-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UCMG+ug+KgmgzIVWL3FpDdm4c+G/Z4mpaHQWcF+xWLxT1gp7qLWBDTV+BL/Veq8m edNxwhOb9bxu2Skqrot1qw== 0000897069-00-000029.txt : 20000203 0000897069-00-000029.hdr.sgml : 20000203 ACCESSION NUMBER: 0000897069-00-000029 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000201 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANT ENERGY CORP CENTRAL INDEX KEY: 0000352541 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 391380265 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09894 FILM NUMBER: 520314 BUSINESS ADDRESS: STREET 1: 222 WEST WSHNGTON AVENUE CITY: MADISON STATE: WI ZIP: 53703 BUSINESS PHONE: 6082523110 MAIL ADDRESS: STREET 1: P O BOX 2568 CITY: MADISON STATE: WI ZIP: 53701-2568 FORMER COMPANY: FORMER CONFORMED NAME: INTERSTATE ENERGY CORP DATE OF NAME CHANGE: 19980427 FORMER COMPANY: FORMER CONFORMED NAME: WPL HOLDINGS INC DATE OF NAME CHANGE: 19920703 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ----------------------- Date of Report (Date of earliest event reported): February 1, 2000 Alliant Energy Corporation --------------------------------------------------------- (Exact name of registrant as specified in its charter) Wisconsin 1-9894 39-1380265 - --------------- ---------------- ------------------ (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 222 West Washington Avenue, Madison, Wisconsin 53703 ------------------------------------------------------------- (Address of principal executive offices, including zip code) (608) 252-3311 ------------------------------- (Registrant's telephone number) Item 5. Other Events. - ------- ------------ On February 1, 2000, Alliant Energy Corporation issued a press release pursuant to the Rule 135c under the Securities Act of 1933 announcing that Alliant Energy Resources, Inc., the parent company of Alliant Energy Corporation's diversified operations, completed a private placement of 5,940,960 exchangeable senior notes in the aggregate principal amount of $402.5 million in accordance with Rule 144A under the Securities Act of 1933. A copy of such press release is filed as Exhibit 99.1 and is incorporated by reference herein. The material terms of the exchangeable senior notes are set forth in (i) a Purchase Agreement, dated January 26, 1999, among Alliant Energy Resources, Inc., Alliant Energy Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated; (ii) an Indenture, dated as of November 4, 1999, among Alliant Energy Resources, Inc., Alliant Energy Corporation, as Guarantor, and Firstar Bank, N.A., as Trustee; (iii) a Second Supplemental Indenture, dated as of February 1, 2000, among Alliant Energy Resources, Inc., Alliant Energy Corporation, as Guarantor, and Firstar Bank, N.A., as Trustee; and (iv) a Registration Rights Agreement, dated as of February 1, 2000, among Alliant Energy Resources, Inc., Alliant Energy Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated. Copies of such documents are filed as Exhibits 99.2., 99.3, 99.4 and 99.5, respectively, and are incorporated by reference herein. Item 7. Financial Statements and Exhibits. - ------ --------------------------------- (a) Not applicable. (b) Not applicable. (c) Exhibits. The following exhibits are being filed herewith: -------- (99.1) Alliant Energy Corporation Press Release dated February 1, 2000. (99.2) Purchase Agreement, dated January 26, 1999, among Alliant Energy Resources, Inc., Alliant Energy Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated. (99.3) Indenture, dated as of November 4, 1999, among Alliant Energy Resources, Inc., Alliant Energy Corporation, as Guarantor, and Firstar Bank, N.A., as Trustee [Incorporated by reference to Exhibit (4.1) to the Form S-4 Registration Statement of Alliant Energy Resources, Inc. and Alliant Energy Corporation (Reg. No. 333-92859)]. (99.4) Second Supplemental Indenture, dated as of February 1, 2000, among Alliant Energy Resources, Inc., Alliant Energy Corporation, as Guarantor, and Firstar Bank, N.A., as Trustee. (99.5) Registration Rights Agreement, dated as of February 1, 2000, among Alliant Energy Resources, Inc., Alliant Energy Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated. -2- SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ALLIANT ENERGY CORPORATION Date: February 1, 2000 By: /s/ Edward M. Gleason ---------------------------------- Edward M. Gleason Vice President-Treasurer and Corporate Secretary -3- ALLIANT ENERGY CORPORATION Exhibit Index to Current Report on Form 8-K Dated February 1, 2000 Exhibit Number - ------ (99.1) Alliant Energy Corporation Press Release dated February 1, 2000. (99.2) Purchase Agreement, dated January 26, 1999, among Alliant Energy Resources, Inc., Alliant Energy Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated. (99.3) Indenture, dated as of November 4, 1999, among Alliant Energy Resources, Inc., Alliant Energy Corporation, as Guarantor, and Firstar Bank, N.A., as Trustee [Incorporated by reference to Exhibit (4.1) to the Form S-4 Registration Statement of Alliant Energy Resources, Inc. and Alliant Energy Corporation (Reg. No. 333-92859)]. (99.4) Second Supplemental Indenture, dated as of February 1, 2000, among Alliant Energy Resources, Inc., Alliant Energy Corporation, as Guarantor, and Firstar Bank, N.A., as Trustee. (99.5) Registration Rights Agreement, dated as of February 1, 2000, among Alliant Energy Resources, Inc., Alliant Energy Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated. -4- EX-99.1 2 PRESS RELEASE [GRAPHIC OMITTED] ALLIANT ENERGY Alliant Energy Worldwide Headquarters 222 W. Washington Ave. P.O. Box 192 Madison, WI 53701-0192 www.alliant-energy.com News Release - -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE Media Contact: David Giroux at (608) 252-3924 Finance Contact: Bob Rusch at (608) 252-3470 ALLIANT ENERGY RESOURCES COMPLETES $402.5 MILLION PRIVATE PLACEMENT OF EXCHANGEABLE SENIOR NOTES MADISON, WIS. -- February 1, 2000 -- Alliant Energy Corporation (NYSE:LNT) today announced that its wholly-owned subsidiary, Alliant Energy Resources, Inc., completed a private placement of 5,940,960 exchangeable senior notes in accordance with Rule 144A under the Securities Act of 1933. The exchangeable senior notes were issued in the original aggregate principal amount of $402.5 million, and will be due in 2030. The exchangeable senior notes have an interest rate of 7.25 percent through February 15, 2003 and 2.5 percent thereafter. The exchangeable senior notes are exchangeable for cash based upon the value of McLeodUSA Incorporated Class A Common Stock. Alliant Energy Corporation has agreed to fully and unconditionally guarantee the payment of principal and interest on the exchangeable senior notes. Alliant Energy Resources expects to use the net proceeds from the sale of the exchangeable senior notes (1) to repay commercial paper Alliant Energy Resources issued initially to capitalize its wholly-owned exempt telecommunications company and indirectly, through an internal transfer of assets, to fund Alliant Energy Resources recent investment in Brazil and (2) for general corporate purposes, including to fund potential future investment opportunities in energy marketing, co-generation, environmental services and other areas. Alliant Energy Resources may initially invest net proceeds that it does not immediately require in short-term marketable securities. The exchangeable senior notes have not been registered under the Securities Act of 1933 and may not be offered or sold absent registration under such Act or an applicable exemption from the registration requirements. # # # EX-99.2 3 EXHIBIT 99.2 Execution Copy ================================================================================ ALLIANT ENERGY RESOURCES, INC. (a Wisconsin corporation) 5,166,052 PHONES EXCHANGEABLE SENIOR NOTES DUE 2030 UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY ALLIANT ENERGY CORPORATION (A Wisconsin Corporation) PURCHASE AGREEMENT Dated: January 26, 2000 ================================================================================ Table of Contents Page ---- SECTION 1. Representations and Warranties by the Company and the Parent.......3 (a) Representations and Warranties.................................3 (i) Offering Memorandum.......................................3 (ii) Incorporated Documents...................................3 (iii) Independent Accountants.................................4 (iv) Financial Statements.....................................4 (v) No Material Adverse Change in Business....................4 (vi) Good Standing of the Company and the Parent...............5 (vii) Good Standing of Designated Subsidiaries................5 (viii) Capitalization.........................................6 (ix) Authorization of Agreement...............................6 (x) Authorization of the Indenture............................6 (xi) Authorization of the Supplemental Indenture..............6 (xii) Authorization of the Registration Rights Agreement.......7 (xiii) Authorization of the Securities........................7 (xiv) Description of the Securities and the Indenture.........7 (xv) Absence of Defaults and Conflicts........................8 (xvi) Absence of Labor Dispute................................9 (xvii) Absence of Proceedings.................................9 (xviii) Absence of Further Requirements.......................9 (xix) Possession of Licenses and Permits......................9 (xx) Title to Property.......................................10 (xxi) Environmental Laws.....................................10 (xxii) Investment Company Act................................11 (xxiii) Similar Offerings....................................11 (xxiv) Rule 144A Eligibility.................................11 (xxv) No General Solicitation................................12 (xxvi) No Registration Required..............................12 (xxvii) Reporting Company....................................12 (b) Officer's Certificates........................................12 SECTION 2. Sale and Delivery to Initial Purchaser; Closing...................12 (a) Initial Securities...........................................12 (b) Option Securities............................................12 (c) Payment......................................................13 i Page ---- (c) Denominations; Registration..................................13 SECTION 3. Covenants of the Company and the Parent...........................13 (a) Offering Memorandum..........................................13 (b) Notice and Effect of Material Events.........................13 (c) Amendment to Offering Memorandum and Supplements.............14 (d) Qualification of Securities for Offer and Sale...............14 (e) Rating of Securities.........................................14 (f) DTC..........................................................15 (g) Use of Proceeds..............................................15 (h) Restriction on Sale of Securities............................15 (i) Filing of Registration Statement.............................15 SECTION 4. Payment of Expenses...............................................16 (a) Expenses.....................................................16 (b) Termination of Agreement.....................................17 SECTION 5. Conditions of Initial Purchaser's Obligations.....................17 (a) Opinion of Counsel for Company and the Parent................17 (b) Opinion of Counsel for Initial Purchaser.....................17 (c) Officers'Certificate.........................................18 (d) Accountants'Comfort Letter...................................18 (e) Bring-down Comfort Letter....................................18 (f) Maintenance of Rating........................................19 (g) Conditions to Purchase of Option Securities..................19 (i) Officers'Certificate....................................19 (ii) Opinion of Counsel for the Company and the Parent......19 (iii) Opinion of Counsel for Initial Purchaser..............19 (iv) Bring-down Comfort Letter..............................20 (v) Maintenance of Rating...................................20 (g) Additional Documents.........................................20 (h) Termination of Agreement.....................................20 SECTION 6. Subsequent Offers and Resales of the Securities...................20 (a) Offer and Sale Procedures....................................20 (i) Offers and Sales only to Qualified Institutional Buyers or Institutional Accredited Investors....................20 (ii) No General Solicitation.................................21 (iii) Purchases by Non-Bank Fiduciaries......................21 (iv) Subsequent Purchaser Notification.......................21 ii Page ---- (v) Minimum Purchase Amount..................................21 (vi) Restrictions on Transfer................................21 (vii) Delivery of Offering Memorandum........................21 (b) Covenants of the Company and the Parent......................22 (i) Integration..............................................22 (ii) Rule 144A Information...................................22 (iii) Restriction on Repurchases.............................22 (c) Qualified Institutional Buyer................................22 SECTION 7. Indemnification...................................................22 (a) Indemnification of Initial Purchaser.........................22 (b) Indemnification of Company and Parent........................23 (c) Actions against Parties; Notification........................24 (d) Settlement without Consent if Failure to Reimburse...........25 SECTION 8. Contribution......................................................25 SECTION 9. Representations, Warranties and Agreements to Survive Delivery....26 SECTION 10. Termination of Agreement..........................................26 (a) Termination; General.........................................26 (b) Liabilities..................................................27 SECTION 11. Default by the Initial Purchaser..................................27 SECTION 12. Notices...........................................................27 SECTION 13. Parties...........................................................28 SECTION 14. Governing Law And Time............................................28 SECTION 15. Effect of Headings................................................28 SECTION 16. Counterparts......................................................28 SCHEDULES Schedule A - Pricing Information.....................................Sch A-1 Schedule B - List of Subsidiaries....................................Sch B-1 iii Page ---- EXHIBITS Exhibit A - Form of Opinion of Company's Counsel.........................A-1 Exhibit B - Form of Opinion of Parent's Counsel..........................B-1 iv ALLIANT ENERGY RESOURCES, INC. (a Wisconsin corporation) 5,166,052 PHONES EXCHANGEABLE SENIOR NOTES DUE 2030 UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY ALLIANT ENERGY CORPORATION (A WISCONSIN CORPORATION) PURCHASE AGREEMENT January 26, 2000 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower World Financial Center New York, New York 10281 Ladies and Gentlemen: Alliant Energy Resources, Inc., a Wisconsin corporation (the "Company"), and Alliant Energy Corporation, a Wisconsin corporation (the "Parent"), confirm their agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") (the "Initial Purchaser"), with respect to the issue and sale by the Company and the purchase by the Initial Purchaser of 5,166,052 Exchangeable Senior Notes due 2030 (the "PHONES"). The aforesaid 5,166,052 PHONES (the "Initial Securities") to be purchased by the Initial Purchaser and all or any part of the PHONES subject to the option described in section 2(b) hereof (the "Option Securities") are hereinafter called the "Securities." The Securities will be unconditionally guaranteed as to payment of principal, premium, if any, and interest by the Parent and will be issued pursuant to an indenture dated as of November 4, 1999 (the "Indenture") between the Company, the Parent and Firstar Bank, N.A., as trustee (the "Trustee"). The term "Indenture," as used herein, includes the Second Supplemental Indenture to be executed in connection with the offering of the PHONES (the "Supplemental Indenture") establishing the form and terms of the Securities pursuant to Section 2.02 of the Indenture. Securities issued in book-entry form will be issued to Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant to a letter agreement, to be dated as of the Closing Time (as defined in Section 2(b)) (the "DTC Agreement"), among the Company, the Trustee and DTC. The Company understands that the Initial Purchaser proposes to make an offering of the Securities on the terms and in the manner set forth herein and agrees that the Initial Purchaser may resell, subject to the conditions set forth herein, all or a portion of the Securities to purchasers ("Subsequent Purchasers") at any time after this Agreement has been executed and delivered. The Securities are to be offered and sold through the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the "1933 Act"), in reliance upon exemptions therefrom. Pursuant to the terms of the Securities and the Indenture, investors that acquire Securities may only resell or otherwise transfer such Securities if such Securities are hereafter registered under the 1933 Act or if an exemption from the registration requirements of the 1933 Act is available (including the exemption afforded by Rule 144A ("Rule 144A") of the rules and regulations promulgated under the 1933 Act by the Securities and Exchange Commission (the "Commission") and the exemption under Regulation D ("Regulation D") for sales to a limited number of institutional "accredited investors" as that term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act (each, an "Institutional Accredited Investor")). Holders (including subsequent transferees) of the Securities will have the registration rights set forth in the Registration Rights Agreement (the "Registration Rights Agreement"), to be entered at the Closing Time, among the Company, the Parent and the Initial Purchaser, for so long as such Securities constitute "Registrable Securities" (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Company and the Parent will use their reasonable best efforts to file with the Commission under the circumstances set forth therein, (i) a registration statement under the 1933 Act (the "Exchange Offer Registration Statement") registering an issue of the Company's PHONES identical in all material respects to the Securities (the "Exchange Securities") to be offered in exchange for the Securities (the "Exchange Offer") and (ii), under certain circumstances, a registration statement pursuant to Rule 415 under the 1933 Act (the "Shelf Registration Statement") to register the Securities. The Company has prepared and delivered to the Initial Purchaser copies of a preliminary offering memorandum dated January 26, 2000 (the "Preliminary Offering Memorandum") and has prepared and will deliver to the Initial Purchaser, on the date hereof or the next succeeding day, copies of a final offering memorandum dated January 26, 2000 (the "Final Offering Memorandum"), each for use by the Initial Purchaser in connection with its solicitation of purchases of, or offering of, the Securities. "Offering Memorandum" means, with respect to any date or time referred to in this Agreement, the most recent offering memorandum (whether the Preliminary Offering Memorandum or the Final Offering Memorandum, or any amendment or supplement to either such document), including exhibits thereto and any documents incorporated 2 therein by reference, which has been prepared and delivered by the Company to the Initial Purchaser in connection with its solicitation of purchases of, or offering of, the Securities. All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Offering Memorandum (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which are incorporated by reference in the Offering Memorandum; and all references in this Agreement to amendments or supplements to the Offering Memorandum shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by reference in the Offering Memorandum. SECTION 1.Representations and Warranties by the Company and the Parent. (a) Representations and Warranties. Except as otherwise noted herein, the Company and the Parent severally and jointly represent and warrant to the Initial Purchaser as of the date hereof and as of the Closing Time referred to in Section 2(b) hereof, and severally and jointly agree with the Initial Purchaser, as follows: (i) Offering Memorandum. The Offering Memorandum does not, and at the Closing Time will not, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation, warranty and agreement shall not apply to statements in or omissions from the Offering Memorandum made in reliance upon and in conformity with information furnished to the Company in writing by the Initial Purchaser expressly for use in the Offering Memorandum. (ii) Incorporated Documents. (A) The Offering Memorandum as delivered from time to time shall incorporate by reference the most recent annual report of the Parent on Form 10-K for the year ended December 31, 1998, as amended by Form 10-K/A filed with the Commission on November 1, 1999, the quarterly reports of the Parent on Form 10-Q for the quarters ended March 31, 1999 and June 30, 1999, each as amended by Form 10-Q/As filed with the Commission on November 1, 1999, and for the quarter ended September 30, 1999 and the current reports of the Parent on Form 8-K, two filed with the Commission on January 20, 1999, one filed on January 25, 2000 as amended by the current report on Form 8-K/A filed on January 25, 2000, and one filed on January 26, 2000, and any such reports filed with the Commission after the date of the Offering Memorandum and before the end of the offering of the Securities. (B) With respect to this subsection clause (B) of this clause (ii) only, the Parent represents and 3 warrants that the documents incorporated or deemed to be incorporated by reference in the Offering Memorandum at the time they were or hereafter are filed with the Commission complied or will comply, as the case may be, in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder, and, when read together with the other information in the Offering Memorandum, at the time the Offering Memorandum was issued and at the Closing Time, did not and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (iii) Independent Accountants. The accountants who certified the financial statements and supporting schedules included in the Offering Memorandum are independent public accountants with respect to the Company, the Parent and their respective subsidiaries within the meaning of Regulation S-X under the 1933 Act. (iv) Financial Statements. The financial statements, together with the related schedules and notes, included in the Offering Memorandum present fairly in all materials respects the financial position of the Company and its consolidated subsidiaries and the Parent and its consolidated subsidiaries at the dates indicated and the statement of operations, shareowners' equity and cash flows of the Company and its consolidated subsidiaries and the Parent and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included in the Offering Memorandum present fairly in all materials respects in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Offering Memorandum present fairly in all materials respects the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Offering Memorandum. (v) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Offering Memorandum, except as otherwise stated therein, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and the Parent and their respective subsidiaries, in each case, considered as one enterprise, whether or not arising in the ordinary course of business nor has there been any developments involving a prospective material adverse change of the Company and the Parent and their respective subsidiaries, in each case, considered as one enterprise, whether or not arising in the ordinary course of business (a "Material Adverse Effect"), (B) there have been no transactions entered into by the Company and the Parent or any of their respective 4 subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and the Parent and their respective subsidiaries, and (C) except for regular dividends on the common stock, par value $.01 per share, of the Parent (the "Common Stock") in amounts per share that are consistent with past practice, there has been no dividend or distribution of any kind declared, paid or made by the Parent on any class of its capital stock. (vi) Good Standing of the Company and the Parent. Each of the Company and the Parent has been duly organized and is validly existing as a corporation under the laws of the State of Wisconsin and has corporate power and authority to own, lease and operate their respective properties and to conduct their respective businesses as described in the Offering Memorandum and to enter into and perform their respective obligations under this Agreement; and each of the Company and the Parent is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. (vii) Good Standing of Designated Subsidiaries. Each material subsidiary of the Company is listed on Schedule B hereto (each subsidiary on the list shall be referred to herein as a "Designated Subsidiary" and, collectively, as the "Designated Subsidiaries"). Each Designated Subsidiary has been duly organized and is validly existing as a corporation under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Offering Memorandum and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect; except as otherwise disclosed in the Offering Memorandum, all of the issued and outstanding capital stock of each Designated Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable (except, in the case of Designated Subsidiaries that are Wisconsin corporations, for certain statutory liabilities that may be imposed by Section 180.0622(b) of the Wisconsin Business Corporation Law (the "WBCL") for unpaid employee wages) and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; and none of the outstanding shares of capital stock of the Designated Subsidiaries was issued in violation of any preemptive or similar rights of any securityholder of such Designated Subsidiary. 