of information  by the lawyers in our firm who have given  substantive
legal  attention  to  matters  on behalf of either  Borrower  in the six  months
preceding  the  date  of  this  opinion  letter,  but  does  not  include  other
information  that might be revealed if there were to be  undertaken a canvass of
all  lawyers  in our firm,  a general  search of our files or any other  type of
independent  investigation.  Moreover,  we have not undertaken  any  independent
investigation  to determine the accuracy or completeness of such knowledge,  and
any  limited   inquiries   made  by  us  should  not  be  regarded  as  such  an
investigation.  Any certificates or representations obtained by us from officers
of the  Borrowers or others with respect to such  opinions have been relied upon
by us without independent verification.

                  B. This opinion letter is limited to the current  Federal laws
of the United  States and the current  internal laws of the State of Indiana and
New York (without  giving effect to any conflict of law principles  thereof) and
we have not  considered,  and  express  no  opinion  on,  the laws of any  other
jurisdiction.

                  C. This  opinion  letter  is dated  and  speaks as of the date
hereof.  We have no obligation to update or  supplement  this opinion  letter to
reflect any facts or circumstances that may hereafter come to our attention.

                  D.  Whenever  we have  stated we  assumed  any  matter,  it is
intended  to  indicate  that we have  assumed  such  matter  without  making any
factual,  legal or other inquiry or  investigation,  and without  expressing any
opinion or stating any  conclusion of any kind  concerning  such matter (but, to
our knowledge, no assumption made herein is inaccurate or unreasonable).

                  E. The only opinions  intended to be provided herein are those
which are expressly stated herein and no opinions by implication are intended or
given.

                  This  opinion  letter  may be  relied  upon by the  Sole  Lead
Arranger, the Administrative Agent, the Lenders and their respective successors,
participants and assignees. Subject to the foregoing, this opinion letter may be
relied upon only in connection with the transactions  contemplated by the Credit
Agreement  and may not be used or  relied  upon by the Sole Lead  Arranger,  the
Administrative  Agent,  such Lenders or any other  person for any other  purpose
whatsoever.

                                      Very truly yours,*

<PAGE>

                                                                       EXHIBIT B

                        [FORM OF COMPLIANCE CERTIFICATE]

To:      The Lenders party to the
         Credit Agreement described below

                  This compliance  certificate (this "Certificate") is furnished
pursuant  to the  Credit  Agreement  dated  as of June [ ],  2000  (as  amended,
modified,  renewed or extended from time to time, the "Credit  Agreement") among
Vectren  Corporation  ("Parent"),  Vectren Utility  Holdings,  Inc. ("VUHI" and,
together with Parent,  the "Borrowers"),  the Lenders party thereto from time to
time, Merrill Lynch,  Pierce,  Fenner & Smith Incorporated as Sole Lead Arranger
and Syndication Agent, ABN AMRO as Documentation  Agent, and Credit Suisse First
Boston as  Administrative  Agent for the Lenders.  All capitalized terms used in
this Certificate and not otherwise  defined shall have the meanings  ascribed to
them in the Credit Agreement.

                  THE UNDERSIGNED HEREBY CERTIFIES THAT:

                  1.       I am the duly elected _______________ of Parent;

                  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 Parent  and its  Subsidiaries  during the
accounting period covered by the attached financial statements; and

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

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

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

<PAGE>

                  The  foregoing  certifications,  together  with the  financial
statements  delivered  with this  Certificate  in support  hereof,  are made and
delivered this _____ day of ____________, ____.

                                  [                            ]

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

<PAGE>

                                   SCHEDULE I

                            TO COMPLIANCE CERTIFICATE

                      Reports and Deliveries Currently Due

<PAGE>

                                                                       EXHIBIT C

                         [FORM OF ASSIGNMENT AGREEMENT]

                  This  ASSIGNMENT  AGREEMENT  (this  "Agreement")  dated  as of
[                ]   is  made   between   [         ]   (the   "Assignor")   and
[             ] (the "Assignee").

