Asset Sale Agreement

Execution Copy

ASSET SALE AGREEMENT

by and between

INTERSTATE POWER AND LIGHT COMPANY

and

ITC MIDWEST LLC

Dated as of January 18, 2007

TABLE OF CONTENTS

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ii

iii

EXHIBITS AND SCHEDULES

Exhibits

Schedules

iv

v

ASSET SALE AGREEMENT

     This Asset Sale Agreement (this " Agreement "), dated as of January 18, 2007, is made and entered into by and between Interstate Power and Light Company, an Iowa corporation (" Seller "), and ITC Midwest LLC, a Michigan limited liability company (" Buyer ").

     WHEREAS, Buyer desires to purchase, and Seller desires to sell, the Purchased Assets (as hereinafter defined) upon the terms and conditions set forth in this Agreement.

     NOW THEREFORE, in consideration of the Parties’ respective covenants, representations, warranties, and agreements hereinafter set forth and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE I
DEFINITIONS

     1.1 Definitions .

     (a) As used in this Agreement, the following capitalized terms have the meanings specified in this Section 1.1(a):

     " Actual Capital Expenditure Amount " means the amount of any capital expenditures made by Seller between January 1, 2006 and the Effective Time, that increase the Rate Base Assets or CWIP, as finally determined pursuant to Section 3.3.

     " Actual CWIP Amount " means the CWIP transferred to Buyer included in the Purchased Assets as of the Effective Time, as reflected on the Final Rate Base Statement delivered pursuant to Section 3.3(a).

     " Actual Rate Base Amount " means the Rate Base Amount attributable to the Rate Base Assets as of the Effective Time, as finally determined pursuant to Section 3.3.

     " Actual Rate Base Reclassification Amount " means the amount of any increase in Net Transmission Plant Investment between the date hereof and the Effective Time, to the extent attributable to a reclassification of assets as "Rate Base Assets".

     " Adjustment Amount " means an amount (which may be a negative number) equal to the Purchase Price minus the Base Price.

     " Affiliate " has the meaning set forth in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended.

     " Affiliated Group " means any affiliated group within the meaning of Code section 1504(a) or any similar group defined under a similar provision of Law.

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     " Ancillary Services " means those services which provide support to or stabilize the transmission system but are not an integral part of Buyer’s business operations following Closing, including without limitation, reactive supply from generation sources, voltage control by generation sources, regulation and frequency response, energy imbalance, generation imbalance, operating reserve, spinning reserve, supplemental reserve, scheduling of transmission service, scheduling entity status, responsible entity status, ownership of generation assets including plants, sales of energy, resource dispatch services, ownership of financial transmission rights, and any other similar service as otherwise provided under the MISO tariff.

     " Assignment and Assumption Agreement " means the Assignment and Assumption Agreement to be executed and delivered by Seller and Buyer at Closing, in the form of Exhibit 1.1-A .

     " Assignment of Easements " means the Assignment of Easements in form and substance reasonably acceptable to the Parties.

     " Bill of Sale " means the Bill of Sale to be executed and delivered by Seller at the Closing, in the form of Exhibit 1.1-B .

     " Business Day " means any day other than Saturday, Sunday, and any day which is a legal holiday or a day on which banking institutions in the States of Iowa or New York are authorized or obligated by Law to close.

     " Buyer’s Knowledge ," or words to similar effect, means the actual knowledge, after reasonable inquiry, of the persons set forth in Schedule 1.1-A .

     " Buyer Material Adverse Effect " means an effect, event, development or change which individually or in the aggregate with all effects, events, developments or changes is or is likely to become materially adverse to the ability of Buyer to execute and perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

     " Buyer Required Regulatory Approvals " means the following filings or approvals: (i) the filings by Seller and Buyer required by the HSR Act and the expiration or early termination of all waiting periods under the HSR Act, (ii) the State Transaction Approvals, (iii) the FERC Transaction Approvals, (iv) the FERC 204 Approval, and (v) the FERC 205 Approval.

     " Buyer’s Representatives " means Buyer’s accountants, employees, counsel, environmental consultants, financial advisors, and other representatives.

     " Calculated Accumulated Depreciation " means the product of the current effective depreciation rate multiplied by the number of years and months (to be reflected as number of years plus the product of number of months divided by 12) the asset has been in service multiplied by the property, plant and equipment value reflected on the asset register at the time of transfer.

     " COBRA " means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

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     " Claims " means any administrative, regulatory, or judicial actions or causes of action, suits, petitions, proceedings (including arbitration proceedings), investigations, hearings, demands, demand letters, claims, complaints, allegations of liability or potential liability or notices of noncompliance or violation delivered by any Governmental Entity or other Person.

     " Code " means the Internal Revenue Code of 1986, as amended.

     " Confidentiality Agreement " means the Mutual Confidentiality Agreement, dated September 14, 2006, between Seller and Parent.

     " Contract " means any agreement, lease, license, note, evidence of indebtedness, mortgage, security agreement, understanding, instrument or other arrangement, in each case, whether written or oral.

     " CWIP " means the construction work in progress balance, solely related to the Purchased Assets, that would be included in account 107 in accordance with FERC 18 CFR.

     " Deed " means the Deed or deeds to be executed and delivered by Seller at the Closing substantially in the form set forth on Exhibit 1.1-C attached hereto.

     " Distribution Interconnect Agreement " means the Distribution Interconnect Agreement to be executed and delivered by Buyer and Seller at the Closing, in the form of Exhibit 1.1-D .

     " Documents " means all files, documents, instruments, papers, books, reports, tapes, microfilms, photographs, letters, ledgers, journals, title policies, customer lists and information, regulatory filings, operating data and plans (to the extent transferable from a practical perspective and without any obligation to convert), technical documentation (such as design specifications, functional requirements, and operating instructions), user documentation (such as installation guides, user manuals, and training materials), marketing documentation (such as sales brochures, flyers, and pamphlets), and other similar materials to the extent related to the Purchased Assets or the Assumed Obligations and any applicable personnel records of Transferred Employees, in each case whether or not in electronic form; provided, that "Documents" does not include: (i) information which, if provided to Buyer, would violate any applicable Law or Order, (ii) letters of intent, expressions of interest, or other proposals received from others in connection with the transactions contemplated by this Agreement or otherwise and information and analyses relating to such communications, (iii) any information, the disclosure of which would jeopardize any legal privilege available to Seller or any of its Affiliates relating to such information or would cause Seller or any of its Affiliates to breach a confidentiality obligation by which it is bound (provided, that in the case of any items that would be Documents but for a confidentiality obligation, Seller will use commercially reasonable efforts to obtain a waiver of such obligation and to the extent such waiver is not obtained, take other commercially reasonable efforts to otherwise provide Buyer with access to such information or a summary thereof), (iv) any valuations or projections of or related to the Purchased Assets or the Assumed Obligations (other than customary studies, reports, and similar items prepared by or on behalf of Seller for the purposes of completing, performing, or executing unperformed service obligations, Easement relocation obligations, and engineering and construction required to complete scheduled construction, construction work in progress, and

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other capital expenditure projects, in each case to the extent related to the Purchased Assets), (v) any information management systems of Seller, (vi) except as specifically set forth above including applicable personnel records, any files, books, records, rights, data, or other information relating to any employees of Seller or its Affiliates, or (vii) any rights, information, or other matters to the extent solely used for or on the Internet, including any web pages or other similar items.

     " Easement " means any easement, rights-of-way, leases for rights-of-way easement in gross, sublease and any other interest in real property other than real property owned in fee simple.

     " Employees " means all employees of the Seller or its Affiliates who are listed on Schedule 5.18(e) and, for any such individuals who terminate employment prior to the Closing Date, their replacements. Upon mutual agreement of Buyer and Seller, additional individuals shall be added to Schedule 5.18(e) reasonably in advance of the Closing Date so that Buyer has the ability to hire up to 50 Employees as Transferred Employees.

     " Encumbrances " means any mortgages, pledges, liens, claims, charges, security interests, conditional and installment sale agreements, Preferential Purchase Rights, activity and use limitations, Easements, covenants, encumbrances, obligations, limitations, title defects, deed restrictions, and any other restrictions of any kind, including restrictions on use, transfer, receipt of income, or exercise of any other attribute of ownership.

     " Environment " means all or any of the following media: soil, land surface and subsurface strata, surface waters (including navigable waters, streams, ponds, drainage basins, and wetlands), groundwater, drinking water supply, sediments, ambient air (including the air within buildings and the air within other natural or man-made structures above or below ground), plant and animal life, and any other natural resource.

     " Environmental Claims " means any and all Claims (including any such Claims involving toxic torts or similar liabilities in tort, whether based on negligence or other fault, strict or absolute liability, or any other basis) relating in any way to any Environmental Laws or Environmental Permits, or arising from the presence, Release, or threatened Release (or alleged presence, Release, or threatened Release) into the Environment of any Hazardous Materials, including any and all Claims by any Governmental Entity or by any Person for enforcement, cleanup, remediation, removal, response, remedial or other actions, or response costs, damages, contribution, indemnification, cost recovery, compensation, fines or penalties or injunctive relief arising out of or relating to any Environmental Law or Hazardous Materials or for any property damage, natural resource damage or personal or bodily injury (including death) or threat of injury to health, safety, natural resources, or the Environment.

