Document:

exv10w2

Exhibit 10.2

EXECUTION COPY

 

$500,000,000

REVOLVING CREDIT AGREEMENT

Dated as of March 31, 2011

among

CONSUMERS ENERGY COMPANY,

as the Company,

THE FINANCIAL INSTITUTIONS NAMED HEREIN,

as the Banks,

JPMORGAN CHASE BANK, N.A.,

as Agent and an LC Issuer,

BARCLAYS CAPITAL AND UNION BANK, N.A.,

as Co-Syndication Agents,

and

CITIBANK, N.A. AND THE ROYAL BANK OF SCOTLAND PLC,

as Co-Documentation Agent

 

J.P. MORGAN SECURITIES LLC, BARCLAYS CAPITAL, UNION BANK, N.A.,

CITIGROUP GLOBAL MARKETS INC. AND RBS SECURITIES INC.,

as Joint Lead Arrangers and Joint Bookrunners

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	1.1 Definitions
	 	 	1	 
	1.2 Interpretation
	 	 	15	 
	1.3 Accounting Terms
	 	 	16	 
	 
	 	 	 	 
	ARTICLE II THE ADVANCES
	 	 	16	 
	2.1 Commitment
	 	 	16	 
	2.2 Repayment
	 	 	16	 
	2.3 Ratable Loans
	 	 	16	 
	2.4 Types of Advances
	 	 	17	 
	2.5 Fees and Changes in Commitments
	 	 	17	 
	2.6 Minimum Amount of Advances
	 	 	17	 
	2.7 Principal Payments
	 	 	17	 
	2.8 Method of Selecting Types and Interest Periods for New Advances
	 	 	18	 
	2.9 Conversion and Continuation of Outstanding Advances
	 	 	18	 
	2.10 Interest Rates, Interest Payment Dates
	 	 	19	 
	2.11 Rate after Maturity
	 	 	19	 
	2.12 Method of Payment; Sharing Set-Offs
	 	 	19	 
	2.13 Bonds; Record-keeping; Telephonic Notices
	 	 	20	 
	2.14 Lending Installations
	 	 	21	 
	2.15 Non-Receipt of Funds by the Agent
	 	 	21	 
	 
	 	 	 	 
	ARTICLE III LETTER OF CREDIT FACILITY
	 	 	21	 
	3.1 Issuance
	 	 	21	 
	3.2 Participations
	 	 	22	 
	3.3 Notice
	 	 	22	 
	3.4 LC Fees
	 	 	22	 
	3.5 Administration; Reimbursement by Banks
	 	 	22	 
	3.6 Reimbursement by Company
	 	 	23	 
	3.7 Obligations Absolute
	 	 	23	 
	3.8 Actions of LC Issuers
	 	 	24	 
	3.9 Indemnification
	 	 	24	 
	3.10 Banks’ Indemnification
	 	 	25	 
	3.11 Rights as a Bank
	 	 	25	 
	 
	 	 	 	 
	ARTICLE IV CHANGE IN CIRCUMSTANCES
	 	 	25	 
	4.1 Yield Protection
	 	 	25	 
	4.2 Replacement of Banks
	 	 	26	 
	4.3 Availability of Eurodollar Rate Loans
	 	 	27	 
	4.4 Funding Indemnification
	 	 	27	 
	4.5 Taxes
	 	 	28	 
	4.6 Bank Certificates, Survival of Indemnity
	 	 	30	 
	4.7 Defaulting Banks
	 	 	30	 

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	 	 	Page	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES
	 	 	32	 
	5.1 Incorporation and Good Standing
	 	 	32	 
	5.2 Corporate Power and Authority: No Conflicts
	 	 	32	 
	5.3 Governmental Approvals
	 	 	32	 
	5.4 Legally Enforceable Agreements
	 	 	32	 
	5.5 Financial Statements
	 	 	32	 
	5.6 Litigation
	 	 	33	 
	5.7 Margin Stock
	 	 	33	 
	5.8 ERISA
	 	 	33	 
	5.9 Insurance
	 	 	33	 
	5.10 Taxes
	 	 	33	 
	5.11 Investment Company Act
	 	 	33	 
	5.12 Bonds
	 	 	33	 
	5.13 Disclosure
	 	 	33	 
	5.14 OFAC
	 	 	34	 
	5.15 Delivery of Documents
	 	 	34	 
	 
	 	 	 	 
	ARTICLE VI AFFIRMATIVE COVENANTS
	 	 	34	 
	6.1 Payment of Taxes, Etc.
	 	 	34	 
	6.2 Maintenance of Insurance
	 	 	34	 
	6.3 Preservation of Corporate Existence, Etc.
	 	 	34	 
	6.4 Compliance with Laws, Etc.
	 	 	34	 
	6.5 Visitation Rights
	 	 	34	 
	6.6 Keeping of Books
	 	 	35	 
	6.7 Reporting Requirements
	 	 	35	 
	6.8 Use of Proceeds
	 	 	36	 
	6.9 Maintenance of Properties, Etc.
	 	 	37	 
	6.10 Bonds
	 	 	37	 
	 
	 	 	 	 
	ARTICLE VII NEGATIVE COVENANTS
	 	 	37	 
	7.1 Liens
	 	 	37	 
	7.2 Sale of Assets
	 	 	38	 
	7.3 Mergers, Etc.
	 	 	39	 
	7.4 Compliance with ERISA
	 	 	39	 
	7.5 Organizational Documents
	 	 	39	 
	7.6 Change in Nature of Business
	 	 	39	 
	7.7 Transactions with Affiliates
	 	 	39	 
	 
	 	 	 	 
	ARTICLE VIII FINANCIAL COVENANT
	 	 	39	 
	 
	 	 	 	 
	ARTICLE IX EVENTS OF DEFAULT
	 	 	40	 
	9.1 Events of Default
	 	 	40	 
	9.2 Remedies
	 	 	41	 
	 
	 	 	 	 
	ARTICLE X WAIVERS, AMENDMENTS AND REMEDIES
	 	 	42	 
	10.1 Amendments
	 	 	42	 
	10.2 Preservation of Rights
	 	 	43	 

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	 	 	Page	 
	ARTICLE XI CONDITIONS PRECEDENT
	 	 	43	 
	11.1 Effectiveness of this Agreement
	 	 	43	 
	11.2 Each Credit Extension
	 	 	45	 
	 
	 	 	 	 
	ARTICLE XII GENERAL PROVISIONS
	 	 	45	 
	12.1 Successors and Assigns
	 	 	45	 
	12.2 Survival of Representations
	 	 	48	 
	12.3 Governmental Regulation
	 	 	48	 
	12.4 Taxes
	 	 	48	 
	12.5 Choice of Law
	 	 	48	 
	12.6 Headings
	 	 	48	 
	12.7 Entire Agreement
	 	 	48	 
	12.8 Expenses; Indemnification
	 	 	48	 
	12.9 Severability of Provisions
	 	 	49	 
	12.10 Setoff
	 	 	49	 
	12.11 Ratable Payments
	 	 	49	 
	12.12 Nonliability
	 	 	50	 
	12.13 Other Agents
	 	 	50	 
	12.14 USA Patriot Act
	 	 	50	 
	12.15 Electronic Delivery
	 	 	50	 
	12.16 Confidentiality
	 	 	52	 
	 
	 	 	 	 
	ARTICLE XIII THE AGENT
	 	 	52	 
	13.1 Appointment
	 	 	52	 
	13.2 Powers
	 	 	52	 
	13.3 General Immunity
	 	 	53	 
	13.4 No Responsibility for Recitals, Etc.
	 	 	53	 
	13.5 Action on Instructions of Banks
	 	 	53	 
	13.6 Employment of Agents and Counsel
	 	 	53	 
	13.7 Reliance on Documents; Counsel
	 	 	53	 
	13.8 Agent’s Reimbursement and Indemnification
	 	 	53	 
	13.9 Rights as a Bank
	 	 	54	 
	13.10 Bank Credit Decision
	 	 	54	 
	13.11 Successor Agent
	 	 	55	 
	 
	 	 	 	 
	ARTICLE XIV NOTICES
	 	 	55	 
	14.1 Giving Notice
	 	 	55	 
	14.2 Change of Address
	 	 	55	 
	 
	 	 	 	 
	ARTICLE XV COUNTERPARTS
	 	 	55	 

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SCHEDULES

	 	 	 

	Schedule 1

	 	Pricing Schedule
	Schedule 2

	 	Commitment Schedule
	Schedule 3.1

	 	Existing LCs

EXHIBITS

	 	 	 

	Exhibit A

	 	Required Opinions from James E. Brunner, Esq., General Counsel of the Company
	Exhibit B

	 	Form of Compliance Certificate
	Exhibit C

	 	Form of Assignment and Assumption Agreement
	Exhibit D

	 	Terms of Subordination (Junior Subordinated Debt)
	Exhibit E

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

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REVOLVING CREDIT AGREEMENT

     This REVOLVING CREDIT AGREEMENT, dated as of March 31, 2011, is among CONSUMERS ENERGY
COMPANY, a Michigan corporation (the “Company”), the financial institutions listed on the
signature pages hereof (together with their respective successors and assigns, the “Banks”)
and JPMORGAN CHASE BANK, N.A., as Agent.

W I T N E S S E T H:

     WHEREAS, the Company has requested, and the Agent and the Banks have agreed, on the terms and
conditions set forth herein, to enter into a 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.

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

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

     “Applicable Margin” means, with respect to 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.

     “Arranger” means each of J.P. Morgan Securities LLC, Barclays Capital, the investment
banking division of Barclays Bank PLC, Union Bank, N.A., Citigroup Global Markets Inc. and RBS
Securities Inc.

     “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.

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

     “Banks” — see the preamble.

     “Base Eurodollar Rate” means, with respect to a Eurodollar Advance for the relevant
Interest Period, the per annum interest rate determined by the offered rate per annum at which
deposits in U.S. dollars, for a period equal or comparable to such Interest Period, appears on

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

     “Bond Delivery Agreement” means that certain Bond Delivery Agreement, dated as of
March 31, 2011, between the Company and the Agent, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

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

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

     “Borrowing Notice” — see Section 2.8.

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

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

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

     “Change in Law” means the occurrence, after the date of this Agreement (or with
respect to any Bank, if later, the date on which such Bank becomes a Bank), of any of the following
(a) the adoption of any law, rule, regulation or treaty, (b) any change in any law, rule,
regulation or treaty or in the interpretation or application thereof by any Governmental Authority
or (c) compliance by any Bank or any LC Issuer (or, for purposes of Section 4.1(a)(iv), by any
lending office of such Bank or by such Bank’s or such LC Issuer’s holding company, if any) with

-3-

 

any request, guideline or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement; provided however, that
notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States regulatory authorities, in each case , pursuant to Basel III, in
the case of each of clauses (i) and (ii), shall be deemed to be a “Change in Law”,
regardless of the date enacted, adopted or issued.

     “Closing Date” means March 31, 2011.

     “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.

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

     “Credit Documents” means this Agreement, the Facility LC Applications (if any), the
Supplemental Indenture, the Bond Delivery Agreement and the Bonds.

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

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

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

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

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

-5-

 

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

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

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

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

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

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

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

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

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

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

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

     “Excluded Taxes” means, in the case of each Bank, LC Issuer or applicable Lending

-6-

 

Installation and the Agent, (i) taxes imposed on its overall net income, and franchise taxes
imposed on it, including Michigan Business Tax, by (a) the jurisdiction under the laws of which
such Bank, such LC Issuer or the Agent is incorporated or organized or (b) 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 , and (ii) any U.S. Federal withholding
taxes resulting from FATCA.

     “Existing Credit Agreement” means that certain Fourth Amended and Restated Revolving
Credit Agreement, dated as of March 30, 2007, by and among the Company, the lenders from time to
time party thereto and JPMorgan Chase Bank, N.A. as agent, together with all other agreements,
instruments, documents and certificates now or hereafter executed and delivered by the Company or
any of its Subsidiaries pursuant thereto and the transactions contemplated thereby, in each case as
amended, modified, supplemented or restated from time to time.

     “Existing LC” — see Section 3.1.

