Document:

exv10w1

 

EXHIBIT 10.1

[EXECUTION COPY]

REVOLVING CREDIT AGREEMENT

among

NISOURCE FINANCE CORP.,

as Borrower,

NISOURCE INC.,

as Guarantor,

LENDERS

Party Hereto,

as Lenders,

DRESDNER BANK, AG, New York and Grand Cayman Branches,

as Administrative Agent,

 

DRESDNER BANK, AG, New York and Grand Cayman Branches,

as Sole Lead Arranger

and

Sole Book Runner

 

Dated as of November 15, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE I

DEFINITIONS
	 
	 	 	 	 	 	 
	SECTION 1.01.

	 	Defined Terms
	 	 	1	 
	SECTION 1.02.

	 	Terms Generally
	 	 	12	 
	SECTION 1.03.

	 	Accounting Terms; GAAP
	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE II

THE CREDITS
	 
	 	 	 	 	 	 
	SECTION 2.01.

	 	Commitments
	 	 	13	 
	SECTION 2.02.

	 	Loans; Requests for Borrowings
	 	 	13	 
	SECTION 2.03.

	 	[Intentionally Omitted]
	 	 	14	 
	SECTION 2.04.

	 	[Intentionally Omitted]
	 	 	14	 
	SECTION 2.05.

	 	Funding of Borrowings
	 	 	14	 
	SECTION 2.06.

	 	[Intentionally Omitted]
	 	 	14	 
	SECTION 2.07.

	 	Mandatory Termination or Reduction of Commitments
	 	 	14	 
	SECTION 2.08.

	 	Mandatory Prepayments
	 	 	14	 
	SECTION 2.09.

	 	Optional Reduction of Commitments
	 	 	15	 
	SECTION 2.10.

	 	Repayment of Loans; Evidence of Debt
	 	 	15	 
	SECTION 2.11.

	 	Optional Prepayment of Loans
	 	 	15	 
	SECTION 2.12.

	 	Fees
	 	 	16	 
	SECTION 2.13.

	 	Interest
	 	 	16	 
	SECTION 2.14.

	 	[Intentionally Omitted]
	 	 	16	 
	SECTION 2.15.

	 	Increased Costs
	 	 	16	 
	SECTION 2.16.

	 	Break Funding Payments
	 	 	18	 
	SECTION 2.17.

	 	Taxes
	 	 	18	 
	SECTION 2.18.

	 	Payments Generally; Pro Rata Treatment; Sharing of Set-Offs
	 	 	19	 
	SECTION 2.19.

	 	Mitigation Obligations; Replacement of Lenders
	 	 	21	 
	 
	 	 	 	 	 	 
	ARTICLE III

CONDITIONS
	 
	 	 	 	 	 	 
	SECTION 3.01.

	 	Conditions Precedent to the Effectiveness of this Agreement
	 	 	22	 
	SECTION 3.02.

	 	Conditions Precedent to Each Loan
	 	 	23	 
	 
	 	 	 	 	 	 
	ARTICLE IV

REPRESENTATIONS AND WARRANTIES
	 
	 	 	 	 	 	 
	SECTION 4.01.

	 	Representations and Warranties of the Credit Parties
	 	 	24	 
	 
	 	 	 	 	 	 
	ARTICLE V

AFFIRMATIVE COVENANTS
	 
	 	 	 	 	 	 
	SECTION 5.01.

	 	Affirmative Covenants
	 	 	26	 

 i 

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE VI

NEGATIVE COVENANTS
	 
	 	 	 	 	 	 
	SECTION 6.01.

	 	Negative Covenants
	 	 	30	 
	ARTICLE VII

FINANCIAL COVENANT

ARTICLE VIII

EVENTS OF DEFAULT
	 
	 	 	 	 	 	 
	SECTION 8.01.

	 	Events of Default
	 	 	34	 
	 
	 	 	 	 	 	 
	ARTICLE IX

THE ADMINISTRATIVE AGENT
	 
	 	 	 	 	 	 
	SECTION 9.01.

	 	The Administrative Agent
	 	 	37	 
	 
	 	 	 	 	 	 
	ARTICLE X

GUARANTY
	 
	 	 	 	 	 	 
	SECTION 10.01.

	 	The Guaranty
	 	 	40	 
	SECTION 10.02.

	 	Waivers
	 	 	41	 
	 
	 	 	 	 	 	 
	ARTICLE XI

MISCELLANEOUS
	 
	 	 	 	 	 	 
	SECTION 11.01.

	 	Notices
	 	 	42	 
	SECTION 11.02.

	 	Waivers; Amendments
	 	 	43	 
	SECTION 11.03.

	 	Expenses; Indemnity; Damage Waiver
	 	 	44	 
	SECTION 11.04.

	 	Successors and Assigns
	 	 	45	 
	SECTION 11.05.

	 	Survival
	 	 	48	 
	SECTION 11.06.

	 	Counterparts; Integration; Effectiveness
	 	 	49	 
	SECTION 11.07.

	 	Severability
	 	 	49	 
	SECTION 11.08.

	 	Right of Setoff
	 	 	49	 
	SECTION 11.09.

	 	Governing Law; Jurisdiction; Consent to Service of Process
	 	 	49	 
	SECTION 11.10.

	 	WAIVER OF JURY TRIAL
	 	 	50	 
	SECTION 11.11.

	 	Headings
	 	 	50	 
	SECTION 11.12.

	 	Confidentiality
	 	 	50	 
	SECTION 11.13.

	 	USA PATRIOT Act
	 	 	51	 

 ii 

 

 

EXHIBITS AND SCHEDULES

	 	 	 
	EXHIBIT A

	 	Form of Assignment and Acceptance
	EXHIBIT B

	 	Form of Opinion of Schiff Hardin LLP
	SCHEDULE 2.01

	 	Lenders and Commitments

 iii 

 

 

     REVOLVING CREDIT AGREEMENT, dated as of November 15, 2006 (this “Agreement”), among
NISOURCE FINANCE CORP., an Indiana corporation, as Borrower (the “Borrower”), NISOURCE
INC., a Delaware corporation (“NiSource”), as Guarantor (the “Guarantor”), the
Lenders (defined below), DRESDNER BANK, AG, NEW YORK AND GRAND CAYMAN BRANCHES, as the Sole Lead
Arranger and Sole Book Runner (the “Arranger”) and DRESDNER BANK, AG, NEW YORK AND GRAND
CAYMAN BRANCHES, as the administrative agent for the Lenders (in such capacity, the
“Administrative Agent”).

W I T N E S S E T H:

     WHEREAS, the parties are willing to enter into this Agreement on the terms and subject to the
conditions herein set forth.

     NOW, THEREFORE, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

     SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:

     “Administrative Agent” is defined in the preamble.

     “Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

     “Affiliate” means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

     “Aggregate Commitments” means the aggregate amount of the Commitments of all Lenders,
as in effect from time to time. As of the date hereof, the Aggregate Commitments equal
$300,000,000.

     “Alternate Base Rate” means, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

     “Applicable Percentage” means, with respect to any Lender, the percentage of the
Aggregate Commitments represented by such Lender’s Commitment. If the Commitments have terminated
or expired, the Applicable Percentages shall be determined based upon the Commitments most recently
in effect, giving effect to any assignments.

     “Arranger” is defined in the preamble.

 

 

     “Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section
11.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other
form approved by the Administrative Agent.

     “Beneficiary” has the meaning set forth in Section 10.01.

     “Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

     “Borrower” is defined in the preamble.

     “Borrowing” means Loans made on the same date and, as to which a single Interest
Period is in effect.

     “Borrowing Request” means a request by the Borrower for a Loan in accordance with
Section 2.02.

     “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 and any day on
which banks are not open for dealings in dollar deposits in the London interbank market.

     “Capital Lease” means, as to any Person, any lease of real or personal property in
respect of which the obligations of the lessee are required, in accordance with GAAP, to be
capitalized on the balance sheet of such Person.

     “Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all equivalent
ownership interests in a Person other than a corporation (including all common stock and preferred
stock and partnership, membership and joint venture interests in a Person), and any and all
warrants, rights or options to purchase any of the foregoing.

     “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act, 42, U.S.C. Section
9601 et seq., as amended.

     “Change of Control” means (a) any “person” or “group” within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended, shall become the “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of more
than 50% of the then outstanding voting Capital Stock of the Guarantor; (b) Continuing Directors
shall cease to constitute at least a majority of the directors constituting the Board of Directors
of the Guarantor, (c) a consolidation or merger of the Guarantor shall occur after which the
holders of the outstanding voting Capital Stock of the Guarantor immediately prior thereto hold
less than 50% of the outstanding voting Capital Stock of the surviving entity; (d) more than 50% of
the outstanding voting Capital Stock of the Guarantor shall be transferred to an entity of which
the Guarantor owns less than 50% of the outstanding voting Capital Stock; (e) there shall occur a
sale of all or substantially all of the assets of the Guarantor, or (f) the
Borrower, NIPSCO or Columbia shall cease to be a Wholly-Owned

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Subsidiary of the Guarantor (except to the extent otherwise permitted under clauses (i), (ii), (iii) or
(iv) of Section 6.01(b)).

     “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement; (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender (or, for purposes of Section 2.15(b), by any lending office of
such Lender or by such Lender’s holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or issued after the
date of this Agreement.

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

     “Columbia” means Columbia Energy Group, a Delaware corporation.

     “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Loans hereunder, as such commitment may be (a) reduced from time to time or terminated pursuant to
Section 2.07 and (b) reduced or increased from time to time pursuant to assignments by or
to such Lender pursuant to Section 11.04. The initial amount of each Lender’s Commitment
is (x) the amount set forth on Schedule 2.01 opposite such Lender’s name, or (y) the amount
set forth in the Assignment and Acceptance pursuant to which such Lender shall have assumed its
Commitment, as applicable.

     “Commitment Termination Date” means the earliest of (a) November 15, 2006 (if the
Loans have not been made on or prior to such date); (b) November 15, 2006 (immediately after the
making of the Loans on such date) and (c) the date on which any Commitments are terminated pursuant
to Section 8.1 or otherwise. Upon the occurrence of any event described above, the
Commitments shall terminate automatically and without any further action.

     “Consolidated Capitalization” means the sum of (a) Consolidated Debt; (b) consolidated
common equity of the Guarantor and its Consolidated Subsidiaries determined in accordance with
GAAP, and (c) the aggregate liquidation preference of preferred stocks (other than preferred stocks
subject to mandatory redemption or repurchase) of the Guarantor and its Consolidated Subsidiaries
upon involuntary liquidation.

     “Consolidated Debt” means, at any time, the Indebtedness of the Guarantor and its
Consolidated Subsidiaries that would be classified as debt on a balance sheet of the Guarantor
determined on a consolidated basis in accordance with GAAP.

     “Consolidated Subsidiary” means, on any date, each Subsidiary of the Guarantor the
accounts of which, in accordance with GAAP, would be consolidated with those of the Guarantor in
its consolidated financial statements if such statements were prepared as of such date.

     “Contingent Guaranty” means a direct or contingent liability in respect of a Project
Financing (whether incurred by assumption, guaranty, endorsement or otherwise) that either (a) is
limited to guarantying performance of the completion of the Project that is financed by such
Project Financing or (b) is contingent upon, or the obligation to pay or perform under which

3

 

is contingent upon, the occurrence of any event other than failure of the primary obligor to pay
upon final maturity (whether by acceleration or otherwise).

     “Continuing Directors” means all members of the board of directors of the Guarantor
who (a) have held office continually since the Effective Date, and (b) were elected as directors
after the Effective Date and whose nomination for election was approved by a vote of at least 50%
of the Continuing Directors.

     “Contractual Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which such Person is a party
or by which it or any of its property is bound.

     “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.

     “Credit Documents” means (a) this Agreement, any promissory notes executed pursuant to
Section 2.10, and any Assignment and Acceptances; (b) any certificates, opinions and other
documents required to be delivered pursuant to Section 3.01, and (c) any other documents
delivered by a Credit Party pursuant to or in connection with any one or more of the foregoing.

     “Credit Party” means each of the Borrower and the Guarantor, and “Credit
Parties” means the Borrower and the Guarantor, collectively.

     “DB” means Dresdner Bank AG, or any of its Affiliates.

     “Debt for Borrowed Money” means, as to any Person, without duplication; (a) all
obligations of such Person for borrowed money; (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments; (c) all Capital Lease obligations of such Person,
and (d) all obligations of such Person under synthetic leases, tax retention operating leases,
off-balance sheet loans or other off-balance sheet financing products that, for tax purposes, are
considered indebtedness for borrowed money of the lessee but are classified as operating leases
under GAAP.

     “Debt to Capitalization Ratio” means, at any time, the ratio of Consolidated Debt to
Consolidated Capitalization.

     “Default” means any event or condition that constitutes an Event of Default or that,
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

     “Dollars” or “$” refers to lawful money of the United States of America.

     “Effective Date” means the date on which this Agreement has been executed and
delivered by each of the Borrower, the Guarantor, the Arranger, the initial Lenders and the
Administrative Agent.

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     “Environmental Laws” means any and all foreign, federal, state, local or municipal
laws (including, common laws), rules, orders, regulations, statutes, ordinances, codes, decrees,
judgments, awards, writs, injunctions, requirements of any Governmental Authority or other
requirements of law regulating, relating to or imposing liability or standards of conduct
concerning, pollution, waste, industrial hygiene, occupational safety or health, the presence,
transport, manufacture, generation, use, handling, treatment, distribution, storage, disposal or
release of Hazardous Substances, or protection of human health, plant life or animal life, natural
resources or the environment, as now or at any time hereafter in effect.