     " Environmental Laws " means all Laws (including common law) relating to pollution or the protection of human health, safety, the Environment, or damage to natural resources, including Laws relating to Releases and threatened Releases or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous Materials. Environmental Laws include the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq.; the Federal Insecticide,

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Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Oil Pollution Act, 33 U.S.C. § 2701 et seq.; the Endangered Species Act, 16 U.S.C. § 1531 et seq.; the National Environmental Policy Act, 42 U.S.C. § 4321, et seq.; the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.; Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq.; Atomic Energy Act, 42 U.S.C. § 2014 et seq.; Nuclear Waste Policy Act, 42 U.S.C. § 10101 et seq.; and their state and local counterparts or equivalents, all as amended from time to time, and regulations issued pursuant to any of those statutes.

     " Environmental Permits " means all permits, certifications, licenses, franchises, approvals, consents, notifications, exemptions, waivers or other authorizations of any Governmental Entity under or with respect to applicable Environmental Laws.

     " Estimated Capital Expenditure Amount " means Seller’s good faith estimate of the amount of capital expenditures made by Seller between January 1, 2006 and the Effective Time, to increase the Rate Base Assets or CWIP, reflected on the Estimated Rate Base Statement delivered pursuant to Section 3.2(a).

     " Estimated CWIP Amount " means Seller’s good faith estimate of CWIP included in the Purchased Assets as of the Effective Time, as reflected on the Estimated Rate Base Statement delivered pursuant to Section 3.2(a).

     " Estimated Rate Base Amount " means Seller’s good faith estimate of the Rate Base Amount attributable to the Rate Base Assets as of the Effective Time, as reflected on the Estimated Rate Base Statement delivered pursuant to Section 3.2(a).

     " Estimated Rate Base Reclassification Amount " means Seller’s good faith estimate of any increase in Net Transmission Plant Investment between the date hereof and the Effective Time, to the extent attributable to a reclassification of assets as "Rate Base Assets", as reflected on the Estimated Rate Base Statement delivered pursuant to Section 3.2(a).

     " FERC " means the Federal Energy Regulatory Commission.

     " FERC 204 Approval " means an approval under Section 204 of the Federal Power Act approving, to the extent necessary, the issuance of securities by Buyer to consummate the Financing.

     " FERC 205 Approval " means approvals under Section 205 of the Federal Power Act requested in the application of Buyer pursuant to Section 7.6(b), including rates which are not suspended or subject to hearing or refund.

     " FERC 18 CFR " means accounting rules and guidelines of the FERC contained in Title 18 of the Code of Federal Regulations.

     " FERC Regulatory Order " means an Order issued by the FERC that affects or governs the rates, services, or other utility operations of the Purchased Assets.

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     " FERC Transaction Approvals " means (i) an approval by FERC under Section 203 of the Federal Power Act approving the transactions contemplated by this Agreement including, without limitation, the Parent Equity Issuance Approval and (ii) an approval of the Distribution Interconnect Agreement, the Generator Interconnect Agreement, and any other agreements, where required, relating to the relationship between Seller and Buyer, including any agreements for the provision of ancillary services and wholesale distribution services by Seller.

     " Final Regulatory Order " means, with respect to any Required Regulatory Approval, an Order granting such Required Regulatory Approval that has not been revised, stayed, enjoined, set aside, annulled, or suspended, and with respect to which (i) any required waiting period has expired, and (ii) all conditions to effectiveness prescribed therein or otherwise by Law or Order have been satisfied; provided that, such Order shall be final irrespective of whether any rehearing or appeal thereof is pending.

     " Financial Information " means (i) the Audited Financial Statements; (ii) unaudited interim financial statements for the business that comprises the Purchased Assets including a balance sheet as of March 31, 2007 and an income statement and statement of cash flow for the three months ended March 31, 2007 and 2006; (iii) unaudited interim financial statements for the business that comprises the Purchased Assets including a balance sheet as of June 30, 2007, an income statement for the three and six months ended June 30, 2007 and 2006 and a statement of cash flow for the six months ended June 30, 2007 and 2006; and (iv) unaudited interim financial statements for the business that comprises the Purchased Assets including a balance sheet as of September 30, 2007, an income statement for the three and nine months ended September 30, 2007 and 2006 and a statement of cash flow for the nine months ended September 30, 2007 and 2006, in each case that comply in all material respects with Regulation S-X, and in each of clauses (ii) through (iv), reviewed by Deloitte and Touche LLP or any other independent auditor reasonably acceptable to Buyer in accordance with SAS 71 or SAS 100, as applicable.

     " Financing " means any debt or equity financing arranged by Buyer or Parent to fund the transactions contemplated hereby.

     " GAAP " means generally accepted accounting principles in the United States of America.

     " Generator Interconnect Agreement " means the Generator Interconnect Agreement to be executed and delivered by MISO, Buyer and Seller substantially in the form of Exhibit 1.1-E .

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

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     " Governing Documents " of a Party means the articles or certificate of incorporation and bylaws, or comparable governing documents, of such Party.

     " Governmental Entity " means the United States of America and any other national, supranational, federal, state, provincial, local, or foreign governmental or regulatory authority, department, agency, commission, body, court, or other governmental entity or instrumentality.

     " Hazardous Materials " means (i) any chemicals, materials, substances, or wastes which are now or hereafter defined as or included in the definition of "hazardous substance," "hazardous material," "hazardous waste," "solid waste," "toxic substance," "extremely hazardous substance," "pollutant," "contaminant," or words of similar import under any applicable Environmental Laws; (ii) any petroleum, petroleum products (including crude oil or any fraction thereof), natural gas, natural gas liquids, liquefied natural gas or synthetic gas useable for fuel (or mixtures of natural gas and such synthetic gas), or oil and gas exploration or production waste, polychlorinated biphenyls, asbestos-containing materials, mercury, urea formaldehyde insulation, radioactivity and lead-based paints; and (iii) any other chemical, material, substances, waste, or mixture thereof which is prohibited, limited, or regulated pursuant to, or that could reasonably be expected to give rise to liability under, Environmental Laws.

     " HSR Act " means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

     " ICC " means the Illinois Commerce Commission.

     " Income Tax " means any Tax based upon, measured by, or calculated with respect to (i) net income, profits, or receipts (including capital gains Taxes and minimum Taxes) or (ii) multiple bases (including corporate franchise and business license Taxes) if one or more of the bases on which such Tax may be based, measured by, or calculated with respect to is described in clause (i), in each case together with any interest, penalties, or additions to such Tax.

     " Independent Accounting Firm " means an independent accounting firm of national reputation mutually appointed by Seller and Buyer.

     " IUB " means the Iowa Utilities Board.

     " Law " means laws, statutes, regulations, rules, ordinances, codes, and similar acts or promulgations or other legally enforceable requirements of any Governmental Entity.

     " Loss " or " Losses " means losses, liabilities, taxes, damages, obligations, payments, costs, and expenses (including the costs and expenses of any and all actions, suits, proceedings, assessments, judgments, settlements, and compromises relating thereto and reasonable attorneys’ fees and reasonable disbursements in connection therewith).

     " Marketing Period " means a period of time of thirty (30) consecutive days, commencing upon the third Business Day after the date on which the regulatory approvals set forth in Sections 9.2 and 9.3 have been obtained; provided , however , that (i) if such thirty day period has not been completed by August 18, 2007, then such thirty-day period shall commence no earlier than

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September 3, 2007, (ii) that portion of the Financial Information that would be required by the rules and regulations of the SEC to be disclosed in connection with a public offering of Buyer’s securities registered under the Securities Act of 1933, as amended, is available to Buyer throughout such thirty day period and (iii) if such thirty day period has not commenced prior to November 30, 2007, and that portion of the Financial Information that would be required by the rules and regulations of the SEC to be disclosed in connection with a public offering of Buyer’s securities registered under the Securities Act of 1933, as amended, is available to Buyer throughout the period from November 30, 2007 through the Closing Date, such thirty day period shall be deemed to be the period commencing on November 30, 2007 and expiring on December 27, 2007.

     " Material Adverse Effect " means an effect, event, development or change, which individually or in the aggregate with all effects, events, developments or changes (x) is or is reasonably likely to become materially adverse to the business, assets, properties, results of operations or financial condition of the Purchased Assets (taken as a whole), or (y) prevents or has a material and adverse effect on the ability of Seller to execute and perform its obligations under this Agreement or to consummate the transactions contemplated hereby, other than effects, events, developments or changes to the extent (i) resulting from an Excluded Matter, or (ii) fully cured by Seller (including by payment of money or credit to the Purchase Price) before the Closing Date. " Excluded Matter " means any one or more of the following: (A) changes in any Law or the issuance of any Order (other than a Law adopted or an Order issued specifically with respect to the transactions contemplated by this Agreement), except for changes in Law that affect the electricity transmission rates or terms and conditions of service applicable to the Purchased Assets, (B) any change in GAAP, (C) compliance with the terms of this Agreement; provided, however, that with respect to references to Material Adverse Effect in Section 5.3, the exception set forth in this clause (C) shall not be applicable, (D) any change in international, national, regional, or local economic, or political conditions, including prevailing interest rates, (E) any proposal for a change in MISO policy or rules, other than a written proposal presented to the MISO board of directors, a MISO committee or a Governmental Entity, (F) any matter disclosed in this Agreement or any Schedule (excluding any updates or supplements after the date hereof) or Exhibits hereto, or (G) any change in the market price of commodities or publicly traded securities; provided that, the exceptions set forth in clauses (B), (D), (E) and (G) shall not be applicable to the extent such changes affect the Purchased Assets in a disproportionate manner compared with other Persons or assets in the electricity transmission industry; provided, further, that for purposes of this definition, a Material Adverse Effect shall be deemed to have occurred in the event that the ICC, IUB or MPUC takes any action indicating that upon purchase and operation of the Purchased Assets, Buyer shall be subject to regulation as a public or electric utility by such commission (other than to the extent any such regulation relates to customary electric transmission facility franchise matters within the jurisdiction of such commission).