5 (viii) Capitalization. The authorized, issued and outstanding capital stock of the Parent is as set forth in the Offering Memorandum in the columns entitled "Actual" under the caption "Capitalization" (except for subsequent issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements, employee benefit plans referred to in the Offering Memorandum or pursuant to the exercise of convertible securities or options referred to in the Offering Memorandum). All of the issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable (except for certain statutory liabilities that may be imposed by Section 180.0622(b) of the WBCL for unpaid employee wages) and are owned by the Parent; and none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company. All of the issued and outstanding shares if capital stock of the Parent have been duly authorized and validly issued and are fully paid and non-assessable (except for certain statutory liabilities that may be imposed by Section 180.0622(b) of the WBCL for unpaid employee wages); and all of the issued and outstanding capital stock of its significant subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X), including the Company, have been duly authorized and validly issued and are fully paid and non-assessable (except, in the case of such subsidiaries that are Wisconsin corporations, for certain statutory liabilities that may be imposed by Section 180.0622(b) of the WBCL for unpaid employee wages) and (except for directors' qualifying shares and except as otherwise set forth in the Offering Memorandum) are owned directly or indirectly by the Parent, free and clear of all liens, encumbrances, equities or claims. (ix) Authorization of Agreement. The Company and the Parent have all requisite corporate power and authority to execute and deliver this Agreement and to perform their obligations hereunder. This Agreement has been duly authorized, executed and delivered by the Company and the Parent. (x) Authorization of the Indenture. The Indenture has been duly authorized, executed and delivered by the Company, the Parent and the Trustee and constitutes a valid and binding agreement of the Company and the Parent, enforceable against the Company and the Parent in accordance with its terms, except as (A) the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and (B) as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). (xi) Authorization of the Supplemental Indenture The Supplemental Indenture has been duly authorized by the Company and the Parent and, when executed and 6 delivered by the Company, the Parent and the Trustee, will constitute a valid and binding agreement of the Company and the Parent, enforceable against the Company and the Parent in accordance with its terms, except (A) as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and (B) as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). (xii) Authorization of the Registration Rights Agreement. The Company and the Parent have all requisite corporate power and authority to execute and deliver the Registration Rights Agreement. The Registration Rights Agreement has been duly authorized by the Company and the Parent and, when executed and delivered by the Company, the Parent and the Initial Purchaser, will constitute a valid and binding agreement of the Company and the Parent, enforceable against the Company and the Parent in accordance with its terms, except (A) as the enforcement thereof may be limited by bankruptcy, insolvency, (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and (B) as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). (xiii) Authorization of the Securities. The Securities have been duly authorized and the Guarantees have been duly authorized and, at the Closing Time or the Date of Delivery (as defined herein), as the case may be, will have been duly executed by the Company and the Securities will have been guaranteed by the Parent and, when authenticated, issued and delivered in the manner provided for in the Indenture and delivered against payment of the purchase price therefor as provided in this Agreement, will constitute valid and binding obligations of the Company and the Parent, enforceable against the Company and the Parent in accordance with their terms, except (A) as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and (B) as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture. (xiv) Description of the Securities and the Indenture. The Securities and the Indenture will conform in all material respects to the respective statements relating thereto contained in the Offering Memorandum and will be in substantially the respective forms last delivered to the Initial Purchaser prior to the date of this Agreement. 7 (xv) Absence of Defaults and Conflicts. None of the Company, the Parent or any of their respective subsidiaries is in violation of their respective charters or by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company, the Parent or any of their respective subsidiaries is a party or by which any of them may be bound, or to which any of the property or assets of the Company, the Parent or any of their respective subsidiaries is subject (collectively, "Agreements and Instruments") except for such defaults that would not result in a Material Adverse Effect; and the execution, delivery and performance of this Agreement, the Indenture, the Registration Rights Agreement, the Securities and the Guarantees and any other agreement or instrument entered into or issued or to be entered into or issued by the Company and the Parent in connection with the transactions contemplated hereby or thereby or in the Offering Memorandum and the consummation of the transactions contemplated herein and in the Offering Memorandum (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Offering Memorandum under the caption "Use of Proceeds") and compliance by the Company and the Parent with their respective obligations hereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or a Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, the Parent or any of their respective subsidiaries pursuant to, the Agreements and Instruments except for such conflicts, breaches or defaults or liens, charges or encumbrances that, singly or in the aggregate, would not result in a Material Adverse Effect, nor will such action result in any violation of the provisions of (x) the charter or by-laws of the Company, the Parent or any of their respective subsidiaries (except for such conflicts, breaches, defaults, events or liens, charges or encumbrances that would not result in a Material Adverse Effect) or (y) any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company, the Parent or any of their respective subsidiaries or any of their assets, properties or operations, except for any such violations with respect to this clause (y) as would not, individually or in the aggregate, result in a Material Adverse Effect. As used herein, a "Repayment Event" means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company, the Parent or any of their respective subsidiaries. 8 (xvi) Absence of Labor Dispute. No labor dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company or the Parent, is imminent, and neither the Company nor the Parent is aware of any existing or imminent labor disturbance by the employees of the Company, its subsidiaries or their respective principal suppliers, manufacturers, customers or contractors, which, in either case, may reasonably be expected to result in a Material Adverse Effect. (xvii) Absence of Proceedings. Except as disclosed in the Offering Memorandum, there is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company or the Parent, threatened, against or affecting the Company, the Parent or any of their respective subsidiaries which might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect (A) the properties or assets of the Company, the Parent or any of their respective subsidiaries or (B) the consummation of the transactions contemplated by this Agreement or the performance by the Company and the Parent of their respective obligations hereunder. The aggregate of all pending legal or governmental proceedings to which the Company, the Parent or any of their respective subsidiaries is a party or of which any of their respective property or assets is the subject which are not described in the Offering Memorandum, including ordinary routine litigation incidental to the business, could not reasonably be expected to result in a Material Adverse Effect. (xviii) Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company and the Parent of their respective obligations hereunder, in connection with (A) the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement or (B) for the due execution, delivery or performance of the Indenture by the Company and the Parent, except such as have been already obtained and except such as may be required by the securities laws of the various states in which the Securities will be offered or sold and the Public Utility Holding Company Act of 1935, as amended (the "1935 Act") (solely with respect to filings required to be made with the Commission subsequent to the Closing Time), with the offer and sale of the Securities or by the 1933 Act or the Trust Indenture Act of 1939, as amended (the "1939 Act"), in connection with the exchange offer as contemplated by the Registration Rights Agreement. (xix) Possession of Licenses and Permits. The Company, the Parent and their respective subsidiaries possess such permits, licenses, approvals, consents and other 9 authorizations (collectively, "Governmental Licenses") issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them except where the failure to possess any such Governmental Licenses would not have a Material Adverse Effect; the Company, the Parent and their respective subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect; and none of the Company, the Parent nor any of their respective subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect. (xx) Title to Property. The Company, the Parent and their respective subsidiaries have good and marketable title to all real property owned by the Company, the Parent and their respective subsidiaries and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (A) are described in the Offering Memorandum or (B) do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company, the Parent or any of their respective subsidiaries; and all of the leases and subleases material to the business of the Company, the Parent and their respective subsidiaries, considered as one enterprise, and under which the Company, the Parent or any of their respective subsidiaries holds properties described in the Offering Memorandum, are in full force and effect, and none of the Company, the Parent nor any of their respective subsidiaries has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company, the Parent or any of their respective subsidiaries under any of the leases or subleases mentioned above, or affecting or questioning the rights of such the Company, the Parent or any subsidiary thereof to the continued possession of the leased or subleased premises under any such lease or sublease, except where such would not have a Material Adverse Effect. (xxi) Environmental Laws. Except as described in the Offering Memorandum and the documents incorporated by reference therein and except such matters as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) none of the Company, the Parent or any of their respective subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any 10 judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, "Hazardous Materials") or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, "Environmental Laws"), (B) the Company, the Parent and their respective subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (C) there are no pending or, to the knowledge of the Company, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company, the Parent or any of their respective subsidiaries and (D) there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company, the Parent or any of their respective subsidiaries relating to Hazardous Materials or Environmental Laws. (xxii) Investment Company Act. Neither the Company nor the Parent is, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Offering Memorandum will be, an "investment company" or an entity "controlled" by an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended (the "1940 Act"). (xxiii) Similar Offerings. None of the Company, the Parent or any of their respective affiliates, as such term is defined in Rule 501(b) under the 1933 Act (each, an "Affiliate"), has, directly or indirectly, solicited any offer to buy, sold or offered to sell or otherwise negotiated in respect of, or will solicit any offer to buy, sell or offer to sell or otherwise negotiate in respect of, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of the Securities in a manner that would require the Securities to be registered under the 1933 Act. (xxiv) Rule 144A Eligibility. The Securities are eligible for resale pursuant to Rule 144A and will not be, at the Closing Time, of the same class as securities listed on a national securities exchange registered under Section 6 of the 1934 Act, or quoted in a U.S. automated interdealer quotation system. 11 (xxv) No General Solicitation. None of the Company, the Parent, their Affiliates or any person acting on its or any of their behalf (other than the Initial Purchaser, as to whom the Company and the Parent make no representation) has engaged or will engage, in connection with the offering of the Securities, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the 1933 Act. (xxvi) No Registration Required. Subject to compliance by the Initial Purchaser with the representations and warranties set forth in Section 2 and the procedures set forth in Section 6 hereof, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchaser and to each Subsequent Purchaser in the manner contemplated by this Agreement and the Offering Memorandum to register the Securities under the 1933 Act or to qualify the Indenture under the 1939 Act. (xxvii) Reporting Company. With respect to this clause (xxvii) only, the Parent represents and warrants that it is subject to the reporting requirements of Section 13 or Section 15(d) of the 1934 Act. (b) Officer's Certificates. Any certificate signed by any officer of the Company and of the Parent or any of their respective subsidiaries delivered to the Initial Purchaser or to counsel for the Initial Purchaser shall be deemed a representation and warranty by the Company and the Parent to the Initial Purchaser as to the matters covered thereby. SECTION 2. Sale and Delivery to Initial Purchaser; Closing. (a) Initial Securities. On the basis of the representations, warranties and agreements herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to the Initial Purchaser and the Initial Purchaser agrees to purchase from the Company 5,166,052 Initial Securities, at the price per PHONES set forth in Schedule A. (b) Option Securities. In addition, on the basis of the representations, warranties and agreements herein contained and subject to the terms and conditions herein set forth, the Company hereby grants an option to the Initial Purchaser to purchase from it any or all of the Option Securities at the same price as is to be paid by the Initial Purchaser for the Initial Securities plus, in the case of the Option Securities, accrued interest, if any, from the Closing Time to the Date of Delivery. The option hereby granted will expire 30 days after the date hereof and may be exercised in whole or in part at any one time only for the purpose of covering over-allotments which may be made in connection with the offering and distribution of the Initial Securities upon notice by the Initial Purchaser to the Company setting forth the number of Option Securities as to which the Initial Purchaser is exercising the option and the time and date of payment and delivery for such Option Securities. Such time and date of delivery for the Option Securities (the "Date of Delivery") shall be determined by the Initial Purchaser, but shall 12 not be later than seven full business days nor earlier than two full business days after the exercise of said option, nor in any event prior to the Closing Time, unless otherwise agreed upon by the Initial Purchaser and the Company. If the option is exercised as to all or any portion of the Option Securities, the Initial Purchaser will purchase the total number of Option Securities then being purchased. (c) Payment. Payment of the purchase price for, and delivery of certificates for, the Securities shall be made at the offices of the Company at 222 West Washington Avenue, Madison, Wisconsin, 53703, or at such other place as shall be agreed upon by the Initial Purchaser and the Company, at 10:00 A.M. (Eastern time) on the third business day after the date hereof (unless postponed in accordance with the provisions of Section 11), or such other time not later than ten business days after such date as shall be agreed upon by the Initial Purchaser and the Company (such time and date of payment and delivery being herein called the "Closing Time"). Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Initial Purchaser of certificates for the Securities to be purchased by them. (d) Denominations; Registration. Certificates for the Initial Securities and the Option Securities shall be in such denominations and registered in such names as the Initial Purchaser may request in writing at least one full business day before the Closing Time or the Date of Delivery, as the case may be. The Initial Securities and the Option Securities will be made available for examination and packaging by the Initial Purchaser in Madison, Wisconsin not later than 10:00 A.M. on the last business day prior to the Closing Time or the Date of Delivery, as the case may be. SECTION 3. Covenants of the Company and the Parent. The Company and the Parent, jointly and severally, covenant with the Initial Purchaser as follows: (a) Offering Memorandum. The Company and the Parent, as promptly as possible, will furnish to the Initial Purchaser, without charge, such number of copies of the Preliminary Offering Memorandum, the Final Offering Memorandum and any amendments and supplements thereto and documents incorporated by reference therein as the Initial Purchaser may reasonably request. (b) Notice and Effect of Material Events. The Company and the Parent will immediately notify the Initial Purchaser, and confirm such notice in writing, of (x) any filing made by the Company or the Parent of information relating to the offering of the Securities with any securities exchange or any other regulatory body in the United States or any other jurisdiction, and (y) prior to the completion of the placement of the Securities by the Initial 13 Purchaser as evidenced by a notice in writing from the Initial Purchaser to the Company, any material changes in or affecting the condition, financial or otherwise, or the earnings or business affairs of the Company and the Parent and their respective subsidiaries, taken as a whole, nor has there been any developments involving a prospective material adverse change of the Company and the Parent and their respective subsidiaries, taken as a whole, which (i) make any statement in the Offering Memorandum materially false or misleading or (ii) are not disclosed in the Offering Memorandum. In such event or if during such time any event shall occur as a result of which it is necessary, in the reasonable opinion of any of the Company, the Parent, their counsel, the Initial Purchaser or counsel for the Initial Purchaser, to amend or supplement the Final Offering Memorandum in order that the Final Offering Memorandum not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances then existing, the Company will forthwith amend or supplement the Final Offering Memorandum by preparing and furnishing to the Initial Purchaser an amendment or amendments of, or a supplement or supplements to, the Final Offering Memorandum (in form and substance satisfactory in the reasonable opinion of counsel for the Initial Purchaser) so that, as so amended or supplemented, the Final Offering Memorandum will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is delivered to a Subsequent Purchaser, not misleading. (c) Amendment to Offering Memorandum and Supplements. The Company and the Parent will advise the Initial Purchaser promptly of any proposal to amend or supplement the Offering Memorandum and will not effect such amendment or supplement without the consent of the Initial Purchaser, which consent shall not be unreasonably withheld. Neither the consent of the Initial Purchaser, nor the Initial Purchaser's delivery of any such amendment or supplement, shall constitute a waiver of any of the conditions set forth in Section 5 hereof. The Company will furnish to the Initial Purchaser, without charge, such number of copies of such amendment or supplement as the Initial Purchaser may reasonably request. (d) Qualification of Securities for Offer and Sale. The Company will use its best efforts, in cooperation with the Initial Purchaser, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions as the Initial Purchaser may designate and will maintain such qualifications in effect as long as required for the sale of the Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. (e) Rating of Securities. The Company shall take all reasonable action necessary to enable Standard & Poor's Ratings Services, a division of McGraw Hill, Inc. ("S&P"), and 14 Moody's Investors Service Inc. ("Moody's") to provide their respective credit ratings of the Securities. (f) DTC. The Company will cooperate with the Initial Purchaser and use its best efforts to permit the Securities to be eligible for clearance and settlement through the facilities of DTC. (g) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the Offering Memorandum under "Use of Proceeds." (h) Restriction on Sale of Securities. During a period of ninety (90) days from the date of the Closing Time, none of the Company, the Parent or their respective subsidiaries will, without the prior written consent of Merrill Lynch, directly or indirectly, issue, sell, offer or agree to sell, grant any option for the sale of, or otherwise dispose of, any of the Securities, any securities substantially similar to the Securities, any securities of the Company or the Parent convertible into or exchangeable or exercisable for the Securities, or any securities substantially similar to the Securities, except in connection with a registered exchange offer for the Securities and except for the offer or sale of up to an aggregate of 300,000 shares of McLeodUSA Incorporated's Class A Common Stock, par value $0.01 per share (the "McLeod Shares") pursuant to Section 3.1(b) of the Second Amended and Restated November 1998 Stockholders' Agreement dated as of December 17, 1999 by and among McLeodUSA Incorporated ("McLeod"), the Parent, certain subsidiaries of the Parent and certain stockholders of McLeod named therein; provided, however, that the foregoing shall not prohibit the Company from taking any of the foregoing actions in connection with any exchanges or redemptions of the Securities. (i) Filing of Registration Statement. The Company and the Parent (A) shall use their reasonable best efforts to file the Exchange Offer Registration Statement on an appropriate form under the 1933 Act (assuming that the Exchange Offer can be effectively registered thereunder) with the Commission within 135 days of the Closing Time, (B) shall use their reasonable best efforts to cause the Exchange Offer Registration Statement to be declared effective under the 1933 Act within 180 days of the Closing Time, (C) shall use their reasonable best efforts to keep the Exchange Offer Registration Statement effective until the closing of the Exchange Offer and (D) shall use their reasonable best efforts to cause the Exchange Offer to be consummated not later than 45 days following the effective date of the Exchange Offer Registration Statement. In the event that (a) the Company and the Parent are not permitted to effect the Exchange Offer as contemplated because the law or applicable interpretations of the law by the staff of the Commission, United States Treasury or the Internal Revenue Service do not permit the Company and the Parent or make it impracticable or inadvisable for the Company and the Parent to effect the Exchange Offer as contemplated, (b) for any other reason, the Exchange Offer Registration 15 Statement is not declared effective within 180 days following the Closing Time or the Exchange Offer is not consummated within 45 days after the effectiveness of the Exchange Offer Registration Statement, (c) upon the request of the Initial Purchaser within 90 days following the consummation of the Exchange Offer (d) if, as a result of any changes in law, Commission rules or regulations or applicable interpretations thereof by the staff of the commission or otherwise a holder of Securities (other than the Initial Purchaser holding Securities acquired directly from the Company) is not permitted to participate in the Exchange Offer or does not receive fully tradeable Exchange Securities pursuant to the Exchange Offer or (e) if, unless the Company determines otherwise, at the time of the issuance of the Exchange Securities or the Private Exchange Securities (as defined herein), the interest rate of such securities will be 300 basis points above the yield to maturity of a United States Treasury obligation having a remaining term equal to the average life of such security, the Company and the Parent shall thereafter use their reasonable best efforts to cause to be declared effective as promptly as practicable but not later than 210 days after the issuance of the Securities a Shelf Registration Statement as provided in the Registration Rights Agreement. For purposes of this Agreement, "Private Exchange Securities" shall mean those securities issued by the Company and the Parent upon the request of the Initial Purchaser for the Securities held by the Initial Purchaser which were acquired from the Company and have the status of an unsold allotment in the initial distribution. The Private Exchange Securities shall be issued and delivered to the Initial Purchaser simultaneously with the delivery of the Exchange Securities in the Exchange Offer. SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing, delivery to the Initial Purchaser and any filing of the Offering Memorandum (including financial statements and any schedules or exhibits and any document incorporated therein by reference) and of each amendment or supplement thereto, (ii) the preparation, printing and delivery to the Initial Purchaser of this Agreement, the Indenture and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Securities, (iii) the preparation, issuance and delivery of the Securities to the Initial Purchaser, including any transfer taxes, any stamp or other duties payable upon the sale, issuance and delivery of the Securities to the Initial Purchaser and any charges of DTC in connection therewith, (iv) the fees and disbursements of the Company's counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(d) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Initial Purchaser in connection therewith and in connection with the preparation of the Blue Sky Survey, any supplement thereto; provided, that, counsel fees in connection therewith do not exceed $5,000, (vi) the fees and expenses of the Trustee, including the fees and disbursements of 16 counsel for the Trustee in connection with the Indenture and the Securities and (vii) any fees payable in connection with the rating of the Securities (b) Termination of Agreement. If this Agreement is terminated by the Initial Purchaser in accordance with the provisions of Section 5 or Section 10(a)(i) hereof, the Company shall reimburse the Initial Purchaser for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Initial Purchaser, provided, that, such fees and expenses do not exceed $200,000. SECTION 5. Conditions of Initial Purchaser's Obligations. The obligations of the Initial Purchaser hereunder are subject to the accuracy in all material respects of the representations and warranties of the Company and the Parent contained in Section 1 hereof or in certificates of any officer of the Company, the Parent or any of their respective subsidiaries delivered pursuant to the provisions hereof, to the performance in all material respects by the Company and the Parent of their respective covenants and other obligations hereunder, and to the following further conditions: (a) Opinions of Counsel for Company and the Parent. At the Closing Time, the Initial Purchaser shall have received the favorable opinions, dated as of the Closing Time, of Brown & Wood LLP (as to tax matters), Thelen Reid & Priest (as to 1935 Act matters) and Foley & Lardner (as to all other matters), in each case counsel for the Company, in form and substance satisfactory to counsel for the Initial Purchaser to the effect set forth in Exhibit A hereto. In addition, the Initial Purchaser shall have received the favorable opinions, dated as of the Closing Time, of Brown & Wood LLP (as to tax matters), Thelen Reid & Priest (as to 1935 Act matters) and Foley & Lardner (as to all other matters), in each case counsel for the Parent, in form and substance satisfactory to counsel for the Initial Purchaser to effect set forth in Exhibit B hereto. Such counsel may also state that they have relied on certificates of public officials and, insofar as such opinions involve factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company, the Parent and their respective subsidiaries. (b) Opinion of Counsel for Initial Purchaser. At the Closing Time, the Initial Purchaser shall have received the favorable opinion, dated as of the Closing Time, of Chadbourne & Parke LLP, counsel for the Initial Purchaser, with respect to certain matters. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York, the federal law of the United States and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the Initial Purchaser. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company, the Parent and their respective subsidiaries and certificates of public officials. 17 (c) Officers' Certificate. At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Offering Memorandum, any material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and the Parent and their respective subsidiaries, in each case, considered as one enterprise, whether or not arising in the ordinary course of business, nor has there been any developments involving a prospective material adverse change of the Company and the Parent and their respective subsidiaries, in each case, considered as one enterprise, whether or not arising in the ordinary course of business, and the Initial Purchaser shall have received a certificate of the President, Chief Executive Officer or a Vice President of the Company and of the chief financial or chief accounting officer of the Company, dated as of the Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1 hereof are true and correct in all materials respects with the same force and effect as though expressly made at and as of the Closing Time and (iii) the Company has complied in all material respects with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time. The Initial Purchaser shall also have received a certificate of the President, Chief Executive Officer or Vice President of the Parent and of the chief financial or chief accounting officer of the Parent, dated as of the Closing Time, to the effect that (i) the representations and warranties in Section 1 hereof are true and correct in all material respects with the same force and effect as through made at and as of the Closing Time and (ii) the Parent has complied in all material respects with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time. (d) Accountants' Comfort Letter. At the time of the execution of this Agreement, the Initial Purchaser shall have received from Arthur Andersen LLP a letter dated such date, in form and substance satisfactory to the Initial Purchaser containing statements and information of the type ordinarily included in accountants' "comfort letters" to initial purchasers with respect to the financial statements and certain financial information contained in the Offering Memorandum. (e) Bring-down Comfort Letter. At the Closing Time, the Initial Purchaser shall have received from Arthur Andersen LLP a letter, dated as of the Closing Time, (i) to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (d) of this Section and (ii) responsive to the additional statements and information requested by the Initial Purchaser, of the type ordinarily included in accountants' "comfort letters" to initial purchasers with respect to the financial statements and certain financial information contained in the Offering Memorandum, in form and substance satisfactory to the Initial Purchaser; except that the specified date referred to shall be a date not more than three business days prior to the Closing Time. 18 (f) Maintenance of Rating. At the Closing Time and at the Date of Delivery, the Securities shall be rated at least A3 by Moody's and A by S&P, and the Company shall have delivered to the Initial Purchaser a letter dated the Closing Time, from each such rating agency, or other evidence satisfactory to the Initial Purchaser, confirming that the Securities have such ratings; and since the date of this Agreement, there shall not have occurred a downgrading in the rating assigned to the Securities or any of the Company's other debt securities by any "nationally recognized statistical rating agency," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and no such securities rating agency shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of the Securities or any of the Company's other debt securities . (g) Conditions to Purchase of Option Securities. In the event that the Initial Purchaser exercise its option provided in Section 2(b) hereof to purchase all or any portion of the Option Securities, the representations and warranties of the Company and the Parent contained herein and the statements in any certificates furnished by the Company, the Parent or any of their respective subsidiaries hereunder shall be true and correct as of the Date of Delivery and, at the Date of Delivery, the Initial Purchaser shall have received: (i) Officers' Certificate. A certificate, dated the Date of Delivery, of the President, Chief Executive Officer or a Vice President of the Company and of the chief financial or chief accounting officer of the Company confirming that the certificate delivered at Closing Time pursuant to Section 5(c) hereof remains true and correct as of the Date of Delivery, and a certificate, dated the Date of Delivery, of the President, Chief Executive Officer or a Vice President of the Parent and of the chief financial or chief accounting officer of the Parent confirming that the certificate delivered pursuant to Section 5(c) hereof remains true and correct as of the Date of Delivery; (ii) Opinions of Counsel for the Company and the Parent. The favorable opinions of Brown & Wood LLP (as to tax matters), Thelen Reid & Priest (as to 1935 Act matters) and Foley & Lardner (as to all other matters), in each case counsel for the Company and the Parent, in form and substance satisfactory to counsel for the Initial Purchaser, dated the Date of Delivery, relating to the Option Securities to be purchased on the Date of Delivery and otherwise to the same effect as the opinion required by Section 5(a) hereof; (iii) Opinion of Counsel for Initial Purchaser. The favorable opinion of Chadbourne & Parke LLP, counsel for the Initial Purchaser, dated the Date of Delivery, relating to the Option Securities to be purchased on the Date of Delivery and otherwise to the same effect as the opinion required by Section 5(b) hereof; 19 (iv) Bring-down Comfort Letter. A letter from Arthur Andersen LLP, in form and substance satisfactory to the Initial Purchaser and dated the Date of Delivery, substantially the same in form and substance as the letters furnished to the Initial Purchaser pursuant to Section 5(e) hereof, except that the "specified date" in the letter furnished pursuant to this paragraph shall be a date not more than five days prior to the Date of Delivery; and (v) Maintenance of Rating. A letter from the rating agencies or other evidence in form satisfactory to the Initial Purchaser dated the Date of Delivery confirming that the Securities have the ratings as set forth in Section 5(f) hereof and otherwise to the same effect as the letter required by Section 5(f) hereof. (h) Additional Documents. At the Closing Time and at the Date of Delivery, counsel for the Initial Purchaser shall have been furnished with the above-referenced opinions and such documents as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Initial Purchaser and counsel for the Initial Purchaser. (i) Termination of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement (or, with respect to the Initial Purchaser's exercise of the over-allotment option for the purchase of Option Securities on the Date of Delivery after the Closing Time, the obligations of the Initial Purchaser to purchase the Option Securities on the Date of Delivery) may be terminated by the Initial Purchaser by notice to the Company at any time at or prior to the Closing Time (or the Date of Delivery, as applicable), and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 7, 8 and 9 shall survive any such termination and remain in full force and effect. SECTION 6. Subsequent Offers and Resales of the Securities. (a) Offer and Sale Procedures. The Initial Purchaser and the Company hereby establish and agree to observe the following procedures in connection with the offer and sale of the Securities: (i) Offers and Sales only to Qualified Institutional Buyers or Institutional Accredited Investors. Offers and sales of the Securities shall only be made (A) to persons whom the offeror or seller reasonably believes to be qualified institutional buyers, as defined in Rule 144A under the 1933 Act ("Qualified Institutional Buyers") or (B) to a 20 limited number of persons who are other institutional accredited investors, as such term is defined in Rule 501(a)(1), (2), (3) or (7) under the 1933 Act that the offeror or seller reasonably believes to be and, with respect to sales and deliveries, that are such institutional accredited investors ("Institutional Accredited Investors"). (ii) No General Solicitation. No general solicitation or general advertising (within the meaning of Rule 502(c) under the 1933 Act) will be used in the United States in connection with the offering or sale of the Securities. (iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank Subsequent Purchaser of a Security acting as a fiduciary for one or more third parties, each third party shall, in the judgment of the Initial Purchaser, be an Institutional Accredited Investor or a Qualified Institutional Buyer. (iv) Subsequent Purchaser Notification. The Initial Purchaser will take reasonable steps to inform, and cause each of its U.S. Affiliates to take reasonable steps to inform, persons acquiring Securities from the Initial Purchaser or affiliate, as the case may be, in the United States that the Securities (A) have not been and will not be registered under the 1933 Act, (B) are being sold to them without registration under the 1933 Act in reliance on Rule 144A or in accordance with another exemption from registration under the 1933 Act, as the case may be, and (C) may not be offered, sold or otherwise transferred except (1) to the Company or (2) inside the United States in accordance with (x) Rule 144A to a person whom the seller reasonably believes is a Qualified Institutional Buyer that is purchasing such Securities for its own account or for the account of a Qualified Institutional Buyer to whom notice is given that the offer, sale or transfer is being made in reliance on Rule 144A or (y) pursuant to another available exemption from registration under the 1933 Act. (v) Minimum Purchase Amount. No sale of the Securities to any one Subsequent Purchaser will be for less than an original principal amount of $100,000. If the Subsequent Purchaser is a non-bank fiduciary acting on behalf of others, each person for whom it is acting must purchase at least an original principal amount of $100,000. (vi) Restrictions on Transfer. The transfer restrictions and the other provisions set forth in the Offering Memorandum under the heading "Transfer Restrictions," including the legend required thereby, shall apply to the Securities except as otherwise agreed by the Company and the Initial Purchaser. (vii) Delivery of Offering Memorandum. The Initial Purchaser will deliver to each purchaser of the Securities from the Initial Purchaser, in connection with its original 21 distribution of the Securities, a copy of the Offering Memorandum, as amended and supplemented at the date of such delivery. (b) Covenants of the Company and the Parent. The Company and the Parent, jointly and severally, covenant with the Initial Purchaser as follows: (i) Integration. The Company and the Parent agree that they will not and will cause their respective Affiliates not to, directly or indirectly, solicit any offer to buy, sell or make any offer or sale of, or otherwise negotiate in respect of, securities of the Company of any class if, as a result of the doctrine of "integration" referred to in Rule 502 under the 1933 Act, such offer or sale would render invalid (for the purpose of (i) the sale of the Securities by the Company to the Initial Purchaser, (ii) the resale of the Securities by the Initial Purchaser to Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent Purchasers to others) the exemption from the registration requirements of the 1933 Act provided by Section 4(2) thereof or by Rule 144A thereunder or otherwise. (ii) Rule 144A Information. The Company and the Parent agree that, in order to render the Securities eligible for resale pursuant to Rule 144A under the 1933 Act, while any of the Securities remain outstanding, they will make available, upon request, to any holder of Securities or prospective purchasers of Securities the information specified in Rule 144A(d)(4), unless such information is furnished to the Commission pursuant to Section 13 or 15(d) of the 1934 Act. (iii) Restriction on Repurchases. Until the expiration of two years after the original issuance of the Securities, the Company and the Parent will not, and will cause their respective Affiliates not to, resell any Securities which are "restricted securities" (as such term is defined under Rule 144(a)(3) under the 1933 Act), whether as beneficial owner or otherwise (except as agent acting as a securities broker on behalf of and for the account of customers in the ordinary course of business in unsolicited broker's transactions). (c) Qualified Institutional Buyer. The Initial Purchaser represents and warrants to, and agrees with, the Company and the Parent that it is a Qualified Institutional Buyer within the meaning of Rule 144A under the 1933 Act and an "accredited investor" within the meaning of Rule 501(a) under the 1933 Act (an "Accredited Investor"). SECTION 7. Indemnification. (a) Indemnification of Initial Purchaser. The Company and the Parent, jointly and severally, agree to indemnify and hold harmless the Initial Purchaser and each person, if any, 22 who controls the Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Offering Memorandum or the Final Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 7(d) below) any such settlement is effected with the written consent of the Company and the Parent; and (iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by Merrill Lynch), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company or the Parent, as the case may be, by any Initial Purchaser expressly for use in the Offering Memorandum (or any amendment thereto). (b) Indemnification of Company and Parent. The Initial Purchaser agrees to indemnify and hold harmless the Company and the Parent and each person, if any, who controls the Company or the Parent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Offering Memorandum in reliance upon and in conformity with written information furnished to the Company or the Parent, as the case may be, by the Initial Purchaser expressly for use in the Offering Memorandum. 23 (c) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 7(a) above, counsel to the indemnified parties shall be selected by Merrill Lynch, and, in the case of parties indemnified pursuant to Section 7(b) above, counsel to the indemnified parties shall be selected by the Parent. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. In addition, the indemnifying party shall be entitled to, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense of any claim or action brought against an indemnified party with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 7 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that the Initial Purchaser shall have the right to employ one counsel to represent it and its officers, employees and controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Initial Purchaser against the Company and the Parent under this Section 7 if, in the reasonable judgment of the Initial Purchaser, either (i) there is an actual or potential conflict between the position of the Company and the Parent on the one hand and the Initial Purchaser on the other hand or (ii) there may be defenses available to it or them that are different from or additional to those available to the Company and Parent (in any of which events the Company shall not have the right to direct the defense of such action on behalf of the Initial Purchaser with respect to such different defenses), in any of which events such reasonable fees and expenses shall be borne by the Company and Parent. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section or Section 8 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as 24 to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 7(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. SECTION 8. Contribution. If the indemnification provided for in Section 7 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Parent on the one hand and the Initial Purchaser on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Parent on the one hand and of the Initial Purchaser on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Parent on the one hand and the Initial Purchaser on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the total underwriting discount received by the Initial Purchaser, bear to the aggregate initial offering price of the Securities. The relative fault of the Company and the Parent on the one hand and the Initial Purchaser on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company and the Parent or by the Initial Purchaser and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. 25 The Company, the Parent and the Initial Purchaser agree that it would not be just and equitable if contribution pursuant to this Section were determined by pro rata allocation (even if the Initial Purchaser were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section, the Initial Purchaser shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities purchased and sold by it hereunder exceeds the amount of any damages which the Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each person, if any, who controls the Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Initial Purchaser, and each person, if any, who controls the Company or the Parent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company and the Parent. SECTION 9. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company, the Parent or any of their respective subsidiaries submitted pursuant hereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Initial Purchaser or controlling person, or by or on behalf of the Company or the Parent, and shall survive delivery of the Securities to the Initial Purchaser. SECTION 10. Termination of Agreement. (a) Termination; General. The Initial Purchaser may terminate this Agreement, by notice to the Company and the Parent, at any time at or prior to the Closing Time (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Offering Memorandum, any material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and the Parent and 26 their respective subsidiaries, in each case, considered as one enterprise, whether or not arising in the ordinary course of business, nor has there been any developments involving a prospective material adverse change of the Company and the Parent and their respective subsidiaries, in each case, considered as one enterprise, whether or not arising in the ordinary course of business, (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the reasonable judgment of the Initial Purchaser, impracticable to market the Securities or to enforce contracts for the sale of the Securities, (iii) if trading in any securities of the Company or the Parent, or in McLeod Shares, has been suspended or materially limited by the Commission, the New York Stock Exchange or The Nasdaq Stock Market, as the case may be, or if trading generally on the American Stock Exchange or the New York Stock Exchange or in the NASDAQ System has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, the National Association of Securities Dealers, Inc. or any other governmental authority or (iv) if a banking moratorium has been declared by either Federal or New York authorities. (b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 7, 8 and 9 shall survive such termination and remain in full force and effect. SECTION 11. Default by the Initial Purchaser. If the Initial Purchaser shall fail at the Closing Time or the Date of Delivery, as the case may be, to purchase the Securities which it is obligated to purchase under this Agreement (the "Defaulted Securities"), this Agreement shall terminate. The termination of this Agreement due to such default by the Initial Purchaser shall not relieve the Initial Purchaser from liability in respect of its default. SECTION 12. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Initial Purchaser shall be directed to the Initial Purchaser at North Tower, World Financial Center, New York, New York 10281, attention of John Thorndike, Managing Director, notices to the Company shall be directed to it 222 West Washington Avenue, Madison, Wisconsin 53703, attention of Edward M. Gleason and notices to the Parent shall be directed to it at 222 West Washington Avenue, Madison, Wisconsin 53703, attention of Edward M. Gleason. 27 SECTION 13. Parties. This Agreement shall inure to the benefit of and be binding upon the Initial Purchaser, the Company, the Parent and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Initial Purchaser, the Company, the Parent and their respective successors and the controlling persons and officers and directors referred to in Sections 7 and 8 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Initial Purchaser, the Company, the Parent and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from the Initial Purchaser shall be deemed to be a successor by reason merely of such purchase. SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. SECTION 15. Effect of Headings. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 16. Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts hereof shall constitute a single instrument. 28 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company and the Parent a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Initial Purchaser, the Company and the Parent in accordance with its terms. Very truly yours, ALLIANT ENERGY RESOURCES, INC. By: /s/ Edward M. Gleason ---------------------------------- Name: Edward M. Gleason Title: Vice President-Treasurer and Corporate Secretary ALLIANT ENERGY CORPORATION By: /s/ Edward M. Gleason ---------------------------------- Name: Edward M. Gleason Title: Vice President-Treasurer and Corporate Secretary CONFIRMED AND ACCEPTED, as of the date first above written: MERRILL LYNCH & CO. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ Mary E. Ryan ----------------------------- Authorized Signatory 29 SCHEDULE A ALLIANT ENERGY RESOURCES, INC. 5,166,052 PHONES EXCHANGEABLE SENIOR NOTES DUE 2030 UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY ALLIANT ENERGY CORPORATION 1. The Price to Investors of the Securities shall be $67.75 per PHONES. 2. The Initial Purchaser's Discount for the Securities shall be $2.0325 per PHONES. 3. The Securities shall be issued in an Original Principal Amount of $67.75 per PHONES. 4. The number of Reference Shares attributable to each PHONES shall be 0.8772 shares of McLeodUSA Incorporated Class A Common Stock, par value $0.01 per share, subject to dilution adjustments as described in the form of Securities. 5. Quarterly interest shall be paid in the amount equal to the sum of $1.2280 per PHONES, reflecting a basic interest rate of 7.25% per year on the Original Principal Amount, through February 15, 2003, and thereafter in an amount equal to $0.4234 per PHONES, reflecting a basic interest rate of 2.50% per year on the Original Principal Amount, in each case plus an amount equal to the amount of any regular cash dividends paid on the Reference Shares attributable to each PHONES. 6. The Securities may be redeemed at any time, in whole but not in part, at a redemption price equal to the sum of (a) the greater of (i) the Contingent Principal Amount of the PHONES or (ii) the sum of the then Current Market Value of the Reference Shares on the Redemption Date plus any deferred quarterly payment of interest (including any Accrued Interest thereon), plus, in the case of either (i) or (ii), the Final Period Distribution, and (b) a Redemption Premium in an amount equal to $14.736 per PHONES if the Redemption Date is prior to the Interest Payment Date on May 15, 2000, which Redemption Premium shall be successively reduced by $1.2280 if the Securities are redeemed prior to each following quarterly Interest Payment Date through the twelfth quarterly Interest Payment Date on February 15, 2003, provided that no Redemption Premium shall be payable in the event the Securities are redeemed between February 6 and February 15, 2003. Sch A - 1 7. This offering of the Securities is subject to an over-allotment option to the Initial Purchaser to purchase up to 774,908 additional PHONES at the Price to Investors, less then Initial Purchaser's Discount, as described above. 