Exhibit 10.1

 

 

$375,000,000

TERM LOAN CREDIT AGREEMENT

Dated as of June 13, 2012

among

CONSUMERS ENERGY COMPANY,

as the Company,

THE FINANCIAL INSTITUTIONS NAMED HEREIN,

as the Banks,

JPMORGAN CHASE BANK, N.A.,

as Agent,

and

UNION BANK, N.A., BANK OF AMERICA, N.A. AND THE BANK OF NOVA SCOTIA

as Co-Syndication Agents

 

 

J.P. MORGAN SECURITIES LLC

as Sole Lead Arranger and Sole Bookrunner

 

 

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TABLE OF CONTENTS

 

          Page   ARTICLE I DEFINITIONS      1   

1.1

   Definitions      1   

1.2

   Interpretation      13   

1.3

   Accounting Terms      14    ARTICLE II THE ADVANCES      15   

2.1

   Commitment      15   

2.2

   Repayment of Loans      15   

2.3

   Ratable Loans      15   

2.4

   Types of Advances      15   

2.5

   [Intentionally Omitted]      15   

2.6

   Minimum Amount of Advances      15   

2.7

   Principal Payments and Changes in Commitments      15   

2.8

   Method of Selecting Types and Interest Periods for New Advances      16   

2.9

   Conversion and Continuation of Outstanding Advances      16   

2.10

   Interest Rates, Interest Payment Dates      17   

2.11

   Rate on Overdue Amounts      18   

2.12

   Method of Payment; Sharing Set-Offs      18   

2.13

   Bonds; Record-keeping; Telephonic Notices      18   

2.14

   Lending Installations      19   

2.15

   Non-Receipt of Funds by the Agent      19   

2.16

   Maximum Rate      19    ARTICLE III INTENTIONALLY OMITTED      19    ARTICLE
IV CHANGE IN CIRCUMSTANCES      19   

4.1

   Yield Protection      20   

4.2

   Replacement of Banks      21   

4.3

   Availability of Eurodollar Rate Loans      21   

4.4

   Funding Indemnification      22   

4.5

   Taxes      22   

4.6

   Bank Certificates, Survival of Indemnity      24   

4.7

   Defaulting Banks.      24    ARTICLE V REPRESENTATIONS AND WARRANTIES      25
  

5.1

   Incorporation and Good Standing      25   

5.2

   Corporate Power and Authority: No Conflicts      25   

5.3

   Governmental Approvals      25   

5.4

   Legally Enforceable Agreements      25   

5.5

   Financial Statements      25   

5.6

   Litigation      26   

5.7

   Margin Stock      26   

5.8

   ERISA      26   

 

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5.9

   Insurance      26   

5.10

   Taxes      26   

5.11

   Investment Company Act      26   

5.12

   Bonds      26   

5.13

   Disclosure      26   

5.14

   OFAC      26   

5.15

   Delivery of Documents      27   

ARTICLE VI AFFIRMATIVE COVENANTS

     27   

6.1

   Payment of Taxes, Etc.      27   

6.2

   Maintenance of Insurance      27   

6.3

   Preservation of Corporate Existence, Etc.      27   

6.4

   Compliance with Laws, Etc.      27   

6.5

   Visitation Rights      27   

6.6

   Keeping of Books      28   

6.7

   Reporting Requirements      28   

6.8

   Use of Proceeds      29   

6.9

   Maintenance of Properties, Etc.      30   

6.10

   Bonds      30   

ARTICLE VII NEGATIVE COVENANTS

     30   

7.1

   Liens      30   

7.2

   Sale of Assets      31   

7.3

   Mergers, Etc.      31   

7.4

   Compliance with ERISA      32   

7.5

   Organizational Documents      32   

7.6

   Change in Nature of Business      32   

7.7

   Transactions with Affiliates      32   

ARTICLE VIII FINANCIAL COVENANT

     32   

ARTICLE IX EVENTS OF DEFAULT

     32   

9.1

   Events of Default      32   

9.2

   Remedies      34   

ARTICLE X WAIVERS, AMENDMENTS AND REMEDIES

     34   

10.1

   Amendments      34   

10.2

   Preservation of Rights      35   

ARTICLE XI CONDITIONS PRECEDENT

     35   

11.1

   Effectiveness of this Agreement      35   

11.2

   Each Advance      37   

ARTICLE XII GENERAL PROVISIONS

     37   

12.1

   Successors and Assigns      37   

12.2

   Survival of Representations      39   

12.3

   Governmental Regulation      39   

 

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12.4

   Taxes      39   

12.5

   Choice of Law      40   

12.6

   Headings      40   

12.7

   Entire Agreement      40   

12.8

   Expenses; Indemnification      40   

12.9

   Severability of Provisions      41   

12.10

   Setoff      41   

12.11

   Ratable Payments      41   

12.12

   Nonliability      41   

12.13

   Other Agents      42   

12.14

   USA Patriot Act.      42   

12.15

   Electronic Delivery      42   

12.16

   Confidentiality      43   

ARTICLE XIII THE AGENT

     44   

13.1

   Appointment      44   

13.2

   Powers      44   

13.3

   General Immunity      44   

13.4

   No Responsibility for Recitals, Etc.      45   

13.5

   Action on Instructions of Banks      45   

13.6

   Employment of Agents and Counsel      45   

13.7

   Reliance on Documents; Counsel      45   

13.8

   Agent’s Reimbursement and Indemnification      45   

13.9

   Rights as a Bank      46   

13.10

   Bank Credit Decision      46   

13.11

   Successor Agent      46   

ARTICLE XIV NOTICES

     47   

14.1

   Giving Notice      47   

14.2

   Change of Address      47   

ARTICLE XV COUNTERPARTS

     47   

 

SCHEDULES    Schedule 1    Commitment Schedule EXHIBITS    Exhibit A    Required
Opinions from Kimberly C. Wilson, Esq., Supervisory Assistant    General Counsel
of the Company Exhibit B    Form of Compliance Certificate Exhibit C    Form of
Assignment and Assumption Agreement Exhibit D    Terms of Subordination (Junior
Subordinated Debt)

 

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TERM LOAN CREDIT AGREEMENT

This TERM LOAN CREDIT AGREEMENT, dated as of June 13, 2012, is among CONSUMERS
ENERGY COMPANY, a Michigan corporation (the “Company”), the financial
institutions listed on the signature pages hereof (together with their
respective successors and assigns, the “Banks”) and JPMORGAN CHASE BANK, N.A.,
as Agent.

W I T N E S S E T H:

WHEREAS, the Company has requested, and the Agent and the Banks have agreed, on
the terms and conditions set forth herein, to enter into a term loan credit
facility in an aggregate amount of $375,000,000;

NOW THEREFORE, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions. As used in this Agreement:

“Accounting Changes” – see Section 1.3.

“Administrative Questionnaire” means an administrative questionnaire,
substantially in the form supplied by the Agent, completed by a Bank and
furnished to the Agent in connection with this Agreement.

“Advance” means a borrowing hereunder, (i) made by the Banks on the Funding Date
or (ii) converted or continued on the same date of conversion or continuation
and, in either case, consisting of Loans of the same Type and, in the case of
Eurodollar Rate Loans, having the same Interest Period.

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling (including all directors and officers of such Person),
controlled by, or under direct or indirect common control with such Person. A
Person shall be deemed to control another entity if such Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of such entity, whether through the ownership of voting
securities, by contract or otherwise.

“Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent
for the Banks pursuant to Article XIII, and not in its individual capacity as a
Bank, and any successor Agent appointed pursuant to Article XIII.

“Aggregate Commitment” means the aggregate amount of the Commitments of all
Banks.

“Aggregate Outstanding Credit Exposure” means, at any time, the aggregate of the
Outstanding Credit Exposure of all the Banks.

 

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“Agreement” means this Term Loan Credit Agreement, as amended from time to time.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus  1/2 of 1% and (c) the Eurodollar Rate for a one
month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that, for the avoidance of
doubt, the Eurodollar Rate for any day shall be based on the rate appearing on
Reuters Screen LIBOR01 Page (or on any successor or substitute page of such
page) at approximately 11:00 a.m. London time on such day. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Eurodollar Rate shall be effective from and including the
effective date of such change in the Prime Rate, the Federal Funds Effective
Rate or the Eurodollar Rate, respectively.

“Applicable Margin” means, with respect to a Floating Rate Advance, 0.00% and,
with respect to a Eurodollar Advance, 0.80%.

“Arranger” means J.P. Morgan Securities LLC.

“Assignment Agreement” – see Section 12.1(e).

“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the Agent,
has taken any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any such proceeding or appointment, provided that a
Bankruptcy Event shall not result solely by virtue of any ownership interest, or
the acquisition of any ownership interest, in such Person by a Governmental
Authority or instrumentality thereof, provided, further, that such ownership
interest does not result in or provide such Person with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

“Banks” – see the preamble.

“Base Eurodollar Rate” means, with respect to a Eurodollar Advance for the
relevant Interest Period, the per annum interest rate determined by the offered
rate per annum at which deposits in U.S. dollars, for a period equal or
comparable to such Interest Period, appears on page 3750 (or any successor page)
of the Dow Jones Market Service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period (rounded upwards, if necessary,
to the next 1/100 of 1%), or in the event such offered rate is not available
from the Dow Jones Market Service page, the average rate offered on deposits in
U.S. dollars, for a period equal or comparable to such Interest Period, to the
Agent by prime banks in the London interbank market at approximately 11:00 a.m.
(London time), two Business Days prior to the first day of such Interest Period
(rounded upwards, if necessary, to the next 1/100 of 1%), and in an amount
substantially equal to the amount of JPMorgan Chase Bank, N.A.’s relevant
Eurodollar Rate Loan for such Interest Period (or, in the event that JPMorgan
Chase Bank, N.A. is not a Bank hereunder, in the amount of $5,000,000).

 

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“Bond Delivery Agreement” means that certain Bond Delivery Agreement, dated as
of the Closing Date, between the Company and the Agent, as the same may be
amended, restated, supplemented or otherwise modified from time to time.

“Bonds” means the series of interest-bearing First Mortgage Bonds created under
the Supplemental Indenture and issued in favor of the Agent.

“Borrowing Date” means a date on which an Advance is made hereunder.

“Borrowing Notice” – see Section 2.8.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Rate
Loan, the term “Business Day” shall also exclude any day on which banks are not
open for dealings in Dollars in the London interbank market.

“Capital Lease” means any lease which has been or would be capitalized on the
books of the lessee in accordance with GAAP.

“Change in Control” means (a) any “person” or “group” within the meaning of
Sections 13(d) and 14(d)(2) of the Exchange Act shall become the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act) of more than 50% of the
then outstanding voting capital stock of CMS, or (b) the majority of the board
of directors of CMS shall fail to consist of Continuing Directors, or (c) a
consolidation or merger of CMS shall occur after which the holders of the
outstanding voting capital stock of CMS immediately prior thereto hold less than
50% of the outstanding voting capital stock of the surviving entity, or (d) more
than 50% of the outstanding voting capital stock of CMS shall be transferred to
any entity of which CMS owns less than 50% of the outstanding voting capital
stock, or (e) CMS shall own less than 80% of the Equity Interests of the
Company.

“Change in Law” means the occurrence, after the date of this Agreement (or with
respect to any Bank, if later, the date on which such Bank becomes a Bank), of
any of the following (a) the adoption of any law, rule, regulation or treaty,
(b) any change in any law, rule, regulation or treaty or in the interpretation
or application thereof by any Governmental Authority or (c) compliance by any
Bank (or, for purposes of Section 4.1(a)(iv), by any lending office of such Bank
or by such Bank’s holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement; provided however, that
notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (ii) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States regulatory authorities, in each case ,
pursuant to Basel III, in the case of each of clauses (i) and (ii), shall be
deemed to be a “Change in Law”, regardless of the date enacted, adopted or
issued.

 

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“Closing Date” means June 13, 2012.

“CMS” means CMS Energy Corporation, a Michigan corporation.

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

“Commitment” means, for each Bank, the obligation of such Bank to make Loans to
the Company on the Funding Date in an aggregate amount not exceeding the amount
set forth on Schedule 1 or as set forth in any Assignment Agreement that has
become effective pursuant to Section 12.1, as such amount may be modified from
time to time.

“Company” – see the preamble.

“Consolidated Subsidiary” means any Subsidiary the accounts of which are or are
required to be consolidated with the accounts of the Company in accordance with
GAAP.

“Continuing Director” means, as of any date of determination, any member of the
board of directors of CMS who (a) was a member of such board of directors on the
Closing Date, or (b) was nominated for election or elected to such board of
directors with the approval of the Continuing Directors who were members of such
board of directors at the time of such nomination or election; provided that an
individual who is so elected or nominated in connection with a merger,
consolidation, acquisition or similar transaction shall not be a Continuing
Director unless such individual was a Continuing Director prior thereto.

“Credit Documents” means this Agreement, the Supplemental Indenture, the Bond
Delivery Agreement and the Bonds.

“Credit Party” means the Agent or any other Bank.

“Debt” means, with respect to any Person, and without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all indebtedness of such
Person for the deferred purchase price of property or services (other than trade
accounts payable arising in the ordinary course of business which are not
overdue), (c) liabilities for accumulated funding deficiencies (prior to the
effectiveness of the applicable provisions of the Pension Protection Act of 2006
with respect to a Plan) and liabilities for failure to make a payment required
to satisfy the minimum funding standard within the meaning of Section 412 of the
Code or Section 302 of ERISA (on and after the effectiveness of the applicable
provisions of the Pension Protection Act of 2006 with respect to a Plan),
(d) all liabilities arising in connection with any withdrawal liability under
ERISA to any Multiemployer Plan, (e) all obligations of such Person arising
under acceptance facilities, (f) all obligations of such Person as lessee under
Capital Leases, (g) all obligations of such Person arising under any interest
rate swap, “cap”, “collar” or other hedging agreement; provided that for
purposes of the calculation of Debt for this clause (g) only, the actual amount
of Debt of such Person shall be determined on a net basis to the extent such
agreements permit such amounts to be calculated on a net basis, (h) Off-Balance
Sheet Liabilities, (i) non-contingent obligations of such Person in respect of
letters of credit and bankers’ acceptances and (j) all guaranties, endorsements
(other than for collection in the ordinary course of business) and other
contingent obligations of such Person to assure a creditor against loss (whether
by the purchase of goods or services, the provision of funds for payment, the
supply of funds to invest in any

 

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Person or otherwise) in respect of indebtedness or obligations of any other
Person of the kinds referred to in clauses (a) through (i) above.
Notwithstanding the foregoing, solely for purposes of the calculations required
under Article VIII, Debt shall not include any Junior Subordinated Debt issued
by the Company and owned by any Hybrid Preferred Securities Subsidiary.

“Default” means an event which but for the giving of notice or lapse of time, or
both, would constitute an Event of Default.

“Defaulting Bank” means any Bank that (a) has failed, within two Business Days
of the date required to be funded or paid, to (i) fund any portion of its Loans
or (ii) pay over to any Credit Party any other amount required to be paid by it
hereunder, unless, in the case of clause (i) above, such Bank notifies the Agent
in writing that such failure is the result of such Bank’s good faith
determination that a condition precedent to funding (specifically identified and
including the particular default, if any) has not been satisfied, (b) has
notified the Company or any Credit Party in writing, or has made a public
statement to the effect, that it does not intend or expect to comply with any of
its funding obligations under this Agreement (unless such writing or public
statement indicates that such position is based on such Bank’s good faith
determination that a condition precedent (specifically identified and including
the particular default, if any) to funding a loan under this Agreement cannot be
satisfied) or generally under other agreements in which it commits to extend
credit, (c) has failed, within three Business Days after request by a Credit
Party, acting in good faith, to provide a certification in writing from an
authorized officer of such Bank that it will comply with its obligations to fund
prospective Loans under this Agreement, provided that such Bank shall cease to
be a Defaulting Bank pursuant to this clause (c) upon such Credit Party’s
receipt of such certification in form and substance satisfactory to it and the
Agent, or (d) has become the subject of a Bankruptcy Event.

“Designated Officer” means the Chief Financial Officer, the Treasurer, an
Assistant Treasurer, any Vice President in charge of financial or accounting
matters or the principal accounting officer of the Company.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any governmental agency or authority relating in
any way to the environment, preservation or reclamation of natural resources,
the management, release or threatened release of any Hazardous Substance or to
health and safety matters.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Substance,
(c) exposure to any Hazardous Substance, (d) the release or threatened release
of any Hazardous Substance into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any of the
foregoing.

 

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any corporation or trade or business which is a member
of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Company or is under common control (within
the meaning of Section 414(c) of the Code) with the Company.

“Eurodollar Advance” means an Advance consisting of Eurodollar Rate Loans.

“Eurodollar Rate” means, with respect to a Eurodollar Advance for the relevant
Interest Period, an interest rate per annum equal to the sum of (i) the quotient
obtained by dividing (a) the Base Eurodollar Rate applicable to such Interest
Period by (b) one minus the Reserve Requirement (expressed as a decimal)
applicable to such Interest Period, plus (ii) the Applicable Margin.

“Eurodollar Rate Loan” means a Loan which bears interest by reference to the
Eurodollar Rate.

“Event of Default” means an event described in Article IX.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Taxes” means, in the case of each Bank or applicable Lending
Installation and the Agent, (i) taxes imposed on its overall net income, and
franchise taxes imposed on it, including Michigan Business Tax, by (a) the
jurisdiction under the laws of which such Bank or the Agent is incorporated or
organized or (b) the jurisdiction in which the Agent’s or such Bank’s principal
executive office or such Bank’s applicable Lending Installation is located , and
(ii) any U.S. Federal withholding taxes resulting from FATCA.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement, and any current or future regulations or official interpretations
thereof.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by the Agent in its sole discretion.

“First Mortgage Bonds” means bonds issued by the Company pursuant to the
Indenture.

“Fitch” means Fitch Inc. or any successor thereto.