     " Material Easements " means any and all Transmission Easements of Seller and Shared Easements that underlie the Transmission Substation Facilities.

     " MISO " means the Midwest Independent Transmission System Operator, Inc., or any successor thereto.

     " MPUC " means the Minnesota Public Utilities Commission.

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     " Net Book Value " means the property, plant and equipment value reflected on the applicable asset register based on the most recently reviewed or audited financial statements of the applicable Party, reduced by the lesser of (a) Post-Closing Calculated Accumulated Depreciation or (b) accumulated depreciation equal to the property, plant and equipment value reflected on the applicable asset register based on the most recently reviewed or audited financial statements of the applicable Party.

     " Net Non-Rate Base Asset Value " means the dollar amount by which cash and other mutually agreed current assets of Seller included in Purchased Assets (other than Rate Base Assets) exceeds the Estimated Assumed Balance Sheet Obligations or the Actual Assumed Balance Sheet Obligations (in each case, other than those that are fully reflected as reductions to Net Transmission Plant Investment), as applicable, as reflected as of the Effective Time in the Estimated Balance Sheet or Final Balance Sheet, as applicable (which amount may be a negative number).

     " Net Premium Multiple " means 0.7709.

     " Net Property, Plant and Equipment " means property, plant and equipment minus accumulated depreciation minus accrued removal costs.

     " Net Transmission Plant Investment " means: (A) plant assets included in FERC accounts 101 and 106 further broken down in FERC sub-accounts 350 through 359 after adjustment to exclude (i) any plant assets depreciated or amortized in FERC account 404 and 405, (ii) asset retirement costs for transmission plant in FERC plant account 359.1, (iii) transmission plant excluded from ISO rates and transmission plant included in OATT Ancillary Services (Note M and Note N, respectively, on the Third Revised Sheet No. 1322 of the Midwest ISO Transmission and Energy Markets Tariff) and (iv) capitalized leases, plus transmission land held for future use in FERC account 105, plus transmission related materials and supplies and stores expense in FERC accounts 154 and 163 after adjustment to exclude obsolete materials & supplies (as determined by Buyer in accordance with GAAP) less (B) Transmission Plant Investment Accumulated Depreciation.

     " Off-Site Location " means any location other than the Purchased Transmission Assets.

     " Order " means any order, judgment, writ, injunction, decree, directive, or award of a court, administrative judge, or other Governmental Entity acting in an adjudicative or regulatory capacity, or of an arbitrator with applicable jurisdiction over the subject matter.

     " Parent " means ITC Holdings Corp., a Michigan corporation.

     " Parent Equity Issuance Approval " means approval by FERC of an application by Parent to issue shares of Parent’s common stock, which application may specify an amount of such shares and a duration for such issuance as Parent in its absolute discretion may specify; provided that, in any event such application shall also specify in the alternative to such amount and duration, the amount of such shares contemplated by Buyer as part of the Financing.

     " Parent Guaranty " means the Guaranty in the form of Exhibit 1.1-F hereto, which Guaranty shall have been executed by Parent as of the date of this Agreement.

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     " Partial Assignment of Shared Easements " means the Assignment of Easements in form and substance reasonably acceptable to the Parties.

     " Party " means either Buyer or Seller, as indicated by the context, and " Parties " means Buyer and Seller.

     " Permits " means all permits, certifications, licenses (including railroad crossing permits), franchises, approvals, consents, waivers, registrations or other authorizations of Governmental Entities issued under or with respect to applicable Laws or Orders and used or held by Seller for the operation of the Purchased Assets, other than Environmental Permits.

     " Permitted Encumbrances " means (i) those Encumbrances set forth in Schedule 1.1-B ; (ii) Encumbrances securing or created by or in respect of any of the Assumed Obligations; (iii) statutory liens for current Taxes or assessments not yet due or payable; (iv) mechanics’, carriers’, workers’, repairers’, landlords’, and other similar liens arising or incurred in the ordinary course of business relating to obligations as to which there is no default on the part of Seller, or pledges, deposits, or other liens securing the performance of statutory obligations (including workers’ compensation, unemployment insurance, or other social security legislation); (v) any Encumbrances set forth in any state, local, or municipal franchise or governing ordinance under which any portion of the Purchased Assets are being used or conducted; or (vi) Encumbrances, including, without limitation, zoning, entitlement, restriction, and other land use regulations by Governmental Entities, which, together with all other Encumbrances, do not materially detract from the value of or materially interfere with the present use of the Purchased Assets or the conduct of the business thereon as it is currently being used and conducted.

     " Person " means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, or Governmental Entity.

     " Post-Closing Adjustment Date " means December 31, 2007 or such other date as the parties mutually agree.

     " Post-Closing Calculated Accumulated Depreciation " means the product of the current effective depreciation rate multiplied by the number of years and months (calculated as the number of years plus the product of the number of additional months divided by 12) the asset has been in service multiplied by the property, plant and equipment value reflected on the applicable asset register based on the most recently reviewed or audited financial statements of the applicable Party.

     " Post-Closing Rate Base Value " means the Rate Base Amount attributable to the assets of Buyer included in Net Transmission Plant Investment on the Post-Closing Adjustment Date.

     " Preferential Purchase Rights " means rights of any Person (other than rights of condemnation, eminent domain, or other similar rights of any Person) to purchase or acquire any interest in any of the Purchased Assets, including any rights that are conditional upon a sale of any Purchased Assets or any other event or condition.

     " Premium Multiple " means 1.7709.

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     " Prime Rate " means, for any day, the per annum rate of interest quoted as the " Bank Prime Rate " rate for the most recent weekday for which such rate is quoted in the statistical release designated as H.15(519), or any successor publication, published from time to time by the Board of Governors of the Federal Reserve System.

     " Projected CWIP Amount " means $19,076,000.

     " Projected Rate Base Amount " means $423,513,994.

     " Purchased Agreements " means any Contract to which (i) on the date hereof, Seller is a party, or by which it is bound, that either (A) is listed or described on Schedule 5.8(a) or Schedule 5.10(a) and primarily relates to Transmission, or (B) relates primarily to the Purchased Assets or (ii) on the Closing Date, Seller is a party, or by which it is bound, that would have been deemed a Purchased Agreement if in existence on the date hereof.

     " Purchased Transmission Assets " means each individual Transmission Land Right, Transmission Line Facility and Transmission Substation Facility.

     " Rate Base Amount " means the dollar valuation of Net Transmission Plant Investment as calculated in accordance with FERC 18 CFR.

     " Rate Base Assets " means any Purchased Assets transferred to Buyer on the Closing Date that are included in the definition of Net Transmission Plant Investment.

     " Rate Base Reclassification Increase " means any increase in Net Transmission Plant Investment between the date hereof and the Effective Time to the extent attributable to a reclassification of Purchased Assets as Rate Base Assets.

     " Release " means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing of Hazardous Materials into the Environment.

     " Required Regulatory Approvals " means the Seller Required Regulatory Approvals and the Buyer Required Regulatory Approvals.

     " SEC " means the Securities and Exchange Commission.

     " Seller Disclosure Schedule " means, collectively, all Schedules other than Schedule 1.1-A , Schedule 6.3 , Schedule 6.5 , Schedule 6.7 .

     " Seller Marks " means the rights of Seller and its Affiliates to the names "Interstate Power and Light Company," "Iowa Southern Utilities Company," "Iowa Electric Light & Power," and "IES Utilities Inc.," Interstate Power Company," "IP&L," "Alliant Energy," "Alliant," "Interstate Energy Corporation," or any trade names, trademarks, service marks, corporate names or logos, or any derivative or combination thereof, that are confusingly similar thereto.

     " Seller Post-Closing Capital Contributions " means funds paid by Buyer at Seller’s direction to fund capital projects set forth on Schedule 7.1(g) between the Closing Date and Post-Closing Adjustment Date pursuant to Section 1(f) of the Transition Services Agreement, in an

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amount not to exceed the excess of the amounts set forth on Schedule 7.1(g) less the Actual Capital Expenditure Amount.

     " Seller Post-Closing Capital Increase " means an amount equal to the excess of the Post-Closing Rate Base Value over the Actual Rate Base Amount; solely to the extent that such excess is attributable to Seller Post-Closing Capital Contributions made between the Closing Date and the Post-Closing Adjustment Date (which Seller Post-Closing Capital Contributions may be applied to convert items included in the Actual CWIP Amount in respect of projects intended to be completed in 2007 to assets included in the definition of Net Transmission Plant Investment).