     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Guarantor or any of its Subsidiaries 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 Materials; (c) exposure to any Hazardous Materials; (d) the
release or threatened release of any Hazardous Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.

     “ERISA Affiliate” means any Person who, for purposes of Title IV of ERISA, is a member
of the Guarantor’s controlled group, or under common control with the Guarantor, within the meaning
of Section 414 of the Code and the regulations promulgated and rulings issued thereunder.

     “ERISA Event” means (a) a reportable event, within the meaning of Section 4043 of
ERISA, unless the 30-day notice requirement with respect thereto has been waived by the PBGC; (b)
the provision by the administrator of any Plan of a notice of intent to terminate such Plan,
pursuant to Section 4041(a)(2) and 4041(c) of ERISA (including any such notice with respect to a
plan amendment referred to in Section 4041(e) of ERISA); (c) the withdrawal by the Guarantor or an
ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (d) the failure by the Guarantor or any ERISA
Affiliate to make a payment to a Plan required under Section 302(f)(1) of ERISA, which Section
imposes a lien for failure to make required payments; (e) the adoption of an amendment to a Plan
requiring the provision of security to such Plan, pursuant to Section 307 of ERISA, or (f) the
institution by the PBGC of proceedings to terminate a Plan, pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition which may reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer,
a Plan.

     “Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of
the Board, as in effect from time to time.

     “Eurodollar Rate Reserve Percentage” of any Lender for the Interest Period for any
Loan means the reserve percentage applicable during such Interest Period (or if more than one such
percentage shall be so applicable, the daily average of such percentages for those days in such

5

 

Interest Period during which any such percentage shall be so applicable) under regulations
issued from time to time by the Board (or any successor) for determining the maximum reserve
requirement (including, any emergency, supplemental or other marginal reserve requirement) for such
Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period.

     “Event of Default” has the meaning assigned to such term in Article VIII.

     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any
other recipient of any payment to be made by or on account of any obligation of the Borrower
hereunder; (a) income or franchise taxes imposed on (or measured by) its net income or net earnings
by the United States of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any Lender, in which its
applicable lending office is located and (b) in case of a Foreign Lender (other than an assignee
pursuant to a request by the Borrower under Section 2.19(d)), any withholding tax that (i)
is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement, except to the extent that such Foreign Lender’s assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the Borrower with respect
to such withholding tax pursuant to Section 2.17(a) or (ii) is attributable to such Foreign
Lender’s failure to comply with Section 2.17(e) when legally able to do so.

     “Existing Agreement” means the Amended and Restated Credit Agreement, dated as of July
7, 2006 (as amended or otherwise modified), among the Borrower, the Guarantor, certain financial
institutions as lenders and Barclays Bank PLC, as Administrative Agent and LC Bank.

     “Exposure” means, with respect to any Lender at any time, such Lender’s Outstanding
Loans.

     “Facility Fee” has the meaning set forth in Section 2.12.

     “Federal Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. § 101 et
seq.) as now or hereafter in effect, or any successor statute.

     “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 Administrative Agent from three Federal funds brokers of recognized standing selected by it.

     “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which the Borrower is located. For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.

6

 

     “GAAP” means generally accepted accounting principles in the United States of America
consistent with those applied in the preparation of the financial statements referred to in
Section 4.01(e).

     “Governmental Authority” means the government of the United States of America, any
other nation, or any political subdivision of the United States of America or any other nation,
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 and includes, in any event, an
“Independent System Operator” or any entity performing a similar function.

     “Granting Lender” has the meaning set forth in Section 11.04.

     “Guarantor” is defined in the preamble.

     “Guaranty” means the guaranty of the Guarantor pursuant to Article X of this
Agreement.

     “Hazardous Materials” means any asbestos; flammables; volatile hydrocarbons;
industrial solvents; explosive or radioactive materials; hazardous wastes; toxic substances;
liquefied natural gas; natural gas liquids; synthetic gas; oil, petroleum, or related materials and
any constituents, derivatives, or byproducts thereof or additives thereto, or any other material,
substance, waste, element or compound (including any product) regulated pursuant to any
Environmental Law, including, substances defined as “hazardous substances,” “hazardous materials,”
“contaminants,” “pollutants,” “hazardous wastes,” “toxic substances,” “solid waste,” or “extremely
hazardous substances” in (i) CERCLA, (ii) the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq., (iii) the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq., (iv) the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq., (v)
the Clean Air Act, 42 U.S.C. Section 7401 et seq., (vi) the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq., (vii) the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., or (viii)
foreign, state, local or municipal law, in each case, as may be amended from time to time.

     “Indebtedness” of any Person means (without duplication) (a) Debt for Borrowed Money;
(b) obligations of such Person to pay the deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of business which are not overdue; (c) all
obligations, contingent or otherwise, of such Person in respect of any letters of credit, bankers’
acceptances or interest rate, currency or commodity swap, cap or floor arrangements; (d) all
indebtedness of others secured by (or for which the holder of such indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the indebtedness secured thereby has been assumed; (e) all amounts payable
by such Person in connection with mandatory redemptions or repurchases of preferred stock, and (f)
obligations of such Person under direct or indirect guarantees in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds referred to in
clauses (a) through (e) above.

     “Indemnified Taxes” means Taxes other than Excluded Taxes.

     “Indemnitee” has the meaning set forth in Section 11.03.

7

 

     “Index Debt” means the senior unsecured long-term debt securities of the Borrower,
without third-party credit enhancement provided by a Person other than the Guarantor.

     “Information” has the meaning set forth in Section 11.12.

     “Insufficiency” means, with respect to any Plan, the amount, if any, by which the
present value of all vested and unvested accrued benefits under such Plan exceeds the fair market
value of assets allocable to such benefits, all determined as of the then most recent valuation
date for such Plan using actuarial assumptions used in determining such Plan’s normal cost for
purposes of Section 412(b)(2)(A) of the Code.

     “Interest Payment Date” means the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and the Termination Date.

     “Interest Period” means the period commencing on the date of such Borrowing and ending
on the numerically corresponding day in the calendar month that is three months thereafter;
provided that (a) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest Period shall end on
the next preceding Business Day, and (b) any Interest Period that commences on the last Business
Day of a calendar month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made.

     “Lenders” means the Persons listed on Schedule 2.01, including any such Person
identified thereon or in the signature pages hereto as the Arranger, and any other Person that
shall have become a party hereto pursuant to an Assignment and Acceptance, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and Acceptance.

     “LIBO Rate” means, with respect to any Borrowing for any Interest Period, the rate
appearing on Telerate Page 3750 (or on any successor or substitute page of such service, or any
successor to or substitute for such service, providing rate quotations comparable to those
currently provided on such page of such service, as determined by the Administrative Agent from
time to time for purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not available at such time for
any reason, then the “LIBO Rate” with respect to such Borrowing for such Interest Period
shall be the rate at which Dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately 11:00 a.m., London
time, the day of the commencement of such Interest Period.

     “Lien” has the meaning set forth in Section 6.01(a).

     “Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.

8

 

     “Margin Stock” means margin stock within the meaning of Regulations U and X issued by
the Board.

     “Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, condition (financial or otherwise) or prospects of the Guarantor and its Subsidiaries
taken as a whole; (b) the validity or enforceability of any of Credit Documents or the rights,
remedies and benefits available to the Administrative Agent and the Lenders thereunder, or (c) the
ability of the Borrower or the Guarantor to consummate the Transactions.

     “Material Subsidiary” means at any time the Borrower, NIPSCO, Columbia, and each
Subsidiary of the Guarantor, other than the Borrower, NIPSCO and Columbia, in respect of which:

     (a) the Guarantor’s and its other Subsidiaries’ investments in and advances to such
Subsidiary and its Subsidiaries exceed 10% of the consolidated total assets of the Guarantor
and its Subsidiaries taken as a whole, as of the end of the most recent fiscal year, or

     (b) the Guarantor’s and its other Subsidiaries’ proportionate interest in the total
assets (after intercompany eliminations) of such Subsidiary and its Subsidiaries exceeds 10%
of the consolidated total assets of the Guarantor and its Subsidiaries as of the end of the
most recent fiscal year, or

     (c) the Guarantor’s and its other Subsidiaries’ equity in the income from continuing
operations before income taxes, extraordinary items and cumulative effect of a change in
accounting principles of such Subsidiary and its Subsidiaries exceeds 10% of the
consolidated income of the Guarantor and its Subsidiaries for the most recent fiscal year.

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

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

     “Multiple Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, which (a) is maintained for employees of the Borrower or an ERISA Affiliate
and at least one Person other than the Borrower and its ERISA Affiliates, or (b) was so maintained
and in respect of which the Borrower or an ERISA Affiliate could have liability under Section 4064
or 4069 of ERISA in the event that such plan has been or were to be terminated.

     “NIPSCO” means Northern Indiana Public Service Company, an Indiana corporation.

     “Non-Recourse Debt” means Indebtedness of the Guarantor or any of its Subsidiaries
which is incurred in connection with the acquisition, construction, sale, transfer or other
disposition of specific assets, to the extent recourse, whether contractual or as a matter of law,
for which non-payment of such Indebtedness is limited (a) to such assets, or (b) if such assets are

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(or are to be) held by a Subsidiary formed solely for such purpose, to such Subsidiary or the
Capital Stock of such Subsidiary.

     “Obligations” means all amounts, direct or indirect, contingent or absolute, of every
type or description, and at any time existing and whenever incurred (including, after the
commencement of any bankruptcy proceeding), owing to the Administrative Agent or any Lender
pursuant to the terms of this Agreement or any other Credit Document.

     “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.

     “Outstanding Loans” means, as to any Lender at any time, the aggregate principal
amount of all Loans made or maintained by such Lender then outstanding.

     “Participant” has the meaning set forth in Section 11.04.

     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.

     “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.

     “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

     “Prime Rate” means the rate of interest per annum publicly announced
or established from time to time by the Administrative Agent as its prime or base 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.

     “Project” means an energy or power generation, transmission or distribution facility
(including a thermal energy generation, transmission or distribution facility and an electric power
generation, transmission or distribution facility (including a cogeneration facility)), a gas
production, transportation or distribution facility, or a minerals extraction, processing or
distribution facility, together with (a) all related electric power transmission, fuel supply and
fuel transportation facilities and power supply, thermal energy supply, gas supply, minerals supply
and fuel contracts; (b) other facilities, services or goods that are ancillary, incidental,
necessary or reasonably related to the marketing, development, construction, management, servicing,
ownership or operation of such facility; (c) contractual arrangements with customers, suppliers and
contractors in respect of such facility, and (d) any infrastructure facility related to such
facility, including for the treatment or management of waste water or the treatment or remediation
of waste, pollution or potential pollutants.

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     “Project Financing” means Indebtedness incurred by a Project Financing Subsidiary to
finance (a) the development and operation of the Project such Project Financing Subsidiary was
formed to develop, or (b) activities incidental thereto; provided that such Indebtedness
does not include recourse to the Guarantor or any of its other Subsidiaries other than (x) recourse
to the Capital Stock in any such Project Financing Subsidiary, and (y) recourse pursuant to a
Contingent Guaranty.

     “Project Financing Subsidiary” means any Subsidiary of the Guarantor (a) (i) that is
not a Material Subsidiary, and (ii) whose principal purpose is to develop a Project and activities
incidental thereto (including the financing and operation of such Project), or to become a partner,
member or other equity participant in a partnership, limited liability company or other entity
having such a principal purpose, and (b) substantially all the assets of which are limited to the
assets relating to the Project being developed or Capital Stock in such partnership, limited
liability company or other entity (and substantially all of the assets of any such partnership,
limited liability company or other entity are limited to the assets relating to such Project);
provided that such Subsidiary incurs no Indebtedness other than in respect of a Project
Financing.

     “Register” has the meaning set forth in Section 11.04.

     “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.

     “Required Lenders” means Lenders having more than 50% in aggregate amount of the
Commitments, or if the Commitments shall have been terminated, of the Total Outstanding Principal.

     “Responsible Officer” of a Credit Party means any of (a) the President, the chief
financial officer, the chief accounting officer and the Treasurer of such Credit Party, and (b) any
other officer of such Credit Party whose responsibilities include monitoring compliance with this
Agreement.

     “S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill Companies,
Inc., and any successor thereto.

     “SPFV” has the meaning set forth in Section 11.04.

     “Subsidiary” means, with respect to any Person, any corporation or other entity of
which at least a majority of the outstanding shares of stock or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of the board of directors or other
managers of such corporation or other entity (irrespective of whether or not at the time stock or
other equity interests of any other class or classes of such corporation or other entity shall have
or might have voting power by reason of the happening of any contingency) is at the time directly
or indirectly owned or Controlled by such Person or one or more of the Subsidiaries of such Person.

     “Substantial Subsidiaries” has the meaning set forth in Section 8.01.

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     “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority, including any interest,
penalties and additions to tax imposed thereon or in connection therewith.

     “Termination Date” means the earliest of (a) February 15, 2007, or (b) the date upon
which the Commitments are terminated pursuant to Section 8.1 or otherwise.

     “Total Outstanding Principal” means the aggregate amount of the Outstanding Loans of
all Lenders.

     “Transactions” means the execution, delivery and performance by the Borrower and the
Guarantor of this Agreement and the Borrowing of Loans hereunder.

     “Upfront Fee” has the meaning set forth in Section 2.12.

     “Utility Subsidiary” means a Subsidiary of the Guarantor that is subject to regulation
by a Governmental Authority (federal, state or otherwise) having authority to regulate utilities,
and any Wholly-Owned Subsidiary thereof.