 

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“Floating Rate” means, with respect to a Floating Rate Advance, an interest rate
per annum equal to (i) the Alternate Base Rate plus (ii) the Applicable Margin,
changing when and as the Alternate Base Rate or the Applicable Margin changes.

“Floating Rate Advance” means an Advance consisting of Floating Rate Loans.

“Floating Rate Loan” means a Loan which bears interest at the Floating Rate.

“FRB” means the Board of Governors of the Federal Reserve System or any
successor thereto.

“Funding Date” means the date on which the Loans are funded to the Company in
the manner specified in Section 2.1, which date shall be on or prior to July 27,
2012.

“GAAP” means generally accepted accounting principles in the United States of
America as in effect on the Closing Date, applied on a basis consistent with
those used in the preparation of the financial statements referred to in
Section 5.5 (except, for purposes of the financial statements required to be
delivered pursuant to Sections 6.7(b) and (c), for changes concurred in by the
Company’s independent public accountants).

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

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

“Hybrid Equity Securities” means securities issued by the Company or a Hybrid
Equity Securities Subsidiary that (i) are classified as possessing a minimum of
at least two of the following: (x) “intermediate equity content” by S&P;
(y) “Basket C equity credit” by Moody’s; and (z) “50% equity credit” by Fitch
and (ii) require no repayment, prepayment, mandatory redemption or mandatory
repurchase prior to the date that is at least 91 days after the later of the
termination of the Commitments and the repayment in full of all Obligations.

“Hybrid Equity Securities Subsidiary” means any Delaware business trust (or
similar entity) (i) all of the common equity interest of which is owned (either
directly or indirectly through one or more wholly-owned Subsidiaries of the
Company) at all times by the Company or a wholly-owned direct or indirect
Subsidiary of the Company, (ii) that has been formed for the purpose of issuing
Hybrid Equity Securities and (iii) substantially all of the assets of which
consist at all times solely of Junior Subordinated Debt issued by the Company or
a wholly-owned direct or indirect Subsidiary of the Company (as the case may be)
and payments made from time to time on such Junior Subordinated Debt.

 

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“Hybrid Preferred Securities” means any preferred securities issued by a Hybrid
Preferred Securities Subsidiary, where such preferred securities have the
following characteristics:

(i) such Hybrid Preferred Securities Subsidiary lends substantially all of the
proceeds from the issuance of such preferred securities to the Company or a
wholly-owned direct or indirect Subsidiary of the Company in exchange for Junior
Subordinated Debt issued by the Company or such wholly-owned direct or indirect
Subsidiary, respectively;

(ii) such preferred securities contain terms providing for the deferral of
interest payments corresponding to provisions providing for the deferral of
interest payments on such Junior Subordinated Debt; and

(iii) the Company or a wholly-owned direct or indirect Subsidiary of the Company
(as the case may be) makes periodic interest payments on such Junior
Subordinated Debt, which interest payments are in turn used by the Hybrid
Preferred Securities Subsidiary to make corresponding payments to the holders of
the preferred securities.

“Hybrid Preferred Securities Subsidiary” means any Delaware business trust (or
similar entity) (i) all of the common equity interest of which is owned (either
directly or indirectly through one or more wholly-owned Subsidiaries of the
Company) at all times by the Company or a wholly-owned direct or indirect
Subsidiary of the Company, (ii) that has been formed for the purpose of issuing
Hybrid Preferred Securities and (iii) substantially all of the assets of which
consist at all times solely of Junior Subordinated Debt issued by the Company or
a wholly-owned direct or indirect Subsidiary of the Company (as the case may be)
and payments made from time to time on such Junior Subordinated Debt.

“Indenture” means the Indenture, dated as of September 1, 1945, as supplemented
and amended from time to time, from the Company to The Bank of New York Mellon,
as successor trustee.

“Interest Period” means, with respect to a Eurodollar Advance, a period of one,
two, three or six months, or such shorter period agreed to by the Company and
the Banks, commencing on a Business Day selected by the Company pursuant to this
Agreement. Such Interest Period shall end on the day which corresponds
numerically to such date one, two, three or six months thereafter (or such
shorter period agreed to by the Company and the Banks); provided that if there
is no such numerically corresponding day in such next, second, third or sixth
succeeding month (or such shorter period, as applicable), such Interest Period
shall end on the last Business Day of such next, second, third or sixth
succeeding month (or such shorter period, as applicable). If an Interest Period
would otherwise end on a day which is not a Business Day, such Interest Period
shall end on the next succeeding Business Day; provided that if said next
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day. The Company may not select
any Interest Period that ends after the scheduled Maturity Date.

 

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“Junior Subordinated Debt” means any unsecured Debt of the Company or a
Subsidiary of the Company that is (i) issued in exchange for the proceeds of
Hybrid Equity Securities or Hybrid Preferred Securities and (ii) subordinated to
the rights of the Banks hereunder and under the other Credit Documents pursuant
to terms of subordination substantially similar to those set forth in Exhibit D,
or pursuant to other terms and conditions satisfactory to the Majority Banks.

“Lending Installation” means any office, branch, subsidiary or Affiliate of a
Bank.

“Lien” means any lien (statutory or otherwise), security interest, mortgage,
deed of trust, priority, pledge, charge, conditional sale, title retention
agreement, financing lease or other encumbrance or similar right of others, or
any agreement to give any of the foregoing.

“Loan” – see Section 2.1.

“Majority Banks” means, as of any date of determination, Banks in the aggregate
having more than 50% of the Aggregate Commitment as of such date or, if the
Aggregate Commitment has been terminated, Banks in the aggregate holding more
than 50% of the aggregate unpaid principal amount of the Aggregate Outstanding
Credit Exposure as of such date.

“Material Adverse Change” means any event, development or circumstance that has
had or could reasonably be expected to have a material adverse effect on (a) the
financial condition or results of operations of the Company and its Consolidated
Subsidiaries, taken as a whole, (b) the Company’s ability to perform its
obligations under any Credit Document or (c) the validity or enforceability of
any Credit Document or the rights or remedies of the Agent or the Banks
thereunder.

“Material Subsidiary” means any Subsidiary of the Company that, on a
consolidated basis with any of its Subsidiaries as of any date of determination,
accounts for more than 10 % of the consolidated assets of the Company and its
Consolidated Subsidiaries.

“Maturity Date” means the date which is eight (8) months after the Funding Date,
or, if such date is not a Business Day, on the immediately preceding Business
Day.

“Maximum Rate” – see Section 2.16.

“Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA.

“Net Proceeds” means, with respect to any sale or issuance of securities or
incurrence of Debt by any Person, the excess of (i) the gross cash proceeds
received by or on behalf of such Person in respect of such sale, issuance or
incurrence (as the case may be) over (ii) customary underwriting commissions,
auditing and legal fees, printing costs, rating agency fees and other customary
and reasonable fees and expenses incurred by such Person in connection
therewith.

“Net Worth” means, with respect to any Person, the excess of such Person’s total
assets over its total liabilities, total assets and total liabilities each to be
determined in accordance with GAAP consistently applied, excluding from the
determination of total assets (i) goodwill,

 

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organizational expenses, research and development expenses, trademarks, trade
names, copyrights, patents, patent applications, licenses and rights in any
thereof, and other similar intangibles, (ii) cash held in a sinking or other
analogous fund established for the purpose of redemption, retirement or
prepayment of capital stock or Debt, and (iii) any item not included in clause
(i) or (ii) above, that is treated as an intangible asset in conformity with
GAAP.

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all accrued and unpaid fees and all other obligations (including
indemnities and interest and fees accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) of the Company to the Banks or
to any Bank or the Agent arising under the Credit Documents.

“Off-Balance Sheet Liability” of a Person means (i) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (ii) any liability under any sale and leaseback transaction which
is not a Capital Lease, or (iii) any liability under any so-called “synthetic
lease” transaction entered into by such Person; but excluding from this
definition, any Operating Leases.

“Operating Lease” of a Person means any lease of Property (other than a Capital
Lease) by such Person as lessee.

“Other Taxes” – see Section 4.5(b).

“Outstanding Credit Exposure” means, as to any Bank at any time, the aggregate
principal amount of its Loans outstanding at such time.

“Parent” means, with respect to any Bank, any Person as to which such Bank is,
directly or indirectly, a subsidiary.

“Payment Date” means the second Business Day of each calendar quarter occurring
after the Closing Date.

“PBGC” means the Pension Benefit Guaranty Corporation and any entity succeeding
to any or all of its functions under ERISA.

“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature.

“Plan” means any employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Company or any ERISA Affiliate and covered by
Title IV of ERISA.

“Plan Termination Event” means (a) a Reportable Event described in Section 4043
of ERISA and the regulations issued thereunder (other than a Reportable Event
not subject to the provision for 30-day notice to the PBGC under such
regulations), (b) the withdrawal of the Company or any ERISA Affiliate from a
Plan during a plan year in which it was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a
Plan or the treatment of a Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate a Plan by the PBGC or
to appoint a trustee to administer any Plan.

 

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“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

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

“Pro Rata Share” means, with respect to a Bank, a portion equal to (i) a
fraction the numerator of which is such Bank’s Commitment and the denominator of
which is the Aggregate Commitment and (ii) after the Commitments of all of the
Banks have terminated, a fraction the numerator of which is the Outstanding
Credit Exposure for such Bank, and the denominator of which is the Aggregate
Outstanding Credit Exposure at such time; provided, that in the case of
Section 4.7(c)(i), when a Defaulting Bank shall exist the Commitment or
Outstanding Credit Exposure, as applicable, of such Defaulting Bank shall be
disregarded when calculating such Bank’s “Pro Rata Share”.

“Regulation D” means Regulation D of the FRB from time to time in effect and
shall include any successor or other regulation or official interpretation of
the FRB relating to reserve requirements applicable to member banks of the
Federal Reserve System.

“Regulation U” means Regulation U of the FRB from time to time in effect and
shall include any successor or other regulation or official interpretation of
the FRB relating to the extension of credit by banks, non-banks and
non-broker-dealers for the purpose of purchasing or carrying margin stocks.

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

“Reportable Event” has the meaning assigned to that term in Title IV of ERISA.

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

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business, or any successor thereto.

“SEC” means the Securities and Exchange Commission or any governmental authority
which may be substituted therefor.

“Secured Debt” means senior, secured, long-term indebtedness for borrowed money
of the Company that is not guaranteed by any other Person or subject to any
other credit enhancement, including, for the avoidance of doubt, the First
Mortgage Bonds.

 

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“Securitized Bonds” means nonrecourse bonds or similar asset-backed securities
issued by a special-purpose Subsidiary of the Company which are payable solely
from specialized charges authorized by the utility commission of the relevant
state in connection with the recovery of (x) stranded regulatory costs,
(y) stranded clean air and pension costs and (z) other “Qualified Costs” (as
defined in M.C.L. §460.10h(g)) authorized to be securitized by the Michigan
Public Service Commission.

“Single Employer Plan” means a Plan maintained by the Company or any ERISA
Affiliate for employees of the Company or any ERISA Affiliate.

“Subsidiary” means, as to any Person, any corporation or other entity of which
at least a majority of the securities or other ownership interests having
ordinary voting power (absolutely or contingently) for the election of directors
or other Persons performing similar functions are at the time owned directly or
indirectly by such Person. Unless otherwise specified, all references herein to
a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries
of the Company.

“Supplemental Indenture” means that certain Supplemental Indenture, dated as of
the Closing Date, between the Company and The Bank of New York Mellon, as
successor trustee, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

“Taxes” means any and all present or future taxes, duties, assessments, fees,
levies, imposts, deductions, charges or withholdings, and any and all
liabilities with respect to the foregoing, that are imposed by a Governmental
Authority on or with respect to any payment made by the Company hereunder or
under any Bond, but excluding Excluded Taxes and Other Taxes.

“Total Consolidated Capitalization” means, at any date of determination, without
duplication, the sum of (a) Total Consolidated Debt plus all amounts excluded
from Total Consolidated Debt pursuant to clauses (ii), (iii) and (v) of the
proviso to the definition of such term (but only, in the case of securities of
the type described in clause (iii) of such proviso, to the extent such
securities have been deemed to be equity pursuant to Accounting Standards
Codification Subtopic 480-10 (previously referred to as Statement of Financial
Accounting Standards No. 150)), (b) equity of the common stockholders of the
Company, (c) equity of the preference stockholders of the Company and (d) equity
of the preferred stockholders of the Company, in each case determined at such
date.

“Total Consolidated Debt” means, at any date of determination, the aggregate
Debt of the Company and its Consolidated Subsidiaries (including, without
limitation, all Off-Balance Sheet Liabilities); provided that Total Consolidated
Debt shall exclude, without duplication, (i) the principal amount of any
Securitized Bonds, (ii) any Junior Subordinated Debt of the Company owned by any
Hybrid Equity Securities Subsidiary or Hybrid Preferred Securities Subsidiary,
(iii) such percentage of the Net Proceeds from any issuance of hybrid
debt/equity securities (other than Junior Subordinated Debt, Hybrid Equity
Securities and Hybrid Preferred Securities) by the Company or any Consolidated
Subsidiary as shall be agreed to be deemed equity by the Agent and the Company
prior to the issuance thereof (which determination shall be based on, among
other things, the treatment (if any) given to such securities by the applicable
rating

 

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agencies), (iv) to the extent that any portion of the disposition of the
Company’s Palisades Nuclear Plant shall be required to be accounted for as a
financing under GAAP rather than as a sale, the amount of liabilities reflected
on the Company’s consolidated balance sheet as the result of such disposition,
(v) Debt of any Affiliate of the Company that is (1) consolidated on the
financial statements of the Company solely as a result of the effect and
application of Accounting Standards Codification Subtopic 810-10 (previously
referred to as Financial Accounting Standards Board Interpretation No. 46(R) and
of Accounting Research Bulletin No. 51) and (2) non-recourse to the Company or
any of its Affiliates (other than the primary obligor of such Debt and any of
its Subsidiaries) and (vi) Debt of the Company and its Affiliates that is
re-categorized as such from certain lease obligations pursuant to Section 15 of
Accounting Standards Codification Subtopic 840-10 (previously referred to as
Emerging Issues Task Force Issue No. 01-8), any subsequent recommendation or
other interpretation, bulletin or other similar document by the Financial
Accounting Standards Board on or related to such re-categorization.

“Type” – see Section 2.4.

“Unsecured Debt” means senior, unsecured, long-term indebtedness for borrowed
money of the Company that is not guaranteed by any other Person or subject to
any other credit enhancement.

“USA Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
L. No. 107-56, 115 Stat. 272 (2001), as amended.

1.2 Interpretation.

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

(b) The words “include,” “includes” and “including” shall be deemed to be
followed by the phrase “without limitation.”

(c) Unless otherwise specified, each reference to an Article, Section, Exhibit
and Schedule means an Article or Section of or an Exhibit or Schedule to this
Agreement.

(d) Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.

(e) The word “will” shall be construed to have the same meaning and effect as
the word “shall”.

(f) The word “law” shall be construed as referring to all statutes, rules,
regulations, codes and other laws (including official rulings and
interpretations thereunder having the force of law or with which affected
Persons customarily comply), and all judgments, orders and decrees, of all
Governmental Authorities.

(g) Unless the context requires otherwise, any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein)

 

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(h) Unless the context requires otherwise, any definition of or reference to any
statute, rule or regulation shall be construed as referring thereto as from time
to time amended, supplemented or otherwise modified (including by succession of
comparable successor laws),

(i) Unless the context requires otherwise, any reference herein to any Person
shall be construed to include such Person’s successors and assigns (subject to
any restrictions on assignment set forth herein) and, in the case of any
Governmental Authority, any other Governmental Authority that shall have
succeeded to any or all functions thereof,

(j) Unless the context requires otherwise, the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof,

(k) Unless the context requires otherwise, the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

1.3 Accounting Terms. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP. If any changes in generally accepted
accounting principles are hereafter required or permitted and are adopted by the
Company or any of its Subsidiaries, or the Company or any of its Subsidiaries
shall change its application of generally accepted accounting principles with
respect to any Off-Balance Sheet Liabilities (including the application of
Accounting Standards Codification Subtopic 460-10 (previously referred to as
Financial Accounting Standards Board Interpretation No. 45), Accounting
Standards Codification Subtopic 810-10 (previously referred to as Financial
Accounting Standards Board Interpretation No. 46(R)) and Accounting Standards
Codification Subtopic 480-10 (previously referred to as Statement of Financial
Accounting Standards No. 150)), in each case with the agreement of its
independent certified public accountants, and such changes result in a change in
the method of calculation of any of the financial covenants, tests, restrictions
or standards herein or in the related definitions or terms used therein
(“Accounting Changes”), the parties hereto agree, at the Company’s request, to
enter into negotiations, in good faith, in order to amend such provisions in a
credit neutral manner so as to reflect equitably such changes with the desired
result that the criteria for evaluating the Company’s and its Subsidiaries’
financial condition shall be the same after such changes as if such changes had
not been made; provided that, until such provisions are amended in a manner
reasonably satisfactory to the Majority Banks, no Accounting Change shall be
given effect in such calculations. In the event such amendment is entered into,
all references in this Agreement to GAAP shall mean generally accepted
accounting principles as of the date of such amendment. Notwithstanding any
other provision contained herein, all terms of an accounting or financial nature
used herein shall be construed, and all computations of amounts and ratios
referred to herein shall be made, (i) without giving effect to any election
under Section 25 of Accounting Standards Codification Subtopic 825-10
(previously referred to as Statement of Financial Accounting Standards No. 159)
(or any other Accounting Standards Codification Topic having a similar result or
effect) to value any Indebtedness or other liabilities of the Company or

 

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any Subsidiary at “fair value”, as defined therein and (ii) without giving
effect to any treatment of Debt in respect of convertible debt instruments under
Accounting Standards Codification Subtopic 470-20 (or any other Accounting
Standards Codification Topic having a similar result or effect) to value any
such Debt in a reduced or bifurcated manner as described therein, and such Debt
shall at all times be valued at the full stated principal amount thereof.