     " Seller’s Knowledge ," or words to similar effect, means the actual knowledge of the individuals listed in Schedule 1.1-C after reasonable inquiry by them of those employees of Seller whom they believe in good faith to be the persons generally responsible for the subject matters to which knowledge is pertinent.

     " Seller’s Representatives " means Seller’s accountants, employees, counsel, environmental consultants, financial advisors, and other representatives.

     " Seller Required Regulatory Approvals " means the following filings or approvals: (i) the filings by Seller and Buyer required by the HSR Act and the expiration or earlier termination of all waiting periods under the HSR Act, (ii) the State Transaction Approvals, and (iii) the FERC Transaction Approvals.

     " State Regulatory Order " means an Order issued by the ICC, IUB or MPUC that affects or governs the rates, services, or other utility operations of the Purchased Assets.

     " State Transaction Approvals " means the order(s) or action(s) of (i) the ICC, (ii) the IUB, and (iii) the MPUC approving or consenting to the transfer of the Purchased Assets by Seller to Buyer in the relevant jurisdiction pursuant to this Agreement; or the order(s) or action(s) of the Missouri Public Service Commission approving or consenting to the transfer of certificates related to the Purchased Assets by Seller to Buyer.

     " Subsidiary ," when used in reference to a Person, means any Person (i) of which outstanding securities or other equity interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions of such Person are owned directly or indirectly by such first Person, (ii) of which such Person or any subsidiary of such first Person is a general partner or (iii) such first Person directly or indirectly controls.

     " Substation Site Easement " means the Substation Site Easement in the form and substance reasonably acceptable to the Parties.

     " Tax " and " Taxes " means all taxes, charges, customs, duties, fees, levies, penalties, or other assessments imposed by any foreign or United States federal, state, or local taxing authority, including profits, estimated gross receipts, income, excise, property, replacement tax, sales, transfer, franchise, license, payroll, withholding, social security, or any other taxes

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(including any escheat or unclaimed property obligations), including any interest, penalties, or additions attributable thereto.

     " Tax Affiliate " of a Person means a member of that Person’s Affiliated Group and any other Subsidiary of that Person which is a partnership or is disregarded as an entity separate from that Person for Tax purposes.

     " Tax Return " means any return, report, information return, or other document (including any related or supporting information or schedule) required to be supplied to any Governmental Entity with respect to Taxes, including any amendments thereto.

     " Transfer Taxes " means any real property transfer, sales, use, value added, stamp, documentary, recording, registration, conveyance, stock transfer, intangible property transfer, personal property transfer, gross receipts, registration, duty, securities transactions or similar fees or Taxes or governmental charges (together with any interest or penalty, addition to Tax or additional amount imposed) as levied by any Governmental Entity in connection with the transactions contemplated by this Agreement, including, without limitation, any payments made in lieu of any such Taxes or governmental charges which become payable in connection with the transactions contemplated by this Agreement.

     " Transition Services Agreement " means the Transition Services Agreement to be executed and delivered by Seller and Buyer at Closing, in the form of Exhibit 1.1-G .

     " Transmission " means (i) the transmission of electricity at nominal voltages that are greater than or equal to 34.5 kV or (ii) the transmission of electricity regardless of the nominal voltage at which such facility is designed to operate or does operate, if the facilities are subject to the jurisdiction of FERC as transmission.

     " Transmission Easement " means any Easement, in which Seller has any right, title or interest and upon which a Transmission Line Facility or Transmission Substation Facility is located or otherwise used or held for use by Seller primarily in Transmission, including those set forth on Schedule 1.1-D , except for the Shared Easements and Easements set forth on Schedule 1.1-E .

     " Transmission Fee Interest " means real property owned in fee simple by Seller upon which any Transmission Line Facility or Transmission Substation Facility is located or otherwise used or held for use by Seller primarily in Transmission, including those set forth on Schedule 1.1-F , except for the real property owned in fee simple set forth on Schedule 1.1-G .

     " Transmission Land Right " means each individual Transmission Fee Interest, Transmission Easement and Transmission Lease.

     " Transmission Lease " means each Contract pursuant to which Seller, as lessee, licensee or contract party leases, licenses or otherwise obtains a contract right to the possession and/or use of a parcel of real property upon which a Transmission Line Facility or Transmission Substation Facility is located or otherwise used or held for use by Seller primarily in Transmission, including those set forth on Schedule 1.1-H , except for those Contracts set forth on Schedule 1.1-I .

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     " Transmission Lines " means the lines identified on Schedule 1.1-J .

     " Transmission Line Facility " means any and all facilities and assets including, without limitation, any duct, wire, line, conduit, pole, tower, equipment or other structure used for Transmission, including any of the foregoing that are part of any Transmission Line or Transmission Substation Facility, are connected to any Transmission Line or Transmission Substation Facility, or are otherwise required to own, use or operate each Transmission Line or Transmission Substation Facility in the manner owned, used or operated by Seller prior to the Closing, but excluding (i) any Transmission Substation Facility and (ii) those assets set forth on Schedule 1.1-K .

     " Transmission Plant Investment Accumulated Depreciation " means accumulated depreciation included in FERC account 108 that reflects the accumulated depreciation on transmission assets recorded in FERC sub-accounts 350 through 359 before reduction for amounts related to asset retirement obligations and after adjustment to exclude the lesser of (a) Calculated Accumulated Depreciation for the following plant assets or (b) accumulated depreciation equal to the property, plant and equipment value at the time of transfer for the following plant assets (i) transmission plant excluded from ISO rates and transmission plant included in OATT Ancillary Services (Note M and Note N, respectively, on the Third Revised Sheet No. 1322 of the Midwest ISO Transmission and Energy Markets Tariff) and (ii) capitalized leases.

     " Transmission Substation Facility " means any and all facilities, assets, equipment, including, without limitation, towers, poles, transformers, circuit breakers, meters, and wires located at any substation that are used for Transmission including those assets set forth in Schedule 1.1-L , but excluding those assets set forth on Schedule 1.1-M .

     (b) In addition, each of the following terms has the meaning specified in the Exhibit or Section set forth opposite such term:

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     1.2 Other Definitional and Interpretive Matters . Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:

     (a)  Calculation of Time Period . When calculating the period of time before which, within which, or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period will be excluded. If the last day of such period is a non-Business Day, the period in question will end on the next succeeding Business Day.

     (b)  Dollars . Any reference in this Agreement to "dollars" or "$" means U.S. dollars.

     (c)  Exhibits and Schedules . Unless otherwise expressly indicated, any reference in this Agreement to an "Exhibit" or a "Schedule" refers to an Exhibit or Schedule to this Agreement. The Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof as if set forth in full herein and are an integral part of this Agreement. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein are defined as set forth in this Agreement.

     (d)  Gender and Number . Any reference in this Agreement to gender includes all genders, and the meaning of defined terms applies to both the singular and the plural of those terms.

     (e)  Headings . The provision of a Table of Contents, the division of this Agreement into Articles, Sections, and other subdivisions, and the insertion of headings are for convenience of reference only and do not affect, and will not be utilized in construing or interpreting, this Agreement. All references in this Agreement to any "Section" are to the corresponding Section of this Agreement unless otherwise specified.

     (f) " Herein ". The words such as " herein ," " hereinafter ," " hereof ," and " hereunder " refer to this Agreement (including the Schedules and Exhibits to this Agreement) as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

     (g) " Including ". The word " including " or any variation thereof means " including, without limitation " and does not limit any general statement that it follows to the specific or similar items or matters immediately following it.

     (h) " To the extent ". The words " to the extent " when used in reference to a liability or other matter, means that the liability or other matter referred to is included in part or excluded in part, with the portion included or excluded determined based on the portion of such liability or other matter exclusively related to the subject. For example, if 40 percent of a liability is attributable to the Purchased Assets, then a statement that Buyer will assume the liability "to the

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extent related to the operation of the Purchased Assets" means that Buyer will assume 40 percent of the liability. As an additional example, if a performance obligation attributable to the Purchased Assets is by its terms to be performed prior to and following the Effective Time, a statement that Buyer will assume the obligation "to the extent such obligation relates to the period from and after the Effective Time" means that Buyer will assume all liability for the performance from and after the Effective Time, and that Seller would remain liable for any failure to perform such obligations prior to the Effective Time.

     1.3 Joint Negotiation and Preparation of Agreement . The Parties have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as jointly drafted by the Parties hereto and no presumption or burden of proof favoring or disfavoring any Party will exist or arise by virtue of the authorship of any provision of this Agreement.