                                    RECITALS

                  The Assignor is party to the Credit Agreement dated as of June
[ ], 2000 (as  amended,  modified,  renewed or extended  from time to time,  the
"Credit Agreement") among Vectren Corporation,  Vectren Utility Holdings,  Inc.,
the Lenders party thereto from time to time,  Merrill  Lynch,  Pierce,  Fenner &
Smith  Incorporated  as Sole Lead Arranger and  Syndication  Agent,  ABN AMRO as
Documentation  Agent and Credit Suisse First Boston as Administrative  Agent for
the Lenders.  All  capitalized  terms used in this  Agreement  and not otherwise
defined shall have the meanings ascribed to them in the Credit Agreement.

                  The  Assignor   wishes  to  assign  to  Assignee   rights  and
obligations  of the  Assignor  under the  Credit  Agreement  in  respect  of the
Commitments and the other rights and obligations of the Assignor thereunder, and
the  Assignee  wishes to accept  assignment  of such  rights and to assume  such
obligations  from the  Assignor  to be assigned to it and assumed by it, in each
case on the terms and subject to the conditions of this Agreement.

                  NOW,  THEREFORE,  in  consideration  of the  foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:

                  1.       Assignment and Acceptance.

                  (a) Subject to the terms and conditions of this Agreement, (i)
the Assignor hereby sells,  transfers and assigns,  and (ii) the Assignee hereby
purchases,  assumes and  undertakes  from the  Assignor,  without  recourse  and
without representation or warranty (except as provided in this Agreement),

                  (i)  Assignor's  Commitments  and  Loans  set forth on Annex 1
         hereto; and

                  (ii) all related rights,  benefits,  obligations,  liabilities
         and  indemnities of the Assignor with respect to such  Commitments  and
         Loans assigned to the Assignee under and in connection  with the Credit
         Agreement and the other Loan Documents;

(all of the  foregoing  being  herein  referred to as the  "Assigned  Rights and
Obligations").

                  (b) With effect on and after the Effective Date (as defined in
Section 5 hereof),  the Assignee  shall be a party to the Credit  Agreement  and
succeed to all of the rights and be obligated to perform all of the  obligations
of a Lender under the Credit  Agreement,  including the requirements  concerning
confidentiality  and the payment of indemnification for claims arising following
the  Effective  Date,  with a pro  rata  share as of the  Effective  Date of the
Commitments  and Loans  equal to the  amounts  set forth on Annex 1 hereto.  The
Assignee  agrees that it will perform in accordance  with their terms all of the
obligations  which by the  terms of the  Credit  Agreement  are  required  to be
performed by it as a Lender.  It is the intent of the parties hereto that (i) as
of the  Effective  Date,  the pro rata share of the  Assignor of the  Commitment
shall be reduced by $ [ ], and the pro rata share of the  Assignor  of the Loans
shall be reduced by $ [ ], in each case as a result of the assignment  hereby to
the Assignee,  and (ii) the Assignor shall relinquish its rights and be released
from its obligations  under the Credit  Agreement to the extent such obligations
have been assumed by the Assignee;  provided,  however,  that the Assignor shall
not  relinquish  its  rights  under  Section [ ] or  Section  [ ] of the  Credit
Agreement  or be relieved  of its  obligations  under  Section [ ] of the Credit
Agreement in respect of the Assigned  Rights and  Obligations to the extent such
rights relate to the time prior to the Effective Date.

                  2.       Payments.

                  As  consideration  for  the  sale,   assignment  and  transfer
contemplated in Section 1 hereof,  the Assignee shall pay to the Assignor on the
Effective  Date in  immediately  available  funds an amount in U.S.  Dollars  as
agreed to between the parties.

                  3.       Reallocation of Payments.

                  Any interest, fees and other payments accrued to the Effective
Date with respect to all of the Assigned  Rights and Obligations of the Assignee
shall be for the account of the Assignor. Any interest,  fees and other payments
accrued on and after the Effective Date with respect to the Assigned  Rights and
Obligations of any Assignee  shall be for the account of each Assignee.  Each of
the Assignor and the Assignee,  severally, agrees that it will hold in trust for
the other party any  interest,  fees and other  amounts  which it may receive to
which the other party is entitled  pursuant to the  preceding  two sentences and
pay to the other  party any such  amounts  which it may  receive  promptly  upon
receipt.