ARTICLE II

THE ADVANCES

2.1 Commitment. Each Bank severally agrees, on the terms and conditions set
forth in this Agreement, to make term loans to the Company on the Funding Date
in the aggregate principal amount of $375,000,000 (the “Loans”); provided that,
after giving effect to the making of such Loan, such Bank’s Outstanding Credit
Exposure shall not exceed its Commitment. Amounts repaid or prepaid in respect
of the Loans may not be reborrowed.

2.2 Repayment of Loans. The Aggregate Outstanding Credit Exposure and all other
unpaid obligations of the Company hereunder shall be paid in full on or before
the Maturity Date.

2.3 Ratable Loans. Each Advance shall consist of Loans made by the several Banks
ratably according to their Pro Rata Shares.

2.4 Types of Advances. The Advances may be Floating Rate Advances or Eurodollar
Advances (each a “Type” of Advance), or a combination thereof, as selected by
the Company in accordance with Sections 2.8 and 2.9.

2.5 [Intentionally Omitted].

2.6 Minimum Amount of Advances. Each Advance shall be in the minimum amount of
$10,000,000 (and in integral multiples of $1,000,000 if in excess thereof);
provided that any Floating Rate Advance may be in the amount of the Aggregate
Commitment (rounded down, if necessary, to an integral multiple of $1,000,000).

2.7 Principal Payments and Changes in Commitments.

(a) The Company may from time to time prepay, without penalty or premium, all
outstanding Floating Rate Advances or, in a minimum aggregate amount of
$10,000,000 or a higher integral multiple of $1,000,000, any portion of the
outstanding Floating Rate Advances upon one (1) Business Day’s prior written
notice to the Agent. The Company may from time to time prepay, subject to the
payment of any funding indemnification amounts required by Section 4.4, but
otherwise without penalty or premium, all outstanding Eurodollar Advances or, in
a minimum aggregate amount of $10,000,000 or a higher integral multiple of
$1,000,000, any portion of any outstanding Eurodollar Advance upon three
(3) Business Days’ prior written notice to the Agent; provided that if, after
giving effect to any such prepayment, the principal amount of any Eurodollar
Advance is less than $10,000,000, such Eurodollar Advance shall automatically
convert into a Floating Rate Advance.

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(b) Each prepayment of an Advance pursuant to Section 2.7(a) shall be applied to
prepay the Loans ratably in accordance with the then outstanding amounts
thereof. Prepayment shall be accompanied by (i) accrued interest to the extent
required by Section 2.10 and (ii) funding indemnification amounts required by
Section 4.4.

(c) Unless previously terminated, the Aggregate Commitment shall be
automatically reduced and terminated ratably among the Banks immediately after
the making of the Loans on the Funding Date (or, if no Loans have been made on
or before the Funding Date, at 5:00 p.m. (New York City time) on such date). At
any time prior to the Funding Date, the Company may permanently reduce the
Aggregate Commitment in whole, or in part ratably among the Banks in the minimum
amount of $10,000,000 (and in multiples of $1,000,000 if in excess thereof),
upon at least five (5) Business Days’ prior written notice to the Agent, which
notice shall specify the amount of any such reduction.

2.8 Method of Selecting Types and Interest Periods for New Advances. The Company
shall select the Type of Advance and, in the case of each Eurodollar Advance,
the Interest Period applicable thereto from time to time. The Company shall give
the Agent irrevocable notice (a “Borrowing Notice”) not later than 12:00 noon
(New York City time) on the Borrowing Date of each Floating Rate Advance and not
later than 12:00 noon (New York City time) three (3) Business Days before the
Borrowing Date for each Eurodollar Advance, specifying:

(i) the Borrowing Date, which shall be a Business Day;

(ii) the aggregate amount of such Advance;

(iii) the Type of Advance selected; and

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

Promptly after receipt thereof, the Agent will notify each Bank of the contents
of each Borrowing Notice. Not later than 3:00 p.m. (New York City time) on each
Borrowing Date, each Bank shall make available its Loan in funds immediately
available in Chicago, Illinois to the Agent at its address specified pursuant to
Section 14.1. To the extent funds are received from the Banks, the Agent will
make such funds available to the Company at the Agent’s aforesaid address. No
Bank’s obligation to make any Loan shall be affected by any other Bank’s failure
to make any Loan.

2.9 Conversion and Continuation of Outstanding Advances. Floating Rate Advances
shall continue as Floating Rate Advances unless and until such Floating Rate
Advances are converted into Eurodollar Advances pursuant to this Section 2.9 or
are repaid in accordance with Section 2.2 or 2.7. Each Eurodollar Advance shall
continue as a Eurodollar Advance until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Advance shall be automatically
converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or
was repaid in accordance with Section 2.2 or 2.7 or (y) the Company shall have
given the Agent a Conversion/Continuation Notice (as defined below) requesting
that, at the end of such Interest Period, such Eurodollar Advance continue as a
Eurodollar Advance for the same or

 

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another Interest Period. Subject to the terms of Section 2.6, the Company may
elect from time to time to convert all or any part of a Floating Rate Advance
into a Eurodollar Advance. The Company shall give the Agent irrevocable notice
(a “Conversion/Continuation Notice”) of each conversion of a Floating Rate
Advance into a Eurodollar Advance or continuation of a Eurodollar Advance not
later than 12:00 noon (New York City time) at least three Business Days prior to
the date of the requested conversion or continuation, specifying:

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

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

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

provided that no Advance may be continued as, or converted into, a Eurodollar
Advance if (x) such continuation or conversion would violate any provision of
this Agreement or (y) a Default or Event of Default exists.

2.10 Interest Rates, Interest Payment Dates. (a) Subject to Section 2.11, each
Advance shall bear interest as follows:

(i) at any time such Advance is a Floating Rate Advance, at a rate per annum
equal to the Floating Rate from time to time in effect; and

(ii) at any time such Advance is a Eurodollar Advance, at a rate per annum equal
to the Eurodollar Rate for each applicable Interest Period.

Changes in the rate of interest on that portion or any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Floating Rate.

(b) Interest accrued on each Floating Rate Advance shall be payable on each
Payment Date and on the Maturity Date. Interest accrued on each Eurodollar
Advance shall be payable on the last day of its applicable Interest Period, on
any date on which such Eurodollar Advance is prepaid and on the Maturity Date.
Interest accrued on each Eurodollar Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest on Eurodollar Advances and
interest on Floating Rate Advances based on the Federal Funds Effective Rate
shall be calculated for actual days elapsed on the basis of a 360-day year.
Interest on Floating Rate Advances based on the Prime Rate shall be calculated
for actual days elapsed on the basis of a 365- or 366-day year, as appropriate.
Interest on each Advance shall accrue from and including the date such Advance
is made to but excluding the date payment thereof is received in accordance with
Section 2.12. If any payment of principal of or interest on an Advance shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day (unless, in the case of a Eurodollar Advance,
such next succeeding Business Day falls in a new calendar month, in which case
such payment shall be due on the immediately preceding Business Day) and, in the
case of a principal payment, such extension of time shall be included in
computing interest in connection with such payment.

 

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2.11 Rate on Overdue Amounts. If any principal of or interest on any Loan or any
fee or other amount payable by the Company hereunder is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
shall bear interest, after as well as before judgment, at a rate per annum equal
to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan or (ii) in the case of any other amount, the Floating
Rate plus 2%.

2.12 Method of Payment; Sharing Set-Offs. (a) All payments of principal,
interest and fees hereunder shall be made in immediately available funds to the
Agent at its address specified on its signature page to this Agreement (or at
any other Lending Installation of the Agent specified in writing by the Agent to
the Company), without setoff or counterclaim, not later than 12:00 noon (New
York City time) on the date when due and shall (except as otherwise specifically
required hereunder) be applied ratably by the Agent among the Banks. Funds
received after such time shall be deemed received on the following Business Day
unless the Agent shall have received from, or on behalf of, the Company a
Federal Reserve reference number with respect to such payment before 1:00 p.m.
(New York City time) on the date of such payment. Each payment delivered to the
Agent for the account of any Bank shall be delivered promptly by the Agent in
the same type of funds received by the Agent to such Bank at the address
specified for such Bank in its Administrative Questionnaire or at any Lending
Installation specified in a notice received by the Agent from such Bank. The
Agent is hereby authorized to charge the account of the Company maintained with
JPMorgan Chase Bank, N.A., if any, for each payment of principal, interest and
fees as such payment becomes due hereunder.

(b) If any Bank shall fail to make any payment required to be made by it
pursuant to Section 2.8, Section 2.15 or Section 13.8, then the Agent may, in
its discretion and notwithstanding any contrary provision hereof, apply any
amounts thereafter received by the Agent for the account of such Bank and for
the benefit of the Agent to satisfy such Bank’s obligations under such Sections
until all such unsatisfied obligations are fully paid.

2.13 Bonds; Record-keeping; Telephonic Notices.

(a) The obligation of the Company to repay the Obligations shall be evidenced by
one or more Bonds.

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

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

 

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(d) The entries maintained in the accounts maintained pursuant to clauses
(b) and (c) above shall be prima facie evidence of the existence and amounts of
the Obligations therein recorded absent manifest error; provided that the
failure of the Agent or any Bank to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Company to repay the
Obligations in accordance with their terms.

(e) The Company hereby authorizes the Banks and the Agent to make Advances based
on telephonic notices made by any person or persons the Agent or any Bank in
good faith believes to be acting on behalf of the Company. The Company agrees to
deliver promptly to the Agent a written confirmation of each telephonic notice
signed by a Designated Officer. If the written confirmation differs in any
material respect from the action taken by the Agent and the Banks, the records
of the Agent and the Banks shall govern absent manifest error.

2.14 Lending Installations. Subject to the provisions of Section 4.6, each Bank
may book its Loans at any Lending Installation selected by such Bank and may
change its Lending Installation from time to time. All terms of this Agreement
shall apply to any such Lending Installation and the Loans shall be deemed held
by the applicable Bank for the benefit of such Lending Installation. Each Bank
may, by written or facsimile notice to the Company, designate a Lending
Installation through which Loans will be made by it and for whose account
payments on the Loans are to be made.

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

2.16 Maximum Rate. Notwithstanding anything to the contrary contained in any
Credit Document, the interest paid or agreed to be paid under the Credit
Documents shall not exceed the maximum rate of non-usurious interest permitted
by applicable law (the “Maximum Rate”). If the Agent or any Bank shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Company.

ARTICLE III

INTENTIONALLY OMITTED

ARTICLE IV

CHANGE IN CIRCUMSTANCES

 

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4.1 Yield Protection.

(a) If any Change in Law,

(i) subjects any Bank or any applicable Lending Installation to any tax, duty,
charge, withholding levy, imposts, deduction, assessment or fee on its loans,
loan principal, letters of credit, commitments, or other obligations, or its
deposits, reserves, other liabilities or capital attributable thereto (other
than (A) Taxes, (B) Excluded Taxes, and (C) Other Taxes), or

(ii) imposes or increases or deems applicable any reserve, assessment, insurance
charge, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by any Bank or any applicable Lending
Installation (including any reserve costs under Regulation D with respect to
Eurocurrency liabilities (as defined in Regulation D)), or

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

(iv) affects the amount of capital required or expected to be maintained by any
Bank or any applicable Lending Installation or any corporation controlling any
Bank and such Bank determines the amount of capital required is increased by or
based upon the existence of this Agreement or its obligation to make Advances
hereunder or of commitments of this type,

then, upon presentation by such Bank to the Company of a certificate (as
referred to in the immediately succeeding sentence of this Section 4.1) setting
forth the basis for such determination and the additional amounts reasonably
determined by such Bank for the period of up to ninety (90) days prior to the
date on which such certificate is delivered to the Company and the Agent, to be
sufficient to compensate such Bank in light of such circumstances, the Company
shall within thirty (30) days of such delivery of such certificate pay to the
Agent for the account of such Bank the specified amounts set forth on such
certificate. The affected Bank shall deliver to the Company and the Agent a
certificate setting forth the basis of the claim and specifying in reasonable
detail the calculation of such increased expense, which certificate shall be
prima facie evidence as to such increase and such amounts. An affected Bank may
deliver more than one certificate to the Company during the term of this
Agreement. In making the determinations contemplated by the above-referenced
certificate, any Bank may make such reasonable estimates, assumptions,
allocations and the like that such Bank in good faith determines to be
appropriate, and such Bank’s selection thereof in accordance with this
Section 4.1 shall be conclusive and binding on the Company, absent manifest
error.

(b) No Bank shall be entitled to demand compensation or be compensated hereunder
to the extent that such compensation relates to any period of time more than
ninety (90) days

 

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prior to the date upon which such Bank first notified the Company of the
occurrence of the event entitling such Bank to such compensation (unless, and to
the extent, that any such compensation so demanded shall relate to the
retroactive application of any event so notified to the Company).

4.2 Replacement of Banks. If any Bank shall make a demand for payment under
Section 4.1, then within thirty (30) days after such demand, the Company may,
with the approval of the Agent (which approval shall not be unreasonably
withheld) and provided that no Default or Event of Default shall then have
occurred and be continuing, demand, at the Company’s sole cost and expense, that
such Bank assign to one or more financial institutions designated by the Company
and approved by the Agent all (but not less than all) of such Bank’s Commitment
and Outstanding Credit Exposure within the period ending on the later of such
30th day and the last day of the longest of the then current Interest Periods or
maturity dates for such Outstanding Credit Exposure. Any such assignment shall
be consummated on terms satisfactory to the assigning Bank; provided that such
Bank’s consent to such assignment shall not be unreasonably withheld.

(b) If the Company shall elect to replace a Bank pursuant to clause (a) above,
the Company shall prepay the Outstanding Credit Exposure of such Bank, and the
financial institution or institutions selected by the Company shall replace such
Bank as a Bank hereunder pursuant to an instrument satisfactory to the Company,
the Agent and the Bank being replaced by making Advances to the Company in the
amount of the Outstanding Credit Exposure of such assigning Bank and assuming
all the same rights and responsibilities hereunder as such assigning Bank and
having the same Commitment as such assigning Bank.

(c) If any Bank becomes a Defaulting Bank, then the Company may, at its sole
expense and effort, upon notice to such Bank and the Agent, require such Bank to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 12.1), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Bank, if such Bank accepts such
assignment); provided that (i) to the extent required pursuant to
Section 12.1(c), the Company shall have received the necessary consents from the
Agent, if any, and (ii) such Bank shall have received payment of an amount equal
to its Outstanding Credit Exposure, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such Outstanding Credit Exposure and accrued interest and fees) or the Company
(in the case of all other amounts). A Bank shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Bank or otherwise, the circumstances entitling the Company to require such
assignment and delegation cease to apply.

4.3 Availability of Eurodollar Rate Loans. If:

(a) any Bank determines that maintenance of a Eurodollar Rate Loan at a suitable
Lending Installation would violate any applicable law, rule, regulation or
directive, whether or not having the force of law, or

(b) the Majority Banks determine that (i) deposits of a type and maturity
appropriate to match fund Eurodollar Rate Loans are not available or (ii) the
Base Eurodollar Rate does not accurately reflect the cost of making or
maintaining a Eurodollar Rate Loan,

 

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then the Agent shall suspend the availability of Eurodollar Rate Loans and, in
the case of clause (a), require any outstanding Eurodollar Rate Loans to be
converted to Floating Rate Loans on such date as is required by the applicable
law, rule, regulation or directive.

4.4 Funding Indemnification. If any payment of a Eurodollar Rate Loan occurs on
a date which is not the last day of an applicable Interest Period, whether
because of prepayment or otherwise, or a Eurodollar Rate Loan is not made on the
date specified by the Company for any reason other than default by the Banks,
the Company will indemnify each Bank for any loss or cost (but not lost profits)
incurred by it resulting therefrom, including any loss or cost in liquidating or
employing deposits acquired to fund or maintain such Eurodollar Rate Loan.

4.5 Taxes.

(a) All payments by the Company to or for the account of any Bank or the Agent
hereunder or under any Bond shall be made free and clear of and without
deduction for any and all Taxes unless such deduction is required by law. If the
Company shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder to any Bank or the Agent, (i) the sum payable shall be
increased by the amount of such Taxes required to be withheld as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.5) such Bank or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Company shall make such deductions,
(iii) the Company shall pay the full amount deducted to the relevant authority
in accordance with applicable law and (iv) the Company shall furnish to the
Agent the original copy of a receipt evidencing payment thereof within thirty
(30) days after such payment is made.

(b) In addition, the Company hereby agrees to pay any present or future stamp or
documentary taxes and any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under any Bond or from the
execution or delivery of, or otherwise with respect to, this Agreement or any
Bond (“Other Taxes”).

(c) The Company hereby agrees to indemnify the Agent and each Bank for the full
amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed on
amounts payable under this Section 4.5) paid by the Agent or such Bank and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. Payments due under this indemnification shall be made within
thirty (30) days of the date the Agent or such Bank makes demand therefor
pursuant to Section 4.6.

(d) Each Bank that is not incorporated under the laws of the United States of
America or a state thereof (each a “Non-U.S. Bank”) agrees that it will, not
more than ten (10) Business Days after the Closing Date, or, if later, not more
than ten (10) Business Days after becoming a Bank hereunder, (i) deliver to each
of the Company and the Agent two duly completed copies of United States Internal
Revenue Service Form W-8BEN or W-8ECI, or any other form or documentation
prescribed by applicable law, certifying in either case that such Bank is
entitled to receive payments under this Agreement without deduction or
withholding of any United

 

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States federal income taxes, and (ii) deliver to each of the Company and the
Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States backup
withholding tax. Each Non-U.S. Bank further undertakes to deliver to each of the
Company and the Agent (x) renewals or additional copies of such form (or any
successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by the Company or the Agent. All forms or
amendments described in the preceding sentence shall certify that such Bank is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event
(including any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Bank from duly completing
and delivering any such form or amendment with respect to it and such Bank
advises the Company and the Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax.