8. Any capitalized terms above not specifically defined herein are as used in the form of Securities attached to the Indenture. Sch A - 2 SCHEDULE B List of Subsidiaries Alliant Energy Investments, Inc. Alliant Energy International, Inc. Alliant Energy Industrial Services, Inc. Whiting Petroleum Corporation Sch B - 1 EX-99.4 4 EXHIBIT 99.4 Execution Copy SECOND SUPPLEMENTAL INDENTURE DATED AS OF FEBRUARY 1, 2000 ALLIANT ENERGY RESOURCES, INC., Company, ALLIANT ENERGY CORPORATION, As Guarantor and FIRSTAR BANK, N.A., as Trustee Second Supplemental Indenture to the Indenture dated as of November 4, 1999 SECOND SUPPLEMENTAL INDENTURE, dated as of February 1, 2000 (the "Second Supplemental Indenture"), among ALLIANT ENERGY RESOURCES, INC., a Wisconsin corporation (the "Company"), ALLIANT ENERGY CORPORATION, a Wisconsin corporation, as guarantor (the "Guarantor"), and FIRSTAR BANK, N.A., as Trustee (the "Trustee"). RECITALS OF THE COMPANY AND THE GUARANTOR The Company and the Guarantor have heretofore executed and delivered to the Trustee an Indenture, dated as of November 4, 1999 (as supplemented by the First Supplemental Indenture dated as of November 4, 1999 and as may be further supplemented and amended from time to time, the "Indenture"), providing for the issuance from time to time of the Company's unsecured unsubordinated debentures, notes or other evidences of indebtedness (the "Securities"), to be issued in one or more series as provided in the Indenture. It is provided in Section 2.02 of the Indenture that the Company, the Guarantor and the Trustee may enter into indentures supplemental thereto to establish the form or terms of Securities of any series. The Company and the Guarantor desire to supplement and amend the Indenture to allow for the issuance of Securities to be initially sold within the United States to U.S. Persons that are Qualified Institutional Buyers and Institutional Accredited Investors and issued in the form of one or more Restricted Global Securities deposited with the Trustee, as custodian for the Depositary, and registered in the name of a nominee of the Depositary, and Restricted Physical Securities. The Company and the Guarantor desire to set forth the terms and form of a new series of Restricted Securities to be known as the Company's Exchangeable Senior Notes due 2030 (the "PAY PHONES" or the "PHONES"), which are exchangeable for cash based on the value of McLeodUSA Incorporated's Class A Common Stock, initially limited to an aggregate number of 5,166,052 PHONES (or up to 5,940,960 if additional PHONES are issued in connection with the exercise by the Initial Purchaser (as such term is defined in the Purchase Agreement dated January 26, 2000 among the Company, the Guarantor and the Initial Purchaser named therein) of its over-allotment option) and unconditionally guaranteed by the Guarantor. The PHONES, the related guarantee and the certificate of authentication to be borne by the PHONES are to be substantially in the form set forth in Exhibit A hereto. NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the PHONES by the Holders (as defined herein) thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the Holders of the PHONES: ARTICLE 1. AMENDMENTS Section 1.01. Article 1 of the Indenture shall be amended by inserting in Section 1.01 the following new terms with the following definitions in the appropriate alphabetic positions: "Closing Time" means, with respect to the PHONES, February 1, 2000, the date of initial issuance of the PHONES issued under the Second Supplemental Indenture. "First Supplemental Indenture" means the First Supplemental Indenture dated as of November 4, 1999 among the Company, the Guarantor and the Trustee. "PHONES" has the meaning set forth in the preamble and Section 2.01 of the Second Supplemental Indenture. The term PHONES shall be interchangeable with the term "PAY PHONES." "Registration Rights Agreement" means, with respect to the PHONES, the Registration Rights Agreement dated as of February 1, 2000, among the Company, the Guarantor and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the initial purchaser. "Second Supplemental Indenture" means the Second Supplemental Indenture dated as of February 1, 2000 among the Company, the Guarantor and the Trustee. Section 1.02 The Indenture shall be amended by adding an exhibit titled "Exhibit E." Exhibit E to the Indenture shall be the form of PHONES and the related guarantee attached as Exhibit A hereto. 2 ARTICLE 2. PROVISIONS FOR THE PHONES Section 2.01. There shall be a series of Securities entitled "Exchangeable Senior Notes due 2030" (herein designated the "PHONES"). The form of the PHONES, the Guarantees issued by the Guarantor and the Trustee's certificate of authentication to be borne thereby shall be substantially in the forms set forth in Exhibit A hereto and shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Indenture and this Second Supplemental Indenture, including, but not limited to, the provisions of the Indenture with respect to the transfer, exchange and replacement thereof. The aggregate number, and the Original Principal Amount (as defined below), of the PHONES that may be executed by the Company and authenticated by the Trustee hereunder shall be limited to 5,166,052 and $350,000,023, respectively (or up to 5,940,960 and $402,500,040, respectively, if additional PHONES are issued in connection with the exercise by the Initial Purchaser of its over-allotment option); provided, however, any exchanges or replacements of the PHONES made pursuant to the Indenture and the Second Supplemental Indenture following the original issuance thereof shall not be counted against this limit. Section 2.02. In accordance with the terms and conditions of the Indenture, the Company may issue and sell the PHONES inside the United States without registration under the Securities Act in reliance on Rule 144A and Regulation D thereunder. Section 2.03. Except as provided below, the PHONES shall be represented initially in the form of a Restricted Global Security. Each Restricted Global Security shall be registered in the name of a nominee of the Depositary and deposited on behalf of the purchasers of the PHONES represented thereby with a custodian for the Depositary for credit to the respective accounts of the purchasers (or to such other accounts as they may direct). Except as set forth below, each Restricted Global Security shall be in the form of the PHONES attached hereto as Exhibit A and may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor of the Depositary or its nominee. Notwithstanding the above, PHONES sold to Institutional Accredited Investors who are not Qualified Institutional Buyers shall be issued in certificated, fully registered form (a "Restricted Physical Security"). A Restricted Physical Security shall be subject to restrictions on transfer in accordance with the IAI Letter that such investor shall be required to sign, substantially in the form attached to the Indenture as Exhibit D. 3 Section 2.04. (a) Each Restricted Global Security, or any PHONES that may be issued in exchange for an interest in a Restricted Global Security, shall be dated as provided in Section 2.03 of the Indenture, shall mature on February 15, 2030 and shall bear interest quarterly in an amount equal to the sum of $1.2280 per PHONES, reflecting a basic interest rate of 7.25% per year on the Original Principal Amount through February 15, 2003, and thereafter in an amount equal to $0.4234 per PHONES, reflecting a Basic Interest Rate of 2.50% per year on the Original Principal Amount, in each case plus an amount equal to any regular cash dividends paid on the Reference Shares attributable to each PHONES. The Company will also distribute, as additional interest on the PHONES, any property, including cash (other than any regular cash dividends), distributed on or with respect to the Reference Shares (other than publicly traded equity securities, which will themselves become Reference Shares). Interest on the PHONES shall be paid quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, beginning May 15, 2000, to holders of record at the close of business on February 1, May 1, August 1 and November 1, as the case may be, immediately preceding the payment date (whether or not a business day), but subject to the Company's right to defer quarterly payments of basic interest beginning after the February 15, 2003 payment. (b) Both principal of and interest on the PHONES shall be payable at the office of the Paying Agent in the Milwaukee, Wisconsin and the Borough of Manhattan, The City of New York, New York or at any other office maintained by the Company or the Guarantor, as the case may be, for such purpose; provided that interest may be payable, at the option of the Company or the Guarantor, as the case may be, by check mailed to the registered address of the person entitled thereto as such address shall appear on the registry books of the Company. On each interest payment date the Trustee shall pay to the registered holder interest accrued in respect of such PHONES. Payment of principal on PHONES shall be paid to the registered holder or upon his order only upon presentation and surrender for payment of such PHONES on or after the payment date at the offices of the Company or the Guarantor, as the case may be, in Milwaukee, Wisconsin and the Borough of Manhattan, The City of New York, New York or at any other office of the Company or the Guarantor, as the case may be, maintained for such purpose. (c) The PHONES shall not be convertible into or exchangeable for equity securities of the Company, the Guarantor or McLeodUSA Incorporated. (d) The PHONES shall not be subject to any sinking fund. (e) The Trustee, at its Corporate Trust Office located at 1555 North RiverCenter Drive, Suite 301, Milwaukee, Wisconsin 53212, shall initially act as Paying Agent for the PHONES. 4 Section 2.05. (a) So long as a nominee of the Depositary is the registered owner of any Restricted Global Security, such nominee shall be considered the sole owner and holder of the PHONES represented by such Restricted Global Security under the Indenture, as supplemented and amended hereby. Except as herein provided, owners of beneficial interests in any Restricted Global Security shall not be entitled to have PHONES represented by such Restricted Global Security registered in their names, shall not receive or be entitled to receive physical delivery of PHONES in certificated form and shall not be considered the owners or holders thereof under the Indenture. (b) None of the Company, the Guarantor or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in any Restricted Global Security, or for maintaining, supervising or reviewing any records relating to such beneficial interests. Section 2.06 Income Tax Characterization. The Company and the Holders (by virtue of their acceptance of the PHONES) shall treat the PHONES as indebtedness of the Company for all tax purposes. The Company shall hereby instruct the Trustee to treat the PHONES as indebtedness of the Company for all tax reporting purposes. The Company, the Trustee and the Holders shall not take any position that is inconsistent with the treatment of the PHONES as indebtedness of the Company for all tax purposes. ARTICLE 3. MISCELLANEOUS Section 3.01. Capitalized terms used but not defined herein shall have the respective meanings set forth in the Indenture and the form of PHONES attached hereto as Exhibit A. Section 3.02. The form of PHONES, and the related guarantee, attached hereto as Exhibit A, constitute a part of the provisions with respect to the PHONES and are incorporated into this Second Supplemental Indenture in its entirety and shall for all purposes have the same effect as if fully set forth in this Second Supplemental Indenture. Section 3.03. Except as supplemented and amended hereby, the Indenture as supplemented and amended by the First Supplemental Indenture is in all respects ratified and confirmed, and all of the terms, provisions and conditions thereof shall be and remain in full force and effect, and this Second Supplemental Indenture and all its provisions shall be deemed a part thereof. 5 Section 3.04. In case any provision in this Second Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 3.05. If any provision of this Second Supplemental Indenture limits, qualifies or conflicts with any other provision hereof or of the Indenture which provision is required to be included in the Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. Section 3.06. THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WISCONSIN WITHOUT REGARD TO THE CONFLICTS OF LAWS AND RULES OF SAID STATE. Section 3.07. This Second Supplemental Indenture has been simultaneously executed in several counterparts, each of which shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Delivery by telecopier of an executed signature page hereto shall be effective as delivery of a manually executed counterpart hereof. Section 3.08. This Second Supplemental Indenture shall be deemed to have been executed on the date of the acknowledgment thereof by the officer of the Trustee who signed it on behalf of the Trustee. 6 IN WITNESS WHEREOF, the Company, the Guarantor and the Trustee have caused their names to be signed hereto by their respective officers thereunto duly authorized and their respective corporate seals, duly attested, to be hereunto affixed, all as of the day and year first above written. ALLIANT ENERGY RESOURCES, INC. ATTEST: By: /s/ Enrique Bacalao By: /s/ Edward M. Gleason ------------------------------ ---------------------------------- Name: Enrique Bacalao Name: Edward M. Gleason Title: Assistant Secretary Title: Vice President-Treasurer and Corporate Secretary ALLIANT ENERGY CORPORATION, ATTEST: as Guarantor By: /s/ Enrique Bacalao By: /s/ Edward M. Gleason ------------------------------ ---------------------------------- Name: Enrique Bacalao Name: Edward M. Gleason Title: Assistant Secretary Title: Vice President-Treasurer and Corporate Secretary FIRSTAR BANK, N.A., as Trustee By: /s/ R. Christian Davis ---------------------------------- Name: R. Christian Davis Title: Vice President 7 Exhibit A NY3: 209294.06 [Form of PHONES] Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to Alliant Energy Resources, Inc., or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or to such other entity or in such other name as is requested by an authorized representative of DTC (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. Transfers of this Global Security shall be limited to transfers in whole, but not in part, to nominees of Cede & Co. or to a successor thereof or such successor's nominee and transfers of portions of this Global Security shall be limited to transfers made in accordance with the restrictions set forth in Section 2.20 of the Indenture referred to in this Global Security. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" ("QIB") (AS DEFINED IN RULE 144A ("RULE 144A") UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT (2) AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(K) UNDER THE SECURITIES ACT) AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THE SECURITIES AND THE LAST DATE ON WHICH ALLIANT ENERGY RESOURCES, INC. OR ANY "AFFILIATE" (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF ALLIANT ENERGY RESOURCES, INC. WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) OR (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION TERMINATION DATE") EXCEPT (A) TO ALLIANT ENERGY RESOURCES, INC., (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, IN EACH CASE TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1), (2), (3) or (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH INVESTOR ACCOUNT OR ACCOUNTS BE AT ALL TIMES WITHIN ITS OR THEIR CONTROL, AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT ALLIANT ENERGY RESOURCES, INC. AND THE TRUSTEE SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING CASES, BUT ONLY IF THIS SECURITY IS NOT A GLOBAL SECURITY (AS DEFINED IN THE INDENTURE REFERRED TO HEREIN), TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO ALLIANT ENERGY RESOURCES, INC. AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. ALLIANT ENERGY RESOURCES, INC. Exchangeable Senior Notes due 2030 (Exchangeable for cash based on value of McLeodUSA Incorporated Class A Common Stock) CUSIP No. ________ PHONES Global Note Alliant Energy Resources, Inc., a corporation duly organized and existing under the laws of the State of Wisconsin (the "Company," which term includes any successor person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co. or registered assigns, the Maturity Amount (as defined below) at the office or agency of the Company referred to below, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts, upon presentation and surrender of this PHONES on the 15th of February, 2030 (the "Maturity Date") and to pay interest ("Basic Interest") on the Original Principal Amount (as defined below) from the date of original issuance or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, as more fully described below. Payment of Basic Interest may be deferred, at the election of the Company as specified herein. Additional Interest (as defined below), if any, shall be distributed as specified herein. As of the date of original issuance hereof, 0.8772 Reference Shares (as defined below) is attributable to each PHONES represented hereby, subject to adjustment as provided herein. This PHONES is a "book-entry" security and is being registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), a clearing agency. Subject to the terms of the Indenture, dated as of November 4, 1999 (as supplemented by the First Supplemental Indenture dated as of November 4, 1999, the Second Supplemental Indenture dated February 1, 2000 and as may be further supplemented and amended from time to time, the "Indenture"), among the Company, Alliant Energy Corporation (the "Guarantor"), and Firstar Bank, N.A., as trustee (the "Trustee"), and except as provided therein, this PHONES will be held by a clearing agency or its nominee, and beneficial interests will be held by beneficial owners through the book-entry facilities of such clearing agency or its nominee. 2 The statements set forth in the restrictive legend above are an integral part of the terms of this PHONES and by acceptance hereof each holder of this PHONES agrees to be subject to and bound by the terms and provisions set forth in such legend. This PHONES is one of a duly authorized issue of unsecured, unsubordinated debentures, notes or other evidences of indebtedness (hereinafter called the "Securities") of the Company of the series hereinafter specified, which PHONES initially are limited in aggregate number to 5,166,052 (or up to 5,940,960 if additional PHONES are issued in connection with the exercise by the Initial Purchaser (as such term is defined in the Purchase Agreement dated as of January 26, 2000 among the Company, the Guarantor and the Initial Purchaser named therein) of its over-allotment option) PHONES and an aggregate Original Principal Amount of $350,000,023 (or up to $402,500,040 if the Initial Purchaser's over-allotment option is exercised), all such Securities issued or to be issued under the Indenture. Terms defined in the Indenture and not defined herein have the meaning ascribed thereto in the Indenture. The Securities are subject to all such terms, and Holders are referred to the Indenture for a statement of those terms. As provided in the Indenture, the Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may be denominated in currencies other than U.S. Dollars (including composite currencies), may mature at different times, may bear interest, if any, at different rates, may be subject to different redemption provisions, if any, may be subject to different sinking fund or other purchase provisions, if any, may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided or permitted. This PHONES is one of a series of the Securities designated as Exchangeable Senior Notes Due 2030, which are exchangeable for cash based on the value of McLeodUSA Incorporated's Class A Common Stock. The Maturity Amount, the Redemption Amount (as defined below), Additional Interest and Basic Interest on the PHONES shall be payable at the office or agency the Company or the Guarantor, as the case may be, maintains for such purpose within Milwaukee, Wisconsin and the Borough of Manhattan, the City of New York, New York, or at the Company's option, any such payments of cash may be made by check mailed to the Holders of the PHONES at their respective addresses set forth in the register of Holders of PHONES. The PHONES shall be issued in denominations of one PHONES and integral multiples thereof. 1. Interest The Company shall pay Basic Interest on the Original Principal Amount from the date of original issuance or from the most recent Interest Payment Date to which interest has been paid or duly provided for in an amount equal to $1.2280 per PHONES, 3 reflecting a basic interest rate of 7.25% per annum on the Original Principal Amount, through February 15, 2003, and thereafter in an amount equal to $0.4234 per PHONES, reflecting a basic interest rate of 2.50% per annum on the Original Principal Amount (as applicable, the "Basic Interest Rate"), in each case plus the amount of any regular cash dividends paid on the Reference Shares attributable to each PHONES. Interest on the PHONES will accrue from the date of issuance and will be paid quarterly in arrears on February 15, May 15, August 15 and November 15 of each year (each, an "Interest Payment Date" and collectively, the "Interest Payment Dates" and each quarterly period ending on such Interest Payment Date, an "Interest Payment Period"), beginning May 15, 2000, until payment of the Maturity Amount, or if redeemed earlier, the Redemption Amount (as defined below) or until earlier exchanged upon exercise of the Exchange Right (as defined below) by the Holder hereof. The Company's first payment of Basic Interest on May 15, 2000 shall equal $1.4327 per PHONES, which is calculated to equal an annual rate of 7.25% on the Original Principal Amount from the date hereof. Basic Interest payable on any Interest Payment Date shall (subject to exceptions provided in the Indenture referred to herein) be paid to the person in whose name this PHONES, or the PHONES in exchange or substitution for which this PHONES shall have been issued, shall have been registered at the close of business on February 1, May 1, August 1 or November 1 (each a "Regular Record Date"), as the case may be, immediately preceding such Interest Payment Date whether or not a Business Day (as defined below). Changes in the Contingent Principal Amount (as defined below) shall not affect the amount of Basic Interest. At least five (5) Business Days prior to each Interest Payment Date, the Company shall deliver an Officers' Certificate to the Trustee setting forth: (i) the amount of Basic Interest per PHONES for such quarterly period and (ii) the total quarterly interest due for such quarterly period on all PHONES outstanding. The Company shall also distribute to the Holder of each PHONES, an amount equal to any property, including cash (other than any regular cash dividends), distributed on or with respect to the Reference Shares attributable to each PHONES (other than publicly traded equity securities, which shall themselves become Reference Shares) ("Additional Interest"). If any Additional Interest includes publicly traded securities (other than equity securities) that can be transferred by the Company to the Holders without registration under the federal securities laws and without breach of any contractual arrangements of the Company with McLeodUSA Incorporated, and that will be freely transferable in the hands of the Holders, such securities shall be distributed to the Holder of each PHONES; provided however, that no fractional units of such securities shall be distributed, and the Company shall distribute cash representing the then fair market value of such fractional units of such securities as determined in good faith by the Board of Directors. If any Additional Interest is not publicly traded securities or is publicly 4 traded securities not meeting the above standards, cash representing the then fair market value of such property (as determined in good faith by the Board of Directors) shall be distributed to the Holder of each PHONES. Additional Interest shall be distributed to the Holder of each PHONES on the twentieth (20th) Business Day (the "Additional Interest Distribution Date") after the Reference Shares Distribution Date. "Reference Shares Distribution Date" means the date on which any property, including cash (other than any regular cash dividends), distributed on or with respect to the Reference Shares shall be distributed to the holders of Reference Shares. The record date for any distribution of Additional Interest shall be the tenth (10th) Business Day after the Reference Shares Distribution Date. At least five (5) Business Days prior to any Additional Interest Distribution Date, the Company shall deliver an Officers' Certificate to the Trustee setting forth: (i) the amount of Additional Interest to be distributed per PHONES; and (ii) the total amount of Additional Interest to be distributed for all outstanding PHONES on such Additional Interest Distribution Date. If any Additional Interest consists of any property that is not publicly traded securities or is publicly traded securities not meeting the standards described above, then at least five (5) Business Days prior to such Additional Interest Distribution Date, the Company shall deliver to the Trustee: (i) a certified copy of a Board Resolution establishing the fair market value of such property; and (ii) an Officers' Certificate setting forth (A) the total amount of cash relating to the fair market value of such property to be distributed per PHONES, and (B) the total amount of cash relating to the fair market value of such property to be distributed for all outstanding PHONES. In each case described above, the Company shall state in such Officers' Certificate whether it shall distribute such Additional Interest in property or cash. The Trustee shall only be responsible for distributing Additional Interest in the form of cash or global book-entry securities which are DTC eligible. The Company shall be responsible for acting as its own paying agent to make all other distributions of Additional Interest. The Company shall prepare a press release relating to any such distribution of Additional Interest to be provided to DTC for dissemination through the DTC broadcast facility. If Basic Interest or Additional Interest is payable on a date that is not a Business Day, payment shall be made on the next Business Day (and without any interest or other payment in respect of such delay). A "Business Day" means any day that is not a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies in The City of New York are authorized or obligated by law to close. The Company shall pay interest at a rate equal to the Basic Interest Rate per annum then in effect on (i) any overdue Maturity Amount; (ii) any overdue installments of Basic Interest; and (iii) any overdue payments of Additional Interest based 5 on the fair market value of such Additional Interest, in each case, without regard to any applicable grace period. Notwithstanding any other provision herein, no interest shall accrue or be payable in accordance with the immediately preceding sentence on any Deferred Basic Interest (as defined below). Interest on the PHONES shall be computed on the basis of a 360-day year of twelve 30-day months. 