exv10wxfy






EXHIBIT 10(f)




 





$500,000,000




FOURTH AMENDED AND RESTATED CREDIT AGREEMENT




Dated as of March 30, 2007




among




CONSUMERS ENERGY COMPANY,

as the Borrower,




THE FINANCIAL INSTITUTIONS NAMED HEREIN,

as the Banks,




JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,




BARCLAYS BANK PLC,

as Syndication Agent,




and




CITIBANK, N.A.,

UNION BANK OF CALIFORNIA, N.A.

and

WACHOVIA BANK, N.A.,

as Co-Documentation Agents




 





J.P. MORGAN SECURITIES INC.

and

BARCLAYS CAPITAL

Co-Lead Arrangers and Joint Book Runners




 





 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	1.1 Definitions
	 	 	1	 
	 
	 	 	 	 
	1.2 Interpretation
	 	 	12	 
	 
	 	 	 	 
	1.3 Accounting Terms
	 	 	12	 
	 
	 	 	 	 
	ARTICLE II THE ADVANCES
	 	 	13	 
	 
	 	 	 	 
	2.1 Commitment
	 	 	13	 
	 
	 	 	 	 
	2.2 Repayment
	 	 	13	 
	 
	 	 	 	 
	2.3 Ratable Loans
	 	 	13	 
	 
	 	 	 	 
	2.4 Types of Advances
	 	 	13	 
	 
	 	 	 	 
	2.5 Fees and Changes in Commitments
	 	 	13	 
	 
	 	 	 	 
	2.6 Minimum Amount of Advances
	 	 	15	 
	 
	 	 	 	 
	2.7 Optional Principal Payments
	 	 	15	 
	 
	 	 	 	 
	2.8 Method of Selecting Types and Interest Periods for New Advances

	 	 	15	 
	 
	 	 	 	 
	2.9 Conversion and Continuation of Outstanding Advances
	 	 	16	 
	 
	 	 	 	 
	2.10 Interest Rates, Interest Payment Dates
	 	 	16	 
	 
	 	 	 	 
	2.11 Rate after Maturity
	 	 	17	 
	 
	 	 	 	 
	2.12 Method of Payment
	 	 	17	 
	 
	 	 	 	 
	2.13 Bonds; Record-keeping; Telephonic Notices
	 	 	17	 
	 
	 	 	 	 
	2.14 Lending Installations
	 	 	18	 
	 
	 	 	 	 
	2.15 Non-Receipt of Funds by the Agent
	 	 	18	 
	 
	 	 	 	 
	ARTICLE III LETTER OF CREDIT FACILITY
	 	 	18	 
	 
	 	 	 	 
	3.1 Issuance
	 	 	19	 
	 
	 	 	 	 
	3.2 Participations
	 	 	19	 
	 
	 	 	 	 
	3.3 Notice
	 	 	19	 
	 
	 	 	 	 
	3.4 LC Fees
	 	 	19	 
	 
	 	 	 	 
	3.5 Administration; Reimbursement by Banks
	 	 	20	 
	 
	 	 	 	 
	3.6 Reimbursement by Company
	 	 	20	 
	 
	 	 	 	 
	3.7 Obligations Absolute
	 	 	21	 
	 
	 	 	 	 
	3.8 Actions of LC Issuers
	 	 	21	 






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TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	3.9 Indemnification
	 	 	21	 
	 
	 	 	 	 
	3.10 Banks’ Indemnification
	 	 	22	 
	 
	 	 	 	 
	3.11 Rights as a Bank
	 	 	22	 
	 
	 	 	 	 
	ARTICLE IV CHANGE IN CIRCUMSTANCES
	 	 	22	 
	 
	 	 	 	 
	4.1 Yield Protection
	 	 	22	 
	 
	 	 	 	 
	4.2 Replacement Bank
	 	 	24	 
	 
	 	 	 	 
	4.3 Availability of Eurodollar Rate Loans
	 	 	24	 
	 
	 	 	 	 
	4.4 Funding Indemnification
	 	 	24	 
	 
	 	 	 	 
	4.5 Taxes
	 	 	26	 
	 
	 	 	 	 
	4.6 Bank Certificates, Survival of Indemnity
	 	 	27	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES
	 	 	28	 
	 
	 	 	 	 
	5.1 Incorporation and Good Standing
	 	 	28	 
	 
	 	 	 	 
	5.2 Corporate Power and Authority: No Conflicts
	 	 	28	 
	 
	 	 	 	 
	5.3 Governmental Approvals
	 	 	28	 
	 
	 	 	 	 
	5.4 Legally Enforceable Agreements
	 	 	28	 
	 
	 	 	 	 
	5.5 Financial Statements
	 	 	28	 
	 
	 	 	 	 
	5.6 Litigation
	 	 	29	 
	 
	 	 	 	 
	5.7 Margin Stock
	 	 	29	 
	 
	 	 	 	 
	5.8 ERISA
	 	 	29	 
	 
	 	 	 	 
	5.9 Insurance
	 	 	29	 
	 
	 	 	 	 
	5.10 Taxes
	 	 	29	 
	 
	 	 	 	 
	5.11 Investment Company Act
	 	 	29	 
	 
	 	 	 	 
	5.12 Bonds
	 	 	29	 
	 
	 	 	 	 
	5.13 Disclosure
	 	 	29	 
	 
	 	 	 	 
	5.14 OFAC
	 	 	30	 
	 
	 	 	 	 
	ARTICLE VI AFFIRMATIVE COVENANTS
	 	 	30	 
	 
	 	 	 	 
	6.1 Payment of Taxes, Etc.
	 	 	30	 
	 
	 	 	 	 
	6.2 Maintenance of Insurance
	 	 	30	 
	 
	 	 	 	 
	6.3 Preservation of Corporate Existence, Etc.
	 	 	30	 






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TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page
	 
	6.4
Compliance with Laws, Etc.
	 	 	30	 
	 
	 	 	 	 
	6.5 Visitation Rights
	 	 	30	 
	 
	 	 	 	 
	6.6 Keeping of Books
	 	 	30	 
	 
	 	 	 	 
	6.7 Reporting Requirements
	 	 	31	 
	 
	 	 	 	 
	6.8 Use of Proceeds
	 	 	32	 
	 
	 	 	 	 
	6.9 Maintenance of Properties, Etc.
	 	 	32	 
	 
	 	 	 	 
	6.10 Bonds
	 	 	33	 
	 
	 	 	 	 
	ARTICLE VII NEGATIVE COVENANTS
	 	 	33	 
	 
	 	 	 	 
	7.1 Liens
	 	 	33	 
	 
	 	 	 	 
	7.2 Sale of Assets
	 	 	34	 
	 
	 	 	 	 
	7.3 Mergers, Etc.
	 	 	34	 
	 
	 	 	 	 
	7.4 Compliance with ERISA
	 	 	34	 
	 
	 	 	 	 
	7.5 Change in Nature of Business
	 	 	35	 
	 
	 	 	 	 
	7.6 Off-Balance Sheet Liabilities
	 	 	35	 
	 
	 	 	 	 
	7.7 Transactions with Affiliates
	 	 	35	 
	 
	 	 	 	 
	ARTICLE VIII FINANCIAL COVENANT
	 	 	35	 
	 
	 	 	 	 
	ARTICLE IX EVENTS OF DEFAULT
	 	 	35	 
	 
	 	 	 	 
	9.1 Events of Default
	 	 	35	 
	 
	 	 	 	 
	9.2 Remedies
	 	 	37	 
	 
	 	 	 	 
	ARTICLE X WAIVERS, AMENDMENTS AND REMEDIES
	 	 	38	 
	 
	 	 	 	 
	10.1 Amendments
	 	 	38	 
	 
	 	 	 	 
	10.2 Preservation of Rights
	 	 	39	 
	 
	 	 	 	 
	ARTICLE XI CONDITIONS PRECEDENT
	 	 	39	 
	 
	 	 	 	 
	11.1 Initial Credit Extension
	 	 	39	 
	 
	 	 	 	 
	11.2 Each Credit Extension
	 	 	40	 
	 
	 	 	 	 
	ARTICLE XII GENERAL PROVISIONS
	 	 	40	 
	 
	 	 	 	 
	12.1 Successors and Assigns
	 	 	41	 
	 
	 	 	 	 
	12.2 Survival of Representations
	 	 	42	 
	 
	 	 	 	 
	12.3 Governmental Regulation
	 	 	42	 






-iii-









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page
	 
	12.4 Taxes
	 	 	43	 
	 
	 	 	 	 
	12.5 Choice of Law
	 	 	43	 
	 
	 	 	 	 
	12.6 Headings
	 	 	43	 
	 
	 	 	 	 
	12.7 Entire Agreement
	 	 	43	 
	 
	 	 	 	 
	12.8 Expenses; Indemnification
	 	 	43	 
	 
	 	 	 	 
	12.9 Severability of Provisions
	 	 	44	 
	 
	 	 	 	 
	12.10 Setoff
	 	 	44	 
	 
	 	 	 	 
	12.11 Ratable Payments
	 	 	44	 
	 
	 	 	 	 
	12.12 Nonliability
	 	 	44	 
	 
	 	 	 	 
	12.13 Other Agents
	 	 	45	 
	 
	 	 	 	 
	12.14 USA Patriot Act
	 	 	45	 
	 
	 	 	 	 
	12.15 Electronic Delivery
	 	 	45	 
	 
	 	 	 	 
	ARTICLE XIII THE AGENT
	 	 	47	 
	 
	 	 	 	 
	13.1 Appointment
	 	 	47	 
	 
	 	 	 	 
	13.2 Powers
	 	 	47	 
	 
	 	 	 	 
	13.3 General Immunity
	 	 	47	 
	 
	 	 	 	 
	13.4 No Responsibility for Loans, Recitals, Etc.
	 	 	47	 
	 
	 	 	 	 
	13.5 Action on Instructions of Banks
	 	 	47	 
	 
	 	 	 	 
	13.6 Employment of Agents and Counsel
	 	 	47	 
	 
	 	 	 	 
	13.7 Reliance on Documents; Counsel
	 	 	47	 
	 
	 	 	 	 
	13.8 Agent’s Reimbursement and Indemnification
	 	 	48	 
	 
	 	 	 	 
	13.9 Rights as a Bank
	 	 	48	 
	 
	 	 	 	 
	13.10 Bank Credit Decision
	 	 	48	 
	 
	 	 	 	 
	13.11 Successor Agent
	 	 	49	 
	 
	 	 	 	 
	13.12 Agent and Arranger Fees
	 	 	49	 
	 
	 	 	 	 
	ARTICLE XIV NOTICES
	 	 	49	 
	 
	 	 	 	 
	14.1 Giving Notice
	 	 	49	 
	 
	 	 	 	 
	14.2 Change of Address
	 	 	50	 
	 
	 	 	 	 
	ARTICLE XV TERMINATION OF PRIOR AGREEMENT
	 	 	50	 





-iv-









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	ARTICLE XVI COUNTERPARTS
	 	 	50	 
	 
	 	 	 	 
	ARTICLE XVII RELEASE OF BONDS
	 	 	50	 






-v-









 




TABLE OF CONTENTS



	 	 	 
	 
	 	 
	SCHEDULES
	 	 
	 
	 	 
	Schedule 1

	 	Pricing Schedule
	Schedule 2

	 	Commitment Schedule
	Schedule 3

	 	Existing Facility LC Schedule
	 
	 	 
	EXHIBITS
	 	 
	 
	 	 
	Exhibit A

	 	Form of Supplemental Indenture
	Exhibit B-1

	 	Required Opinions from James E. Brunner, Esq.
	Exhibit B-2

	 	Required Opinion from Miller, Canfield, Paddock and Stone, P.L.C.
	Exhibit C

	 	Form of Compliance Certificate
	Exhibit D

	 	Form of Assignment and Assumption Agreement
	Exhibit E

	 	Terms of Subordination (Junior Subordinated Debt)
	Exhibit F

	 	Terms of Subordination (Guaranty of Hybrid Equity Securities/Hybrid Preferred Securities)
	Exhibit G

	 	Form of Bond Delivery Agreement
	Exhibit H

	 	Form of Increase Request






-vi-









 






FOURTH AMENDED AND RESTATED CREDIT AGREEMENT




     This Fourth Amended and Restated Credit Agreement, dated as of March 30, 2007, 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., a national banking association, as Agent and as an LC Issuer.



W I T N E S S E T H:




     WHEREAS, the Company has requested, and the Banks have agreed to enter into, a credit facility
in an aggregate amount of $500,000,000;



     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 group of Loans made by the Banks hereunder of the same Type, made, converted
or continued on the same day 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.



 









 





     “Agreement” means this Fourth Amended and Restated Credit Agreement, as amended from time to
time.



     “Alternate Base Rate” means, for any day, a rate per annum equal to the higher of (i) the
Prime Rate for such day and (ii) the sum of the Federal Funds Effective Rate for such day plus 1/2%
per annum.



     “Applicable Margin” means, with respect to Advances of any Type at any time, the percentage
rate per annum which is applicable at such time with respect to Advances of such Type as set forth
in Schedule 1.



     “Arrangers” — see Section 13.12.



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



     “Available Aggregate Commitment” means, at any time, the Available Commitment then in effect
minus the Aggregate Outstanding Credit Exposure at such time.



     “Available Commitment” means, at any time, the lesser of (i) the Aggregate Commitment and (ii)
the face amount of the Bonds.



     “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, or in the event such offered rate is not
available from the Dow Jones Market Service page, the rate offered on deposits in U.S. dollars, for
a period equal or comparable to such Interest Period, by JPMorgan’s London Office to 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, and in an amount substantially equal to the amount of
JPMorgan’s relevant Eurodollar Rate Loan for such Interest Period.



     “Bond Delivery Agreement” means a bond delivery agreement whereby the Agent (x) acknowledges
delivery of the Bonds and (y) agrees to hold the Bonds for the benefit of the Banks and to
distribute all payments made by the Company on account thereof to the Banks, substantially in the
form of Exhibit G.



     “Bonds” means a series of interest-bearing First Mortgage Bonds created under the Supplemental
Indenture issued in favor of, and in form and substance satisfactory to, the Agent.



     “Borrowing Date” means a date on which a Credit Extension is made hereunder.



     “Borrowing Notice” — see Section 2.8.



2









 





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



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



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



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



     “Collateral Shortfall Amount” — see Section 9.2.



     “Commitment” means, for each Bank, the obligation of such Bank to make Loans to, and
participate in Facility LCs issued upon the application of, the Company in an aggregate amount not
exceeding the amount set forth on Schedule 2 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.



     “Commitment Fee” — see Section 2.5.



     “Commitment Fee Rate” means, at any time, the percentage rate per annum at which Commitment
Fees are accruing on the Unused Commitment as set forth in Schedule 1.



     “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.



     “Credit Documents” means this Agreement, the Facility LC Applications, the Supplemental
Indenture, any promissory note issued pursuant to Section 2.13 and the Bonds.



     “Credit Extension” means the making of an Advance or the issuance of a Facility LC hereunder.



     “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) all liabilities arising from any accumulated funding
deficiency (as defined in Section 412(a) of the Code) for 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



3









 







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, and (h) 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 Person or otherwise) in respect of indebtedness or obligations of
any other Person of the kinds referred to in clauses (a) through (g) above.



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



     “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.



     “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



4









 







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.



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



     “Existing Facility LC” means each letter of credit issued under the Prior Agreement that is
listed on Schedule 3.



     “Facility LC” — see Section 3.1. The term “Facility LC” includes each Existing
Facility LC.



     “Facility LC Application” — see Section 3.3.



     “Facility LC Collateral Account” means a special, interest-bearing account maintained
(pursuant to arrangements satisfactory to the Agent) at the Agent’s office at the address specified
pursuant to Article XII, which account shall be in the name of the Company but under the
sole dominium and control of the Agent, for the benefit of the Banks.



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



     “Fee Letter” means the fee letter referred to in Section 13.12.



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



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



     “Floating Rate” means a 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.



5









 





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



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



     “FMB Release Date” means the date on which the Bonds are released pursuant to Article
XVII.



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



     “GAAP” means generally accepted accounting principles in the United States of America as in
effect on the date hereof, 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).



     “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.



     “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;



6









 






     (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, as successor Trustee.



     “Initial Borrowing Date” means March 30, 2007.



     “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 Termination Date.



     “JPMorgan” means JPMorgan Chase Bank, N.A., in its individual capacity, and its successors and
assigns.



     “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 E, or pursuant to other terms and conditions satisfactory to the Majority Banks.



7









 





     “LC Fee” — see Section 3.4.



     “LC Issuer” means JPMorgan (or any subsidiary or affiliate of JPMorgan designated by JPMorgan)
in its capacity as an issuer of Facility LCs hereunder, and any other Bank designated by the
Company that (i) agrees to be an issuer of Facility LCs hereunder and (ii) is approved by the Agent
(such approval not to be unreasonably withheld or delayed).



     “LC Obligations” means, at any time, the sum, without duplication, of (i) the aggregate
undrawn stated amount under all Facility LCs outstanding at such time plus (ii) the aggregate
unpaid amount at such time of all Reimbursement Obligations.



     “LC Payment Date” — see Section 3.5.



     “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.



     “Modify” and “Modification” — see Section 3.1.



     “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.



8









 





     “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,
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
Reimbursement Obligations, all accrued and unpaid fees and all other obligations of the Company to
the Banks or to any Bank, any LC Issuer 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, (iii) any liability under
any so-called “synthetic lease” transaction entered into by such Person, or (iv) any obligation
arising with respect to any other transaction which is the functional equivalent of or takes the
place of borrowing but which does not constitute a liability on the balance sheet of such Person,
but excluding from this clause (iv) 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 sum of (i) the aggregate
principal amount of its Loans outstanding at such time, plus (ii) an amount equal to its Pro Rata
Share of the LC Obligations at such time.



     “Payment Date” means the second Business Day of each calendar quarter occurring after the
Initial Borrowing 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



9









 







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.



     “Prime Rate” means a rate per annum equal to the prime rate of interest announced from time to
time by JPMorgan or its parent (which is not necessarily the lowest rate charged to any customer),
changing when and as said prime rate changes.



     “Prior Agreement” means the Third Amended and Restated Credit Agreement dated as of May 18,
2005 among the Company, various financial institutions and JPMorgan, as Agent, as amended.



     “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 a fraction the numerator of
which is such Bank’s Commitment and the denominator of which is the Aggregate Commitment.



     “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.



     “Reimbursement Obligations” means, at any time, the aggregate of all obligations of the
Company then outstanding under Article III to reimburse the applicable LC Issuer for
amounts paid by such LC Issuer in respect of any one or more drawings under Facility LCs issued by
such LC Issuer.



     “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 and Poor’s Rating Services, a division of The McGraw Hill Companies,
Inc., or any successor thereto.



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



10









 





     “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.



     “Senior Debt” means the First Mortgage Bonds.



     “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.



     “Supplemental Indenture” means a supplemental indenture substantially in the form of
Exhibit A.



     “Taxes” means any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and any and all liabilities with respect to the foregoing, but excluding
Excluded Taxes and Other Taxes.



     “Termination Date” means the earlier of (i) March 30, 2012 and (ii) the date on which the
Commitments are terminated.



     “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), (iv), (vi) and (vii) of
the proviso to the definition of such term (but only, in the case of securities of the type
described in clause (iii) or (iv) of such proviso, to the extent such securities
have been deemed to be equity pursuant to Financial Accounting Standards Board Statement 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; provided that Total Consolidated Debt shall
exclude, without duplication, (i) the principal amount of any Securitized Bonds, (ii) any Junior
Subordinated Debt owned by any Hybrid Equity Securities Subsidiary or Hybrid Preferred Securities
Subsidiary, (iii) Hybrid Equity Securities or Hybrid Preferred Securities outstanding as of
December 31, 2002 (including any guaranty by the Company of payments with respect to such Hybrid
Equity Securities or Hybrid Preferred Securities, provided that such guaranty is
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 F, or pursuant
to other terms and conditions satisfactory to the Majority Banks), (iv) such percentage of the Net



11









 







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 agencies), (v) if all or any portion of the
disposition of the Company’s Palisades Nuclear Plant is 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, (vi) obligations of the Company and its
Consolidated Subsidiaries of the type described in Section 1.3, (vii) 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 Financial Accounting Standards Board No. 46 and of
Accounting Research Bulletin No. 51, Consolidated Financial Statements, as modified by Statement of
Financial Accounting Standards No. 94, 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), (viii) Debt of the
Company and its Affiliates that is re-categorized as such from certain lease obligations pursuant
to Emerging Issues Task Force (“EITF”) Issue 01-8, any subsequent EITF Issue or recommendation or
other interpretation, bulletin or other similar document by the Financial Accounting Standards
Board on or related to such re-categorization and (ix) any non-cash obligations resulting from the
adoption of Financial Accounting Standards Board Statement No. 158 and any proposed amendment
thereto, to the extent such obligations are required to be treated as debt.



     “Type” — see Section 2.4.



     “Unused Commitment” means, at any time, the Aggregate Commitment then in effect minus the
Aggregate Outstanding Credit Exposure at such time.



     “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.



     “Utilization Fee Rate” means, at any time, the percentage rate per annum at which utilization
fees are accruing at such time as set forth in Schedule 1.



     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.



     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



12









 







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 Financial Accounting Standards Board Interpretation Nos. 45 and 46 and Financial
Accounting Standards Board Statement 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.



ARTICLE II

THE ADVANCES




     2.1 Commitment. From and including the Initial Borrowing Date and prior to the
Termination Date, each Bank severally agrees, on the terms and conditions set forth in this
Agreement, (a) to make loans to the Company from time to time (the “Loans”), and (b) to
participate in Facility LCs issued upon the request of the Company from time to time;
provided that, after giving effect to the making of each such Loan and the issuance of each
such Facility LC, such Bank’s Outstanding Credit Exposure shall not exceed its Commitment. In no
event may the Aggregate Outstanding Credit Exposure exceed the Available Commitment. Subject to
the terms and conditions of this Agreement, the Company may borrow, repay and reborrow at any time
prior to the Termination Date. The Commitments shall expire on the Termination Date.