(e) For any period during which a Non-U.S. Bank has failed to provide the
Company with an appropriate form pursuant to clause (d), above (unless such
failure is due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Bank shall not be entitled to indemnification under
this Section 4.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Bank which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (d) above, the Company shall take such
steps as such Non-U.S. Bank shall reasonably request to assist such Non-U.S.
Bank to recover such Taxes.

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

(g) If a payment made to a Bank under this Agreement would be subject to
U.S. Federal withholding tax imposed by FATCA if such Bank were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Bank
shall deliver to the Agent, at the time or times prescribed by law and at such
time or times reasonably requested by the Agent, such documentation prescribed
by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the
Code) and such additional documentation reasonably requested by the Agent as may
be necessary for the Agent to comply with its obligations under FATCA, to
determine that such Bank has or has not complied with such Bank’s obligations
under FATCA and, as necessary, to determine the amount to deduct and withhold
from such payment. Solely for purposes of this Section 4.5(g), “FATCA” shall
include any amendments made to FATCA after the date of this Agreement.

 

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(h) Each Bank shall severally indemnify the Agent for any taxes, levies,
imposts, duties, deductions, withholdings, assessments, fees or other charges
imposed by any taxing authority (but, in the case of any Taxes, only to the
extent that the Company has not already indemnified the Agent for such Taxes and
without limiting the obligation of the Company to do so) attributable to such
Bank that are paid or payable by the Agent in connection with this Agreement or
any Bond and any reasonable expenses arising therefrom or with respect thereto,
whether or not such amounts were correctly or legally imposed or asserted by the
relevant taxing authority. The indemnity under this Section 4.5(h) shall be paid
within ten (10) days after the Agent delivers to the applicable Bank a
certificate stating the amount so paid or payable by the Agent. Such certificate
shall be conclusive of the amount so paid or payable absent manifest error. The
obligations of the Banks under this clause (h) shall survive the payment of the
Obligations and termination of this Agreement.

4.6 Bank Certificates, Survival of Indemnity. To the extent reasonably possible,
each Bank shall designate an alternate Lending Installation with respect to
Eurodollar Rate Loans to reduce any liability of the Company to such Bank under
Section 4.1 or to avoid the unavailability of Eurodollar Rate Loans under
Section 4.3, so long as such designation is not disadvantageous to such Bank. A
certificate of such Bank as to the amount due under Section 4.1, 4.4 or 4.5
shall be final, conclusive and binding on the Company in the absence of manifest
error. Determination of amounts payable under such Sections in connection with a
Eurodollar Rate Loan shall be calculated as though each Bank funded each
Eurodollar Rate Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Base
Eurodollar Rate applicable to such Loan whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in any certificate shall
be payable on demand after receipt by the Company of such certificate. The
obligations of the Company under Sections 4.1, 4.4 and 4.5 shall survive payment
of the Obligations and termination of this Agreement; provided that no Bank
shall be entitled to compensation to the extent that such compensation relates
to any period of time more than ninety (90) days after the termination of this
Agreement.

4.7 Defaulting Banks.

Notwithstanding any provision of this Agreement to the contrary, if any Bank
becomes a Defaulting Bank, then, so long as such Bank is a Defaulting Bank, the
Commitment and Outstanding Credit Exposure of such Defaulting Bank shall not be
included in determining whether the Majority Banks have taken or may take any
action hereunder (including any consent to any amendment or waiver pursuant to
Section 10.1); provided, that this Section 4.7 shall not apply to the vote of a
Defaulting Bank in the case of an amendment, waiver or other modification
requiring the consent of such Bank or each Bank affected thereby.

In the event that the Agent and the Company each agrees that a Defaulting Bank
has adequately remedied all matters that caused such Bank to be a Defaulting
Bank, then on such date such Bank shall purchase at par such of the Loans of the
other Banks as the Agent shall determine may be necessary in order for such Bank
to hold such Loans in accordance with its Pro Rata Share of the Aggregate
Commitment.

 

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ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Company hereby represents and warrants that:

5.1 Incorporation and Good Standing. Each of the Company and its Material
Subsidiaries is duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of organization.

5.2 Corporate Power and Authority: No Conflicts. The execution, delivery and
performance by the Company of the Credit Documents are within the Company’s
corporate powers, have been duly authorized by all necessary corporate action
and do not (i) violate the Company’s charter, bylaws or any applicable law, or
(ii) breach or result in an event of default under any indenture or material
agreement, and do not result in or require the creation of any Lien upon or with
respect to any of its properties (except the Lien of the Indenture securing the
Bonds).

5.3 Governmental Approvals. No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Company of any
Credit Document, except for the authorization to issue, sell or guarantee
secured and/or unsecured short-term debt granted by the Federal Energy
Regulatory Commission, which authorization has been obtained and is in full
force and effect.

5.4 Legally Enforceable Agreements. Each Credit Document constitutes a legal,
valid and binding obligation of the Company, enforceable in accordance with its
terms, subject to (a) the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (b) the application of general principles of
equity (regardless of whether considered in a proceeding in equity or at law).

5.5 Financial Statements. (a) The audited balance sheet of the Company and its
Consolidated Subsidiaries as at December 31, 2011, and the related statements of
income and cash flows of the Company and its Consolidated Subsidiaries for the
fiscal year then ended, as set forth in the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2011 (copies of which have been furnished
to each Bank), fairly present the financial condition of the Company and its
Consolidated Subsidiaries as at such date and the results of operations of the
Company and its Consolidated Subsidiaries for the fiscal year ended on such
date, all in accordance with GAAP.

(b) The unaudited balance sheet of the Company and its Consolidated Subsidiaries
as at March 31, 2012, and the related unaudited statements of income and cash
flows of the Company and its Consolidated Subsidiaries for the three-month
period then ended, as set forth in the Company’s Quarterly Report on Form 10-Q
for the quarter ended March 31, 2012 (copies of which have been furnished to
each Bank), fairly present (subject to year-end audit adjustments) the financial
condition of the Company and its Consolidated Subsidiaries as at such date and
the results of operations of the Company and its Consolidated Subsidiaries for
the three-month period ended on such date, all in accordance with GAAP, and
since December 31, 2011, there has been no Material Adverse Change.

 

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5.6 Litigation. Except (i) to the extent described in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2011 as filed with the SEC,
and (ii) such other similar actions, suits and proceedings predicated on the
occurrence of the same events giving rise to any actions, suits and proceedings
described in the reports referred to in the foregoing clause (i) (all matters
described in clauses (i) and (ii) above, the “Disclosed Matters”), there is no
pending or threatened action, suit, investigation or proceeding against the
Company or any of its Consolidated Subsidiaries before any court, governmental
agency or arbitrator, which, if adversely determined, might reasonably be
expected to result in a Material Adverse Change. As of the Closing Date,
(a) there is no litigation challenging the validity or the enforceability of any
of the Credit Documents and (b) there have been no adverse developments with
respect to the Disclosed Matters that have resulted, or could reasonably be
expected to result, in a Material Adverse Change.

5.7 Margin Stock. The Company is not engaged in the business of extending credit
for the purpose of buying or carrying margin stock (within the meaning of
Regulation U), and no proceeds of any Advance will be used to buy or carry any
margin stock or to extend credit to others for the purpose of buying or carrying
any margin stock.

5.8 ERISA. No Plan Termination Event has occurred or is reasonably expected to
occur with respect to any Plan. Neither the Company nor any ERISA Affiliate is
an employer under or has any liability with respect to a Multiemployer Plan.

5.9 Insurance. All insurance required by Section 6.2 is in full force and
effect.

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

5.11 Investment Company Act. The Company is not an investment company (within
the meaning of the Investment Company Act of 1940, as amended).

5.12 Bonds. The issuance to the Agent of Bonds pursuant to the terms of this
Agreement as evidence of the Obligations (i) does not violate any provision of
the Indenture or any other agreement or instrument, or any law or regulation, or
judicial or regulatory order, judgment or decree, to which the Company or any of
its Subsidiaries is a party or by which any of the foregoing is bound and
(ii) does provide the Banks, as beneficial holders of the Bonds through the
Agent, the benefit of the Lien of the Indenture equally and ratably with the
holders of other First Mortgage Bonds.

5.13 Disclosure. The Company has not withheld any fact from the Agent or the
Banks in regard to the occurrence of a Material Adverse Change; and all
financial information delivered by the Company to the Agent and the Banks on and
after the date of this Agreement is true and correct in all material respects as
at the dates and for the periods indicated therein.

5.14 OFAC. Neither the Company nor any Subsidiary or Affiliate of the Company is
named on the United States Department of the Treasury’s Specially Designated
Nationals or Blocked Persons list available through
http://www.treas.gov/offices/eotffc/ofac/sdn/t11sdn.pdf or as otherwise
published from time.

 

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5.15 Delivery of Documents. On or prior to the Closing Date, the Company
delivered, or caused to be delivered, true, accurate and complete copies of the
Bonds, the Supplemental Indenture and the Bond Delivery Agreement, each as in
effect as of the Closing Date.

ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Obligations shall remain unpaid or any Bank shall have any
Commitment under this Agreement:

6.1 Payment of Taxes, Etc. The Company shall, and shall cause each of its
Subsidiaries to, pay and discharge, before the same shall become delinquent,
(a) all taxes, assessments and governmental charges or levies imposed upon it or
upon its property, and (b) all lawful claims which, if unpaid, might by law
become a Lien upon its property; provided that the Company shall not be required
to pay or discharge any such tax, assessment, charge or claim (i) which is being
contested by it in good faith and by proper procedures or (ii) the non-payment
of which will not result in a Material Adverse Change.

6.2 Maintenance of Insurance. The Company shall, and shall cause each of its
Material Subsidiaries to, maintain insurance in such amounts and covering such
risks with respect to its business and properties as is usually carried by
companies engaged in similar businesses and owning similar properties, either
with reputable insurance companies or, in whole or in part, by establishing
reserves or one or more insurance funds, either alone or with other corporations
or associations.

6.3 Preservation of Corporate Existence, Etc. Except as provided in Section 7.3,
the Company shall, and shall cause each of its Material Subsidiaries to,
(a) preserve and maintain its corporate existence, rights and franchises, and
(b) qualify and remain qualified as a foreign corporation in each jurisdiction
in which such qualification is necessary in view of its business and operations
or the ownership of its properties; provided that the Company shall not be
required to preserve any such right or franchise under clause (a) above or to
remain so qualified under clause (b) above unless the failure to do so would
reasonably be expected to result in a Material Adverse Change.

6.4 Compliance with Laws, Etc. The Company shall, and shall cause each of its
Consolidated Subsidiaries to, comply with the requirements of all applicable
laws, rules, regulations and orders of any governmental authority, the
non-compliance of which would reasonably be expected to result in a Material
Adverse Change.

6.5 Visitation Rights. The Company shall, and shall cause each of its Material
Subsidiaries to, at any reasonable time and from time to time, permit the Agent,
any of the Banks or any agents or representatives thereof to examine and make
copies of and abstracts from its records and books of account, visit its
properties and discuss its affairs, finances and accounts with any of its
officers.

 

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6.6 Keeping of Books. The Company shall, and shall cause each of its
Consolidated Subsidiaries to, keep adequate records and books of account, in
which full and correct entries shall be made of all of its financial
transactions and its assets and business so as to permit the Company and its
Consolidated Subsidiaries to present financial statements in accordance with
GAAP.

6.7 Reporting Requirements. The Company shall furnish to the Agent, with
sufficient copies for each of the Banks (and the Agent shall thereafter promptly
make available to the Banks):

(a) as soon as practicable and in any event within five (5) Business Days after
becoming aware of the occurrence of any Default or Event of Default, a statement
of a Designated Officer as to the nature thereof, and as soon as practicable and
in any event within five (5) Business Days thereafter, a statement of a
Designated Officer as to the action which the Company has taken, is taking or
proposes to take with respect thereto;

(b) as soon as available and in any event within sixty (60) days after the end
of each of the first three quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
at the end of such quarter, and the related consolidated statements of income,
cash flows and common stockholder’s equity of the Company and its Consolidated
Subsidiaries as at the end of and for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
date or period of the preceding fiscal year, or statements providing
substantially similar information (which requirement shall be deemed satisfied
by the delivery of the Company’s quarterly report on Form 10-Q for such
quarter), all in reasonable detail and duly certified (subject to the absence of
footnotes and to year-end audit adjustments) by a Designated Officer as having
been prepared in accordance with GAAP, together with (i) a certificate of a
Designated Officer stating that such officer has no knowledge (having made due
inquiry with respect thereto) that a Default or Event of Default has occurred
and is continuing, or, if a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the actions which the
Company has taken, is taking or proposes to take with respect thereto, and
(ii) a certificate of a Designated Officer, in substantially the form of Exhibit
B hereto, setting forth the Company’s computation of the financial ratio
specified in Article VIII as of the end of the immediately preceding fiscal
quarter or year, as the case may be, of the Company;

(c) as soon as available and in any event within one hundred twenty (120) days
after the end of each fiscal year of the Company, a copy of the Company’s Annual
Report on Form 10-K (or any successor form) for such year, including therein the
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
at the end of such year and the consolidated statements of income, cash flows
and common stockholder’s equity of the Company and its Consolidated Subsidiaries
as at the end of and for such year, or statements providing substantially
similar information, in each case (i) certified by independent public
accountants of recognized national standing selected by the Company and not
objected to by the Majority Banks (without a “going concern” or like
qualification or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of

 

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operations of the Company and its Consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, and (ii) together with (a) a
certificate of a Designated Officer stating that such officer has no knowledge
(having made due inquiry with respect thereto) that a Default or Event of
Default has occurred and is continuing, or, if a Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof and the actions
which the Company has taken, is taking or proposes to take with respect thereto
and (b) a certificate of a Designated Officer, in substantially the form of
Exhibit B hereto, setting forth the Company’s computation of the financial ratio
specified in Article VIII as of the end of the immediately preceding fiscal year
of the Company;

(d) promptly after the sending or filing thereof, notice of all proxy statements
which the Company sends to its stockholders, copies of all regular, periodic and
special reports (other than those which relate solely to employee benefit plans)
which the Company files with the SEC and notice of the sending or filing of
(and, upon the request of the Agent or any Bank, a copy of) any final prospectus
filed with the SEC;

(e) as soon as possible and in any event (i) within thirty (30) days after the
Company or any ERISA Affiliate knows or has reason to know that any Plan
Termination Event described in clause (a) of the definition of Plan Termination
Event with respect to any Plan has occurred and (ii) within ten (10) days after
the Company or any ERISA Affiliate knows or has reason to know that any other
Plan Termination Event with respect to any Plan has occurred and could
reasonably be expected to result in a material liability to the Company, a
statement of the Chief Financial Officer of the Company describing such Plan
Termination Event and the action, if any, which the Company or such ERISA
Affiliate, as the case may be, proposes to take with respect thereto;

(f) promptly, and in any event within five (5) Business Days, after becoming
aware thereof, notice of any upgrading or downgrading of the rating of the
Secured Debt (or, if applicable, the Unsecured Debt) by Moody’s or S&P;

(g) as soon as possible and in any event within five (5) Business Days after the
occurrence of any default under any agreement to which the Company or any of its
Subsidiaries is a party, which default would reasonably be expected to result in
a Material Adverse Change, and which is continuing on the date of such
certificate, a certificate of the president or chief financial officer of the
Company setting forth the details of such default and the action which the
Company or any such Subsidiary proposes to take with respect thereto; and

(h) promptly after requested, such other information respecting the business,
properties or financial condition of the Company as the Agent or any Bank
through the Agent may from time to time reasonably request in writing.

6.8 Use of Proceeds. The Company will use the proceeds of the Advances for
general corporate purposes. The Company will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Advances to purchase or carry any
“margin stock” (as defined in Regulation U).

 

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6.9 Maintenance of Properties, Etc. The Company shall, and shall cause each of
its Material Subsidiaries to, maintain in all material respects all of its
respective owned and leased Property in good and safe condition and repair to
the same degree as other companies engaged in similar businesses and owning
similar properties, and not permit, commit or suffer any waste or abandonment of
any such Property, and from time to time make or cause to be made all material
repairs, renewals and replacements thereof, including any capital improvements
which may be required; provided that such Property may be altered or renovated
in the ordinary course of the Company’s or its Subsidiaries’ business; and
provided, further, that the foregoing shall not restrict the sale of any asset
of the Company or any Subsidiary to the extent not prohibited by Section 7.2.

6.10 Bonds. The Company shall, until the date on which the Commitments have
terminated and all Obligations have been paid in full, cause the face amount of
all Bonds to at all times be equal to or greater than the greater of (a) the
Aggregate Commitment and (b) the Aggregate Outstanding Credit Exposure.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Obligations shall remain unpaid or any Bank shall have any
Commitment under this Agreement:

7.1 Liens. The Company shall not create, incur, assume or suffer to exist any
Lien upon or with respect to any of its properties, now owned or hereafter
acquired, except:

(a) Liens created pursuant to the Indenture securing the First Mortgage Bonds;

(b) Liens securing pollution control bonds, or bonds issued to refund or
refinance pollution control bonds (including Liens securing obligations
(contingent or otherwise) of the Company under letter of credit agreements or
other reimbursement or similar credit enhancement agreements with respect to
pollution control bonds); provided that the aggregate face amount of any such
bonds so issued shall not exceed the aggregate face amount of such pollution
control bonds, as the case may be, so refunded or refinanced;

(c) Liens in (and only in) assets acquired to secure Debt incurred to finance
the acquisition of such assets;

(d) statutory and common law banker’s Liens on bank deposits;

(e) Liens in respect of accounts receivable sold, transferred or assigned by the
Company;

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

(g) Liens of carriers, warehousemen, mechanics, materialmen and landlords
incurred in the ordinary course of business for sums not overdue or being
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on its books;

 

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(h) Liens incurred in the ordinary course of business in connection with
workers’ compensation, unemployment insurance or other forms of governmental
insurance or benefits, or to secure performance of tenders, statutory
obligations, leases and contracts (other than for borrowed money) entered into
in the ordinary course of business or to secure obligations on surety or appeal
bonds;

(i) judgment Liens in existence less than thirty (30) days after the entry
thereof or with respect to which execution has been stayed or the payment of
which is covered (subject to a customary deductible) by insurance;

(j) zoning restrictions, easements, licenses, covenants, reservations, utility
company rights, restrictions on the use of real property or minor irregularities
of title incident thereto which do not in the aggregate materially detract from
the value of the property or assets of the Company or any Subsidiary or
materially impair the operation of its business;

(k) Liens arising in connection with the financing of the Company’s fuel
resources, including nuclear fuel;

(l) Liens arising pursuant to M.C.L. 324.20138; provided that the aggregate
amount of all obligations secured by such Liens (excluding any such Liens of
which the Company has no knowledge or which are permitted by clause (f) above)
shall not exceed $20,000,000;

(m) Liens arising in connection with Securitized Bonds;

(n) Liens on natural gas, oil and mineral, or on stock in trade, material or
supplies manufactured or acquired for the purpose of sale and or resale in the
usual course of business or consumable in the operation of any of the properties
of the Company; provided that such Liens secure obligations not exceeding
$500,000,000 in aggregate principal amount; and

(o) other Liens securing obligations in an aggregate amount not in excess of
$500,000,000.