     “Facility LC” — see Section 3.1.

     “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 XIV, 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.

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

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

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

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

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

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

-7-

 

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

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

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

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

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

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

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

     “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;

-8-

 

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

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

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

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

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

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

     “LC Fee” — see Section 3.4.

     “LC Issuer” means each of JPMorgan Chase Bank, N.A., Barclays Bank PLC and Union Bank,
N.A. (or any subsidiary or affiliate of any of the foregoing designated by such Person) in

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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 (which agreement may include a
maximum limit on the aggregate face amount of all Facility LCs to be issued by such Bank hereunder,
and such Bank and the Company shall provide notice of such limitation to the Agent) and (ii) is
approved by the Agent (such approval not to be unreasonably withheld or delayed); provided
that, solely with respect to the Existing LCs issued by Wells Fargo Bank, National Association,
Wells Fargo Bank, National Association shall be deemed to be an LC Issuer (and each reference in
this Agreement to an “LC Issuer” solely when made in respect of the Existing LCs issued by Wells
Fargo Bank, National Association, shall be deemed to refer to Wells Fargo Bank, National
Association).

     “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.

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

     “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.

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

     “Net Worth” means, with respect to any Person, the excess of such Person’s total
assets over its total liabilities, total assets and total liabilities each to be determined
in accordance with GAAP consistently applied, excluding from the determination of total assets (i)
goodwill, 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
(including indemnities and interest and fees accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in
such proceeding) of the Company to the Banks or to any Bank, 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, or (iii) any
liability under any so-called “synthetic lease” transaction entered into by such Person; but
excluding from this definition, any Operating Leases.

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

     “Other Taxes” — see Section 4.5(b).

     “Outstanding Credit Exposure” means, as to any Bank at any time, the 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.

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

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

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

     “Person” means an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint venture,

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governmental authority or other entity of whatever nature.

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

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

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

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

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

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

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

     “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.

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

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     “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.

     “Secured Debt” has the meaning assigned to such term in Schedule 1.

     “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 Rating” has the meaning assigned to such term in Schedule 1.

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

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

     “Substitute Rating Agency” has the meaning assigned to such term in Schedule
1.

     “Supplemental Indenture” means that certain Supplemental Indenture, dated as of March
31, 2011, between the Company and The Bank of New York Mellon, as successor trustee, as the same
may be amended, restated, supplemented or otherwise modified from time to time.

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

     “Termination Date” means the earlier of (i) March 31, 2016 and (ii) the date on which
the Commitments are terminated.

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     “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) and (vi) 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 (including, without limitation, all Off-Balance Sheet
Liabilities); provided that Total Consolidated Debt shall exclude, without duplication, (i)
the principal amount of any Securitized Bonds, (ii) any Junior Subordinated Debt of the Company
owned by any Hybrid Equity Securities Subsidiary or Hybrid Preferred Securities Subsidiary, (iii)
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 E, or pursuant to other terms and
conditions satisfactory to the Majority Banks), (iv) such percentage of the Net Proceeds from any
issuance of hybrid debt/equity securities (other than Junior Subordinated Debt, Hybrid Equity
Securities and Hybrid Preferred Securities) by the Company or any Consolidated Subsidiary as shall
be agreed to be deemed equity by the Agent and the Company prior to the issuance thereof (which
determination shall be based on, among other things, the treatment (if any) given to such
securities by the applicable rating agencies), (v) to the extent that any portion of the
disposition of the Company’s Palisades Nuclear Plant shall be required to be accounted for as a
financing under GAAP rather than as a sale, the amount of liabilities reflected on the Company’s
consolidated balance sheet as the result of such disposition, (vi) 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), (vii) 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 (viii) 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.

     “Unsecured Debt” has the meaning assigned to such term in Schedule 1.

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

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

     1.2 Interpretation.

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

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

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

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

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

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

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

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

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

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

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

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     1.3 Accounting Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. If any changes in generally accepted accounting principles are
hereafter required or permitted and are adopted by the Company or any of its Subsidiaries, or the
Company or any of its Subsidiaries shall change its application of generally accepted accounting
principles with respect to any Off-Balance Sheet Liabilities (including the application of
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. Notwithstanding any other provision contained herein, all terms of an accounting or
financial nature used herein shall be construed, and all computations of amounts and ratios
referred to herein shall be made, (i) without giving effect to any election under Accounting
Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting
Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any Indebtedness or other liabilities of the Company or
any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment
of Debt in respect of convertible debt instruments under Accounting Standards Codification 470-20
(or any other Accounting Standards Codification or Financial Accounting Standard having a similar
result or effect) to value any such Debt in a reduced or bifurcated manner as described therein,
and such Debt shall at all times be valued at the full stated principal amount thereof.

ARTICLE II

THE ADVANCES

     2.1 Commitment. From and including the Closing 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

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 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 a commitment fee (the “Commitment Fee”) at the Commitment Fee Rate on the daily
Unused Commitment from the Closing Date to but not including the date on which this Agreement is
terminated in full and all of the Obligations hereunder have been paid in full. The Commitment Fee
shall be payable quarterly in arrears on each Payment Date (for the quarter then most recently
ended), on the date of any reduction of the Aggregate Commitment pursuant to clause (b)
below 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 (5) Business Days’ prior 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.

     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 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 (1) Business Day’s prior written 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 (3) Business Days’ prior written notice to the Agent;
provided that if, after giving effect to any such prepayment, the principal amount of any
Eurodollar Advance is less than $10,000,000, such Eurodollar Advance shall automatically convert
into a Floating Rate Advance. If at any time the Aggregate Outstanding Credit Exposure exceeds the
Available Aggregate Commitment, the Company shall immediately repay Advances or cash collateralize
LC Obligations in the Facility LC Collateral Account in accordance with the procedures set forth in
Section 9.2, as applicable, in an aggregate principal amount sufficient to cause the Aggregate
Outstanding Credit Exposure to be less than or equal to the Aggregate Available Commitment.

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

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

     (ii) the aggregate amount of such Advance;

     (iii) the Type of Advance selected; and

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

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

     2.9 Conversion and Continuation of Outstanding Advances. Floating Rate Advances shall
continue as Floating Rate Advances unless and until such Floating Rate Advances are converted into
Eurodollar Advances pursuant to this Section 2.9 or are repaid in accordance with
Section 2.2 or 2.7. Each Eurodollar Advance shall continue as a Eurodollar Advance
until the end of the then applicable Interest Period therefor, at which time such Eurodollar
Advance shall be automatically converted into a Floating Rate Advance unless (x) such Eurodollar
Advance is or was repaid in accordance with Section 2.2 or 2.7 or (y) the Company
shall have given the Agent a Conversion/Continuation Notice (as defined below) requesting that, at
the end of such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance for the
same or another Interest Period. Subject to the terms of Section 2.6, the Company may
elect from time to time to convert all or any part of a Floating Rate Advance into a Eurodollar
Advance. The Company shall give the Agent irrevocable notice (a “Conversion/Continuation
Notice”) of each conversion of a Floating Rate Advance into a Eurodollar Advance or
continuation of a Eurodollar Advance not later than 12:00 noon (New York City time) at least three
Business Days prior to the date of the requested conversion or continuation, specifying:

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

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

     (iii) the amount of the Advance which is to be converted into or continued as a

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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 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 2.00% or (ii) the Floating Rate
plus 2.00%.

     2.12 Method of Payment; Sharing Set-Offs. (a) All payments of principal, interest and
fees hereunder shall be made in immediately available funds to the Agent at its address specified
on its signature page to this Agreement (or at any other Lending Installation of the Agent
specified in writing by the Agent to the Company), without setoff or counterclaim, not later than
12:00 noon (New York City time) on the date when due and shall (except 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

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among the Banks. Funds received after such time shall be deemed received on the following
Business Day unless the Agent shall have received from, or on behalf of, the Company a Federal
Reserve reference number with respect to such payment before 1:00 p.m. (New York City time) on the
date of such payment. Each payment delivered to the Agent for the account of any Bank shall be
delivered promptly by the Agent in the same type of funds received by the Agent to such Bank at the
address specified for such Bank in its Administrative Questionnaire or at any Lending Installation
specified in a notice received by the Agent from such Bank. The Agent is hereby authorized to
charge the account of the Company maintained with JPMorgan Chase Bank, N.A., if any, for each
payment of principal, interest, 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.

          (b) If any Bank shall fail to make any payment required to be made by it pursuant to
Section 2.8, Section 2.15, Section 3.5 or Section 13.8, then the
Agent may, in its discretion and notwithstanding any contrary provision hereof, apply any amounts
thereafter received by the Agent for the account of such Bank and for the benefit of the Agent or
the LC Issuer to satisfy such Bank’s obligations under such Sections until all such unsatisfied
obligations are fully paid.

     2.13 Bonds; Record-keeping; Telephonic Notices.

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

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

     (c) The Agent shall also maintain accounts in which it will record (i) the amount of each Loan
made hereunder, the Type thereof and, if applicable, the Interest Period with respect thereto, (ii)
the amount of any principal or interest due and payable or to become due and payable from the
Company to each Bank hereunder, (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 absent manifest error; provided that the failure of the Agent or any Bank
to maintain such accounts or any error therein shall not in any manner affect the obligation of the
Company to repay the Obligations in accordance with their terms.

     (e) The Company hereby authorizes the Banks and the Agent to make Advances based on telephonic
notices made by any person or persons the Agent or any Bank in good faith believes to be acting on
behalf of the Company. The Company agrees to deliver promptly to the Agent a written confirmation
of each telephonic notice signed by a Designated Officer. If the

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

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 letters of credit and, to the extent agreed to by any applicable
LC Issuer, direct-pay 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 Closing Date and prior to the Termination Date upon the request of the Company;
provided, however, that in no event shall (i) immediately after each such Facility
LC is issued or Modified, the Aggregate Outstanding Credit Exposure exceed the Available
Commitment, (ii) immediately after each such Facility LC is issued or Modified, the amount of the
LC Obligations exceed $325,000,000, (iii) immediately after each such Facility LC is issued or
Modified, the LC Obligations in respect of all Facility LCs issued by any LC Issuer exceed (x)
$225,000,000, with respect to JPMorgan Chase Bank, N.A., (y) $100,000,000, with respect to each of
Barclays Bank PLC and Union Bank, N.A. and (z) $104,126,388.90, with respect to Wells Fargo Bank,
National Association and (iv) a Facility LC (x) be issued later than 30 days prior to the scheduled
Termination Date, (y) have an expiry date later than the earlier of (1) the date one year after the
date of the issuance of such Facility LC (or, in the case of any renewal or extension thereof, one
year after such renewal or extension and provided that such Facility LC may contain customary
“evergreen”

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provisions pursuant to which the expiry date is automatically extended by a specific time
period unless such LC Issuer gives notice to the beneficiary of such Facility LC at least a
specified time period prior to the expiry date then in effect) and (2) the fifth Business Day prior
to the scheduled Termination Date or (z) provide for time drafts. Notwithstanding the foregoing,
the letters of credit identified on Schedule 3.1 (the “Existing LCs”) shall be
deemed to be “Facility LCs” issued on the Closing Date for all purposes of the Credit Documents.

     3.2 Participations. Upon the issuance or Modification by an LC Issuer of a Facility
LC in accordance with this Article III, 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 Agent and the
applicable LC Issuer notice prior to 12:00 noon (New York City time) at least three (3) Business
Days prior to the proposed date of issuance 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 Agent shall promptly notify
each Bank, of the contents thereof and of the amount of such Bank’s participation in such proposed
Facility LC. Each Bank, shall within two (2) Business Days following the date on which it receives
such notice from the Agent, notify the Agent whether such Bank consents to the issuance or
Modification of such Facility LC (which consent shall be in the sole and absolute discretion of
such Bank), it being understood and agreed that unless and until each Bank consents in writing to
such issuance or Modification, such Facility LC will not be issued or Modified by the applicable LC
Issuer. 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 separately agreed by the Company and such LC Issuer, and (b) documentary and
processing charges in connection with the issuance or Modification of and 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

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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 the 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, Event of
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 City 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 1.00% 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 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,

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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. Subject to the proviso contained in the first sentence of
Section 3.6, 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, teletype or electronic
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 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

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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 (in such LC Issuer’s capacity as an 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 (in such LC Issuer’s capacity as an LC
Issuer).