     2.2 Repayment. The Aggregate Outstanding Credit Exposure and all other unpaid
obligations of the Company hereunder shall be paid in full on the Termination 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 Fees and Changes in Commitments.



     (a) The Company agrees to pay to the Agent for the account of each Bank according to its Pro
Rata Share (i) a commitment fee (the “Commitment Fee”) at the Commitment Fee Rate on the
daily Unused Commitment from the Initial Borrowing Date to but not including the date on which this
Agreement is terminated in full and all of the Obligations hereunder have been



13









 







paid in full and (ii) a utilization fee at the Utilization Fee Rate on such Bank’s Outstanding
Credit Exposure for any date on which the Aggregate Outstanding Credit Exposure exceeds 50% of the
Aggregate Commitment. The fees payable pursuant to this clause (a) shall be payable
quarterly in arrears on each Payment Date (for the quarter then most recently ended) and on the
Termination Date (for the period then ended for which such fee has not previously been paid) and
shall be calculated for actual days elapsed on the basis of a 360 day year.



     (b) 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 Business Days’ written notice to the Agent, which notice shall specify
the amount of any such reduction; provided that the Aggregate Commitment may not be reduced
below the Aggregate Outstanding Credit Exposure. All accrued Commitment Fees shall be payable on
the effective date of any termination of the obligation of the Banks to make Credit Extensions
hereunder. Upon any permanent reduction in the Aggregate Commitment pursuant to the terms of this
Section 2.5(b), the Agent shall, upon request of the Company, promptly surrender to or upon
the order of the Company one or more Bonds specified by the Company; provided that the
Company remains in compliance with Section 6.10.



     (c) The Company may, from time to time, by means of a letter delivered to the Agent
substantially in the form of Exhibit H, request that the Aggregate Commitment be increased
by up to $250,000,000 (in the aggregate during the term of this Agreement) by (i) increasing the
Commitment of one or more Banks which have agreed to such increase in writing pursuant to the
procedures described below (it being understood that no Bank has any obligation to agree to such
increase) and/or (ii) adding one or more commercial banks or other Persons as a party hereto (each
an “Additional Bank”) with a Commitment in an amount agreed to by any such Additional Bank;
provided that no Additional Bank shall be added as a party hereto without the written
consent of the Agent and each LC Issuer (which consents shall not be unreasonably withheld) or if a
Default or an Event of Default exists. Any increase in the Aggregate Commitment pursuant to this
clause (c) shall be effective three Business Days (or such other reasonable period of time
as may be specified by the Agent) after the date on which the Agent has received (A) the applicable
increase letter in the form of Annex 1 to Exhibit H (in the case of an increase in
the Commitment of an existing Bank) or assumption letter in the form of Annex 2 to
Exhibit H (in the case of the addition of a commercial bank or other Person as a new Bank),
in each case signed by all applicable parties; and (b) if the requested increase is to occur before
the FMB Release Date and, after giving effect to such increase, the Aggregate Commitment would
exceed the face amount of all Bonds, additional Bonds in an amount not less than such excess
together with such certificates, opinions of counsel and other documents as the Agent may
reasonably request in connection with the issuance and delivery of such Bonds.. The Agent shall
promptly notify the Company and the Banks of any increase in the amount of the Aggregate Commitment
pursuant to this clause (c) and of the Pro Rata Share of each Bank after giving effect
thereto. The parties hereto agree that, notwithstanding any other provision of this Agreement, the
Agent, the Company, each Additional Bank and each increasing Bank, as applicable, may make
arrangements satisfactory to such parties to cause an Additional Bank or an increasing Bank to
temporarily hold risk participations in the outstanding Loans of the other Banks (rather than fund
its Percentage of all outstanding Loans concurrently with the applicable increase) with a view



14









 







toward minimizing breakage costs and transfers of funds in connection with any increase in the
Aggregate Commitment. The Company acknowledges that if, as a result of an increase in the
Aggregate Commitment that is not pro rata among the existing Banks, any Eurodollar Rate Loan is
prepaid or converted (in whole or in part) on a day other than the last day of an Interest Period
therefor, then such prepayment or conversion shall be subject to the provisions of Section
4.4.



     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 Available Aggregate Commitment (rounded down,
if necessary, to an integral multiple of $1,000,000).



     2.7 Optional Principal Payments. 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 Business Day’s prior notice to the Agent. The Company may from time to time
pay, subject to the payment of any funding indemnification amounts required by Section 4.4
but 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 Business Days’ prior 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.



     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 time) on the Borrowing Date of each
Floating Rate Advance and not later than 12:00 noon (New York time) three 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 2:00 p.m. (New York time) on each Borrowing Date, each Bank shall make
available its Loan in funds immediately available in New York to the Agent at its address specified
pursuant to Section 14. 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.




15









 








     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 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 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 Termination 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 Termination 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, interest on



16









 







Floating Rate Advances based on the Federal Funds Effective Rate and the LC Fee 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.



     2.11 Rate after Maturity. Any Advance not paid by the Company at maturity, whether by
acceleration or otherwise, shall bear interest until paid in full at a rate per annum equal to the
higher of (i) the rate otherwise applicable thereto plus 1% or (ii) the Floating Rate plus 1%.



     2.12 Method of Payment. 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) not later than 1:00 p.m. (New York time) on the date when due and shall
(except in the case of Reimbursement Obligations for which the applicable LC Issuer has not been
fully indemnified by the Banks, or 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 4:00 p.m. (New York 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, if any, for each payment of principal,
interest, Reimbursement Obligations and fees as such payment becomes due hereunder. Each reference
to the Agent in this Section 2.12 shall also be deemed to refer, and shall apply equally,
to each LC Issuer, in the case of payments required to be made by the Company to such LC Issuer
pursuant to Section 3.6.



     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 or, at the request of any Bank following the FMB Release Date, a promissory note in form and
substance reasonably satisfactory to the Company, the Agent and such Bank.



     (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.



17









 





     (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, (iii) the original stated amount of each Facility LC and the amount
of LC Obligations outstanding at any time, and (iv) the amount of any sum received by the Agent
hereunder from the Company and each Bank’s share thereof.



     (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; 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 and its participation in any LC Obligations and each LC Issuer may book the
Facility LCs issued by it at any Lending Installation selected by such Bank or such LC Issuer, as
the case may be, 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 or Facility LCs will be issued by it and for whose account payments on the Loans or payments
with respect to Facility LCs 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 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.




18









 


ARTICLE III

LETTER OF CREDIT FACILITY






     3.1 Issuance. Each LC Issuer hereby agrees, on the terms and conditions set forth in
this Agreement, to issue standby and commercial letters of credit denominated in U.S. dollars
(each, a “Facility LC”) and to renew, extend, increase, decrease or otherwise modify each
Facility LC (“Modify,” and each such action a “Modification”), from time to time
from and including the date hereof and prior to the Termination Date upon the request of the
Company; provided that immediately after each such Facility LC is issued or Modified, the Aggregate
Outstanding Credit Exposure shall not exceed the Available Commitment. No Facility LC shall (x) be
issued later than 30 days prior to the scheduled Termination Date, (y) have an expiry date later
than the fifth Business Day (or, in the case of a commercial Facility LC, the 30th day)
prior to the scheduled Termination Date or (z) provide for time drafts.



     3.2 Participations. Upon the issuance or Modification by an LC Issuer of a Facility
LC in accordance with this Article III (or, in the case of any Existing Facility LC, on the
Initial Borrowing Date), such LC Issuer shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably sold to each Bank, and each Bank shall be deemed,
without further action by any party hereto, to have unconditionally and irrevocably purchased from
such LC Issuer, a participation in such Facility LC (and each Modification thereof) and the related
LC Obligations in proportion to its Pro Rata Share.



     3.3 Notice. Subject to Section 3.1, the Company shall give the applicable LC
Issuer notice prior to 12:00 noon (New York time) at least three Business Days prior to the
proposed date of issuance (other than an Existing Facility LC) or Modification of each Facility LC,
specifying the beneficiary, the proposed date of issuance (or Modification) and the expiry date of
such Facility LC, and describing the proposed terms of such Facility LC and the nature of the
transactions proposed to be supported thereby. Upon receipt of such notice, the applicable LC
Issuer shall promptly notify the Agent, and the Agent shall promptly notify each Bank, of the
contents thereof and of the amount of such Bank’s participation in such proposed Facility LC. The
issuance or Modification by an LC Issuer of any Facility LC shall, in addition to the conditions
precedent set forth in Article XI (the satisfaction of which such LC Issuer shall have no
duty to ascertain), be subject to the conditions precedent that such Facility LC shall be
satisfactory to such LC Issuer and that the Company shall have executed and delivered such
application agreement and/or such other instruments and agreements relating to such Facility LC as
such LC Issuer shall have reasonably requested (each, a “Facility LC Application”). In the
event of any conflict between the terms of this Agreement and the terms of any Facility LC
Application, the terms of this Agreement shall control.



     3.4 LC Fees. The Company shall pay to the Agent, for the account of the Banks ratably
in accordance with their respective Pro Rata Shares, a letter of credit fee (the “LC Fee”)
at a per annum rate equal to the Applicable Margin for Eurodollar Rate Loans in effect from time to
time on the daily undrawn stated amount of each Facility LC, such fee to be payable in arrears on
each Payment Date and the Termination Date (and, if applicable, thereafter on demand). The Company
shall also pay to each LC Issuer for its own account (a) a fronting fee for each Facility LC at the
time and in the amount (i) in the case of JPMorgan, set forth in the Fee Letter, and (ii) in the
case of any other LC Issuer, separately agreed by the Company and such LC Issuer, and (b)
documentary and processing charges in connection with the issuance or Modification of and



19









 







draws under Facility LCs in accordance with such LC Issuer’s standard schedule for such
charges as in effect from time to time.



     3.5 Administration; Reimbursement by Banks. Upon receipt from the beneficiary of any
Facility LC of any demand for payment under such Facility LC, the applicable LC Issuer shall notify
the Agent and the Agent shall promptly notify the Company and each other Bank as to the amount to
be paid by such LC Issuer as a result of such demand and the proposed payment date (the “LC
Payment Date”). The responsibility of an LC Issuer to the Company and each Bank shall be only
to determine that the documents (including each demand for payment) delivered under each Facility
LC issued by such LC Issuer in connection with such presentment shall be in conformity in all
material respects with such Facility LC. Each LC Issuer shall endeavor to exercise the same care
in the issuance and administration of Facility LCs as it does with respect to letters of credit in
which no participations are granted, it being understood that in the absence of any gross
negligence or willful misconduct by such LC Issuer, each Bank shall be unconditionally and
irrevocably liable without regard to the occurrence of any Default or any condition precedent
whatsoever, to reimburse such LC Issuer on demand for (i) such Bank’s Pro Rata Share of the amount
of each payment made by such LC Issuer under each Facility LC issued by it to the extent such
amount is not reimbursed by the Company pursuant to Section 3.6 below, plus (ii) interest
on the foregoing amount to be reimbursed by such Bank, for each day from the date of such LC
Issuer’s demand for such Reimbursement (or, if such demand is made after 12:00 noon (New York time)
on such date, from the next succeeding Business Day) to the date on which such Bank pays the amount
to be reimbursed by it, at a rate of interest per annum equal to the Federal Funds Effective Rate
for the first three days and, thereafter, at a rate of interest equal to the rate applicable to
Floating Rate Advances.



     3.6 Reimbursement by Company. The Company shall be irrevocably and unconditionally
obligated to reimburse the applicable LC Issuer on the applicable LC Payment Date for any amounts
to be paid by such LC Issuer upon any drawing under any Facility LC issued by it, without
presentment, demand, protest or other formalities of any kind; provided that neither the Company
nor any Bank shall hereby be precluded from asserting any claim for direct (but not consequential)
damages suffered by the Company or such Bank to the extent, but only to the extent, caused by (i)
the willful misconduct or gross negligence of such LC Issuer in determining whether a request
presented under any Facility LC issued by it complied with the terms of such Facility LC or (ii)
such LC Issuer’s failure to pay under any Facility LC issued by it after the presentation to it of
a request strictly complying with the terms and conditions of such Facility LC. All such amounts
paid by the applicable LC Issuer and remaining unpaid by the Company shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to (x) the rate applicable to Floating
Rate Advances for such day if such day falls on or before the applicable LC Payment Date and (y)
the sum of 1% plus the rate applicable to Floating Rate Advances for such day if such day falls
after such LC Payment Date. The applicable LC Issuer will pay to each Bank ratably in accordance
with its Pro Rata Share all amounts received by such LC Issuer from the Company for application in
payment, in whole or in part, of the Reimbursement Obligation in respect of any Facility LC issued
by such LC Issuer, but only to the extent such Bank has made payment to such LC Issuer in respect
of such Facility LC pursuant to Section 3.5. Subject to the terms and conditions of this
Agreement (including the submission of a Borrowing Notice in compliance with Section 2.8
and the satisfaction of the



20









 







applicable conditions precedent set forth in Article XI), the Company may request an
Advance hereunder for the purpose of satisfying any Reimbursement Obligation.



     3.7 Obligations Absolute. The Company’s obligations under this Article III
shall be absolute and unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Company may have or have had against any LC Issuer,
any Bank or any beneficiary of a Facility LC. The Company further agrees with the LC Issuers and
the Banks that the LC Issuers and the Banks shall not be responsible for, and the Company’s
Reimbursement Obligation in respect of any Facility LC shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon, even if such
documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or any
dispute between or among the Company, any of its affiliates, the beneficiary of any Facility LC or
any financing institution or other party to whom any Facility LC may be transferred or any claims
or defenses whatsoever of the Company or of any of its affiliates against the beneficiary of any
Facility LC or any such transferee. No LC Issuer shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Facility LC. The Company agrees that any action taken or
omitted by any LC Issuer or any Bank under or in connection with a Facility LC and the related
drafts and documents, if done without gross negligence or willful misconduct, shall be binding upon
the Company and shall not put any LC Issuer or any Bank under any liability to the Company.
Nothing in this Section 3.7 is intended to limit the right of the Company to make a claim
against any LC Issuer for damages as contemplated by the proviso to the first sentence of
Section 3.6.



     3.8 Actions of LC Issuers. Each LC Issuer shall be entitled to rely, and shall be
fully protected in relying, upon any Facility LC, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by such LC Issuer. Each LC Issuer
shall be fully justified in failing or refusing to take any action under this Agreement unless it
shall first have received such advice or concurrence of the Majority Banks as it reasonably deems
appropriate or it shall first be indemnified to its reasonable satisfaction by the Banks against
any and all liability and expense which may be incurred by it by reason of taking or continuing to
take any such action. Notwithstanding any other provision of this Article III, each LC
Issuer shall in all cases be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of the Majority Banks, and such request and any action taken
or failure to act pursuant thereto shall be binding upon the Banks and any future holders of a
participation in any Facility LC.



     3.9 Indemnification. The Company hereby agrees to indemnify and hold harmless each
Bank, each LC Issuer and the Agent, and their respective directors, officers, agents and employees
from and against any and all claims and damages, losses, liabilities, reasonable costs or expenses
which such Bank, such LC Issuer or the Agent may incur (or which may be claimed against such Bank,
such LC Issuer or the Agent by any Person whatsoever) by reason of or in connection with the
issuance, execution and delivery or transfer of or payment or failure to pay



21









 







under any Facility LC or any actual or proposed use of any Facility LC, including any claims,
damages, losses, liabilities, costs or expenses which any LC Issuer may incur by reason of or in
connection with (i) the failure of any other Bank to fulfill or comply with its obligations to such
LC Issuer hereunder (but nothing herein contained shall affect any rights the Company may have
against any defaulting Bank) or (ii) by reason of or on account of such LC Issuer issuing any
Facility LC which specifies that the term “Beneficiary” included therein includes any successor by
operation of law of the named Beneficiary, but which Facility LC does not require that any drawing
by any such successor Beneficiary be accompanied by a copy of a legal document, satisfactory to
such LC Issuer, evidencing the appointment of such successor Beneficiary; provided that the
Company shall not be required to indemnify any Bank, any LC Issuer or the Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by
(x) the willful misconduct or gross negligence of any LC Issuer in determining whether a request
presented under any Facility LC issued by it complied with the terms of such Facility LC or (y) any
LC Issuer’s failure to pay under any Facility LC issued by it after the presentation to it of a
request strictly complying with the terms and conditions of such Facility LC. Nothing in this
Section 3.9 is intended to limit the obligations of the Company under any other provision
of this Agreement.



     3.10 Banks’ Indemnification. Each Bank shall, ratably in accordance with its Pro Rata
Share, indemnify each LC Issuer, its affiliates and their respective directors, officers, agents
and employees (to the extent not reimbursed by the Company) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such
as result from such indemnitees’ gross negligence or willful misconduct or such LC Issuer’s failure
to pay under any Facility LC issued by it after the presentation to it of a request strictly
complying with the terms and conditions of the Facility LC) that such indemnitees may suffer or
incur in connection with this Article III or any action taken or omitted by such indemnitees
hereunder.



     3.11 Rights as a Bank. In its capacity as a Bank, each LC Issuer shall have the same
rights and obligations as any other Bank.



ARTICLE IV

CHANGE IN CIRCUMSTANCES




     4.1 Yield Protection.



     (a) If any change in law or any governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), or any interpretation thereof by any agency or authority
having jurisdiction over any Bank or any LC Issuer,




     (i) subjects any Bank, any LC Issuer or any applicable Lending Installation to any
increased tax, duty, charge or withholding on or from payments due from the Company
(excluding taxation measured by or attributable to the overall net income of such Bank, such
LC Issuer or such applicable Lending Installation, whether overall or in



22









 







any geographic area), or changes the rate of taxation of payments to any Bank or any LC
Issuer in respect of its Credit Extensions (including any participations in Facility LCs) or
other amounts due it hereunder, 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, any LC Issuer 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, any LC Issuer or any applicable Lending Installation of making, funding or maintaining
Credit Extensions (including any participations in Facility LCs), or reduces any amount
receivable by any Bank, any LC Issuer or any applicable Lending Installation in connection
with Credit Extensions (including any participations in Facility LCs) or requires any Bank,
any LC Issuer 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 such LC Issuer, or




     (iv) affects the amount of capital required or expected to be maintained by any Bank,
any LC Issuer or any applicable Lending Installation or any corporation controlling any Bank
or any LC Issuer and such Bank or such LC Issuer, as applicable, determines the amount of
capital required is increased by or based upon the existence of this Agreement or its
obligation to make Credit Extensions (including any participations in Facility LCs)
hereunder or of commitments of this type,


then, upon presentation by such Bank or such LC Issuer 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 or such LC Issuer
for the period of up to 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 or such LC Issuer, as applicable,
in light of such circumstances, the Company shall within 30 days of such delivery of such
certificate pay to the Agent for the account of such Bank or such LC Issuer, as applicable, the
specified amounts set forth on such certificate. The affected Bank or LC Issuer, as applicable,
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 or LC Issuer, as
applicable, 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 and any LC
Issuer may make such reasonable estimates, assumptions, allocations and the like that such Bank or
such LC Issuer, as applicable, in good faith determines to be appropriate, and such Bank’s or such
LC Issuer’s selection thereof in accordance with this Section 4.1 shall be conclusive and
binding on the Company, absent manifest error.




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



23









 







than 90 days prior to the date upon which such Bank or such LC Issuer, as applicable, first
notified the Company of the occurrence of the event entitling such Bank or such LC Issuer, as
applicable, 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 Bank.



     (a) If any Bank shall make a demand for payment under Section 4.1, then within 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 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 Credit
Extensions 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.



     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,



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;



24









 




provided that the Company shall not be liable for any of the foregoing to the extent
they arise because of acceleration by any Bank.




25









 





     4.5 Taxes.



     (a) All payments by the Company to or for the account of any Bank, any LC Issuer or the Agent
hereunder or under any Bond or Facility LC Application shall be made free and clear of and without
deduction for any and all Taxes. If the Company shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to any Bank, any LC Issuer or the Agent, (i) the sum
payable shall be increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 4.5) such Bank, such LC
Issuer 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 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 Facility LC Application or from the execution or
delivery of, or otherwise with respect to, this Agreement or any Bond or Facility LC Application
(“Other Taxes”).



     (c) The Company hereby agrees to indemnify the Agent, each LC Issuer 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, such LC Issuer 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 30 days of the date the Agent, such LC Issuer
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 Business Days
after the date hereof, or, if later, not more than ten 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, certifying in either case that such Bank is
entitled to receive payments under this Agreement without deduction or withholding of any United
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



26









 







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 the U.S. Internal Revenue Service or any other governmental authority of the United
States or any other country or any political subdivision thereof asserts a claim that the Agent did
not properly withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or properly completed, because such Bank failed to notify the
Agent of a change in circumstances which rendered its exemption from withholding ineffective, or
for any other reason), such Bank shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax, withholding therefor, or otherwise, including penalties and
interest, and including taxes imposed by any jurisdiction on amounts payable to the Agent under
this clause (g), together with all costs and expenses related thereto (including attorneys
fees and time charges of attorneys for the Agent, which attorneys may be employees of the Agent).
The obligations of the Banks under this clause (g) 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 Loan 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



27









 







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 90 days after the
termination of this Agreement.



ARTICLE V

REPRESENTATIONS AND WARRANTIES




     The Company hereby represents and warrants that:



     5.1 Incorporation and Good Standing. The Company is duly incorporated, validly
existing and in good standing under the laws of the State of Michigan.



     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 and any
Lien in favor of the Agent on the Facility LC Collateral Account or any funds therein).