In addition, the Company will not, and will not permit any Subsidiary to,
create, incur, assume or suffer to exist any Lien on the Equity Interests of any
Material Subsidiary other than Liens permitted to exist under clauses (f), (g),
(h) or (i) above.

7.2 Sale of Assets. The Company will not, and will not permit any Material
Subsidiary to, sell, lease, assign, transfer or otherwise dispose of 25% or more
of its assets calculated with reference to total assets as reflected on the
Company’s consolidated balance sheet as at December 31, 2011, during the term of
this Agreement.

7.3 Mergers, Etc. The Company will not, and will not permit any Material
Subsidiary to, merge with or into or consolidate with or into any other Person,
except that the Company or any Material Subsidiary may merge with any other
Person; provided that, in each case, immediately after giving effect thereto,
(a) no event shall occur and be continuing which constitutes a Default or Event
of Default, (b) if the Company is party thereto, the Company is the

 

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surviving corporation, or, if the Company is not party thereto, a Material
Subsidiary is the surviving corporation, (c) neither the Company nor any
Material Subsidiary shall be liable with respect to any Debt or allow its
Property to be subject to any Lien which it could not become liable with respect
to or allow its Property to become subject to under this Agreement on the date
of such transaction and (d) the Company’s Net Worth shall be equal to or greater
than its Net Worth immediately prior to such merger.

7.4 Compliance with ERISA. The Company will not, and will not permit any ERISA
Affiliate to, permit to exist any occurrence of any Reportable Event, or any
other event or condition which presents a material (in the reasonable opinion of
the Majority Banks) risk of a termination by the PBGC of any Plan, which
termination will result in any material (in the reasonable opinion of the
Majority Banks) liability of the Company or such ERISA Affiliate to the PBGC.

7.5 Organizational Documents. The Company will not, and will not permit any
Consolidated Subsidiary to, amend, modify or otherwise change any of the terms
or provisions in any of their respective certificate of incorporation and
by-laws (or comparable constitutive documents) as in effect on the Closing Date
to the extent that such change is reasonably expected to result in a Material
Adverse Change.

7.6 Change in Nature of Business. The Company will not, and will not permit any
Material Subsidiary to, make any material change in the nature of its business
as carried on as of the Closing Date.

7.7 Transactions with Affiliates. The Company will not, and will not permit any
Subsidiary to, enter into any transaction with any of its Affiliates (other than
the Company or any Subsidiary) unless such transaction is on terms no less
favorable to the Company or such Subsidiary than if the transaction had been
negotiated in good faith on an arm’s-length basis with a non-Affiliate; provided
that the foregoing shall not prohibit (a) the payment by the Company or any
Subsidiary of dividends or other distributions on, or redemptions of, its
capital stock, (b) the purchase, acquisition or retirement by the Company or any
Subsidiary of the Company’s capital stock or (c) intercompany loans and advances
not otherwise prohibited by this Agreement.

ARTICLE VIII

FINANCIAL COVENANT

So long as any of the Obligations shall remain unpaid or any Bank shall have any
Commitment under this Agreement, the Company shall at all times maintain a ratio
of Total Consolidated Debt to Total Consolidated Capitalization of not greater
than 0.65 to 1.0.

ARTICLE IX

EVENTS OF DEFAULT

9.1 Events of Default. The occurrence of any of the following events shall
constitute an “Event of Default”:

(a) the Company shall fail to pay (i) any principal of any Advance when due and
payable within one (1) Business Day after the same becomes due, or (ii) any
interest on any Advance or any fee or other Obligation payable hereunder within
five (5) Business Days after such interest or fee or other Obligation becomes
due and payable;

 

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(b) any representation or warranty made by or on behalf of the Company in this
Agreement or any other Credit Document or in any certificate, document, report,
financial or other written statement furnished at any time pursuant to any
Credit Document shall prove to have been incorrect in any material respect on or
as of the date made or deemed made;

(c) (i) the Company or any of its Subsidiaries shall fail to perform or observe
any term, covenant or agreement contained in Section 6.3(a) (solely with respect
to the Company), Section 6.8, Section 6.10, Article VII or Article VIII; or
(ii) the Company shall fail to perform or observe any other term, covenant or
agreement on its part to be performed or observed in this Agreement or in any
other Credit Document and such failure under this clause (ii) shall continue for
thirty (30) consecutive days after the earlier of (x) a Designated Officer
obtaining knowledge of such breach and (y) written notice thereof by means of
facsimile, regular mail or written notice delivered in person (or telephonic
notice thereof confirmed in writing) having been given to the Company by the
Agent or the Majority Banks;

(d) the Company or any Material Subsidiary shall: (i) fail to pay any Debt
(other than the payment obligations described in clause (a) above) in excess of
$50,000,000, or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
the instrument or agreement relating to such Debt; or (ii) fail to perform or
observe any term, covenant or condition on its part to be performed or observed
under any agreement or instrument relating to any such Debt, when required to be
performed or observed, if the effect of such failure to perform or observe is to
accelerate, or to permit the acceleration of, the maturity of such Debt, unless
the obligee under or holder of such Debt shall have waived in writing such
circumstance, or such circumstance has been cured, so that such circumstance is
no longer continuing; or (iii) any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), in each case in accordance with the terms of such agreement or
instrument, prior to the stated maturity thereof; or (iv) generally not, or
shall admit in writing its inability to, pay its debts as such debts become due;

(e) the Company or any Material Subsidiary: (i) shall make an assignment for the
benefit of creditors, or petition or apply to any tribunal for the appointment
of a custodian, receiver or trustee for it or a substantial part of its assets;
or (ii) shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; or (iii) shall have had
any such petition or application filed or any such proceeding shall have been
commenced, against it, in which an adjudication or appointment is made or order
for relief is entered, or which petition, application or proceeding remains
undismissed for a period of sixty (60) consecutive days or more; or (iv) by any
act or omission shall indicate its consent to, approval of or acquiescence in
any such petition, application or proceeding or order for relief or the
appointment of a custodian, receiver or trustee for all or any substantial part
of its property; or (v) shall suffer any such custodianship, receivership or
trusteeship to continue undischarged for a period of sixty (60) days or more; or
(vi) shall take any corporate action to authorize any of the actions set forth
above in this clause (e);

 

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(f) one or more judgments, decrees or orders for the payment of money in excess
of $50,000,000 in the aggregate shall be rendered against the Company or any
Material Subsidiary and either (i) enforcement proceedings shall have been
commenced by any creditor upon any such judgment or order or (ii) there shall be
any period of more than thirty (30) consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect;

(g) any material provision of any Credit Document, after execution hereof or
delivery thereof under Article XI, shall for any reason other than the express
terms hereof or thereof cease to be valid and binding on any party thereto; or
the Company shall so assert in writing;

(h) any Plan Termination Event with respect to a Plan shall have occurred, and
thirty (30) days after notice thereof shall have been given to the Company by
the Agent, (i) such Plan Termination Event (if correctable) shall not have been
corrected and (ii) the then present value of such Plan’s vested benefits exceeds
the then current value of the assets accumulated in such Plan by more than the
amount of $50,000,000 (or in the case of a Plan Termination Event involving the
withdrawal of a “substantial employer” (as defined in Section 4001(A)(2) of
ERISA), the withdrawing employer’s proportionate share of such excess shall
exceed such amount);

(i) (x) any Bond shall cease to be in full force and effect or (y) the Company
shall deny that it has any liability or obligation under any Bond or purport to
revoke, terminate, rescind or redeem any Bond (other than in accordance with the
terms of the Bonds and the Indenture); or

(j) a Change in Control shall occur.

9.2 Remedies. If any Event of Default shall occur and be continuing, the Agent
shall upon the request, or may with the consent, of the Majority Banks, by
notice to the Company, (i) declare the Commitments to be terminated or
suspended, whereupon the same shall forthwith terminate, and/or (ii) declare the
Obligations to be forthwith due and payable whereupon the Aggregate Outstanding
Credit Exposure and all other Obligations shall become and be forthwith due and
payable, in each case without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by the Company; provided that
in the case of an Event of Default referred to in Section 9.1(e), the
Commitments shall automatically terminate and the Obligations shall
automatically become due and payable without notice, presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Company.

ARTICLE X

WAIVERS, AMENDMENTS AND REMEDIES

10.1 Amendments. Subject to the provisions of this Article X, the Majority Banks
(or the Agent with the consent in writing of the Majority Banks) and the Company
may enter into written agreements supplemental hereto for the purpose of adding
or modifying any provisions to the Credit Documents or changing in any manner
the rights of the Banks or the Company hereunder or waiving any Event of Default
hereunder; provided that no such supplemental agreement shall, without the
consent of all of the Banks:

 

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(a) Extend the maturity of any Loan or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon or fees
thereon.

(b) Modify the percentage specified in the definition of Majority Banks.

(c) Extend the Funding Date, the Maturity Date or increase the amount of the
Commitment of any Bank hereunder, or permit the Company to assign its rights
under this Agreement.

(d) Amend Section 6.10, this Section 10.1 or Section 12.11.

(e) Make any change in an express right in this Agreement of a single Bank to
give its consent, make a request or give a notice.

(f) Authorize the Agent to vote in favor of the release of all or substantially
all of the collateral securing the Bonds.

(g) Release all or any substantial portion of the Bonds.

(h) Amend any provisions hereunder relating to the pro rata treatment of the
Banks.

No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. Notwithstanding the
foregoing, no amendment to Section 4.7 shall be effective unless the same shall
be in writing and signed by the Agent and the Majority Banks.

10.2 Preservation of Rights. No delay or omission of the Banks or the Agent to
exercise any right under the Credit Documents shall impair such right or be
construed to be a waiver of any Default or Event of Default or an acquiescence
therein, and the making of an Advance notwithstanding the existence of a Default
or Event of Default or the inability of the Company to satisfy the conditions
precedent to such Advance shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Credit Documents
whatsoever shall be valid unless in writing signed by the Banks required
pursuant to Section 10.1, and then only to the extent in such writing
specifically set forth. All remedies contained in the Credit Documents or by law
afforded shall be cumulative and all shall be available to the Agent and the
Banks until the Obligations have been paid in full.

ARTICLE XI

CONDITIONS PRECEDENT

11.1 Effectiveness of this Agreement. This Agreement shall not become effective
unless the Agent shall have received (or such delivery shall have been waived in
accordance with Section 10.1):

 

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(a) (i) Counterparts of this Agreement executed by the Company and the Banks or
(ii) written evidence satisfactory to the Agent (which may include telecopy or
electronic transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.

(b) Copies of the Restated Articles of Incorporation of the Company, together
with all amendments, certified by the Secretary or an Assistant Secretary of the
Company, and a certificate of good standing, certified by the appropriate
governmental officer in its jurisdiction of incorporation.

(c) Copies, certified by the Secretary or an Assistant Secretary of the Company,
of its by-laws and of its Board of Directors’ resolutions (and resolutions of
other bodies, if any are deemed necessary by counsel for any Bank) authorizing
the execution of the Credit Documents.

(d) An incumbency certificate, executed by the Secretary or an Assistant
Secretary of the Company, which shall identify by name and title and bear the
original or facsimile signature of the officers of the Company authorized to
sign the Credit Documents and the officers or other employees authorized to make
borrowings hereunder, upon which certificate the Banks shall be entitled to rely
until informed of any change in writing by the Company.

(e) A certificate, signed by a Designated Officer of the Company, stating that
on the Closing Date (i) no Default or Event of Default has occurred and is
continuing and (ii) each representation or warranty contained in Article V is
true and correct.

(f) A favorable opinion of (i) Kimberly C. Wilson, Esq., Supervisory Assistant
General Counsel of the Company, as to the matters set forth in Exhibit A and as
to such other matters as the Agent may reasonably request and (ii) Sidley Austin
LLP, counsel for the Agent, as to such matters as the Agent may reasonably
request. Such opinions shall be addressed to the Agent and the Banks and shall
be satisfactory in form and substance to the Agent.

(g) Evidence, in form and substance satisfactory to the Agent, that the Company
has obtained all governmental approvals, if any, necessary for it to enter into
the Credit Documents.

(h) (i) Satisfactory audited consolidated financial statements of the Company
for the two most recent fiscal years ended prior to the Closing Date as to which
such financial statements are available and (ii) satisfactory unaudited interim
consolidated financial statements of the Company for each quarterly period ended
subsequent to the date of the latest financial statements delivered pursuant to
clause (i) of this paragraph as to which such financial statements are
available.

(i) To the extent requested by any of the Banks, all documentation and other
information required by bank regulatory authorities under applicable
“know-your-customer” and anti-money laundering rules and regulations, including
the USA Patriot Act.

(j) All fees and other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced at least three (3) Business Days prior to the
Closing Date, reimbursement or payment of all out-of-pocket expenses required to
be reimbursed or paid by the Company hereunder.

 

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(k) Such other documents as any Bank or its counsel may have reasonably
requested.

11.2 Each Advance. The Banks shall not be required to make any Advance if on the
applicable Borrowing Date, (i) any Default or Event of Default exists or would
result from such Advance, (ii) any representation or warranty contained in
Article V is not true and correct as of such Borrowing Date, except
Section 5.5(b) and the first sentence of Section 5.6, (iii) after giving effect
to such Advance, the Aggregate Outstanding Credit Exposure would exceed the face
amount of all Bonds or (iv) all legal matters incident to the making of such
Advance are not satisfactory to the Banks and their counsel. Each Borrowing
Notice shall constitute a representation and warranty by the Company that the
conditions contained in clauses (i) through (iii) above will be satisfied on the
relevant Borrowing Date. For the avoidance of doubt, the conversion or
continuation of an Advance shall not be considered the making of an Advance.

ARTICLE XII

GENERAL PROVISIONS

12.1 Successors and Assigns. (a) The terms and provisions of the Credit
Documents shall be binding upon and inure to the benefit of the Company and the
Banks and their respective successors and assigns, except that the Company shall
not have the right to assign its rights under the Credit Documents. Any Bank may
sell participations in all or a portion of its rights and obligations under this
Agreement pursuant to clause (b) below and any Bank may assign all or any part
of its rights and obligations under this Agreement pursuant to clause (c) below.

(b) Any Bank may sell participations to one or more banks or other entities
(other than the Company and its Affiliates) (each a “Participant”) in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and its Outstanding Credit Exposure); provided that
(i) such Bank’s obligations under this Agreement (including its Commitment to
the Company hereunder) shall remain unchanged, (ii) such Bank shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Bank shall remain the holder of the Outstanding Credit
Exposure of such Bank for all purposes of this Agreement and (iv) the Company
shall continue to deal solely and directly with such Bank in connection with
such Bank’s rights and obligations under this Agreement. Each Bank shall retain
the sole right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Credit Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which would require consent
of all of the Banks pursuant to the terms of Section 10.1 or of any other Credit
Document. The Company agrees that each Participant shall be deemed to have the
right of setoff provided in Section 12.10 in respect of its participating
interest in amounts owing under the Credit Documents to the same extent as if
the amount of its participating interest were owing directly to it as a Bank
under the Credit Documents; provided that each Bank shall retain the right of
setoff provided in Section 12.10 with respect to the amount of participating
interests sold to each Participant. The Banks agree to share with each
Participant, and each Participant, by exercising the right of setoff provided in
Section 12.10, agrees to share with each Bank, any amount received pursuant to
the exercise

 

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of its right of setoff, such amounts to be shared in accordance with
Section 12.11 as if each Participant were a Bank. The Company further agrees
that each Participant shall be entitled to the benefits of Sections 4.1, 4.3,
4.4 and 4.5 to the same extent as if it were a Bank and had acquired its
interest by assignment pursuant to Section 12.1(c); provided that (i) a
Participant shall not be entitled to receive any greater payment under
Section 4.1, 4.3, 4.4 or 4.5 than the Bank that sold the participating interest
to such Participant would have received had it retained such interest for its
own account, unless the sale of such interest to such Participant is made with
the prior written consent of the Company, and (ii) any Participant not
incorporated under the laws of the United States of America or any State thereof
agrees to comply with the provisions of Section 4.5 to the same extent as if it
were a Bank (it being understood that the documentation required under
Section 4.5 shall be delivered to the participating Bank). Each Bank that sells
a participation shall, acting solely for this purpose as a non-fiduciary agent
of the Company, maintain a register on which it enters the name and address of
each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the obligations under this Agreement (the “Participant
Register”); provided that no Bank shall have any obligation to disclose all or
any portion of the Participant Register to any Person (including the identity of
any Participant or any information relating to a Participant’s interest in the
obligations under this Agreement) except to the extent that such disclosure is
necessary to establish that such interest is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations. The entries in
the Participant Register shall be conclusive absent manifest error, and such
Bank shall treat each person whose name is recorded in the Participant Register
as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.