ARTICLE II
PURCHASE AND SALE

     2.1 The Sale . Upon the terms and subject to the satisfaction or waiver of the conditions contained in this Agreement, at the Closing, Seller will sell, assign, convey, transfer, and deliver to Buyer, free and clear of all Encumbrances (except for Permitted Encumbrances), and Buyer will purchase and acquire from Seller, all of Seller’s right, title, and interest in, to, and under the real and personal property, tangible or intangible, described below, except to the extent that such assets are Excluded Assets (collectively, the " Purchased Assets "):

     (a) the Purchased Transmission Assets;

     (b) the inventory of Seller identified in Schedule 2.1(b );

     (c) the Documents;

     (d) the machinery, equipment, vehicles, furniture, and other tangible personal property listed on Schedule 2.1(d );

     (e) to the extent commercially practicable, only that portion of each Purchased Agreement that relates to Transmission, and otherwise, the Purchased Agreements;

     (f) the Permits listed on Schedule 5.12(a) , and all other Permits primarily used by Seller in the ownership and operation of the Purchased Assets (the " Transferable Permits ");

     (g) the Environmental Permits listed on Schedule 5.9(a)-2 and all other Environmental Permits primarily used by Seller in the ownership and operation of the Purchased Assets (the " Transferable Environmental Permits ");

     (h) Claims and defenses of Seller to the extent such Claims or defenses arise primarily with respect to the Assumed Obligations or the Purchased Assets, provided that any such Claims and defenses will be assigned to Buyer without warranty or recourse, other than pursuant to the representations and warranties contained in this Agreement;

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     (i) any assets acquired by Seller pursuant to Section 7.4(d) for inclusion in the Purchased Assets;

     (j) the software set forth on Schedule 2.1(j) ;

     (k) all warranties pertaining to the Purchased Assets and set forth in Schedule 2.1(k) ;

     (l) the Shared Easement Rights; and

     (m) all assets to be transferred by, or on behalf of, Seller and its Affiliates to, or on behalf of, Buyer or its Affiliates in accordance with Article VIII.

     2.2 Excluded Assets . The Purchased Assets do not include any property or assets of Seller not described in Section 2.1 and, notwithstanding any provision to the contrary in Section 2.1 or elsewhere in this Agreement, the Purchased Assets do not include, without limitation, the following property or assets of Seller (all assets excluded pursuant to this Section 2.2, the " Excluded Assets "):

     (a) subject to Section 7.10 of this Agreement, the Seller Marks;

     (b) all cash, cash equivalents, bank deposits, accounts receivable, and any income, sales, payroll or other tax receivables;

     (c) subject to Section 3.5 hereof, any refund or credit (i) related to Taxes paid by or on behalf of Seller, whether such refund is received as a payment or as a credit against future Taxes payable, or (ii) relating to a period before the Closing Date;

     (d) any Purchased Assets that have been disposed of in compliance with this Agreement prior to Closing;

     (e) except as expressly provided in Section 2.1(h) and Section 2.1(k), all of the Claims or causes of action of Seller against any Person;

     (f) all insurance policies, and rights thereunder, including any such policies and rights in respect of the Purchased Assets;

     (g) the rights of Seller arising under or in connection with this Agreement, any certificate or other document delivered in connection herewith, and any of the transactions contemplated hereby and thereby;

     (h) all agreements and Contracts not included in the Purchased Agreements;

     (i) subject to Section 7.10, all software, software licenses, information systems, management systems, and any items set forth in or generally described in subparts (i) through (vii) of the definition of " Documents " in Section 1.1(a), and the software set forth on Schedule 2.2(i) ;

     (j) the communication towers, equipment and assets set forth on Schedule 2.2(j) ; and

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     (k) the assets and other rights set forth on Schedule 2.2(k ).

     2.3 Assumed Obligations . Upon the terms and subject to the satisfaction or waiver of the conditions contained in this Agreement, at the Closing, Buyer will deliver to Seller the Assignment and Assumption Agreement pursuant to which Buyer will assume and agree to discharge all of the debts, liabilities, obligations, duties, and responsibilities of Seller of any kind and description, whether absolute or contingent, monetary or non-monetary, direct or indirect, known or unknown, or matured or unmatured, or of any other nature, to the extent primarily related to the Purchased Assets, other than Excluded Liabilities (the " Assumed Obligations "), in accordance with the respective terms and subject to the respective conditions thereof, including, without limitation, the following liabilities and obligations (in every case other than Excluded Liabilities); provided that nothing contained herein shall limit or prevent the Buyer from asserting any defenses, claims or counterclaims that it may have against third Persons or under this Agreement in respect of the Assumed Obligations (including those related to the validity and enforceability thereof):

     (a) all liabilities and obligations of Seller existing, arising, or asserted, whether before, on, or after the Closing Date under the Purchased Agreements, the Transferable Permits, the Transferable Environmental Permits (except to the extent such liabilities or obligations are Assumed Pre-Closing Environmental Liabilities which are assumed pursuant to Section 2.3(d)), and any other agreements or contractual rights assigned to Buyer pursuant to the terms of this Agreement;

     (b) all liabilities and obligations relating to Transmission Easement relocation obligations and engineering and construction required to complete scheduled construction, construction work in progress, and other capital expenditure projects, in each case related primarily to the Purchased Assets and outstanding on or arising after the Effective Time;

     (c) all liabilities and obligations associated with the Purchased Assets in respect of Taxes for which Buyer is liable pursuant to Section 3.5 or Section 7.7;

     (d) (i) all liabilities, obligations, Environmental Claims, and demands arising under, in respect of, or relating to compliance or non-compliance by Seller, prior to the Closing Date, with past, present, and future Environmental Laws, existing, arising, or asserted with respect to the Purchased Assets (the " Assumed Pre-Closing Environmental Liabilities "), and (ii) all liabilities, obligations, Environmental Claims, and demands arising under, in respect of, or relating to compliance or noncompliance with present and future Environmental Laws with respect to the Purchased Assets, on or after the Closing Date, except to the extent any of the foregoing is an Assumed Pre-Closing Environmental Liability (the " Assumed Post-Closing Environmental Liability ," and together with the Assumed Pre-Closing Environmental Liabilities, the " Assumed Environmental Liabilities ");

     (e) all liabilities and obligations in respect of the Purchased Assets arising on or after the Closing Date (A) under (i) any FERC Regulatory Orders applicable to the Purchased Assets, (ii) the State Regulatory Orders applicable to the Purchased Assets set forth on Schedule 2.3(e) or (iii) State Regulatory Orders that relate to customary electric transmission facility siting or siting certification matters within the jurisdiction of the Governmental Entity issuing such State

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Regulatory Order or (B) imposed on Buyer or the Purchased Assets in connection with any Required Regulatory Approval;

     (f) the Actual Assumed Balance Sheet Obligations;

     (g) (i) all liabilities, obligations, arising under, in respect of, or relating to any Claim, existing, arising, or asserted with respect to the Purchased Assets, prior to the Closing Date (the " Assumed Pre-Closing Litigation "), and (ii) all liabilities, obligations, arising under, in respect of, or relating to any Claim, existing, arising, or asserted with respect the Purchased Assets, on or after the Closing Date, except to the extent any of the foregoing is Assumed Pre-Closing Litigation (the " Assumed Post-Closing Litigation " and together with the Assumed Pre-Closing Litigation, the " Assumed Litigation ");

     (h) the liabilities and obligations set forth on Schedule 2.3(h) ;

     (i) any liabilities or obligations (other than those set forth in clauses (a) through (h) of this Section 2.3), whether known or unknown, of the Seller relating primarily to the Purchased Assets, not reflected on the Final Balance Sheet or Final Rate Base Statement, which arose prior to the Closing Date (the " Pre-Closing Non-Balance Sheet Liabilities ").

     2.4 Excluded Liabilities . Notwithstanding anything to the contrary contained in this Agreement, Buyer does not assume and will not be obligated to pay, perform, or otherwise discharge any of the following liabilities or obligations of Seller or its Affiliates (collectively, the " Excluded Liabilities "):

     (a) any liabilities or obligations of Seller to the extent related to any Excluded Assets;

     (b) any liabilities or obligations in respect of Taxes of Seller or any Tax Affiliate of Seller, or any liability of Seller for unpaid Taxes of any Person under Treasury Regulation section 1.1502-6 (or similar provision of state, local, or foreign law) as a transferee or successor, by Contract or otherwise, including without limitation, any Taxes relating to, pertaining to or arising from the Purchased Assets for periods (or portions thereof) ending on or prior to the Closing Date, except for Taxes for which Buyer is liable pursuant to Section 3.5 or Section 7.7;

     (c) subject to Article VIII, any liabilities or obligations in respect of any employees of Seller or its Affiliates, including any obligations of Seller for benefits, bonuses, wages, employment Taxes, or severance pay and any liability or obligations arising under any Seller Plan;

     (d) any liabilities or obligations relating to the disposal, storage, transportation, discharge, Release, recycling, or the arrangement for such activities, by Seller, of Hazardous Materials at any Off-Site Location, provided that for purposes of this Section 2.4(d), "Off-Site Location" does not include any location to, at, or through which Hazardous Materials originally disposed of at, discharged from, emitted from or Released at the Purchased Assets have migrated, including, but not limited to, surface waters that have received waste water discharges from the Purchased Assets (it being understood that the foregoing proviso shall not in any way diminish Seller’s liabilities and obligations under this Agreement with respect to manufactured gas plant sites);

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     (e) liabilities or obligations relating to any properties (other than Purchased Assets) formerly owned or operated by the Seller or its Affiliates or predecessors prior to the Closing;

     (f) any liabilities or obligations reflected on the Final Balance Sheet, other than Actual Assumed Balance Sheet Obligations and liabilities that are fully reflected as reductions to Net Transmission Plant Investment;