     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. The audited balance sheet of the Company and its
Consolidated Subsidiaries as at December 31, 2006, 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 (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 periods
ended on such date, all in accordance with GAAP, and since December 31, 2006, there has been no
Material Adverse Change.





28









 






      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, 2006 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 Initial Borrowing 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 Credit Extension 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 as evidence of the Obligations (i)
will 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) will, prior to the FMB
Release Date, 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.



29









 





     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.



ARTICLE VI

AFFIRMATIVE COVENANTS




     So long as any Obligations shall remain unpaid, any Facility LC shall remain outstanding or
any Bank shall have any Commitment under this Agreement, the Company shall:



     6.1 Payment of Taxes, Etc. 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. 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. Preserve and maintain its corporate
existence, rights and franchises, and 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 or to remain so qualified unless the failure to do so would reasonably
be expected to result in a Material Adverse Change.



     6.4 Compliance with Laws, Etc. Comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority, the non-compliance with which would
reasonably be expected to result in a Material Adverse Change.



     6.5 Visitation Rights. Subject to any necessary approval from the Nuclear Regulatory
Commission, 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.



     6.6 Keeping of Books. Keep, and cause each Consolidated Subsidiary 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.



30









 





     6.7 Reporting Requirements. Furnish to the Agent, with sufficient copies for each of
the Banks:



     (a) as soon as practicable and in any event within five 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 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 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 (which certificate shall also accompany the financial
statements delivered pursuant to clause (c) below) 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 C hereto, setting forth the Company’s computation of the
financial ratios specified in Sections 8.1 and 8.2 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 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 certified by
independent public accountants of recognized national standing selected by the Company (and not
objected to by the Majority Banks), together with a certificate of such accounting firm addressed
to the Banks stating that, in the course of its examination of the consolidated financial
statements of the Company and its Consolidated Subsidiaries, which examination was conducted by
such accounting firm in accordance with GAAP, (1) such accounting firm has obtained no knowledge
that an Event of Default, insofar as such Event of Default related to accounting or financial
matters, has occurred and is continuing, or if, in the opinion of such accounting firm, such an
Event of Default has occurred and is continuing, a statement as to the nature thereof, and (2) such
accounting firm has examined a certificate prepared by the Company setting forth the computations
made by the Company in determining,



31









 







as of the end of such fiscal year, the ratios specified in
Sections 8.1 and 8.2, which certificate shall be attached to the certificate of
such accounting firm, and such accounting firm confirms that such computations accurately reflect
such ratios;



     (d) promptly after the sending or filing thereof, copies 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 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 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, 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 upon becoming aware thereof, notice of any upgrading or downgrading of the rating
of the Senior Debt by Moody’s or S&P;



     (g) as soon as possible and in any event within five 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, 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.



     6.8 Use of Proceeds. The Company will use the proceeds of the Credit Extensions for
general corporate purposes, working capital and refinancing the Debt under the Prior Agreement.
The Company will not, nor will it permit any Subsidiary to, use any of the proceeds of the Credit
Extensions to purchase or carry any “margin stock” (as defined in Regulation U).



     6.9 Maintenance of Properties, Etc. The Company shall, and shall cause each of its
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



32









 







restrict the sale of any asset of the Company or any Subsidiary to the extent not
prohibited by Section 7.2.



     6.10 Bonds. Beginning on the Initial Borrowing Date and continuing until the earlier
of (i) the FMB Release Date and (ii) the date on which the Commitments and Facility LCs 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, any Facility LC shall remain outstanding or
any Bank shall have any Commitment under this Agreement, the Company shall not:



     7.1 Liens. 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 and any Lien in
favor of the Agent on the Facility LC Collateral Account or any funds therein;



     (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;



     (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



33









 







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 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
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.



     7.2 Sale of Assets. 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, 2006, during the term of this Agreement.



     7.3 Mergers, Etc. Merge with or into or consolidate with or into any other Person,
except that the Company 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) the Company is the surviving corporation, (c) the
Company shall not 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. 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



34









 







any material (in the reasonable opinion of the Majority Banks) liability of the Company or such ERISA Affiliate
to the PBGC.



     7.5 Change in Nature of Business. Make any material change in the nature of its
business as carried on as of the date hereof.



     7.6 Off-Balance Sheet Liabilities. Create, incur, assume or suffer to exist, or
permit any Subsidiary to create, incur, assume or suffer to exist, Off-Balance Sheet Liabilities
(exclusive of obligations arising in connection with the Purchase Agreement among the Company,
Consumers Receivables Funding II, LLC, Falcon Asset Securitization Corporation and JPMorgan, dated
as of May 22, 2003, as amended, restated or otherwise modified from time to time and any similar
agreement entered into in replacement thereof) in the aggregate in excess of $250,000,000 at any
time.



     7.7 Transactions with Affiliates. Enter into, or 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, any Facility LC shall remain
outstanding 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 0.70 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, or
(ii) any Reimbursement Obligation within one day after the same becomes due, or (iii) any interest
on any Advance or any fee or other Obligation payable hereunder within five days after such
interest or fee or other Obligation becomes due and payable;



     (b) Any representation or warranty made by the Company (or any of its officers) 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;



35









 





     (c) The Company shall fail to perform or observe any term, covenant or agreement contained in
Section 6.10, Article VII or Article VIII; or 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 shall continue for 30 consecutive
days after the earlier of (i) a Designated Officer obtaining knowledge of such breach and (ii)
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 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: (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 30 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 30 days or
more; or (vi) shall take any corporate action to authorize any of the actions set forth above in
this clause (e);



     (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 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 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 Plan Termination Event with respect to a Plan shall have occurred, and 30 days after
notice thereof shall have been given to the Company by the Agent, (i) such Plan



36









 







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 $25,000,000 (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).



     (h) Prior to the FMB Release Date, (i) any Bond shall cease to be in full force and effect
(except for Bonds surrendered by the Agent pursuant to Section 2.5(b); or (ii) 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).



     9.2 Remedies.



     (a) 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 and the obligations and powers of the LC Issuers to issue Facility LCs 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, and/or (iii) in addition to the
continuing right to demand payment of all amounts payable under this Agreement, make demand on the
Company to pay, and the Company will, forthwith upon such demand and without any further notice or
act, pay to the Agent the Collateral Shortfall Amount (as defined below), which funds shall be
deposited in the Facility LC Collateral Account, 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, the obligations and powers of the LC Issuers to issue
Facility LCs 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, and the Company will be and become thereby
unconditionally obligated, without any further notice, act or demand, to pay to the Agent an amount
in immediately available funds, which funds shall be held in the Facility LC Collateral Account,
equal to the difference of (x) the amount of LC Obligations at such time, less (y) the amount on
deposit in the Facility LC Collateral Account at such time which is free and clear of all rights
and claims of third parties and has not been applied against the Obligations (such difference, the
“Collateral Shortfall Amount”).



     (b) If at any time while any Event of Default is continuing, the Agent determines that the
Collateral Shortfall Amount at such time is greater than zero, the Agent may make demand on the
Company to pay, and the Company will, forthwith upon such demand and without any further notice or
act, pay to the Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account.



     (c) The Agent may, at any time or from time to time after funds are deposited in the Facility
LC Collateral Account, apply such funds to the payment of the Obligations and any other amounts as
shall from time to time have become due and payable by the Company to the



37









 







Banks or the LC Issuers
under the Credit Documents. The Company hereby pledges, assigns and grants to the Agent, on behalf
of and for the ratable benefit of the Banks and the LC Issuers, a security interest in all of the
Company’s right, title and interest in and to all funds which may from time to time be on deposit
in the Facility LC Collateral Account to secure the prompt and complete payment and performance of
the Obligations. The Agent will invest any funds on
deposit from time to time in the Facility LC Collateral Account in certificates of deposit of
JPMorgan having a maturity not exceeding 30 days.



     (d) At any time while any Event of Default is continuing, neither the Company nor any Person
claiming on behalf of or through the Company shall have any right to withdraw any of the funds held
in the Facility LC Collateral Account. After all of the Obligations have been indefeasibly paid in
full, all Facility LCs have expired or been terminated and the Aggregate Commitment has been
terminated, any funds remaining in the Facility LC Collateral Account shall be returned by the
Agent to the Company or paid to whomever may be legally entitled thereto at such time.



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:



     (a) Extend the maturity of any Loan or reduce the principal amount thereof, or extend the
expiry date of any Facility LC to a date after the scheduled Termination Date, or reduce the rate
or extend the time of payment of interest thereon or fees thereon or Reimbursement Obligations
related thereto.



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



     (c) Extend the Termination Date or increase the amount of the Commitment of any Bank hereunder
or the commitment to issue Facility LCs, 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.



38









 




No amendment of any provision of this Agreement relating to the Agent shall be effective without
the written consent of the Agent, and no amendment of any provision relating to any LC Issuer shall
be effective without the written consent of such LC Issuer.




     10.2 Preservation of Rights. No delay or omission of the Banks, the LC Issuers 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 a
Credit Extension notwithstanding the existence of a Default or Event of Default or the
inability of the Company to satisfy the conditions precedent to such Credit Extension 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, the LC Issuers and the Banks until the Obligations have been paid in full.



ARTICLE XI

CONDITIONS PRECEDENT




     11.1 Initial Credit Extension. The Banks shall not be required to make the initial
Credit Extension hereunder unless the Company has furnished to the Agent with sufficient copies for
the Banks:



     (a) Counterparts of this Agreement executed by the Company and the Banks.



     (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 bylaws
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 date
hereof (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.



39









 





     (f) Evidence satisfactory to the Agent of the issuance of the Bonds in the form set forth in
the Supplemental Indenture and in an aggregate principal amount of $500,000,000 pursuant to the
Bond Delivery Agreement.



     (g) Favorable opinions of: (i) James E. Brunner, Esq., General Counsel of the Company, as to
the matters set forth in Exhibit B-1 and as to such other matters as the Agent may
reasonably request; and (ii) Miller, Canfield, Paddock and Stone, P.L.C., as to the matters set
forth in Exhibit B-2 and as to such other 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.



     (h) Evidence satisfactory to the Agent that the Prior Agreement shall have been or shall
simultaneously on the Initial Borrowing Date be terminated (except for those provisions that
expressly survive the termination thereof) and all loans outstanding and other amounts owed to the
lenders or agents thereunder (other than contingent obligations with respect to Existing Facility
LCs) shall have been, or shall simultaneously with the initial Credit Extension hereunder be, paid
in full.



     (i) 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.



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


It shall be a further condition precedent to the making of the initial Credit Extension hereunder
that the Company shall have paid (i) to the Agent for the account of the Banks the fees required to
be paid on the Initial Borrowing Date and (ii) to the Agent and each Arranger the fees required to
be paid to them pursuant to the Fee Letter.




     11.2 Each Credit Extension. The Banks shall not be required to make any Credit
Extension if on the applicable Borrowing Date, (i) any Default or Event of Default exists, (ii) any
representation or warranty contained in Article V is not true and correct as of such
Borrowing Date, (iii) prior to the FMB Release Date, after giving effect to such Credit Extension
the Aggregate Outstanding Credit Exposure would exceed the face amount of all Bonds or (iv) all
legal matters incident to the making of such Credit Extension are not satisfactory to the Banks and
their counsel; provided that, on any date following the Initial Borrowing Date on which the
ratings of the Senior Debt from Moody’s and S&P are Baa2 or higher and BBB or higher, respectively,
the Company shall not be required to make the representation and warranty (x) regarding no Material
Adverse Change set forth in Section 5.5 or (y) set forth in the first sentence of
Section 5.6. Each Borrowing Notice and each request for issuance of a Facility LC shall
constitute a representation and warranty by the Company that the conditions contained in
clauses (i), (ii) and (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 a Credit Extension.




40









 


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 (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 of its right of setoff, such amounts to be shared in
accordance with Section 12.10 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.



     (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 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, the Company (so long as no Event of Default exists) and each LC
Issuer, which consents of the Company and the LC Issuers shall not be unreasonably withheld or



41









 







delayed, 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 to 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). Notwithstanding the foregoing
sentence, (x) any Bank may at any time, without the consent of the Company or the Agent, assign all
or any portion of its rights under this Agreement to a Federal Reserve Bank; provided that
no such assignment shall release the transferor Bank from its obligations hereunder; and (y) no
assignment by a 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 D 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 or
(ii) a Bank or an affiliate of the assigning Bank or (iii) to any direct or indirect contractual
counterparties in swap agreements relating to the Loans to the extent required in connection with
the settlement of any Bank’s obligations pursuant thereto.



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



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



42









 





     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.



     12.5 Choice of Law. THE CREDIT DOCUMENTS SHALL BE 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. THE COMPANY 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 LC Issuers, the Agent and the Banks and supersede all prior
agreements and understandings between the Company, the LC Issuers, the Agent and the Banks relating
to the subject matter thereof (other than those contained in the Fee Letter which shall survive and
remain in full force and effect during the term of this Agreement).



     12.8 Expenses; Indemnification. The Company shall reimburse the Agent and each
Arranger for (a) any reasonable costs, internal charges and out-of-pocket expenses (including
reasonable attorneys’ fees and time charges of attorneys for the Agent) paid or incurred by the
Agent or such Arranger in connection with the preparation, review, execution, delivery,
syndication, distribution (including via the internet), amendment and modification of the Credit
Documents and (b) any reasonable costs, internal charges and out-of-pocket expenses (including
reasonable attorneys’ fees and time charges of attorneys for the Agent) paid or incurred by the
Agent or such Arranger on its own behalf or on behalf of any LC Issuer or 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, each Arranger, each LC
Issuer, 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) 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 Credit Extension hereunder, any



43









 







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 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 arise 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 any Default or Event
of Default occurs, 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 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, 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 Arrangers, the LC Issuers and the Agent, on the other hand, shall be solely that of
borrower and lender. None of the Agent, either Arranger, any LC Issuer or any Bank shall have any
fiduciary responsibilities to the Company. None of the Agent, either Arranger, any LC Issuer or
any Bank undertakes any responsibility to the Company to review or inform the Company of any matter
in connection 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



44









 







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, either Arranger, any LC Issuer 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, either Arranger, any LC Issuer 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 the
“Syndication Agent” or a Co-Documentation 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.



     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 available to the Banks by posting Communications on IntraLinks or a
substantially similar electronic transmission system (the “Platform”); provided,
that upon written notice to the Agent and the Company, any Bank (such



45









 







bank, a “Declining
Bank”) may decline to receive Communications via the Platform and shall direct the Company to
provide, and the Company shall so provide, such Communications to such Declining Bank by delivery
to such Declining Bank’s address in accordance with Section 14.1. 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 (other than a Declining Bank) agrees that 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 (other than
a Declining 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 (other than a Declining Bank) 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.



46









 





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.



     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 not have any implied duties to the Banks or any
obligation to the Banks to take any action hereunder 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.



     13.4 No Responsibility for Loans, 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



47









 







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 ratably in accordance with their respective Pro Rata Shares (i) for any
amounts not reimbursed by the Company for which the 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 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, 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.



     13.9 Rights as a Bank. With respect to its Commitment and any Credit Extension 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 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)



48









 







any other procedure required under the CIP
Regulations or such other law, rule, regulation or order.



     (c) Within 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. The Agent may resign at any time by giving written notice
thereof to the Banks and the Company, and the Agent may be removed at any time with or without
cause by written notice received by the Agent from the Majority Banks. Upon any such resignation
or removal, the Majority Banks shall have the right to appoint, on behalf of the Banks, a successor
Agent. If no successor Agent shall have been so appointed by the Majority Banks and shall have
accepted such appointment within thirty days after the retiring Agent’s giving notice of
resignation, then the retiring Agent may appoint, on behalf of the Banks, a successor Agent. Such
successor Agent shall be a commercial bank having capital and retained earnings of at least
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon 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. After any retiring Agent’s resignation hereunder as Agent, the
provisions of this Article XIII shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent hereunder.



     13.12 Agent and Arranger Fees. The Company agrees to pay to the Agent, J.P. Morgan
Securities Inc. (“JPMSI”) and Barclays Capital (“Barclays”; together with JPMSI, the “Arrangers”),
for their respective accounts, the fees agreed to by the Company, the Agent and the Arrangers
pursuant to the letter agreement dated February 28, 2007, or as otherwise agreed from time to time.



ARTICLE XIV

NOTICES




     14.1 Giving Notice. Except as otherwise permitted by Section 2.13 with
respect to borrowing notices, all notices, requests and other communications to any party hereunder
shall be in writing (including electronic transmission, facsimile transmission or similar writing)
and shall be given to such party: (x) in the case of the Company, the Agent or JPMorgan in its
capacity as LC Issuer, at its address or facsimile number set forth on the signature pages hereof,
(y) in the case of any Bank, at its address or facsimile number set forth in its Administrative
Questionnaire or (z) in the case of any party, at such other address or facsimile number as such



49









 







party may hereafter specify for the 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

TERMINATION OF PRIOR AGREEMENT




     The Company and the Banks which are parties to the Prior Agreement (which Banks constitute
“Majority Banks” under the Prior Agreement) agree that notwithstanding any requirement for notice
of termination of the Commitments under Section 2.5(b) of the Prior Agreement), simultaneously with
the initial Credit Extension hereunder, the Prior Agreement shall terminate and be of no further
force or effect (except for any provision thereof which by its terms survives termination thereof);
it being understood that concurrently with such termination, each Existing Facility LC shall be
deemed to be issued hereunder.



ARTICLE XVI

COUNTERPARTS




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



ARTICLE XVII

RELEASE OF BONDS




     The Agent will release the Bonds without any further action or consent by the Banks, and
deliver, at the Company’s expense, such documents to the Company or the trustee under the Indenture
as the Company may reasonably require to evidence such release, upon written request by the Company
accompanied by a certificate of a Designated Officer certifying that (a) no Default or Event of
Default exists prior to or after giving effect to such release and (b) at least two of the three
then current ratings of the Company’s senior unsecured long-term debt (without third-party credit
enhancement) are as follows: (i) Baa2 or higher in the case of Moody’s, (ii) BBB or higher in the
case of S&P and (iii) BBB or higher in the case of Fitch.



[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]




50









 





     IN WITNESS WHEREOF, the Company, the Banks, the LC Issuers 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

Facsimile No.: (517) 788-0412

Confirmation (Phone) No: (517) 788-2541

E-Mail Address: bsburger@cmsenergy.com






S-1









 





	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., as Administrative Agent, as
an LC Issuer and as a Bank
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Thomas Casey
	 

	 	 	 	 
Name:
Thomas Casey
	 

	 	 	 	Title:   Vice President
	 
	 	 	 	 
	 	 	Address:
	 
	 	 	 	 
	 	 	270 Park Avenue, 4th Floor

New York, NY 10016

Attention: Thomas Casey, Vice President

Facsimile No.: (212) 270-3089

Confirmation (Phone) No.: (212) 270-5305

E-Mail Address: thomas.casey@jpmorgan.com






S-2









 





	 	 	 	 	 
	 	BARCLAYS BANK PLC, as Syndication Agent and as a Bank

 	 
	 	By:  	/s/ Gary Wenslow
 	 
	 	 	Name:  	Gary Wenslow 	 
	 	 	Title:  	Associate Director 	 



S-3









 






	 	 	 	 	 



	 	 	 	 	 
	 	CITIBANK, N.A., as Co-Documentation Agent and as a Bank

 	 
	 	By:  	/s/ J. Nicholas McKee
 	 
	 	 	Name:  	J. Nicholas McKee 	 
	 	 	Title:  	Managing Director 	 



S-4









 






	 	 	 	 	 



	 	 	 	 	 
	 	UNION BANK OF CALIFORNIA, N.A., as

Co-Documentation Agent and as a Bank

 	 
	 	By:  	/s/ Bryan P. Read
 	 
	 	 	Name:  	Bryan P. Read 	 
	 	 	Title:  	Vice President 	 



S-5









 






	 	 	 	 	 



	 	 	 	 	 
	 	WACHOVIA BANK, N.A., as 
Co-Documentation Agent and as a Bank

 	 
	 	By:  	/s/ Frederick W. Price
 	 
	 	 	Name:  	Frederick W. Price 	 
	 	 	Title:  	Managing Director 	 



S-6









 






	 	 	 	 	 



	 	 	 	 	 
	 	MERRILL LYNCH BANK USA

 	 
	 	By:  	/s/ Derek Befus
 	 
	 	 	Name:  	Derek Befus 	 
	 	 	Title:  	Vice President 	 



S-7









 






	 	 	 	 	 



	 	 	 	 	 
	 	BNP PARIBAS

 	 
	 	By:  	/s/ Timothy Vincent
 	 
	 	 	Name:  	Timothy Vincent 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	/s/ Leonardo Osorio
 	 
	 	 	Name:  	Leonardo Osorio 	 
	 	 	Title:  	Director 	 



S-8









 






	 	 	 	 	 



	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS

 	 
	 	By:  	/s/ Marcus M. Tarkington
 	 
	 	 	Name:  	Marcus M. Tarkington 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	/s/ Paul O’Leary
 	 
	 	 	Name:  	Paul O’Leary 	 
	 	 	Title:  	Vice President 	 



S-9









 






	 	 	 	 	 



	 	 	 	 	 
	 	UBS LOAN FINANCE LLC

 	 
	 	By:  	/s/ Richard L. Tavrow
 	 
	 	 	Name:  	Richard L. Tavrow 	 
	 	 	Title:  	Director, Banking Products Services, US 	 
	 	 	 
	 	By:  	/s/ Mary E. Evans
 	 
	 	 	Name:  	Mary E. Evans 	 
	 	 	Title:  	Associate Director, Banking Products 
Services, US 	 



S-10









 






	 	 	 	 	 



	 	 	 	 	 
	 	SUNTRUST BANK

 	 
	 	By:  	/s/ Yann Pirio
 	 
	 	 	Name:  	Yann Pirio 	 
	 	 	Title:  	Vice President 	 



S-11









 






	 	 	 	 	 



	 	 	 	 	 
	 	CREDIT SUISSE, CAYMAN ISLANDS BRANCH

 	 
	 	By:  	/s/ Brian T. Caldwell
 	 
	 	 	Name:  	Brian T. Caldwell 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	/s/ Nupur Kumar
 	 
	 	 	Name:  	Nupur Kumar 	 
	 	 	Title:  	Associate 	 



S-12









 






	 	 	 	 	 



	 	 	 	 	 
	 	COMERICA BANK

 	 
	 	By:  	/s/ Blake Arnett
 	 
	 	 	Name:  	Blake Arnett 	 
	 	 	Title:  	Assistant Vice President 	 



S-13









 






	 	 	 	 	 



	 	 	 	 	 
	 	LASALLE BANK MIDWEST N.A.