     “Wholly-Owned Subsidiary” means, with respect to any Person, any corporation or other
entity of which all of the outstanding shares of stock or other ownership interests in which, other
than directors’ qualifying shares (or the equivalent thereof), are at the time directly or
indirectly owned or Controlled by such Person or one or more of the Subsidiaries of such Person.

     “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Sections
4201, 4203 and 4205 of ERISA.

     SECTION 1.02. Terms Generally. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “or” shall not be exclusive. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires otherwise (a) 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, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements or modifications
set forth herein); (b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns; (c) 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; (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, and (e) 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. The terms “knowledge of”, “awareness of”
and “receipt of notice of” in relation to a Credit Party, and other similar expressions, mean
knowledge of, awareness of, or receipt of notice by, a Responsible Officer of such Credit Party.

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     SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the Administrative Agent
that the Borrower requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the Effective Date in GAAP or in the application thereof on the operation of
such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP or in the application thereof, then such
provision shall be interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.

ARTICLE II

THE CREDITS

     SECTION 2.01. Commitments. (a) Subject to the terms and conditions set forth
herein, each Lender agrees to make Loans to the Borrower in a single Borrowing (on a day which
shall be a Business Day) occurring on or prior to the Commitment Termination Date in an aggregate
principal amount that will not result in (i) such Lender’s Exposure exceeding such Lender’s
Commitment or (ii) the sum of the Exposures of all of the Lenders exceeding the Aggregate
Commitments.

     (b) Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow the Loans. No amounts paid or prepaid with respect to the
Loans may be reborrowed.

     SECTION 2.02. Loans; Requests for Borrowings. (a) Each Loan shall be made as part
of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans
as required.

     (b) Each Lender at its option may make any Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise of
such option shall not affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Agreement.

     (c) At the commencement of each Interest Period for any Borrowing, such Borrowing shall
be in an aggregate amount that is an integral multiple of $5,000,000 and not less than
$10,000,000 and there shall not at any time be more than one Loan outstanding under this
Agreement.

     (d) To request a Loan, the Borrower shall notify the Administrative Agent of such
request by telephone not later than 11:00 a.m., New York City time, three Business Days
before the date of the proposed Borrowing. Each such telephonic Borrowing

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Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form approved by
the Administrative Agent and signed by the Borrower. Each such telephonic and written
Borrowing Request shall specify the following information:

     (i) the aggregate amount of the requested Borrowing, and

     (ii) the date of such Borrowing, which shall be a Business Day;

     Promptly following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.

     SECTION 2.03. [Intentionally Omitted].

     SECTION 2.04. [Intentionally Omitted].

     SECTION 2.05. Funding of Borrowings. (a) Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of immediately available funds
by 3:00 p.m., New York City time, to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders. The Administrative Agent will make
such Loans available to the Borrower by promptly crediting the amounts so received, in like funds,
to an account established and maintained by the Borrower at the Administrative Agent’s office in
New York City.

     (b) Unless the Administrative Agent shall have received notice from a Lender prior to
the proposed time of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may
assume that such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has not in
fact made its share of the applicable Borrowing available to the Administrative Agent, then
the applicable Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of such Lender, the Federal Funds
Effective Rate or (ii) in the case of the Borrower, the interest rate applicable to such
Borrowing. If such Lender pays such amount to the Administrative Agent, then such amount
shall constitute such Lender’s Loan included in such Borrowing.

     SECTION 2.06. [Intentionally Omitted].

     SECTION 2.07. Mandatory Termination or Reduction of Commitments. Unless previously
terminated, the Commitments shall terminate on the Commitment Termination Date.

     SECTION 2.08. Mandatory Prepayments. (a) If at any time the Total Outstanding
Principal exceeds the Aggregate Commitments then in effect for any reason whatsoever, the

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Borrower shall prepay Loans in such aggregate amount (together with accrued interest thereon
to the extent required by Section 2.13) as shall be necessary so that, after giving effect
to such prepayment, the Total Outstanding Principal does not exceed the Aggregate Commitments.

     (b) Each prepayment of Loans pursuant to this Section 2.08 shall be accompanied
by the Borrower’s payment of any amounts payable under Section 2.16 in connection
with such prepayment. Prepayments of Loans shall be applied ratably to the Loans so
prepaid.

     SECTION 2.09. Optional Reduction of Commitments. The Borrower may not voluntarily
terminate, or reduce, the Commitments at any time.

     SECTION 2.10. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of each Lender the then
unpaid principal amount of each Loan on the Termination Date.

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

     (c) The Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder and (iii)
the amount of any sum received by the Administrative Agent hereunder for the account of the
Lenders and each Lender’s share thereof.

     (d) The entries made in the accounts maintained pursuant to paragraph (b) or
(c) of this Section shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrower to repay the Loans in accordance with the terms of
this Agreement.

     (e) Any Lender may request that Loans made by it be evidenced by a promissory note. In
such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times (including
after assignment pursuant to Section 11.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such promissory
note is a registered note, to such payee and its registered assigns).

     SECTION 2.11. Optional Prepayment of Loans. The Borrower may not make any voluntary
repayment or prepayment of any Borrowing in whole or in part at any time prior to the Termination
Date.

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     SECTION 2.12. Fees. (a) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a facility fee (each a “Facility Fee”), which shall accrue at
the rate of 0.375% per annum on the daily amount of the Commitment of such Lender (whether used or
unused) during the period from and including the Effective Date to but excluding the date set forth
in clause (a) of the definition of “Termination Date.” Accrued Facility Fees shall be
payable in arrears on the last day of December and on the Termination Date, commencing on the first
such date to occur after the Effective Date. All Facility Fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).

     (b) The Borrower agrees to pay to the Administrative Agent for the account of the
Lenders an upfront fee (the “Upfront Fee”) in the aggregate amount of $150,000,
payable in full on the Effective Date.

     (c) All fees payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution to the Lenders. Fees due and paid shall
not be refundable under any circumstances.

     SECTION 2.13. Interest. (a) The Loans shall bear interest at a rate per annum equal
to the LIBO Rate for a three-month Interest Period.

     (b) Notwithstanding the foregoing, if any principal of or interest on any Loan or any
fee or other amount payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest,
after as well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided above
or (ii) in the case of any other amount, 2% plus the Alternate Base Rate as provided above.

     (c) Accrued interest on each Loan shall be payable in arrears on each Interest Payment
Date for such Loan; provided that (i) interest accrued pursuant to paragraph
(b) of this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) all accrued interest shall be
payable upon termination of the Commitments.

     (d) All interest hereunder shall be computed on the basis of a year of 360 days, and in
each case shall be payable for the actual number of days elapsed (including the first day
but excluding the last day). The applicable LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest error.

     SECTION 2.14. [Intentionally Omitted].

     SECTION 2.15. Increased Costs. (a) If any Change in Law shall:

     (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by,

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any Lender (except any such reserve requirement described in paragraph (e) of
this Section), or

     (ii) impose on any Lender or the London interbank market any other condition affecting
this Agreement or Loans made by such Lender or participation therein, and the result of any
of the foregoing shall be to increase the cost to such Lender of making or maintaining any
Loan and participation interests therein (or of maintaining its obligation to make any such
Loan) or to reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or otherwise), then the Borrower will pay to such Lender, as
the case may be, such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.

     (b) If any Lender determines that any Change in Law regarding capital requirements has
or would have the effect of reducing the rate of return on such Lender’s capital or on the
capital of its holding company, if any, as a consequence of this Agreement to a level below
that which such Lender or its holding company could have achieved but for such Change in Law
(taking into consideration its policies and the policies of its holding company with respect
to capital adequacy), then from time to time the Borrower will pay to such Lender, as the
case may be, such additional amount or amounts as will compensate it or its holding company
for any such reduction suffered.

     (c) A certificate of a Lender, as the case may be, setting forth the amount or amounts
necessary to compensate it or its holding company as specified in paragraph (a) or
(b) of this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay the amount shown as due on any such
certificate within 10 days after receipt thereof.

     (d) Failure or delay on the part of any Lender to demand compensation pursuant to this
Section shall not constitute a waiver of its right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender pursuant to
this Section for any increased costs or reductions incurred more than ninety days prior to
the date that such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of its intention to claim compensation therefor;
provided, further that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the ninety day period referred to above shall be
extended to include the period of retroactive effect thereof.

     (e) The Borrower shall pay (without duplication as to amounts paid under this
Section 2.15) to each Lender, so long as such Lender shall be required under
regulations of the Board to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, additional interest on the unpaid
principal amount of each Loan of such Lender, from the date of such Loan until such
principal amount is paid in full, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (i) the LIBO Rate for the Interest Period for such Loan
from (ii) the rate obtained by dividing such LIBO Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period, payable on
each date on which interest is payable on such Loan. Such additional interest determined

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by such Lender and notified to the Borrower and the Administrative Agent, accompanied
by the calculation of the amount thereof, shall be conclusive and binding for all purposes
absent manifest error.

     SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default); (b) the failure to borrow or prepay any Loan on the
date specified in any notice delivered pursuant hereto, or (c) the assignment of any Loan other
than on the last day of the Interest Period applicable thereto as a result of a request by the
Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall compensate
each Lender for the loss, cost and expense attributable to such event. In the case of a Loan, the
loss to any Lender attributable to any such event shall be deemed to include an amount reasonably
determined by such Lender to be equal to the excess, if any, of (x) the amount of interest that
such Lender would pay for a deposit equal to the principal amount of such Loan for the period from
the date of such payment, failure or assignment to the last day of the then current Interest Period
for such Loan (or, in the case of a failure to borrow, the duration of the Interest Period that
would have resulted from such borrowing) if the interest rate payable on such deposit were equal to
the LIBO Rate for such Interest Period, over (y) the amount of interest that such Lender would earn
on such principal amount for such period if such Lender were to invest such principal amount for
such period at the interest rate that would be bid by such Lender (or an affiliate of such Lender)
for dollar deposit from other banks in the eurodollar market at the commencement of such period. A
certificate of any Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

     SECTION 2.17. Taxes. (a) Any and all payments by or on account of any obligation of
the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified
Taxes or Other Taxes; provided that if any Credit Party shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender (as the case may be)
receives an amount equal to the sum it would have received had no such deductions been made, (ii)
such Credit Party shall make such deductions and (iii) such Credit Party shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable law.

     (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

     (c) The Borrower shall indemnify the Administrative Agent and each Lender, within 10
days after written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (and for any Taxes imposed or asserted on or attributable to amounts payable under
this Section) paid by the Administrative Agent, or such Lender, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.

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A certificate as to the amount of such payment or liability delivered to the Borrower by
a Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender, shall
be conclusive absent manifest error.

     (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by a
Credit Party to a Governmental Authority, such Credit Party shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Administrative Agent.

     (e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the laws of the jurisdiction in which the Borrower or the Guarantor is
located, or any treaty to which such jurisdiction is a party, with respect to payments under
this Agreement shall deliver to the Borrower (with an additional original or a photocopy, as
required under applicable rules and procedures, to the Administrative Agent), at the time or
times prescribed by applicable law or reasonably requested by the Borrower, such properly
completed and executed documentation prescribed by applicable law as shall be necessary to
permit such payments to be made without withholding or at a reduced rate. Further, in those
circumstances as shall be necessary to allow payments hereunder to be made free of (or at a
reduced rate of) withholding tax, each other Lender and the Administrative Agent, as
applicable, shall deliver to Borrower such documentation as the Borrower may reasonably
request in writing.

     (f) Except with the prior written consent of the Administrative Agent, all amounts
payable by a Credit Party hereunder shall be made by such Credit Party in its own name and
for its own account from within the United States by a payor that is a United States person
(within the meaning of Section 7701 of the Code).

     SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-Offs. (a) The
Borrower shall make each payment required to be made by it hereunder (whether of principal,
interest or fees, or under Section 2.15, 2.16, 2.17 or 11.03, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on any date may, in
the discretion of the Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at 1301 Avenue of the Americas, New York, New York, except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 11.03 shall be
made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the period of such
extension. All payments hereunder shall be made in Dollars.

     (b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees then due

19

 

hereunder, such funds shall be applied (i) first, to pay interest and fees then
due hereunder, ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, to pay principal then
due hereunder, ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.

     (c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of the
Obligations owing to it resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of such Obligations and accrued interest thereon than the proportion
received by any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Loans of, or other Obligations owing
to, other Lenders to the extent necessary so that the benefit of all such payments shall be
shared by the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans or other Obligations, as applicable;
provided that (i) if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made by the
Borrower pursuant to and in accordance with the express terms of this Agreement or any
payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans to any assignee or participant, other than to the
Guarantor, the Borrower or any other Subsidiary or Affiliate of the Guarantor (as to which
the provisions of this paragraph shall apply). The Borrower and the Guarantor consent to
the foregoing and agree, to the extent they may effectively do so under applicable law, that
any Lender acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower and the Guarantor rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the Borrower or the
Guarantor in the amount of such participation.

     (d) Unless the Administrative Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Administrative Agent for the account of the
Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders the amount due. In such event,
if the Borrower has not in fact made such payment, then each of the Lenders severally agrees
to repay to the Administrative Agent forthwith on demand the amount so distributed to such
Lender with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative Agent, at the
Federal Funds Effective Rate.

     (e) If any Lender shall fail to make any payment required to be made by it pursuant to
Sections 2.05(b) or 2.18(d), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully paid.

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     SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) Any Lender
claiming reimbursement or compensation from the Borrower under either of Sections 2.15 and
2.17 for any losses, costs or other liabilities shall use reasonable efforts (including,
reasonable efforts to designate a different lending office of such Lender for funding or booking
its Loans or to assign its rights and obligations hereunder to another of its offices, branches or
affiliates) to mitigate the amount of such losses, costs and other liabilities, if such efforts can
be made and such mitigation can be accomplished without such Lender suffering (i) any economic
disadvantage for which such Lender does not receive full indemnity from the Borrower under this
Agreement or (ii) otherwise be disadvantageous to such Lender.