     (g) liabilities or obligations relating to any manufactured gas plant sites at, affecting or related to the Purchased Assets;

     (h) except for the Assumed Environmental Liabilities, liabilities or obligations arising from any Claim (including any workers compensation Claim) related to the Purchased Assets of which Seller has received written notice from a third party prior to the Closing;

     (i) any liabilities or obligations of Seller arising under or in connection with this Agreement, any certificate or other document delivered in connection herewith, and any of the transactions contemplated hereby and thereby;

     (j) subject to Section 7.18, all pre-closing liabilities and obligations of Seller, of whatever nature, to the extent such liabilities are covered by a third party insurance policy maintained by Seller and then only to the extent actual proceeds are received by Seller from such third party insurer in respect of such liabilities or obligations;

     (k) all liabilities and obligations of Seller or in respect of the Purchased Assets existing on or after the Closing Date under any State Regulatory Orders issued prior to the Closing, other than the liabilities or obligations (i) under the State Regulatory Orders applicable to the Purchased Assets set forth on Schedule 2.3(e) , (ii) imposed on Buyer or the Purchased Assets in connection with any Required Regulatory Approval, or (iii) that relate to customary transmission facility siting or siting certification matters within the jurisdiction of the Governmental Entity issuing such State Regulatory Order;

     (l) the liabilities or obligations set forth on Schedule 2.4(l) ;

     (m) liabilities and obligations under Purchased Agreements for the provision of any Ancillary Services or that would otherwise cause Buyer to be considered a customer of electricity transmission service or electricity market participant under FERC rules or regulations;

     (n) liabilities and obligations under Purchased Agreements to the extent not primarily related to the Purchased Assets or Transmission; and

     (o) liabilities and obligations under the Settlement Agreement dated October 31, 2002 between Interstate Power Light and Electric and Southern Minnesota Municipal Power Agency.

ARTICLE III
PURCHASE PRICE

     3.1 Purchase Price . The purchase price for the Purchased Assets will be an amount equal to $750,000,000.00 (the " Initial Valuation "), as adjusted pursuant to Section 3.2 (as so

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adjusted, the " Base Price "), as further adjusted pursuant to Section 3.3 (as so adjusted, the " Purchase Price ").

     3.2 Determination of Base Price.

     (a) Not less than fifteen (15) Business Days prior to the Closing Date, Seller shall deliver to Buyer an estimated consolidated balance sheet of the Purchased Assets and Assumed Obligations as of the Closing Date prepared in good faith by Seller (the " Estimated Balance Sheet ") (A) clearly indicating in reasonable detail the liabilities and obligations included thereon that Seller wishes to transfer to Buyer on the Closing Date (the " Estimated Assumed Balance Sheet Obligations ") and (B) containing Seller’s good faith estimate of the Net Non-Rate Base Asset Value as of the Closing Date (the " Estimated Net Non-Rate Base Asset Value ") and a statement (the " Estimated Rate Base Statement ") setting forth the Estimated Rate Base Amount, the Estimated Capital Expenditure Amount, the Estimated Rate Base Reclassification Amount and the Estimated CWIP Amount, together with reasonably detailed supporting documentation. The Estimated Balance Sheet shall be prepared in accordance with GAAP, consistently applied. The Estimated Rate Base Statement shall be prepared in accordance with FERC 18 CFR, consistently applied. Seller will provide Buyer and Buyer’s independent accountant with all supporting work papers used by Seller in connection with such calculations at the time it delivers the Estimated Balance Sheet and the Estimated Rate Base Statement. In the event that, not less than five (5) Business Days prior to the Closing Date, Buyer notifies Seller of any errors contained in the Estimated Balance Sheet or the Estimated Rate Base Statement, Seller shall in good faith consider Buyer’s comments relating to such errors and make any amendments to the Estimated Balance Sheet or the Estimated Rate Base Statement as Seller, acting in good faith, deems necessary or appropriate.

     (b) Non-Rate Base Adjustment. For purposes of calculating the Base Price:

     (i) If the Estimated Net Non-Rate Base Asset Value is a positive number, then the Base Price shall be calculated as the Initial Valuation increased by such amount.

     (ii) If the Estimated Net Non-Rate Base Asset Value is a negative number, then the Base Price shall be calculated as the Initial Valuation decreased by such amount.

     (c) Rate Base Adjustment. For purposes of calculating the Base Price:

     (i) If the Estimated Rate Base Amount is greater than the Projected Rate Base Amount, then the Base Price shall be calculated as the Initial Valuation, as adjusted pursuant to the terms of Section 3.2(b), increased by the sum of (A) an amount equal to the Estimated Rate Base Amount minus the Projected Rate Base Amount plus , if applicable, (B) the product of (x) any portion of such amount (but not to exceed $20 million) calculated in the preceding clause (A) to the extent attributable to a Rate Base Reclassification Increase multiplied by (y) the Net Premium Multiple.

     (ii) If the Estimated Rate Base Amount is less than the Projected Rate Base Amount, then the Base Price shall be calculated as the Initial Valuation, as adjusted

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pursuant to the terms of Section 3.2(b), decreased by the product of (x) an amount equal to the Projected Rate Base Amount minus the Estimated Rate Base Amount, multiplied by (y) the Premium Multiple.

     (iii) If the Estimated CWIP Amount is greater than the Projected CWIP Amount, then the Base Price shall be calculated as the Initial Valuation, as adjusted pursuant to the terms of Section 3.2(c)(i) or (ii), as the case may be, increased by an amount equal to the Estimated CWIP Amount minus the Projected CWIP Amount.

     (iv) If the Estimated CWIP Amount is less than the Projected CWIP Amount, then the Base Price shall be calculated as the Initial Valuation, as adjusted pursuant to the terms of Section 3.2(c)(i) or (ii), as the case may be, decreased by an amount equal to the Projected CWIP Amount minus the Estimated CWIP Amount.

     (d) The Base Price shall be an amount equal to the Initial Valuation as adjusted pursuant to the terms of Section 3.2(b) and 3.2(c).

     3.3 Determination of Purchase Price.

     (a) As soon as reasonably practicable after the Post-Closing Adjustment Date, but in any event within ninety (90) days thereafter, Seller will prepare and deliver to Buyer a consolidated balance sheet of the Purchased Assets and Assumed Obligations as of the Closing Date (as finally determined pursuant to this Section 3.3, the " Final Balance Sheet "), (A) clearly indicating in reasonable detail the liabilities and obligations included thereon that Seller transferred to Buyer on the Closing Date (as finally determined pursuant to this Section 3.3, the " Actual Assumed Balance Sheet Obligations ") and (B) containing the Net Non-Rate Base Asset Value as of the Closing Date (as finally determined pursuant to this Section 3.3, the " Actual Net Non-Rate Base Asset Value "), and a statement (as finally determined pursuant to this Section 3.3, the " Final Rate Base Statement ") setting forth the Actual Rate Base Amount, the Post-Closing Rate Base Value, the Actual Capital Expenditure Amount, the Actual Rate Base Reclassification Amount and the Actual CWIP Amount, together with reasonably detailed supporting documentation. Each of the Final Balance Sheet and the Final Rate Base Statement shall be reviewed by Deloitte & Touche LLP. The Final Balance Sheet shall be prepared in accordance with GAAP, consistently applied. The Final Rate Base Statement shall be prepared in accordance with FERC 18 CFR, consistently applied. Seller shall provide Buyer and Buyer’s independent accountant with all supporting work papers and all books and records of Seller, and Buyer may make inquiry of the representatives of Seller’s accountants and Seller, as requested by Buyer in connection with preparation and review of the Final Balance Sheet and the Final Rate Base Statement. Buyer agrees to cooperate with Seller in connection with Seller’s preparation of the Final Balance Sheet and the Final Rate Base Statement and related information, and to provide Seller with access to its books, records, information and employees as Seller may reasonably request in connection with such preparation. The Final Balance Sheet and Final Rate Base Statement shall be prepared and adjusted pursuant to this Section 3.3 to avoid duplication of any items, and not to include any items, to the extent otherwise taken into account in the prorations under Section 3.5.

     (b) The amounts set forth in the Final Balance Sheet and the Final Rate Base Statement will be final, binding, and conclusive for all purposes unless, and only to the extent,

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that within 60 days after Seller has delivered the Final Balance Sheet and the Final Rate Base Statement, Buyer notifies Seller of any dispute with matters set forth therein. Any such notice of dispute delivered by Buyer (an " Adjustment Dispute Notice ") will identify with reasonable specificity each item in the Final Balance Sheet and the Final Rate Base Statement with respect to which Buyer disagrees, the basis of such disagreement, and Buyer’s position with respect to such disputed item.