                  4.       Independent Credit Decision.

                  The Assignee (a)  acknowledges  that it has received a copy of
the Credit  Agreement  and the Schedules  and Exhibits  thereto,  and such other
documents and  information  as it has deemed  appropriate to make its own credit
and legal  analysis  and decision to enter into this  Agreement;  and (b) agrees
that it will,  independently  and without  reliance upon the Assignor,  the Sole
Lead Arranger,  the  Administrative  Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time,  continue to
make its own credit and legal decisions in taking or not taking action under the
Credit Agreement.

                  5.       Effective Date: Notices.

                  (a) As between the Assignor and the  Assignee,  the  effective
date for this Agreement shall be [ ], 200 [ ](the "Effective  Date");  provided,
however,  that the  following  conditions  precedent  have been  satisfied on or
before the Effective Date:

                  (i) this  Agreement  shall be executed  and  delivered  by the
         Assignor and the Assignee;

                  (ii)  notice of the  assignment  substantially  in the form of
         Exhibit I shall have been delivered to the Administrative Agent and, if
         required  for an  effective  assignment  of  the  Assigned  Rights  and
         Obligations by the Assignor to the Assignee under Section 12.3.1 of the
         Credit Agreement,  the consent of each Borrower, the Sole Lead Arranger
         and the Administrative  Agent, as the case may be, shall have been duly
         obtained  and  shall be in full  force and  effect as of the  Effective
         Date;

                  (iii) the  Assignee  shall pay to the Assignor all amounts due
         to the Assignor from the Assignee  under this  Agreement and payment to
         the  Administrative  Agent of the fee required by Section 12.3.2 of the
         Credit Agreement shall have been made; and

                  (iv) the  information in this  Agreement  shall be recorded in
         the register maintained by the Administrative Agent

                  6.       Representations and Warranties.

                  (a) The Assignor  represents and warrants to the Assignee that
(i) it is the legal and  beneficial  owner of the interest  being assigned by it
hereunder to the  Assignee and that such  interest is free and clear of any Lien
or other  adverse  claim known to Assignor  other than any Lien or other adverse
claim created by the Assignee; (ii) it is duly organized and existing and it has
the full power and  authority to take,  and has taken,  all action  necessary to
execute and deliver this Agreement and any other documents required or permitted
to be executed or  delivered  by it in  connection  with this  Agreement  and to
fulfill   its   obligations   hereunder;   (iii)  no  notices  to,  or  consents
authorizations  or approvals of, any Person are required (other than any already
given or  obtained)  for its due  execution,  delivery and  performance  of this
Agreement,  and apart from any agreements or undertakings or filings required by
the Credit  Agreement,  no further  action by, or notice to, or filing with, any
Person is required of it for such execution,  delivery or performance;  and (iv)
this  Agreement has been duly executed and delivered by it and  constitutes  the
legal,  valid and binding  obligation of the Assignor,  enforceable  against the
Assignor in accordance with the terms hereof,  subject,  as to  enforcement,  to
bankruptcy,  insolvency,  moratorium,  reorganization  and other laws of general
application  relating to or affecting creditors' rights and to general equitable
principles.

                  (b) The  Assignor  makes no  representation  or  warranty  and
assumes  no  responsibility  with  respect  to  any  statements,  warranties  or
representations  made in or in  connection  with  the  Credit  Agreement  or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document  furnished  pursuant
thereto.  The Assignor makes no  representation  or warranty in connection with,
and assumes no responsibility with respect to, the solvency, financial condition
or  statements  of  the  Borrowers,  or the  performance  or  observance  by the
Borrowers  or any other  obligor  of any of their  obligations  under the Credit
Agreement or any other instrument or document furnished in connection therewith.