 	 
	 	By:  	/s/ Gregory E. Castle
 	 
	 	 	Name:  	Gregory E. Castle 	 
	 	 	Title:  	First Vice President 	 



S-14









 






	 	 	 	 	 



	 	 	 	 	 
	 	FIFTH THIRD BANK

 	 
	 	By:  	/s/ Randal S. Wolffis
 	 
	 	 	Name:  	Randal S. Wolffis 	 
	 	 	Title:  	Vice President 	 



S-15









 






	 	 	 	 	 



	 	 	 	 	 
	 	SUMITOMO MITSUI BANKING CORPORATION

 	 
	 	By:  	/s/ William M. Ginn
 	 
	 	 	Name:  	William M. Ginn 	 
	 	 	Title:  	General Manager 	 



S-16









 






	 	 	 	 	 



	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ Scott Bjelde
 	 
	 	 	Name:  	Scott Bjelde 	 
	 	 	Title:  	Senior Vice President 	 



S-17









 






	 	 	 	 	 



	 	 	 	 	 
	 	GOLDMAN SACHS CREDIT PARTNERS L.P.

 	 
	 	By:  	/s/ Mark Walton
 	 
	 	 	Name:  	Mark Walton 	 
	 	 	Title:  	Authorized Signatory 	 



S-18









 






	 	 	 	 	 



	 	 	 	 	 
	 	HUNTINGTON NATIONAL BANK

 	 
	 	By:  	/s/ Mark Wilson
 	 
	 	 	Name:  	Mark Wilson 	 
	 	 	Title:  	Senior Vice President 	 



S-19









 






	 	 	 	 	 



	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ Sherrie I. Manson
 	 
	 	 	Name:  	Sherrie I. Manson 	 
	 	 	Title:  	Sr. Vice President 	 



S-20









 






	 	 	 	 	 



	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA

 	 
	 	By:  	/s/ Thane A. Rattew
 	 
	 	 	Name:  	Thane A. Rattew 	 
	 	 	Title:  	Managing Director 	 



S-21









 






	 	 	 	 	 



	 	 	 	 	 
	 	BAYERISCHE LANDESBANK

 	 
	 	By:  	/s/ John Gregory
 	 
	 	 	Name:  	John Gregory 	 
	 	 	Title:  	Vice President 	 
	 	 	 
	 	By:  	/s/ Annette Schmidt
 	 
	 	 	Name:  	Annette Schmidt 	 
	 	 	Title:  	First Vice President 	 
	 




S-22











 





EXHIBIT A




[FORM OF SUPPLEMENTAL INDENTURE]




ONE HUNDRED FIFTH SUPPLEMENTAL INDENTURE




Providing among other things for




FIRST MORTGAGE BONDS,




2007-1 Collateral Series (Interest Bearing)




 






Dated as of March 30, 2007




 






CONSUMERS ENERGY COMPANY




TO




THE BANK OF NEW YORK,




TRUSTEE




Counterpart ____ of 80




 









 





     THIS ONE HUNDRED FIFTH SUPPLEMENTAL INDENTURE, dated as of March 30, 2007 (herein sometimes
referred to as “this Supplemental Indenture”), made and entered into by and between CONSUMERS
ENERGY COMPANY, a corporation organized and existing under the laws of the State of Michigan, with
its principal executive office and place of business at One Energy Plaza, in Jackson, Jackson
County, Michigan 49201, formerly known as Consumers Power Company (hereinafter sometimes referred
to as the “Company”), and THE BANK OF NEW YORK, a New York banking corporation, with its corporate
trust offices at 101 Barclay St., New York, New York 10286 (hereinafter sometimes referred to as
the “Trustee”), as Trustee under the Indenture dated as of September 1, 1945 between Consumers
Power Company, a Maine corporation (hereinafter sometimes referred to as the “Maine corporation”),
and City Bank Farmers Trust Company (Citibank, N.A., successor, hereinafter sometimes referred to
as the “Predecessor Trustee”), securing bonds issued and to be issued as provided therein
(hereinafter sometimes referred to as the “Indenture”),



     WHEREAS at the close of business on January 30, 1959, City Bank Farmers Trust Company was
converted into a national banking association under the title “First National City Trust Company”;
and



     WHEREAS at the close of business on January 15, 1963, First National City Trust Company was
merged into First National City Bank; and



     WHEREAS at the close of business on October 31, 1968, First National City Bank was merged into
The City Bank of New York, National Association, the name of which was thereupon changed to First
National City Bank; and



     WHEREAS effective March 1, 1976, the name of First National City Bank was changed to Citibank,
N.A.; and



     WHEREAS effective July 16, 1984, Manufacturers Hanover Trust Company succeeded Citibank, N.A.
as Trustee under the Indenture; and



     WHEREAS effective June 19, 1992, Chemical Bank succeeded by merger to Manufacturers Hanover
Trust Company as Trustee under the Indenture; and



     WHEREAS effective July 15, 1996, The Chase Manhattan Bank (National Association), merged with
and into Chemical Bank which thereafter was renamed The Chase Manhattan Bank; and



     WHEREAS effective November 11, 2001, The Chase Manhattan Bank merged with Morgan Guaranty
Trust Company of New York and the surviving corporation was renamed JPMorgan Chase Bank; and



     WHEREAS, effective November 13, 2004, the name of JPMorgan Chase Bank was changed to JPMorgan
Chase Bank, N.A.; and



     WHEREAS, effective October 2, 2006, The Bank of New York assumed the rights and obligations of
JPMorgan Chase Bank, N.A. under the Indenture; and



 









 







     WHEREAS the Indenture was executed and delivered for the purpose of securing such bonds as may
from time to time be issued under and in accordance with the terms of the Indenture, the aggregate
principal amount of bonds to be secured thereby being limited to $5,000,000,000 at any one time
outstanding (except as provided in Section 2.01 of the Indenture), and the Indenture describes and
sets forth the property conveyed thereby and is filed in the Office of the Secretary of State of
the State of Michigan and is of record in the Office of the Register of Deeds of each county in the
State of Michigan in which this Supplemental Indenture is to be recorded; and



     WHEREAS the Indenture has been supplemented and amended by various indentures supplemental
thereto, each of which is filed in the Office of the Secretary of State of the State of Michigan
and is of record in the Office of the Register of Deeds of each county in the State of Michigan in
which this Supplemental Indenture is to be recorded; and



     WHEREAS the Company and the Maine corporation entered into an Agreement of Merger and
Consolidation, dated as of February 14, 1968, which provided for the Maine corporation to merge
into the Company; and



     WHEREAS the effective date of such Agreement of Merger and Consolidation was June 6, 1968,
upon which date the Maine corporation was merged into the Company and the name of the Company was
changed from “Consumers Power Company of Michigan” to “Consumers Power Company”; and



     WHEREAS the Company and the Predecessor Trustee entered into a Sixteenth Supplemental
Indenture, dated as of June 4, 1968, which provided, among other things, for the assumption of the
Indenture by the Company; and



     WHEREAS said Sixteenth Supplemental Indenture became effective on the effective date of such
Agreement of Merger and Consolidation; and



     WHEREAS the Company has succeeded to and has been substituted for the Maine corporation under
the Indenture with the same effect as if it had been named therein as the mortgagor corporation;
and



     WHEREAS effective March 11, 1997, the name of Consumers Power Company was changed to Consumers
Energy Company; and



     WHEREAS, the Company has entered into a Fourth Amended and Restated Credit Agreement dated as
of March 30, 2007 (as amended or otherwise modified from time to time, the “Credit Agreement”) with
various financial institutions and JPMorgan Chase Bank, N.A., as administrative agent (in such
capacity, the “Agent”) for the Banks (as such term is defined in the Credit Agreement), providing
for the making of certain financial accommodations thereunder, and pursuant to such Credit
Agreement the Company has agreed to issue to the Agent, as evidence of and security for the
Obligations (as such term is defined in the Credit Agreement), a new series of bonds under the
Indenture; and



A-2









 







     WHEREAS, for such purposes the Company desires to issue a new series of bonds, to be
designated First Mortgage Bonds, 2007-1 Collateral Series (Interest Bearing), each of which bonds
shall also bear the descriptive title “First Mortgage Bond” (hereinafter provided for and
hereinafter sometimes referred to as the “2007-1 Collateral Bonds”), the bonds of which series are
to be issued as registered bonds without coupons and are to bear interest at the rate per annum
specified herein and are to mature on the Termination Date (as such term is defined in the Credit
Agreement); and



     WHEREAS, each of the registered bonds without coupons of the 2007-1 Collateral Bonds and the
Trustee’s Authentication Certificate thereon are to be substantially in the following form, to wit:



A-3









 





[FORM OF REGISTERED BOND




OF THE 2007-1 COLLATERAL BONDS]




[FACE]




CONSUMERS ENERGY COMPANY

FIRST MORTGAGE BOND

2007-1 COLLATERAL SERIES (INTEREST BEARING)




	 	 	 	 	 	 	 
	 

	 	No. 1
	 	$	500,000,000	 






     CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called the “Company”), for value
received, hereby promises to pay to JPMorgan Chase Bank, N.A., as administrative agent (in such
capacity, the “Agent”) for the Banks under and as defined in the Fourth Amended and Restated Credit
Agreement dated as of March 30, 2007 among the Company, the Banks and the Agent (as amended or
otherwise modified from time to time, the “Credit Agreement”), or registered assigns, the principal
sum of Five Hundred Million Dollars ($500,000,000) or such lesser principal amount as shall be
equal to the aggregate principal amount of the Loans (as defined in the Credit Agreement) and
Reimbursement Obligations (as defined in the Credit Agreement) included in the Obligations (as
defined in the Credit Agreement) outstanding on the Termination Date (as defined in the Credit
Agreement) (the “Maturity Date”), but not in excess, however, of the principal amount of this bond,
and to pay interest thereon at the Interest Rate (as defined below) until the principal hereof is
paid or duly made available for payment on the Maturity Date, or, in the event of redemption of
this bond, until the redemption date, or, in the event of default in the payment of the principal
hereof, until the Company’s obligations with respect to the payment of such principal shall be
discharged as provided in the Indenture (as defined on the reverse hereof). Interest on this bond
shall be payable on each Interest Payment Date (as defined below), commencing on the first Interest
Payment Date next succeeding March 30, 2007. If the Maturity Date falls on a day which is not a
Business Day, as defined below, principal and any interest and/or fees payable with respect to the
Maturity Date will be paid on the immediately preceding Business Day. The interest payable, and
punctually paid or duly provided for, on any Interest Payment Date will, subject to certain
exceptions, be paid to the person in whose name this bond (or one or more predecessor bonds) is
registered at the close of business on the Record Date (as defined below); provided, however, that
interest payable on the Maturity Date will be payable to the person to whom the principal hereof
shall be payable. Should the Company default in the payment of interest (“Defaulted Interest”),
the Defaulted Interest shall be paid to the person in whose name this bond (or one or more
predecessor bonds) is registered on a subsequent record date fixed by the Company, which subsequent
record date shall be fifteen (15) days prior to the payment of such Defaulted Interest. As used
herein, (A) “Business Day” shall mean any day, other than a Saturday or Sunday, on which banks
generally are open in New York, New York for the conduct of substantially all of their commercial
lending activities and on which interbank wire transfers



A-4









 







can be made on the Fedwire system; (B) “Interest Payment Date” shall mean each date on which
Obligations constituting interest and/or fees are due and payable from time to time pursuant to the
Credit Agreement; (C) “Interest Rate” shall mean a rate of interest per annum, adjusted as
necessary, to result in an interest payment equal to the aggregate amount of Obligations
constituting interest and fees due under the Credit Agreement on the applicable Interest Payment
Date; and (D) “Record Date” with respect to any Interest Payment Date shall mean the day (whether
or not a Business Day) immediately next preceding such Interest Payment Date.



     Payment of the principal of and interest on this bond will be made in immediately available
funds at the office or agency of the Company maintained for that purpose in the City of Jackson,
Michigan, in such coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.



     The provisions of this bond are continued on the reverse hereof and such continued provisions
shall for all purposes have the same effect as though fully set forth at this place.



     This bond shall not be valid or become obligatory for any purpose unless and until it shall
have been authenticated by the execution by the Trustee or its successor in trust under the
Indenture of the certificate hereon.



A-5









 





          IN WITNESS WHEREOF, Consumers Energy Company has caused this bond to be executed in its name
by its Chairman of the Board, its President or one of its Vice Presidents by his or her signature
or a facsimile thereof, and its corporate seal or a facsimile thereof to be affixed hereto or
imprinted hereon and attested by its Secretary or one of its Assistant Secretaries by his or her
signature or a facsimile thereof.




	 	 	 	 	 	 	 
	 	 	CONSUMERS ENERGY COMPANY	 	 
	 
	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Printed	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title	 	 	 	 
	 

	 	 	 	 	 	 





Attest:                                                             




TRUSTEE’S AUTHENTICATION CERTIFICATE




     This is one of the bonds, of the series designated therein, described in the within-mentioned
Indenture.



	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK, Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Officer	 	 






A-6









 





[REVERSE]




CONSUMERS ENERGY COMPANY




FIRST MORTGAGE BOND

2007-1 COLLATERAL SERIES (INTEREST BEARING)




     This bond is one of the bonds of a series designated as First Mortgage Bonds, 2007-1
Collateral Series (Interest Bearing) (sometimes herein referred to as the “2007-1 Collateral
Bonds”) issued under and in accordance with and secured by an Indenture dated as of September 1,
1945, given by the Company (or its predecessor, Consumers Power Company, a Maine corporation) to
City Bank Farmers Trust Company (The Bank of New York, successor) (hereinafter sometimes referred
to as the “Trustee”), together with indentures supplemental thereto, heretofore or hereafter
executed, to which indenture and indentures supplemental thereto (hereinafter referred to
collectively as the “Indenture”) reference is hereby made for a description of the property
mortgaged and pledged, the nature and extent of the security and the rights, duties and immunities
thereunder of the Trustee and the rights of the holders of said bonds and of the Trustee and of the
Company in respect of such security, and the limitations on such rights. By the terms of the
Indenture, the bonds to be secured thereby are issuable in series which may vary as to date,
amount, date of maturity, rate of interest and in other respects as provided in the Indenture.



     The 2007-1 Collateral Bonds are to be issued and delivered to the Agent in order to evidence
and secure the obligation of the Company under the Credit Agreement to make payments to the Banks
under the Credit Agreement and to provide the Banks the benefit of the lien of the Indenture with
respect to the 2007-1 Collateral Bonds.



     The obligation of the Company to make payments with respect to the principal of 2007-1
Collateral Bonds shall be fully or partially, as the case may be, satisfied and discharged to the
extent that, at the time that any such payment shall be due, the then due principal of the Loans
and/or the Reimbursement Obligations included in the Obligations shall have been fully or partially
paid. Satisfaction of any obligation to the extent that payment is made with respect to the Loans
and/or the Reimbursement Obligations means that if any payment is made on the principal of the
Loans and/or the Reimbursement Obligations, a corresponding payment obligation with respect to the
principal of the 2007-1 Collateral Bonds shall be deemed discharged in the same amount as the
payment with respect to the Loans and/or the Reimbursement Obligations discharges the outstanding
obligation with respect to such Loans and/or Reimbursement Obligations. No such payment of
principal shall reduce the principal amount of the 2007-1 Collateral Bonds.



     The obligation of the Company to make payments with respect to the interest on 2007-1
Collateral Bonds shall be fully or partially, as the case may be, satisfied and discharged to the
extent that, at the time that any such payment shall be due, the then due interest and/or fees
under the Credit Agreement shall have been fully or partially paid. Satisfaction of any obligation
to the extent that payment is made with respect to the interest and/or fees under the Credit
Agreement means that if any payment is made on the interest and/or fees under the Credit Agreement, a



A-7









 







corresponding payment obligation with respect to the interest on the 2007-1 Collateral Bonds
shall be deemed discharged in the same amount as the payment with respect to the Loans and/or the
Reimbursement Obligations discharges the outstanding obligation with respect to such Loans and/or
Reimbursement Obligations.



     The Trustee may at any time and all times conclusively assume that the obligation of the
Company to make payments with respect to the principal of and interest on this bond, so far as such
payments at the time have become due, has been fully satisfied and discharged unless and until the
Trustee shall have received a written notice from the Agent stating (i) that timely payment of
principal and interest on the 2007-1 Collateral Bonds has not been made, (ii) that the Company is
in arrears as to the payments required to be made by it to the Agent in connection with the
Obligations pursuant to the Credit Agreement, and (iii) the amount of the arrearage.



     If an Event of Default (as defined in the Credit Agreement) with respect to the payment of the
principal of the Loans and/or the Reimbursement Obligations shall have occurred, it shall be deemed
to be a default for purposes of Section 11.01 of the Indenture in the payment of the principal of
the 2007-1 Collateral Bonds equal to the amount of such unpaid principal or Reimbursement
Obligations (but in no event in excess of the principal amount of the 2007-1 Collateral Bonds). If
an Event of Default (as defined in the Credit Agreement) with respect to the payment of interest on
the Loans and/or the Reimbursement Obligations or any fees shall have occurred, it shall be deemed
to be a default for purposes of Section 11.01 of the Indenture in the payment of the interest on
the 2007-1 Collateral Bonds equal to the amount of such unpaid interest or fees.



     This bond is not redeemable except upon written demand of the Agent following the occurrence
of an Event of Default under the Credit Agreement and the acceleration of the Obligations, as
provided in Section 9.2 of the Credit Agreement. This bond is not redeemable by the operation of
the improvement fund or the maintenance and replacement provisions of the Indenture or with the
proceeds of released property.



     In case of certain defaults as specified in the Indenture, the principal of this bond may be
declared or may become due and payable on the conditions, at the time, in the manner and with the
effect provided in the Indenture. The holders of certain specified percentages of the bonds at the
time outstanding, including in certain cases specified percentages of bonds of particular series,
may in certain cases, to the extent and as provided in the Indenture, waive certain defaults
thereunder and the consequences of such defaults.



     The Indenture contains provisions permitting the Company and the Trustee, with the consent of
the holders of not less than seventy-five per centum in principal amount of the bonds (exclusive of
bonds disqualified by reason of the Company’s interest therein) at the time outstanding, including,
if more than one series of bonds shall be at the time outstanding, not less than sixty per centum
in principal amount of each series affected, to effect, by an indenture supplemental to the
Indenture, modifications or alterations of the Indenture and of the rights and obligations of the
Company and the rights of the holders of the bonds and coupons; provided, however, that no such
modification or alteration shall be made without the written approval or consent of the holder
hereof which will (a) extend the maturity of this bond or reduce the rate or



A-8









 







extend the time of payment of interest hereon or reduce the amount of the principal hereof, or
(b) permit the creation of any lien, not otherwise permitted, prior to or on a parity with the lien
of the Indenture, or (c) reduce the percentage of the principal amount of the bonds the holders of
which are required to approve any such supplemental indenture.



     The Company reserves the right, without any consent, vote or other action by holders of the
2007-1 Collateral Bonds or any other series created after the Sixty-eighth Supplemental Indenture,
to amend the Indenture to reduce the percentage of the principal amount of bonds the holders of
which are required to approve any supplemental indenture (other than any supplemental indenture
which is subject to the proviso contained in the immediately preceding sentence) (a) from not less
than seventy-five per centum (including sixty per centum of each series affected) to not less than
a majority in principal amount of the bonds at the time outstanding or (b) in case fewer than all
series are affected, not less than a majority in principal amount of the bonds of all affected
series, voting together.



     No recourse shall be had for the payment of the principal of or interest on this bond, or for
any claim based hereon, or otherwise in respect hereof or of the Indenture, to or against any
incorporator, stockholder, director or officer, past, present or future, as such, of the Company,
or of any predecessor or successor company, either directly or through the Company, or such
predecessor or successor company, or otherwise, under any constitution or statute or rule of law,
or by the enforcement of any assessment or penalty, or otherwise, all such liability of
incorporators, stockholders, directors and officers, as such, being waived and released by the
holder and owner hereof by the acceptance of this bond and being likewise waived and released by
the terms of the Indenture.



     This bond shall be exchangeable for other registered bonds of the same series, in the manner
and upon the conditions prescribed in the Indenture, upon the surrender of such bonds at the
Investor Services Department of the Company, as transfer agent. However, notwithstanding the
provisions of Section 2.05 of the Indenture, no charge shall be made upon any registration of
transfer or exchange of bonds of said series other than for any tax or taxes or other governmental
charge required to be paid by the Company.



     The Agent shall surrender this bond to the Trustee when all of the principal of and interest
on the Loans and Reimbursement Obligations arising under the Credit Agreement, and all of the fees
payable pursuant to the Credit Agreement with respect to the Obligations shall have been duly paid,
and the Credit Agreement shall have been terminated.