     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,

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

     (ii) imposes or increases or deems applicable any reserve, assessment, insurance
charge, special deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by any Bank, 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

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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 ninety (90) days prior to the date on which such certificate is delivered
to the Company and the Agent, to be sufficient to compensate such Bank or such LC Issuer, as
applicable, in light of such circumstances, the Company shall within thirty (30) days of such
delivery of such certificate pay to the Agent for the account of such Bank 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 Bank or LC Issuer shall be entitled to demand compensation or be compensated hereunder
to the extent that such compensation relates to any period of time more than ninety (90) days 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 of Banks.

     (a) If any Bank shall make a demand for payment under Section 4.1, then within thirty
(30) days after such demand, the Company may, with the approval of the Agent and each LC Issuer
which has issued a Facility LC which is then outstanding or in respect of which there is any
unreimbursed Reimbursement Obligation (which approvals shall not be unreasonably
withheld) and provided that no Default or Event of Default shall then have occurred and be

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continuing, demand, at the Company’s sole cost and expense, that such Bank assign to one or more
financial institutions designated by the Company and approved by the Agent all (but not less than
all) of such Bank’s Commitment and Outstanding Credit Exposure within the period ending on the
later of such 30th day and the last day of the longest of the then current Interest
Periods or maturity dates for such Outstanding Credit Exposure. Any such assignment shall be
consummated on terms satisfactory to the assigning Bank; provided that such Bank’s consent
to such assignment shall not be unreasonably withheld.

     (b) If the Company shall elect to replace a Bank pursuant to clause (a) above, the
Company shall prepay the Outstanding Credit Exposure of such Bank, and the financial institution or
institutions selected by the Company shall replace such Bank as a Bank hereunder pursuant to an
instrument satisfactory to the Company, the Agent and the Bank being replaced by making 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.

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

     4.3 Availability of Eurodollar Rate Loans. If:

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

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

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

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reason other than default by the Banks, the Company will indemnify each Bank for any loss or cost
(but not lost profits) incurred by it resulting therefrom, including any loss or cost in
liquidating or employing deposits acquired to fund or maintain such Eurodollar Rate Loan.

     4.5 Taxes.

     (a) All payments by the Company to or for the account of any Bank, 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 unless such deduction is required by law. If the Company shall be
required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Bank,
any LC Issuer or the Agent, (i) the sum payable shall be increased by the amount of such Taxes
required to be withheld as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 4.5) such Bank, 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 thirty (30) days after such payment is made.

     (b) In addition, the Company hereby agrees to pay any present or future stamp or documentary
taxes and any other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or under any Bond or 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 thirty (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 (10) Business
Days after the Closing Date, or, if later, not more than ten (10) Business Days after becoming a
Bank hereunder, (i) deliver to each of the Company and the Agent two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI, or any other form or documentation
prescribed by applicable law, certifying in either case that such Bank is entitled to receive
payments under this Agreement without deduction or withholding of any United 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

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Bank is entitled to receive payments under this Agreement without deduction or withholding of
any United States federal income taxes, unless an event (including any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would otherwise be required
which renders all such forms inapplicable or which would prevent such Bank from duly completing and
delivering any such form or amendment with respect to it and such Bank advises the Company and the
Agent that it is not capable of receiving payments without any deduction or withholding of United
States federal income tax.

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

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

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

     (h) Each Bank and each LC Issuer shall severally indemnify the Agent for any taxes, levies,
imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any taxing
authority (but, in the case of any Taxes, only to the extent that the Company has not already
indemnified the Agent for such Taxes and without limiting the obligation of the Company to do so)
attributable to such Bank or LC Issuer that are paid or payable by the Agent in connection with
this Agreement, any Bond or any Facility LC and any reasonable expenses arising therefrom or with
respect thereto, whether or not such amounts were correctly or legally
imposed or asserted by the relevant taxing authority. The indemnity under this Section
4.5(h)

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shall be paid within ten (10) days after the Agent delivers to the applicable Bank or LC
Issuer a certificate stating the amount so paid or payable by the Agent. Such certificate shall be
conclusive of the amount so paid or payable absent manifest error. The obligations of the Banks
and LC Issuers under this clause (h) shall survive the payment of the Obligations and
termination of this Agreement.

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

     4.7 Defaulting Banks.

     Notwithstanding any provision of this Agreement to the contrary, if any Bank becomes a
Defaulting Bank, then the following provisions shall apply for so long as such Bank is a Defaulting
Bank:

     (a) Commitment Fees shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Bank pursuant to Section 2.5(a);

     (b) the Commitment and Outstanding Credit Exposure of such Defaulting Bank shall not be
included in determining whether the Majority Banks have taken or may take any action hereunder
(including any consent to any amendment or waiver pursuant to Section 10.1);
provided, that this clause (b) shall not apply to the vote of a Defaulting Bank in the case
of an amendment, waiver or other modification requiring the consent of such Bank or each Bank
affected thereby;

     (c) if any LC Obligations exist at the time a Bank becomes a Defaulting Bank then:

     (i) so long as no Default or Event of Default shall be continuing immediately before or
after giving effect to such reallocation, all or any part of such LC Obligation shall be
reallocated among the non-Defaulting Banks in accordance with their respective Pro Rata
Share but only to the extent (x) the sum of all non-Defaulting Banks’ Outstanding Credit
Exposure does not exceed the total of all non-Defaulting Banks’
Commitments, (y) no Bank’s Outstanding Credit Exposure shall exceed its Commitment

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and (z) the conditions set forth in Section 11.2 are satisfied at such time;

     (ii) if the reallocation described in subclause (i) above cannot, or can only
partially, be effected, the Company shall within one (1) Business Day following notice by
the Agent, cash collateralize for the benefit of the relevant LC Issuer such Defaulting
Bank’s Pro Rata Share of the LC Obligations (after giving effect to any partial reallocation
pursuant to subclause (i) above) in accordance with the procedures set forth in
Section 9.2 for so long as such LC Obligation is outstanding;

     (iii) if the Company cash collateralizes any portion of such Defaulting Bank’s Pro Rata
Share of the LC Obligations pursuant this clause (c), the Company shall not be
required to pay any fees to such Defaulting Bank pursuant to Section 3.4 with
respect to such Defaulting Bank’s Pro Rata Share of the LC Obligations during the period
such Defaulting Bank’s Pro Rata Share of the LC Obligations is cash collateralized;

     (iv) if the non-Defaulting Banks’ Pro Rata Share of the LC Obligations is reallocated
pursuant to this clause (c), then the fees payable to the Banks pursuant to
Section 2.5(a) and Section 3.4 shall be adjusted in accordance with such
non-Defaulting Banks’ Pro Rata Shares; or

     (v) if any Defaulting Bank’s Pro Rata Share of the LC Obligations is neither
reallocated nor cash collateralized pursuant to this clause (c), then, without
prejudice to any rights or remedies of any LC Issuer or any Bank hereunder, all fees that
otherwise would have been payable to such Defaulting Bank (solely with respect to the
portion of such Defaulting Bank’s Commitment that was utilized by such LC Obligations) and
LC Fees payable under Section 3.4 with respect to such Defaulting Bank’s Pro Rata
Share of the LC Obligations shall be payable to the applicable LC Issuer until such
Defaulting Bank’s Pro Rata Share of the LC Obligation is cash collateralized and/or
reallocated; and

     (d) so long as any Bank is a Defaulting Bank, no LC Issuer shall be required to issue or
Modify any Facility LC, unless it is satisfied that the related exposure will be 100% covered by
the Commitments of the non-Defaulting Banks and/or cash collateral will be provided by the Company
in accordance with clause (c) above, and participating interests in any such newly issued
or Modified Facility LC shall be allocated among non-Defaulting Banks in a manner consistent with
clause(c)(i) above (and Defaulting Banks shall not participate therein).

     (e) If (i) a Bankruptcy Event with respect to a Parent of any Bank shall occur following the
date hereof and for so long as such event shall continue or (ii) any LC Issuer has a good faith
belief that any Bank has defaulted in fulfilling its obligations under one or more other agreements
in which such Bank commits to extend credit, such LC Issuer shall not be required to issue, amend
or increase any Facility LC, unless such LC Issuer, as the case may be, shall have entered into
arrangements with the Company or such Bank, satisfactory to such LC Issuer, as the case may be, to
defease any risk to it in respect of such Bank hereunder.

     (f) In the event that the Agent, the Company, and each LC Issuer each agrees that a Defaulting
Bank has adequately remedied all matters that caused such Bank to be a Defaulting
Bank, then the Banks’ Pro Rata Shares of the LC Obligations shall be readjusted to reflect the

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inclusion of such Bank’s Commitment and on such date such Bank shall purchase at par such of the
Loans of the other Banks as the Agent shall determine may be necessary in order for such Bank to
hold such Loans in accordance with its Pro Rata Share of the Aggregate Commitment;
provided, that if the Company cash collateralized any portion of such Defaulting Bank’s Pro
Rata Share of the LC Obligations pursuant to Section 4.7(c), such cash shall be returned to
the Company.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

     The Company hereby represents and warrants that:

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

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

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

     5.5 Financial Statements. (a) The audited balance sheet of the Company and its
Consolidated Subsidiaries as at December 31, 2010, and the related statements of income and cash
flows of the Company and its Consolidated Subsidiaries for the fiscal year then ended, as set forth
in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (copies of
which have been furnished to each Bank), fairly present the financial condition of the Company and
its Consolidated Subsidiaries as at such date and the results of operations of
the Company and its Consolidated Subsidiaries for the fiscal year ended on such date, all in

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accordance with GAAP.

     (b) Since December 31, 2010, there has been no Material Adverse Change.

     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, 2010 as filed with the SEC, and (ii) such other similar
actions, suits and proceedings predicated on the occurrence of the same events giving rise to any
actions, suits and proceedings described in the reports referred to in the foregoing clause
(i) (all matters described in clauses (i) and (ii) above, the “Disclosed
Matters”), there is no pending or threatened action, suit, investigation or proceeding against
the Company or any of its Consolidated Subsidiaries before any court, governmental agency or
arbitrator, which, if adversely determined, might reasonably be expected to result in a Material
Adverse Change. As of the Closing Date, (a) there is no litigation challenging the validity or the
enforceability of any of the Credit Documents and (b) there have been no adverse developments with
respect to the Disclosed Matters that have resulted, or could reasonably be expected to result, in
a Material Adverse Change.

     5.7 Margin Stock. The Company is not engaged in the business of extending credit for
the purpose of buying or carrying margin stock (within the meaning of Regulation U), and no
proceeds of any 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 pursuant to the terms of this
Agreement as evidence of the Obligations (i) does not violate any provision of the Indenture or any
other agreement or instrument, or any law or regulation, or judicial or regulatory order, judgment
or decree, to which the Company or any of its Subsidiaries is a party or by which any of the
foregoing is bound and (ii) does provide the Banks, as beneficial holders of the Bonds through the
Agent, the benefit of the Lien of the Indenture equally and ratably with the holders of other First
Mortgage Bonds.

     5.13 Disclosure. The Company has not withheld any fact from the Agent or the Banks in
regard to the occurrence of a Material Adverse Change; and all financial information delivered
by the Company to the Agent and the Banks on and after the date of this Agreement is true and

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correct in all material respects as at the dates and for the periods indicated therein.

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

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

ARTICLE VI

AFFIRMATIVE COVENANTS

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

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

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

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

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

     6.5 Visitation Rights. The Company shall, and shall cause each of its Material

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Subsidiaries to, at any reasonable time and from time to time, permit the Agent, any of the Banks
or any agents or representatives thereof to examine and make copies of and abstracts from its
records and books of account, visit its properties and discuss its affairs, finances and accounts
with any of its officers.