     (b) In determining the amount of any claim for reimbursement or compensation under
Sections 2.15 and 2.17, each Lender will use reasonable methods of
calculation consistent with such methods customarily employed by such Lender in similar
situations.

     (c) Each Lender will notify the Borrower either directly or through the Administrative
Agent of any event giving rise to a claim under Section 2.15 or Section 2.17
promptly after the occurrence thereof which notice shall be accompanied by a certificate of
such Lender setting forth in reasonable detail the circumstances of such claim.

     (d) If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, or if any Lender defaults in its
obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions contained in
Section 11.04), all its interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (i) the Borrower shall have received
the prior written consent of the Administrative Agent, which consent, shall not unreasonably
be withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a reduction in such compensation or payments. A Lender shall not
be required to make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.

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ARTICLE III

CONDITIONS

     SECTION 3.01. Conditions Precedent to the Effectiveness of this Agreement. This
Agreement shall not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 11.02).

     (a) The Administrative Agent (or its counsel) shall have received from each party
thereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement.

     (b) The Lenders, the Administrative Agent, the Arrangers and each other Person entitled
to the payment of fees or the reimbursement or payment of expenses, pursuant hereto, shall
have received all fees required to be paid by the Effective Date, and all expenses for which
invoices have been presented on or before the Effective Date.

     (c) The Administrative Agent shall have received certified copies of the resolutions of
the Board of Directors of each of the Guarantor and the Borrower approving this Agreement,
and of all documents evidencing other necessary corporate action and governmental and
regulatory approvals with respect to this Agreement.

     (d) The Administrative Agent shall have received from each of the Borrower and the
Guarantor, to the extent generally available in the relevant jurisdiction, a copy of a
certificate or certificates of the Secretary of State (or other appropriate public official)
of the jurisdiction of its incorporation, dated reasonably near the Effective Date, (i)
listing the charters of the Borrower or the Guarantor, as the case may be, and each
amendment thereto on file in such office and certifying that such amendments are the only
amendments to the Borrower’s or the Guarantor’s charter, as the case may be, on file in such
office, and (ii) stating, in the case of the Borrower, that the Borrower is authorized to
transact business under the laws of the jurisdiction of its place of incorporation, and, in
the case of the Guarantor, that the Guarantor is duly incorporated and in good standing
under the laws of the jurisdiction of its place of incorporation.

     (e) (i) The Administrative Agent shall have received a certificate or certificates of
each of the Borrower and the Guarantor, signed on behalf of the Borrower and the Guarantor
respectively, by the Secretary, an Assistant Secretary or a Responsible Officer thereof,
dated the Effective Date, certifying as to (A) the absence of any amendments to the charter
of the Borrower or the Guarantor, as the case may be, since the date of the certificates
referred to in paragraph (d) above; (B) a true and correct copy of the bylaws of
each of the Borrower or the Guarantor, as the case may be, as in effect on the Effective
Date; (C) the absence of any proceeding for the dissolution or liquidation of the Borrower
or the Guarantor, as the case may be; (D) the truth, in all material respects, of the
representations and warranties contained in the Credit Documents to which the Borrower or
the Guarantor is a party, as the case may be, as though made on and as of the Effective

22

 

Date, and (E) the absence, as of the Effective Date, of any Default or Event of
Default, and (ii) each of such certifications shall be true.

     (f) The Administrative Agent shall have received a certificate of the Secretary or an
Assistant Secretary of each of the Guarantor and the Borrower certifying the names and true
signatures of the officers of Guarantor or the Borrower, as the case may be, authorized to
sign, and signing, this Agreement and the other Credit Documents to be delivered hereunder
on or before the Effective Date.

     (g) The Administrative Agent shall have received from Schiff Hardin LLP, counsel for
the Guarantor and the Borrower, a favorable opinion, substantially in the form of
Exhibit B hereto and as to such other matters as any Lender through the
Administrative Agent may reasonably request.

     SECTION 3.02. Conditions Precedent to Each Loan. The obligation of each Lender to
make any Loan shall be subject to the satisfaction (or waiver in accordance with Section
11.02) of each of the following conditions:

     (a) The representations and warranties of the Guarantor and the Borrower set forth in
this Agreement (other than the representation and warranty set forth in Section
4.01(f)) shall be true and correct in all material respects on and as of the date of
such Loan, except to the extent that such representations and warranties are specifically
limited to a prior date, in which case such representations and warranties shall be true and
correct in all material respects on and as of such prior date.

     (b) After giving effect to such Loan, such Loan will not result in the sum of the then
Total Outstanding Principal exceeding the Aggregate Commitments.

     (c) Such Loan will comply with all other applicable requirements of Article II,
including, without limitation Sections 2.01 and 2.02, as applicable.

     (d) At the time of and immediately after giving effect to such Loan, no Default or
Event of Default shall have occurred and be continuing.

     (e) The Administrative Agent shall have timely received a Borrowing Request.

     Each Loan and the acceptance by the Borrower of the benefits thereof shall be deemed to
constitute a representation and warranty by the Borrower on the date thereof as to the matters
specified in paragraphs (a), (b), (c) and (d) of this Section.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

     SECTION 4.01. Representations and Warranties of the Credit Parties. Each of the
Borrower and the Guarantor represents and warrants as follows:

     (a) Each of the Borrower and the Guarantor is a corporation duly organized, validly
existing and, in the case of the Borrower, authorized to transact business under the laws of
the State of its incorporation, and, in the case of the Guarantor, in good standing under
the laws of the State of its incorporation.

     (b) The execution, delivery and performance by each of the Credit Parties of the Credit
Documents to which it is a party (i) are within such Credit Party’s corporate powers, (ii)
have been duly authorized by all necessary corporate action, (iii) do not contravene (A)
such Credit Party’s charter or by-laws, as the case may be, or (B) any law, rule or
regulation, or any material Contractual Obligation or legal restriction, binding on or
affecting such Credit Party or any Material Subsidiary, as the case may be, and (iv) do not
require the creation of any Lien on the property of such Credit Party or any Material
Subsidiary under any Contractual Obligation binding on or affecting such Credit Party or any
Material Subsidiary.

     (c) No authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or other Person is required for the due execution, delivery and
performance by any Credit Party of this Agreement or any other Credit Document to which any
of them is a party, except for such as (i) have been obtained or made and that are in full
force and effect or (ii) are not presently required under applicable law and have not yet
been applied for.

     (d) Each Credit Document to which any Credit Party is a party is a legal, valid and
binding obligation of such Credit Party, enforceable against such Credit Party in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

     (e) The consolidated balance sheet of the Guarantor and its Subsidiaries as at
September 30, 2006, and the related statements of income and retained earnings of the
Guarantor and its Subsidiaries for the nine months then ended, copies of which have been
made available or furnished to each Lender, fairly present (subject to year-end adjustments)
the financial condition of the Guarantor and its Subsidiaries as at such date and the
results of the operations of the Guarantor and its Subsidiaries for the period ended on such
date, all in accordance with generally accepted accounting principles consistently applied.

     (f) Since December 31, 2005, there has been no material adverse change in such
condition or operations, or in the business, assets, operations, condition (financial or
otherwise) or prospects of any of the Credit Parties or of Columbia.

24

 

     (g) There is no pending or threatened action, proceeding or investigation affecting
such Credit Party before any court, governmental agency or other Governmental Authority or
arbitrator that (taking into account the exhaustion of appeals) would have a Material
Adverse Effect, or that (i) purports to affect the legality, validity or enforceability of
this Agreement or any promissory notes executed pursuant hereto, or (ii) seeks to prohibit
the ownership or operation, by any Credit Party or any of their respective Material
Subsidiaries, of all or a material portion of their respective businesses or assets.

     (h) The Guarantor and its Subsidiaries, taken as a whole, do not hold or carry Margin
Stock having an aggregate value in excess of 10% of the value of their consolidated assets,
and no part of the proceeds of any Loan hereunder will be used to buy or carry any Margin
Stock.

     (i) No ERISA Event has occurred, or is reasonably expected to occur, with respect to
any Plan that could reasonably be expected to have a Material Adverse Effect.

     (j) Schedule B (Actuarial Information) to the 2005 Annual report (Form 5500 Series) for
each Plan, copies of which have been filed with the Internal Revenue Service and made
available or furnished to each Lender, is complete and accurate and fairly presents the
funding status of such Plan, and since the date of such Schedule B there has been no adverse
change in such funding status which may reasonably be expected to have a Material Adverse
Effect.

     (k) Neither the Guarantor nor any ERISA Affiliate has incurred or is reasonably
expected to incur any Withdrawal Liability to any Multiemployer Plan which may reasonably be
expected to have a Material Adverse Effect.

     (l) Neither the Guarantor nor any ERISA Affiliate has been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated,
within the meaning of Title VI of ERISA, and no Multiemployer Plan is reasonably expected to
be in reorganization or to be terminated, within the meaning of Title IV of ERISA, in either
such case, that could reasonably be expected to have a Material Adverse Effect.

     (m) No Credit Party is an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940, as amended.

     (n) The Guarantor is a “holding company” within the meaning of the Public Utility
Holding Company Act of 2005 (“PUHCA 2005”). Pursuant to PUHCA 2005, the Guarantor is
subject to the limited jurisdiction of the Federal Energy Regulatory Commission, and any
state commission with jurisdiction to regulate a public utility company in the Guarantor’s
holding company system, with respect to access to the books and records of the Guarantor and
its subsidiaries and affiliates.

     (o) Each Credit Party has filed all tax returns (Federal, state and local) required to
be filed by it and has paid or caused to be paid all taxes due for the periods covered

25

 

thereby, including interest and penalties, except for any such taxes, interest or
penalties which are being contested in good faith and by proper proceedings and in respect
of which such Credit Party has set aside adequate reserves for the payment thereof in
accordance with GAAP.

     (p) Each Credit Party and its Subsidiaries are and have been in compliance with all
laws (including, the Public Utility Holding Company Act of 1935, as amended, and all
Environmental Laws), except to the extent that any failure to be in compliance, individually
or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

     (q) No Subsidiary of any Credit Party is party to, or otherwise bound by, any agreement
that prohibits such Subsidiary from making any payments, directly or indirectly, to such
Credit Party, by way of dividends, advances, repayment of loans or advances, reimbursements
of management or other intercompany charges, expenses and accruals or other returns on
investment, or any other agreement that restricts the ability of such Subsidiary to make any
payment, directly or indirectly, to such Credit Party, other than prohibitions and
restrictions permitted to exist under Section 6.01(e).

     (r) The information, exhibits and reports furnished by the Guarantor or any of its
Subsidiaries to the Administrative Agent or to any Lender in connection with the negotiation
of, or compliance with, the Credit Documents, taken as a whole, do not contain any material
misstatement of fact and do not omit to state a material fact or any fact necessary to make
the statements contained therein not misleading in light of the circumstances made.

     (s) The outstanding amount of the Loans when aggregated with all other outstanding
short-term debt does not exceed $2,500,000,000 at any time prior to the delivery to the
Administrative Agent of evidence reasonably satisfactory to it that the terms of the Order
Authorizing Various External and Intrasystem Financing and Related Transactions;
Reservations of Jurisdiction, dated December 30, 2003 and issued by the Securities and
Exchange Commission (Release No. 35-27789; File No. 70-10169), are no longer in effect.

ARTICLE V

AFFIRMATIVE COVENANTS

     SECTION 5.01. Affirmative Covenants. So long as any Lender shall have any Commitment
hereunder or any principal of any Loan, or interest or fees payable hereunder shall remain unpaid,
each of the Credit Parties will, unless the Required Lenders shall otherwise consent in writing:

     (a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, in all material respects with all applicable laws, rules, regulations and orders
(including, any of the foregoing relating to employee health and safety or public utilities

26

 

and all Environmental Laws), unless the failure to so comply could not reasonably be
expected to have a Material Adverse Effect.

     (b) Maintenance of Properties, Etc. Maintain and preserve, and cause each
Material Subsidiary to maintain and preserve, all of its material properties which are used
in the conduct of its business in good working order and condition, ordinary wear and tear
excepted, if the failure to do so could reasonably be expected to have a Material Adverse
Effect.

     (c) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon it or upon its property, and
(ii) all legal claims which, if unpaid, might by law become a lien upon its property;
provided, however, that neither any Credit Party nor any of its Subsidiaries
shall be required to pay or discharge any such tax, assessment, charge or claim which is
being contested in good faith and by proper proceedings and as to which appropriate reserves
are being maintained.

     (d) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies or associations in
such amounts and covering such risks as is usually obtained by companies engaged in similar
businesses of comparable size and financial strength and owning similar properties in the
same general areas in which such Credit Party or such Subsidiary operates, or, to the extent
such Credit Party or Subsidiary deems it reasonably prudent to do so, through its own
program of self-insurance.

     (e) Preservation of Corporate Existence, Etc. Preserve and maintain, and cause
each Material Subsidiary to preserve and maintain, its corporate existence, rights (charter
and statutory) and franchises, except as otherwise permitted under this Agreement;
provided that that no such Person shall be required to preserve any right or
franchise with respect to which the Board of Directors of such Person has determined that
the preservation thereof is no longer desirable in the conduct of the business of such
Person and that the loss thereof is not disadvantageous in any material respect to any
Credit Party or the Lenders.