     (c) If Buyer delivers an Adjustment Dispute Notice in compliance with Section 3.3(b), then (i) the undisputed portion of the total proposed Adjustment Amount based on the Final Balance Sheet and the Final Rate Base Statement (together with interest thereon for the period commencing on the Closing Date through the date of payment calculated at the Prime Rate in effect on the Closing Date) will be paid by Seller or Buyer, as the case may be, in accordance with the payment procedures set forth in Section 3.3(g); and (ii) Buyer and Seller will attempt to reconcile their differences and any written resolution agreed and executed by both of them as to any disputed amounts will be final, binding, and conclusive for all purposes on the Parties. If Buyer and Seller are unable to reach a resolution with respect to all disputed items within 45 days of delivery of the Adjustment Dispute Notice, Buyer and Seller will submit any items remaining in dispute for determination and resolution to the Independent Accounting Firm which will be instructed to determine and report to the Parties, within 30 days after such submission, upon such remaining disputed items. The report of the Independent Accounting Firm will be final, binding, and conclusive on the Parties for all purposes. The personnel of the Independent Accounting Firm performing such services shall be individuals who are independent of, and impartial with respect to Buyer and Seller and their Affiliates, officers, directors, agents and employees, and the officers, directors, agents and employees of their respective Affiliates. Before referring a matter to the Independent Accounting Firm, the Parties shall agree on procedures to be followed by the Independent Accounting Firm (including procedures for the presentation of evidence). If the Parties are unable to agree upon procedures before the expiration of thirty (30) days after receipt by Seller of the Adjustment Dispute Notice, the Independent Accounting Firm shall establish procedures, which procedures may be, but need not be, those proposed by either Party. The Parties shall, as promptly as practicable, submit evidence to the Independent Accounting Firm in accordance with such procedures. The fees and expenses of the Independent Accounting Firm incurred in the resolution of such dispute shall be borne by the Parties in such proportion as is appropriate to reflect the relative benefits received by Seller on the one hand and Buyer on the other from the resolution of the dispute. For example, if Buyer challenges items underlying the calculation of the Adjustment Amount in the net amount of $100,000, but the Independent Accounting Firm determine that Buyer has a valid claim for only $40,000, Buyer shall bear 60% of the fees and expenses of the Independent Accounting Firm and Seller shall bear the other 40% of such fees and expenses. The decision rendered by the Independent Accounting Firm pursuant to this Section 3.3 may be filed as a judgment in any court of competent jurisdiction. Either Party may seek specific enforcement or take other necessary legal action to enforce any decision of the Independent Accounting Firm under this Section 3.3.

     (d) Final Non-Rate Base Adjustment. For purposes of calculating the Purchase Price:

     (i) If the Actual Net Non-Rate Base Asset Value is a positive number, then the Purchase Price shall be calculated as the Initial Valuation increased by such amount.

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     (ii) If the Actual Net Non-Rate Base Asset Value is a negative number, then the Purchase Price shall be calculated as the Initial Valuation decreased by such amount.

     (e) Final Rate Base Adjustment. For purposes of calculating the Purchase Price:

     (i) If the Actual Rate Base Amount is greater than the Projected Rate Base Amount, then the Purchase Price shall be calculated as the Initial Valuation, as adjusted pursuant to the terms of Section 3.3(d), increased by the sum of (A) an amount equal to the Actual Rate Base Amount minus the Projected Rate Base Amount plus , if applicable, (B) the product of (x) any portion of such amount (but not to exceed $20 million) calculated in the preceding clause (A) to the extent attributable to a Rate Base Reclassification Increase multiplied by (y) the Net Premium Multiple.

     (ii) If the Actual Rate Base Amount is less than the Projected Rate Base Amount, then the Purchase Price shall be calculated as the Initial Valuation, as adjusted pursuant to the terms of Section 3.3(d), decreased by the product of (x) an amount equal to the Projected Rate Base Amount minus the Actual Rate Base Amount, multiplied by (y) the Premium Multiple.

     (iii) If the Post-Closing Rate Base Value is greater than the Actual Rate Base Amount, then the Purchase Price shall be calculated as the Initial Valuation, as adjusted pursuant to the terms of Section 3.3(e)(i) or (ii), as the case may be, increased by the product of (A) an amount equal to the Seller Post-Closing Capital Increase multiplied by (B) the Net Premium Multiple.

     (iv) If the Actual CWIP Amount is greater than the Projected CWIP Amount, then the Purchase Price shall be calculated as the Initial Valuation, as adjusted pursuant to the terms of Section 3.3(e)(i), (ii) and/or (iii), as the case may be, increased by an amount equal to the Actual CWIP Amount minus the Projected CWIP Amount.

     (v) If the Actual CWIP Amount is less than the Projected CWIP Amount, then the Purchase Price shall be calculated as the Initial Valuation, as adjusted pursuant to the terms of Section 3.3(e)(i), (ii) and/or (iii), as the case may be, decreased by an amount equal to the Projected CWIP Amount minus the Actual CWIP Amount.

     (f) The Purchase Price shall be an amount equal to the Initial Valuation as adjusted pursuant to the terms of Section 3.3(d) and 3.3(e).

     (g) Within five days following the final determination of the Purchase Price pursuant to this Article III, (i) if the Purchase Price is greater than the Base Price, Buyer will pay the Adjustment Amount to Seller; or (ii) if the Purchase Price is less than the Base Price, Seller will pay the Adjustment Amount to Buyer. Any amount paid under this Section 3.3(g) will be paid with interest for the period commencing on the Post-Closing Adjustment Date through the date of payment, calculated at the Prime Rate in effect on the Post-Closing Adjustment Date, in cash by wire transfer of immediately available funds to the account specified by the Party receiving payment.

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     3.4 Allocation of Purchase Price . The sum of the Purchase Price and the Assumed Obligations will be allocated among the Purchased Assets on a basis consistent with Section 1060 of the Code and the Treasury Regulations thereunder. Within 60 days following the Closing Date, the Parties will work together in good faith to agree upon such allocation; provided that in the event that such agreement has not been reached within such 60-day period, the allocation will be determined by the Independent Accounting Firm, and such determination will be binding on the Parties. Each Party will pay one-half of the fees and expenses of the Independent Accounting Firm in connection with such determination. Each Party will report the transactions contemplated by the Agreement for federal Income Tax and all other Tax purposes in a manner consistent with such allocation to the extent consistent with applicable law. Each Party will provide the other promptly with any other information required to complete Form 8594 under the Code. Each Party will notify the other, and will provide the other with reasonably requested cooperation, in the event of an examination, audit, or other proceeding regarding the allocations provided for in this Section 3.4.

     3.5 Proration .

     (a) All Taxes (but not including Transfer Taxes), utility charges, and similar items customarily prorated, including those listed below, to the extent relating to the Purchased Assets will be prorated as of the Effective Time, with Seller liable to the extent such items relate to any period prior to the Effective Time, and Buyer liable to the extent such items relate to any period from and after the Effective Time. To the extent that Seller determines in good faith that amounts to be prorated under this Section 3.5 can be reasonably estimated at Closing, Seller will provide Buyer with such estimate and the Parties will adjust the amounts paid at Closing to reflect such prorations. Such items to be prorated will include:

     (i) personal property Taxes, real property Taxes, replacement Taxes, assessments, franchise Taxes, and other similar charges, including charges for water, telephone, electricity, and other utilities;

     (ii) any permit, license, registration, compliance assurance fees or other fees with respect to any Transferable Permits and Transferable Environmental Permits that are in fact transferred to Buyer, excluding any fees to transfer such Transferable Permits and Transferable Environmental Permits;

     (iii) any pre-paid expenses (including security deposits) relating to the Purchased Assets;

     (iv) rent, Taxes and other items (including prepaid services or goods not included in inventory) payable by or to Seller under any of the Purchased Agreements;

     (v) fees or charges (other than Taxes) imposed by any Governmental Entity; and

     (vi) rents under any leases of real or personal property.

     (b) In connection with any real property or personal property Tax prorations, including installments of special assessments, replacement taxes payable by the owner of the

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Purchased Assets, or any other taxes assessed with respect to the Purchased Assets on an annual or periodic basis, Buyer will be credited with an amount equal to the amount of the current real property Tax or installment of special assessments or other Tax, as the case may be, multiplied by a fraction, (i) the numerator of which is the number of days from the date of the immediately preceding installment to the day before the Closing Date, and (ii) the denominator of which is the total number of days in the assessment period in which the Closing Date occurs. In connection with any prorations, in the event that actual amounts are not available at the Closing Date, the proration will be based upon the Taxes, assessments, charges, fees, or rents for the most recent period completed prior to the Closing Date for which actual Taxes, assessments, charges, fees, or rents are available. All prorations will be based upon the most recent available Tax rates, assessments, and valuations. Any prorations will be made so as to avoid duplication of any items, and will not include items to the extent otherwise taken into account in determining the Purchase Price, including the Adjustment Amount.

     (c) The proration of all items under this Section 3.5 will be recalculated by Buyer within 60 days following the date upon which the actual amounts become available to Buyer. Buyer will notify Seller promptly of such recalculated amounts, and will provide Seller with all documentation relating to such recalculations, including tax statements and other notices from third parties. The Parties will make such payments to each other as are necessary to reconcile any estimated amounts prorated as of the Effective Time with the final amounts to be prorated. Seller and Buyer agree to furnish each other with such documents and other records as may be reasonably requested in order to confirm all proration calculations made pursuant to this Section 3.5.