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

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

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

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

     (c) as soon as available and in any event within one hundred twenty (120) days after the end
of each fiscal year of the Company, a copy of the Company’s Annual Report on Form 10-K (or any
successor form) for such year, including therein the consolidated balance sheet of the Company and
its Consolidated Subsidiaries as at the end of such year and the consolidated statements of income,
cash flows and common stockholder’s equity of the Company and its
Consolidated Subsidiaries as at the end of and for such year, or statements providing

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substantially similar information, in each case (i) certified by independent public accountants of
recognized national standing selected by the Company and not objected to by the Majority Banks
(without a “going concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of operations of the
Company and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, and (ii) together with (a) a certificate of a Designated Officer stating that
such officer has no knowledge (having made due inquiry with respect thereto) that a Default or
Event of Default has occurred and is continuing, or, if a Default or Event of Default has occurred
and is continuing, a statement as to the nature thereof and the actions which the Company has
taken, is taking or proposes to take with respect thereto and (b) a certificate of a Designated
Officer, in substantially the form of Exhibit B hereto, setting forth the Company’s
computation of the financial ratio specified in Article VIII as of the end of the
immediately preceding fiscal year of the Company;

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

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

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

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

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

     6.8 Use of Proceeds. The Company will use the proceeds of the Credit Extensions for

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

     6.10 Bonds. The Company shall, until the date on which the Commitments 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:

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

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

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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 to
secure performance of tenders, statutory obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business or to secure obligations on surety or appeal
bonds;

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

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

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

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

     (m) Liens arising in connection with Securitized Bonds;

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

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

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

     7.2 Sale of Assets. The Company will not, and will not permit any Material Subsidiary
to, sell, lease, assign, transfer or otherwise dispose of 25% or more of its assets calculated with
reference to total assets as reflected on the Company’s consolidated balance
sheet as at December 31, 2010, during the term of this Agreement.

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     7.3 Mergers, Etc. The Company will not, and will not permit any Material Subsidiary
to, merge with or into or consolidate with or into any other Person, except that the Company or any
Material Subsidiary may merge with any other Person; provided that, in each case,
immediately after giving effect thereto, (a) no event shall occur and be continuing which
constitutes a Default or Event of Default, (b) if the Company is party thereto, the Company is the
surviving corporation, or, if the Company is not party thereto, a Material Subsidiary is the
surviving corporation, (c) neither the Company nor any Material Subsidiary shall be liable with
respect to any Debt or allow its Property to be subject to any Lien which it could not become
liable with respect to or allow its Property to become subject to under this Agreement on the date
of such transaction and (d) the Company’s Net Worth shall be equal to or greater than its Net Worth
immediately prior to such merger.

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

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

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

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

ARTICLE VIII

FINANCIAL COVENANT

     So long as any of the Obligations shall remain unpaid, 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 0.65 to 1.0.

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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 (1) Business Day after the same becomes due, or (iii)
any interest on any Advance or any fee or other Obligation payable hereunder within five (5)
Business Days after such interest or fee or other Obligation becomes due and payable;

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

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

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

     (e) the Company or any Material Subsidiary: (i) shall make an assignment for the benefit of
creditors, or petition or apply to any tribunal for the appointment of a custodian, receiver or
trustee for it or a substantial part of its assets; or (ii) shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or (iii)
shall

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have had any such petition or application filed or any such proceeding shall have been
commenced, against it, in which an adjudication or appointment is made or order for relief is
entered, or which petition, application or proceeding remains undismissed for a period of sixty
(60) consecutive days or more; or (iv) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or order for relief or
the appointment of a custodian, receiver or trustee for all or any substantial part of its
property; or (v) shall suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of sixty (60) days or more; or (vi) shall take any corporate action to
authorize any of the actions set forth above in this clause (e);

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

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

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

     (i) (i) any Bond shall cease to be in full force and effect 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); or

     (j) a Change in Control shall occur.

     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

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(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 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 Chase Bank, N.A. having a maturity not
exceeding thirty (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

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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 3.1, Section 6.10, this Section 10.1 or Section
12.11.

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

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

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

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

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

     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 Effectiveness of this Agreement. This Agreement shall not become effective

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unless the Agent shall have received (or such delivery shall have been waived in accordance
with Section 10.1):

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

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

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

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

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

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

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

     (h) Evidence satisfactory to the Agent that the Existing Credit Agreement shall have been
terminated and cancelled and all indebtedness thereunder shall have been fully repaid (except to
the extent being so repaid with the initial Loans) and any and all liens thereunder shall have been
terminated.

     (i) (i) Satisfactory audited consolidated financial statements of the Company for the two most
recent fiscal years ended prior to the Closing Date as to which such financial statements are
available, (ii) satisfactory unaudited interim consolidated financial statements of the Company for
each quarterly period ended subsequent to the date of the latest financial statements delivered
pursuant to clause (i) of this paragraph as to which such financial statements are available and
(iii) satisfactory financial statement projections through and including the Company’s 2015 fiscal
year, together with such information as the Agent and the Banks shall

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reasonably request (including, without limitation, a detailed description of the assumptions
used in preparing such projections).

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

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

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

     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 or would
result from such Credit Extension, (ii) any representation or warranty contained in Article
V is not true and correct as of such Borrowing Date, except Section 5.5(b) and the
first sentence of Section 5.6, (iii) after giving effect to such 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. 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.

ARTICLE XII

GENERAL PROVISIONS

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

     (b) Any Bank may sell participations to one or more banks or other entities (other than the
Company and its Affiliates) (each a “Participant”) in all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment and its Outstanding
Credit Exposure); provided that (i) such Bank’s obligations under this Agreement (including
its Commitment to the Company hereunder) shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations, (iii) such Bank
shall remain the holder of the Outstanding Credit Exposure of such Bank for all purposes of this
Agreement and (iv) the Company shall continue to deal solely and directly with such Bank in
connection with such Bank’s rights and obligations under this Agreement. Each Bank shall retain
the sole right to approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Credit Documents

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

     (c) Any Bank may, in the ordinary course of its business and in accordance with applicable
law, at any time assign to one or more financial institutions or other Persons (other than the
Company and its Affiliates) all or any part of its rights and obligations under this Agreement;
provided that (i) unless such assignment is to another Bank, an Affiliate of such assigning
Bank, or any direct or indirect contractual counterparty in any swap agreement relating to the
Loans to the extent required in connection with the settlement of such Bank’s obligations pursuant
thereto, such Bank has received the prior written consent of the Agent, the Company (so long as no
Event of Default exists) and each LC Issuer, which consents of the Agent and the Company shall not
be unreasonably withheld or delayed, provided that the Company shall be deemed to have consented to
any such assignment unless it shall object thereto by written notice to the Agent within ten (10)
Business Days after having received notice thereof, and (ii) the minimum principal amount of any
such assignment (other than assignments to a Federal Reserve Bank, to another Bank, to an Affiliate
of such assigning Bank or any direct or indirect contractual counterparty in any swap agreement
relating to the Loans to the extent required in

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connection with the settlement of such Bank’s obligations pursuant thereto) shall be
$5,000,000 (or such lesser amount consented to by the Agent and, so long as no Event of Default
shall be continuing, the Company, which consents shall not be unreasonably withheld or delayed);
provided that after giving effect to such assignment the assigning Bank shall have a
Commitment of not less than $5,000,000 (unless otherwise consented to by the Agent and, so long as
no Event of Default shall be continuing, the Company), unless such assignment constitutes an
assignment of all of the assigning Bank’s Commitment, Loans and other rights and obligations
hereunder to a single assignee. Notwithstanding the foregoing sentence, (x) any Bank may at any
time, without the consent of the Company, any LC Issuer or the Agent, pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure obligations of such
Bank, including, without limitation, any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such assignment shall release the transferor Bank from its
obligations hereunder or substitute any such pledgee or assignee for such Bank as a party hereto;
and (y) no assignment by a Bank to any Affiliate of such Bank shall release such Bank from its
obligations hereunder unless (I) the Agent and, so long as no Event of Default exists, the Company
have approved such assignment or (II) the creditworthiness of such Affiliate (as determined in
accordance with customary standards of the banking industry) is no less than that of the assigning
Bank.

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

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

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     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.

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

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

     12.7 Entire Agreement. The Credit Documents embody the entire agreement and
understanding between the Company, the 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.

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

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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), regardless of whether such matter is initiated by a third party or by the Company
or any of its Affiliates or equityholders, which any of them may pay or incur arising out of or
relating to this Agreement, the other Credit Documents, the transactions contemplated hereby, the
direct or indirect application or proposed application of the proceeds of any Credit Extension
hereunder, any actual or alleged presence or release of any Hazardous Substance on or from any
property owned or operated by the Company or any Subsidiary or any Environmental Liability related
in any way to the Company or any Subsidiary; provided that the Company shall not be liable
to any Indemnified Person for any of the foregoing to the extent they are determined by a court of
competent jurisdiction by final and nonappealable judgment to have arisen from the gross negligence
or willful misconduct of such Indemnified Person. Without limiting the foregoing, the Company
shall pay any civil penalty or fine assessed by the Office of Foreign Assets Control against any
Indemnified Person, and all reasonable costs and expenses (including reasonable fees and expenses
of counsel to such Indemnified Person) incurred in connection with defense thereof, as a result of
any breach or inaccuracy of the representation made in Section 5.14. The obligations of
the Company under this Section shall survive the termination of this Agreement.

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

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

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

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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, any Arranger, any LC Issuer or any Bank shall have any
fiduciary responsibilities to the Company. To the fullest extent permitted by law, the Company
hereby waives and releases any claims that it may have against each of the Agent, the Arrangers,
each LC Issuer and each Bank with respect to any breach or alleged breach of agency or fiduciary
duty in connection with any aspect of any transaction contemplated hereby. None of the Agent, any
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 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, any 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, any 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 a
“Co-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. Nothing
contained in this Agreement or otherwise shall be construed to impose any obligation or duty on any
Other Agent, other than those applicable to all Banks as such.

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

     12.15 Electronic Delivery.

     (a) The Company shall use its commercially reasonable best efforts to transmit to the

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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”). Subject to the
conditions set forth in the proviso in the immediately preceding sentence, nothing in this
Section 12.15 shall prejudice the right of the Agent to make Communications available to
the Banks in any other manner specified herein.

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

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

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

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

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

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COMMUNICATION; AND

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

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

ARTICLE XIII

THE AGENT

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

     13.2 Powers. The Agent shall have and may exercise such powers hereunder as are

-52-

 

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

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

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

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

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

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

     13.8 Agent’s Reimbursement and Indemnification. The Banks agree to reimburse and
indemnify the Agent (in the Agent’s capacity as Agent) ratably in accordance with their respective
Pro Rata Shares (i) for any amounts not reimbursed by the Company for which the Agent (in the
Agent’s capacity as Agent) is entitled to reimbursement by the Company under the Credit Documents,
(ii) for any other expenses reasonably incurred by the Agent on behalf of the

-53-

 

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

     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 Chase Bank, N.A. in its individual capacity. The Agent may
accept deposits from, lend money to, and generally engage in any kind of banking or trust business
with the Company or any Subsidiary as if it were not the Agent.

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

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

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

-54-

 

bank) shall deliver to the Agent a certification, or, if applicable, recertification,
certifying that such Bank is not a “shell” and certifying as to other matters as required by
Section 313 of the USA Patriot Act and the applicable regulations.

     13.11 Successor Agent. Subject to the appointment and acceptance of a successor Agent
as provided in this paragraph, the Agent may resign at any time by notifying the Banks, the LC
Issuers and the Company. Upon any such resignation, the Majority Banks shall have the right, in
consultation with the Company, to appoint a successor. If no successor shall have been so
appointed by the Majority Banks and shall have accepted such appointment within thirty (30) days
after the retiring Agent gives notice of its resignation, then the retiring Agent may, on behalf of
the Banks and the LC Issuers, appoint a successor Agent which shall be a bank with an office in New
York, New York or Los Angeles, California, or an Affiliate of any such bank. Upon the acceptance
of its appointment as Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. The fees payable by the
Company to a successor Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Company and such successor. After the Agent’s resignation hereunder, the
provisions of this Article and Section 12.8 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Agent.