                  (c) The Assignee  represents and warrants to Assignor that (i)
it is duly  organized  and existing and it has full power and authority to take,
and has taken,  all action  necessary to execute and deliver this  Agreement and
any other  documents  required or permitted to be executed or delivered by it in
connection with this Agreement,  and to fulfill its obligations hereunder;  (ii)
no notices  to, or  consents,  authorizations  or  approvals  of, any Person are
required  (other than any already  given or obtained)  for its due execution and
performance of this Agreement;  and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing  with,  any Person is  required  of it for such  execution,  delivery  or
performance; (iii) this Agreement has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignee, enforceable
against  the  Assignee  in  accordance  with the terms  hereof,  subject,  as to
enforcement,  to bankruptcy,  insolvency,  moratorium,  reorganization and other
laws of general  application  relating to or affecting  creditors' rights and to
general equitable principles; (iv) it is an Eligible Person; and (v) none of the
consideration  used to make the purchase of the Assigned  Rights and Obligations
are "plan  assets" as defined  under  ERISA;  the  rights and  interests  of the
Assignee in and under the Loan Documents will not be "plan assets" under ERISA.

                  7.       Further Assurances.

                  The Assignor and the Assignee each hereby agree to execute and
deliver such other instruments,  and take such other action, as either party may
reasonably  request in connection  with the  transactions  contemplated  by this
Agreement,  including  the  delivery  of  any  notices  or  other  documents  or
instruments to the  Borrowers,  the Sole Lead  Arranger,  or the  Administrative
Agent which may be required in connection  with the  assignment  and  assumption
contemplated hereby.

                  8.       Miscellaneous.

                  (a) Any amendment or waiver of any provision of this Agreement
shall be in writing and signed by the parties hereto to be affected thereby.  No
failure  or delay by either  party  hereto in  exercising  any  right,  power or
privilege  hereunder  shall operate as a waiver  thereof,  and any waiver of any
breach of the  provisions of this  Agreement be without  prejudice to any rights
with respect to any other or further breach thereof.

                  (b) All  payments  made  hereunder  shall be made  without any
set-off or counterclaim.

                  (c) The Assignor and the Assignee shall each pay its own costs
and expenses incurred in connection with the negotiation, preparation, execution
and performance of this Agreement.

                  (d)  This   Agreement   may  be  executed  in  any  number  of
counterparts  and all of such  counterparts  taken  together  shall be deemed to
constitute one and the same instrument.

                  (e) THIS AGREEMENT  SHALL BE CONSTRUED IN ACCORDANCE  WITH THE
INTERNAL  LAWS (AND NOT THE LAW OF  CONFLICTS)  OF THE  STATE OF NEW  YORK,  BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. The Assignor and the
Assignee each irrevocably submit to the non-exclusive jurisdiction of any United
States Federal or New York State court sitting in New York County, the courts of
the  United  States of  America  for the  Southern  District  of New  York,  and
appellate courts from any thereof in any action or proceeding  arising out of or
relating to this  Agreement or to any other Loan Documents and each party hereby
irrevocably  agrees that all claims in respect of such action or proceeding  may
be heard and determined in any such court and  irrevocably  waives any objection
it may now or  hereafter  have as to the  venue  of any  such  suit,  action  or
proceeding brought in such a court or that such court is an inconvenient  forum.
Each party agrees that service of process in any such proceeding may be effected
by mailing a copy thereof by registered or certified mail (or any  substantially
similar form of mail),  postage  prepaid,  to the other party at the address set
forth on  Schedule  I hereto or at such other  address of which the other  party
shall have been notified  pursuant  thereto;  and each party agrees that nothing
herein shall  affect the right to effect  service of process in any other manner
permitted by law or shall limit the right to sue in any other  jurisdiction over
any suit, action or proceeding  arising out of or relating to this Agreement and
irrevocably agree that all claims in respect of such action or proceeding may be
heard and determined in such New York State or Federal court. Each party to this
Agreement hereby irrevocably waives, to the fullest extent it may effectively do
so, the defense of an  inconvenient  forum to the  maintenance of such action or
proceeding.

                  (f) THE ASSIGNOR  AND THE ASSIGNEE  EACH HEREBY WAIVE TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING  INVOLVING,  DIRECTLY OR INDIRECTLY,  ANY MATTER
(WHETHER  SOUNDING IN TORT,  CONTRACT OR  OTHERWISE)  IN ANY WAY ARISING OUT OF,
RELATED TO OR CONNECTED WITH THIS  AGREEMENT,  THE CREDIT  AGREEMENT,  ANY OTHER
LOAN DOCUMENT,  THE TRANSACTION OR THE  RELATIONSHIPS  ESTABLISHED  HEREUNDER OR
THEREUNDER.