2. Deferral of Interest Payments If no Event of Default has occurred and is continuing under the PHONES, the Company may, on one or more occasions, beginning after the February 15, 2003 payment, defer payments of Basic Interest ("Deferred Basic Interest") for up to twenty (20) consecutive quarterly periods. Any deferral of Basic Interest may not extend beyond the Maturity Date, and the Company may not defer distributions of Additional Interest or quarterly payments equal to regular cash dividends paid on the maximum number of Reference Shares. If the Company defers payments of Basic Interest, the Contingent Principal Amount shall increase during each quarter by the amount of such Deferred Basic Interest (plus accrued interest thereon at an annual rate equal to 2.50%, compounded quarterly ("Accrued Interest") ) and the Early Exchange Ratio (as defined below) shall be 100% of the Reference Shares for the quarter following such deferral. Once the Company has paid all Deferred Basic Interest (plus Accrued Interest), together with the Basic Interest for the then current quarterly period, the Contingent Principal Amount shall decrease by the amount of the payment of such Deferred Basic Interest (plus Accrued Interest), the Early Exchange Ratio will change to 95% of the Reference Shares, and the Company may again defer Basic Interest as described above. The Company may only pay Deferred Basic Interest (plus Accrued Interest) on an Interest Payment Date. If the Company elects to defer payments of Basic Interest for any quarterly period, the Company shall provide the Trustee with notice of such election (a "Deferral Notice") and shall prepare a press release relating to such deferral to be provided to DTC for dissemination through the DTC broadcast facility. The Deferral Notice with respect to any quarterly period shall be given to the Trustee not later than one (1) Business Day before the earlier of: (i) the Regular Record Date for the payment of Basic Interest for such quarterly period; or (ii) the date that the Company is required to give notice to The Nasdaq Stock Market (or any other applicable self-regulatory organization) or to the Holders of the PHONES as of such Regular Record Date or the applicable Interest Payment Date. 6 The Deferral Notice shall be in the form of an Officers' Certificate to the Trustee setting forth: (i) the period with respect to which the Company is electing to defer Basic Interest; (ii) the amount of increase of Contingent Principal Amount per PHONES; (iii) the total amount of increase of the Contingent Principal Amount for all outstanding PHONES; (iv) a statement that the Early Exchange Ratio will change to 100% of the Reference Shares, or will continue at such rate, prospectively from such date for the following quarter; and (v) that no Event of Default has occurred and is continuing under the PHONES. The Company shall deliver a Deferral Notice for each deferral of Basic Interest. If and when the Company pays all of the Deferred Basic Interest and Accrued Interest, the Company shall deliver to the Trustee an Officers' Certificate setting forth: (i) the calculation of Deferred Basic Interest and Accrued Interest owed per PHONES; (ii) the total amount of Deferred Basic Interest and Accrued Interest owed on all outstanding PHONES; (iii) a statement that the Early Exchange Ratio will change to 95% of the Reference Shares prospectively from such date for the following quarter; (iv) the amount of decrease of the Contingent Principal Amount per PHONES; and (v) the total amount of decrease of the Contingent Principal Amount for all outstanding PHONES. 3. Principal Amount The "Original Principal Amount" per PHONES is equal to $67.75. The minimum amount payable upon redemption or maturity of each PHONES (the "Contingent Principal Amount") shall be initially equal to the Original Principal Amount. The Contingent Principal Amount for each PHONES will be increased during each quarter, based on the Contingent Principal Amount at the beginning of the Interest Payment Period, by an amount equal to interest accrued on such beginning Contingent Principal Amount at the Basic Interest Rate on the PHONES then in effect, and, on the dates the following amounts are paid to Holders of the PHONES, will be reduced by: (a) each Basic Interest Payment made on the PHONES, (b) any amounts paid on the PHONES in respect of regular cash dividends paid on the Reference Shares during that quarter and (c) any Additional Interest paid on the PHONES. In no event will the Contingent Principal Amount be less than zero. Notwithstanding the foregoing, in the event that the Company redeems the PHONES on a date which is between February 6 and February 15, 2003 (not including February 6 or February 15), the Contingent Principal Amount will not be increased by an amount equal to the interest accrued on the beginning Contingent Principal Amount for the Interest Payment Period beginning on November 15, 2002. 7 For purposes of the Indenture, the "principal" of a PHONES on any day and for any purpose means the amount that is payable with respect to such PHONES as of such date and for such purpose (including without limitation, upon any redemption at the option of the Company, upon any exchange at the option of the Holder of such PHONES and upon the acceleration of the maturity of such PHONES). For purposes of the Indenture, "Interest" on a PHONES for any purpose includes Basic Interest, any regular cash dividends paid on the Reference Shares, Additional Interest and any Final Period Distribution. At maturity, the Holder of each PHONES shall be entitled to receive the Maturity Amount. The "Maturity Amount" per PHONES means the higher of: (i) the Contingent Principal Amount of the PHONES on the Maturity Date or (ii) the sum of (1) the then Current Market Value (as defined below) of the Reference Shares on the Maturity Date attributable to each PHONES and (2) any Deferred Basic Interest (including any Accrued Interest), plus, in the case of either (i) or (ii), the Final Period Distribution. "Final Period Distribution" per PHONES means, in respect of (i) the Maturity Date, a distribution determined in accordance with clauses (2), (3) and (4) below and (ii) the Redemption Date (as defined below), a distribution determined in accordance with clauses (1), (2), (3) and (4) below. If the Redemption Date is in connection with a Rollover Offering (as defined below), the distribution determined in accordance with clause (4) shall be a distribution equal to all dividends and distributions on or in respect of the Reference Shares which a holder of the Reference Shares on the Pricing Date (as defined below) would be entitled to receive. (1) Unless (i) the Redemption Date of the PHONES is also an Interest Payment Date or (ii) Basic Interest has been deferred for the then current quarterly period, an amount equal to the Basic Interest Rate accrued on the Original Principal Amount from the most recent Interest Payment Date to the Redemption Date, or to the next Interest Payment Date in the case of a redemption of the PHONES on a date which is between February 6 and February 15, 2003 (not including February 6 or February 15), plus (2) a distribution equal to the sum of all dividends and distributions on or in respect of the Reference Shares declared by the applicable Reference Company (as defined below) and for which the ex-date for the dividend or distribution falls during the period from the date of original issuance of the PHONES to the most recent Interest Payment Date and which have not been distributed to holders of 8 Reference Shares prior to the most recent Interest Payment Date, plus (3) a distribution equal to the sum of all dividends and distributions on or in respect of the Reference Shares which a holder of Reference Shares on the latest ex-date for a dividend or distribution occurring during the period from the most recent Interest Payment Date to the date immediately preceding the first Trading Day (as defined below) of the Averaging Period (as defined below) is entitled to receive, plus (4) a distribution equal to the sum of, for each successive day in the Averaging Period that is anticipated on the first day of the Averaging Period to be a Trading Day, the amounts determined in accordance with the following formula: E x (1 - 0.05n) where: E= all dividends and distributions on or in respect of the Reference Shares which a holder of the Reference Shares on the applicable day would be entitled to receive, provided that the ex-date for the dividend or distribution date that occurs on a day that is not a scheduled Trading Day shall be deemed to have occurred on the immediately preceding scheduled Trading Day; and n= the number of scheduled Trading Days that have elapsed in the Averaging Period with the first Trading Day of the Averaging Period being counted as zero. The Holder of each PHONES is only entitled to receive distributions determined in accordance with clauses (2), (3) or (4) to the extent actually distributed by the applicable Reference Company. Distributions related to cash amounts paid by the applicable Reference Company on Reference Shares as described in clauses (2), (3) or (4) before the Redemption Date or the Maturity Date, as the case may be, shall be paid on the Redemption Date or the Maturity Date, as the case may be. Distributions related to all other property distributed, or the cash value of such property, shall be distributed within twenty (20) Business Days after the Reference Shares Distribution Date. 9 Upon maturity, the Company shall deliver to the Trustee an Officers' Certificate (i) informing the Trustee of the applicable Maturity Amount per PHONES and in the aggregate for all outstanding PHONES and the Company's calculation thereof and (ii) directing the Trustee to adjust the Trustee's records and to request DTC to adjust DTC's records. Notwithstanding any other provision hereof, if the Contingent Principal Amount is reduced to zero or if all of the Reference Shares cease to be outstanding, the PHONES shall continue to remain outstanding until the Maturity Date unless the Company shall elect to earlier redeem the PHONES, and each Holder of PHONES will receive the Contingent Principal Amount, if any, on the Redemption Date or the Maturity Date, as applicable. 4. Exchange Option The Holder of each PHONES shall have a right, at any time and from time to time, to exchange (an "Exchange Right") each PHONES for an amount of cash equal to a percentage of the then Exchange Market Value (as defined below) of the Reference Shares attributable to each PHONES (the "Early Exchange Ratio"). The Early Exchange Ratio at any time shall be equal to: (i) 95% of the then Exchange Market Value of the Reference Shares attributable to each PHONES or (ii) during a deferral of Basic Interest or, if the Company so elects, during the pendency of any tender or exchange offer for any of the Reference Shares, 100% of the then Exchange Market Value of the Reference Shares attributable to each PHONES. The Company shall pay the Holder of each PHONES the amount due upon exchange as soon as reasonably practicable after such Holder delivers notice (an "Exchange Notice") to the Trustee, but in no event earlier than three Trading Days after the date of such Exchange Notice or later than fifteen (15) Trading Days after the date of such Exchange Notice. "Exchange Market Value" means the Closing Price (as defined below) on the Trading Day following the date a Holder of PHONES delivers an Exchange Notice to the Trustee (an "Exchange Date"); provided, however, if Exchange Notices relating to more than 200,000 PHONES have been delivered on any Exchange Date, then the Exchange Market Value shall be the average Closing Price on the five (5) Trading Days following such Exchange Date. If Exchange Notices relating to more than 200,000 PHONES are delivered on any Exchange Date, the Trustee shall notify the Company of such fact by 6:00 p.m., New York City time, on the Exchange Date, and the Company shall give notice of such fact by issuing a press release prior to 9:00 a.m., New York City time, on the next Trading Day, which shall be provided to DTC for dissemination through the DTC broadcast facility and to the Trustee. The Company's failure to provide this 10 notice, however, shall not affect the determination of Exchange Market Value as described above. If the PHONES are held through DTC, the Holder of each PHONES may exercise such Holder's Exchange Right through the relevant direct participant in DTC through the DTC ATOP system by delivering an agent's message and delivering the PHONES of such Holder to the Trustee's DTC participant account. If the PHONES are held in certificated form, the Holder may exercise such Exchange Right as follows: the Holder shall (i) complete and manually sign an Exchange Notice in the form available from the Trustee and deliver such Exchange Notice to the Trustee at the office maintained by the Trustee for such purpose, (ii) surrender such PHONES to the Trustee, (iii) if required, furnish appropriate endorsement and transfer documents, and (iv) if required, pay all transfer or similar taxes. By 12:00 noon, New York City time, on each Business Day following receipt by the Trustee of notification from DTC that DTC has received an agent's message from a DTC participant electing to exercise such participant's Exchange Right and delivery of such PHONES into the Trustee's DTC participant account or following receipt of a complete manually signed Exchange Notice and receipt of the related PHONES from the Holder, the Trustee shall notify the Company of the amount of such PHONES so tendered. The Company shall deliver an Officers' Certificate to the Trustee no later than one (1) Business Day after the Trading Day following the Exchange Date; provided however, if Exchange Notices relating to more than 200,000 PHONES have been delivered on any Exchange Date, the Company shall deliver such Officers' Certificate no later than one (1) Business Day after the fifth (5th) Trading Day following such Exchange Date. Such Officers' Certificate shall set forth the amount to be paid to such tendering Holder and the date of payment of such amount (the "Exchange Payment Date"). The Company shall deposit such amount with the Trustee on the Exchange Payment Date, and upon receipt of such payment from the Company, the Trustee shall pay DTC, as soon as practicable or, in the case of PHONES that are held in certificated form, as directed by the tendering Holder. The date on which all of the foregoing requirements have been satisfied shall be the Redemption Date with respect to the PHONES delivered for exchange. 5. Redemption The Company may redeem, at any date (the "Redemption Date"), the PHONES in whole but not in part (a "Redemption") at a redemption price per PHONES (the "Redemption Amount") equal to the sum of: (i) the higher of (A) the Contingent Principal Amount per PHONES or (B) the sum of (1) the then Current Market Value of 11 the Reference Shares on the Redemption Date attributable to each PHONES and (2) any Deferred Basic Interest (plus Accrued Interest) per PHONES; plus, in the case of either (A) or (B), the Final Period Distribution; and (ii) a "Redemption Premium" in an amount equal to $14.9407 per PHONES if the Company redeems the PHONES prior to the first quarterly Interest Payment Date on May 15, 2000, and such amount as successively reduced by $1.2280 per PHONES if the Company redeems the PHONES prior to each following quarterly Interest Payment Date through the twelfth quarterly Interest Payment Date on February 15, 2003; except that no such amount referred to in this clause (ii) shall be payable in the event the PHONES are redeemed between February 6 and February 15, 2003 (not including February 6 or February 15). In addition, if any Additional Interest Distribution Date falls after the Redemption Date, the Company shall make such distribution on the Additional Interest Distribution Date. The "Current Market Value" (other than in the case of a Rollover Offering, as defined below) is defined in respect of: (i) the Maturity Date, as the average Closing Price per Reference Share on the twenty (20) Trading Days (the "Averaging Period") immediately prior to (but not including) the fifth (5th) Business Day preceding the Maturity Date; and (ii) the Redemption Date, as the average Closing Price per Reference Share during the Averaging Period immediately prior to (but not including) the fifth (5th) Business Day preceding the Redemption Date; provided, however, that for purposes of determining the payment required upon Redemption in connection with a Rollover Offering, "Current Market Value" means the Closing Price per Reference Share on the Trading Day immediately preceding the date that the Rollover Offering is priced (the "Pricing Date") or, if the Rollover Offering is priced after 4:00 p.m., New York City time, on the Pricing Date, the Closing Price per Reference Share on the Pricing Date, except that if there is not a Trading Day immediately preceding the Pricing Date or (where pricing occurs after 4:00 p.m., New York City time, on the Pricing Date) if the Pricing Date is not a Trading Day, "Current Market Value" means the market value per Reference Share as of the Redemption Date as determined by a nationally recognized independent investment banking firm retained by the Company. A "Rollover Offering" means a refinancing of the PHONES by way of either (i) a sale of the Reference Shares or (ii) a sale of securities that are priced by reference to the Reference Shares, in either case, by means of a completed public or private offering or offerings by the Company and which is expected to yield net proceeds which are sufficient to pay the Redemption Amount for all of the PHONES. The Trustee will notify the Holders of the PHONES if the Company elects to redeem the PHONES in connection with a Rollover Offering not less than thirty (30) nor more than sixty (60) Business Days prior to the Redemption Date. The Company will also issue a press release prior to 4:00 p.m., New York City time, on the Business Day immediately prior to the day 12 on which the Closing Price of the Reference Shares is to be measured for the purpose of determining the Current Market Value in connection with a Rollover Offering. Such notice shall state that the Company is firmly committed to price the Rollover Offering, shall specify the date on which the Rollover Offering is to be priced (including whether the Rollover Offering shall be priced during trading on the Pricing Date or after the close of trading on the Pricing Date) and consequently, whether the Closing Price for the Reference Shares by which the Current Market Value shall be measured shall be the Closing Price on the Trading Day immediately preceding the Pricing Date or the Closing Price on the Pricing Date. The Company shall provide such press release to DTC for dissemination through the DTC broadcast facility. The "Closing Price" of any security on any date of determination means the closing sale price (or, if no closing sale price is reported, the last reported sale price) of such security (regular way) on The Nasdaq Stock Market on such date or, if such security is not listed for trading on The Nasdaq Stock Market on that date, as reported in the composite transactions for the principal United States securities exchange on which such security is so listed, or if such security is not so listed on a United States national or regional securities exchange, the last quoted bid price for such security in the over-the-counter market as reported by the National Quotation Bureau or similar organization. In the event that no such quotation is available for any day, the Board of Directors shall be entitled to determine the Closing Price on the basis of such quotations as it in good faith considers appropriate. To the extent that trading of Reference Shares normal way continues past 4:00 p.m., New York City time, "Closing Price" shall be deemed to refer to the price at the time that is then customary for determining the Trading Day's index levels for stocks traded on the primary national securities exchange or automated quotation system on which the Reference Shares are then traded or quoted. All references to 4:00 p.m., New York City time, in the definition of Current Market Value shall thereafter be deemed to refer to the then customary determination time. A "Trading Day" is defined as a day on which the security, the Closing Price of which is being determined, (i) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (ii) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of such security. In case of any Redemption (other than a Redemption in connection with a Rollover Offering), the Company shall give thirty (30) Business Days' notice to the Trustee and to the Holders of the PHONES of such Redemption and the Redemption Date, such notice to include the issuance of a press release by the Company, which press release shall also be provided by the Company to DTC for dissemination through the DTC 13 broadcast facility. On the fifth Business Day preceding the Redemption Date (or as soon as practicable thereafter), the Company shall provide to the Trustee an Officer's Certificate and prepare a press release to be provided to DTC for dissemination through the DTC broadcast facility. Such Officer's Certificate and press release shall set forth on a per PHONES and an aggregate basis, (i) the Redemption Amount, (ii) the Contingent Principal Amount as of the Redemption Date, (iii) the Current Market Value of the Reference Shares, and (iv) the Deferred Basic Interest in respect of such Redemption. The Company shall irrevocably deposit with the Trustee sufficient funds to pay the Redemption Amount on the Redemption Date. Distributions to be paid on or before the Redemption Date shall be payable to the Holders on the record dates for the related dates of distribution. In addition, if any Additional Interest Distribution Date falls after the Redemption Date, the Company shall make such distribution on the Additional Interest Distribution Date. Once notice of Redemption is given and funds are irrevocably deposited, interest on the PHONES shall cease to accrue on and after the Redemption Date and all rights of the Holders shall cease, except for the right of such Holders to receive the Redemption Amount (but without interest on such Redemption Amount). If the Redemption Date is not a Business Day, then the Redemption Amount shall be payable on the next Business Day (and without any interest or other payment in respect of any such delay). If the Company improperly holds or refuses to pay any Redemption Amount, interest on the PHONES shall continue to accrue at a rate equal to the Basic Interest Rate then in effect, even if such rate is lower than the rate in effect when the amount owed originally accrued, from the original Redemption Date (the "Original Redemption Date") to the actual date of payment (the "Actual Redemption Date"). In such case, the Actual Redemption Date shall be considered the Redemption Date for purposes of calculating the Redemption Amount. The Final Period Distribution shall be deemed paid on the Original Redemption Date to the extent paid as set forth in the definition of Final Period Distribution above. 6. Reference Share Adjustments For purposes hereof, "Reference Company" means McLeodUSA Incorporated, a Delaware corporation ("McLeodUSA"), and any other issuer of a Reference Share. A "Reference Share" means, collectively (i) initially, 0.8772 share of McLeodUSA's Class A Common Stock, par value $0.01 (the "McLeodUSA Stock"); (ii) and, after the date hereof, each share or fraction of a share of publicly traded equity securities received by a holder of a Reference Share in respect of such Reference Share 14 and, to the extent that the Reference Share remains outstanding after any of the following events but without duplication, including the Reference Share, in each case directly or as the result of successive applications of this paragraph upon any of the following events: (A) the distribution on or in respect of a Reference Share in Reference Shares; (B) the combination of Reference Shares into a smaller number of shares or other units; (C) the subdivision of outstanding shares or other units of Reference Shares; (D) the conversion or reclassification of Reference Shares by issuance or exchange of other securities; (E) any consolidation or merger of a Reference Company, or any surviving entity or subsequent surviving entity of a Reference Company (a "Reference Company Successor"), with or into another entity (other than a merger or consolidation in which the Reference Company is the continuing corporation and in which the Reference Company common stock outstanding immediately prior to the merger or consolidation is not exchanged for cash, securities or other property of the Reference Company or another corporation); (F) any statutory exchange of securities of the Reference Company or any Reference Company Successor with another corporation (other than in connection with a merger or acquisition and other than a statutory exchange of securities in which the Reference Company is the continuing corporation and in which the Reference Company common stock outstanding immediately prior to the statutory exchange is not exchanged for cash, securities or other property of the Reference Company or another corporation); or (G) any liquidation, dissolution or winding up of the Reference Company or any Reference Company Successor; and (iii) any Reference Share as adjusted by any Reference Share Offer Adjustment (as defined below). A "Reference Share Offer" means any tender offer or exchange offer made for all or a portion of a class or series of Reference Shares of a Reference Company. If a Reference Share Offer is made, the Company shall, at its option, either: (i) during the pendency of the Reference Share Offer, increase the Early Exchange Ratio to 100% of the Reference Shares and, if the Company exercises this option prior to February 15, 2003, agree to pay to each exchanging Holder of a PHONES an amount equal to the Redemption Premium that would be owed to such Holder if the Company had redeemed the PHONES on the date of exchange; or (ii) make a Reference Share Offer Adjustment. A "Reference Share Offer Adjustment" means including as part of a Reference Share each share of publicly traded equity securities, if any, deemed to be distributed on or in respect of a Reference Share as Average Transaction Consideration (as defined below) less the Reference Share Proportionate Reduction (as defined below). "Average Transaction Consideration" deemed to be received by a holder of one Reference Share in a Reference Share Offer shall be equal to (i) the aggregate consideration actually paid or distributed to all holders of Reference Shares that participated in the Reference Share Offer, divided by (ii) the total number of Reference 15 Shares outstanding immediately prior to the expiration of the Reference Share Offer and entitled to participate in such Reference Share Offer. A "Reference Share Proportionate Reduction" means a proportionate reduction in the number of Reference Shares which are the subject of the applicable Reference Share Offer and attributable to one PHONES calculated in accordance with the following formula: R= X -- N where: R= the fraction by which the number of Reference Shares of the class of Reference Shares subject to the Reference Share Offer and attributable to one PHONES shall be reduced. X= the aggregate number of Reference Shares of the class or series of Reference Shares subject to the Reference Share Offer accepted in the Reference Share Offer. N= the aggregate number of Reference Shares of the class of series of Reference Shares subject to the Reference Share Offer outstanding immediately prior to the expiration of the Reference Share Offer. If the Company elects to make a Reference Share Offer Adjustment, the Company will distribute as Additional Interest the Average Transaction Consideration (other than Average Transaction Consideration that is publicly traded equity securities which will themselves become Reference Shares as a result of a Reference Share Offer Adjustment) deemed to be received on the Reference Shares of the class or series subject to the Reference Share Offer and attributable to each PHONES immediately prior to giving effect to the Reference Share Proportionate Reduction relating to such Reference Share Offer. If the Company elects to make a Reference Share Offer Adjustment, and during the pendency of the Reference Share Offer another Reference Share Offer is commenced in relation to the Reference Shares that are the subject of the then existing Reference Share Offer, the Company may change its original election by electing to increase the Early Exchange Ratio to 100% of the Reference Shares and agreeing to pay the other amounts described above during the pendency of the new Reference Share Offer, or the Company may continue to elect to make a Reference Share Offer Adjustment. The 16 Company shall similarly be entitled to change its election for each further Reference Share Offer made during the pendency of any Reference Share Offer for the same class of Reference Shares. For the purposes of these adjustments, a material change to the terms of an existing Reference Share Offer will be deemed to be a new Reference Share Offer. If the Company elects to increase the Early Exchange Ratio to 100% of the Reference Shares in connection with a Reference Share Offer, no Reference Share Offer Adjustment shall be made and the Company may not change such election if any further Reference Share Offer is made. The Company shall give the Trustee notice of the Company's election in the event of a Reference Share Offer. The Company shall also prepare a press release and provide such press release to DTC for dissemination through the DTC broadcast facility. The Company shall give such notice no later than ten (10) Business Days before the scheduled expiration of the Reference Share Offer. 