ARTICLE IV
THE CLOSING

     4.1 Time and Place of Closing . Upon the terms and subject to the satisfaction of the conditions contained in Article IX of this Agreement (or waiver thereof as provided herein), the closing of the purchase and sale of the Purchased Assets and assumption of the Assumed Obligations (the " Closing ") will take place at a location to be agreed to by the Parties beginning at 10:00 A.M. (local time) on the second Business Day following the date on which the conditions set forth in Article IX (other than conditions to be satisfied by deliveries at the Closing) have been satisfied or waived, or at such other time as the Parties may agree. The date on which the Closing occurs is referred to herein as the " Closing Date ." The purchase and sale of the Purchased Assets and assumption of the Assumed Obligations will be effective as of 12:00:01 A.M., Cedar Rapids, Iowa time on the Closing Date (the " Effective Time ").

     4.2 Payment of Base Price . Upon the terms and subject to the satisfaction or waiver of the conditions contained in this Agreement, at the Closing, Buyer will pay or cause to be paid to Seller the Base Price, by wire transfer of immediately available funds, to the account or accounts designated by Seller on the third Business Day prior to the Closing, or by such other means as may be agreed upon by Seller and Buyer.

     4.3 Deliveries by Seller . At or prior to the Closing, Seller will deliver the following to Buyer:

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     (a) the Bill of Sale, duly executed by Seller;

     (b) the Assignment and Assumption Agreement, duly executed by Seller;

     (c) the Distribution Interconnect Agreement, duly executed by Seller;

     (d) the Generator Interconnect Agreement, duly executed by Seller and MISO;

     (e) the Transition Services Agreement, duly executed by Seller;

     (f) the lease agreement described in Section 8.3(b), duly executed by Seller;

     (g) all consents, waivers, Transferable Permits, Transferable Environmental Permits or approvals obtained by Seller from third parties in connection with this Agreement including, without limitation, the consents, waivers, Transferable Permits, Transferable Environmental Permits or approvals obtained by Seller pursuant to Sections 7.4 and 9.2(j);

     (h) the certificate contemplated by Section 9.2(d);

     (i) one or more deeds of conveyance of the Transmission Fee Interests, substantially in the form of the Deed, duly executed and acknowledged by Seller and in recordable form, conveying good and insurable fee simple title to the Transmission Fee Interests;

     (j) one or more Easements, substantially in the form of the Substation Site Easement, as are necessary to convey a reservation of Easement and other rights to Buyer (such that Buyer will have access to Transmission Line Facilities and Transmission Substation Facilities following the Closing) to the real property, Easements and other land rights of Seller set forth Schedule 4.3(j);

     (k) one or more instruments of assignment or conveyance, substantially in the form of the Assignment of Easements and the Partial Assignment of Shared Easements, as are necessary to transfer the Transmission Easements, the Transmission Leases, and the Shared Easement Rights;

     (l) all such other instruments of assignment or conveyance as are reasonably requested by Buyer in connection with the transfer of the Purchased Assets to Buyer in accordance with this Agreement;

     (m) terminations or releases of all Encumbrances on the Purchased Assets required to be released pursuant to Section 9.2(f) and Section 9.2(g);

     (n) a duly executed certificate, in form and substance reasonably satisfactory to the Buyer, certifying that the transactions contemplated by this Agreement are exempt from withholding under Section 1445 of the Code; and

     (o) a receipt for payment of the Base Price by Buyer.

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     4.4 Deliveries by Buyer . At or prior to the Closing, Buyer will deliver the following to Seller:

     (a) the Assignment and Assumption Agreement, duly executed by Buyer;

     (b) the Distribution Interconnect Agreement, duly executed by Buyer;

     (c) the Generator Interconnect Agreement, duly executed by Buyer and MISO;

     (d) the Transition Services Agreement, duly executed by Buyer;

     (e) the lease agreement described in Section 8.3(b), duly executed by Buyer;

     (f) the certificate contemplated by Section 9.3(c);

     (g) one or more Easements, substantially in the form of the Substation Site Easement, as are necessary to convey a reservation of Easement and other rights to Seller (such that Seller will continue to have access to its utility and distribution assets and facilities following the Closing) to the Transmission Land Rights set forth in Schedule 4.4(g) ;

     (h) all consents, waivers, or approvals obtained by Buyer from third parties in connection with this Agreement; and

     (i) all such other documents, instruments, and undertakings as are reasonably requested by Seller in connection with the assumption by Buyer of the Assumed Obligations in accordance with this Agreement.

     4.5 Parent Guaranty . To guaranty its obligations under this Agreement, Buyer shall deliver to Seller upon execution of this Agreement the Parent Guaranty, duly executed by Parent.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER

     As an inducement to Buyer to enter into this Agreement and to consummate the transactions contemplated hereby, except as set forth in, or qualified by any matter set forth in, the Seller Disclosure Schedule (as the same may be supplemented or amended pursuant to Section 7.8), Seller represents and warrants to Buyer as set forth in this Article V. For convenience of reference, selected Sections of Article V refer to specific, numbered Schedules, but such references do not limit the general applicability of the exceptions, qualifications, and other matters set forth in the Seller Disclosure Schedule (excluding any supplement or amendment pursuant to Section 7.8) to each and every representation and warranty set forth in this Article V; provided that, the applicability of such exceptions, qualifications and other matters set forth in the Seller Disclosure Schedule are reasonably apparent to such other representation and warranty; provided further that, no such exception, qualification or other matter shall be deemed disclosed for the purposes of Section 5.5(a) of this Agreement unless such exception, qualification or other matter is set forth on Schedule 5.5(a) .

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     5.1 Organization; Qualification . Seller is a corporation duly organized, validly existing, and in good standing under the laws of Iowa and has all requisite corporate power and authority to own, lease, and operate the Purchased Assets. Seller is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction in which the ownership or operation of any Purchased Assets by Seller makes such qualification necessary, except where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect.

     5.2 Authority Relative to this Agreement . Seller has all corporate power and authority necessary to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the board of directors of Seller and no other corporate proceedings on the part of Seller are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Seller, and constitutes a valid and binding agreement of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, or other similar laws affecting or relating to enforcement of creditors’ rights generally or general principles of equity.

     5.3 Consents and Approvals; No Violation . Except as set forth in Schedules 5.3(a) through (d) , the execution and delivery of this Agreement by Seller, and the consummation by Seller of the transactions contemplated hereby, do not:

     (a) conflict with or result in any breach of Seller’s Governing Documents;

     (b) (i) breach or otherwise constitute or give rise to a breach of or result in a default under (including with notice, lapse of time, or both), (ii) give rise to any right of termination, cancellation, acceleration or modification, under, (iii) result in or give to any person or entity any additional rights or entitlement to increased, additional accelerated or guaranteed payments under or (iv) result in the creation or imposition of any Encumbrance on the Purchased Assets under any of the terms, conditions, or provisions of any Contract or other obligation to which Seller is a party or by which Seller or any of the Purchased Assets may be bound, except for matters as to which requisite waivers or consents have been, or will prior to the Closing be, obtained or which if not obtained or made would not, individually or in the aggregate, have a Material Adverse Effect;

     (c) violate any Law or Order applicable to Seller, any of its Affiliates, or any of the Purchased Assets, which violations would, individually or in the aggregate, have a Material Adverse Effect; or

     (d) require any declaration, filing, issuance of a Permit, or registration with, or notice to, or authorization, consent, or approval or act of any Person, entity, including without limitation any Person or entity that is party to a Purchased Agreement, or Governmental Entity, other than (i) the Required Regulatory Approvals or (ii) such declarations, filings, registrations, notices, authorizations, consents, or approvals which, if not obtained or made, would not, individually or in the aggregate, have a Material Adverse Effect.

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     5.4 Governmental Filings . Since January 1, 2004, Seller has filed or caused to be filed with the ICC, IUB, MPUC and FERC and all other applicable Governmental Entities, all material forms, statements, reports, and documents (including all exhibits, amendments, and supplements thereto) required by Law or Order to be filed by Seller with the ICC, IUB, MPUC or FERC or such other Governmental Entities with respect to the Purchased Assets. As of the respective dates on which such forms, statements, reports, and documents were filed, each (to the extent prepared by Seller and excluding information prepared or provided by third parties) complied in all material respects with all requirements of any Law or Order applicable to such form, statement, report, or document in effect on such date.

     5.5 No Material Adverse Effect; Liabilities .

     (a) Except as set forth in Schedule 5.5(a) , or as required by the terms of this Agreement, since January 1, 2006, no change, effect, development or event has occurred which, either individually or in the aggregate, with all effects, events, developments or changes, has resulted in a Material Adverse Effect.

     (b) Except as set forth on Schedule 5.5(b), there are no material liabilities, obligations or debts whether absolute or contingent, monetary or non-monetary, direct or indirect, known or unknown, matured or unmatured, or of any other nature related to the Purchased Assets, whether or not required by GAAP to be disclosed in a balance sheet, except for liabilities reflected in the Estimated Balance Sheet. Except as set forth on Schedule 5.5(b) , Seller does not have any obligations (absolute or contingent) related to the Purchased Assets to provide funds on behalf of, or to guarantee any debt, liability or obligation of, any Person.

     5.6 Operation in the Ordinary Course . Except as otherwise disclosed herein or set forth in Schedule 5.6 , since January 1, 2006, and until the date hereof, the Purchased Assets have been operated in the ordinary course of business consistent with past practice. Withou