ARTICLE XIV

NOTICES

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

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

ARTICLE XV

COUNTERPARTS

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

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

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     IN WITNESS WHEREOF, the Company, the Banks, 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

 	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

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

 	 
	 	By:  	/s/ Nancy R. Barwig
 	 
	 	 	Name:  	Nancy R. Barwig 	 
	 	 	Title:  	Credit Executive 	 
	 
	 	Address:

Notices for Borrowing:

JPMorgan Chase Bank, N.A.

10 South Dearborn, Floor 7

Chicago, IL 60603

Attention: Nida Mischke

Fax: 312-385-0796

Email: leonida.g.mischke@jpmchase.com

For all Other Matters:

JPMorgan Chase Bank, N.A.

10 South Dearborn, Floor 9

Chicago, IL 60603

Attention: Nancy Barwig

Fax: 312-732-1762

Email: nancy.r.barwig@jpmorgan.com

With a copy to:

JPMorgan Chase Bank, N.A.

10 South Dearborn, Floor 9

Chicago, IL 60603

Attention: Lisa Tverdek

Fax: 312-325-3238

Email: lisa.tverdek@jpmorgan.com
 	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	BARCLAYS BANK PLC, as an LC Issuer and as a Bank

 	 
	 	By:  	/s/ Ann E. Sutton
 	 
	 	 	Name:  	Ann E. Sutton 	 
	 	 	Title:  	Director 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	UNION BANK, N.A., as an LC Issuer and as a Bank

 	 
	 	By:  	/s/ Jeff Fesenmaier
 	 
	 	 	Name:  	Jeff Fesenmaier 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	CITIBANK, N.A., as a Bank

 	 
	 	By:  	/s/ Maureen Maroney
 	 
	 	 	Name:  	Maureen Maroney 	 
	 	 	Title:  	Authorized Signatory 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	THE ROYAL BANK OF SCOTLAND plc, as a Bank

 	 
	 	By:  	/s/ Andrew N. Taylor
 	 
	 	 	Name:  	Andrew N. Taylor 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

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

 	 
	 	By:  	/s/ David K. Komrska
 	 
	 	 	Name:  	David K. Komrska 	 
	 	 	Title:  	Senior Vice President 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	BNP PARIBAS, as a Bank

 	 
	 	By:  	/s/ Francis J. Delaney
 	 
	 	 	Name:  	FRANCIS J. DELANEY 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                                              /s/ Pasquale A. Perraglia IV
 	 
	 	 	Name:  	Pasquale A. Perraglia IV 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY 
AMERICAS, as a Bank

 	 
	 	By:  	/s/ Michael Getz
 	 
	 	 	Name:  	Michael Getz 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	                                              /s/ Carin Keegan
 	 
	 	 	Name:  	Carin Keegan 	 
	 	 	Title:  	Director 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	GOLDMAN SACHS BANK USA, as a Bank

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

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	SUNTRUST BANK, as a Bank

 	 
	 	By:  	/s/ Sean Drinan
 	 
	 	 	Sean Drinan 	 
	 	 	Managing Director 	 
	 

	 	 	 	 	 
	Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 
	 	 	 
	 	 	 
	 	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA, as a Bank

 	 
	 	By:  	/s/ Frank Sandler
 	 
	 	 	Name:  	Frank Sandler 	 
	 	 	Title:  	Managing Director 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	UBS LOAN FINANCE LLC, as a Bank

 	 
	 	By:  	/s/ Irja R. Otsa
 	 
	 	 	Name:  	Irja R. Otsa 	 
	 	 	Title:  	Associate Director 	 
	 
	 	 	 
	 	By:  	                                              /s/ Mary E. Evans
 	 
	 	 	Name:  	Mary E. Evans 	 
	 	 	Title:  	Associate Director 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	WELLS FARGO NATIONAL ASSOCIATION, as a Bank

 	 
	 	By:  	/s/ Shawn Young
 	 
	 	 	Name:  	Shawn Young 	 
	 	 	Title:  	Director 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	COMERICA BANK, as a Bank

 	 
	 	By:  	/s/ Kimberly S. Kersten
 	 
	 	 	Name:  	Kimberly S. Kersten 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	FIFTH THRID BANK, an Ohio Banking Corporation,

as a Bank

 	 
	 	By:  	/s/ Brian Jelinski
 	 
	 	 	Name:  	Brian Jelinski 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	HUNTINGTON NATIONAL BANK, as a Bank

 	 
	 	By:  	/s/ Cheryl B. Holm
 	 
	 	 	Name:  	Cheryl B. Holm 	 
	 	 	Title:  	Sr. Vice President 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION, as a Bank

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

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION, as a Bank

 	 
	 	By:  	/s/ Katie Mikula
 	 
	 	 	Name:  	Katie Mikula 	 
	 	 	Title:  	Credit Officer 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	ROYAL BANK OF CANADA, as a Bank

 	 
	 	By:  	/s/ Meredith Majesty
 	 
	 	 	Name:  	Meredith Majesty 	 
	 	 	Title:  	Authorized Signatory 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	SUMITOMO MITSUI BANKING CORPORATION, as a Bank

 	 
	 	By:  	/s/ Masakazu Hasegawa
 	 
	 	 	Name:  	Masakazu Hasegawa 	 
	 	 	Title:  	General Manager 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as a Bank

 	 
	 	By:  	/s/ Eric J. Cosgrove
 	 
	 	 	Name:  	Eric J. Cosgrove 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to

Revolving Credit Agreement

Consumers Energy Company

 

 

EXHIBIT A

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 Mellon (formerly known as The Bank of
New York), as Trustee, and (ii) the Indenture dated as of February 1, 1998, as supplemented and
amended from time to time, between the Company and The Bank of New York Mellon (successor trustee
to JPMorgan Chase Bank, N.A.), as Trustee.

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

     4. To the best of my knowledge, there is no pending or threatened action or proceeding against
the Company or any of its Consolidated Subsidiaries before any court, governmental agency or
arbitrator (except (i) to the extent described in the Company’s annual report on Form 10-K for the
year ended December 31, 2010 as filed with the SEC, and (ii) such other similar actions, suits and
proceedings predicated on the occurrence of the same events giving rise to any actions, suits and
proceedings described in the reports filed with the SEC set forth in clause (i) of this
paragraph 4) which might reasonably be expected to materially adversely affect the financial
condition or results of operations of the Company and its Consolidated Subsidiaries, taken as a
whole, or that would materially adversely affect the Company’s ability to perform its obligations
under any Credit Document. To the best of my knowledge, there is no litigation challenging the
validity or the enforceability of any of the Credit Documents.

A - 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 in Docket No. ES10-34-000 (hereinafter the “FERC Order”). The FERC Order is in full
force and effect as of the date hereof.

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

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

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

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

A - 2

 

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

     I, _________________, ______________ of Consumers Energy Company, a Michigan corporation (the
“Company”), DO HEREBY CERTIFY in connection with the Revolving Credit Agreement, dated as
of March 31, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; the terms defined therein being used herein as so defined), among the
Company, various financial institutions and JPMorgan Chase Bank, N.A., as Agent and an LC Issuer,
that:

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

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

	 	 	 	 	 	 	 	 	 	 	 

	A. Total Consolidated Debt	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(a)
	 	Indebtedness for borrowed money
	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	plus

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

	 	 	 	 	 	 	 	 	 	 
	 
	plus

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

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	plus

	 	(d)
	 	Liabilities in connection with withdrawal liability under
ERISA
	 	 	(+) $	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	plus

	 	(e)
	 	Obligations under acceptance facilities
	 	 	(+) $	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	plus

	 	(f)
	 	Obligations under Capital Leases
	 	 	(+) $	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	plus

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

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	plus

	 	(h)
	 	Guaranties, endorsements and other contingent obligations
	 	 	(+) $	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	plus

	 	(i)
	 	Off-Balance Sheet Liabilities
	 	 	(+) $	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

B- 1

 

	 	 	 	 	 	 	 	 	 	 	 

	plus

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

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	minus

	 	(k)
	 	Principal amount of any Securitized Bonds
	 	 	(-) $	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	minus

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

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	minus

	 	(m)
	 	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

	 	(n)
	 	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

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

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	minus

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

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	minus

	 	(q)
	 	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

	 	(r)
	 	Non-cash obligations resulting from the adoption of FASB
No. 158 to the extent such obligations are required to be
treated as debt
	 	 	(-) $	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	Total	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	B.	 	Total Consolidated Capitalization:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(a)
	 	Total Consolidated Debt
	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	plus

	 	(b)
	 	The sum of Items A(l), A(m), A(n) and A(p) above1
	 	 	(+) $	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	plus

	 	(c)
	 	Equity of common stockholders
	 	 	(+) $	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	plus

	 	(d)
	 	Equity of preference stockholders
	 	 	(+) $	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

 

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

B- 2

 

	 	 	 	 	 	 	 	 	 

	plus

	 	(e)
	 	Equity of preferred stockholders
	 	(+) $	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	Total 	 	$	 	 
	 

	 	 	 	 	 	 	 	 
	C.	 	Debt to Capital Ratio	 	 	 	 
	 	 	(total of A divided by total of B)	 	 	 	_______ to 1.00

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

	 	 	 	 	 
	 
	 	Name:

Title:

 	 

B- 3

 

	 	 	 	 	 

EXHIBIT C

ASSIGNMENT AND ASSUMPTION AGREEMENT

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

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

	 	 	 	 	 	 	 

	1.

	 	Assignor:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	2.

	 	Assignee:
	 	 	 	[and is an Affiliate of Assignor]
	 
	 	 	 	 	 	 
	3.

	 	Borrower:
	 	Consumers Energy Company	 	 
	 
	 	 	 	 	 	 
	4.	 	Agent:	 	JPMorgan Chase Bank, N.A., as the Agent under the Credit Agreement.
	 
	 	 	 	 	 	 
	5.	 	Credit Agreement:	 	Revolving Credit Agreement, dated as of March 31, 2011, among Consumers
Energy Company, the Banks party thereto, and JPMorgan Chase Bank, N.A., as
Agent and an LC Issuer.
	 
	 	 	 	 	 	 
	6.

	 	Assigned Interest:	 	 	 	 

C - 1

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate Amount of	 	Amount of	 	Percentage Assigned of
	 	 	Commitment/Outstanding	 	Commitment/Outstanding	 	Commitment/Outstanding
	 	 	Credit Exposure for	 	Credit Exposure	 	Credit
	Facility Assigned	 	all Banks1	 	Assigned1	 	Exposure2
	 

	 	$	 	 	 	$	 	 	 	____ %
	 
	 

	 	$	 	 	 	$	 	 	 	____ %
	 
	 

	 	$	 	 	 	$	 	 	 	____ %
	 
	 

	 	 	 	 	 	 	 	 	 	 

7. Trade Date: ________________________3

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

 

			
	1	 	Amount to be adjusted by the counterparties
to take into account any payments or prepayments made between the Trade Date
and the Effective Date.
	 
	2.	 	Set forth, to at least 9 decimals, as a percentage of
the Commitment/Outstanding Credit Exposure of all Banks thereunder.
	 
	3.	 	Insert if satisfaction of minimum amounts is to be
determined as of the Trade Date.

C - 2

 

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

	 	 	 	 	 
	 	ASSIGNOR

[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ASSIGNEE

[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	[Consented to and]4
 Accepted:

JPMORGAN CHASE BANK, N.A., as Agent

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

	 	 	 	 	 
	[Consented to:]5

[NAME OF RELEVANT PARTY]

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

			
	4.	 	To be added only if the consent of the Agent is required
by the terms of the Credit Agreement.
	 
	5.	 	To be added only if the consent of the Company and/or
other parties (e.g., the LC Issuers) is required by the terms of the Credit
Agreement.