7. Acceleration of PHONES If an Event of Default with respect to the PHONES shall occur and be continuing, the Maturity Amount of all PHONES then outstanding may be declared, or may become, due and payable upon the conditions and in the manner and with the effect provided in the Indenture. 8. Calculations in Respect of the PHONES The Company shall be responsible for making all calculations required under the PHONES, including, without limitation, the determination of: (i) the Contingent Principal Amount; (ii) the Current Market Value of the Reference Shares; (iii) the Exchange Market Value of the Reference Shares; (iv) the Final Period Distribution on the PHONES; (v) the fair market value of any property distributed on the Reference Shares; (vi) the Average Transaction Consideration; (vii) the composition of a Reference Share; (viii) the Redemption Amount; (ix) the Maturity Amount; (x) Basic Interest; (xi) Additional Interest; and (xii) the amount of Accrued Interest payable upon Redemption or at Maturity of the PHONES. The Company shall make all such calculations in good faith and, absent manifest error, such calculations shall be final and binding on Holders of the PHONES. The Company shall provide a schedule of such calculations to the Trustee and the Trustee shall be entitled to rely upon the accuracy of such calculations without independent verification. 17 9. Amount Payable Upon Bankruptcy Upon dissolution, winding-up, liquidation or reorganization, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other similar proceedings in respect of the Company, Holders of the PHONES may be entitled to a claim against the Company with respect to each PHONES in an amount equal to the higher of: (i) the Contingent Principal Amount or (ii) the sum of (1) the then Current Market Value (without giving effect to the provisions relating to any Rollover Offering) of the Reference Shares attributable to each PHONES and (2) any unpaid Deferred Basic Interest (including any Accrued Interest) plus, in the case of either (i) or (ii), the Final Period Distribution determined as if the date of such event were the Maturity Date of the PHONES. 10. Discharge and Defeasance The Indenture contains provisions for defeasance of the entire indebtedness of the PHONES upon compliance with certain conditions set forth therein, which provisions shall not apply to the PHONES. 11. Amendment; Waiver The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the Guarantor and the rights of the Holders of the PHONES under the Indenture at any time by the Company, the Guarantor and the Trustee with the consent of the Holders of a majority in Original Principal Amount of the PHONES at the time outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in Original Principal Amount of the PHONES at the time outstanding, on behalf of the Holders of all PHONES, to waive compliance by the Company or the Guarantor with certain provisions of the Indenture and certain past Defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this PHONES shall be conclusive and binding upon such Holder and upon all future Holders of this PHONES and of any PHONES issued upon the registration of transfer thereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this PHONES. Notwithstanding any other provision of this PHONES or the Indenture, no supplemental indenture, without the consent of the Holders of each PHONES shall: (a) reduce the amount of PHONES whose Holders must consent to an amendment or waiver; 18 (b) change the rate or the time for payment of interest, including Basic Interest, Additional Interest and amounts relating to cash dividends on the Reference Shares; (c) change the principal or the fixed maturity; (d) waive a default in the payment of principal, premium or interest; (e) make the PHONES payable in a different currency; (f) make any change in the provisions of the Indenture concerning (i) waiver of existing Defaults; (ii) right of Holders of PHONES to receive payment; or (iii) amendments and waivers with consent of Holders of PHONES; (g) impair the right to institute suit for the enforcement of any payment on or after the stated maturity of such payment or, in the case of Redemption, on or after the Redemption Date; or (h) modify or effect in any manner adverse to the Holders the terms and conditions of the Guarantor's obligations regarding due and punctual payment of principal of, or any premium or interest on the PHONES. 12. Payment No reference herein to the Indenture and provision of this PHONES or of the Indenture shall alter or impair the obligation of the Company and the Guarantor, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this PHONES at the times, place and rate, and in the coin or currency, herein prescribed. 13. Transfers As provided in the Indenture and subject to certain limitations on transfer of this PHONES by DTC or its nominee, the transfer of this PHONES is registrable by the Registrar, upon surrender of this PHONES for registration of transfer at the office or agency of the Company or the Guarantor, as the case may be, in Milwaukee, Wisconsin and the Borough of Manhattan, The City of New York, New York, duly endorsed by, or accompanied by the written instrument of transfer attached hereto duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new PHONES, of authorized denominations and for the same aggregate principal amount, shall be issued to the designated transferee or transferees. The Registrar need not register the transfer of or exchange any PHONES for a period of 15 days before an Interest Payment Date. 19 No service charge shall be made for any such registration of transfer or exchange of PHONES, but the Company and the Guarantor may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this PHONES for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the person in whose name this PHONES is registered as the owner hereof for all purposes, whether or not this PHONES be overdue, and none of the Company, the Guarantor, the Trustee or any such agent shall be affected by notice to the contrary. 14. Persons Deemed Owners The registered Holder of this PHONES may be treated as the owner of it for all purposes. 15. Unclaimed Money If money for the payment of principal of, or premium, if any, or interest on, any PHONES remains unclaimed for two years, the Trustee or paying agent shall pay the money back to the Company at its request unless an abandoned property law designates another person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 16. No Recourse Against Others A director, officer, employee or stockholder, as such, of the Company or the Trustee shall not have any liability for any obligations of the Company under the PHONES or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a PHONES, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the PHONES. 17. Registration Rights The Holder of this PHONES is entitled to the benefits of the Registration Rights Agreement, dated as of February 1, 2000 (the "Registration Rights Agreement"), among the Company, the Guarantor and the Initial Purchaser. 20 18. Representation and Warranty by Holders Each purchaser of PHONES, by its acquisition thereof, will be deemed to have acknowledged, represented to and agreed with the Initial Purchaser, the Company and the Guarantor as follows: (1) Such purchaser understands and acknowledges that the PHONES have not been registered under the Securities Act or any other applicable securities laws, are being offered for resale in transactions not requiring registration under the Securities Act or any other securities laws including sales pursuant to Rule 144A under the Securities Act, and may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act or any other applicable securities law, or pursuant to an exemption therefrom or in a transaction not subject thereto, and in each case in compliance with the conditions for transfer set forth in paragraph (4) below. (2) Such purchaser is not an "affiliate" (as defined in Rule 144 under the Securities Act) of the Company and it is either: (a) a QIB and is aware that any sale of PHONES to it will be made in reliance on Rule 144A and such acquisition will be for its own account or for the account of another QIB with respect to which it exercises sole investment discretion and to whom it has given notice that the PHONES are being sold in reliance on Rule 144A; or (b) an Institutional Accredited Investor and, if the PHONES are to be purchased for one or more accounts ("investor accounts") for which it is acting as fiduciary or agent, each such investor account is an Institutional Accredited Investor on a like basis; in the normal course of its business, it invests in or purchases securities similar to the PHONES and such purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of purchasing any of the PHONES and it is aware that it (or any such investor account) may be required to bear the economic risk of an investment in the PHONES for an indefinite period of time and it (or such investor account) is able to bear such risk for an indefinite period and such purchaser has agreed to deliver a letter substantially in the form of Exhibit D to the Second Supplemental Indenture to the Company. (3) Such purchaser acknowledges that none of the Company, the Guarantor or the Initial Purchaser, or any person representing the Company, the 21 Guarantor or the Initial Purchaser, has made any representation to it with respect to the Company, the Guarantor or the offering or sale of any PHONES other than the information contained in the Offering Memorandum, dated January 26, 2000, relating to the PHONES, which has been delivered to it and upon which such purchaser is relying in making its investment decision with respect to the PHONES. Accordingly, such purchaser acknowledges that no representation or warranty is made by the Initial Purchaser as to the accuracy or completeness of such materials. Such purchaser has had access to such financial and other information concerning the Company, the Guarantor and the PHONES (and the Guarantees) as it has deemed necessary in connection with its decision to purchase any of the PHONES, including an opportunity to ask questions of and request information from the Initial Purchaser, the Company and the Guarantor. (4) Such purchaser is purchasing the PHONES for its own account, or for one or more investor accounts for which it is acting as a fiduciary or agent, in each case for investment, and not with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act, subject to any requirement of law that the disposition of its property or the property of such investor account or accounts be at all times within its or their control and subject to its or their ability to resell such PHONES pursuant to Rule 144A or any exemption from registration available under the Securities Act or pursuant to a registration statement which has been declared effective under the Securities Act. Such purchaser agrees on its own behalf and on behalf of any investor account for which it is purchasing the PHONES, and each subsequent holder of the PHONES by its acceptance thereof will be deemed to agree, not to offer, sell or otherwise transfer the PHONES prior to (x) the date which is two years (or such shorter period of time as permitted by Rule 144(k) under the Securities Act) after the later of the date of original issue of the PHONES and the last date on which the Company or any of its "affiliates" (as defined in Rule 144 under the Securities Act) was the owner of the PHONES (or any predecessor thereto) or (y) such later date, if any, as may be required by applicable law (the "Resale Restriction Termination Date"), unless such sale, offer or transfer is made (a) to the Company, (b) pursuant to a registration statement which has been declared effective under the Securities Act, (c) for so long as the PHONES are eligible for resale pursuant to Rule 144A to a person it reasonably believes is a QIB that purchases for its own account or for the account of a QIB, in each case to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) to an Institutional Accredited Investor that is acquiring the PHONES for its own account or for the account of such an Institutional Accredited Investor for investment purposes and not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities 22 Act or (e) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of its property or the property of such investor account or accounts be at all times within its or their control and to compliance with any applicable state or other securities laws. If any resale or transfer of the PHONES is proposed to be made pursuant to clause (d) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of Exhibit D to the Indenture to the Company and the Trustee. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. Each purchaser of PHONES acknowledges that the Company, the Guarantor and the Trustee reserve the right prior to any offer, sale or other transfer of PHONES prior to the Resale Restriction Termination Date pursuant to clauses (d) or (e), above, to require the delivery of an opinion of counsel, certifications and/or other information satisfactory to them and the Trustee. Each purchaser of PHONES acknowledges that each PHONES will contain a legend substantially in the form on the face of this PHONES unless otherwise agreed by the Company, the Guarantor and the Trustee. (5) Such purchaser acknowledges that the Company, the Guarantor, the Initial Purchaser, the Trustee and others will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements and agree that, if any of the acknowledgments, representations, warranties and agreements deemed to have been made by its purchase of the notes are no longer accurate, it shall promptly notify the Initial Purchaser. If such purchaser is acquiring any notes as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and it has full power to make the foregoing acknowledgments, representations and agreements on behalf of each such account and that each such investor account is eligible to purchase the PHONES. (6) Such purchaser acknowledges that the Trustee, the transfer agent and the registrar will not be required to accept for registration of transfer any PHONES acquired by it, except upon presentation of evidence satisfactory to the Company and the Trustee that the restrictions set forth above have been complied with. (7) Such purchaser acknowledges that the foregoing restrictions apply to holders of beneficial interests in the PHONES, as well as the holders of the PHONES. 23 19. Sinking Fund The PHONES do not have the benefit of any sinking fund obligations. 20. Indenture The Company shall furnish to any Holder of record of PHONES, upon written request and without charge, a copy of the Indenture. 21. Governing Law The Indenture and this PHONES each shall be governed by and construed in accordance with the laws of the State of Wisconsin without regard to principles of conflicts of law. 22. Authentication Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this PHONES shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 24 In Witness Whereof, Alliant Energy Resources, Inc. has caused this PHONES to be signed in its corporate name by the facsimile signature of two of its officers thereonto duly authorized and has caused a facsimile of its corporate seal to be affixed hereto or imprinted or otherwise reproduced hereon. ALLIANT ENERGY RESOURCES, INC. ATTEST: By: __________________________________ By: __________________________________ Name: Name: Title: Title: 25 FOR VALUE RECEIVED, the Guarantor, hereby unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed the due and punctual payment of the principal, of premium, if any, or interest on said Security, when and as the same shall be become due and payable, whether at maturity, upon redemption or otherwise, according to the terms thereof and of the Indenture referred to therein. The Guarantor agrees to determine, at least one business day prior to the date upon which a payment of principal, of premium, if any, or interest on said Security is due and payable, whether the Company has available the funds to make such payment as the same shall become due and payable. In case of the failure of the Company punctually to pay any such principal, premium, if any, or interest, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at maturity, upon redemption or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrevocable and absolute, irrespective of the validity, regularity or enforceability of said Security or said Indenture, the absence of any action to enforce the same, any waiver or consent by the Holder of said Security with respect to any provisions thereof, the recovery of any judgment against the Company or any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to said Security or indebtedness evidenced thereby, and all demands whatsoever and covenants that this Guarantee will not be discharged except by complete performance of the obligations contained in said Security and in this Guarantee. The Guarantor shall be subrogated to all rights of the Holder of said Security against the Company in respect to any amounts paid by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not, without the consent of the Holders of all of the Securities then outstanding, be entitled to enforce or to receive any payments arising out of or based upon such right of subrogation until the principal of and premium, if any, and interest on all Securities shall have been paid in full or payment thereof shall have been provided for in accordance with said Indenture. Notwithstanding anything to the contrary contained herein, if following any payment of principal or interest by the Company on the Securities to the Holders of the 26 Securities it is determined by a final decision of a court of competent jurisdiction that such payment shall be avoided by a trustee in bankruptcy (including any debtor-in-possession) as a preference under 11 U.S.C. Section 547 and such payment is paid by such Holder to such trustee in bankruptcy, then and to the extent of such repayment the obligations of the Guarantor hereunder shall remain in full force and effect. This Guarantee shall not be valid or become obligatory for any purpose with respect to a Security until a certificate of authentication on such Security shall have been signed by the Trustee (or the authenticating agent). This Guarantee shall be governed by the laws of the State of Wisconsin. IN WITNESS WHEREOF, ALLIANT ENERGY CORPORATION has caused this Guarantee to be signed in its corporate name by the signature of two of its officers thereunto duly authorized and has caused its corporate seal to be affixed hereto or imprinted or otherwise reproduced hereon. ALLIANT ENERGY CORPORATION, as Guarantor ATTEST: By: _________ ________________________ By: __________________________________ Name: Name: Title: Title: 27 TRUSTEE CERTIFICATE OF AUTHENTICATION This is one of the PHONES described in the within-named Indenture. FIRSTAR BANK, N.A., as Trustee By: ________________________________ Name: Title: 28 EX-99.5 5 EXHIBIT 99.5 Execution Copy ================================================================================ Registration Rights Agreement Dated as of February 1, 2000 among Alliant Energy Resources, Inc., ALLIANT ENERGY CORPORATION and MERRILL LYNCH & CO., Merrill Lynch, Pierce, Fenner & Smith Incorporated ================================================================================ REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (the "Agreement") is made and entered into this 1st day of February, 2000, among Alliant Energy Resources, Inc., a Wisconsin corporation (the "Company"), Alliant Energy Corporation, a Wisconsin corporation (the "Parent"), and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Initial Purchaser"). This Agreement is made pursuant to the Purchase Agreement, dated January 26, 2000, among the Company, the Parent, as guarantor, and the Initial Purchaser (the "Purchase Agreement"), which provides for the sale by the Company to the Initial Purchaser of 5,166,052 (or 5,940,960 if the over-allotment option is exercised in full) Exchangeable Senior Notes due 2030 (the "Securities"). In order to induce the Initial Purchaser to enter into the Purchase Agreement, the Company and the Parent have agreed to provide to the Initial Purchaser and their direct and indirect transferees the registration rights set forth in this Agreement. The execution of this Agreement is a condition to the closing under the Purchase Agreement. In consideration of the foregoing, the parties hereto agree as follows: 1. Definitions. As used in this Agreement, the following capitalized defined terms shall have the following meanings: "1933 Act" shall mean the Securities Act of 1933, as amended from time to time. "1934 Act" shall mean the Securities Exchange Act of l934, as amended from time to time. "Agreement" shall have the meaning set forth in the preamble. "Closing Date" shall mean the Closing Time as defined in the Purchase Agreement. "Company" shall have the meaning set forth in the preamble and shall also include the Company's successors. "Depositary" shall mean The Depository Trust Company, or any other depositary appointed by the Company, provided, however, that such depositary must have an address in the Borough of Manhattan, in the City of New York. "Effectiveness Period" shall have the meaning set forth in Section 2.2 hereof. "Exchange Offer" shall mean the exchange offer by the Company and the Parent of Exchange Securities for Registrable Securities pursuant to Section 2.1 hereof. "Exchange Offer Registration" shall mean a registration under the 1933 Act effected pursuant to Section 2.1 hereof. "Exchange Offer Registration Statement" shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form), and all amendments and supplements to such registration statement, including the Prospectus contained therein, all exhibits thereto and all documents incorporated by reference therein. "Exchange Period" shall have the meaning set forth in Section 2.1 hereof. "Exchange Securities" shall mean the Securities, issued by the Company under the Indenture containing terms identical to the Securities in all respects (except for restrictions on transfers and restrictive legends), to be offered to Holders of Registrable Securities pursuant to the Exchange Offer. "Holder" shall mean an Initial Purchaser, for so long as it owns any Registrable Securities, and each of its successors, assigns and direct and indirect transferees who become registered owners of Registrable Securities under the Indenture and each Participating Broker-Dealer that holds Exchange Securities for so long as such Participating Broker-Dealer is required to deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Securities. "Indenture" shall mean the Indenture relating to, among other debt securities, the Securities, dated as of November 4, 1999, between the Company, the Parent and Firstar Bank, N.A., as trustee, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof. 2 "Initial Purchaser" shall have the meaning set forth in the preamble. "Majority Holders" shall mean the Holders of a majority of the aggregate principal amount of Outstanding (as defined in the Indenture) Registrable Securities; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company and other obligors on the Securities or any Affiliate (as defined in the Indenture) of the Company shall be disregarded in determining whether such consent or approval was given by the Holders of such required percentage amount. "NASD" shall mean the National Association of Securities Dealers, Inc. "Parent" shall have the meaning set forth in the preamble and shall also include the Parent's successors. "Participating Broker-Dealer" shall mean Merrill Lynch, Pierce, Fenner & Smith Incorporated, and any other broker-dealer which makes a market in the Securities and exchanges Registrable Securities in the Exchange Offer for Exchange Securities. "Person" shall mean an individual, partnership (general or limited), corporation, limited liability company, trust or unincorporated organization, or a government or agency or political subdivision thereof. "Private Exchange" shall have the meaning set forth in Section 2.1 hereof. "Private Exchange Securities" shall have the meaning set forth in Section 2.1 hereof. "Prospectus" shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including any such prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein. 3 "Purchase Agreement" shall have the meaning set forth in the preamble. "Registrable Securities" shall mean the Securities and, if issued, the Private Exchange Securities; provided, however, that the Securities and, if issued, the Private Exchange Securities, shall cease to be Registrable Securities when (i) a Registration Statement with respect to such securities shall have been declared effective under the 1933 Act and such securities shall have been disposed of pursuant to such Registration Statement, (ii) such securities have been sold to the public pursuant to Rule l44 (or any similar provision then in force, but not Rule 144A) under the 1933 Act, (iii) such securities shall have ceased to be outstanding or (iv) the Exchange Offer is consummated (except in the case of Securities purchased from the Company and continued to be held by the Initial Purchaser). "Registration Expenses" shall mean any and all expenses incident to performance of or compliance by the Company and the Parent with this Agreement, including without limitation: (i) all SEC, stock exchange or the NASD registration and filing fees, including, if applicable, the fees and expenses of any "qualified independent underwriter" (and its counsel) that is required to be retained by any holder of Registrable Securities in accordance with the rules and regulations of the NASD, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws and compliance with the rules of the NASD (including reasonable fees and disbursements of counsel for any underwriters or Holders in connection with blue sky qualification of any of the Exchange Securities or Registrable Securities and any filings with the NASD), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all fees and expenses incurred in connection with the listing, if any, of any of the Registrable Securities on any securities exchange or exchanges, (v) all rating agency fees, (vi) the fees and disbursements of counsel for the Company and the Parent and of the independent public accountants of the Company and the Parent, including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance, (vii) the fees and expenses of the Trustee, and any escrow agent or custodian, (viii) in the case of a Shelf Registration Statement, the reasonable fees and disbursements of one special counsel designated in writing by the Majority Holders to represent the Holders of Registrable Securities and (ix) any fees and 4 disbursements of the underwriters customarily required to be paid by issuers or sellers of securities and the fees and expenses of any special experts retained by the Company and the Parent in connection with any Registration Statement, but excluding underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder. "Registration Statement" shall mean any registration statement of the Company and the Parent which covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "SEC" shall mean the Securities and Exchange Commission or any successor agency or government body performing the functions currently performed by the United States Securities and Exchange Commission. "SEC Order" shall have the meaning set forth in Section 2.1. "Securities" shall have the meaning set forth in the preamble. "Shelf Registration" shall mean a registration effected pursuant to Section 2.2 hereof. "Shelf Registration Statement" shall mean a "shelf" registration statement of the Company and the Parent pursuant to the provisions of Section 2.2 of this Agreement which covers all of the Registrable Securities or all of the Private Exchange Securities on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "TIA" shall mean Trust Indenture Act of 1939, as amended. "Trustee" shall mean the trustee with respect to the Securities under the Indenture. "Underwriter" shall have the meaning set forth in Section 4 hereof. 