     (f) Visitation Rights. At any reasonable time and from time to time, permit
the Administrative Agent or any of the Lenders or any agents or representatives thereof, on
not less than five Business Days’ notice (which notice shall be required only so long as no
Default shall be occurred and be continuing), to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, such Credit Party or
any of its Subsidiaries, and to discuss the affairs, finances and accounts of the Credit
Parties and their respective Subsidiaries with any of their respective officers and with
their independent certified public accountants; subject, however, in all cases to the
imposition of such conditions as the affected Credit Party or Subsidiary shall deem
necessary based on reasonable considerations of safety and security and provided that so
long as no Default or Event of Default shall have occurred and be continuing, each Lender
will be limited to one visit each year.

27

 

     (g) Keeping of Books. (i) Keep, and cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall be made of all
material financial transactions and the assets and business of each of the Credit Parties
and each of their respective Subsidiaries, and (ii) maintain, and cause each of its
Subsidiaries to maintain, a system of accounting established and administered in accordance
with generally accepted accounting principles consistently applied.

     (h) Reporting Requirements. Deliver to the Administrative Agent for
distribution to the Lenders:

     (i) as soon as available and in any event within 60 days after the end of each of the
first three quarters of each fiscal year of the Guarantor (or, if earlier, concurrently with
the filing thereof with the Securities and Exchange Commission or any national securities
exchange in accordance with applicable law or regulation), balance sheets of the Guarantor
and its Consolidated Subsidiaries in comparative form as of the end of such quarter and
statements of income and retained earnings of the Guarantor and its Consolidated
Subsidiaries for the period commencing at the end of the previous fiscal year of the
Guarantor and ending with the end of such quarter, each prepared in accordance with
generally accepted accounting principles consistently applied, subject to normal year-end
audit adjustments, certified by the chief financial officer of the Guarantor.

     (ii) as soon as available and in any event within 90 days after the end of each fiscal
year of the Guarantor (or, if earlier, concurrently with the filing thereof with the
Securities and Exchange Commission or any national securities exchange in accordance with
applicable law or regulation), a copy of the audit report for such year for the Guarantor
and its Consolidated Subsidiaries containing financial statements for such year prepared in
accordance with generally accepted accounting principles consistently applied as reported on
by independent certified public accountants of recognized national standing acceptable to
the Required Lenders, which audit was conducted by such accounting firm in accordance with
generally accepted auditing standards;

     (iii) concurrently with the delivery of financial statements pursuant to clauses
(i) and (ii) above or the notice relating thereto contemplated by the final
sentence of this Section 5.01(h), a certificate of a senior financial officer of
each of the Guarantor and the Borrower (A) to the effect that no Default or Event of Default
has occurred and is continuing (or, if any Default or Event of Default has occurred and is
continuing, describing the same in reasonable detail and describing the action that the
Guarantor or the Borrower, as the case may be, has taken and proposes to take with respect
thereto), and (B) in the case of the certificate relating to the Guarantor, setting forth
calculations, in reasonable detail, establishing Guarantor’s compliance, as at the end of
such fiscal quarter, with the financial covenant contained in Article VII;

     (iv) as soon as possible and in any event within five days after the occurrence of each
Default or Event of Default continuing on the date of such statement, a statement of the
chief financial officer of the Borrower setting forth details of such Event of Default or

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event and the action which the Borrower has taken and proposes to take with respect
thereto;

     (v) promptly after the sending or filing thereof, copies of all reports which the
Guarantor sends to its stockholders, and copies of all reports and registration statements
(other than registration statements filed on Form S-8) that the Guarantor, the Borrower or
any Subsidiary of the Guarantor or the Borrower, files with the Securities and Exchange
Commission;

     (vi) promptly and in any event within 10 days after the Guarantor knows or has reason
to know that any material ERISA Event has occurred, a statement of the chief financial
officer of the Borrower describing such ERISA Event and the action, if any, which the
Guarantor or any affected ERISA Affiliate proposes to take with respect thereto;

     (vii) promptly and in any event within two Business Days after receipt thereof by the
Guarantor (or knowledge being obtained by the Guarantor of the receipt thereof by any ERISA
Affiliate), copies of each notice from the PBGC stating its intention to terminate any Plan
or to have a trustee appointed to administer any Plan;

     (viii) promptly and in any event within five Business Days after receipt thereof by the
Guarantor (or knowledge being obtained by the Guarantor of the receipt thereof by any ERISA
Affiliate) from the sponsor of a Multiemployer Plan, a copy of each notice received by the
Guarantor or any ERISA Affiliate concerning (A) the imposition of material Withdrawal
Liability by a Multiemployer Plan; (B) the reorganization or termination, within the meaning
of Title IV of ERISA, of any Multiemployer Plan or (C) the amount of liability incurred, or
which may be incurred, by the Guarantor or any ERISA Affiliate in connection with any event
described in clause (A) or (B) above;

     (ix) promptly after the Guarantor has knowledge of the commencement thereof, notice of
any actions, suits and proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, affecting the Guarantor or
any Material Subsidiary of the type described in Section 4.01(g);

     (x) promptly after the Guarantor or the Borrower knows of any change in the rating of
the Index Debt by S&P or Moody’s, a notice of such changed rating, and

     (xi) such other information respecting the condition or operations, financial or
otherwise, of the Guarantor or any of its Subsidiaries as any Lender through the
Administrative Agent may from time to time reasonably request.

Notwithstanding the foregoing, the Credit Parties’ obligations to deliver the documents or
information required under any of clauses (i), (ii) and (v) above
shall be deemed to be satisfied upon (x) the relevant documents or information being
publicly available on the Guarantor’s website or other publicly available electronic medium
(such as EDGAR) within the time period required by such clause, and (y) the delivery by the
Guarantor or

29

 

the Borrower of notice to the Administrative Agent and the Lenders, within the time period
required by such clause, that such documents or information are so available.

     (i) Use of Proceeds. Use the proceeds of the Loans hereunder for working
capital and other general corporate purposes, including to provide liquidity support for
commercial paper issued by the Borrower.

     (j) Ratings. At all times maintain ratings by both Moody’s and S&P with
respect to the Index Debt.

ARTICLE VI

NEGATIVE COVENANTS

     SECTION 6.01. Negative Covenants. So long as any Lender shall have any Commitment
hereunder or any principal of any Loan, or interest or fees payable hereunder shall remain unpaid,
no Credit Party will, without the written consent of the Required Lenders:

     (a) Limitation on Liens. Create or suffer to exist, or permit any of its
Subsidiaries (other than a Utility Subsidiary) to create or suffer to exist, any lien,
security interest, or other charge or encumbrance (collectively, “Liens”) upon or
with respect to any of its properties, whether now owned or hereafter acquired, or
collaterally assign for security purposes, or permit any of its Subsidiaries (other than a
Utility Subsidiary) to so assign any right to receive income in each case to secure or
provide for or guarantee the payment of Debt for Borrowed Money of any Person, without in
any such case effectively securing, prior to or concurrently with the creation, issuance,
assumption or guaranty of any such Debt for Borrowed Money, the Obligations (together with,
if the Guarantor shall so determine, any other Debt for Borrowed Money of or guaranteed by
the Guarantor or any of its Subsidiaries ranking equally with the Loans and then existing or
thereafter created) equally and ratably with (or prior to) such Debt for Borrowed Money;
provided, however, that the foregoing restrictions shall not apply to or
prevent the creation or existence of:

     (i) (A) Liens on any property acquired, constructed or improved by the Guarantor or any
of its Subsidiaries (other than a Utility Subsidiary) after the date of this Agreement that
are created or assumed prior to, contemporaneously with, or within 180 days after, such
acquisition or completion of such construction or improvement, to secure or provide for the
payment of all or any part of the purchase price of such property or the cost of such
construction or improvement, or (B) in addition to Liens contemplated by clauses
(ii) and (iii) below, Liens on any property existing at the time of acquisition
thereof, provided that the Liens shall not apply to any property theretofore owned
by the Guarantor or any such Subsidiary other than, in the case of any such construction or
improvement, (1) unimproved real property on which the property so constructed or the
improvement is located, (2) other property (or improvements thereon) that is an improvement
to or is acquired or constructed for specific use with such acquired or constructed property
(or improvement thereof), and (3) any rights and interests (A) under

30

 

any agreements or other documents relating to, or (B) appurtenant to, the property
being so constructed or improved or such other property;

     (ii) existing Liens on any property or indebtedness of a corporation that is merged
with or into or consolidated with any Credit Party or any of its Subsidiaries;
provided that such Lien was not created in contemplation of such merger or
consolidation;

     (iii) Liens on any property or indebtedness of a corporation existing at the time such
corporation becomes a Subsidiary of any Credit Party; provided that such Lien was
not created in contemplation of such occurrence;

     (iv) Liens to secure Debt for Borrowed Money of a Subsidiary of a Credit Party to a
Credit Party or to another Subsidiary of the Guarantor;

     (v) Liens in favor of the United States of America, any State, any foreign country or
any department, agency or instrumentality or political subdivision of any such jurisdiction,
to secure partial, progress, advance or other payments pursuant to any contract or statute
or to secure any Debt for Borrowed Money incurred for the purpose of financing all or any
part of the purchase price of the cost of constructing or improving the property subject to
such Liens, including, Liens to secure Debt for Borrowed Money of the pollution control or
industrial revenue bond type;

     (vi) Liens on any property (including any natural gas, oil or other mineral property)
to secure all or part of the cost of exploration, drilling or development thereof or to
secure Debt for Borrowed Money incurred to provide funds for any such purpose;

     (vii) Liens existing on the date of this Agreement;

     (viii) Liens for the sole purposes of extending, renewing or replacing in whole or in
part Debt for Borrowed Money secured by any Lien referred to in the foregoing clauses
(i) through (vii), inclusive, or this clause (viii); provided,
however, that the principal amount of Debt for Borrowed Money secured thereby shall
not exceed the principal amount of Debt for Borrowed Money so secured at the time of such
extension, renewal or replacement (which, for purposes of this limitation as it applies to a
synthetic lease, shall be deemed to be (x) the lessor’s original cost of the property
subject to such lease at the time of extension, renewal or replacement, less (y) the
aggregate amount of all prior payments under such lease allocated pursuant to the terms of
such lease to reduce the principal amount of the lessor’s investment, and borrowings by the
lessor, made to fund the original cost of the property), and that such extension, renewal or
replacement shall be limited to all or a part of the property or indebtedness which secured
the Lien so extended, renewed or replaced (plus improvements on such property);

     (ix) Liens on any property or assets of a Project Financing Subsidiary, or on any
Capital Stock in a Project Financing Subsidiary, in either such case, that secure only a
Project Financing or a Contingent Guaranty that supports a Project Financing, or

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     (x) any Lien, other than a Lien described in any of the foregoing clauses (i)
through (ix), inclusive, to the extent that it secures Debt for Borrowed Money, or
guaranties thereof, the outstanding principal balance of which at the time of creation of
such Lien, when added to the aggregate principal balance of all Debt for Borrowed Money
secured by Liens incurred under this clause (x) then outstanding, does not
exceed $150,000,000.

     If at any time any Credit Party or any of its Subsidiaries shall create, issue, assume
or guaranty any Debt for Borrowed Money secured by any Lien and the first paragraph of this
Section 6.01(a) requires that the Loans be secured equally and ratably with such
Debt for Borrowed Money, the Borrower shall promptly deliver to the Administrative Agent and
each Lender:

     (1) a certificate of a duly authorized officer of the Borrower stating that the
covenant contained in the first paragraph of this Section 6.01(a) has been
complied with, and

     (2) an opinion of counsel acceptable to the Required Lenders to the effect that
such covenant has been complied with and that all documents executed by any Credit
Party or any of its Subsidiaries in the performance of such covenant comply with the
requirements of such covenant.

     (b) Mergers, Etc. Merge or consolidate with or into, or, except in a
transaction permitted under paragraph (c) of this Section, convey, transfer, lease
or otherwise dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to any Person, or
permit any of its Subsidiaries to do so, except that:

     (i) any Subsidiary of the Guarantor (other than the Borrower) may merge or consolidate
with or transfer assets to or acquire assets from any other Subsidiary of the Guarantor,
provided that in the case of any such merger, consolidation, or transfer of assets
to which NIPSCO or Columbia is a party, the continuing or surviving Person shall be a
Wholly-Owned Subsidiary of the Guarantor, and

     (ii) the Borrower may merge or consolidate with, or transfer assets to, or acquire
assets from, any other Wholly-Owned Subsidiary of the Guarantor, provided that in the case
of any such merger or consolidation to which the Borrower is not the surviving Person, or
transfer of all or substantially all of the assets of the Borrower to any other Wholly-Owned
Subsidiary of the Guarantor, immediately after giving effect thereto; (A) no Event of
Default shall have occurred and be continuing (determined, for purposes of compliance with
Article VII after giving effect to such transaction, on a pro forma basis as if such
transaction had occurred on the last day of the Guarantor’s fiscal quarter then most
recently ended) and (B) such surviving Person or transferee, as applicable, shall have
assumed all of the obligations of the Borrower under and in respect of the Credit Documents
by written instrument satisfactory to the Administrative Agent and its counsel in their
reasonable discretion, accompanied by such opinions of counsel and other supporting
documents as they may reasonably require, and

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     (iii) any Subsidiary of the Guarantor may merge into the Guarantor or the Borrower or
transfer assets to the Borrower or the Guarantor, provided that in the case of any
merger or consolidation of the Borrower into the Guarantor or transfer of all or
substantially all of the assets of the Borrower to the Guarantor, immediately after giving
effect thereto; (A) no Event of Default shall have occurred and be continuing (determined,
for purposes of compliance with Article VII after giving effect to such transaction,
on a pro forma basis as if such transaction had occurred on the last day of the Guarantor’s
fiscal quarter then most recently ended) and (B) the Guarantor shall have assumed all of the
obligations of the Borrower under and in respect of the Credit Documents by written
instrument satisfactory to the Administrative Agent and its counsel in their reasonable
discretion, accompanied by such opinions of counsel and other supporting documents as they
may reasonably require, and

     (iv) the Guarantor or any Subsidiary of the Guarantor may merge, or consolidate with or
transfer all or substantially all of its assets to any other Person; provided that
in each case under this clause (iii), immediately after giving effect thereto; (A)
no Event of Default shall have occurred and be continuing (determined, for purposes of
compliance with Article VII after giving effect to such transaction, on a pro forma
basis as if such transaction had occurred on the last day of the Guarantor’s fiscal quarter
then most recently ended); (B) in the case of any such merger, consolidation or transfer of
assets to which the Borrower is a party, the Borrower shall be the continuing or surviving
corporation; (C) in the case of any such merger, consolidation, or transfer of assets to
which NIPSCO or Columbia is a party, NIPSCO or Columbia, as the case may be, shall be the
continuing or surviving corporation and shall be a Wholly-Owned Subsidiary of the Guarantor;
(D) in the case of any such merger, consolidation or transfer of assets to which the
Guarantor is a party, the Guarantor shall be the continuing or surviving corporation, and
(E) the Index Debt shall be rated at least BBB- by S&P and at least Baa3 by Moody’s.