C - 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 2 to this Assignment and Assumption is any documentation required to be
delivered by the Assignee with respect to its tax status pursuant to the terms of the Credit
Agreement, duly completed and executed by the Assignee; (b) appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under the Credit Documents as
are delegated to the Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; and (c) agrees that (i) it will, independently and without reliance

Annex 1

 

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

     2. Payments. The Assignee shall pay the Assignor, on the Effective Date, the amount
agreed to by the Assignor and the Assignee. From and after the Effective Date, the Agent shall
make all payments in respect of the Assigned Interest (including payments of principal, interest,
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

 

SCHEDULE 1

TO

TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION AGREEMENT

Administrative Questionnaire

On File with Agent

 

 

SCHEDULE 2

TO

TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION AGREEMENT

US and Non-US Tax Information Reporting Requirements

 

 

EXHIBIT D

TERMS OF SUBORDINATION

[JUNIOR SUBORDINATED DEBT]

ARTICLE ____

SUBORDINATION

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

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

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

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

D-1

 

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

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

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

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

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

D-2

 

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

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

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

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

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

D-3

 

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

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

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

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

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

D-4

 

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

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

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

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

D-5

 

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

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

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

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

D-6

 

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

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

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

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

D-7

 

EXHIBIT E

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.

E -1

 

SCHEDULE 1

PRICING SCHEDULE

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Pricing Level I	 	Pricing Level II	 	Pricing Level III	 	Pricing Level IV	 	Pricing Level V
	Commitment Fee Rate

	 	 	0.10	%	 	 	0.125	%	 	 	0.15	%	 	 	0.20	%	 	 	0.25	%
	Applicable Margin 

for Eurodollar Rate 

Loans

	 	 	1.00	%	 	 	1.125	%	 	 	1.25	%	 	 	1.50	%	 	 	1.75	%
	Applicable Margin 

for Floating Rate 

Loans

	 	 	0.00	%	 	 	0.125	%	 	 	0.25	%	 	 	0.50	%	 	 	0.75	%

For purposes of the foregoing:

Changes in the Applicable Margin and the Commitment Fee Rate resulting from a change in the Pricing
Level shall become effective on the effective date of any change in the Senior Debt Rating from S&P
or Moody’s. In the event of a split in the Senior Debt Rating from S&P and Moody’s that would
otherwise result in the application of more than one Pricing Level (had the provisions regarding
the applicability of other Pricing Levels contained in the definitions thereof not been given
effect), then the Applicable Margin and the Commitment Fee Rate shall be determined as follows:
(x) if the split in the Senior Debt Rating is one Pricing Level, then the higher Senior Debt Rating
will be the applicable Pricing Level, (y) if the split in the Senior Debt Rating is two Pricing
Levels, the midpoint between the two will be the applicable Pricing Level, and (z) if the split in
the Senior Debt Rating is more than two Pricing Levels, the Pricing Level will be the Pricing Level
immediately below the higher Pricing Level. If either (but not both) Moody’s or S&P shall cease to
be in the business of rating corporate debt obligations, the Pricing Levels shall be determined on
the basis of the Senior Debt Ratings provided by the other rating agency. If at any time both the
Secured Debt and the Unsecured Debt of the Company is unrated by Moody’s and S&P, the Pricing Level
will be Pricing Level V; provided that if the reason that there is no such Senior Debt
Rating results from Moody’s and S&P ceasing to issue debt ratings generally, then the Company and
the Agent may select a Substitute Rating Agency for purposes of the foregoing Pricing Schedule (and
all references in the Credit Agreement to Moody’s and S&P, as applicable, shall refer to such
Substitute Rating Agency), and until a Substitute Rating Agency is so selected, the Pricing Level
shall be determined by reference to the Senior Debt Rating most recently in effect prior to
cessation.

     “Pricing Level” means Pricing Level I, Pricing Level II, Pricing Level III, Pricing
Level IV or Pricing Level V, as the context may require.

     “Pricing Level I” means any time when (i) no Event of Default has occurred and is
continuing and (ii) the Senior Debt Rating is A+ or higher by S&P or A1 or higher by Moody’s.

Sch.-1

 

     “Pricing Level II” means any time when (i) no Event of Default has occurred and is
continuing, (ii) the Senior Debt Rating is A or higher by S&P or A2 or higher by Moody’s and (iii)
Pricing Level I does not apply.

     “Pricing Level III” means any time when (i) no Event of Default has occurred and is
continuing, (ii) the Senior Debt Rating is A- or higher by S&P or A3 or higher by Moody’s and (iii)
none of Pricing Level I or Pricing Level II is applicable.

     “Pricing Level IV” means any time when (i) no Event of Default has occurred and is
continuing, (ii) the Senior Debt Rating is BBB+ or higher by S&P or Baa1 or higher by Moody’s and
(iii) none of Pricing Level I, Pricing Level II or Pricing Level III is applicable.

     “Pricing Level V” means any time when none of Pricing Levels I, II, III or IV is
applicable.

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

     “Senior Debt Rating” means at any date, the credit rating identified by S&P or Moody’s
as the credit rating which (i) it has assigned to Secured Debt of the Company or (ii) would assign
to Secured Debt of the Company were the Company to issue or have outstanding any Secured Debt on
such date; provided that if the Secured Debt of the Company is unrated by both of Moody’s
and S&P, “Senior Debt Rating” means the credit rating that is one level higher than the
credit rating identified by S&P or Moody’s as the credit rating which (i) it has assigned to
Unsecured Debt of the Company or (ii) would assign to Unsecured Debt of the Company were the
Company to issue any Unsecured Debt on such date.

     “Substitute Rating Agency” means a nationally-recognized rating agency (other than
Moody’s and S&P).

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

Sch.-1

 

SCHEDULE 2

COMMITMENT SCHEDULE

	 	 	 	 	 
	BANK	 	COMMITMENT	 
	JPMorgan Chase Bank, N.A.
	 	$	31,047,619.05	 
	Barclays Bank PLC
	 	$	31,047,619.05	 
	Union Bank, N.A.
	 	$	31,047,619.05	 
	Citibank, N.A.
	 	$	31,047,619.05	 
	The Royal Bank of Scotland plc
	 	$	31,047,619.05	 
	Bank of America, N.A.
	 	$	24,761,904.76	 
	BNP Paribas
	 	$	24,761,904.76	 
	Deutsche Bank Trust Company Americas
	 	$	24,761,904.76	 
	Goldman Sachs Bank USA
	 	$	24,761,904.76	 
	SunTrust Bank
	 	$	24,761,904.76	 
	The Bank of Nova Scotia
	 	$	24,761,904.76	 
	UBS Loan Finance LLC
	 	$	24,761,904.76	 
	Wells Fargo Bank, National Association
	 	$	24,761,904.76	 
	Comerica Bank
	 	$	18,333,333.33	 
	Fifth Third Bank
	 	$	18,333,333.33	 
	Huntington National Bank
	 	$	18,333,333.33	 
	KeyBank National Association
	 	$	18,333,333.33	 
	PNC Bank, National Association
	 	$	18,333,333.33	 
	Royal Bank of Canada
	 	$	18,333,333.33	 
	Sumitomo Mitsui Banking Corporation
	 	$	18,333,333.33	 
	U.S. Bank National Association
	 	$	18,333,333.33	 
	AGGREGATE COMMITMENT
	 	$	500,000,000.00	 

Sch.-2

 

SCHEDULE 3.1

EXISTING LCs

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	L/C	 	Facility	 	 	 	EFFECTIVE	 	EXPIRATION	 	AMOUNT
	ENTITY / PROJECT	 	NUMBER	 	Issuer	 	BENEFICIARY	 	DATE	 	DATE	 	OUTSTANDING
	Consumers 

Energy

	 	SLT411076
	 	JPMorgan
	 	Total Gas & Power
North America Inc.
	 	10/04/07
	 	8/31/2011
	 	 	25,000,000.00	 
	Consumers Energy

	 	SLT332011
	 	JPMorgan
	 	City of Sterling
Heights, Michigan*
	 	05/19/03
	 	05/19/11
	 	 	10,000.00	 
	Consumers Energy

	 	CPCS-275535
	 	JPMorgan
	 	Michigan Dept of
Environmental
Quality
	 	01/16/08
	 	12/21/2011
	 	 	157,800.00	 
	Consumers Energy

	 	CPCS-206214
	 	JPMorgan
	 	City of Novi
	 	10/14/05
	 	10/11/2011
	 	 	20,000.00	 
	Consumers Energy

	 	CPCS-250893
	 	JPMorgan
	 	City of Wixom
	 	11/21/07
	 	11/19/2011
	 	 	5,000.00	 
	Consumers Energy

	 	CPCS-786698
	 	JPMorgan
	 	Entergy Nuclear

Palisades, LLC
	 	08/18/09
	 	8/1/2011
	 	 	163,000,000.00	 
	Consumers Energy

	 	NZS617634
	 	Wells Fargo
	 	Bank of New York
	 	04/03/08
	 	3/23/2012
	 	 	35,486,111.12	 
	Consumers Energy

	 	NZS616180
	 	Wells Fargo
	 	Deutsche Bank

National Trust

Company
	 	03/20/08
	 	3/19/2012
	 	 	68,640,277.78	 
	Total LCs

	 	 	 	 	 	 	 	 	 	 	 	 	292,319,188.90	 

Sch.-3.1exv10w3

Exhibit 10.3

EXECUTION COPY

PLEDGE AND SECURITY AGREEMENT

     THIS PLEDGE AND SECURITY AGREEMENT (this “Security Agreement”), dated as of March 31, 2011, is
made by CMS ENERGY CORPORATION, a corporation organized and existing under the laws of the State of
Michigan (the “Grantor”), to BARCLAYS BANK PLC, as Administrative Agent (the “Administrative
Agent”) for the financial institutions (the “Banks”) from time to time parties to the Credit
Agreement (as hereinafter defined).

PRELIMINARY STATEMENTS

     (1) The Grantor, the Banks and the Administrative Agent have entered into that certain Credit
Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”).

     (2) The Grantor is the owner of the Collateral described in Exhibit “A” hereto.

     (3) It is a condition precedent to the effectiveness of the Credit Agreement that the Grantor
shall have made the pledge contemplated by this Agreement.

     NOW, THEREFORE, in consideration of the premises and in order to induce the Banks to make
Credit Extensions under the Credit Agreement, the Grantor hereby agrees with the Administrative
Agent, for its benefit and the ratable benefit of the other Secured Parties, as follows:

ARTICLE I

DEFINITIONS

     1.1. Terms Defined in Credit Agreement. All capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

     1.2. Terms Defined in New York Uniform Commercial Code. Terms defined in the New York
UCC which are not otherwise defined in this Security Agreement are used herein as defined in the
New York UCC.

     1.3. Definitions of Certain Terms Used Herein. As used in this Security Agreement, in
addition to the terms defined in the Preliminary Statements, the following terms shall have the
following meanings:

     “Accounts” shall have the meaning set forth in Article 9 of the New York UCC.

     “Article” means a numbered article of this Security Agreement, unless another document is
specifically referenced.

     “Collateral” means the Investment Property described on Exhibit “A” and the proceeds
(including Stock Rights) and products thereof, together with records related thereto.

1

 

     “Control” shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104,
9-105, 9-106 or 9-107 of Article 9 of the New York UCC.

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

     “Event of Default” means an event described in Section 5.1.

     “Exhibit” refers to a specific exhibit to this Security Agreement, unless another document is
specifically referenced.

     “Investment Property” shall have the meaning set forth in Article 9 of the New York UCC.

     “New York UCC” means the New York Uniform Commercial Code as in effect from time to time.

     “Permitted Liens” means the Liens permitted to be created, incurred or assumed or otherwise to
exist pursuant to Sections 7.1(c), (d), (e), (f) or (n) of the Credit Agreement.

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

     “Secured Obligations” means any and all Obligations, including, without limitation, all
existing and future indebtedness, obligations and liabilities of every kind, nature and character,
direct or indirect, absolute or contingent (including all renewals, extensions and modifications
thereof and all reasonable and reimbursable fees, costs and expenses incurred by any Secured Party
in connection with the preparation, administration, collection or enforcement thereof), of the
Grantor to any Secured Party, arising under or pursuant to this Security Agreement, the Credit
Agreement and any other Credit Document.

     “Security” has the meaning set forth in Article 8 of the New York UCC.