[END OF FORM OF REGISTERED BOND




OF THE 2007-1 COLLATERAL BONDS]




 






A-9









 





     AND WHEREAS all acts and things necessary to make the 2007-1 Collateral Bonds (the “Collateral
Bonds”), when duly executed by the Company and authenticated by the Trustee or its agent and issued
as prescribed in the Indenture, as heretofore supplemented and amended, and this Supplemental
Indenture provided, the valid, binding and legal obligations of the Company, and to constitute the
Indenture, as supplemented and amended as aforesaid, as well as by this Supplemental Indenture, a
valid, binding and legal instrument for the security thereof, have been done and performed, and the
creation, execution and delivery of this Supplemental Indenture and the creation, execution and
issuance of bonds subject to the terms hereof and of the Indenture, as so supplemented and amended,
have in all respects been duly authorized;



     NOW, THEREFORE, in consideration of the premises, of the acceptance and purchase by the
holders thereof of the bonds issued and to be issued under the Indenture, as supplemented and
amended as above set forth, and of the sum of One Dollar duly paid by the Trustee to the Company,
and of other good and valuable considerations, the receipt whereof is hereby acknowledged, and for
the purpose of securing the due and punctual payment of the principal of and premium, if any, and
interest on all bonds now outstanding under the Indenture and the $500,000,000 principal amount of
the Collateral Bonds and all other bonds which shall be issued under the Indenture, as supplemented
and amended from time to time, and for the purpose of securing the faithful performance and
observance of all covenants and conditions therein, and in any indenture supplemental thereto, set
forth, the Company has given, granted, bargained, sold, released, transferred, assigned,
hypothecated, pledged, mortgaged, confirmed, set over, warranted, alienated and conveyed and by
these presents does give, grant, bargain, sell, release, transfer, assign, hypothecate, pledge,
mortgage, confirm, set over, warrant, alien and convey unto The Bank of New York, as Trustee, as
provided in the Indenture, and its successor or successors in the trust thereby and hereby created
and to its or their assigns forever, all the right, title and interest of the Company in and to all
the property, described in Section 11 hereof, together (subject to the provisions of Article X of
the Indenture) with the tolls, rents, revenues, issues, earnings, income, products and profits
thereof, excepting, however, the property, interests and rights specifically excepted from the lien
of the Indenture as set forth in the Indenture.



     TOGETHER WITH all and singular the tenements, hereditaments and appurtenances belonging or in
any wise appertaining to the premises, property, franchises and rights, or any thereof, referred to
in the foregoing granting clause, with the reversion and reversions, remainder and remainders and
(subject to the provisions of Article X of the Indenture) the tolls, rents, revenues, issues,
earnings, income, products and profits thereof, and all the estate, right, title and interest and
claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire
in and to the aforesaid premises, property, franchises and rights and every part and parcel
thereof.



     SUBJECT, HOWEVER, with respect to such premises, property, franchises and rights, to excepted
encumbrances as said term is defined in Section 1.02 of the Indenture, and subject also to all
defects and limitations of title and to all encumbrances existing at the time of acquisition. TO
HAVE AND TO HOLD all said premises, property, franchises and rights hereby conveyed, assigned,
pledged or mortgaged, or intended so to be, unto the Trustee, its successor or successors in trust
and their assigns forever;



A-10









 





     BUT IN TRUST, NEVERTHELESS, with power of sale for the equal and proportionate benefit and
security of the holders of all bonds now or hereafter authenticated and delivered under and secured
by the Indenture and interest coupons appurtenant thereto, pursuant to the provisions of the
Indenture and of any supplemental indenture, and for the enforcement of the payment of said bonds
and coupons when payable and the performance of and compliance with the covenants and conditions of
the Indenture and of any supplemental indenture, without any preference, distinction or priority as
to lien or otherwise of any bond or bonds over others by reason of the difference in time of the
actual authentication, delivery, issue, sale or negotiation thereof or for any other reason
whatsoever, except as otherwise expressly provided in the Indenture; and so that each and every
bond now or hereafter authenticated and delivered thereunder shall have the same lien, and so that
the principal of and premium, if any, and interest on every such bond shall, subject to the terms
thereof, be equally and proportionately secured, as if it had been made, executed, authenticated,
delivered, sold and negotiated simultaneously with the execution and delivery thereof.



     AND IT IS EXPRESSLY DECLARED by the Company that all bonds authenticated and delivered under
and secured by the Indenture, as supplemented and amended as above set forth, are to be issued,
authenticated and delivered, and all said premises, property, franchises and rights hereby and by
the Indenture and indentures supplemental thereto conveyed, assigned, pledged or mortgaged, or
intended so to be, are to be dealt with and disposed of under, upon and subject to the terms,
conditions, stipulations, covenants, agreements, trusts, uses and purposes expressed in the
Indenture, as supplemented and amended as above set forth, and the parties hereto mutually agree as
follows:



     SECTION 1. There is hereby created a series of bonds (the “2007-1 Collateral Bonds”)
designated as hereinabove provided, which shall also bear the descriptive title “First Mortgage
Bond”, and the forms thereof shall be substantially as hereinbefore set forth (collectively, the
“Sample Bond”). The 2007-1 Collateral Bonds shall be issued in the aggregate principal amount of
$500,000,000, shall mature on the Termination Date (as such term is defined in the Credit
Agreement) and shall be issued only as registered bonds without coupons in denominations of $1,000
and any multiple thereof. The serial numbers of the Collateral Bonds shall be such as may be
approved by any officer of the Company, the execution thereof by any such officer either manually
or by facsimile signature to be conclusive evidence of such approval. The Collateral Bonds are to
be issued to and registered in the name of the Agent under the Credit Agreement (as such terms are
defined in the Sample Bonds) to evidence and secure any and all Obligations (as such term is
defined in the Credit Agreement) of the Company under the Credit Agreement.



     The 2007-1 Collateral Bonds shall bear interest as set forth in the Sample Bond. The
principal of and the interest on said bonds shall be payable as set forth in the Sample Bond.



     The obligation of the Company to make payments with respect to the principal of 2007-1
Collateral Bonds shall be fully or partially, as the case may be, satisfied and discharged to the
extent that, at the time that any such payment shall be due, the then due principal of the Loans
and/or the Reimbursement Obligations included in the Obligations shall have been fully or partially
paid. Satisfaction of any obligation to the extent that payment is made with respect to the Loans
and/or the Reimbursement Obligations means that if any payment is made on the



A-11









 







principal of the Loans and/or the Reimbursement Obligations, a corresponding payment
obligation with respect to the principal of the 2007-1 Collateral Bonds shall be deemed discharged
in the same amount as the payment with respect to the Loans and/or the Reimbursement Obligations
discharges the outstanding obligation with respect to such Loans and/or Reimbursement Obligations.
No such payment of principal shall reduce the principal amount of the 2007-1 Collateral Bonds.



     The obligation of the Company to make payments with respect to interest on 2007-1 Collateral
Bonds shall be fully or partially, as the case may be, satisfied and discharged to the extent that,
at the time that any such payment shall be due, the then due interest and/or fees under the Credit
Agreement shall have been fully or partially paid. Satisfaction of any obligation to the extent
that payment is made with respect to the interest and/or fees under the Credit Agreement means that
if any payment is made on the interest and/or fees under the Credit Agreement, a corresponding
payment obligation with respect to the interest on the 2007-1 Collateral Bonds shall be deemed
discharged in the same amount as the payment with respect to the interest and/or fees discharges
the outstanding obligation with respect to such interest and/or fees.



     The Trustee may at any time and all times conclusively assume that the obligation of the
Company to make payments with respect to the principal of and interest on the Collateral Bonds, so
far as such payments at the time have become due, has been fully satisfied and discharged unless
and until the Trustee shall have received a written notice from the Agent stating (i) that timely
payment of principal and interest on the 2007-1 Collateral Bonds has not been made, (ii) that the
Company is in arrears as to the payments required to be made by it to the Agent pursuant to the
Credit Agreement, and (iii) the amount of the arrearage.



     The Collateral Bonds shall be exchangeable for other registered bonds of the same series, in
the manner and upon the conditions prescribed in the Indenture, upon the surrender of such bonds at
the Investor Services Department of the Company, as transfer agent. However, notwithstanding the
provisions of Section 2.05 of the Indenture, no charge shall be made upon any registration of
transfer or exchange of bonds of said series other than for any tax or taxes or other governmental
charge required to be paid by the Company.



     SECTION 2. The Collateral Bonds are not redeemable by the operation of the maintenance and
replacement provisions of this Indenture or with the proceeds of released property.



     SECTION 3. Upon the occurrence of an Event of Default under the Credit Agreement and the
acceleration of the Obligations, the Collateral Bonds shall be redeemable in whole upon receipt by
the Trustee of a written demand from the Agent stating that there has occurred under the Credit
Agreement both an Event of Default and a declaration of acceleration of the Obligations and
demanding redemption of the Collateral Bonds (including a description of the amount of principal,
interest and fees which comprise such Obligations). The Company waives any right it may have to
prior notice of such redemption under the Indenture. Upon surrender of the Collateral Bonds by the
Agent to the Trustee, the Collateral Bonds shall be redeemed at a redemption price equal to the
aggregate amount of the Obligations.



A-12









 





     SECTION 4. The Company reserves the right, without any consent, vote or other action by the
holder of the Collateral Bonds or of any subsequent series of bonds issued under the Indenture, to
make such amendments to the Indenture, as supplemented, as shall be necessary in order to amend
Section 17.02 to read as follows:




     SECTION 17.02. With the consent of the holders of not less than a
majority in principal amount of the bonds at the time outstanding or their
attorneys-in-fact duly authorized, or, if fewer than all series are
affected, not less than a majority in principal amount of the bonds at the
time outstanding of each series the rights of the holders of which are
affected, voting together, the Company, when authorized by a resolution, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or modifying the rights and
obligations of the Company and the rights of the holders of any of the bonds
and coupons; provided, however, that no such supplemental indenture shall
(1) extend the maturity of any of the bonds or reduce the rate or extend the
time of payment of interest thereon, or reduce the amount of the principal
thereof, or reduce any premium payable on the redemption thereof, without
the consent of the holder of each bond so affected, or (2) permit the
creation of any lien, not otherwise permitted, prior to or on a parity with
the lien of this Indenture, without the consent of the holders of all the
bonds then outstanding, or (3) reduce the aforesaid percentage of the
principal amount of bonds the holders of which are required to approve any
such supplemental indenture, without the consent of the holders of all the
bonds then outstanding. For the purposes of this Section, bonds shall be
deemed to be affected by a supplemental indenture if such supplemental
indenture adversely affects or diminishes the rights of holders thereof
against the Company or against its property. The Trustee may in its
discretion determine whether or not, in accordance with the foregoing, bonds
of any particular series would be affected by any supplemental indenture and
any such determination shall be conclusive upon the holders of bonds of such
series and all other series. Subject to the provisions of Sections 16.02 and
16.03 hereof, the Trustee shall not be liable for any determination made in
good faith in connection herewith.




     Upon the written request of the Company, accompanied by a resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of bondholders as
aforesaid (the instrument or instruments evidencing such consent to be dated
within one year of such request), the Trustee shall join with the Company in
the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee



A-13









 







may in its discretion but shall not be obligated to enter into such
supplemental indenture.




     It shall not be necessary for the consent of the bondholders under this
Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.




     The Company and the Trustee, if they so elect, and either before or
after such consent has been obtained, may require the holder of any bond
consenting to the execution of any such supplemental indenture to submit
his bond to the Trustee or to ask such bank, banker or trust company as may
be designated by the Trustee for the purpose, for the notation thereon of
the fact that the holder of such bond has consented to the execution of such
supplemental indenture, and in such case such notation, in form satisfactory
to the Trustee, shall be made upon all bonds so submitted, and such bonds
bearing such notation shall forthwith be returned to the persons entitled
thereto.




     Prior to the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the
Company shall publish a notice, setting forth in general terms the substance
of such supplemental indenture, at least once in one daily newspaper of
general circulation in each city in which the principal of any of the bonds
shall be payable, or, if all bonds outstanding shall be registered bonds
without coupons or coupon bonds registered as to principal, such notice
shall be sufficiently given if mailed, first class, postage prepaid, and
registered if the Company so elects, to each registered holder of bonds at
the last address of such holder appearing on the registry books, such
publication or mailing, as the case may be, to be made not less than thirty
days prior to such execution. Any failure of the Company to give such
notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.



     SECTION 5. As supplemented and amended as above set forth, the Indenture is in all respects
ratified and confirmed, and the Indenture and all indentures supplemental thereto shall be read,
taken and construed as one and the same instrument.



     SECTION 6. Nothing contained in this Supplemental Indenture shall, or shall be construed to,
confer upon any person other than a holder of bonds issued under the Indenture, as supplemented and
amended as above set forth, the Company, the Trustee and the Agent, for the benefit of the Banks
(as such term is defined in the Credit Agreement), any right or interest to avail himself of any
benefit under any provision of the Indenture, as so supplemented and amended.



A-14









 





     SECTION 7. The Trustee assumes no responsibility for or in respect of the validity or
sufficiency of this Supplemental Indenture or of the Indenture as hereby supplemented or the due
execution hereof by the Company or for or in respect of the recitals and statements contained
herein (other than those contained in the sixth, seventh and eighth recitals hereof), all of which
recitals and statements are made solely by the Company.



     SECTION 8. This Supplemental Indenture may be simultaneously executed in several counterparts
and all such counterparts executed and delivered, each as an original, shall constitute but one and
the same instrument.



     SECTION 9. In the event the date of any notice required or permitted hereunder shall not be a
Business Day, then (notwithstanding any other provision of the Indenture or of any supplemental
indenture thereto) such notice need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date fixed for such
notice. “Business Day” means, with respect to this Section 9, any day, other than a Saturday or
Sunday, on which banks generally are open in New York, New York for the conduct of substantially
all of their commercial lending activities and on which interbank wire transfers can be made on the
Fedwire system.



     SECTION 10. This Supplemental Indenture and the Collateral Bonds shall be governed by and
deemed to be a contract under, and construed in accordance with, the laws of the State of Michigan,
and for all purposes shall be construed in accordance with the laws of such state, except as may
otherwise be required by mandatory provisions of law.



     SECTION 11. Detailed Description of Property Mortgaged:



I.




ELECTRIC GENERATING PLANTS AND DAMS




     All the electric generating plants and stations of the Company, constructed or otherwise
acquired by it and not heretofore described in the Indenture or any supplement thereto and not
heretofore released from the lien of the Indenture, including all powerhouses, buildings,
reservoirs, dams, pipelines, flumes, structures and works and the land on which the same are
situated and all water rights and all other lands and easements, rights of way, permits,
privileges, towers, poles, wires, machinery, equipment, appliances, appurtenances and supplies and
all other property, real or personal, forming a part of or appertaining to or used, occupied or
enjoyed in connection with such plants and stations or any of them, or adjacent thereto.



II.




ELECTRIC TRANSMISSION LINES




     All the electric transmission lines of the Company, constructed or otherwise acquired by it
and not heretofore described in the Indenture or any supplement thereto and not heretofore released
from the lien of the Indenture, including towers, poles, pole lines, wires, switches, switch racks,
switchboards, insulators and other appliances and equipment, and all other



A-15









 







property, real or personal, forming a part of or appertaining to or used, occupied or enjoyed
in connection with such transmission lines or any of them or adjacent thereto; together with all
real property, rights of way, easements, permits, privileges, franchises and rights for or relating
to the construction, maintenance or operation thereof, through, over, under or upon any private
property or any public streets or highways, within as well as without the corporate limits of any
municipal corporation. Also all the real property, rights of way, easements, permits, privileges
and rights for or relating to the construction, maintenance or operation of certain transmission
lines, the land and rights for which are owned by the Company, which are either not built or now
being constructed.



III.




ELECTRIC DISTRIBUTION SYSTEMS




     All the electric distribution systems of the Company, constructed or otherwise acquired by it
and not heretofore described in the Indenture or any supplement thereto and not heretofore released
from the lien of the Indenture, including substations, transformers, switchboards, towers, poles,
wires, insulators, subways, trenches, conduits, manholes, cables, meters and other appliances and
equipment, and all other property, real or personal, forming a part of or appertaining to or used,
occupied or enjoyed in connection with such distribution systems or any of them or adjacent
thereto; together with all real property, rights of way, easements, permits, privileges,
franchises, grants and rights, for or relating to the construction, maintenance or operation
thereof, through, over, under or upon any private property or any public streets or highways within
as well as without the corporate limits of any municipal corporation.



IV.




ELECTRIC SUBSTATIONS, SWITCHING STATIONS AND SITES




     All the substations, switching stations and sites of the Company, constructed or otherwise
acquired by it and not heretofore described in the Indenture or any supplement thereto and not
heretofore released from the lien of the Indenture, for transforming, regulating, converting or
distributing or otherwise controlling electric current at any of its plants and elsewhere, together
with all buildings, transformers, wires, insulators and other appliances and equipment, and all
other property, real or personal, forming a part of or appertaining to or used, occupied or enjoyed
in connection with any of such substations and switching stations, or adjacent thereto, with sites
to be used for such purposes.



V.




GAS COMPRESSOR STATIONS, GAS PROCESSING PLANTS, DESULPHURIZATION

STATIONS, METERING STATIONS, ODORIZING STATIONS, REGULATORS AND SITES




     All the compressor stations, processing plants, desulphurization stations, metering stations,
odorizing stations, regulators and sites of the Company, constructed or otherwise acquired by it
and not heretofore described in the Indenture or any supplement thereto and not



A-16









 







heretofore released from the lien of the Indenture, for compressing, processing,
desulphurizing, metering, odorizing and regulating manufactured or natural gas at any of its plants
and elsewhere, together with all buildings, meters and other appliances and equipment, and all
other property, real or personal, forming a part of or appertaining to or used, occupied or enjoyed
in connection with any of such purposes, with sites to be used for such purposes.



VI.




GAS STORAGE FIELDS




     The natural gas rights and interests of the Company, including wells and well lines (but not
including natural gas, oil and minerals), the gas gathering system, the underground gas storage
rights, the underground gas storage wells and injection and withdrawal system used in connection
therewith, constructed or otherwise acquired by it and not heretofore described in the Indenture or
any supplement thereto and not heretofore released from the lien of the Indenture: In the Overisel
Gas Storage Field, located in the Township of Overisel, Allegan County, and in the Township of
Zeeland, Ottawa County, Michigan; in the Northville Gas Storage Field located in the Township of
Salem, Washtenaw County, Township of Lyon, Oakland County, and the Townships of Northville and
Plymouth and City of Plymouth, Wayne County, Michigan; in the Salem Gas Storage Field, located in
the Township of Salem, Allegan County, and in the Township of Jamestown, Ottawa County, Michigan;
in the Ray Gas Storage Field, located in the Townships of Ray and Armada, Macomb County, Michigan;
in the Lenox Gas Storage Field, located in the Townships of Lenox and Chesterfield, Macomb County,
Michigan; in the Ira Gas Storage Field, located in the Township of Ira, St. Clair County, Michigan;
in the Puttygut Gas Storage Field, located in the Township of Casco, St. Clair County, Michigan; in
the Four Corners Gas Storage Field, located in the Townships of Casco, China, Cottrellville and
Ira, St. Clair County, Michigan; in the Swan Creek Gas Storage Field, located in the Township of
Casco and Ira, St. Clair County, Michigan; and in the Hessen Gas Storage Field, located in the
Townships of Casco and Columbus, St. Clair, Michigan.



VII.




GAS TRANSMISSION LINES




     All the gas transmission lines of the Company, constructed or otherwise acquired by it and not
heretofore described in the Indenture or any supplement thereto and not heretofore released from
the lien of the Indenture, including gas mains, pipes, pipelines, gates, valves, meters and other
appliances and equipment, and all other property, real or personal, forming a part of or
appertaining to or used, occupied or enjoyed in connection with such transmission lines or any of
them or adjacent thereto; together with all real property, right of way, easements, permits,
privileges, franchises and rights for or relating to the construction, maintenance or operation
thereof, through, over, under or upon any private property or any public streets or highways,
within as well as without the corporate limits of any municipal corporation.



A-17









 





VIII.




GAS DISTRIBUTION SYSTEMS




     All the gas distribution systems of the Company, constructed or otherwise acquired by it and
not heretofore described in the Indenture or any supplement thereto and not heretofore released
from the lien of the Indenture, including tunnels, conduits, gas mains and pipes, service pipes,
fittings, gates, valves, connections, meters and other appliances and equipment, and all other
property, real or personal, forming a part of or appertaining to or used, occupied or enjoyed in
connection with such distribution systems or any of them or adjacent thereto; together with all
real property, rights of way, easements, permits, privileges, franchises, grants and rights, for or
relating to the construction, maintenance or operation thereof, through, over, under or upon any
private property or any public streets or highways within as well as without the corporate limits
of any municipal corporation.



IX.




OFFICE BUILDINGS, SERVICE BUILDINGS, GARAGES, ETC.




     All office, garage, service and other buildings of the Company, wherever located, in the State
of Michigan, constructed or otherwise acquired by it and not heretofore described in the Indenture
or any supplement thereto and not heretofore released from the lien of the Indenture, together with
the land on which the same are situated and all easements, rights of way and appurtenances to said
lands, together with all furniture and fixtures located in said buildings.



X.




TELEPHONE PROPERTIES AND

RADIO COMMUNICATION EQUIPMENT




     All telephone lines, switchboards, systems and equipment of the Company, constructed or
otherwise acquired by it and not heretofore described in the Indenture or any supplement thereto
and not heretofore released from the lien of the Indenture, used or available for use in the
operation of its properties, and all other property, real or personal, forming a part of or
appertaining to or used, occupied or enjoyed in connection with such telephone properties or any of
them or adjacent thereto; together with all real estate, rights of way, easements, permits,
privileges, franchises, property, devices or rights related to the dispatch, transmission,
reception or reproduction of messages, communications, intelligence, signals, light, vision or
sound by electricity, wire or otherwise, including all telephone equipment installed in buildings
used as general and regional offices, substations and generating stations and all telephone lines
erected on towers and poles; and all radio communication equipment of the Company, together with
all property, real or personal (except any in the Indenture expressly excepted), fixed stations,
towers, auxiliary radio buildings and equipment, and all appurtenances used in connection
therewith, wherever located, in the State of Michigan.