     (c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of, or
permit any of their respective Subsidiaries to sell, lease, transfer or otherwise dispose of
(other than in connection with a transaction authorized by paragraph (b) of this
Section) any substantial part of its assets; provided that the foregoing shall not
prohibit any such sale, conveyance, lease, transfer or other disposition that (i)
constitutes realization on a Lien permitted to exist under Section 6.01(a), or (ii)
(A) (1) is for a price not materially less than the fair market value of such assets, (2)
would not materially impair the ability of any Credit Party to perform its obligations under
this Agreement and (3) together with all other such sales, conveyances, leases, transfers
and other dispositions, would have no Material Adverse Effect, or (B) would not result in
the sale, lease, transfer or other disposition, in the aggregate, of more than 10% of the
consolidated total assets of the Guarantor and its Subsidiaries, determined in accordance
with GAAP, on December 31, 2005.

     (d) Compliance with ERISA. (i) Terminate, or permit any ERISA Affiliate to
terminate, any Plan so as to result in a Material Adverse Effect or (ii) permit to exist any
occurrence of any Reportable Event (as defined in Title IV of ERISA), or any other event or
condition, that presents a material (in the reasonable opinion of the Required Lenders)

33

 

risk of such a termination by the PBGC of any Plan, if such termination could
reasonably be expected to have a Material Adverse Effect.

     (e) Certain Restrictions. Permit any of its Subsidiaries (other than, in the
case of the Guarantor, the Borrower) to enter into or permit to exist any agreement that by
its terms prohibits such Subsidiary from making any payments, directly or indirectly, to
such Credit Party by way of dividends, advances, repayment of loans or advances,
reimbursements of management or other intercompany charges, expenses and accruals or other
returns on investment, or any other agreement that restricts the ability of such Subsidiary
to make any payment, directly or indirectly, to such Credit Party; provided that the
foregoing shall not apply to prohibitions and restrictions (i) imposed by applicable law,
(ii) (A) imposed under an agreement in existence on the date of this Agreement, and (B)
described on Schedule 6.01(e) of the Existing Agreement, (iii) existing with respect
to a Subsidiary on the date it becomes a Subsidiary that are not created in contemplation
thereof (but shall apply to any extension or renewal of, or any amendment or modification
expanding the scope of, any such prohibition or restriction), (iv) contained in agreements
relating to the sale of a Subsidiary pending such sale, provided that such
prohibitions or restrictions apply only to the Subsidiary that is to be sold and such sale
is permitted hereunder, (v) imposed on a Project Financing Subsidiary in connection with a
Project Financing, or (vi) that could not reasonably be expected to have a Material Adverse
Effect.

ARTICLE VII

FINANCIAL COVENANT

     So long as any Lender shall have any Commitment hereunder or any principal of any Loan, or
interest or fees payable hereunder shall remain unpaid, the Guarantor shall maintain a Debt to
Capitalization Ratio of not more than 0.70 to 1.00.

ARTICLE VIII

EVENTS OF DEFAULT

     SECTION 8.01. Events of Default. If any of the following events (“Events of
Default”) shall occur and be continuing:

     (a) The Borrower shall fail to pay any principal of any Loan when the same becomes due
and payable or shall fail to pay any interest, fees or other amounts hereunder within three
days after when the same becomes due and payable, or

     (b) Any representation or warranty made by any Credit Party in any Credit Document or
by any Credit Party (or any of its officers) in connection with this Agreement shall prove
to have been incorrect in any material respect when made, or

     (c) Any Credit Party shall fail to perform or observe any term, covenant or agreement
contained in Sections 5.01(e), 5.01(f), 5.01(h), 5.01(i),
6.01 or Article VII, or

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     (d) Any Credit Party shall fail to perform or observe any term, covenant or agreement
contained in any Credit Document on its part to be performed or observed (other than one
identified in paragraph (a), (b) or (c) above) if the failure to
perform or observe such other term, covenant or agreement shall remain unremedied for thirty
days after written notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender, or

     (e) The Guarantor, the Borrower or any of their respective Subsidiaries shall fail to
pay any principal of or premium or interest on any Indebtedness (excluding Non-Recourse
Debt) which is outstanding in a principal amount of at least $50,000,000 in the aggregate
(but excluding the Loans) of the Guarantor, the Borrower or such Subsidiary, as the case may
be, when the same becomes due and payable (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 agreement or instrument relating to such
Indebtedness, or any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Indebtedness and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the scheduled maturity of such
Indebtedness, or any such Indebtedness shall be declared to be due and payable, or required
to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof, or

     (f) Any Credit Party shall generally not pay its debts as such debts become due, or
shall admit in writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors, or any proceeding shall be instituted by or against
any Credit Party seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief
of debtors, or seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against any Credit Party (but
not instituted by any Credit Party), either such proceeding shall remain undismissed or
unstayed for a period of 60 days, or any of the actions sought in such proceeding
(including, the entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, any Credit Party or for any substantial
part of its property) shall occur, or any Credit Party shall take any corporate action to
authorize any of the actions set forth above in this paragraph (f), or

     (g) One or more Subsidiaries of the Guarantor (other than the Borrower) in which the
aggregate sum of (i) the amounts invested by the Guarantor and its other Subsidiaries in the
aggregate, by way of purchases of Capital Stock, Capital Leases, loans or otherwise, and
(ii) the amount of recourse, whether contractual or as a matter of law (but excluding
Non-Recourse Debt), available to creditors of such Subsidiary or Subsidiaries against the
Guarantor or any of its other Subsidiaries, is $100,000,000 or more (collectively,
“Substantial Subsidiaries”) shall generally not pay their respective debts as such
debts become due, or shall admit in writing their respective inability to pay their debts
generally, or shall make a general assignment for the benefit of creditors,

35

 

or any proceeding shall be instituted by or against Substantial Subsidiaries seeking to
adjudicate them bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of them or their respective
debts under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for them or for any substantial part of their
respective property and, in the case of any such proceeding instituted against Substantial
Subsidiaries (but not instituted by the Guarantor or any Subsidiary of the Guarantor),
either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any
of the actions sought in such proceeding (including, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar official for,
the Substantial Subsidiaries or for any substantial part of their respective property) shall
occur, or Substantial Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this paragraph (g), or

     (h) Any judgment or order for the payment of money in excess of $50,000,000 shall be
rendered against the Borrower, the Guarantor or any of its other Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 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, or

     (i) Any ERISA Event shall have occurred with respect to a Plan and, 30 days after
notice thereof shall have been given to the Guarantor or the Borrower by the Administrative
Agent, (i) such ERISA Event shall still exist and (ii) the sum (determined as of the date of
occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of
any and all other Plans with respect to which an ERISA Event shall have occurred and then
exist (or, in the case of a Plan with respect to which an ERISA Event described in
clauses (c) through (f) of the definition of ERISA Event shall have occurred
and then exist, the liability related thereto) is equal to or greater than $10,000,000 (when
aggregated with paragraphs (j), (k) and (l) of this Section), and a
Material Adverse Effect could reasonably be expected to occur as a result thereof, or

     (j) The Guarantor or any ERISA Affiliate shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in
an amount which, when aggregated with all other amounts required to be paid to Multiemployer
Plans by the Guarantor and its ERISA Affiliates as Withdrawal Liability (determined as of
the date of such notification), exceeds $10,000,000 or requires payments exceeding
$10,000,000 per annum (in either case, when aggregated with paragraphs (i),
(k) and (l) of this Section), and a Material Adverse Effect could reasonably
be expected to occur as a result thereof, or

     (k) The Guarantor or any ERISA Affiliate shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Guarantor and its ERISA Affiliates to
all Multiemployer Plans which are then in reorganization or being

36

 

terminated have been or will be increased over the amounts contributed to such
Multiemployer Plans for the respective plan year of each such Multiemployer Plan immediately
preceding the plan year in which the reorganization or termination occurs by an amount
exceeding $10,000,000 (when aggregated with paragraphs (i), (j) and
(l) of this Section), and a Material Adverse Effect could reasonably be expected to
occur as a result thereof, or

     (l) The Guarantor or any ERISA Affiliate shall have committed a failure described in
Section 302(f)(1) of ERISA and the amount determined under Section 302(f)(3) of ERISA is
equal to or greater than $10,000,000 (when aggregated with paragraphs (i),
(j) and (k) of this Section), and a Material Adverse Effect could reasonably
be expected to occur as a result thereof, or

     (m) Any provision of the Credit Documents shall be held by a court of competent
jurisdiction to be invalid or unenforceable against any Credit Party purported to be bound
thereby, or any Credit Party shall so assert in writing, or

     (n) Any Change of Control shall occur;

then, and in any such event, the Administrative Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Commitment of each Lender
hereunder to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request or with the consent of the Required Lenders, by notice to the Borrower, declare all amounts
payable under this Agreement to be forthwith due and payable, whereupon all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by the Borrower; provided that in the
event of an actual or deemed entry of an order for relief with respect to any Credit Party under
the Federal Bankruptcy Code, (1) the Commitment of each Lender, hereunder shall automatically be
terminated and (2) all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.

ARTICLE IX

THE ADMINISTRATIVE AGENT

     SECTION 9.01. The Administrative Agent. (a) Each of the Lenders hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by
the terms hereof, together with such actions and powers as are reasonably incidental thereto.

     (b) The Person serving as the Administrative Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise the same as
though it were not the Administrative Agent, and such bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business

37

 

with the any Credit Party or any of such Credit Party’s Subsidiaries or other
Affiliates thereof as if it were not the Administrative Agent hereunder.

     (c) The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing, (i) the
Administrative Agent shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing, (ii) the Administrative
Agent shall not have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing by the Required Lenders, and (iii)
except as expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information relating to
the Borrower, the Guarantor or any of its other Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in any
capacity. The Administrative Agent shall not be liable for any action taken or not taken by
it with the consent or at the request of the Required Lenders (or, if applicable, all of the
Lenders) or in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and
the Administrative Agent shall not be responsible for or have any duty to ascertain or
inquire into (1) any statement, warranty or representation made in or in connection with
this Agreement, (2) the contents of any certificate, report or other document delivered
hereunder or in connection herewith, (3) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein, (4) the validity,
enforceability, effectiveness or genuineness of this Agreement or any other agreement,
instrument or document, or (5) the satisfaction of any condition set forth in Article
III or elsewhere herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent and the conformity thereof to such express
requirement.

     (d) The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be genuine and to have been signed
or sent by the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper Person, and
shall not incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for a Credit Party) independent accountants and other
experts selected by it and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.

     (e) The Administrative Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by the Administrative Agent.
The Administrative Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent,

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and shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Administrative Agent.

     (f) Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by notifying the
Lenders and the Credit Parties. Upon any such resignation, the Required Lenders shall have
the right, with the consent of the Borrower (which consent shall not unreasonably be
withheld), to appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a
bank with an office in New York, New York, or an Affiliate of any such bank, in any event
having total assets in excess of $500,000,000 and who shall serve until such time, if any,
as an Agent shall have been appointed as provided above. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Borrower and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 11.03 shall
continue in effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Administrative Agent.

     (g) Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this Agreement, any related
agreement or any document furnished hereunder or thereunder.

     (h) No Lender identified on the signature pages of this Agreement as a “Lead Arranger”
or “Book Runner”, or that is given any other title hereunder other than “Administrative
Agent”, shall have any right, power, obligation, liability, responsibility or duty under
this Agreement other than those applicable to all Lenders as such. Without limiting the
generality of the foregoing, no Lender so identified as a “Lead Arranger” or that is given
any other title hereunder, shall have, or be deemed to have, any fiduciary relationship with
any Lender. Each Lender acknowledges that it has not relied, and will not rely, on the
Lenders so identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.

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ARTICLE X

GUARANTY

     SECTION 10.01. The Guaranty. (a) The Guarantor, as primary obligor and not merely
as a surety, hereby irrevocably, absolutely and unconditionally guarantees to the Administrative
Agent and the Lenders and each of their respective successors, endorsees, transferees and assigns
(each a “Beneficiary” and collectively, the “Beneficiaries”) the prompt and
complete payment by the Borrower, as and when due and payable, of the Obligations, in accordance
with the terms of the Credit Documents. The provisions of this Article X are sometimes
referred to hereinafter as the “Guaranty”.