     “Stock Rights” means any securities, dividends or other distributions and any other right or
property which the Grantor shall receive or shall become entitled to receive for any reason
whatsoever with respect to, in substitution for or in exchange for any securities or other
ownership interests in a corporation, partnership, joint venture or limited liability company
constituting Collateral and any securities, any right to receive securities and any right to
receive earnings, in which the Grantor now has or hereafter acquires any right, issued by an issuer
of such securities.

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

2

 

ARTICLE II

GRANT OF SECURITY INTEREST

     The Grantor hereby pledges, assigns and grants to the Administrative Agent, on behalf of and
for the ratable benefit of the Secured Parties, a security interest in all of the Grantor’s right,
title and interest, whether now owned or hereafter acquired, in and to the Collateral to secure the
prompt and complete payment and performance of the Secured Obligations, provided, however, that the
principal amount of the Secured Obligations secured by the security interests granted pursuant to
this Security Agreement shall not exceed an amount that would cause all secured Debt of Grantor
outstanding on the date hereof to exceed 5% of the “Consolidated Net Tangible Assets” (as defined
in the Nineteenth Supplemental Indenture dated as of December 13, 2005 between the Grantor and Bank
of New York Mellon (successor trustee to JPMorgan Chase Bank, N.A.) with respect to the Grantor’s
original Indenture dated as of September 15, 1992) as of the date hereof.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

     The Grantor represents and warrants to the Administrative Agent and the other Secured Parties
that:

     3.1. Title, Authorization, Validity and Enforceability. The Grantor has good and
valid rights in or the power to transfer the Collateral and title to the Collateral with respect to
which it has purported to grant a security interest hereunder, free and clear of all Liens (other
than Permitted Liens), and has full power and authority to grant to the Administrative Agent the
security interest in such Collateral pursuant hereto. The execution and delivery by the Grantor of
this Security Agreement has been duly authorized by proper corporate or other proceedings, and this
Security Agreement constitutes a legal, valid and binding obligation of the Grantor and creates a
security interest which is enforceable against the Grantor in all now owned and hereafter acquired
Collateral. When financing statements (or appropriate amendments to existing filings) have been
filed in the appropriate offices against the Grantor in the locations listed on Exhibit “B”, the
Administrative Agent will have a fully perfected first priority security interest in the Collateral
in which a security interest may be perfected by filing.

     3.2. Conflicting Laws and Contracts. The execution, delivery and performance by the
Grantor of this Security Agreement (i) are within the Grantor’s powers, (ii) have been duly
authorized by all necessary corporate or other organizational action or proceedings and (iii) do
not and will not (A) require any consent or approval of the stockholders (or other applicable
holder of equity) of the Grantor (other than such consents and approvals which have been obtained
and are in full force and effect), (B) violate any provision of the charter or by-laws (or other
comparable constitutive documents) of the Grantor or of law, (C) violate any legal restriction
binding on or affecting the Grantor, (D) result in a breach of, or constitute a default under, any
indenture or loan or credit agreement or any other agreement, lease or instrument to which the
Grantor is a party or by which it or its properties may be bound or affected, or (E) result in or
require the creation of any Lien (other than pursuant to the Credit Documents as defined in the
Credit Agreement) upon or with respect to any of its properties.

3

 

     3.3. Type and Jurisdiction of Organization. The Grantor is a corporation organized
under the laws of the State of Michigan.

     3.4. Pledged Securities. Exhibit “A” sets forth a complete and accurate list of the
Securities delivered to the Administrative Agent. The Grantor is the direct and beneficial owner
of each Security listed on Exhibit “A” as being owned by it, free and clear of any Liens, except
for the security interest granted to the Administrative Agent for the benefit of the Secured
Parties hereunder and other Permitted Liens. The Grantor further represents and warrants that all
such Securities have been duly and validly issued, are fully paid and non-assessable and constitute
the percentage of the issued and outstanding shares of stock of the respective issuers thereof
indicated on Exhibit “A” hereto.

ARTICLE IV

COVENANTS

     From the date of this Security Agreement, and thereafter until this Security Agreement is
terminated:

     4.1. General.

          4.1.1 Inspection. The Grantor will permit the Administrative Agent or any Bank, by
its representatives and agents (i) to inspect the Collateral, (ii) to examine and make copies of
the records of the Grantor relating to the Collateral and (iii) to discuss the Collateral and the
related records of the Grantor with, and to be advised as to the same by, the Grantor’s officers
and employees all at such reasonable times and intervals as the Administrative Agent or such Bank
may determine.

          4.1.2 Records and Reports. The Grantor will maintain complete and accurate books and
records with respect to the Collateral, and furnish to the Administrative Agent, with sufficient
copies for each of the Banks, such reports relating to the Collateral as the Administrative Agent
shall from time to time reasonably request.

          4.1.3 Financing Statements and Other Actions; Defense of Title. The Grantor hereby
authorizes the Administrative Agent to file, and if requested will execute and deliver to the
Administrative Agent, all financing statements describing the Collateral and other documents and
take such other actions as may from time to time be reasonably requested by the Administrative
Agent in order to maintain a perfected security interest in and, if applicable, Control of, the
Collateral. The Grantor will take any and all actions necessary to defend title to the Collateral
against all persons and to defend the security interest of the Administrative Agent in the
Collateral and the priority thereof against any Lien not expressly permitted hereunder.

          4.1.4 Change in Corporate Existence, Type or Jurisdiction of Organization, Location,
Name. The Grantor will preserve its existence as a corporation, not change its state of
organization, and not change its mailing address, unless, in each such case, the Grantor shall have
given the Administrative Agent not less than 10 days’ prior written notice of such event or
occurrence and the Administrative Agent shall have either (x) determined that such event or
occurrence will not adversely affect the validity, perfection or priority of the Administrative

4

 

Agent’s security interest in the Collateral, or (y) taken such steps (with the cooperation of the
Grantor to the extent necessary or advisable) as are necessary or advisable to properly maintain
the validity, perfection and priority of the Administrative Agent’s security interest in the
Collateral.

     4.2. Securities. The Grantor will (i) deliver to the Administrative Agent immediately
upon execution of this Security Agreement the originals of all Securities constituting Collateral
(if any then exist) and (ii) hold in trust for the Administrative Agent upon receipt and
immediately thereafter deliver to the Administrative Agent any additional Securities constituting
Collateral, in each case together with a stock power or endorsement therefor executed in blank.

     4.3. Stock and Other Ownership Interests. The Grantor will permit any registerable
Collateral to be registered in the name of the Administrative Agent or its nominee at any time at
the option of the Majority Banks following the occurrence and during the continuance of an Event of
Default.

     4.4. Voting Rights and Dividends

     4.5.1 Rights Prior to Default. So long as no Event of Default, and no Default under
Section 9.1(e) of the Credit Agreement, shall have occurred and be continuing:

     (i) Until the Administrative Agent shall have notified the Grantor in writing to the
contrary, the Grantor shall be entitled to exercise or refrain from exercising any and all
voting and other consensual rights pertaining to the Collateral or any part thereof for any
purpose not inconsistent with the terms of this Security Agreement or the Credit Agreement,
provided, however, that the Grantor shall not exercise or refrain from exercising any such
right if such action would have a material adverse effect on the value of the Collateral.

     (ii) The Grantor shall be entitled to receive and retain any and all dividends
and interest paid in respect of the Collateral; provided, however, that any and all (a)
dividends and interest paid or payable other than in cash in respect of, and securities,
instruments and other property received, receivable or otherwise distributed in respect of,
or in exchange for, any Collateral, and (b) dividends, interest and other distributions paid
or payable in cash in respect of any Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital surplus or
paid-in-surplus, shall be, and shall be forthwith delivered to the Administrative Agent to
hold as, Collateral and shall, if received by the Grantor, be received in trust for the
benefit of the Administrative Agent, be segregated from the other property or funds of the
Grantor, and be forthwith delivered to the Administrative Agent as Collateral in the same
form as so received (with any necessary endorsement or assignment).

     (iii) The Administrative Agent shall execute and deliver (or cause to be executed
and delivered) to the Grantor all such proxies and other instruments as the Grantor may
reasonably request for the purpose of enabling the Grantor to exercise the voting and other
rights which it is entitled to exercise pursuant to paragraph (i), above,

5

 

and to receive the dividends and interest which it is authorized to receive and retain
pursuant to paragraph (ii), above.

     4.5.2 Rights During Default. Upon the occurrence and during the continuance of a
Default under Section 9.1(e) of the Credit Agreement or an Event of Default:

     (i) Upon written notice to the Grantor by the Administrative Agent, which
notice can only be given by the Administrative Agent with respect to the Collateral
consisting of the common stock of Consumers after the Grantor has filed an application with
the Federal Energy Regulatory Commission seeking approval pursuant to Section 203 of the
Federal Power Act, 16 U.S.C. 824b, to transfer the common stock of Consumers to the
Administrative Agent and received such approval from the Federal Energy Regulatory
Commission, all rights of the Grantor to exercise or refrain from exercising the voting and
other consensual rights which it would otherwise be entitled to exercise pursuant to
Section 4.5.1(i) and to receive the dividends and interest which it would otherwise be
authorized to receive and retain pursuant to Section 4.5.1(ii) shall cease, and all such
rights shall thereupon become vested in the Administrative Agent who shall thereupon have
the sole right to exercise or refrain from exercising such voting and other consensual
rights and to receive and hold as Collateral such dividends and interest. The Grantor
shall only file the application pursuant to Section 203 of the Federal Power Act referred
to in the prior sentence if the Administrative Agent instructs it to do so in writing, and
the Grantor shall have 10 days after receipt of such instruction in which to prepare and
make the filing; provided, that the Administrative Agent can withdraw such
instruction at any time before the expiration of the ninth day after its receipt.

     (ii) All dividends and interest and other property which are received by the Grantor
after proper written notice has been received by the Grantor pursuant to paragraph (i) of
this Section 4.5.2 shall be received in trust for the benefit of the Administrative Agent,
shall be segregated from other funds of the Grantor and shall be forthwith paid over to the
Administrative Agent as Collateral in the same form as so received (with any necessary
endorsement).

ARTICLE V

DEFAULT

     5.1. Default. The occurrence of any “Event of Default” under, and as defined in, the
Credit Agreement shall constitute an Event of Default hereunder.

     5.2. Acceleration and Remedies. Upon the acceleration of the Obligations under the
Credit Agreement pursuant to Section 9.2 thereof, the Administrative Agent may, with the
concurrence or at the direction of the Majority Banks, exercise any or all of the following rights
and remedies:

          5.2.1 Those rights and remedies provided in this Security Agreement, the Credit Agreement, or
any other Credit Document, provided that this Section 5.2.1 shall not be

6

 

understood to limit any rights or remedies available to the Administrative Agent and the other
Secured Parties prior to an Event of Default.

          5.2.2 Those rights and remedies available to a secured party under the New York UCC (whether
or not the New York UCC applies to the affected Collateral) or under any other applicable law
(including, without limitation, any law governing the exercise of a bank’s right of setoff or
bankers’ lien) when a debtor is in default under a security agreement.

          5.2.3 Without notice except as specifically provided herein, sell, lease, assign, grant an
option or options to purchase or otherwise dispose of the Collateral or any part thereof in one or
more parcels at public or private sale, for cash, on credit or for future delivery, and upon such
other terms as the Administrative Agent may deem commercially reasonable. The Administrative Agent
may comply with any applicable state or federal law requirements in connection with a disposition
of the Collateral and compliance will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.

ARTICLE VI

WAIVERS, AMENDMENTS AND REMEDIES

     No delay or omission of the Administrative Agent or any other Secured Party to exercise any
right or remedy granted under this Security Agreement shall impair such right or remedy or be
construed to be a waiver of any Event of Default or an acquiescence therein, and any single or
partial exercise of any such right or remedy shall not preclude any other or further exercise
thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of
the terms, conditions or provisions of this Security Agreement whatsoever shall be valid unless in
writing signed by the Administrative Agent with the concurrence or at the direction of the Banks
required under Section 10.1 of the Credit Agreement and the Grantor, and then only to the extent in
such writing specifically set forth. All rights and remedies contained in this Security Agreement
or by law afforded shall be cumulative and all shall be available to the Administrative Agent and
the other Secured Parties until the Secured Obligations have been paid in full in cash and all of
the Commitments have been terminated.