A-18









 





XI.




OTHER REAL PROPERTY




     All other real property of the Company and all interests therein, of every nature and
description (except any in the Indenture expressly excepted) wherever located, in the State of
Michigan, acquired by it and not heretofore described in the Indenture or any supplement thereto
and not heretofore released from the lien of the Indenture. Such real property includes but is not
limited to the following described property, such property is subject to any interests that were
excepted or reserved in the conveyance to the Company:



ALCONA COUNTY




     Certain land in Caledonia Township, Alcona County, Michigan described as:




     The East 330 feet of the South 660 feet of the SW 1/4 of the SW 1/4 of
Section 8, T28N, R8E, except the West 264 feet of the South 330 feet
thereof; said land being more particularly described as follows: To find the
place of beginning of this description, commence at the Southwest corner of
said section, run thence East along the South line of said section 1243 feet
to the place of beginning of this description, thence continuing East along
said South line of said section 66 feet to the West 1/8 line of said
section, thence N 02 degrees 09’ 30” E along the said West 1/8 line of said
section 660 feet, thence West 330 feet, thence S 02 degrees 09’ 30” W, 330
feet, thence East 264 feet, thence S 02 degrees 09’ 30” W, 330 feet to the
place of beginning.



ALLEGAN COUNTY




     Certain land in Lee Township, Allegan County, Michigan described as:




     The NE 1/4 of the NW 1/4 of Section 16, T1N, R15W.



ALPENA COUNTY




     Certain land in Wilson and Green Townships, Alpena County, Michigan described as:




     All that part of the S’ly 1/2 of the former Boyne City-Gaylord and
Alpena Railroad right of way, being the Southerly 50 feet of a 100 foot
strip of land formerly occupied by said Railroad, running from the East line
of Section 31, T31N, R7E, Southwesterly across said Section 31 and Sections
5 and 6 of T30N, R7E and Sections 10, 11 and the E 1/2 of Section 9, except
the West 1646 feet thereof, all in T30N, R6E.



ANTRIM COUNTY




     Certain land in Mancelona Township, Antrim County, Michigan described as:



A-19









 






     The S 1/2 of the NE 1/4 of Section 33, T29N, R6W, excepting therefrom
all mineral, coal, oil and gas and such other rights as were reserved unto
the State of Michigan in that certain deed running from the State of
Michigan to August W. Schack and Emma H. Schack, his wife, dated April 15,
1946 and recorded May 20, 1946 in Liber 97 of Deeds on page 682 of Antrim
County Records.



ARENAC COUNTY




     Certain land in Standish Township, Arenac County, Michigan described as:




     A parcel of land in the SW 1/4 of the NW 1/4 of Section 12, T18N, R4E,
described as follows: To find the place of beginning of said parcel of land,
commence at the Northwest corner of Section 12, T18N, R4E; run thence South
along the West line of said section, said West line of said section being
also the center line of East City Limits Road 2642.15 feet to the W 1/4 post
of said section and the place of beginning of said parcel of land; running
thence N 88 degrees 26’ 00” E along the East and West 1/4 line of said
section, 660.0 feet; thence North parallel with the West line of said
section, 310.0 feet; thence S 88 degrees 26’ 00” W, 330.0 feet; thence South
parallel with the West line of said section, 260.0 feet; thence S 88 degrees
26’ 00” W, 330.0 feet to the West line of said section and the center line
of East City Limits Road; thence South along the said West line of said
section, 50.0 feet to the place of beginning.



BARRY COUNTY




     Certain land in Johnstown Township, Barry County, Michigan described as:




     A strip of land 311 feet in width across the SW 1/4 of the NE 1/4 of
Section 31, T1N, R8W, described as follows: To find the place of beginning
of this description, commence at the E 1/4 post of said section; run thence N
00 degrees 55’ 00” E along the East line of said section, 555.84 feet;
thence N 59 degrees 36’ 20” W, 1375.64 feet; thence N 88 degrees 30’ 00” W,
130 feet to a point on the East 1/8 line of said section and the place of
beginning of this description; thence continuing N 88 degrees 30’ 00” W,
1327.46 feet to the North and South 1/4 line of said section; thence S 00
degrees 39’35” W along said North and South 1/4 line of said section, 311.03
feet to a point, which said point is 952.72 feet distant N’ly from the East
and West 1/4 line of said section as measured along said North and South 1/4
line of said section; thence S 88 degrees 30’ 00” E, 1326.76 feet to the
East 1/8 line of said section; thence N 00 degrees 47’ 20” E along said East
1/8 line of said section, 311.02 feet to the place of beginning.



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BAY COUNTY




     Certain land in Frankenlust Township, Bay County, Michigan described as:




     The South 250 feet of the N 1/2 of the W 1/2 of the W 1/2 of the SE 1/4
of Section 9, T13N, R4E.



BENZIE COUNTY




     Certain land in Benzonia Township, Benzie County, Michigan described as:




     A parcel of land in the Northeast 1/4 of Section 7, Township 26 North,
Range 14 West, described as beginning at a point on the East line of said
Section 7, said point being 320 feet North measured along the East line of
said section from the East 1/4 post; running thence West 165 feet; thence
North parallel with the East line of said section 165 feet; thence East 165
feet to the East line of said section; thence South 165 feet to the place of
beginning.



BRANCH COUNTY




     Certain land in Girard Township, Branch County, Michigan described as:




     A parcel of land in the NE 1/4 of Section 23 T5S, R6W, described as
beginning at a point on the North and South quarter line of said section at
a point 1278.27 feet distant South of the North quarter post of said
section, said distance being measured along the North and South quarter line
of said section, running thence S89 degrees21’E 250 feet, thence North along
a line parallel with the said North and South quarter line of said section
200 feet, thence N89 degrees21’W 250 feet to the North and South quarter
line of said section, thence South along said North and South quarter line
of said section 200 feet to the place of beginning.



CALHOUN COUNTY




     Certain land in Convis Township, Calhoun County, Michigan described as:




     A parcel of land in the SE 1/4 of the SE 1/4 of Section 32, T1S, R6W,
described as follows: To find the place of beginning of this description,
commence at the Southeast corner of said section; run thence North along the
East line of said section 1034.32 feet to the place of beginning of this
description; running thence N 89 degrees 39’ 52” W, 333.0 feet; thence North
290.0 feet to the South 1/8 line of said section; thence S 89 degrees 39’
52” E along said South 1/8 line of said section 333.0 feet to the East line
of said section; thence South along said East line of said section 290.0
feet to the place of beginning. (Bearings are



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based on the East line of Section 32, T1S, R6W, from the Southeast
corner of said section to the Northeast corner of said section assumed as
North.)



CASS COUNTY




     Certain easement rights located across land in Marcellus Township, Cass County, Michigan
described as:




     The East 6 rods of the SW 1/4 of the SE 1/4 of Section 4, T5S, R13W.



CHARLEVOIX COUNTY




     Certain land in South Arm Township, Charlevoix County, Michigan described as:




     A parcel of land in the SW 1/4 of Section 29, T32N, R7W, described as
follows: Beginning at the Southwest corner of said section and running
thence North along the West line of said section 788.25 feet to a point
which is 528 feet distant South of the South 1/8 line of said section as
measured along the said West line of said section; thence N 89 degrees 30’
19” E, parallel with said South 1/8 line of said section 442.1 feet; thence
South 788.15 feet to the South line of said section; thence S 89 degrees 29’
30” W, along said South line of said section 442.1 feet to the place of
beginning.



CHEBOYGAN COUNTY




     Certain land in Inverness Township, Cheboygan County, Michigan described as:




     A parcel of land in the SW frl 1/4 of Section 31, T37N, R2W, described
as beginning at the Northwest corner of the SW frl 1/4, running thence East
on the East and West quarter line of said Section, 40 rods, thence South
parallel to the West line of said Section 40 rods, thence West 40 rods to
the West line of said Section, thence North 40 rods to the place of
beginning.



CLARE COUNTY




     Certain land in Frost Township, Clare County, Michigan described as:




     The East 150 feet of the North 225 feet of the NW 1/4 of the NW 1/4 of
Section 15, T20N, R4W.



CLINTON COUNTY




     Certain land in Watertown Township, Clinton County, Michigan described as:



A-22









 






     The NE 1/4 of the NE 1/4 of the SE 1/4 of Section 22, and the North 165
feet of the NW 1/4 of the NE 1/4 of the SE 1/4 of Section 22, T5N, R3W.



CRAWFORD COUNTY




     Certain land in Lovells Township, Crawford County, Michigan described as:




     A parcel of land in Section 1, T28N, R1W, described as: Commencing at
NW corner said section; thence South 89 degrees53’30” East along North
section line 105.78 feet to point of beginning; thence South 89
degrees53’30” East along North section line 649.64 feet; thence South 55
degrees 42’30” East 340.24 feet; thence South 55 degrees 44’ 37” “East
5,061.81 feet to the East section line; thence South 00 degrees 00’ 08”

“West along East section line 441.59 feet; thence North 55 degrees 44’ 37”
West 5,310.48 feet; thence North 55 degrees 42’30” West 877.76 feet to point
of beginning.



EATON COUNTY




     Certain land in Eaton Township, Eaton County, Michigan described as:




     A parcel of land in the SW 1/4 of Section 6, T2N, R4W, described as
follows: To find the place of beginning of this description commence at the
Southwest corner of said section; run thence N 89 degrees 51’ 30” E along
the South line of said section 400 feet to the place of beginning of this
description; thence continuing N 89 degrees 51’ 30” E, 500 feet; thence N 00
degrees 50’ 00” W, 600 feet; thence S 89 degrees 51’ 30” W parallel with the
South line of said section 500 feet; thence S 00 degrees 50’ 00” E, 600 feet
to the place of beginning.



EMMET COUNTY




     Certain land in Wawatam Township, Emmet County, Michigan described as:




     The West 1/2 of the Northeast 1/4 of the Northeast 1/4 of Section 23,
T39N, R4W.



GENESEE COUNTY




     Certain land in Argentine Township, Genesee County, Michigan described as:




     A parcel of land of part of the SW 1/4 of Section 8, T5N, R5E, being
more particularly described as follows:




     Beginning at a point of the West line of Duffield Road, 100 feet wide,
(as now established) distant 829.46 feet measured N01



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degrees42’56”W
and 50 feet measured S88 degrees14’04”W from the South
quarter corner, Section 8, T5N, R5E; thence S88
degrees14’04”W a distance of
550 feet; thence N01 degrees42’56”W a distance of 500 feet to a point on the
North line of the South half of the Southwest quarter of said Section 8;
thence N88 degrees14’04”E along the North line of South half of the
Southwest quarter of said Section 8 a distance 550 feet to a point on the
West line of Duffield Road, 100 feet wide (as now established); thence S01
degrees42’56”E along the West line of said Duffield Road a distance of 500
feet to the point of beginning.



GLADWIN COUNTY




     Certain land in Secord Township, Gladwin County, Michigan described as:




     The East 400 feet of the South 450 feet of Section 2, T19N, R1E.



GRAND TRAVERSE COUNTY




     Certain land in Mayfield Township, Grand Traverse County, Michigan described as:




     A parcel of land in the Northwest 1/4 of Section 3, T25N, R11W,
described as follows: Commencing at the Northwest corner of said section,
running thence S 89 degrees19’15” E along the North line of said section and
the center line of Clouss Road 225 feet, thence South 400 feet, thence N 89
degrees19’15” W 225 feet to the West line of said section and the center
line of Hannah Road, thence North along the West line of said section and
the center line of Hannah Road 400 feet to the place of beginning for this
description.



GRATIOT COUNTY




     Certain land in Fulton Township, Gratiot County, Michigan described as:




     A parcel of land in the NE 1/4 of Section 7, Township 9 North, Range 3
West, described as beginning at a point on the North line of George Street
in the Village of Middleton, which is 542 feet East of the North and South
one-quarter (1/4) line of said Section 7; thence North 100 feet; thence East
100 feet; thence South 100 feet to the North line of George Street; thence
West along the North line of George Street 100 feet to place of beginning.



HILLSDALE COUNTY




     Certain land in Litchfield Village, Hillsdale County, Michigan described as:




     Lot 238 of Assessors Plat of the Village of Litchfield.



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HURON COUNTY




     Certain easement rights located across land in Sebewaing Township, Huron County, Michigan
described as:




     The North 1/2 of the Northwest 1/4 of Section 15, T15N, R9E.



INGHAM COUNTY




     Certain land in Vevay Township, Ingham County, Michigan described as:




     A parcel of land 660 feet wide in the Southwest 1/4 of Section 7 lying
South of the centerline of Sitts Road as extended to the North-South 1/4
line of said Section 7, T2N, R1W, more particularly described as follows:
Commence at the Southwest corner of said Section 7, thence North along the
West line of said Section 2502.71 feet to the centerline of Sitts Road;
thence South 89 degrees54’45” East along said centerline 2282.38 feet to the
place of beginning of this description; thence continuing South 89
degrees54’45” East along said centerline and said centerline extended 660.00
feet to the North-South 1/4 line of said section; thence South 00
degrees07’20” West 1461.71 feet; thence North 89 degrees34’58” West 660.00
feet; thence North 00 degrees07’20” East 1457.91 feet to the centerline of
Sitts Road and the place of beginning.



IONIA COUNTY




     Certain land in Sebewa Township, Ionia County, Michigan described as:




     A strip of land 280 feet wide across that part of the SW 1/4 of the NE
1/4 of Section 15, T5N, R6W, described as follows:




     To find the place of beginning of this description commence at the E
1/4 corner of said section; run thence N 00 degrees 05’ 38” W along the East
line of said section, 1218.43 feet; thence S 67 degrees 18’ 24” W, 1424.45
feet to the East 1/8 line of said section and the place of beginning of this
description; thence continuing S 67 degrees 18’ 24” W, 1426.28 feet to the
North and South 1/4 line of said section at a point which said point is
105.82 feet distant N’ly of the center of said section as measured along
said North and South 1/4 line of said section; thence N 00 degrees 04’ 47” E
along said North and South 1/4 line of said section, 303.67 feet; thence N
67 degrees 18’ 24” E, 1425.78 feet to the East 1/8 line of said section;
thence S 00 degrees 00’ 26” E along said East 1/8 line of said section,
303.48 feet to the place of beginning. (Bearings are based on the East line
of Section 15, T5N, R6W, from the E 1/4 corner of said section to the
Northeast corner of said section assumed as N 00 degrees 05’ 38” W.)



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IOSCO COUNTY




     Certain land in Alabaster Township, Iosco County, Michigan described as:




     A parcel of land in the NW 1/4 of Section 34, T21N, R7E, described as
follows: To find the place of beginning of this description commence at the
N 1/4 post of said section; run thence South along the North and South 1/4
line of said section, 1354.40 feet to the place of beginning of this
description; thence continuing South along the said North and South 1/4 line
of said section, 165.00 feet to a point on the said North and South 1/4 line
of said section which said point is 1089.00 feet distant North of the center
of said section; thence West 440.00 feet; thence North 165.00 feet; thence
East 440.00 feet to the said North and South 1/4 line of said section and
the place of beginning.



ISABELLA COUNTY




     Certain land in Chippewa Township, Isabella County, Michigan described as:




     The North 8 rods of the NE 1/4 of the SE 1/4 of Section 29, T14N, R3W.



JACKSON COUNTY




     Certain land in Waterloo Township, Jackson County, Michigan described as:




     A parcel of land in the North fractional part of the N fractional 1/2
of Section 2, T1S, R2E, described as follows: To find the place of beginning
of this description commence at the E 1/4 post of said section; run thence N
01 degrees 03’ 40” E along the East line of said section 1335.45 feet to the
North 1/8 line of said section and the place of beginning of this
description; thence N 89 degrees 32’ 00” W, 2677.7 feet to the North and
South 1/4 line of said section; thence S 00 degrees 59’ 25” W along the
North and South 1/4 line of said section 22.38 feet to the North 1/8 line of
said section; thence S 89 degrees 59’ 10” W along the North 1/8 line of said
section 2339.4 feet to the center line of State Trunkline Highway M-52;
thence N 53 degrees 46’ 00” W along the center line of said State Trunkline
Highway 414.22 feet to the West line of said section; thence N 00 degrees
55’ 10” E along the West line of said section 74.35 feet; thence S 89
degrees 32’ 00” E, 5356.02 feet to the East line of said section; thence S
01 degrees 03’ 40” W along the East line of said section 250 feet to the
place of beginning.



A-26









 





KALAMAZOO COUNTY




     Certain land in Alamo Township, Kalamazoo County, Michigan described as:




     The South 350 feet of the NW 1/4 of the NW 1/4 of Section 16, T1S,
R12W, being more particularly described as follows: To find the place of
beginning of this description, commence at the Northwest corner of said
section; run thence S 00 degrees 36’ 55” W along the West line of said
section 971.02 feet to the place of beginning of this description; thence
continuing S 00 degrees 36’ 55” W along said West line of said section
350.18 feet to the North 1/8 line of said section; thence S 87 degrees 33’
40” E along the said North 1/8 line of said section 1325.1 feet to the West
1/8 line of said section; thence N 00 degrees 38’ 25” E along the said West
1/8 line of said section 350.17 feet; thence N 87 degrees 33’ 40” W, 1325.25
feet to the place of beginning.



KALKASKA COUNTY




     Certain land in Kalkaska Township, Kalkaska County, Michigan described as:




     The NW 1/4 of the SW 1/4 of Section 4, T27N, R7W, excepting therefrom
all mineral, coal, oil and gas and such other rights as were reserved unto
the State of Michigan in that certain deed running from the Department of
Conservation for the State of Michigan to George Welker and Mary Welker, his
wife, dated October 9, 1934 and recorded December 28, 1934 in Liber 39 on
page 291 of Kalkaska County Records, and subject to easement for pipeline
purposes as granted to Michigan Consolidated Gas Company by first party
herein on April 4, 1963 and recorded June 21, 1963 in Liber 91 on page 631
of Kalkaska County Records.



KENT COUNTY




     Certain land in Caledonia Township, Kent County, Michigan described as:




     A parcel of land in the Northwest fractional 1/4 of Section 15, T5N,
R10W, described as follows: To find the place of beginning of this
description commence at the North 1/4 corner of said section, run thence S 0
degrees 59’ 26” E along the North and South 1/4 line of said section 2046.25
feet to the place of beginning of this description, thence continuing S 0
degrees 59’ 26” E along said North and South 1/4 line of said section 332.88
feet, thence S 88 degrees 58’ 30” W 2510.90 feet to a point herein
designated “Point A” on the East bank of the Thornapple River, thence
continuing S 88 degrees 53’ 30” W to the center thread of the Thornapple
River, thence NW’ly along the center thread of said Thornapple River to a
point which said point is S 88 degrees 58’ 30” W of a point on the East bank
of the Thornapple River herein designated “Point



A-27









 







B”, said “Point B” being N 23 degrees 41’ 35” W 360.75 feet from said
above-described “Point A”, thence N 88 degrees 58’ 30” E to said “Point B”,
thence continuing N 88 degrees 58’ 30” E 2650.13 feet to the place of
beginning. (Bearings are based on the East line of Section 15, T5N, R10W
between the East 1/4 corner of said section and the Northeast corner of said
section assumed as N 0 degrees 59’ 55” W.)



LAKE COUNTY




     Certain land in Pinora and Cherry Valley Townships, Lake County, Michigan described as:




     A strip of land 50 feet wide East and West along and adjoining the West
line of highway on the East side of the North 1/2 of Section 13 T18N, R12W.
Also a strip of land 100 feet wide East and West along and adjoining the
East line of the highway on the West side of following described land: The
South 1/2 of NW 1/4, and the South 1/2 of the NW 1/4 of the SW 1/4, all in
Section 6, T18N, R11W.



LAPEER COUNTY




     Certain land in Hadley Township, Lapeer County, Michigan described as:




     The South 825 feet of the W 1/2 of the SW 1/4 of Section 24, T6N, R9E,
except the West 1064 feet thereof.



LEELANAU COUNTY




     Certain land in Cleveland Township, Leelanau County, Michigan described as:




     The North 200 feet of the West 180 feet of the SW 1/4 of the SE 1/4 of
Section 35, T29N, R13W.



LENAWEE COUNTY




     Certain land in Madison Township, Lenawee County, Michigan described as:




     A strip of land 165 feet wide off the West side of the following
described premises: The E 1/2 of the SE 1/4 of Section 12. The E 1/2 of the
NE 1/4 and the NE 1/4 of the SE 1/4 of Section 13, being all in T7S, R3E,
excepting therefrom a parcel of land in the E 1/2 of the SE 1/4 of Section
12, T7S, R3E, beginning at the Northwest corner of said E 1/2 of the SE 1/4
of Section 12, running thence East 4 rods, thence South 6 rods, thence West
4 rods, thence North 6 rods to the place of beginning.



A-28









 





LIVINGSTON COUNTY




     Certain land in Cohoctah Township, Livingston County, Michigan described as:




     Parcel 1




     The East 390 feet of the East 50 rods of the SW 1/4 of Section 30, T4N,
R4E.




     Parcel 2




     A parcel of land in the NW 1/4 of Section 31, T4N, R4E, described as
follows: To find the place of beginning of this description commence at the
N 1/4 post of said section; run thence N 89 degrees 13’ 06” W along the
North line of said section, 330 feet to the place of beginning of this
description; running thence S 00 degrees 52’ 49” W, 2167.87 feet; thence N
88 degrees 59’ 49” W, 60 feet; thence N 00 degrees 52’ 49” E, 2167.66 feet
to the North line of said section; thence S 89 degrees 13’ 06” E along said
North line of said section, 60 feet to the place of beginning.