5 2. Registration Under the 1933 Act. 2.1 Exchange Offer. Except as provided in Section 2.2 and to the extent not prohibited by any applicable law or applicable interpretation of the staff of the SEC, the Company and the Parent shall, for the benefit of the Holders, at the cost of the Company and the Parent, (A) prepare and, as soon as practicable but not later than 135 days following the Closing Date, use their reasonable best efforts to file with the SEC an Exchange Offer Registration Statement on an appropriate form under the 1933 Act with respect to a proposed Exchange Offer and the issuance and delivery to the Holders, in exchange for the Registrable Securities (other than Private Exchange Securities), of a like principal amount of Exchange Securities, (B) use their reasonable best efforts to cause the Exchange Offer Registration Statement to be declared effective under the 1933 Act within 180 days of the Closing Date, (C) use their reasonable best efforts to keep the Exchange Offer Registration Statement effective until the closing of the Exchange Offer and (D) use their reasonable best efforts to cause the Exchange Offer to be consummated not later than 45 days after the effective date of the Exchange Offer Registration Statement. The Exchange Securities will be issued under the Indenture. Upon the effectiveness of the Exchange Offer Registration Statement, the Company and the Parent shall promptly commence the Exchange Offer, it being the objective of such Exchange Offer to enable each Holder eligible and electing to exchange Registrable Securities for Exchange Securities (assuming that such Holder (a) is not an affiliate of the Company within the meaning of Rule 405 under the 1933 Act, (b) is not a broker-dealer tendering Registrable Securities acquired directly from the Company for its own account, (c) acquired the Exchange Securities in the ordinary course of such Holder's business and (d) has no arrangements or understandings with any Person to participate in the Exchange Offer for the purpose of distributing the Exchange Securities) to transfer such Exchange Securities from and after their receipt without any limitations or restrictions under the 1933 Act and under state securities or blue sky laws. In connection with the Exchange Offer, the Company and the Parent shall: (a) mail as promptly as practicable to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; (b) keep the Exchange Offer open for acceptance for a period of not less than 20 business days after the date notice thereof is mailed to the Holders (or longer if required by applicable law) (such period referred to herein as the "Exchange Period"); 6 (c) utilize the services of the Depositary for the Exchange Offer; (d) permit Holders to withdraw tendered Registrable Securities at any time prior to 5:00 p.m. (Eastern Time), on the last business day of the Exchange Period, by sending to the institution specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Securities delivered for exchange, and a statement that such Holder is withdrawing such Holder's election to have such Securities exchanged; (e) notify each Holder that any Registrable Security not tendered will remain outstanding and continue to accrue interest, but will not retain any rights under this Agreement (except in the case of the Initial Purchaser and Participating Broker-Dealers as provided herein); and (f) otherwise comply in all respects with all applicable laws relating to the Exchange Offer. If, prior to consummation of the Exchange Offer, the Initial Purchaser holds any Securities acquired by it and having the status of an unsold allotment in the initial distribution, the Company and the Parent upon the request of the Initial Purchaser shall, simultaneously with the delivery of the Exchange Securities in the Exchange Offer and subject to compliance with applicable securities laws, issue and deliver to the Initial Purchaser in exchange (the "Private Exchange") for the Securities held by the Initial Purchaser, a like principal amount of debt securities of the Company on a senior basis, that are identical (except that such securities shall bear appropriate transfer restrictions) to the Exchange Securities (the "Private Exchange Securities"). The Exchange Securities and the Private Exchange Securities shall be issued under the Indenture which has been qualified under the TIA or is exempt from such qualification and shall provide that the Exchange Securities shall not be subject to the transfer restrictions set forth in the Indenture but that the Private Exchange Securities shall be subject to such transfer restrictions. The Indenture shall provide that the Exchange Securities, the Private Exchange Securities and the Securities shall vote and consent together on all matters as one class and that none of the Exchange Securities, the Private Exchange Securities or the Securities will have the right to vote or consent as a separate class on any matter. The Private Exchange Securities shall be of the same series as and the Company and the Parent shall use all commercially reasonable efforts to have the Private Exchange Securities bear the same CUSIP number as the Exchange Securities. Neither the Company nor the Parent shall have any liability under this Agreement solely as 7 a result of such Private Exchange Securities not bearing the same CUSIP number as the Exchange Securities. As soon as practicable after the close of the Exchange Offer and/or the Private Exchange, as the case may be, the Company and the Parent shall: (i) accept for exchange all Registrable Securities duly tendered and not validly withdrawn pursuant to the Exchange Offer in accordance with the terms of the Exchange Offer Registration Statement and the letter of transmittal which shall be an exhibit thereto; (ii) accept for exchange all Securities properly tendered pursuant to the Private Exchange; (iii) deliver to the Trustee for cancellation all Registrable Securities so accepted for exchange; and (iv) cause the Trustee promptly to authenticate and deliver Exchange Securities or Private Exchange Securities, as the case may be, to each Holder of Registrable Securities so accepted for exchange in a principal amount equal to the principal amount of the Registrable Securities of such Holder so accepted for exchange. Interest on each Exchange Security and Private Exchange Security will accrue from the last date on which interest was paid on the Registrable Securities surrendered in exchange therefor or, if no interest has been paid on the Registrable Securities, from the date of original issuance. The Exchange Offer and the Private Exchange shall not be subject to any conditions, other than (i) that the Exchange Offer or the Private Exchange, or the making of any exchange by a Holder, does not violate applicable law or any applicable interpretation of the staff of the SEC, (ii) the due tendering of Registrable Securities in accordance with the Exchange Offer and the Private Exchange, (iii) that each Holder of Registrable Securities exchanged in the Exchange Offer shall have represented that all Exchange Securities to be received by it shall be acquired in the ordinary course of its business and that at the time of the consummation of the Exchange Offer it shall have no arrangement or understanding with any person to participate in the distribution (within the meaning of the 1933 Act) of the Exchange Securities and shall have made such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to render the use of Form S-4 or other appropriate form under the 1933 Act available and (iv) that no action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency with respect to the Exchange Offer or the Private Exchange which, in the 8 judgment of the Company and the Parent, would reasonably be expected to impair the ability of the Company and the Parent to proceed with the Exchange Offer or the Private Exchange and that the Exchange Offer and the Private Exchange shall comply with the provisions of the SEC's Release No. 35-27069, 70-9455 dated as of August 26, 1999 by which the Parent and the Company are bound (the "SEC Order"). The Company and the Parent shall inform the Initial Purchaser of the names and addresses of the Holders to whom the Exchange Offer is made, and the Initial Purchaser shall have the right to contact such Holders and otherwise facilitate the tender of Registrable Securities in the Exchange Offer. 2.2 Shelf Registration. (i) If the law, SEC rules or regulations or applicable interpretations thereof by the staff of the SEC, U.S. Department of the Treasury or the Internal Revenue Service do not permit or make it impractical or inadvisable for the Company and the Parent to effect the Exchange Offer as contemplated by Section 2.1 hereof, (ii) if for any other reason the Exchange Offer Registration Statement is not declared effective within 180 days following the Closing Date or the Exchange Offer is not consummated within 45 days after effectiveness of the Exchange Offer Registration Statement (provided that if the Exchange Offer Registration Statement shall be declared effective after such 180-day period or if the Exchange Offer shall be consummated after such 45-day period, then the obligation of the Company and the Parent under this clause (ii) arising from the failure of the Exchange Offer Registration Statement to be declared effective within such 180-day period or the failure of the Exchange Offer to be consummated within such 45-day period, respectively, shall terminate), (iii) upon the request of the Initial Purchaser within 90 days following the consummation of the Exchange Offer or (iv) if, as a result of any changes in law, SEC rules or regulations or applicable interpretations thereof by the staff of the SEC or otherwise, a Holder (other than the Initial Purchaser holding securities acquired directly from the Company) is not permitted to participate in the Exchange Offer or does not receive fully tradeable Exchange Securities pursuant to the Exchange Offer, then in case of each of clauses (i) through (iv) the Company and the Parent shall, at their cost: (a) To the extent not prohibited by any applicable law or applicable interpretations thereof by the staff of the SEC or otherwise, as promptly as practicable, use their reasonable best efforts to file with the SEC and thereafter to cause to be declared effective as promptly as practicable but no later than 210 days after the Closing Date, a Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the Holders from time to time in accordance with the methods of distribution elected by the Majority Holders participating in the Shelf Registration and set forth in such Shelf Registration Statement. 9 (b) Use their reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the Prospectus forming part thereof to be usable by Holders for a period of two years from the Closing Date, or for such shorter period that will terminate when all Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or cease to be outstanding or otherwise to be Registrable Securities (the "Effectiveness Period"); provided, however, that the Effectiveness Period in respect of the Shelf Registration Statement shall be extended to the extent required to permit dealers to comply with the applicable prospectus delivery requirements of Rule 174 under the 1933 Act and as otherwise provided herein. (c) Notwithstanding any other provisions hereof, use their reasonable best efforts to ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming part thereof and any supplement thereto complies in all material respects with the 1933 Act and the rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any Prospectus forming part of any Shelf Registration Statement, and any supplement to such Prospectus (as amended or supplemented from time to time), does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements, in light of the circumstances under which they were made, not misleading; provided, however, that clauses (ii) and (iii) shall not apply to any information relating to the Initial Purchaser or any Holder furnished to the Company in writing by the Initial Purchaser or Holder expressly for use in the Shelf Registration Statement. The Company and the Parent further agree, if necessary, to supplement or amend the Shelf Registration Statement, as required by Section 3(b) below, and to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly after its being used or filed with the SEC. 2.3 Expenses. The Company and the Parent shall pay all Registration Expenses in connection with the registration pursuant to Section 2.1 or 2.2. Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Registrable Securities pursuant to the Shelf Registration Statement. 10 2.4. Effectiveness. (a) The Company and the Parent will be deemed not to have used their reasonable best efforts to cause the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, to become, or to remain, effective during the requisite period if the Company and the Parent voluntarily take any action that would, or omit to take any action which omission would, result in any such Registration Statement not being declared effective or in the Holders of Registrable Securities covered thereby not being able to exchange or offer and sell such Registrable Securities during that period as and to the extent contemplated hereby, unless such action is required by applicable law, as contemplated by clause (i) of Section 2.2, or, in the case of the Exchange Offer Registration Statement, such action would violate the provisions of the SEC Order. (b) An Exchange Offer Registration Statement pursuant to Section 2.1 hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it has been declared effective, the offering of Registrable Securities pursuant to an Exchange Offer Registration Statement or a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement will be deemed not to have become effective during the period of such interference, until the offering of Registrable Securities pursuant to such Registration Statement may legally resume. (c) Notwithstanding anything in this Agreement to the contrary, during the Effectiveness Period, upon notice to the Holders of the Securities (as described in Section 3(e)(viii) hereunder), the Company and the Parent may suspend the availability of the Shelf Registration Statement for up to two (2) periods of up to 30 consecutive days each, but not more than an aggregate of 30 days during any 365-day period, if the board of directors of the Company and the Parent in their respective reasonable judgments believe that they may possess material non-public information that makes it advisable to so suspend the availability of the Shelf Registration Statement. 3. Registration Procedures. In connection with and subject to the rights and the obligations of the Company and the Parent with respect to Registration Statements pursuant to Sections 2.1, 2.2 and 2.4(c) hereof, the Company and the Parent shall: 11 (a) prepare and file with the SEC a Registration Statement, within the relevant time period specified in Section 2, on the appropriate form under the 1933 Act, which form (i) shall be selected by the Company and the Parent, (ii) shall, in the case of a Shelf Registration, be available for the sale of the Registrable Securities by the selling Holders thereof, (iii) shall comply as to form in all material respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to be filed therewith or incorporated by reference therein and (iv) shall comply in all material respects with the requirements of Regulation S-T under the 1933 Act, and use their reasonable best efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof; (b) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary under applicable law to keep such Registration Statement effective for the applicable period; and cause each Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the 1933 Act and comply with the provisions of the 1933 Act, the 1934 Act and the rules and regulations thereunder applicable to them with respect to the disposition of all securities covered by each Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the selling Holders thereof (including sales by any Participating Broker-Dealer); (c) in the case of a Shelf Registration, (i) notify each Holder of Registrable Securities, at least five business days prior to filing, that a Shelf Registration Statement with respect to the Registrable Securities is being filed and advising such Holders that the distribution of Registrable Securities will be made in accordance with the method selected by the Majority Holders participating in the Shelf Registration; (ii) furnish to each Holder of Registrable Securities and to each underwriter of an underwritten offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request, including financial statements and schedules and, if the Holder so requests, all exhibits in order to facilitate the public sale or other disposition of the Registrable Securities; and (iii) hereby consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of Registrable Securities in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto; 12 (d) use their reasonable best efforts to register or qualify the Registrable Securities under all applicable state securities or "blue sky" laws of such jurisdictions as any Holder of Registrable Securities covered by a Registration Statement and each underwriter of an underwritten offering of Registrable Securities shall reasonably request by the time the applicable Registration Statement is declared effective by the SEC, and do any and all other acts and things which may be reasonably necessary or advisable to enable each such Holder and underwriter to consummate the disposition in each such jurisdiction of such Registrable Securities owned by such Holder; provided, however, that neither the Company nor the Parent shall be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), or (ii) take any action which would subject it to general service of process or taxation in any such jurisdiction where it is not then so subject; (e) notify promptly each Holder of Registrable Securities under a Shelf Registration or any Participating Broker-Dealer who has notified the Company and the Parent that it is utilizing the Exchange Offer Registration Statement as provided in paragraph (f) below and, if requested by such Holder or Participating Broker-Dealer, confirm such advice in writing promptly (i) when a Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of any request by the SEC or any state securities authority for post-effective amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) in the case of a Shelf Registration, if, between the effective date of a Registration Statement and the closing of any sale of Registrable Securities covered thereby, the representations and warranties of the Company and the Parent contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to the offering cease to be true and correct in all material respects, (v) of the happening of any event or the discovery of any facts during the period a Shelf Registration Statement is effective which makes any statement made in such Registration Statement or the related Prospectus untrue in any material respect or which requires the making of any changes in such Registration Statement or Prospectus in order to make the statements therein not misleading, (vi) of the receipt by the Company or the Parent of any notification with respect to the suspension of the qualification of the Registrable Securities or the Exchange Securities, as the case may be, for sale 13 in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (vii) of any determination by the Company and the Parent that a post-effective amendment to such Registration Statement would be appropriate and (viii) of any determination to suspend the use of the Shelf Registration Statement under Section 2.4(c); (f) (A) in the case of the Exchange Offer Registration Statement (i) include in the Exchange Offer Registration Statement a section entitled "Plan of Distribution" which section shall be reasonably acceptable to Merrill Lynch on behalf of the Participating Broker-Dealers, and which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential "underwriter" status of any broker-dealer that holds Registrable Securities acquired for its own account as a result of market-making activities or other trading activities and that will be the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange Securities to be received by such broker-dealer in the Exchange Offer, whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies, in the reasonable judgment of Merrill Lynch on behalf of the Participating Broker-Dealers and its counsel, represent the prevailing views of the staff of the SEC, including a statement that any such broker-dealer who receives Exchange Securities for Registrable Securities pursuant to the Exchange Offer may be deemed a statutory underwriter and must deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Securities, (ii) furnish to each Participating Broker-Dealer who has delivered to the Company and the Parent the notice referred to in Section 3(e), without charge, as many copies of each Prospectus included in the Exchange Offer Registration Statement, including any preliminary prospectus, and any amendment or supplement thereto, as such Participating Broker-Dealer may reasonably request, (iii) hereby consent to the use of the Prospectus forming part of the Exchange Offer Registration Statement or any amendment or supplement thereto, by any Person subject to the prospectus delivery requirements of the SEC, including all Participating Broker-Dealers, in connection with the sale or transfer of the Exchange Securities covered by the Prospectus or any amendment or supplement thereto, and (iv) include in the transmittal letter or similar documentation to be executed by an exchange offeree in order to participate in the Exchange Offer (x) the following provision: "If the exchange offeree is a broker-dealer holding Registrable Securities acquired for its own account as a result of market-making activities or other trading activities, 14 it will deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of Exchange Securities received in respect of such Registrable Securities pursuant to the Exchange Offer;" and (y) a statement to the effect that by a broker-dealer making the acknowledgment described in clause (x) and by delivering a Prospectus in connection with the exchange of Registrable Securities, the broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the 1933 Act; and (B) in the case of any Exchange Offer Registration Statement, the Company and the Parent agree to deliver to the Initial Purchaser on behalf of the Participating Broker-Dealers upon the effectiveness of the Exchange Offer Registration Statement (i) an opinion of counsel or opinions of counsel substantially in the form attached hereto as Exhibit A, (ii) officers' certificates substantially in the form customarily delivered in a public offering of debt securities and (iii) a comfort letter or comfort letters in customary form to the extent permitted by Statement on Auditing Standards No. 72 of the American Institute of Certified Public Accountants (or if such a comfort letter is not permitted, an agreed upon procedures letter in customary form) from the independent certified public accountants of the Company and the Parent (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or the Parent or of any business acquired by the Company or the Parent for which financial statements are, or are required to be, included in the Registration Statement) at least as broad in scope and coverage as the comfort letter or comfort letters delivered to the Initial Purchaser in connection with the initial sale of the Securities to the Initial Purchaser; (g) (i) in the case of an Exchange Offer, furnish counsel for the Initial Purchaser and (ii) in the case of a Shelf Registration, furnish counsel for the Holders of Registrable Securities copies of any comment letters received from the SEC or any other request by the SEC or any state securities authority for amendments or supplements to a Registration Statement and Prospectus or for additional information; (h) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment; (i) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, and each underwriter, if any, without charge, at least one 15 conformed copy of each Registration Statement and any post-effective amendment thereto, including financial statements and schedules (without documents incorporated therein by reference and all exhibits thereto, unless requested); (j) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations (consistent with the provisions of the Indenture) and registered in such names as the selling Holders or the underwriters, if any, may reasonably request at least three business days prior to the closing of any sale of Registrable Securities; (k) in the case of a Shelf Registration, upon the occurrence of any event or the discovery of any facts, each as contemplated by Sections 3(e)(v), 3(e)(vi) and 3(e)(viii) hereof, as promptly as practicable after the occurrence of such an event, use their reasonable best efforts to prepare a supplement or post-effective amendment to the Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities or Participating Broker-Dealers, such Prospectus will not contain at the time of such delivery any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or will remain so qualified. At such time as such public disclosure is otherwise made or the Company and the Parent determine that such disclosure is not necessary, in each case to correct any misstatement