(c) Any Bank may, in the ordinary course of its business and in accordance with
applicable law, at any time assign to one or more financial institutions or
other Persons (other than the Company and its Affiliates) all or any part of its
rights and obligations under this Agreement; provided that (i) unless such
assignment is to another Bank, an Affiliate of such assigning Bank, or any
direct or indirect contractual counterparty in any swap agreement relating to
the Loans to the extent required in connection with the settlement of such
Bank’s obligations pursuant thereto, such Bank has received the prior written
consent of the Agent and the Company (so long as no Event of Default exists),
which consents of the Agent and the Company shall not be unreasonably withheld
or delayed, provided that the Company shall be deemed to have consented to any
such assignment unless it shall object thereto by written notice to the Agent
within ten (10) Business Days after having received notice thereof, and (ii) the
minimum principal amount of any such assignment (other than assignments to a
Federal Reserve Bank, to another Bank, to an Affiliate of such assigning Bank or
any direct or indirect contractual counterparty in any swap agreement relating
to the Loans to the extent required in connection with the settlement of such
Bank’s obligations pursuant thereto) shall be $5,000,000 (or such lesser amount
consented to by the Agent and, so long as no Event of Default shall be
continuing, the Company, which consents shall not be unreasonably withheld or
delayed); provided that after giving effect to such assignment the assigning
Bank shall have a Commitment of not less than $5,000,000 (unless otherwise
consented to by the Agent and, so long as no Event of Default shall be
continuing, the Company), unless such assignment constitutes an assignment of
all of the assigning Bank’s Commitment, Loans and other rights and obligations
hereunder to a single assignee. Notwithstanding the foregoing sentence, (x) any
Bank may at any time, without the consent of the Company or the Agent, pledge or
assign

 

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a security interest in all or any portion of its rights under this Agreement to
secure obligations of such Bank, including, without limitation, any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such assignment shall release the transferor Bank from its obligations hereunder
or substitute any such pledgee or assignee for such Bank as a party hereto; and
(y) no assignment by a Bank to any Affiliate of such Bank shall release such
Bank from its obligations hereunder unless (I) the Agent and, so long as no
Event of Default exists, the Company have approved such assignment or (II) the
creditworthiness of such Affiliate (as determined in accordance with customary
standards of the banking industry) is no less than that of the assigning Bank.

(d) Any Bank may, in connection with any sale or participation or proposed sale
or participation pursuant to this Section 12.1, disclose to the purchaser or
participant or proposed purchaser or participant any information relating to the
Company furnished to such Bank by or on behalf of the Company; provided that
prior to any such disclosure of non-public information, the purchaser or
participant or proposed purchaser or participant (which purchaser or participant
is not an Affiliate of a Bank) shall agree to preserve the confidentiality of
any confidential information (except any such disclosure as may be required by
law or regulatory process) relating to the Company received by it from such
Bank.

(e) Assignments under this Section 12.1 shall be made pursuant to an agreement
(an “Assignment Agreement”) substantially in the form of Exhibit C hereto or in
such other form as may be agreed to by the parties thereto and shall not be
effective until a $3,500 fee has been paid to the Agent by the assignee, which
fee shall cover the cost of processing such assignment; provided that such fee
shall not be incurred in the event of an assignment by any Bank of all or a
portion of its rights under this Agreement to (i) a Federal Reserve Bank, (ii) a
Bank or an Affiliate of the assigning Bank or (iii) any direct or indirect
contractual counterparty in any swap agreement relating to the Loans to the
extent required in connection with the settlement of such Bank’s obligations
pursuant thereto. The Agent, acting for this purpose as a non-fiduciary agent of
the Company, shall maintain at one of its offices a copy of each Assignment
Agreement delivered to it and a register for the recordation of the names and
addresses of the Banks, and the Commitment of, and principal amount of the Loans
owing to, each Bank pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive and the Company,
the Agent and the Banks shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Bank hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Company and any Bank at any reasonable time and
from time to time upon reasonable prior notice.

12.2 Survival of Representations. All representations and warranties of the
Company contained in this Agreement shall survive the making of the Advances
herein contemplated.

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

12.4 Taxes. Any taxes (excluding income taxes) payable or ruled payable by any
Federal or State authority in respect of the execution of the Credit Documents
shall be paid by the Company, together with interest and penalties, if any

 

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12.5 Choice of Law. THE CREDIT DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE LAW OF
CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY CREDIT DOCUMENT AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT. EACH OF THE COMPANY, THE AGENT AND THE BANKS
HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN ANY ACTION OR ARISING HEREUNDER OR
UNDER ANY CREDIT DOCUMENT.

12.6 Headings. Section headings in the Credit Documents are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of the Credit Documents.

12.7 Entire Agreement. The Credit Documents embody the entire agreement and
understanding between the Company, the Agent and the Banks and supersede all
prior agreements and understandings between the Company, the Agent and the Banks
relating to the subject matter thereof.

12.8 Expenses; Indemnification. The Company shall reimburse the Agent and the
Arranger for (a) any reasonable costs, internal charges and out-of-pocket
expenses (including reasonable attorneys’ fees, time charges and expenses of
counsel for the Agent) paid or incurred by the Agent or the Arranger in
connection with the preparation, review, execution, delivery, syndication,
distribution (including via the internet), administration, amendment and
modification of the Credit Documents and (b) any reasonable costs, internal
charges and out-of-pocket expenses (including reasonable attorneys’ fees, time
charges and expenses of counsel) paid or incurred by the Agent or the Arranger
on its own behalf or on behalf of any Bank and, on or after the date upon which
an Event of Default specified in Section 9.1(a) or 9.1(e) has occurred and is
continuing, each Bank, in connection with the collection and enforcement of the
Credit Documents. The Company further agrees to indemnify the Agent, the
Arranger, each Bank and their respective Affiliates, and the directors,
officers, employees and agents of the foregoing (all of the foregoing, the
“Indemnified Persons), against all losses, claims, damages, penalties,
judgments, liabilities and reasonable expenses (including all reasonable
expenses of litigation or preparation therefor whether or not an Indemnified
Person is a party thereto), regardless of whether such matter is initiated by a
third party or by the Company or any of its Affiliates or equityholders, which
any of them may pay or incur arising out of or relating to this Agreement, the
other Credit Documents, the transactions contemplated hereby, the direct or
indirect application or proposed application of the proceeds of any Advance
hereunder, any actual or alleged presence or release of any Hazardous Substance
on or from any property owned or operated by the Company or any Subsidiary or
any Environmental Liability related in any way

 

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to the Company or any Subsidiary; provided that the Company shall not be liable
to any Indemnified Person for any of the foregoing to the extent they are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have arisen from the gross negligence or willful misconduct of such
Indemnified Person. Without limiting the foregoing, the Company shall pay any
civil penalty or fine assessed by the Office of Foreign Assets Control against
any Indemnified Person, and all reasonable costs and expenses (including
reasonable fees and expenses of counsel to such Indemnified Person) incurred in
connection with defense thereof, as a result of any breach or inaccuracy of the
representation made in Section 5.14. The obligations of the Company under this
Section shall survive the termination of this Agreement.

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

12.10 Setoff. In addition to, and without limitation of, any rights of the Banks
under applicable law, if the Company becomes insolvent, however evidenced, or
during the continuance of an Event of Default, any indebtedness from any Bank or
any of its Affiliates to the Company (including all account balances, whether
provisional or final and whether or not collected or available) may be, upon
prior notice to the Agent, offset and applied toward the payment of the
Obligations owing to such Bank or such Affiliate, whether or not the
Obligations, or any part hereof, shall then be due. The Company agrees that any
purchaser or participant under Section 12.1 may, to the fullest extent permitted
by law and in accordance with this Agreement, exercise all its rights of payment
with respect to such purchase or participation as if it were the direct creditor
of the Company in the amount of such purchase or participation.

12.11 Ratable Payments. If any Bank, whether by setoff or otherwise, has payment
made to it upon its Outstanding Credit Exposure in a greater proportion than
that received by any other Bank, such Bank agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit Exposure held by the
other Banks so that after such purchase each Bank will hold its Pro Rata Share
of the Aggregate Outstanding Credit Exposure. If any Bank, whether in connection
with setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Bank agrees, promptly upon demand, to take such action
necessary such that all Banks share in the benefits of such collateral ratably
in proportion to their respective Pro Rata Share of the Aggregate Outstanding
Credit Exposure. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.

12.12 Nonliability. The relationship between the Company, on the one hand, and
the Banks, the Arranger and the Agent, on the other hand, shall be solely that
of borrower and lender. None of the Agent, the Arranger or any Bank shall have
any fiduciary responsibilities to the Company. To the fullest extent permitted
by law, the Company hereby waives and releases any claims that it may have
against each of the Agent, the Arranger and each Bank with respect to any breach
or alleged breach of agency or fiduciary duty in connection with any aspect of
any transaction contemplated hereby. None of the Agent, the Arranger or any Bank
undertakes any responsibility to the Company to review or inform the Company of
any matter in connection

 

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with any phase of the Company’s business or operations. The Company shall rely
entirely upon its own judgment with respect to its business, and any review,
inspection, supervision or information supplied to the Company by the Banks is
for the protection of the Banks and neither the Company nor any third party is
entitled to rely thereon. The Company agrees that none of the Agent, the
Arranger or any Bank shall have liability to the Company (whether sounding in
tort, contract or otherwise) for losses suffered by the Company in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Credit Documents, or any act, omission
or event occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. None of the Agent, the Arranger or any Bank shall have any
liability with respect to, and the Company hereby waives, releases and agrees
not to sue for, any special, indirect, consequential or punitive damages
suffered by the Company in connection with, arising out of, or in any way
related to the Credit Documents or the transactions contemplated thereby.

12.13 Other Agents. The Banks identified on the signature pages of this
Agreement or otherwise herein, or in any amendment hereof or other document
related hereto, as being a “Co-Syndication Agent” (the “Other Agents”) shall
have no rights, powers, obligations, liabilities, responsibilities or duties
under this Agreement other than those applicable to all Banks as such. Without
limiting the foregoing, the Other Agents shall not have or be deemed to have any
fiduciary relationship with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on the Other Agents in deciding to enter into this
Agreement or in taking or refraining from taking any action hereunder or
pursuant hereto. Nothing contained in this Agreement or otherwise shall be
construed to impose any obligation or duty on any Other Agent, other than those
applicable to all Banks as such.

12.14 USA Patriot Act. Each Bank hereby notifies the Company that pursuant to
requirements of the USA Patriot Act, such Bank is required to obtain, verify and
record information that identifies the Company, which information includes the
name and address of the Company and other information that will allow such Bank
to identify the Company in accordance with the USA Patriot Act.

12.15 Electronic Delivery.

(a) The Company shall use its commercially reasonable best efforts to transmit
to the Agent all information, documents and other materials that it is obligated
to furnish to the Agent pursuant to this Agreement and the other Credit
Documents, including all notices, requests, financial statements, financial and
other reports, certificates and other information materials, but excluding
(i) any Borrowing Notice, Conversion/Continuation Notice or notice of
prepayment, (ii) any notice of a Default or an Event of Default or (iii) any
communication that is required to be delivered to satisfy any condition
precedent to the effectiveness of this Agreement and/or any Advance hereunder
(all such non-excluded communications, collectively, “Communications”), in an
electronic/soft medium in a format reasonably acceptable to the Agent to such
e-mail address as designated by the Agent from time to time. In addition, the
Company shall continue to provide Communications to the Agent or any Bank in the
manner specified in this Agreement but only to the extent requested by the Agent
or such Bank. Each Bank and the Company further agrees that the Agent may make
Communications

 

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available to the Banks by posting Communications on IntraLinks or a
substantially similar electronic transmission system (the “Platform”). Subject
to the conditions set forth in the proviso in the immediately preceding
sentence, nothing in this Section 12.15 shall prejudice the right of the Agent
to make Communications available to the Banks in any other manner specified
herein.

(b) Each Bank agrees that an e-mail notice to it (at the address provided
pursuant to the next sentence and deemed delivered as provided in clause
(c) below) specifying that a Communication has been posted to the Platform shall
constitute effective delivery of such Communication to such Bank for purposes of
this Agreement. Each Bank agrees (i) to notify the Agent in writing (including
by electronic communication) from time to time to ensure that the Agent has on
record an effective e-mail address for such Bank to which the foregoing notice
may be sent by electronic transmission and (ii) that the foregoing notice may be
sent to such e-mail address.

(c) Each party hereto agrees that any electronic Communication referred to in
this Section 12.15 shall be deemed delivered upon the posting of a record of
such Communication as “sent” in the e-mail system of the sending party or, in
the case of any such Communication to the Agent, upon the posting of a record of
such Communication as “received” in the e-mail system of the Agent, provided
that if such Communication is not so received by a Person during the normal
business hours of such Person, such Communication shall be deemed delivered at
the opening of business on the next business day for such Person.

(d) Each party hereto acknowledges that the distribution of material through an
electronic medium is not necessarily secure and there are confidentiality and
other risks associated with such distribution.

(e) EACH PARTY HERETO FURTHER ACKNOWLEDGES AND AGREES THAT:

(i) NONE OF THE AGENT OR ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, THE
“AGENT PARTIES”) WARRANTS THE ADEQUACY OF THE PLATFORM OR THE ACCURACY OR
COMPLETENESS OF ANY COMMUNICATION, AND EACH AGENT PARTY EXPRESSLY DISCLAIMS
LIABILITY FOR ERRORS OR OMISSIONS IN ANY COMMUNICATION; AND

(ii) NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT
OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY
ANY AGENT PARTY IN CONNECTION WITH ANY COMMUNICATION OR THE PLATFORM.

12.16 Confidentiality. Each of the Agent and the Banks agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed

 

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(a) to its and its Affiliates’ directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority or
self-regulatory body, (c) to the extent required by applicable laws or by any
subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Credit Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Company and its obligations or (iii) any actual or
prospective credit insurance provider relating to the Company and its
obligations, or (g) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Agent or any Bank on a non-confidential basis from a source
other than the Company. For the purposes of this Section, “Information” means
all information received from the Company relating to the Company, its
Subsidiaries or their business, other than any such information that is
available to the Agent or any Bank on a non-confidential basis prior to
disclosure by the Company; provided that, in the case of information received
from the Company after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

ARTICLE XIII

THE AGENT

13.1 Appointment. JPMorgan Chase Bank, N.A. is hereby appointed Agent hereunder,
and each of the Banks irrevocably authorizes the Agent to act as the contractual
representative on behalf of such Bank. The Agent agrees to act as such upon the
express conditions contained in this Article XIII. The Agent shall not have a
fiduciary relationship in respect of any Bank by reason of this Agreement nor
shall the Agent have any implied duties, regardless of whether a Default or
Event of Default has occurred and is continuing.

13.2 Powers. The Agent shall have and may exercise such powers hereunder as are
specifically delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. The Agent shall be deemed not to
have knowledge of any Default or Event of Default unless and until written
notice thereof is given to the Agent by the Company or a Bank or any implied
duties to the Banks or any obligation to the Banks to take any action hereunder
(whether a Default or Event of Default has occurred and is continuing), except
any action specifically provided by this Agreement to be taken by the Agent.

13.3 General Immunity. Neither the Agent nor any of its directors, officers,
agents or employees shall be liable to the Banks or any Bank for any action
taken or omitted to be taken by it or them hereunder or in connection herewith
except for its or their own gross negligence or willful misconduct.

 

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13.4 No Responsibility for Recitals, Etc. The Agent shall not be responsible to
the Banks for any recitals, reports, statements, warranties or representations
herein or in any Credit Document or be bound to ascertain or inquire as to the
performance or observance of any of the terms of this Agreement.

13.5 Action on Instructions of Banks. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and under any other
Credit Document in accordance with written instructions signed by the Majority
Banks (or all of the Banks if required by Section 10.1), and such instructions
and any action taken or failure to act pursuant thereto shall be binding on all
of the Banks. The Banks hereby acknowledge that the Agent shall be under no duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement or any other Credit Document unless it shall be
requested in writing to do so by the Majority Banks. The Agent shall be fully
justified in failing or refusing to take any action hereunder and under any
other Credit Document unless it shall first be indemnified to its satisfaction
by the Banks pro rata against any and all liability, cost and expense that it
may incur by reason of taking or continuing to take any such action.

13.6 Employment of Agents and Counsel. The Agent may execute any of its duties
as Agent hereunder by or through employees, agents and attorneys-in-fact and
shall not be answerable to the Banks, except as to money or securities received
by it or its authorized agents, for the default or misconduct of any such agents
or attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning all matters pertaining to the agency
hereby created and its duties hereunder.

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

13.8 Agent’s Reimbursement and Indemnification. The Banks agree to reimburse and
indemnify the Agent (in the Agent’s capacity as Agent) ratably in accordance
with their respective Pro Rata Shares (i) for any amounts not reimbursed by the
Company for which the Agent (in the Agent’s capacity as Agent) is entitled to
reimbursement by the Company under the Credit Documents, (ii) for any other
expenses reasonably incurred by the Agent on behalf of the Banks, in connection
with the preparation, execution, delivery, administration and enforcement of the
Credit Documents, and for which the Agent (in the Agent’s capacity as Agent) is
not entitled to reimbursement by the Company under the Credit Documents, and
(iii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, reasonable expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of this Agreement or any other
document delivered in connection with this Agreement or the transactions
contemplated hereby or the enforcement of any of the terms hereof or of any such
other documents, and for which the Agent is not entitled to reimbursement by the
Company under the Credit Documents; provided that no Bank shall be liable for
any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Agent.

 

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13.9 Rights as a Bank. With respect to its Commitment and any Advance made by
it, the Agent shall have the same rights and powers hereunder as any Bank and
may exercise the same as though it were not the Agent, and the term “Bank” or
“Banks” shall, unless the context otherwise indicates, include JPMorgan Chase
Bank, N.A. in its individual capacity. The Agent may accept deposits from, lend
money to, and generally engage in any kind of banking or trust business with the
Company or any Subsidiary as if it were not the Agent.