                            [Signature Page Follows]

<PAGE>

                                       S-1

                  IN WITNESS WHEREOF,  the Assignor and the Assignee have caused
this Agreement to be executed and delivered by their duly authorized officers as
of the date first above written.

                                          [ASSIGNOR], as Assignor

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

                                          [ASSIGNEE], as Assignee

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

<PAGE>
<TABLE>
<CAPTION>

                                                                         ANNEX 1

<S>                    <C>             <C>             <C>            <C>            <C>             <C>
                                                       Term A-1       Term A-2        Term B         Term C
                       Revolving       Revolving       Facility       Facility       Facility       Facility
                       Commitment        Loans          Loans           Loans          Loans          Loans
                       ----------        -----          -----           -----          -----          -----

                                                                                                                      Total
Assigned
Commitment/
Loans

</TABLE>

<PAGE>

                                   SCHEDULE 1
                             to Assignment Agreement

1. Description and Date of Credit  Agreement:  Credit Agreement dated as of June
29, 2000, among Vectren Corporation, Vectren Utility Holdings, Inc., the Lenders
party  thereto  from  time  to  time,  Merrill  Lynch,  Pierce,  Fenner  & Smith
Incorporated  as  Sole  Lead  Arranger  and  Syndication   Agent,  ABN  AMRO  as
Documentation  Agent, and Credit Suisse First Boston as Administrative Agent for
the Lenders.

2. Date of Assignment Agreement:  [              ], 200[ ].

3. Amounts (As of Date of Item 2 above):

        a.       Total of Commitments (Loans)**           $
                 under Credit Agreement                    -------

        b.       Assignee's Percentage of each
                 Facility purchased under the
                 Assignment Agreement***                          %
                                                          --------

        c.       Amount of Assigned Share in each
                 Facility purchased under the             $
                 Assignment Agreement                      -------

4. Assignee's Aggregate (Loan Amount)** Commitment
   Amount Purchased Hereunder:                            $
                                                           -------

5. Proposed Effective Date:                               [      ], 200[ ]

Accepted and Agreed:

[NAME OF ASSIGNOR]                               [NAME OF ASSIGNEE]

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

**       If a Commitment has been terminated,  insert outstanding Loans in place
         of Commitment.

***      Percentage taken to 10 decimal places.

<PAGE>

                Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT

                        ADMINISTRATIVE INFORMATION SHEET

                               VECTREN CORPORATION

Lending Institution:
                         -------------------------------------------------------

Name for Signature Pages:
                         -------------------------------------------------------
                         Will sign Credit Agreement:
                         Will come in via Assignment:      Number of Days
                                                           Post Closing:  ______

Name for Publicity:
                         -------------------------------------------------------

Address:
                         -------------------------------------------------------

                         -------------------------------------------------------
Main Telephone:                              Telex No./Answerback:
                         --------------------                     --------------

CONTACT - Credit         Name:
                                   ---------------------------------------------
                         Address:
                                   ---------------------------------------------

                                   ---------------------------------------------
                         Telephone:
                                   ---------------------------------------------
                         Fax:
                                   ---------------------------------------------

CONTACT - Operation      Name:
                                   ---------------------------------------------
                         Address:
                                   ---------------------------------------------

                                   ---------------------------------------------
                         Telephone:
                                   ---------------------------------------------
                         Fax:
                                   ---------------------------------------------

PAYMENT INSTRUCTIONS

Bank Name:
                         -------------------------------------------------------
ABA/Routing No.
                         -------------------------------------------------------
Account Name
                         -------------------------------------------------------
Account No.
                         -------------------------------------------------------
For further credit:
                         -------------------------------------------------------
Account No.
                         -------------------------------------------------------
Attention:
                         -------------------------------------------------------
Reference:
                         -------------------------------------------------------