ARTICLE VII

SUBORDINATION OF INTERCOMPANY INDEBTEDNESS

     The Grantor agrees that any and all claims of the Grantor against any Subsidiary with respect
to any “Intercompany Indebtedness” (as hereinafter defined), any endorser, obligor or any other
guarantor of all or any part of the Secured Obligations, or against any of its properties shall be
subordinate and subject in right of payment to the prior payment, in full and in cash, of all
Secured Obligations; provided, that, for the avoidance of doubt, so long as no Event of
Default shall be continuing, the Borrower and each Subsidiary may make loans to and receive
payments in the ordinary course with respect to Intercompany Indebtedness (as hereinafter defined)
from each other Subsidiary to the extent not prohibited by the terms of the Credit Agreement and
the other Credit Documents. If all or any part of the assets of any the Borrower or any
Subsidiary, or the proceeds thereof, are subject to any distribution, division or application to
the creditors of party, whether partial or complete, voluntary or involuntary, and whether by
reason of liquidation, bankruptcy, arrangement, receivership, assignment for the benefit of

7

 

creditors or any other action or proceeding, or if the business of any such Loan Party is dissolved
or if substantially all of the assets of any such party are sold, then, and in any such event (such
events being herein referred to as an “Insolvency Event”), any payment or distribution of any kind
or character, either in cash, securities or other property, which shall be payable or deliverable
upon or with respect to any indebtedness of any Subsidiary to the Grantor (“Intercompany
Indebtedness”) shall be paid or delivered directly to the Administrative Agent for application to
the Secured Obligations, due or to become due, until the Secured Obligations shall have been fully
paid and satisfied in cash. Should any payment, distribution, security or instrument or proceeds
thereof be received by the Grantor upon or with respect to the Intercompany Indebtedness after any
Insolvency Event and prior to the satisfaction of all of the Secured Obligations, the Grantor shall
receive and hold the same in trust, as trustee, for the benefit of the Secured Parties, and shall
forthwith deliver the same to the Administrative Agent, for the benefit of the Secured Parties, in
precisely the form received (except for any necessary endorsement or assignment of the Grantor),
for application to the Secured Obligations, due or to become due, until the Secured Obligations
shall have been fully paid and satisfied in cash, and, until so delivered, the same shall be held
in trust by the Grantor as the property of the Secured Parties.

ARTICLE VIII

GENERAL PROVISIONS

     8.1. Secured Party Performance of Grantor’s Obligations. Without having any
obligation to do so, the Administrative Agent may perform or pay any obligation which the Grantor
has agreed to perform or pay in this Security Agreement and the Grantor shall reimburse the
Administrative Agent for any reasonable amounts paid by the Administrative Agent pursuant to this
Section 8.1. The Grantor’s obligation to reimburse the Administrative Agent pursuant to the
preceding sentence shall be an Obligation payable on demand.

     8.2. Authorization for Secured Party to Take Certain Action. The Grantor irrevocably
authorizes the Administrative Agent at any time and from time to time in the sole discretion of the
Administrative Agent and appoints the Administrative Agent as its attorney in fact (i) to contact
and enter into one or more agreements with the issuers of uncertificated securities which are
Collateral and which are Securities or with financial intermediaries holding other Investment
Property as may be necessary or advisable solely to give the Administrative Agent Control over such
Securities or other Investment Property, (ii) following the occurrence and during the continuance
of an Event of Default, to apply the proceeds of any Collateral received by the Administrative
Agent to the Secured Obligations and (iii) to discharge past due taxes, assessments, charges, fees
or Liens on the Collateral (except for such Liens as are specifically permitted hereunder or under
any other Credit Document), and the Grantor agrees to reimburse the Administrative Agent on demand
for any reasonable payment made or any reasonable expense incurred by the Administrative Agent in
connection therewith, provided that this authorization shall not relieve the Grantor of any of its
obligations under this Security Agreement or under the Credit Agreement.

     8.3. Benefit of Agreement. The terms and provisions of this Security Agreement shall
be binding upon and inure to the benefit of the Grantor, the Administrative Agent and the other
Secured Parties and their respective successors and assigns (including all persons who become

8

 

bound as a debtor to this Security Agreement), except that the Grantor shall not have the
right to assign its rights or delegate its obligations under this Security Agreement or any
interest herein, without the prior written consent of the Administrative Agent.

     8.4. Survival of Representations. All representations and warranties of the Grantor
contained in this Security Agreement shall survive the execution and delivery of this Security
Agreement.

     8.5. Taxes and Expenses. Any stamp, documentary or (to the extent provided in the
Credit Agreement) withholding taxes payable or ruled payable by Federal or State authority in
respect of this Security Agreement shall be paid by the Grantor, together with interest and
penalties, if any. The Grantor shall reimburse the Administrative Agent for any and all reasonable
out-of-pocket expenses and internal charges (including reasonable attorneys’, auditors’ and
accountants’ fees and reasonable time charges of attorneys, paralegals, auditors and accountants
who may be employees of the Administrative Agent) paid or incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration, collection and enforcement of
this Security Agreement and in the audit, analysis, administration, collection, preservation or
sale of the Collateral (including the expenses and charges associated with any periodic or special
audit of the Collateral). Any and all costs and expenses incurred by the Grantor in the
performance of actions required pursuant to the terms hereof shall be borne solely by the Grantor.

     8.6. Headings. The title of and section headings in this Security Agreement are for
convenience of reference only, and shall not govern the interpretation of any of the terms and
provisions of this Security Agreement.

     8.7. CHOICE OF LAW. SUBMISSION TO JURISDICTION. THIS SECURITY AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK, BUT OTHERWISE
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). EACH OF THE GRANTOR AND THE ADMINISTRATIVE AGENT
(I) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING IN
NEW YORK CITY IN ANY ACTION ARISING OUT OF ANY CREDIT DOCUMENT, (II) AGREES THAT ALL CLAIMS IN SUCH
ACTION MAY BE DECIDED IN SUCH COURT, (III) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO,
THE DEFENSE OF AN INCONVENIENT FORUM AND (IV) CONSENTS TO THE SERVICE OF PROCESS BY MAIL. A FINAL
JUDGMENT IN ANY SUCH ACTION SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW OR
AFFECT ITS RIGHT TO BRING ANY ACTION IN ANY OTHER COURT. THE GRANTOR AGREES THAT THE
ADMINISTRATIVE AGENT SHALL HAVE THE RIGHT TO PROCEED AGAINST THE GRANTOR OR ITS PROPERTY IN A COURT
IN ANY LOCATION TO ENABLE THE BANKS TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE ADMINISTRATIVE
AGENT OR THE BANKS. THE GRANTOR

9

 

AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE
ADMINISTRATIVE AGENT TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE ADMINISTRATIVE AGENT. THE GRANTOR WAIVES
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE ADMINISTRATIVE AGENT MAY
COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.

     8.8. Indemnity. The Grantor hereby agrees to indemnify the Administrative Agent and
its successors, assigns, agents and employees (each, an “indemnified party”), from and against any
and all liabilities, damages, penalties, suits, costs, and expenses of any kind and nature
(including, without limitation, all expenses of litigation or preparation therefor whether or not
the Administrative Agent is a party thereto) imposed on, incurred by or asserted against the
Administrative Agent, or its successors, assigns, agents and employees, in any way relating to or
arising out of this Security Agreement, or the ownership, delivery, possession, or other
disposition of any Collateral except to the extent that such liabilities, damages, penalties, costs
or expenses were caused by the gross negligence or willful misconduct of such indemnified party.

     8.9. Addresses for Notices. All notices and other communications provided for
hereunder shall be in writing (including facsimile communication) and mailed, telegraphed,
telecopied, telexed, cabled or delivered, if to the Grantor, at its address at One Energy Plaza,
Jackson, Michigan 49201, Attention: James E. Brunner Attention: Laura L. Mountcastle, and if to the
Administrative Agent, at its address specified in the Credit Agreement, or, as to either party, at
such other address as shall be designated by such party in a written notice to the other party.
All such notices and other communications shall, when mailed or telecopied, be effective five days
after when deposited in the mails, or when telecopied.

     8.10. Continuing Security Interest; Assignments under Credit Agreement. This Security
Agreement shall create a continuing security interest in the Collateral and shall (i) remain in
full force and effect until the earlier to occur of (x) the payment in full of all Secured
Obligations now or hereafter existing under the Credit Agreement, whether for principal, interest,
fees, expenses or otherwise, and all other amounts payable under this Security Agreement and the
termination of all of the Commitments or (y) the release by the Administrative Agent of its
security interest in all of the Collateral, (ii) be binding upon the Grantor, its successors and
assigns, and (iii) inure, together with the rights and remedies of the Administrative Agent
hereunder, to the benefit of, and be enforceable by, the Administrative Agent and its successors,
transferees and assigns. Without limiting the generality of the foregoing clause (iii) and Section
8.3 above, any Bank may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or any portion of its
Commitment, the Loans owing to it and any promissory note held by it) to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect thereof granted to such
Bank herein or otherwise, subject, however to the provisions of Sections 10.3, 12.1 and 13.12 of
the Credit Agreement. Upon the earlier to occur of (A) the payment in full of all Secured
Obligations now or hereafter existing under the Credit Agreement, whether for principal, interest,
fees, expenses or otherwise, and all other amounts payable under this Security Agreement and the
termination of all of the Commitments or (B) the release by the Administrative Agent of its
security interest in all of the Collateral, the security interest granted

10

 

hereby shall terminate and all rights to the Collateral shall revert to the Grantor. In
addition, the Administrative Agent shall release any Collateral as permitted or required pursuant
to Section 10.3 of the Credit Agreement. Upon any such termination, the Administrative Agent will,
at the Grantor’s expense, return to the Grantor such of the Collateral as shall not have been sold
or otherwise applied pursuant to the terms hereof and execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.

     8.11. WAIVER OF JURY TRIAL. THE GRANTOR AND THE ADMINISTRATIVE AGENT EACH HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER CREDIT DOCUMENT, OR ANY OTHER INSTRUMENT OR
DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.

[Remainder of page intentionally blank.]

11

 

     IN WITNESS WHEREOF, the Grantor and the Administrative Agent have executed this Security
Agreement as of the date first above written.

	 	 	 	 	 
	 	CMS ENERGY CORPORATION

 	 
	 	By:  	/s/ Laura L. Mountcastle
 	 
	 	 	Name:  	Laura L. Mountcastle 	 
	 	 	Title: Vice President and Treasurer 	 
	 

Signature Page to

Pledge and Security Agreement

(CMD Energy)

 

 

	 	 	 	 
	AGREED AND ACKNOWLEDGED:

BARCLAYS BANK PLC, as Administrative

Agent

 	 
	By:  	/s/ Ann E. Sutton
 	 
	 	Name:  	Ann E. Sutton 	 
	 	Title:  	Director 	 
	 

Signature Page to

Pledge and Security Agreement

(CMD Energy)

 

 

EXHIBIT “A”

List of Pledged Securities and Pledged Instruments

(See Section 3.4 of Security Agreement)

STOCK OWNED BY CMS ENERGY CORPORATION:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Issuer	 	Certificate Number	 	Number of Shares	 	Percentage Ownership Interest
	Consumers Energy Company
	 	 	04	 	 	 	84,108,789	 	 	 	100	%
	 
	INSTRUMENTS OWNED BY CMS ENERGY CORPORATION
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Obligor	 	Amount	 	Interest Rate	 	Maturity
	None
	 	 	 	 	 	 	 	 	 	 	 	 

GENERAL INTANGIBLES AND OTHER SECURITIES OR OTHER INVESTMENT

PROPERTY (CERTIFICATED AND UNCERTIFICATED)

OWNED BY CMS ENERGY CORPORATION:

	 	 	 	 	 	 	 	 	 
	Issuer	 	Description of Collateral	 	Percentage Ownership Interest
	None
	 	 	 	 	 	 	 	 

A-1

 

EXHIBIT “B”

(See Section 3.1 of Security Agreement)

OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED

Secretary of State of Michigan

B-1

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