13.10 Bank Credit Decision. (a) Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based on
the financial statements prepared by the Company and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.

(b) Without limiting clause (a) above, each Bank acknowledges and agrees that
neither such Bank nor any of its Affiliates, participants or assignees may rely
on the Agent to carry out such Bank’s or other Person’s customer identification
program, or other obligations required or imposed under or pursuant to the USA
Patriot Act or the regulations thereunder, including the regulations contained
in 31 C.F.R. 103.121 (as amended or replaced, the “CIP Regulations”), or any
other applicable law, rule, regulation or order of any governmental authority,
including any program involving any of the following items relating to or in
connection with the Company or any of its Subsidiaries or Affiliates or agents,
the Credit Documents or the transactions contemplated hereby: (i) any identity
verification procedure; (ii) any recordkeeping; (iii) any comparison with a
government list; (iv) any customer notice or (v) any other procedure required
under the CIP Regulations or such other law, rule, regulation or order.

(c) Within ten (10) days after the date of this Agreement and at such other
times as are required under the USA Patriot Act, each Bank and each assignee and
participant that is not incorporated under the laws of the United States of
America or a state thereof (and is not excepted from the certification
requirement contained in Section 313 of the USA Patriot Act and the applicable
regulations because it is both (i) an Affiliate of a depository institution or
foreign bank that maintains a physical presence in the United States or foreign
country and (ii) subject to supervision by a banking authority regulating such
affiliated depository institution or foreign bank) shall deliver to the Agent a
certification, or, if applicable, recertification, certifying that such Bank is
not a “shell” and certifying as to other matters as required by Section 313 of
the USA Patriot Act and the applicable regulations.

13.11 Successor Agent. Subject to the appointment and acceptance of a successor
Agent as provided in this paragraph, the Agent may resign at any time by
notifying the Banks and the Company. Upon any such resignation, the Majority
Banks shall have the right, in consultation with the Company, to appoint a
successor. If no successor shall have been so appointed by the Majority Banks
and shall have accepted such appointment within thirty (30) days after the
retiring Agent gives notice of its resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent which shall be a bank with an
office in New York, New York or Los Angeles, California, or an Affiliate of any
such bank. Upon the

 

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acceptance of its appointment as Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. The fees payable by the Company to a
successor Agent shall be in the same amount as those payable to its predecessor
(without duplication for amounts payable to the retiring Agent for the period it
was acting as Agent) unless otherwise agreed between the Company and such
successor. After the Agent’s resignation hereunder, the provisions of this
Article and Section 12.8 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as Agent.

ARTICLE XIV

NOTICES

14.1 Giving Notice. Except as otherwise permitted by Section 2.13(e) with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party:
(a) in the case of the Company or the Agent, at its address or facsimile number
set forth on the signature pages hereof, (b) in the case of any Bank, at its
address or facsimile number set forth in its Administrative Questionnaire or
(c) in the case of any party, at such other address or facsimile number as such
party may hereafter specify for such purpose by notice to the Agent and the
Company in accordance with the provisions of this Section 14.1. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iii) if given by any other means,
when delivered (or, in the case of electronic transmission, received) at the
address specified in this Section; provided that notices to the Agent under
Article II shall not be effective until received.

14.2 Change of Address. The Company, the Agent and any Bank may each change the
address for service of notice upon it by a notice in writing to the other
parties hereto.

ARTICLE XV

COUNTERPARTS

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

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 

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IN WITNESS WHEREOF, the Company, the Banks and the Agent have executed this
Agreement as of the date first above written.

CONSUMERS ENERGY COMPANY

By: /s/ Laura L Mountcastle                                         

Name: Laura L. Mountcastle

Title: Vice President and Treasurer

Address:

One Energy Plaza

Jackson, MI 49201

Attention: Beverly S. Burger

Fax: (517) 788-0412

Confirmation (Phone): (517) 788-2541

E-Mail Address: bsburger@cmsenergy.com

 

Signature Page to

Term Loan Credit Agreement

Consumers Energy Company

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JPMORGAN CHASE BANK, N.A., as Agent and as a Bank

By: /s/ Nancy R. Barwig                                        

Name: Nancy R. Barwig

Title: Credit Executive

Address:

Notices for Borrowing:

JPMorgan Chase Bank, N.A.

10 South Dearborn, Floor 7

Chicago, IL 60603

Attention: Nida Mischke

Fax: (888) 292-9533

Email: leonida.g.mischke@jpmchase.com

For all Other Matters:

JPMorgan Chase Bank, N.A.

10 South Dearborn, Floor 9

Chicago, IL 60603

Attention: Nancy Barwig

Fax: (312) 732-1762

Email: nancy.r.barwig@jpmorgan.com

With a copy to:

JPMorgan Chase Bank, N.A.

10 South Dearborn, Floor 9

Chicago, IL 60603

Attention: Lisa Tverdek

Fax: (312) 325-3238

Email: lisa.tverdek@jpmorgan.com

 

Signature Page to

Term Loan Credit Agreement

Consumers Energy Company

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UNION BANK, N.A., as a Bank

By: /s/ Jeff Fesenmaier                                        

Name: Jeff Fesenmaier

Title: Vice President

Address:

445 South Figueroa Street

Los Angeles, CA 90071

Attention: Kevin Zitar, Senior Vice President

Facsimile No.: (213) 236-4096

Confirmation (Phone) No.: (213) 236-5503

E-Mail Address: kevin.zitar@uboc.com

 

Signature Page to

Term Loan Credit Agreement

Consumers Energy Company

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

By: /s/ David K. Komrska                                        

Name: David K. Komrska

Title: Senior Vice President

Address:

101 N. Tyron, Charlotte, NC 28255

NC1-001-04-39

Attention: Sandeep Singh

Fax:       213-457-8992

Email:   ssingh11@bankofamerica.com

 

Signature Page to

Term Loan Credit Agreement

Consumers Energy Company

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THE BANK OF NOVA SCOTIA, as a Bank

By: /s/ Thane Rattew                                        

Name: Thane Rattew

Title: Managing Director

Address:

1 Liberty Plaza, 26th Floor

New York, NY 10006

Attention: Ben Thomas

Fax: 212-225-5480

Email: benjamin.thomas@scotiabank.com

 

Signature Page to

Term Loan Credit Agreement

Consumers Energy Company

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SCOTIABANK (IRELAND) LIMITED, as a Bank

By: /s/ David Muldoon                                        

Name: David Muldoon

Title: Managing Director

Address: SCOTIABANK (IRELAND) LIMITED

4th Floor, IFSC House

CUSTOM HOUSE QUAY, DUBLIN 1, IRELAND

Attention: DAVID WHITE / CLIVE SINNAMON

Fax: _+ 353 1 670 0684

Email: david.j.white@scotiabank.ie

clive.sinnamon@scotiabank.ie

 

Signature Page to

Term Loan Credit Agreement

Consumers Energy Company

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SCHEDULE 1

COMMITMENT SCHEDULE

 

BANK

   COMMITMENT  

JPMorgan Chase Bank, N.A.

   $ 125,000,000.00   

Union Bank, N.A.

   $ 83,333,333.34   

Bank of America, N.A.

   $ 83,333,333.33   

The Bank of Nova Scotia

   $ 41,666,666.67   

Scotiabank (Ireland) Limited

   $ 41,666,666.66   

AGGREGATE COMMITMENT

   $ 375,000,000.00   

 

Sch. 1

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EXHIBIT A

REQUIRED OPINIONS FROM

KIMBERLY C. WILSON, ESQ.

1. The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Michigan.

2. The execution and delivery of the Credit Documents by the Company and the
performance by the Company of the Obligations have been duly authorized by all
necessary corporate action and proceedings on the part of the Company and will
not:

(a) contravene the Company’s Restated Articles of Incorporation, as amended, or
bylaws, as amended;

(b) contravene any law or any contractual restriction imposed by any indenture
or any other agreement or instrument evidencing or governing indebtedness for
borrowed money of the Company (including but not limited to the Company
Indentures (as defined below)); or

(c) result in or require the creation of any Lien upon or with respect to any of
the Company’s properties except the lien of the Indenture securing the Bonds.

As used in this paragraph 2, “Company Indentures” means collectively, (i) the
Indenture dated as of January 1, 1996, as supplemented and amended from time to
time, between the Company (formerly known as Consumers Power Company) and The
Bank of New York Mellon (formerly known as The Bank of New York), as Trustee,
and (ii) the Indenture dated as of February 1, 1998, as supplemented and amended
from time to time, between the Company and The Bank of New York Mellon
(successor trustee to JPMorgan Chase Bank, N.A.), as Trustee.

3. The Credit Documents have been duly executed and delivered by the Company.

4. To the best of my knowledge, there is no pending or threatened action or
proceeding against the Company or any of its Consolidated Subsidiaries before
any court, governmental agency or arbitrator (except (i) to the extent described
in the Company’s annual report on Form 10-K for the year ended December 31, 2011
and quarterly report on Form 10-Q for the quarter ended March 31, 2012, in each
case, as filed with the SEC, and (ii) such other similar actions, suits and
proceedings predicated on the occurrence of the same events giving rise to any
actions, suits and proceedings described in the reports filed with the SEC set
forth in clause (i) of this paragraph 4) which might reasonably be expected to
materially adversely affect the financial condition or results of operations of
the Company and its Consolidated Subsidiaries, taken as a whole, or that would
materially adversely affect the Company’s ability to perform its obligations
under any Credit Document. To the best of my knowledge, there is no litigation
challenging the validity or the enforceability of any of the Credit Documents.

5. No authorization or approval or other action by, and no notice to or filing
with,

 

Exh. A-1

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any governmental authority or regulatory body is required for the due execution,
delivery and performance by the Company of any Credit Document, except for the
authorization to issue, sell or guarantee secured and/or unsecured short-term
debt granted by the Federal Energy Regulatory Commission in Docket No.
ES10-33-000 (hereinafter the “FERC Order”). The FERC Order is in full force and
effect as of the date hereof.

6. The Bonds executed in connection with the Credit Agreement (a) are in due and
proper form, (b) evidence and secure the Obligations owing under the Credit
Agreement and (c) are valid and enforceable obligations of the Company in
accordance with their terms, secured by the lien of the Indenture on an equal
and ratable basis with all other bonds issued thereunder and otherwise entitled
to the benefits provided by the Indenture.

7. The Indenture has been qualified under the Trust Indenture Act of 1939, as
amended, and the execution and delivery of the Supplemental Indenture will not
cause the Indenture to not be so qualified.

8. The Company is not an “investment company” or a company “controlled” by an
“investment company” as such terms are defined in the Investment Company Act of
1940, as amended.

9. In a properly presented case, a Michigan court or a federal court applying
Michigan choice of law rules should give effect to the choice of law provisions
of the Agreement and should hold that the Agreement is to be governed by the
laws of the State of New York rather than the laws of the State of Michigan,
except in the case of those provisions set forth in the Agreement the
enforcement of which would contravene a fundamental policy of the State of
Michigan. In the course of our review of the Agreement, nothing has come to my
attention to indicate that any of such provisions would do so. Notwithstanding
the foregoing, even if a Michigan court or a federal court holds that the
Agreement is to be governed by the laws of the State of Michigan, the Agreement
constitutes a legal, valid and binding obligation of the Company, enforceable
under Michigan law (including usury provisions) against the Company in
accordance with its terms, subject to (a) the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and (b) the application of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).

 

Exh. A-2

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EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

I,             ,             of Consumers Energy Company, a Michigan corporation
(the “Company”), DO HEREBY CERTIFY in connection with the Term Loan Credit
Agreement, dated as of June 13, 2012 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”; the terms defined
therein being used herein as so defined), among the Company, various financial
institutions and JPMorgan Chase Bank, N.A., as Agent, that:

Article VIII of the Credit Agreement provides that the Company shall: “At all
times, maintain a ratio of Total Consolidated Debt to Total Consolidated
Capitalization of not greater than 0.65 to 1.0.”

The following calculations are made in accordance with the definitions of Total
Consolidated Debt and Total Consolidated Capitalization in the Credit Agreement
and are correct and accurate as of             ,             :

 

A. Total Consolidated Debt

 

  

(a)    Indebtedness for borrowed money

   $                 plus   

(b)    Indebtedness for deferred purchase price of property/services

   (+) $                 plus   

(c)    Liabilities for accumulated funding deficiencies (prior to the
effectiveness of the applicable provisions of the Pension Protection Act of 2006
with respect to a Plan) and liabilities for failure to make a payment required
to satisfy the minimum funding standard within the meaning of Section 412 of the
Code or Section 302 of ERISA (on and after the effectiveness of the applicable
provisions of the Pension Protection Act of 2006 with respect to a Plan).

   (+) $                 plus   

(d)    Liabilities in connection with withdrawal liability under ERISA

   (+) $                 plus   

(e)    Obligations under acceptance facilities

   (+) $                 plus   

(f)     Obligations under Capital Leases

   (+) $                 plus   

(g)    Obligations under interest rate swap, “cap”, “collar” or other hedging
agreement

   (+) $                 plus   

(h)    Guaranties, endorsements and other contingent obligations

   (+) $                 plus   

(i)     Off-Balance Sheet Liabilities

   (+) $                

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plus

 

(j)

   non-contingent obligations in respect of letters of credit and bankers’
acceptances    (+) $                        

minus

 

(k)

   Principal amount of any Securitized Bonds    (-)$                    

minus

 

(l)

   Junior Subordinated Debt of the Company owned by any Hybrid Equity Securities
Subsidiary or Hybrid Preferred Securities Subsidiary    (-)$                    

minus

 

(m)

   Agreed upon percentage of Net Proceeds from issuance of hybrid debt/equity
securities (other than Junior Subordinated Debt, Hybrid Equity Securities and
Hybrid Preferred Securities)    (-)$                    

minus

 

(n)

   Liabilities on the Company’s balance sheet resulting from the disposition of
the Palisades Nuclear Plant    (-)$                    

minus

 

(o)

   Debt of Affiliates of the Company of the type described in clause (v) of the
definition of “Total Consolidated Debt”    (-)$                    

minus

 

(p)

   Debt of the Company and its Affiliates that is re-categorized as such from
certain lease obligations pursuant to Section 15 of Accounting Standards
Codification Subtopic 840-10 (previously referred to as Emerging Issues Task
Force Issue No. 01-8)    (-)$                          Total    $
                   

B.

 

Total Consolidated Capitalization:

            

(a)

   Total Consolidated Debt    $                    

plus

 

(b)

   The sum of Items A(l), A(m), and A(o) above1    (+) $                    

plus

 

(c)

   Equity of common stockholders    (+) $                    

plus

 

(d)

   Equity of preference stockholders    (+) $                    

plus

 

(e)

   Equity of preferred stockholders    (+) $                          Total    $
                   

 

1 

In the case of securities of the type described in A(m), only to the extent such
securities have been deemed to be equity pursuant to Accounting Standards
Codification Subtopic 480-10 (previously referred to as Statement of Financial
Accounting Standards No. 150).

 

Exh. B-2

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C.

  

Debt to Capital Ratio

(total of A divided by total of B)

                 to 1.00   

IN WITNESS WHEREOF, I have signed this Certificate this              day of
            ,             .

 

  Name: Title:

 

Exh. B-3

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EXHIBIT C

ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Term Loan Credit Agreement identified below (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed
to and incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Agent as contemplated below, the interest in and to all of the Assignor’s rights
and obligations in its capacity as a Bank under the Credit Agreement and any
other documents or instruments delivered pursuant thereto that represents the
amount and percentage interest identified below of all of the Assignor’s
outstanding rights and obligations under the respective facilities identified
below (including any letters of credit and guaranties included in such
facilities and, to the extent permitted to be assigned under applicable law, all
claims (including contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity), suits, causes of action and
any other right of the Assignor against any Person whether known or unknown
arising under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed
thereby) (the “Assigned Interest”). Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.

 

1.            Assignor:   

__________________________________

2.    Assignee:    __________ [and is an Affiliate of Assignor] 3.    Borrower:
   Consumers Energy Company 4.    Agent:    JPMorgan Chase Bank, N.A., as the
Agent under the Credit Agreement. 5.    Credit Agreement:    Term Loan Credit
Agreement, dated as of June 13, 2012, among Consumers Energy Company, the Banks
party thereto, and JPMorgan Chase Bank, N.A., as Agent. 6.    Assigned Interest:
  

 

Exh. C-1

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Facility Assigned

  

Aggregate Amount of
Commitment/Outstanding

Credit Exposure for all

Banks1

   Amount of
Commitment/Outstanding
Credit Exposure
Assigned1    Percentage Assigned of
Commitment/Outstanding
Credit Exposure2  

____________________

   $                                     $                          %   

____________________

   $                                     $                          %   

____________________

   $                                     $                          %   

 

7.

Trade Date:                     3

Effective Date:             , 20             [TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE AGENT.]

 

 

1. 

Amount to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective Date.

 

2. Set forth, to at least 9 decimals, as a percentage of the
Commitment/Outstanding Credit Exposure of all Banks thereunder.