CREDIT SUISSE FIRST BOSTON ADMINISTRATIVE DETAILS
  CREDIT SUISSE FIRST BOSTON       Account Administrator    Secondary Contact
                                   ---------------------    ------------------
  11 Madison Avenue                Elizabeth Burnett        Yvette McQueen
  New York, NY  10010              Tel:  (212) 325-9940     Tel: (212)  325-9934
  Main Telephone: (212) 325-8304   Fax: (212) 325-8304      Fax: (212) 325-8304

Wire Instructions:;  The Agent's wire instructions will be disclosed at the time
of closing.
<PAGE>

                                    EXHIBIT I
                             to Assignment Agreement

                              NOTICE OF ASSIGNMENT

To:      Vectren Corporation
         Vectren Utility Holdings, Inc.

         Credit Suisse First Boston

         Merrill Lynch & Co.,
         Merrill Lynch, Pierce, Fenner & Smith Incorporated

From:    [NAME OF ASSIGNOR] (the "Assignor")

         [NAME OF ASSIGNEE] (the "Assignee")

                  1. We refer to that Credit  Agreement  (as amended,  modified,
reviewed or extended  from time to time,  the "Credit  Agreement")  described in
Item 1 of Schedule 1 attached hereto  ("Schedule 1"). All capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to them in the
Credit Agreement.

                  2. This  Notice of  Assignment  (this  "Notice")  is given and
delivered to the Borrowers, the Sole Lead Arranger, and the Administrative Agent
pursuant to Section 12.3.2 of the Credit Agreement.

                  3.  The  Assignor  and  the  Assignee  have  entered  into  an
Assignment  Agreement,  dated  as of  _____________,  ____  (the  "Assignment"),
pursuant  to which,  among  other  things,  the  Assignor  has  sold,  assigned,
delegated  and  transferred  to the  Assignee,  and the Assignee has  purchased,
accepted and assumed from the Assignor,  the  percentage  interest  specified in
Item 3 of  Schedule  1 of all  outstandings,  rights and  obligations  under the
Credit Agreement  relating to the facilities listed in Item 3 of Schedule 1. The
Effective  Date of the  Assignment  shall be the later of the date  specified in
Item 5 of Schedule 1 or two Business  Days (or such shorter  period as agreed to
by the  Administrative  Agent) after this Notice of Assignment  and any consents
and fees  required by Sections  12.3.1 and 12.3.2 of the Credit  Agreement  have
been  delivered to the  Administrative  Agent;  provided that the Effective Date
shall not occur if any  condition  precedent  agreed to by the  Assignor and the
Assignee has not been satisfied.

                  4. The Assignor and the Assignee hereby give to the Borrowers,
the Sole Lead Arranger,  and the  Administrative  Agent notice of the assignment
and  delegation   referred  to  herein.   The  Assignor  will  confer  with  the
Administrative  Agent  before  the date  specified  in Item 5 of  Schedule  1 to
determine  if the  Assignment  Agreement  will  become  effective  on such  date
pursuant to Section 3 hereof, and will confer with the  Administrative  Agent to
determine  the  Effective  Date  pursuant  to  Section  3  hereof  if it  occurs
thereafter.   The  Assignor   shall  notify  the  Sole  Lead  Arranger  and  the
Administrative  Agent if the Assignment  Agreement does not become  effective on
any proposed Effective Date as a result of the failure to satisfy the conditions
precedent agreed to by the Assignor and the Assignee. At the request of the Sole
Lead Arranger or the Administrative  Agent, the Assignor will give the Sole Lead
Arranger and the Administrative  Agent written  confirmation of the satisfaction
of the conditions precedent.

                  5.  The   Assignor   or  the   Assignee   shall   pay  to  the
Administrative  Agent on or before  the  Effective  Date the  processing  fee of
$3,500 required by Section 12.3.2 of the Credit Agreement.

                  6.  If  Notes  are  outstanding  on the  Effective  Date,  the
Assignor  and the  Assignee  request  and direct that the  Administrative  Agent
prepare  and  cause  the  Borrowers  to  execute  and  deliver  new Notes or, as
appropriate,  replacement  notes to the Assignor and the Assignee.  The Assignor
and, if  applicable,  the Assignee  each agree to deliver to the  Administrative
Agent the original Note received by it from the Borrowers  upon its receipt of a
new Note in the appropriate amount.