MACOMB COUNTY




     Certain land in Macomb Township, Macomb County, Michigan described as:




     A parcel of land commencing on the West line of the E 1/2 of the NW 1/4
of fractional Section 6, 20 chains South of the NW corner of said E 1/2 of
the NW 1/4 of Section 6; thence South on said West line and the East line of
A. Henry Kotner’s Hayes Road Subdivision #15, according to the recorded plat
thereof, as recorded in Liber 24 of Plats, on page 7, 24.36 chains to the
East and West 1/4 line of said Section 6; thence East on said East and West
1/4 line 8.93 chains; thence North parallel with the said West line of the E
1/2 of the NW 1/4 of Section 6, 24.36 chains; thence West 8.93 chains to the
place of beginning, all in T3N, R13E.



MANISTEE COUNTY




     Certain land in Manistee Township, Manistee County, Michigan described as:




     A parcel of land in the SW 1/4 of Section 20, T22N, R16W, described as
follows: To find the place of beginning of this description, commence at the
Southwest corner of said section; run thence East along the South line of
said section 832.2 feet to the place of beginning of this description;
thence continuing East along said South line of said section 132 feet;
thence North 198 feet; thence West 132 feet; thence South 198 feet to the
place of beginning, excepting therefrom the South 2 rods thereof which was
conveyed to Manistee Township for highway purposes



A-29









 







by a Quitclaim Deed dated June 13, 1919 and recorded July 11, 1919 in
Liber 88 of Deeds on page 638 of Manistee County Records.



MASON COUNTY




     Certain land in Riverton Township, Mason County, Michigan described as:




     Parcel 1




     The South 10 acres of the West 20 acres of the S 1/2 of the NE 1/4 of
Section 22, T17N, R17W.




     Parcel 2




     A parcel of land containing 4 acres of the West side of highway, said
parcel of land being described as commencing 16 rods South of the Northwest
corner of the NW 1/4 of the SW 1/4 of Section 22, T17N, R17W, running thence
South 64 rods, thence NE’ly and N’ly and NW’ly along the W’ly line of said
highway to the place of beginning, together with any and all right, title,
and interest of Howard C. Wicklund and Katherine E. Wicklund in and to that
portion of the hereinbefore mentioned highway lying adjacent to the E’ly
line of said above described land.



MECOSTA COUNTY




     Certain land in Wheatland Township, Mecosta County, Michigan described as:




     A parcel of land in the SW 1/4 of the SW 1/4 of Section 16, T14N, R7W,
described as beginning at the Southwest corner of said section; thence East
along the South line of Section 133 feet; thence North parallel to the West
section line 133 feet; thence West 133 feet to the West line of said
Section; thence South 133 feet to the place of beginning.



MIDLAND COUNTY




     Certain land in Ingersoll Township, Midland County, Michigan described as:




     The West 200 feet of the W 1/2 of the NE 1/4 of Section 4, T13N, R2E.



MISSAUKEE COUNTY




     Certain land in Norwich Township, Missaukee County, Michigan described as:




     A parcel of land in the NW 1/4 of the NW 1/4 of Section 16, T24N, R6W,
described as follows: Commencing at the Northwest corner of said section,
running thence N 89 degrees 01’ 45” E along the North



A-30









 







line of said section 233.00 feet; thence South 233.00 feet; thence S 89
degrees 01’ 45” W, 233.00 feet to the West line of said section; thence
North along said West line of said section 233.00 feet to the place of
beginning. (Bearings are based on the West line of Section 16, T24N, R6W,
between the Southwest and Northwest corners of said section assumed as
North.)



MONROE COUNTY




     Certain land in Whiteford Township, Monroe County, Michigan described as:




     A parcel of land in the SW1/4 of Section 20, T8S, R6E, described as
follows: To find the place of beginning of this description commence at the
S 1/4 post of said section; run thence West along the South line of said
section 1269.89 feet to the place of beginning of this description; thence
continuing West along said South line of said section 100 feet; thence N 00
degrees 50’ 35” E, 250 feet; thence East 100 feet; thence S 00 degrees 50’
35” W parallel with and 16.5 feet distant W’ly of as measured perpendicular
to the West 1/8 line of said section, as occupied, a distance of 250 feet to
the place of beginning.



MONTCALM COUNTY




     Certain land in Crystal Township, Montcalm County, Michigan described as:




     The N 1/2 of the S 1/2 of the SE 1/4 of Section 35, T10N, R5W.



MONTMORENCY COUNTY




     Certain land in the Village of Hillman, Montmorency County, Michigan described as:




     Lot 14 of Hillman Industrial Park, being a subdivision in the South 1/2
of the Northwest 1/4 of Section 24, T31N, R4E, according to the plat thereof
recorded in Liber 4 of Plats on Pages 32-34, Montmorency County Records.



MUSKEGON COUNTY




     Certain land in Casnovia Township, Muskegon County, Michigan described as:




     The West 433 feet of the North 180 feet of the South 425 feet of the SW
1/4 of Section 3, T10N, R13W.



NEWAYGO COUNTY




     Certain land in Ashland Township, Newaygo County, Michigan described as:




     The West 250 feet of the NE 1/4 of Section 23, T11N, R13W.



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OAKLAND COUNTY




     Certain land in Wixcom City, Oakland County, Michigan described as:




     The E 75 feet of the N 160 feet of the N 330 feet of the W 526.84 feet
of the NW 1/4 of the NW 1/4 of Section 8, T1N, R8E, more particularly
described as follows: Commence at the NW corner of said Section 8, thence N
87 degrees 14’ 29” E along the North line of said Section 8 a distance of
451.84 feet to the place of beginning for this description; thence
continuing N 87 degrees 14’ 29” E along said North section line a distance
of 75.0 feet to the East line of the West 526.84 feet of the NW 1/4 of the
NW 1/4 of said Section 8; thence S 02 degrees 37’ 09” E along said East line
a distance of 160.0 feet; thence S 87 degrees 14’ 29” W a distance of 75.0
feet; thence N 02 degrees 37’ 09” W a distance of 160.0 feet to the place of
beginning.



OCEANA COUNTY




     Certain land in Crystal Township, Oceana County, Michigan described as:




     The East 290 feet of the SE 1/4 of the NW 1/4 and the East 290 feet of
the NE 1/4 of the SW 1/4, all in Section 20, T16N, R16W.



OGEMAW COUNTY




     Certain land in West Branch Township, Ogemaw County, Michigan described as:




     The South 660 feet of the East 660 feet of the NE 1/4 of the NE 1/4 of
Section 33, T22N, R2E.



OSCEOLA COUNTY




     Certain land in Hersey Township, Osceola County, Michigan described as:




     A parcel of land in the North 1/2 of the Northeast 1/4 of Section 13,
T17N, R9W, described as commencing at the Northeast corner of said Section;
thence West along the North Section line 999 feet to the point of beginning
of this description; thence S 01 degrees 54’ 20” E 1327.12 feet to the North
1/8 line; thence S 89 degrees 17’ 05” W along the North 1/8 line 330.89
feet; thence N 01 degrees 54’ 20” W 1331.26 feet to the North Section line;
thence East along the North Section line 331 feet to the point of beginning.



OSCODA COUNTY




     Certain land in Comins Township, Oscoda County, Michigan described as:



A-32









 






     The East 400 feet of the South 580 feet of the W 1/2 of the SW 1/4 of
Section 15, T27N, R3E.



OTSEGO COUNTY




     Certain land in Corwith Township, Otsego County, Michigan described as:




     Part of the NW 1/4 of the NE 1/4 of Section 28, T32N, R3W, described
as: Beginning at the N 1/4 corner of said section; running thence S 89
degrees 04’ 06” E along the North line of said section, 330.00 feet; thence
S 00 degrees 28’ 43” E, 400.00 feet; thence N 89 degrees 04’ 06” W, 330.00
feet to the North and South 1/4 line of said section; thence N 00 degrees
28’ 43” W along the said North and South 1/4 line of said section, 400.00
feet to the point of beginning; subject to the use of the N’ly 33.00 feet
thereof for highway purposes.



OTTAWA COUNTY




     Certain land in Robinson Township, Ottawa County, Michigan described as:




     The North 660 feet of the West 660 feet of the NE 1/4 of the NW 1/4 of
Section 26, T7N, R15W.



PRESQUE ISLE COUNTY




     Certain land in Belknap and Pulawski Townships, Presque Isle County, Michigan described as:




     Part of the South half of the Northeast quarter, Section 24, T34N, R5E,
and part of the Northwest quarter, Section 19, T34N, R6E, more fully
described as: Commencing at the East 1/4 corner of said Section 24; thence N
00 degrees15’47” E, 507.42 feet, along the East line of said Section 24 to
the point of beginning; thence S 88 degrees15’36” W, 400.00 feet, parallel
with the North 1/8 line of said Section 24; thence N 00 degrees15’47” E,
800.00 feet, parallel with said East line of Section 24; thence N 88
degrees15’36”E, 800.00 feet, along said North 1/8 line of Section 24 and
said line extended; thence S 00 degrees15’47” W, 800.00 feet, parallel with
said East line of Section 24; thence S 88 degrees15’36” W, 400.00 feet,
parallel with said North 1/8 line of Section 24 to the point of beginning.




     Together with a 33 foot easement along the West 33 feet of the
Northwest quarter lying North of the North 1/8 line of Section 24, Belknap
Township, extended, in Section 19, T34N, R6E.



A-33









 





ROSCOMMON COUNTY




     Certain land in Gerrish Township, Roscommon County, Michigan described as:




     A parcel of land in the NW 1/4 of Section 19, T24N, R3W, described as
follows: To find the place of beginning of this description commence at the
Northwest corner of said section, run thence East along the North line of
said section 1,163.2 feet to the place of beginning of this description
(said point also being the place of intersection of the West 1/8 line of
said section with the North line of said section), thence S 01 degrees 01’ E
along said West 1/8 line 132 feet, thence West parallel with the North line
of said section 132 feet, thence N 01 degrees 01’ W parallel with said West
1/8 line of said section 132 feet to the North line of said section, thence
East along the North line of said section 132 feet to the place of
beginning.



SAGINAW COUNTY




     Certain land in Chapin Township, Saginaw County, Michigan described as:




     A parcel of land in the SW 1/4 of Section 13, T9N, R1E, described as
follows: To find the place of beginning of this description commence at the
Southwest corner of said section; run thence North along the West line of
said section 1581.4 feet to the place of beginning of this description;
thence continuing North along said West line of said section 230 feet to the
center line of a creek; thence S 70 degrees 07’ 00” E along said center line
of said creek 196.78 feet; thence South 163.13 feet; thence West 185 feet to
the West line of said section and the place of beginning.



SANILAC COUNTY




     Certain easement rights located across land in Minden Township, Sanilac County, Michigan
described as:




     The Southeast 1/4 of the Southeast 1/4 of Section 1, T14N, R14E,
excepting therefrom the South 83 feet of the East 83 feet thereof.



SHIAWASSEE COUNTY




     Certain land in Burns Township, Shiawassee County, Michigan described as:




     The South 330 feet of the E 1/2 of the NE 1/4 of Section 36, T5N, R4E.



ST. CLAIR COUNTY




     Certain land in Ira Township, St. Clair County, Michigan described as:



A-34









 






     The N 1/2 of the NW 1/4 of the NE 1/4 of Section 6, T3N, R15E.



ST. JOSEPH COUNTY




     Certain land in Mendon Township, St. Joseph County, Michigan described as:




     The North 660 feet of the West 660 feet of the NW 1/4 of SW 1/4,
Section 35, T5S, R10W.



TUSCOLA COUNTY




     Certain land in Millington Township, Tuscola County, Michigan described as:




     A strip of land 280 feet wide across the East 96 rods of the South 20
rods of the N 1/2 of the SE 1/4 of Section 34, T10N, R8E, more particularly
described as commencing at the Northeast corner of Section 3, T9N, R8E,
thence S 89 degrees 55’ 35” W along the South line of said Section 34 a
distance of 329.65 feet, thence N 18 degrees 11’ 50” W a distance of 1398.67
feet to the South 1/8 line of said Section 34 and the place of beginning for
this description; thence continuing N 18 degrees 11’ 50” W a distance of
349.91 feet; thence N 89 degrees 57’ 01” W a distance of 294.80 feet; thence
S 18 degrees 11’ 50” E a distance of 350.04 feet to the South 1/8 line of
said Section 34; thence S 89 degrees 58’ 29” E along the South 1/8 line of
said section a distance of 294.76 feet to the place of beginning.



VAN BUREN COUNTY




     Certain land in Covert Township, Van Buren County, Michigan described as:




     All that part of the West 20 acres of the N 1/2 of the NE fractional
1/4 of Section 1, T2S, R17W, except the West 17 rods of the North 80 rods,
being more particularly described as follows: To find the place of beginning
of this description commence at the N 1/4 post of said section; run thence N
89 degrees 29’ 20” E along the North line of said section 280.5 feet to the
place of beginning of this description; thence continuing N 89 degrees 29’
20” E along said North line of said section 288.29 feet; thence S 00 degrees
44’ 00” E, 1531.92 feet; thence S 89 degrees 33’ 30” W, 568.79 feet to the
North and South 1/4 line of said section; thence N 00 degrees 44’ 00” W
along said North and South 1/4 line of said section 211.4 feet; thence N 89
degrees 29’ 20” E, 280.5 feet; thence N 00 degrees 44’ 00” W, 1320 feet to
the North line of said section and the place of beginning.



WASHTENAW COUNTY




     Certain land in Manchester Township, Washtenaw County, Michigan described as:



A-35









 






     A parcel of land in the NE 1/4 of the NW 1/4 of Section 1, T4S, R3E,
described as follows: To find the place of beginning of this description
commence at the Northwest corner of said section; run thence East along the
North line of said section 1355.07 feet to the West 1/8 line of said
section; thence S 00 degrees 22’ 20” E along said West 1/8 line of said
section 927.66 feet to the place of beginning of this description; thence
continuing S 00 degrees 22’ 20” E along said West 1/8 line of said section
660 feet to the North 1/8 line of said section; thence N 86 degrees 36’ 57”
E along said North 1/8 line of said section 660.91 feet; thence N 00
degrees22’ 20” W, 660 feet; thence S 86 degrees 36’ 57” W, 660.91 feet to
the place of beginning.



WAYNE COUNTY




     Certain land in Livonia City, Wayne County, Michigan described as:




     Commencing at the Southeast corner of Section 6, T1S, R9E; thence North
along the East line of Section 6 a distance of 253 feet to the point of
beginning; thence continuing North along the East line of Section 6 a
distance of 50 feet; thence Westerly parallel to the South line of Section
6, a distance of 215 feet; thence Southerly parallel to the East line of
Section 6 a distance of 50 feet; thence easterly parallel with the South
line of Section 6 a distance of 215 feet to the point of beginning.



WEXFORD COUNTY




     Certain land in Selma Township, Wexford County, Michigan described as:




     A parcel of land in the NW 1/4 of Section 7, T22N, R10W, described as
beginning on the North line of said section at a point 200 feet East of the
West line of said section, running thence East along said North section line
450 feet, thence South parallel with said West section line 350 feet, thence
West parallel with said North section line 450 feet, thence North parallel
with said West section line 350 feet to the place of beginning.



     SECTION 12. The Company is a transmitting utility under Section 9501(2) of the Michigan
Uniform Commercial Code (M.C.L. 440.9501(2)) as defined in M.C.L. 440.9102(1)(aaaa).



     IN WITNESS WHEREOF, said Consumers Energy Company has caused this Supplemental Indenture to be
executed in its corporate name by its Chairman of the Board, President, a Vice President or its
Treasurer and its corporate seal to be hereunto affixed and to be attested by its Secretary or an
Assistant Secretary, and The Bank of New York, as Trustee as aforesaid, to evidence its acceptance
hereof, has caused this Supplemental Indenture to be executed in its corporate name by a Vice
President and its corporate seal to be hereunto affixed



A-36









 







and to be attested by an Assistant Treasurer, in several counterparts, all as of the day and
year first above written.



A-37









 





	 	 	 	 	 	 	 
	 	 	CONSUMERS ENERGY COMPANY	 	 
	 
	 	 	 	 	 	 
	(SEAL)

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name	 	 	 	 
	 

	 	 	 	 	 	 
	Attest:

	 	Title	 	 	 	 
	 

	 	 	 	 	 	 





                                                            

Joyce H. Norkey

Assistant Secretary




Signed, sealed and delivered

by CONSUMERS ENERGY COMPANY

in the presence of




                                                            

Kimberly C. Wilson




                                                            

Sammie B. Dalton




	 	 	 	 	 	 	 
	STATE OF MICHIGAN

	 	 	)	 	 	 
	 

	 	 	 	 	 	ss.
	COUNTY OF JACKSON

	 	 	)	 	 	 






          The
foregoing instrument was acknowledged before me this ___ day of                     , 2007,
by                                                             ,                                          of CONSUMERS ENERGY COMPANY, a
Michigan corporation, on behalf of the corporation.




	 	 	 	 	 
	 

	 	Margaret Hillman, Notary Public
	 	 
	[SEAL]

	 	Jackson County, Michigan	 	 
	 

	 	My Commission Expires:                                       	 	 






S-1









 





	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK, AS TRUSTEE	 	 
	 
	 	 	 	 	 	 
	(SEAL)

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	

	 	 	 	L. O’Brien	 	 
	Attest:

	 	 	 	 Vice President	 	 






                                                            

Assistant Treasurer




Signed, sealed and delivered

by THE BANK OF NEW YORK

in the presence of




                                                            




                                                            




	 	 	 	 	 	 	 
	STATE OF NEW YORK

	 	 	)	 	 	 
	 

	 	 	 	 	 	ss.
	COUNTY OF NEW YORK

	 	 	)	 	 	 






          The
foregoing instrument was acknowledged before me this ___ day of                     , 2007, by L.
O’Brien, a Vice President of THE BANK OF NEW YORK, a New York banking corporation, on behalf of the
bank, as trustee.




	 	 	 	 	 
	 

	 	 	 	 
	 

	 	Notary Public
	 	 
	 
	 	 	 	 
	[Seal]

	 	New York County, New York	 	 
	 

	 	My Commission Expires:	 	 
	 
	 	 	 	 
	Prepared by:

	 	When recorded, return to:	 	 
	Kimberly C. Wilson

	 	Consumers Energy Company	 	 
	One Energy Plaza

	 	Business Services Real Estate Dept.	 	 
	Jackson, MI 49201

	 	Attn: Nancy Fisher EP7-439	 	 
	 

	 	One Energy Plaza	 	 
	 

	 	Jackson, MI 4920	 	 







S-2











 





EXHIBIT B-1




REQUIRED OPINIONS FROM




JAMES E. BRUNNER, 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;




          (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 and any Lien in
favor of the Agent on the Facility LC Collateral Account or any funds therein.



          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, 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, 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, 2006 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 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.




B-1-1









 







5. 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 long-term debt granted by the Federal Energy Regulatory
Commission (hereinafter the “FERC”) in Docket No. ES06-38-000 (hereinafter the “FERC Order”). The
FERC Order is in full force and effect as of the date hereof.



6. The Bonds, assuming due authentication in accordance with the terms of the Indenture, are in due
and proper form and, when delivered to the Agent pursuant to the Bond Delivery Agreement, will
evidence and secure the Obligations owing under the Agreement and will be 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).





B-1-2









 








EXHIBIT B-2




REQUIRED OPINION FROM




MILLER, CANFIELD, PADDOCK AND STONE, P.L.C.




     1. The Bonds, assuming due authentication in accordance with the terms of the Indenture, are
in due and proper form and, when delivered to the Agent pursuant to the Bond Delivery Agreement,
will evidence and secure the Obligations owing under the Agreement and will be 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.



B-3-1









 





EXHIBIT C




FORM OF COMPLIANCE CERTIFICATE




     I,                     ,                      of Consumers Energy Company, a Michigan corporation (the
“Company”), DO HEREBY CERTIFY in connection with the Fourth Amended and Restated Credit Agreement
dated as of March 30, 2007 (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 0.70 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	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	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	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	minus

	 	(i)
	 	Principal amount of any Securitized Bonds	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	minus

	 	(j)
	 	Junior Subordinated Debt owned by any Hybrid Equity Securities Subsidiary or Hybrid Preferred Securities Subsidiary	 	 	 	 






C-1









 






	 	 	 	 	 	 	 	 	 
	minus

	 	(k)
	 	Hybrid Equity Securities and Hybrid Preferred
Securities outstanding as of December 31, 2002
(including subordinated guaranties by the Company of
payments with respect thereto)	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	minus

	 	(l)
	 	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

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

	 	(n)
	 	Obligations of the Company and its Consolidated
Subsidiaries of the type described in Section 1.3 of
the Credit Agreement	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	minus

	 	(o)
	 	Debt of Affiliates of the Company of the type
described in clause (vii) 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 Emerging Issues Task Force Issue 01-8	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	minus

	 	(q)
	 	Non-cash obligations resulting from the adoption of
FASB 158 to the extent such obligations are required
to be treated as debt	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Total
	 	 	$	 
	 
	 	 	 	 	 	 	 	 
	B.

	 	Total
	 	Consolidated Capitalization:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	(a)
	 	Total Consolidated Debt
	 	 	$	 






C-2









 






	 	 	 	 	 	 	 	 	 
	plus

	 	(b)
	 	The sum of Items A(j), A(k),
A(l), A(n) and A(o)
above1	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	plus

	 	(c)
	 	Equity of common stockholders	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	plus

	 	(d)
	 	Equity of preference stockholders
	 	 


	 
	 	 	 	 	 	 	 	 
	plus

	 	(e)
	 	Equity of preferred stockholders
	 	 


	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Total
	 	 	$	 
	 
	 	 	 	 	 	 	 	 
	C.	 	Debt to Capital Ratio_	 	____ to 1.00

	 	 	(total of A divided by total of B)	 	 	 	 






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





 




			
	1	 	In the case of securities of the type described in A(k)
and A(l), only to the extent such securities have been deemed to be equity
pursuant to Financial Accounting Standards Board Statement No. 150




C-3









 










EXHIBIT D




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 Fourth Amended and Restated Credit Agreement identified below (as amended, 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, guaranties and swingline
loans 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: The Fourth Amended and Restated Credit Agreement dated as of March 30, 2007
among Consumers Energy Company, the Banks party thereto, and JPMorgan Chase Bank, N.A., as Agent.