 

3. Insert if satisfaction of minimum amounts is to be determined as of the Trade
Date.

 

Exh. C-2

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The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

 

[NAME OF ASSIGNOR]

By:       Name:   Title:

 

ASSIGNEE

 

[NAME OF ASSIGNEE]

By:       Name:   Title:

[Consented to and]4 Accepted:

JPMORGAN CHASE BANK, N.A., as Agent

 

By:       Name:   Title:

[Consented to:]5

[NAME OF RELEVANT PARTY]

 

By:       Name:   Title:

 

 

4. To be added only if the consent of the Agent is required by the terms of the
Credit Agreement.

 

5. To be added only if the consent of the Company and/or other parties is
required by the terms of the Credit Agreement.

 

Exh.C-3

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ANNEX 1

TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free
and clear of any lien, encumbrance or other adverse claim and (iii) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby. Neither the Assignor nor any of its officers, directors, employees,
agents or attorneys shall be responsible for (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Credit Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency, perfection, priority, collectibility, or value of the
Credit Documents or any collateral thereunder, (iii) the financial condition of
the Company, any of its Subsidiaries or Affiliates or any other Person obligated
in respect of any Credit Document, (iv) the performance or observance by the
Company, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Credit Document, (v) inspecting any of
the property, books or records of the Company, or any guarantor, or (vi) any
mistake, error of judgment, or action taken or omitted to be taken in connection
with the Advance or the Credit Documents.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Bank under the Credit Agreement, (ii) from and after the
Effective Date, it shall be bound by the provisions of the Credit Agreement as a
Bank thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Bank thereunder, (iii) agrees that its payment instructions and
notice instructions are as set forth in Schedule 1 to this Assignment and
Assumption, (iv) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are “plan
assets” as defined under ERISA and that its rights, benefits and interests in
and under the Credit Documents will not be “plan assets” under ERISA, (v) agrees
to indemnify and hold the Assignor harmless against all losses, costs and
expenses (including reasonable attorneys’ fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee’s
non-performance of the obligations assumed under this Assignment and Assumption,
(vi) it has received a copy of the Credit Agreement, together with copies of
financial statements and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Agent or any other Bank, and (vii) attached as Schedule 2 to this
Assignment and Assumption is any documentation required to be delivered by the
Assignee with respect to its tax status pursuant to the terms of the Credit
Agreement, duly completed and executed by the Assignee; (b) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Documents as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
and (c) agrees that (i) it will, independently and without reliance

 

Exh. C-4

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

on the Agent, the Assignor or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Documents, and
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Credit Documents are required to be performed by it as a
Bank.

2. Payments. The Assignee shall pay the Assignor, on the Effective Date, the
amount agreed to by the Assignor and the Assignee. From and after the Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to but excluding the Effective Date and
to the Assignee for amounts which have accrued from and after the Effective
Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

 

Exh. C-5

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SCHEDULE 1

TO

TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION AGREEMENT

Administrative Questionnaire

On File with Agent

 

Exh. C-6

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SCHEDULE 2

TO

TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION AGREEMENT

US and Non-US Tax Information Reporting Requirements

 

Exh. C-7

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EXHIBIT D

TERMS OF SUBORDINATION

[JUNIOR SUBORDINATED DEBT]

ARTICLE             

SUBORDINATION

Section     .1. Applicability of Article; Securities Subordinated to Senior
Indebtedness.

(a) This Article             shall apply only to the Securities of any series
which, pursuant to Section             , are expressly made subject to this
Article. Such Securities are referred to in this Article             as
“Subordinated Securities.”

(b) The Issuer covenants and agrees, and each Holder of Subordinated Securities
by his acceptance thereof likewise covenants and agrees, that the indebtedness
represented by the Subordinated Securities and the payment of the principal and
interest, if any, on the Subordinated Securities is subordinated and subject in
right, to the extent and in the manner provided in this Article, to the prior
payment in full of all Senior Indebtedness.

“Senior Indebtedness” means the principal of and premium, if any, and interest
on the following, whether outstanding on the date hereof or thereafter incurred,
created or assumed: (i) indebtedness of the Issuer for money borrowed by the
Issuer (including purchase money obligations) or evidenced by debentures (other
than the Subordinated Securities), notes, bankers’ acceptances or other
corporate debt securities, or similar instruments issued by the Issuer; (ii) all
capital lease obligations of the Issuer; (iii) all obligations of the Issuer
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of the Issuer and all obligations of the Issuer under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) obligations with respect to letters of
credit; (v) all indebtedness of others of the type referred to in the preceding
clauses (i) through (iv) assumed by or guaranteed in any manner by the Issuer or
in effect guaranteed by the Issuer; (vi) all obligations of the type referred to
in clauses (i) through (v) above of other persons secured by any lien on any
property or asset of the Issuer (whether or not such obligation is assumed by
the Issuer), except for (1) any such indebtedness that is by its terms
subordinated to or pari passu with the Subordinated Securities, as the case may
be, including all other debt securities and guaranties in respect of those debt
securities, issued to any other trusts, partnerships or other entities
affiliated with the Issuer which act as a financing vehicle of the Issuer in
connection with the issuance of preferred securities by such entity or other
securities which rank pari passu with, or junior to, the Preferred Securities,
and (2) any indebtedness between or among the Issuer and its affiliates; and/or
(vii) renewals, extensions or refundings of any of the indebtedness referred to
in the preceding clauses unless, in the case of any particular indebtedness,
renewal, extension or refunding, under the express provisions of the instrument
creating or evidencing the same or the assumption or guarantee of the same, or
pursuant to which the same is outstanding, such indebtedness or such renewal,
extension or refunding thereof is not superior in right of payment to the
Subordinated Securities.

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

This Article shall constitute a continuing obligation to all Persons who, in
reliance upon such provisions become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are made obligees hereunder and they
and/or each of them may enforce such provisions.

Section     .2. Issuer Not to Make Payments with Respect to Subordinated
Securities in Certain Circumstances.

(a) Upon the maturity of any Senior Indebtedness by lapse of time, acceleration
or otherwise, all principal thereof and premium and interest thereon shall first
be paid in full, or such payment duly provided for in cash in a manner
satisfactory to the holders of such Senior Indebtedness, before any payment is
made on account of the principal of, or interest on, Subordinated Securities or
to acquire any Subordinated Securities or on account of any sinking fund
provisions of any Subordinated Securities (except payments made in capital stock
of the Issuer or in warrants, rights or options to purchase or acquire capital
stock of the Issuer, sinking fund payments made in Subordinated Securities
acquired by the Issuer before the maturity of such Senior Indebtedness, and
payments made through the exchange of other debt obligations of the Issuer for
such Subordinated Securities in accordance with the terms of such Subordinated
Securities, provided that such debt obligations are subordinated to Senior
Indebtedness at least to the extent that the Subordinated Securities for which
they are exchanged are so subordinated pursuant to this Article             ).

(b) Upon the happening and during the continuation of any default in payment of
the principal of, or interest on, any Senior Indebtedness when the same becomes
due and payable or in the event any judicial proceeding shall be pending with
respect to any such default, then, unless and until such default shall have been
cured or waived or shall have ceased to exist, no payment shall be made by the
Issuer with respect to the principal of, or interest on, Subordinated Securities
or to acquire any Subordinated Securities or on account of any sinking fund
provisions of Subordinated Securities (except payments made in capital stock of
the Issuer or in warrants, rights, or options to purchase or acquire capital
stock of the Issuer, sinking fund payments made in Subordinated Securities
acquired by the Issuer before such default and notice thereof, and payments made
through the exchange of other debt obligations of the Issuer for such
Subordinated Securities in accordance with the terms of such Subordinated
Securities, provided that such debt obligations are subordinated to Senior
Indebtedness at least to the extent that the Subordinated Securities for which
they are exchanged are so subordinated pursuant to this Article             ).

(c) In the event that, notwithstanding the provisions of this Section
            .2, the Issuer shall make any payment to the Trustee on account of
the principal of or interest on Subordinated Securities, or on account of any
sinking fund provisions of such Subordinated Securities, after the maturity of
any Senior Indebtedness as described in Section             .2(a) above or after
the happening of a default in payment of the principal of or interest on any
Senior Indebtedness as described in Section             .2(b) above, then,
unless and until all Senior Indebtedness which shall have matured, and all
premium and interest thereon, shall have been paid in full (or the declaration
of acceleration thereof shall have been rescinded or annulled), or such default
shall have been cured or waived or shall have ceased to exist, such payment
(subject to the provisions of Sections             .6 and             .7) shall
be held by the Trustee, in trust for the benefit of, and shall be

 

Exh. D-2

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

paid forthwith over and delivered to, the holders of such Senior Indebtedness
(pro rata as to each of such holders on the basis of the respective amounts of
Senior Indebtedness held by them) or their representative or the trustee under
the indenture or other agreement (if any) pursuant to which such Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of all such Senior Indebtedness remaining unpaid to
the extent necessary to pay the same in full in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness. The Issuer shall give prompt written notice to the Trustee
of any default in the payment of principal of or interest on any Senior
Indebtedness.

Section     .3. Subordinated Securities Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution, Liquidation or Reorganization of Issuer.
Upon any distribution of assets of the Issuer in any dissolution, winding up,
liquidation or reorganization of the Issuer (whether voluntary or involuntary,
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise):

(a) the holders of all Senior Indebtedness shall first be entitled to receive
payments in full of the principal thereof and premium and interest due thereon,
or provision shall be made for such payment, before the Holders of Subordinated
Securities are entitled to receive any payment on account of the principal of or
interest on such Subordinated Securities;

(b) any payment or distribution of assets of the Issuer of any kind or
character, whether in cash, property or securities (other than securities of the
Issuer as reorganized or readjusted or securities of the Issuer or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in this Article
             with respect to Subordinated Securities, to the payment in full
without diminution or modification by such plan of all Senior Indebtedness), to
which the Holders of Subordinated Securities or the Trustee on behalf of the
Holders of Subordinated Securities would be entitled except for the provisions
of this Article              shall be paid or delivered by the liquidating
trustee or agent or other person making such payment or distribution directly to
the holders of Senior Indebtedness or their representative, or to the trustee
under any indenture under which Senior Indebtedness may have been issued (pro
rata as to each such holder, representative or trustee on the basis of the
respective amounts of unpaid Senior Indebtedness held or represented by each),
to the extent necessary to make payment in full of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or distribution
or provision thereof to the holders of such Senior Indebtedness; and

(c) in the event that notwithstanding the foregoing provisions of this Section
            .3, any payment or distribution of assets of the Issuer of any kind
or character, whether in cash, property or securities (other than securities of
the Issuer as reorganized or readjusted or securities of the Issuer or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in this Article
             with respect to Subordinated Securities, to the payment in full
without diminution or modification by such plan of all Senior Indebtedness),
shall be received by the Trustee or the Holders of the Subordinated Securities
on account of principal of or interest on the Subordinated Securities before all
Senior Indebtedness is paid in full, or effective provision made for its
payment, such payment or distribution (subject to the provisions of Section
            .6 and             .7) shall be received

 

Exh. D-3

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and held in trust for and shall be paid over to the holders of the Senior
Indebtedness remaining unpaid or unprovided for or their representative, or to
the trustee under any indenture under which such Senior Indebtedness may have
been issued (pro rata as provided in clause (b) above), for application to the
payment of such Senior Indebtedness until all such Senior Indebtedness shall
have been paid in full, after giving effect to any concurrent payment or
distribution or provision therefor to the holders of such Senior Indebtedness.

The Issuer shall give prompt written notice to the Trustee of any dissolution,
winding up, liquidation or reorganization of the Issuer.

The consolidation of the Issuer with, or the merger of the Issuer into, another
corporation or the liquidation or dissolution of the Issuer following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in
Article              hereof shall not be deemed a dissolution, winding up,
liquidation or reorganization for the purposes of this Section             . 3
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated such in Article
            .

Section     .4. Holders of Subordinated Securities to be Subrogated to Right of
Holders of Senior Indebtedness. Subject to the payment in full of all Senior
Indebtedness, the Holders of Subordinated Securities shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Issuer applicable to the Senior Indebtedness
until all amounts owing on Subordinated Securities shall be paid in full, and
for the purposes of such subrogation no payments or distributions to the holders
of the Senior Indebtedness by or on behalf of the Issuer or by or on behalf of
the Holders of Subordinated Securities by virtue of this Article             
which otherwise would have been made to the Holders of Subordinated Securities
shall, as between the Issuer, its creditors other than holders of Senior
Indebtedness and the Holders of Subordinated Securities, be deemed to be payment
by the Issuer to or on account of the Senior Indebtedness, it being understood
that the provisions of this Article              are and are intended solely for
the purpose of defining the relative rights of the Holders of the Subordinated
Securities, on the one hand, and the holders of the Senior Indebtedness, on the
other hand.

Section     .5. Obligation of the Issuer Unconditional. Nothing contained in
this Article              or elsewhere in this Indenture or in any Subordinated
Security is intended to or shall impair, as among the Issuer, its creditors
other than holders of Senior Indebtedness and the Holders of Subordinated
Securities, the obligation of the Issuer, which is absolute and unconditional,
to pay to the Holders of Subordinated Securities the principal of, and interest
on, Subordinated Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of Subordinated Securities and creditors of the Issuer
other than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or the Holder of any Subordinated Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article             
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Issuer received upon the exercise of any such remedy. Upon any payment or
distribution of assets of the Issuer referred to in this Article             ,
the Trustee and Holders of Subordinated Securities shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding up,

 

Exh. D-4

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liquidation or reorganization proceedings are pending, or, subject to the
provisions of Section              and             , a certificate of the
receiver, trustee in bankruptcy, liquidating trustee or agent or other Person
making such payment or distribution to the Trustee or the Holders of
Subordinated Securities, for the purposes of ascertaining the Persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Issuer, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article             .

Nothing contained in this Article              or elsewhere in this Indenture or
in any Subordinated Security is intended to or shall affect the obligation of
the Issuer to make, or prevent the Issuer from making, at any time except during
the pendency of any dissolution, winding up, liquidation or reorganization
proceeding, and, except as provided in subsections (a) and (b) of
Section             .2, payments at any time of the principal of, or interest
on, Subordinated Securities.

Section     .6. Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice. The Issuer shall give prompt written notice to the Trustee of any fact
known to the Issuer which would prohibit the making of any payment or
distribution to or by the Trustee in respect of the Subordinated Securities.
Notwithstanding the provisions of this Article              or any provision of
this Indenture, the Trustee shall not at any time be charged with knowledge of
the existence of any facts which would prohibit the making of any payment or
distribution to or by the Trustee, unless at least two Business Days prior to
the making of any such payment, the Trustee shall have received written notice
thereof from the Issuer or from one or more holders of Senior Indebtedness or
from any representative thereof or from any trustee therefor, together with
proof satisfactory to the Trustee of such holding of Senior Indebtedness or of
the authority of such representative or trustee; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Sections
             and             , shall be entitled to assume conclusively that no
such facts exist. The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a representative or trustee on behalf of the holder) to
establish that such notice has been given by a holder of Senior Indebtedness (or
a representative of or trustee on behalf of any such holder). In the event that
the Trustee determines, in good faith, that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payments or distribution pursuant of this Article
            , the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, as to the extent to which such Person is entitled to
participate in such payment or distribution, and as to other facts pertinent to
the rights of such Person under this Article             , and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
The Trustee, however, shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and nothing in this Article              shall
apply to claims of, or payments to, the Trustee under or pursuant to
Section             .

Section     .7. Application by Trustee of Monies or Government Obligations
Deposited with It. Money or Government Obligations deposited in trust with the
Trustee pursuant to and in accordance with Section              shall be for the
sole benefit of Securityholders and, to the extent allocated for the payment of
Subordinated Securities, shall not be subject to the subordination

 

Exh. D-5

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provisions of this Article             , if the same are deposited in trust
prior to the happening of any event specified in Section             .2.
Otherwise, any deposit of monies or Government Obligations by the Issuer with
the Trustee or any paying agent (whether or not in trust) for the payment of the
principal of, or interest on, any Subordinated Securities shall be subject to
the provisions of Section             .1,             .2 and             .3
except that, if prior to the date on which by the terms of this Indenture any
such monies may become payable for any purposes (including, without limitation,
the payment of the principal of, or the interest, if any, on any Subordinated
Security) the Trustee shall not have received with respect to such monies the
notice provided for in Section             .6, then the Trustee or the paying
agent shall have full power and authority to receive such monies and Government
Obligations and to apply the same to the purpose for which they were received,
and shall not be affected by any notice to the contrary which may be received by
it on or after such date. This Section             .7 shall be construed solely
for the benefit of the Trustee and paying agent and, as to the first sentence
hereof, the Securityholders, and shall not otherwise effect the rights of
holders of Senior Indebtedness.

Section     .8. Subordination Rights Not Impaired by Acts or Omissions of Issuer
or Holders of Senior Indebtedness. No rights of any present or future holders of
any Senior Indebtedness to enforce subordination as provided herein shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Issuer or by any act or failure to act, in good faith, by any such
holders or by any noncompliance by the Issuer with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with.

Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness of the Issuer may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Subordinated Securities, without incurring responsibility to the Holders of the
Subordinated Securities and without impairing or releasing the subordination
provided in this Article             or the obligations hereunder of the Holders
of the Subordinated Securities to the holders of such Senior Indebtedness, do
any one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, such Senior
Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection for such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Issuer, as the case may be, and any other
Person.

Section     .9. Securityholders Authorize Trustee to Effectuate Subordination of
Securities. Each Holder of Subordinated Securities by his acceptance thereof
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article             and appoints the Trustee his attorney-in-fact for such
purpose, including in the event of any dissolution, winding up, liquidation or
reorganization of the Issuer (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise) the
immediate filing of a claim for the unpaid balance of his Subordinated
Securities in the form required in said proceedings and causing said claim to be
approved. If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the

 

Exh. D-6

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time to file such claim or claims, then the holders of Senior Indebtedness have
the right to file and are hereby authorized to file an appropriate claim for and
on behalf of the Holders of said Subordinated Securities.

Section     .10. Right of Trustee to Hold Senior Indebtedness. The Trustee in
its individual capacity shall be entitled to all of the rights set forth in this
Article              in respect of any Senior Indebtedness at any time held by
it to the same extent as any other holder of Senior Indebtedness, and nothing in
this Indenture shall be construed to deprive the Trustee of any of its rights as
such holder.

With respect to the holders of Senior Indebtedness of the Issuer, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article             , and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Sections             .2 and             .3, the
Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall pay over or deliver to Holders of Subordinated Securities, the Issuer or
any other Person money or assets to which any holder of such Senior Indebtedness
shall be entitled by virtue of this Article              or otherwise.

Section     .11. Article             Not to Prevent Events of Defaults. The
failure to make a payment on account of principal or interest by reason of any
provision in this Article              shall not be construed as preventing the
occurrence of an Event of Default under Section             .

 

Exh. D-7