     (b) The Guarantor hereby guarantees that the Obligations will be paid strictly in
accordance with the terms of the Credit Documents, regardless of any law now or hereafter in
effect in any jurisdiction affecting any such terms or the rights of the Beneficiaries with
respect thereto. The obligations and liabilities of the Guarantor under this Guaranty shall
be absolute and unconditional irrespective of: (i) any lack of validity or enforceability of
any of the Obligations or any Credit Document, or any delay, failure or omission to enforce
or agreement not to enforce, or the stay or enjoining, by order of court, by operation of
law or otherwise, of the exercise of any right with respect to the foregoing (including, in
each case, without limitation, as a result of the insolvency, bankruptcy or reorganization
of any Beneficiary, the Borrower or any other Person), (ii) any change in the time, manner
or place of payment of, or in any other term in respect of, all or any of the Obligations,
or any other amendment or waiver of or consent to any departure from the Credit Documents or
any agreement or instrument relating thereto, (iii) any exchange or release of, or
non-perfection of any Lien on or in any collateral, or any release, amendment or waiver of,
or consent to any departure from, any other guaranty of, or agreement granting security for,
all or any of the Obligations, (iv) any claim, set-off, counterclaim, defense or other
rights that the Guarantor may have at any time and from time to time against any Beneficiary
or any other Person, whether in connection with this Transaction or any unrelated
transaction, or (v) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or any other guarantor or surety in respect of
the Obligations or the Guarantor in respect hereof.

     (c) The Guaranty provided for herein (i) is a guaranty of payment and not of
collection, (ii) is a continuing guaranty and shall remain in full force and effect until
the Commitments have been terminated and the Obligations have been paid in full in cash, and
(iii) shall continue to be effective or shall be reinstated, as the case may be, if at any
time any payment, or any part thereof, of any of the Obligations is rescinded or must
otherwise be returned by any Beneficiary upon or as a result of the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or otherwise, all as though such
payment had not been made.

     (d) The obligations and liabilities of the Guarantor hereunder shall not be conditioned
or contingent upon the pursuit by any Beneficiary or any other Person at any time of any
right or remedy against the Borrower or any other Person that may be or

40

 

become liable in respect of all or any part of the Obligations or against any
collateral security or guaranty therefor or right of setoff with respect thereto.

     (e) The Guarantor hereby consents that, without the necessity of any reservation of
rights against the Guarantor and without notice to or further assent by the Guarantor, any
demand for payment of any of the Obligations made by any Beneficiary may be rescinded by
such Beneficiary and any of the Obligations continued after such rescission.

     (f) The Guarantor’s obligations under this Guaranty shall be unconditional,
irrespective of any lack of capacity of the Borrower or any lack of validity or
enforceability of any other provision of this Agreement or any other Credit Document, and
this Guaranty shall not be affected in any way by any variation, extension, waiver,
compromise or release of any or all of the Obligations or of any security or guaranty from
time to time therefor.

     (g) The obligations of the Guarantor under this Guaranty shall not be reduced, limited,
impaired, discharged, deferred, suspended or terminated by any proceeding or action,
voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, marshalling of assets, assignment for the benefit of creditors, composition
with creditors, readjustment, liquidation or arrangement of the Borrower or any similar
proceedings or actions, or by any defense the Borrower may have by reason of the order,
decree or decision of any court or administrative body resulting from any such proceeding or
action. Without limiting the generality of the foregoing, the Guarantor’s liability shall
extend to all amounts and obligations that constitute the Obligations and would be owed by
the Borrower, but for the fact that they are unenforceable or not allowable due to the
existence of any such proceeding or action.

     SECTION 10.02. Waivers. (a) The Guarantor hereby unconditionally waives: (i)
promptness and diligence, (ii) notice of or proof of reliance by the Administrative Agent or the
Lenders upon this Guaranty or acceptance of this Guaranty, (iii) notice of the incurrence of any
Obligation by the Borrower or the renewal, extension or accrual of any Obligation or of any
circumstances affecting the Borrower’s financial condition or ability to perform the Obligations,
(iv) notice of any actions taken by the Beneficiaries or the Borrower or any other Person under any
Credit Document or any other agreement or instrument relating thereto, (v) all other notices,
demands and protests, and all other formalities of every kind in connection with the enforcement of
the Obligations, of the obligations of the Guarantor hereunder or under any other Credit Document,
the omission of or delay in which, but for the provisions of this Article X might
constitute grounds for relieving the Guarantor of its obligations hereunder, (vi) any requirement
that the Beneficiaries protect, secure, perfect or insure any Lien or any property subject thereto,
or exhaust any right or take any action against the Borrower or any other Person or any collateral,
and (vii) each other circumstance, other than payment of the Obligations in full, that might
otherwise result in a discharge or exoneration of, or constitute a defense to, the Guarantor’s
obligations hereunder.

     (b) No failure on the part of any Beneficiary to exercise, and no delay in exercising,
any right, remedy, power or privilege hereunder or under any Credit Document or any other
agreement or instrument relating thereto shall operate as a waiver

41

 

thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder or under any Credit Document or any other agreement or instrument
relating thereto preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. This Guaranty is in addition to and not in limitation of
any other rights, remedies, powers and privileges the Beneficiaries may have by virtue of
any other instrument or agreement heretofore, contemporaneously herewith or hereafter
executed by the Guarantor or any other Person or by applicable law or otherwise. All
rights, remedies, powers and privileges of the Beneficiaries shall be cumulative and may be
exercised singly or concurrently. The rights, remedies, powers and privileges of the
Beneficiaries under this Guaranty against the Guarantor are not conditional or contingent on
any attempt by the Beneficiaries to exercise any of their rights, remedies, powers or
privileges against any other guarantor or surety or under the Credit Documents or any other
agreement or instrument relating thereto against the Borrower or against any other Person.

     (c) The Guarantor hereby acknowledges and agrees that, until the Commitments have been
terminated and all of the Obligations have been paid in full in cash, under no circumstances
shall it be entitled to be subrogated to any rights of any Beneficiary in respect of the
Obligations performed by it hereunder or otherwise, and the Guarantor hereby expressly and
irrevocably waives, until the Commitments have been terminated and all of the Obligations
have been paid in full in cash, (i) each and every such right of subrogation and any claims,
reimbursements, right or right of action relating thereto (howsoever arising), and (ii) each
and every right to contribution, indemnification, set-off or reimbursement, whether from the
Borrower or any other Person now or hereafter primarily or secondarily liable for any of the
Obligations, and whether arising by contract or operation of law or otherwise by reason of
the Guarantor’s execution, delivery or performance of this Guaranty.

     (d) The Guarantor represents and warrants that it has established adequate means of
keeping itself informed of the Borrower’s financial condition and of other circumstances
affecting the Borrower’s ability to perform the Obligations, and agrees that neither the
Administrative Agent nor any Lender shall have any obligation to provide to the Guarantor
any information it may have, or hereafter receive, in respect of the Borrower.

ARTICLE XI

MISCELLANEOUS

     SECTION 11.01. Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:

     (a) if to any Credit Party, to it at:

801 East 86th Avenue

Merrillville, Indiana 46410

Attention: Treasurer

Telecopier: (219) 647-6060;

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with a copy to such Credit Party at:

801 East 86th Avenue

Merrillville, Indiana 46410

Attention: Director Corporate Finance and Treasury

Telecopier: (219) 647-6116;

     (b) if to the Administrative Agent at:

1301 Avenue of the Americas

New York, NY 10019

Attention: Joerg Kohn, Andrea Stockemer and Thomas Brady

Telecopier: 212-895-7229 (for Mr. Kohn and Mr. Stockemer) and 212-895-1560 (for Mr. Brady)

     (c) if to any Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.

     Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.

     SECTION 11.02. Waivers; Amendments. (a) No failure or delay by the Administrative
Agent, or any Lender in exercising any right or power hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the Administrative
Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any Credit Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, no Loan shall be construed as a waiver of any Default, regardless of
whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at
the time.

     (b) Neither this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the Borrower, the
Guarantor and the Required Lenders or by the Borrower, the Guarantor and the Administrative
Agent with the consent of the Required Lenders; provided that if the representations
or covenants under the Existing Agreement are amended, waived or otherwise modified pursuant
to an agreement or agreements in writing permitted under

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the Existing Agreement, then the analogous representations and covenants under this
Agreement shall automatically be amended, waived or modified to the same extent, and,
provided further, that no such agreement referred to in this Section
11.02(b) shall (i) increase the Commitment of any Lender without the written consent of
such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest
thereon, or reduce any fees or other amounts payable hereunder, without the written consent
of each Lender affected thereby, (iii) postpone the scheduled date of payment of the
principal amount of any Loan, or any interest thereon, or any fees or other amounts payable
hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written consent of each
Lender, (v) release the Guarantor from its obligations under the Guaranty without the
written consent of each Lender, (vi) waive any of the conditions precedent to the
effectiveness of this Agreement set forth in Section 3.01 without the written
consent of each Lender, or (vii) change any of the provisions of this Section or the
definition of “Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of each Lender;
provided, further, that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent hereunder without the prior written
consent of the Administrative Agent.

     SECTION 11.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i)
all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including (in an amount not to exceed $15,000), the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the initial syndication of the credit
facilities provided for herein, the preparation and administration of this Agreement or any
amendments, modifications or waivers of the provisions hereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), and (ii) all reasonable out of-pocket
expenses incurred by the Administrative Agent or any Lender, including the reasonable fees, charges
and disbursements of any counsel for the Administrative Agent or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement, including its rights
under this Section, or in connection with the Loans made, including in connection with any workout,
restructuring or negotiations in respect thereof.

     (b) The Borrower shall indemnify the Administrative Agent and each Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related reasonable expenses, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement or any agreement or instrument contemplated hereby, the
performance by the parties hereto of their respective obligations hereunder or the
consummation of the Transactions or any other transaction contemplated hereby, (ii) any Loan
or the use of the proceeds therefrom, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property now, in the past or hereafter

44

 

owned or operated by the Borrower, the Guarantor or any of its other Subsidiaries, or
any Environmental Liability related in any way to the Borrower, the Guarantor or any of its
other Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Indemnitee.

     (c) To the extent that the Borrower fails to pay any amount required to be paid by it
to the Administrative Agent under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to the Administrative Agent such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may be, was
incurred by or asserted against the Administrative Agent in its capacity as such.

     (d) To the extent permitted by applicable law, each party hereto shall not assert, and
hereby waives, any claim against each other party, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual damages) arising
out of, in connection with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions or any Loan or the use of the proceeds thereof.

     (e) All amounts due under this Section shall be payable not later than 20 days after
written demand therefor.

     SECTION 11.04. Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby; provided that, except to the extent permitted pursuant to
Section 6.01(b)(ii), (iii) or (iv), no Credit Party may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by a Credit Party without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon
any Person (other than the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative
Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this
Agreement.

     (b) Any Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans
and other Obligations at the time owing to it); provided that (i) except in the case
of an assignment to a Lender or an Affiliate of a Lender, each of the Administrative Agent,
and, so long as no Event of Default is continuing, the Borrower must give its prior written
consent to such assignment (which consent, in the case of the Administrative Agent and the
Borrower, shall not unreasonably be withheld), (ii) except in the case of an assignment to a
Lender or an Affiliate of a Lender or an assignment of the entire

45

 

remaining amount of the assigning Lender’s Commitment, the amount of the Commitment of
the assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $5,000,000 unless each of the Administrative Agent and, so
long as no Event of Default shall be continuing, the Borrower otherwise consent, (iii) each
partial assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500, and (v) the assignee,
if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest assigned by
such Assignment and Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned
by such Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.15, 2.16,
2.17 and 11.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in such rights
and obligations in accordance with paragraph (e) of this Section.

     (c) The Administrative Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices in The City of New York a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans and other Obligations
owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive (absent manifest
error), and the Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement, notwithstanding notice to the contrary.

     (d) Upon its receipt of a duly completed Assignment and Acceptance executed by an
assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this paragraph.

     (e) Any Lender may, without the consent of the Borrower or the Administrative Agent,
sell participations to one or more banks or other entities (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement (including all or
a

46

 

portion of its Commitment and the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, the Guarantor and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 11.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.15,
2.16 and 2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section.

     (f) A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.17 unless the Borrower is notified of the participation sold
to such Participant and such Participant agrees, for the benefit of the Borrower, to comply
with Section 2.17(e) as though it were a Lender.

     (g) Any Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided that no
such pledge or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such assignee for such Lender as a party hereto.