6. Assigned Interest:




D-1









 








	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate Amount of	 	 	 	 
	 	 	Commitment/	 	 	 	 
	 	 	Outstanding Credit	 	Amount of Commitment/	 	Percentage Assigned of
	 	 	Exposure for all	 	Outstanding Credit Exposure	 	Commitment/ Outstanding
	Facility Assigned	 	Banks*	 	Assigned*	 	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.]





 




			
	*	 	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/Loans of all Banks thereunder.
	 
	3	 	Insert if satisfaction of minimum amounts is to be
determined as of the Trade Date.




D-2









 










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



	 	 	 	 	 	 	 
	 	 	ASSIGNOR	 	 
	 	 	[NAME OF ASSIGNOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Title:
	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE	 	 
	 	 	[NAME OF ASSIGNEE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Title:
	 	 






[Consented to and]4 Accepted:


JPMORGAN CHASE BANK, N.A., as Agent




	 	 	 	 	 
	By:
	 	 	 	 
	Title:

	 	 

	 	 






[Consented to:]5

[NAME OF RELEVANT PARTY]




	 	 	 	 	 
	By:
	 	 	 	 
	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 (e.g. LC Issuer) is required by the terms of the Credit
Agreement.




D-3









 










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 Credit Extensions 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 1 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 and (b) agrees that (i) it will, independently and without reliance 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




Annex 1









 







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,
Reimbursement Obligations, 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.




Annex 1









 








ADMINISTRATIVE QUESTIONNAIRE




(Schedule to be supplied by Closing Unit or Trading Documentation Unit)




[(For Forms for Primary Syndication call Peterine Svoboda at 312-732-8844)

(For Forms after Primary Syndication call Jim Bartz at 312-732-1242)]














 





US AND NON-US TAX INFORMATION REPORTING REQUIREMENTS




(Schedule to be supplied by Closing Unit or Trading Documentation Unit)




[(For Forms for Primary Syndication call Peterine Svoboda at 312-732-8844)

(For Forms after Primary Syndication call Jim Bartz at 312-732-1242)]














 





EXHIBIT E




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 Notes, 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



E-1









 




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 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,



E-2









 




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 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 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



E-3









 




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 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



E-4









 




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,
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



E-5









 




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
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



E-6









 




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
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
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 ___.



E-7









 





EXHIBIT F




TERMS OF SUBORDINATION




[GUARANTY OF HYBRID EQUITY SECURITIES/HYBRID PREFERRED SECURITIES]




     SECTION ___. This Guarantee will constitute an unsecured obligation of the Guarantor and will
rank subordinate and junior in right of payment to all other liabilities of the Guarantor and pari
passu with any guarantee now or hereafter entered into by the Guarantor in respect of the
securities representing common beneficial interests in the assets of the Issuer or of any preferred
or preference stock of any affiliate of the Guarantor.



F-1









 





EXHIBIT G




FORM OF BOND DELIVERY AGREEMENT




BOND DELIVERY AGREEMENT




CONSUMERS ENERGY COMPANY




to




JPMORGAN CHASE BANK, N.A., as Agent




Dated as of March 30, 2007




 






Relating to

First Mortgage Bonds,




2007-1 Collateral Series (Interest Bearing)

 






G-1









 





     THIS BOND DELIVERY AGREEMENT (this “Agreement”), dated as of March 30, 2007, is between
Consumers Energy Company (the “Company”), and JPMorgan Chase Bank, N.A., as administrative agent
(the “Agent”) under the Fourth Amended and Restated Credit Agreement (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”) dated as of March 30, 2007 among the
Company, the financial institutions parties thereto (the “Banks”), and the Agent. Capitalized
terms used but not otherwise defined herein have the respective meanings assigned to such terms in
the Credit Agreement.



     Whereas, the Company has entered into the Credit Agreement and may from time to time make
borrowings thereunder in accordance with the provisions thereof;



     Whereas, the Company has established its First Mortgage Bonds, 2007-1 Collateral Series
(Interest Bearing) in the aggregate principal amount of $500,000,000 (the “Bonds”), to be issued
under and in accordance with the One Hundred Fifth Supplemental Indenture dated as of March 30,
2007 (the “Supplemental Indenture”) to the Indenture of the Company to The Bank of New York dated
as of September 1, 1945 (as amended and supplemented, the “Indenture”); and



     Whereas, the Company proposes to issue and deliver to the Agent, for the benefit of the Banks,
the Bonds in order to provide the Bonds as evidence of (and the benefit of the lien of the
Indenture with respect to the Bonds for) the Obligations of the Company arising under the Credit
Agreement.



     Now, therefore, in consideration of the premises and for other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the Company and the Agent hereby
agree as follows:



ARTICLE I




The Bonds



Section 1.1 Delivery of Bonds.




     In order to provide the Bonds as evidence of (and through the Bonds the benefit of the Lien of
the Indenture for) the Obligations of the Company under the Credit Agreement as aforesaid, the
Company hereby delivers to the Agent the Bonds in the aggregate principal amount of $500,000,000,
maturing on the earlier of (a) March 30, 2012 or such later date as may be fixed as the
“Termination Date” under and as defined in the Credit Agreement and (b) the “FMB Release Date” (as
defined in the Credit Agreement) and bearing interest as provided in the Supplemental Indenture.
The obligation of the Company to pay the principal of and interest on the Bonds shall be deemed to
have been satisfied and discharged in full or in part, as the case may be, to the extent of payment
by the Company of the Obligations, all as set forth in the Bonds and in Section 1 of the
Supplemental Indenture.



     The Bonds are registered in the name of the Agent and shall be owned and held by the Agent,
subject to the provisions of this Agreement, for the benefit of the Banks, and the Company shall
have no interest therein. The Agent shall be entitled to exercise all rights of bondholders under
the Indenture with respect to the Bonds.



G-2









 





     The Agent hereby acknowledges receipt of the Bonds.


Section 1.2 Payments on the Bonds.




     Any payments received by the Agent on account of the principal of or interest on the Bonds
shall be deemed to be and treated in all respects as payments of the Obligations, and such payments
shall be distributed by the Agent to the Banks in accordance with the provisions of the Credit
Agreement applicable to payments received by the Agent in respect of the Obligations (and the
Company hereby consents to such distributions).



ARTICLE II




No Transfer of Bonds; Surrender of Bonds



Section 2.1 No Transfer of the Bonds.




     The Agent shall not sell, assign or otherwise transfer any Bonds delivered to it under this
Agreement except to a successor administrative agent under the Credit Agreement. The Company may
take such actions as it shall deem necessary, desirable or appropriate to effect compliance with
such restrictions on transfer, including the issuance of stop-transfer instructions to the trustee
under the Indenture or any other transfer agent thereunder.


Section 2.2 Surrender of Bonds.




     (a) The Agent shall forthwith surrender to or upon the order of the Company all Bonds held by
it at the first time at which the Commitments shall have been terminated and all Obligations shall
have been paid in full.



     (b) Upon any permanent reduction in the Aggregate Commitment pursuant to the terms of the
Credit Agreement, the Agent shall forthwith surrender to or upon the order of the Company Bonds in
an aggregate principal amount equal to the excess of the aggregate principal amount of Bonds held
by the Agent over the Aggregate Commitment.



ARTICLE III




Governing Law




     This Agreement shall construed in accordance with and governed by the internal laws (without
regard to the conflict of laws provisions) of the State of New York, but giving effect to Federal
laws applicable to national banks.



[SIGNATURE PAGE FOLLOWS]




G-3









 





     IN WITNESS WHEREOF, the Company and the Agent have caused this Agreement to be executed and
delivered as of the date first above written.



CONSUMERS ENERGY COMPANY




	 	 	 
	 


	 	 
	Name:
	 	 
	Title:
	 	 






JPMORGAN CHASE BANK, N.A., as Agent




	 	 	 
	 


	 	 
	Name:
	 	 
	Title:
	 	 






G-4









 






EXHIBIT H

FORM OF

INCREASE REQUEST




                                        , 20___




JPMorgan Chase Bank, N.A., as Agent

under the Credit Agreement referred to below



Ladies/Gentlemen:




     Please refer to the Fourth Amended and Restated Credit Agreement dated as of March 30, 2007
among Consumers Energy Company (the “Company”), various financial institutions and JPMorgan Chase
Bank, N.A., as Agent (as amended, modified, extended or restated from time to time, the “Credit
Agreement”). Capitalized terms used but not defined herein have the respective meanings set forth
in the Credit Agreement.



     In accordance with Section 2.5(c) of the Credit Agreement, the Company hereby requests
an increase in the Aggregate Commitment from $                     to $                    . Such increase shall be made
by [increasing the Commitment of                      from $                     to $                    ] [adding  
         
           as
a Bank under the Credit Agreement with a Commitment of $                    ] as set forth in the letter
attached hereto. Such increase shall be effective three Business Days after the date that the
Agent accepts the letter attached hereto or such other date as is agreed among the Company, the
Agent and the [increasing] [new] Bank.



	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	CONSUMERS ENERGY COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 






H-1









 






ANNEX I TO EXHIBIT H




[Date]




JPMorgan Chase Bank, N.A., as Agent

under the Credit Agreement referred to below



Ladies/Gentlemen:




     Please refer to the letter dated                     , 20___ from Consumers Energy Company (the
“Company”) requesting an increase in the Aggregate Commitment from $                     to $                    
pursuant to Section 2.5(c) of the Credit Agreement dated as of March 30, 2007 among the
Company, various financial institutions and JPMorgan Chase Bank, N.A., as Agent (as amended,
modified, extended or restated from time to time, the “Credit Agreement”). Capitalized terms used
but not defined herein have the respective meanings set forth in the Credit Agreement.



     The undersigned hereby confirms that it has agreed to increase its Commitment under the Credit
Agreement from $                     to $                     effective on the date which is three Business Days after
the acceptance hereof by the Agent or on such other date as may be agreed among the Company, the
Agent and the undersigned.



	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF INCREASING BANK]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 






Accepted as of

                    , ___




JPMORGAN CHASE BANK, N.A., as Agent




	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 






H-2









 






ANNEX II TO EXHIBIT H




[Date]




JPMorgan Chase Bank, N.A., as Agent

under the Credit Agreement referred to below



Ladies/Gentlemen:




     Please refer to the letter dated                     , 20___ from Consumers Energy Company (the
“Company”) requesting an increase in the Aggregate Commitment from $                     to $                    
pursuant to Section 2.5(c) of the Credit Agreement dated as of March 30, 2007 among the
Company, various financial institutions and JPMorgan Chase Bank, N.A., as Agent (as amended,
modified, extended or restated from time to time, the “Credit Agreement”). Capitalized terms used
but not defined herein have the respective meanings set forth in the Credit Agreement.



     The undersigned hereby confirms that it has agreed to become a Bank under the Credit Agreement
with a Commitment of $                     effective on the date which is three Business Days after the
acceptance hereof, and consent hereto, by the Agent or on such other date as may be agreed among
the Company, the Agent and the undersigned.



     The undersigned (a) acknowledges that it has received a copy of the Credit Agreement and the
Schedules and Exhibits thereto, together with copies of the most recent financial statements
delivered by the Company pursuant to the Credit Agreement, and such other documents and information
as it has deemed appropriate to make its own credit and legal analysis and decision to become a
Bank under the Credit Agreement; and (b) agrees 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 and legal decisions in taking or not
taking action under the Credit Agreement.



     The undersigned represents and warrants that (i) it is duly organized and existing and it has
full power and authority to take, and has taken, all action necessary to execute and deliver this
letter and to become a Bank under the Credit Agreement; and (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already given or obtained)
for its due execution and delivery of this letter and the performance of its obligations as a Bank
under the Credit Agreement.



     The undersigned agrees to execute and deliver such other instruments, and take such other
actions, as the Agent may reasonably request in connection with the transactions contemplated by
this letter.



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The following administrative details apply to the undersigned:





	(A)	 	Notice Address:





Legal name:                                         

Address:     
       
                                



           
            
            
             
        
            
            
      


           
            
            
             
           
        
            
       




Attention:                                         

Telephone: (___)                                         

Facsimile: (___)                                           





	(B)	 	Payment Instructions:





Account No.:                                         

At:                                         




Reference:                                         

Attention:                                         




     The undersigned acknowledges and agrees that, on the date on which the undersigned becomes a
Bank under the Credit Agreement as set forth in the second paragraph hereof, the undersigned will
be bound by the terms of the Credit Agreement as fully and to the same extent as if the undersigned
were an original Bank under the Credit Agreement.



	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF NEW BANK]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 






Accepted and consented to as of

                    , 20___




JPMORGAN CHASE BANK, N.A., as Agent




	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 






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SCHEDULE 1




PRICING SCHEDULE




          The Applicable Margin shall be determined pursuant to the table below.




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	BBB+/ BBB+/	 	BBB/ BBB/	 	BBB-/BBB-/	 	 	 	 	 	BB/BB/Ba2 or
	Specified Rating	 	A-/A-/A3	 	Baa1	 	Baa2	 	Baa3	 	BB+/ BB+/Ba1	 	lower
	Commitment Fee Rate
	 	 	0.060	%	 	 	0.070	%	 	 	0.090	%	 	 	0.125	 	 	 	0.175	%	 	 	0.225	%
	Eurodollar Rate
+/LC Fee Rate
	 	 	0.250	%	 	 	0.350	%	 	 	0.450	%	 	 	0.600	%	 	 	0.875	%	 	 	1.250	%
	Alternate Base Rate
+
	 	 	0.000	%	 	 	0.000	%	 	 	0.000	%	 	 	0.000	%	 	 	0.000	%	 	 	0.250	%
	Utilization Fee
Rate (>50%)
	 	 	0.050	%	 	 	0.050	%	 	 	0.050	%	 	 	0.050	%	 	 	0.050	%	 	 	0.050	%






          For purposes of the foregoing:




          The “Rating” from S&P, Fitch or Moody’s shall mean (a) at any time prior to the FMB Release
Date, the rating issued by such rating agency and then in effect with respect to the Senior Debt,
and (b) at any time thereafter, the rating issued by such rating agency and then in effect with
respect to the Company’s senior unsecured long-term debt (without credit enhancement).




          (a) If each of S&P, Fitch and Moody’s shall issue a Rating, the Specified Rating shall be (i)
if two of such Ratings are the same, such Ratings; and (ii) if all such Ratings are different, the
middle of such Ratings.




          (b) If only two of S&P, Fitch and Moody’s shall issue a Rating, the Specified Rating shall be
the higher of such Ratings; provided that if a split of greater than one ratings category occurs
between such Ratings, the Specified Rating shall be the ratings category that is one category below
the higher of such Ratings.




          (c) If only one of S&P, Fitch and Moody’s shall issue a Rating, the Specified Rating shall be
such Rating.




          (d) If none of S&P, Fitch and Moody’s shall issue a Rating, the Specified Rating shall be
BB/BB/Ba2.




H-i









 








SCHEDULE 2




COMMITMENT SCHEDULE




	 	 	 	 	 
	BANK	 	COMMITMENT
	JPMORGAN CHASE BANK, N.A.
	 	$	31,875,000	 
	BARCLAYS BANK PLC
	 	$	31,875,000	 
	CITIBANK, N.A.
	 	$	31,875,000	 
	UNION BANK OF CALIFORNIA, N.A.
	 	$	31,875,000	 
	WACHOVIA BANK, N.A.
	 	$	31,875,000	 
	MERRILL LYNCH BANK USA
	 	$	31,875,000	 
	BNP PARIBAS
	 	$	25,625,000	 
	DEUTSCHE BANK TRUST COMPANY AMERICAS
	 	$	25,625,000	 
	UBS LOAN FINANCE LLC
	 	$	25,625,000	 
	SUNTRUST BANK
	 	$	25,625,000	 
	CREDIT SUISSE, CAYMAN ISLANDS BRANCH
	 	$	18,750,000	 
	COMERICA BANK
	 	$	18,750,000	 
	LASALLE BANK MIDWEST N.A.
	 	$	18,750,000	 
	FIFTH THIRD BANK
	 	$	18,750,000	 
	SUMITOMO MITSUI BANKING CORPORATION
	 	$	18,750,000	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION
	 	$	18,750,000	 
	GOLDMAN SACHS CREDIT PARTNERS L.P.
	 	$	18,750,000	 
	HUNTINGTON NATIONAL BANK
	 	$	18,750,000	 
	KEYBANK NATIONAL ASSOCIATION
	 	$	18,750,000	 
	THE BANK OF NOVA SCOTIA
	 	$	18,750,000	 
	BAYERISCHE LANDESBANK
	 	$	18,750,000	 
	AGGREGATE COMMITMENT
	 	$	500,000,000	 






H-ii









 






SCHEDULE 3

EXISTING FACILITY LC SCHEDULE




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	L/C	 	Facility	 	 	 	EFFECTIVE	 	EXPIRATION	 	AMOUNT
	ENTITY / PROJECT	 	NUMBER	 	Issuer	 	BENEFICIARY	 	DATE	 	DATE	 	OUTSTANDING
	Consumers Energy
	 	SLT332006	 	JPMorgan	 	Michigan Dept of Environmental Quality*	 	 	05/19/03	 	 	 	05/19/07	 	 	 	500,000.00	 
	Consumers Energy
	 	SLT332007	 	JPMorgan	 	Michigan Dept of Environmental Quality*	 	 	05/19/03	 	 	 	05/19/07	 	 	 	1,000,000.00	 
	Consumers Energy
	 	SLT332008	 	JPMorgan	 	Michigan Dept of Environmental Quality*	 	 	05/19/03	 	 	 	05/19/07	 	 	 	1,000,000.00	 
	Consumers Energy
	 	SLT332009	 	JPMorgan	 	Michigan Dept of Environmental Quality*	 	 	05/19/03	 	 	 	05/19/07	 	 	 	1,000,000.00	 
	Consumers Energy
	 	SLT332010	 	JPMorgan	 	Michigan Dept of Environmental Quality*	 	 	05/19/03	 	 	 	05/19/07	 	 	 	1,000,000.00	 
	Consumers Energy
	 	SLT332011	 	JPMorgan	 	City of Sterling Heights, Michigan*	 	 	05/19/03	 	 	 	05/19/07	 	 	 	10,000.00	 
	Consumers Energy
	 	SLT332012	 	JPMorgan	 	Charter Township of Oakland*	 	 	05/19/03	 	 	 	05/19/07	 	 	 	0.00	 
	Consumers Energy
	 	SLT332013	 	JPMorgan	 	Michigan Bureau of Workers*	 	 	05/19/03	 	 	 	05/19/07	 	 	 	2,000,000.00	 
	Consumers Energy
	 	SLT751646	 	JPMorgan	 	Vector Pipeline LP	 	 	10/10/03	 	 	 	3/31/2008	 	 	 	4,927,500.00	 
	Consumers Energy
	 	SLT411076	 	JPMorgan	 	Total Gas & Power North America Inc.	 	 	04/01/05	 	 	 	4/30/2007	 	 	 	45,000,000.00	 
	Consumers Energy
	 	CPCS-637065	 	JPMorgan	 	Michigan Dept of Environmental Quality	 	 	05/13/05	 	 	 	6/13/2007	 	 	 	205,620.00	 
	Consumers Energy
	 	CPCS-637066	 	JPMorgan	 	Michigan Dept of Environmental Quality	 	 	05/13/05	 	 	 	6/13/2007	 	 	 	47,880.00	 
	Consumers Energy
	 	CPCS-637067	 	JPMorgan	 	Michigan Dept of Environmental Quality	 	 	05/13/05	 	 	 	6/13/2007	 	 	 	1,363,800.00	 
	Consumers Energy
	 	CPCS-637068	 	JPMorgan	 	Michigan Dept of Environmental Quality	 	 	05/13/05	 	 	 	6/13/2007	 	 	 	90,000.00	 
	Consumers Energy
	 	CPCS-206214	 	JPMorgan	 	City of Novi	 	 	10/14/05	 	 	 	10/11/2007	 	 	 	20,000.00	 
	Consumers Energy
	 	CPCS-209402	 	JPMorgan	 	City of Royal Oak	 	 	11/15/05	 	 	 	10/25/2007	 	 	 	10,000.00	 
	Consumers Energy
	 	CPCS-264930	 	JPMorgan	 	Wayne County	 	 	06/09/06	 	 	 	6/9/2007	 	 	 	50,000.00	 
	Consumers Energy
	 	CPCS-288764	 	JPMorgan	 	ANR Pipeline Company	 	 	10/19/06	 	 	 	10/19/2007	 	 	 	665,000.00	 
	Consumers Energy
	 	CPCS-289494	 	JPMorgan	 	City of Royal Oak	 	 	10/24/06	 	 	 	10/23/2007	 	 	 	12,500.00	 
	Consumers Energy
	 	CPCS-294353	 	JPMorgan	 	City of Royal Oak	 	 	11/21/06	 	 	 	11/17/2007	 	 	 	18,375.00	 
	Consumers Energy
	 	CPCS-303948	 	JPMorgan	 	City of Royal Oak	 	 	01/08/07	 	 	 	4/30/2007	 	 	 	185,000.00	 
	Consumers Energy
	 	CPCS-305451	 	JPMorgan	 	City of Royal Oak	 	 	01/17/07	 	 	 	1/16/2008	 	 	 	10,500.00	 
	Total Consumers LCs
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	59,116,175.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 






 




			
	*	 	Note: The Expiration Date shown does not reflect end of LC Requirement per underlying agreement.