                  7. The Assignee advises the  Administrative  Agent that notice
and payment instructions are set forth in the attachment to Schedule 1.

                  8. The Assignee  hereby  represents  and warrants that none of
the funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that its
rights,  benefits,  and  interests in and under the Loan  Documents  will not be
"plan assets" under ERISA.

                  9. The Assignee authorizes the Administrative  Agent to act as
its agent under the Loan  Documents in accordance  with the terms  thereof.  The
Assignee  acknowledges  that  the  Administrative  Agent  has no duty to  supply
information  with respect to the Borrowers or the Loan Documents to the Assignee
until the Assignee becomes a party to the Credit Agreement.*

*May be eliminated if Assignee is a party to the Credit  Agreement  prior to the
Effective Date.

[NAME OF ASSIGNOR]                             [NAME OF ASSIGNEE]

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

ACKNOWLEDGED **[AND                            ACKNOWLEDGED **[AND
  CONSENTED TO]**                                CONSENTED TO]**
BY:  CREDIT SUISSE FIRST BOSTON,               BY:  VECTREN CORPORATION
  as Administrative Agent

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

                                               VECTREN UTILITY HOLDINGS, INC.

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

ACKNOWLEDGED **[AND
  CONSENTED TO]**
BY:  MERRILL LYNCH & CO.,
       MERRILL LYNCH, PIERCE, FENNER &
           SMITH INCORPORATED,
  as Sole Lead Arranger

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

                  **[Attach photocopy of Schedule 1 to Assignment]**

<PAGE>

                                                                       EXHIBIT D

            [FORM OF LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION]

To:      Credit Suisse First Boston as Administrative Agent (the "Administrative
         Agent") under the Credit Agreement described below.

Re:      Credit  Agreement  dated as of June 29,  2000  (as  amended,  modified,
         renewed or extended from time to time, the "Credit  Agreement"),  among
         Vectren Corporation ("Parent"),  Vectren Utility Holdings, Inc. ("VUHI"
         and, together with Parent,  the "Borrowers"),  the Lenders party hereto
         from time to time, Merrill Lynch,  Pierce,  Fenner & Smith Incorporated
         as Sole Lead Arranger and Syndication  Agent, ABN AMRO as Documentation
         Agent,  and  Credit  Suisse  First  Boston  as  Administrative   Agent.
         Capitalized  terms used herein and not otherwise defined shall have the
         meanings ascribed to them in the Credit Agreement.

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

Facility Identification Number(s)
                                 -----------------------------------------------
Customer/Account Name
                     -----------------------------------------------------------
Transfer Funds To
                 ---------------------------------------------------------------

                 ---------------------------------------------------------------
For Account No.
               -----------------------------------------------------------------
Reference/Attention To
                      ----------------------------------------------------------
Authorized Officer (Customer Representative)       Date
                                                       -------------------------
----------------------------                           -------------------------

-----------------------------------         ------------------------------------
(Please Print)                                                      Signature

Bank Officer Name                           Date
                                                 -------------------------------

-----------------------------------         ------------------------------------
(Please Print)                                                      Signature

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

<PAGE>

                                                                      EXHIBIT E

                                 [FORM OF NOTE]

$                                                           June 29, 2000
 -----------------

                  VECTREN  CORPORATION,   an  Indiana  corporation  and  VECTREN
UTILITY  HOLDINGS,  INC., an Indiana  corporation  (together,  the  "Borrowers")
promise,  on a joint and several basis,  to pay to the order of  _______________
(the  "Lender") the lesser of the  principal sum of  ___________________________
Dollars or the aggregate unpaid principal amount of all Loans made by the Lender
to  either  Borrower  pursuant  to  Article  II  of  the  Credit  Agreement  (as
hereinafter  defined),  in  immediately  available  funds at the main  office of
Credit Suisse First Boston, as Administrative  Agent,  together with interest on
the unpaid  principal  amount  hereof at the rates and on the dates set forth in
the Agreement,  all without relief from any valuation or  appraisement  law. The
Borrowers  shall pay the  principal  of and accrued and unpaid  interest on each
Loan in full on or before the  Facility  Termination  Date in effect at the time
such Loan was made.