of a material fact or to include any omitted material fact, the Company and the Parent agree promptly to notify each Holder of such determination and to furnish each Holder such number of copies of the Prospectus as amended or supplemented, as such Holder may reasonably request; (l) in the case of a Shelf Registration, a reasonable time prior to the filing of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or any document which is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of a Registration Statement, provide copies of such document to the Initial Purchaser on behalf of such Holders; and make representatives of the Company and the Parent as shall be reasonably requested by the Holders of Registrable Securities, or the Initial Purchaser on behalf of such Holders, available for discussion of such document upon reasonable advance 16 notice. In connection with such discussions, the Holders or the Initial Purchaser, on behalf of such Holders, shall use their reasonable best efforts to minimize any disruption to the business of the Company and the Parent; (m) obtain a CUSIP number for all Exchange Securities, Private Exchange Securities or Registrable Securities, as the case may be, not later than the effective date of a Registration Statement, and provide the Trustee with certificates for the Exchange Securities, Private Exchange Securities or the Registrable Securities, as the case may be, in a form eligible for deposit with the Depositary; (n) (i) cause the Indenture to be qualified under the TIA in connection with the registration of the Exchange Securities or Registrable Securities, as the case may be, (ii) cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and (iii) execute, and use their reasonable best efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner; (o) in the case of a Shelf Registration, enter into agreements (including underwriting agreements) and take all other customary and appropriate actions in order to expedite or facilitate the disposition of such Registrable Securities and in such connection whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration: (i) make such representations and warranties to the Holders of such Registrable Securities and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in similar underwritten offerings as may be reasonably requested by them; (ii) obtain opinions of counsel to the Company and the Parent and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and the holders of a majority in principal amount of the Registrable Securities being sold) addressed to each selling Holder and the underwriters, if any, covering the matters customarily covered in opinions requested in sales of securities or underwritten offerings and 17 such other matters as may be reasonably requested by such Holders and underwriters; (iii) obtain "cold comfort" letters and updates thereof from the independent certified public accountants of the Company and the Parent (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or the Parent or of any business acquired by the Company or the Parent for which financial statements are, or are required to be, included in the Registration Statement) addressed to the underwriters, if any, and use reasonable efforts to have such letter addressed to the selling Holders of Registrable Securities (to the extent consistent with Statement on Auditing Standards No. 72 of the American Institute of Certified Public Accountants), such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters to underwriters in connection with similar underwritten offerings; (iv) enter into a securities sales agreement with the Holders and an agent of the Holders providing for, among other things, the appointment of such agent for the selling Holders for the purpose of soliciting purchases of Registrable Securities, which agreement shall be in form, substance and scope customary for similar offerings; (v) if an underwriting agreement is entered into, cause the same to set forth indemnification provisions and procedures substantially equivalent to the indemnification provisions and procedures set forth in Section 4 hereof with respect to the underwriters and all other parties to be indemnified pursuant to said Section or, at the request of any underwriters, in the form customarily provided to such underwriters in similar types of transactions; and (vi) deliver such documents and certificates as may be reasonably requested and as are customarily delivered in similar offerings to the Holders of a majority in principal amount of the Registrable Securities being sold and the managing underwriters, if any. The above shall be done at (i) the effectiveness of such Registration Statement (and each post-effective amendment thereto) and (ii) each closing under any underwriting or similar agreement as and to the extent required thereunder; 18 (p) in the case of a Shelf Registration or if a Prospectus is required to be delivered by any Participating Broker-Dealer in the case of an Exchange Offer, make available for inspection by representatives of the Holders of the Registrable Securities, any underwriters participating in any disposition pursuant to a Shelf Registration Statement, any Participating Broker-Dealer and any counsel or accountant retained by any of the foregoing, all financial and other records, pertinent corporate documents and properties of the Company and the Parent reasonably requested by any such persons, and cause the respective officers, directors, employees, and any other agents of the Company and the Parent to supply all information reasonably requested by any such representative, underwriter, special counsel or accountant in connection with a Registration Statement, and make such representatives of the Company and the Parent available for discussion of such documents as shall be reasonably requested by the Initial Purchaser; (q) (i) in the case of an Exchange Offer Registration Statement, a reasonable time prior to the filing of any Exchange Offer Registration Statement, any Prospectus forming a part thereof, any amendment to an Exchange Offer Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Initial Purchaser and to counsel to the Holders of Registrable Securities and make such changes in any such document prior to the filing thereof as the Initial Purchaser or counsel to the Holders of Registrable Securities may reasonably request and, except as otherwise required by applicable law, not file any such document in a form to which the Initial Purchaser on behalf of the Holders of Registrable Securities and counsel to the Holders of Registrable Securities shall not have previously been advised and furnished a copy of or to which the Initial Purchaser on behalf of the Holders of Registrable Securities or counsel to the Holders of Registrable Securities shall reasonably object, and make the representatives of the Company and the Parent available for discussion of such documents as shall be reasonably requested by the Initial Purchaser; and (ii) in the case of a Shelf Registration, a reasonable time prior to filing any Shelf Registration Statement, any Prospectus forming a part thereof, any amendment to such Shelf Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Holders of Registrable Securities, to the Initial Purchaser, to counsel for the Holders and to the underwriter or underwriters of an underwritten offering of Registrable Securities, if any, make such changes in any such document prior to the filing thereof as the Initial Purchaser, the counsel to the Holders or the underwriter or underwriters reasonably request and not file any such document in a form to 19 which the Majority Holders, the Initial Purchaser on behalf of the Holders of Registrable Securities, counsel for the Holders of Registrable Securities or any underwriter shall not have previously been advised and furnished a copy of or to which the Majority Holders, the Initial Purchaser of behalf of the Holders of Registrable Securities, counsel to the Holders of Registrable Securities or any underwriter shall reasonably object, and make the representatives of the Company and the Parent available for discussion of such document as shall be reasonably requested by the Holders of Registrable Securities, the Initial Purchaser on behalf of such Holders, counsel for the Holders of Registrable Securities or any underwriter. (r) following effectiveness of a Registration Statement, use their reasonable best efforts to cause all Exchange Securities to be listed on the New York Stock Exchange if requested by the Majority Holders, or if requested by the underwriter or underwriters of an underwritten offering of Exchange Securities, if any; (s) in the case of a Shelf Registration, use their reasonable best efforts to cause the Registrable Securities to be rated by the appropriate rating agencies, if so requested by the Majority Holders, or if requested by the underwriter or underwriters of an underwritten offering of Registrable Securities, if any; (t) otherwise comply with all applicable rules and regulations of the SEC and make available to its security holders, as soon as reasonably practicable, an earnings statement of the Parent covering at least 12 months which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder; (u) cooperate and assist in any filings required to be made with the NASD and, in the case of a Shelf Registration, in the performance of any due diligence investigation by any underwriter and its counsel (including any "qualified independent underwriter" that is required to be retained in accordance with the rules and regulations of the NASD); and (v) upon consummation of an Exchange Offer or a Private Exchange, obtain a customary opinion of counsel to the Company and the Parent addressed to the Trustee for the benefit of all Holders of Registrable Securities participating in the Exchange Offer or Private Exchange, and which includes an opinion that (i) each of the Company and the Parent has duly authorized, executed and delivered the Exchange Securities and/or Private Exchange Securities, as applicable, and the related indenture, and (ii) each of the Exchange Securities and related indenture constitute a legal, valid and binding obligation of the Company and the Parent, enforceable against the Company 20 and the Parent in accordance with its respective terms (with customary exceptions). In the case of a Shelf Registration Statement, the Company and the Parent may (as a condition to such Holder's participation in the Shelf Registration) require each Holder of Registrable Securities (i) to furnish to the Company and the Parent such information regarding the Holder and the proposed distribution by such Holder of such Registrable Securities as the Company and the Parent may from time to time reasonably request and (ii) to agree in writing to be bound by this Agreement, including the indemnification provisions. In the case of a Shelf Registration Statement, each Holder agrees that, upon receipt of any notice from the Company and the Parent of the happening of any event or the discovery of any facts, each of the kind described in Sections 3(e)(v) and 3(e)(viii) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to a Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(k) hereof, and, if so directed by the Company and the Parent, such Holder will deliver to the Company and the Parent (at its expense) all copies in such Holder's possession, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. If any of the Registrable Securities covered by any Shelf Registration Statement are to be sold in an underwritten offering, the underwriter or underwriters and manager or managers that will manage such offering will be selected by the Majority Holders of such Registrable Securities included in such offering and shall be acceptable to the Company and the Parent. No Holder of Registrable Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 4. Indemnification; Contribution. (a) The Company and the Parent jointly and severally agree to indemnify and hold harmless the Initial Purchaser, each Holder, each Participating Broker-Dealer, each Person who participates as an underwriter (any such Person being an "Underwriter") and each Person, if any, who controls any Holder or Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: 21 (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto) pursuant to which Exchange Securities or Registrable Securities were registered under the 1933 Act, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 4(d) below) any such settlement is effected with the written consent of the Company and the Parent; and (iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by any indemnified party), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above; provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by the Holder or Underwriter expressly for use in a Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto). 22 (b) Each Holder severally, but not jointly, agrees to indemnify and hold harmless the Company, the Parent, the Initial Purchaser, each Underwriter and the other selling Holders, and each of their respective directors and officers, and each Person, if any, who controls the Company, the Parent, the Initial Purchaser, any Underwriter or any other selling Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 4(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Shelf Registration Statement (or any amendment thereto) or any Prospectus included therein (or any amendment or supplement thereto) in reliance upon and in conformity with written information with respect to such Holder furnished to the Company by such Holder expressly for use in the Shelf Registration Statement (or any amendment thereto) or such Prospectus (or any amendment or supplement thereto); provided, however, that no such Holder shall be liable for any claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Shelf Registration Statement. (c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure so to notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying party or parties be liable for the fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. In addition, the indemnifying party shall be entitled to, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense of any claim or action brought against an indemnified party with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 7 for any legal or other expenses 23 subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that the Initial Purchaser shall have the right to employ one counsel to represent it and its officers, employees and controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Initial Purchaser against the Company and the Parent under this Section 4 if, in the reasonable judgment of the Initial Purchaser, either (i) there is an actual or potential conflict between the position of the Company and the Parent on the one hand and the Initial Purchaser on the other hand or (ii) there may be defenses available to it or them that are different from or additional to those available to the Company and Parent (in any of which events the Company shall not have the right to direct the defense of such action on behalf of the Initial Purchaser with respect to such different defenses), in any of which events such reasonable fees and expenses shall be borne by the Company and Parent. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 4 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 4(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. (e) If the indemnification provided for in this Section 4 is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such 24 losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative fault of the Company and the Parent on the one hand and the Holders and the Initial Purchaser on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative fault of the Company and the Parent on the one hand and the Holders and the Initial Purchaser on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company, the Parent, the Holders or the Initial Purchaser and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Parent, the Holders and the Initial Purchaser agree that it would not be just and equitable if contribution pursuant to this Section 4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 4. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 4 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 4, the Initial Purchaser shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities sold by it were offered exceeds the amount of any damages which the Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 4, each Person, if any, who controls the Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Initial Purchaser or Holder, and each director of the Company, the Parent and each Person, if any, who controls the 25 Company or the Parent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company and the Parent. 5. Miscellaneous. 5.1 Rule 144 and Rule 144A. For so long as the Parent is subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the Parent covenants that it will file the reports required to be filed by it under the 1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC thereunder. If the Parent ceases to be so required to file such reports, the Parent covenants that it will upon the request of any Holder of Registrable Securities (a) make publicly available such information as is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver such information to a prospective purchaser as is necessary to permit sales pursuant to Rule 144A under the 1933 Act and it will take such further action as any Holder of Registrable Securities may reasonably request, and (c) take such further action that is reasonable in the circumstances, in each case, to the extent required from time to time to enable such Holder to sell its Registrable Securities without registration under the 1933 Act within the limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act, as such Rule may be amended from time to time, or (iii) any similar rules or regulations hereafter adopted by the SEC. Upon the request of any Holder of Registrable Securities, the Parent will deliver to such Holder a written statement as to whether it has complied with such requirements. The Company shall not be subject to the requirements of this Section 5.1, provided, that, it obtains no-action relief from the SEC regarding its reporting requirements under Section 13 or 15 of the 1934 Act and under the 1933 Act. 5.2 No Inconsistent Agreements. Neither the Company nor the Parent has entered into and neither the Company nor the Parent will after the date of this Agreement enter into any agreement which is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not and will not for the term of this Agreement in any way conflict with the rights granted to the holders of the Company's or the Parent's other issued and outstanding securities under any such agreements. 5.3 Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company and the Parent have obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or departure. 26 5.4 Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery (a) if to a Holder, at the most current address given by such Holder to the Company or the Parent, as the case may be, by means of a notice given in accordance with the provisions of this Section 5.4, which address initially is the address set forth in the Purchase Agreement with respect to the Initial Purchaser; (b) if to the Company, initially at the Company's address set forth in the Purchase Agreement, and thereafter at such other address of which notice is given in accordance with the provisions of this Section 5.4 and (c) if to the Parent, initially at the Parent's address set forth in Purchase Agreement, and thereafter at such other address of which notice is given in accordance with the provisions of this Section 5.4. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; two business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands, or other communications shall be concurrently delivered by the person giving the same to the Trustee under the Indenture, at the address specified in such Indenture. 5.5 Successor and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such person shall be entitled to receive the benefits hereof. 5.6 Third Party Beneficiaries. The Initial Purchaser (even if the Initial Purchaser is not a Holder of Registrable Securities) shall be a third party beneficiary to the agreements made hereunder between the Company and the Parent, on the one hand, and the Holders, on the other hand, and shall have the right to enforce such agreements directly to the extent they deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder. Each Holder of Registrable Securities shall be a 27 third party beneficiary to the agreements made hereunder between the Company and the Parent, on the one hand, and the Initial Purchaser, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights hereunder. 5.7. Specific Enforcement. Without limiting the remedies available to the Initial Purchaser and the Holders, the Company and the Parent acknowledge that any failure by the Company and the Parent to comply with its obligations under Sections 2.1 through 2.4 hereof may result in material irreparable injury to the Initial Purchaser or the Holders for which there is no adequate remedy at law, that it would not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchaser or any Holder may obtain such relief as may be required to specifically enforce the obligations of the Company and the Parent under Sections 2.1 through 2.4 hereof. 5.8. Restriction on Resales. Until the expiration of two years after the original issuance of the Securities and the related guarantees, the Company and the Parent will not, and will cause their "affiliates" (as such term is defined in Rule 144(a)(1) under the 1933 Act) not to, resell any Securities and related guarantees which are "restricted securities" (as such term is defined under Rule 144(a)(3) under the 1933 Act) that have been reacquired by any of them and shall immediately upon any purchase of any such Securities and related guarantees submit such Securities and related guarantees to the Trustee for cancellation. 5.9 Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 5.10 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 5.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF. 28 5.12 Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. 29 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. ALLIANT ENERGY RESOURCES, INC. By: /s/ Edward M. Gleason ---------------------------------- Name: Edward M. Gleason Title: Vice President-Treasurer and Corporate Secretary ALLIANT ENERGY CORPORATION, By: /s/ Edward M. Gleason ---------------------------------- Name: Edward M. Gleason Title: Vice President-Treasurer and Corporate Secretary Confirmed and accepted as of the date first above written: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ Mary E. Ryan ---------------------------------- Name: Mary E. Ryan Title: Vice President 30 Exhibit A Form of Opinion of Counsel Merrill Lynch, Pierce, Fenner & Smith Incorporated Merrill Lynch World Headquarters North Tower World Financial Center New York, New York 10281-1209 Ladies and Gentlemen: We have acted as counsel for Alliant Energy Resources, Inc., a Wisconsin corporation (the "Company"), and Alliant Energy Corporation, a Wisconsin corporation (the "Parent"), in connection with the sale by the Company to the Initial Purchaser (as defined below) of 5,166,052 (or 5,940,960 if the over-allotment option is exercised in full) Exchangeable Senior Notes Due 2030 of the Company pursuant to the Purchase Agreement dated January 26, 2000 (the "Purchase Agreement") among the Company, the Parent, as guarantor and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Initial Purchaser") and the filing by the Company and the Parent of an Exchange Offer Registration Statement (the "Registration Statement") in connection with an Exchange Offer to be effected pursuant to the Registration Rights Agreement (the "Registration Rights Agreement"), dated February 1, 2000 among the Company, the Parent and the Initial Purchaser. This opinion is furnished to you pursuant to Section 3(f)(B) of the Registration Rights Agreement. Unless otherwise defined herein, capitalized terms used in this opinion that are defined in the Registration Rights Agreement are used herein as so defined. We have examined such documents, records and matters of law as we have deemed necessary for purposes of this opinion. In rendering this opinion, as to all matters of fact relevant to this opinion, we have assumed the completeness and accuracy of, and are relying solely upon, the representations and warranties of the Company and the Parent set forth in the Purchase Agreement and the statements set forth in certificates of public officials and officers of the Company and the Parent, without making any independent investigation or inquiry with respect to the completeness or accuracy of such representations, warranties or statements, other than a review of the certificate of incorporation, by-laws and relevant minute books of the Company and the Parent. Based on and subject to the foregoing, we are of the opinion that: 1. The Exchange Offer Registration Statement and the Prospectus (other than the financial statements, notes or schedules thereto and other financial and statistical data and supplemental schedules included or incorporated by reference therein or omitted therefrom and the Form T-1, as to which such counsel need express no opinion), comply as to form in all material respects with the requirements of the 1933 Act and the applicable rules and regulations promulgated under the 1933 Act. We have participated in the preparation of the Registration Statement and the Prospectus and in the course thereof have had discussions with representatives of the Underwriters, officers and other representatives of the Company, the Parent and Arthur Andersen LLP, the independent certified public accountants of the Company and the Parent, during which the contents of the Registration Statement and the Prospectus were discussed. We have not, however, independently verified and are not passing upon, and do not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus. Based on our participation as described above, nothing has come to our attention that would lead us to believe that the Registration Statement (except for financial statements and schedules and other financial and statistical data included therein as to which we make no statement) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus or any amendment or supplement thereto (except for financial statements and schedules and other financial and statistical data included therein, as to which such counsel need make no statement), at the time the Prospectus was issued, at the time any such amended or supplemented Prospectus was issued or at the Closing Time, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. This opinion is being furnished to you solely for your benefit in connection with the transactions contemplated by the Registration Rights Agreement, and may not be used for any other purpose or relied upon by any person other than you. Except with our prior written consent, the opinions herein expressed are not to be used, circulated, quoted or otherwise referred to in connection with any transactions other than those contemplated by the Registration Rights Agreement by or to any other person. Very truly yours, 2 -----END PRIVACY-ENHANCED MESSAGE-----