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

                  This  Note is one of the  Notes  issued  pursuant  to,  and is
entitled to the benefits of, the Credit  Agreement dated as of June 29, 2000 (as
amended,   modified,  renewed  or  extended  from  time  to  time,  the  "Credit
Agreement"),  among the Borrowers,  the lenders party thereto from time to time,
including the Lender, Merrill Lynch, Pierce, Fenner & Smith Incorporated as Sole
Lead Arranger and Syndication Agent, ABN AMRO as Documentation  Agent and Credit
Suisse First Boston as Administrative Agent, to which Credit Agreement reference
is hereby made for a statement of the terms and conditions  governing this Note,
including the terms and  conditions  under which this Note may be prepaid or its
maturity date accelerated.

                  Capitalized  terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Credit Agreement.

                                               VECTREN CORPORATION

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

                                               VECTREN UTILITY HOLDINGS, INC.

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

<PAGE>

                   SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
                                   TO NOTE OF
             VECTREN CORPORATION AND VECTREN UTILITY HOLDINGS, INC.,
                       PAYABLE TO ______________________,
                         DATED __________________, ____

                    Principal      Maturity      Principal
                    Amount of     of Interest      Amount        Unpaid
        Date          Loan          Period          Paid         Balance
     ----------   ------------  --------------  ------------  -------------
<PAGE>

                                                                       EXHIBIT F

                    [FORM OF TAX REPRESENTATION CERTIFICATE]

                  Reference is hereby made to the Credit Agreement,  dated as of
June 29, 2000,  by and among Vectren  Corporation  ("Parent"),  Vectren  Utility
Holdings,  Inc. ("VUHI" and,  together with Parent,  the "Borrowers" the Lenders
party thereto from time to time,  Merrill Lynch & Co.,  Merrill  Lynch,  Pierce,
Fenner & Smith  Incorporated,  as Sole Lead Arranger and Syndication  Agent (the
"Lead Arranger"),  Credit Suisse First Boston, as Administrative  Agent, and ABN
AMRO, as Documentation Agent (the "Credit Agreement"). Terms used herein and not
otherwise  defined  shall  have  the  meanings  ascribed  to them in the  Credit
Agreement.   [Name  of  non-U.S.   Lender]  (the  "Lender")  is  providing  this
certificate pursuant to Section 3.5 of the Credit Agreement.  Under penalties of
perjury, the Lender hereby represents and warrants that:

                  1. The Lender is the sole record and  beneficial  owner of the
         [Loan(s)][Note(s)]  registered  in its name in  respect  of which it is
         providing  this  certificate,  and it shall remain the sole  beneficial
         owner of such  [Loan(s)][Note(s)]  registered  in its name at all times
         during  which  it is  the  record  holder  of  such  [Loan(s)][Note(s)]
         registered in its name.

                  2.  The  Lender  is  not a  "bank"  for  purposes  of  Section
         881(c)(3)(A)  of the  Internal  Revenue  Code of 1986,  as amended (the
         "Code").

                  3. The Lender is not a 10%  shareholder  of Parent  within the
         meaning of Section 881(c)(3)(B) of the Code.

                  4. The Lender is not a controlled foreign  corporation related
         to either Borrower within the meaning of Section 864(d)(4) of the Code.

                  5. The  income  from the  Note(s)  held by the  Lender  is not
         effectively  connected  with the conduct of a trade or business  within
         the United States.

                  6. The Lender has furnished  the Borrowers  with a certificate
         of  foreign  status  on  Internal  Revenue  Service  Form  W-8  (or the
         applicable successor form or certificate).

                  7. The Lender will promptly  notify the Borrowers and the Sole
         Lead Arranger if any of the  representations and warranties made herein
         are no longer true and correct.

                  IN WITNESS  WHEREOF,  the  undersigned  has duly executed this
certificate.

                                               [NAME OF NON-U.S. LENDER]

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

Date:
     -----------------

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