     (h) Anything herein to the contrary notwithstanding, each Lender (the “Granting
Lender”) shall have the right, without the prior consent of the Borrower, to grant to a
special purpose funding vehicle (the “SPFV”) that is utilized by such Granting
Lender, identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide all or any part of any Loan
that such Granting Lender would otherwise be obligated to make hereunder, provided
that (i) nothing herein shall constitute a commitment to make any Loan by any SPFV or shall
relieve its Granting Lender of any obligation of such Granting Lender hereunder or under any
other Credit Document, except to the extent that such SPFV actually funds all or part of any
Loan such Granting Lender is obligated to make hereunder, (ii) if an SPFV elects not to
exercise such option or otherwise fails to provide all or any part of such Loan, such
Granting Lender shall be obligated to make such Loan pursuant to the terms hereof, (iii) the
Granting Lender hereby indemnifies and holds the Administrative Agent harmless from and
against any liability, loss, cost or expense (including for or in respect of Taxes) arising
out of such identification and grant or any transaction contemplated thereby, and (iv) the
provisions of this paragraph (h) shall not impose any increased cost

47

 

or liability on any Credit Party. The making of a Loan by an SPFV hereunder shall
utilize the Commitment of its Granting Lender to the same extent, and as if, such Loan were
made by such Granting Lender. Each party hereto agrees that no SPFV shall be liable for any
payment under this Agreement or any other Credit Document for which a Lender would otherwise
be liable, for so long as, and to the extent that, its Granting Lender makes such payment.
As to any Loans or portions of Loans made by it, each SPFV shall have all the rights that a
Lender making such Loans or such portions of Loans would have had under this Agreement and
otherwise; provided that (1) its voting rights under this Agreement shall be
exercised solely by its Granting Lender and (2) its Granting Lender shall remain solely
responsible to the other parties hereto for the performance of such SPFV’s obligations under
this Agreement, including its obligations in respect of the Loans or portions of Loans made
by it. No additional promissory notes, if any, shall be required to evidence the Loans or
portions of Loans made by a SPFV, and the Granting Lender shall be deemed to hold its
promissory note, if any, as agent for its SPFV to the extent of the Loans or portions of
Loans funded by such SPFV. Each Granting Lender shall act as administrative agent for its
SPFV and give and receive notices and other communications on its behalf. Any payments for
the account of any SPFV shall be paid to its Granting Lender as administrative agent for
such SPFV, and neither a Credit Party nor the Administrative Agent shall be responsible for
any Granting Lender’s application of such payments. In furtherance of the foregoing, each
party hereto hereby agrees that, until the date that is one year and one day after the
payment in full of all outstanding senior Debt of any SPFV, it shall not institute against,
or join any other Person in instituting against, such SPFV any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings (or any similar proceedings) under the
laws of the United States of America or any State thereof. In addition, notwithstanding
anything to the contrary contained in this paragraph (h), an SPFV may (1) (A) with
notice to, but without the prior written consent of, the Administrative Agent or the
Borrower and without paying any processing fee therefor, assign all or any portion of its
interest in any Loan to its Granting Lender or (B) with the consent (which consent shall not
be unreasonably withheld) of the Administrative Agent and (if no Event of Default has
occurred and is continuing) the Borrower, but without paying any processing fee therefor,
assign all or any portion of its interest in any Loan to any financial institution providing
liquidity or credit facilities to or for the account of such SPFV to fund the Loans funded
by such SPFV or to support any securities issued by such SPFV to fund such Loans, and (2)
disclose, on a confidential basis, any non-public information relating to Loans funded by it
to any rating agency, commercial paper dealer or provider of a surety, guaranty or credit or
liquidity enhancement to such SPFV. The Borrower shall not be required to pay, or to
reimburse any Granting Lender for, its expenses relating to any SPFV identified by such
Granting Lender pursuant to this paragraph (h).

     SECTION 11.05. Survival. All covenants, agreements, representations and warranties
made by the Borrower and the Guarantor herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered to have been relied
upon by the other parties hereto and shall survive the execution and delivery of this Agreement and
the making of any Loans. The provisions of Sections 2.15, 2.16, 2.17,
10.01(c)(iii) and 11.03 and Article IX shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the

48

 

expiration or termination of the Commitments or the termination of this Agreement or any
provision hereof.

     SECTION 11.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement, the commitment letter relating to the credit facility provided hereby
(to the extent provided therein) and any separate letter agreements with respect to fees payable to
the Administrative Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 3.01, this Agreement
shall become effective when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement.

     SECTION 11.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof, and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

     SECTION 11.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender or any Affiliate thereof is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other indebtedness at any time
owing by such Lender to or for the credit or the account of any Credit Party against any of and all
the Obligations now or hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and although such
Obligations may be unmatured. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) which such Lender may have.

     SECTION 11.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This
Agreement shall be construed in accordance with and governed by the laws of the State of New York.

     (b) Each Credit Party hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the Southern District
of New York, and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New York State
or, to the extent permitted by law, in such Federal

49

 

court. Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against any Credit Party or its properties in the
courts of any jurisdiction.

     (c) Each Credit Party hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding in any such
court.

     (d) Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 11.01. Nothing in this Agreement will affect
the right of any party to this Agreement to serve process in any other manner permitted by
law.

     SECTION 11.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

     SECTION 11.11. Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.

     SECTION 11.12. Confidentiality. Each of the Administrative Agent and the Lenders
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; (c) to the extent required by applicable laws or regulations 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 the enforcement of rights hereunder; (f) subject to an agreement containing

50

 

provisions substantially the same as those of this Section, to any assignee of or Participant
in, or any prospective assignee of or Participant in, any of its rights or obligations under this
Agreement; (g) with the consent of the Borrower or (h) 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 Administrative Agent or any Lender on a nonconfidential basis from a source other than a Credit
Party or any Subsidiary of a Credit Party. For the purposes of this Section, “Information”
means all information received from any Credit Party or any Subsidiary of a Credit Party relating
to a Credit Party or any Subsidiary of a Credit Party or its respective businesses, other than any
such information that is available to the Administrative Agent or any Lender on a nonconfidential
basis prior to disclosure by any Credit Party or any Subsidiary of a Credit Party; provided
that, in the case of information received from any Credit Party or any Subsidiary of a Credit Party
after the Effective Date, 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.

     SECTION 11.13. USA PATRIOT Act. Each Lender hereby notifies the Credit Parties that
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the “Act”), it is required to obtain, verify and record information
that identifies the Credit Parties, which information includes the name and address of the Credit
Parties and other information that will allow such Lender to identify the Credit Parties in
accordance with the Act.

51

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	NISOURCE FINANCE CORP., as Borrower

 	 
	 	By:  	/s/ David J. Vajda
 	 
	 	 	Name:  	David J. Vajda 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	Federal Tax Identification Number: 35-2105468 	 
	 
	 	NISOURCE INC., as Guarantor

 	 
	 	By:  	/s/ David Vajda
 	 
	 	 	Name:  	David J. Vajda 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	Federal Tax Identification Number: 35-2108964 	 
	 

 

 

	 	 	 	 	 
	 	DRESDNER BANK, AG, NEW YORK AND GRAND CAYMAN BRANCHES, as Sole Lead Arranger and Sole Book Runner

 	 
	 	By:  	/s/ Thomas R. Brady
 	 
	 	 	Name:  	Thomas R. Brady 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	                      /s/ Brian Smith
 	 
	 	 	Name:  	Brian Smith 	 
	 	 	Title:  	Managing Director 	 
	 
	 	DRESDNER BANK, AG, NEW YORK AND GRAND CAYMAN BRANCHES,

as Administrative Agent and a Lender

 	 
	 	By:  	/s/ Thomas R. Brady
 	 
	 	 	Name:  	Thomas R. Brady 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	                      /s/ Brian Smith
 	 
	 	 	Name:  	Brian Smith 	 
	 	 	Title:  	Managing Director 	 
	 

 

 

SCHEDULE 2.01

(Credit Agreement)

Names, Addresses, Allocation of Aggregate Commitment, and Applicable Percentages of Banks

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Eurodollar Lending	 	 	 	 	 	Applicable
	Bank Name	 	Domestic Office	 	Office	 	Commitment	 	Percentage
	Dresdner Bank AG,
	 	1301 Avenue of the	 	Same	 	$	300,000,000	 	 	 	100	%
	New York and Grand
	 	Americas	 	 	 	 	 	 	 	 	 	 
	Cayman Branches
	 	New York, NY 10019	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL
	 	 	 	 	 	$	300,000,000	 	 	 	100	%

Sch. 6.01(e)-1exv10w1

 

EXHIBIT 10.1

INDEMNIFICATION AGREEMENT

     This Indemnification Agreement (“Agreement”) is entered into as of                      by
and between Xcorporeal, Inc. (“Company”), and                      (“Indemnitee”).

RECITALS

     A. It is important to the Company to attract and retain as directors the most capable persons
reasonably available.

     B. Indemnitee is becoming a director of the Company.

     C. Both the Company and Indemnitee recognize the increased risk of litigation and other claims
being asserted against directors of companies in today’s environment.

     D. The Company’s Certificate of Incorporation and By-laws (the “Constituent
Documents”) provide that the Company will indemnify its directors and the Company’s By-laws
provide that the Company will advance expenses in connection therewith, and Indemnitee’s
willingness to serve as a director of the Company is based in part on Indemnitee’s reliance on such
provisions.

     E. In recognition of Indemnitee’s need for substantial protection against personal liability
in order to enhance Indemnitee’s continued service to the Company in an effective manner, and
Indemnitee’s reliance on the aforesaid provisions of the Constituent Documents, and to provide
Indemnitee with express contractual indemnification (regardless of, among other things, any
amendment to or revocation of such provisions or any change in the composition of the Company’s
Board of Directors (the “Board”) or any acquisition or business combination transaction
relating to the Company), the Company wishes to provide in this Agreement for the indemnification
of and the advancement of Expenses to Indemnitee as set forth in this Agreement and, to the extent
insurance is maintained, for the continued coverage of Indemnitee under the Company’s directors’
and officers’ liability insurance policies.

     NOW, THEREFORE, the parties hereby agree as follows:

     1. Definitions. In addition to terms defined elsewhere herein, the following terms have the
following meanings when used in this Agreement with initial capital letters:

          (a) “Affiliate” has the meaning given to that term in Rule 405 under the Securities
Act of 1933, provided, however, that for purposes of this Agreement the Company and its
subsidiaries will not be deemed to constitute Affiliates of Indemnitee or the Indemnitee.

          (b) “Claim” means any threatened, pending or completed action, suit or proceeding, or
any inquiry or investigation, whether instituted, made or conducted by the Company or any other
party, including without limitation any governmental entity, that Indemnitee determines might lead
to the institution of any such action, suit or proceeding, whether civil, criminal, administrative,
arbitrative, investigative or other.

1

 

          (c) “Expenses” includes attorneys’ and experts’ fees, expenses and charges and all
other costs, expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or preparing to defend, be
a witness in or participate in, any Claim.

          (d) “Indemnifiable Losses” means any and all Expenses, damages, losses, liabilities,
judgments, fines, penalties and amounts paid in settlement (including without limitation all
interest, assessments and other charges paid or payable in connection with or in respect of any of
the foregoing) (collectively, “Losses”) relating to, resulting from or arising out of any
act or failure to act by the Indemnitee, or his or her status as any person referred to in clause
(i) of this sentence, (i) in his or her capacity as a director, officer, employee or agent of the
Company, any of its Affiliates or any other entity as to which the indemnitee is or was serving at
the request of the Company as a director, officer, employee, member, manager, trustee or agent of
another corporation, limited liability company, partnership, joint venture, trust or other entity
or enterprise, whether or not for profit and (ii) in respect of any business, transaction or other
activity of any entity referred to in clause (i) of this sentence.

     2. Indemnification. The Company will indemnify and hold harmless Indemnitee, to the
fullest extent permitted by the laws of the State of Delaware in effect on the date hereof or as
such laws may from time to time hereafter be amended to increase the scope of such permitted
indemnification, against all Indemnifiable Losses relating to, resulting from or arising out of any
Claim. The failure by Indemnitee to notify the Company of such Claim will not relieve the Company
from any liability hereunder unless, and only to the extent that, the Company did not otherwise
learn of the Claim and such failure results in forfeiture by the Company of substantial defenses,
rights or insurance coverage. Except as provided in Section 16, however, Indemnitee will
not be entitled to indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the Company unless the
Company has joined in or consented to the initiation of such Claim. If so requested by Indemnitee,
the Company will advance within two business days of such request any and all Expenses to
Indemnitee which Indemnitee determines reasonably likely to be payable, provided, however, that
Indemnitee will return, without interest, any such advance which remains unspent at the final
conclusion of the Claim to which the advance related.

     3. Additional Expenses. Without limiting the generality or effect of the foregoing,
the Company will indemnify Indemnitee against and, if requested by Indemnitee, will within two
business days of such request advance to Indemnitee, any and all attorneys’ fees and other Expenses
paid or incurred by Indemnitee in connection with any Claim asserted or brought by Indemnitee for
(i) indemnification or advance payment of Expenses by the Company under this Agreement or any other
agreement or under any provision of the Company’s Constituent Documents now or hereafter in effect
relating to Claims for Indemnifiable Losses and/or (ii) recovery under any directors’ and officers’
liability insurance policies maintained by the Company, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advance expense payment or
insurance recovery, as the case may be.

     4. Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement
to indemnification by the Company for some or a portion of any Indemnifiable Loss but not for all
of the total amount thereof, the Company will nevertheless indemnify Indemnitee

2

 

for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Loss or
in defense of any issue or matter therein, including without limitation dismissal without
prejudice, Indemnitee will be indemnified against all Expenses incurred in connection therewith.
In connection with any determination as to whether Indemnitee is entitled to be indemnified
hereunder, there will be a presumption that Indemnitee is so entitled, which presumption the
Company may overcome only by its adducing clear and convincing evidence to the contrary.

     5. No Other Presumption. For purposes of this Agreement, the termination of any Claim
by judgment, order, settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere or its equivalent, will not create a presumption that Indemnitee did not
meet any particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law.

     6. Non-Exclusivity. The rights of Indemnitee hereunder will be in addition to any
other rights Indemnitee may have under the Constituent Documents, or the substantive laws of the
Company’s jurisdiction of incorporation, any other contract or otherwise (collectively, “Other
Indemnity Provisions”); provided, however, that (i) to the extent that Indemnitee otherwise
would have any greater right to indemnification under any Other Indemnity Provision, Indemnitee
will be deemed to have such greater right hereunder and (ii) to the extent that any change is made
to any Other Indemnity Provision which permits any greater right to indemnification than that
provided under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater
right hereunder. The Company will not adopt any amendment to any of the Constituent Documents the
effect of which would be to deny, diminish or encumber Indemnitee’s right to indemnification under
this Agreement or any Other Indemnity Provision.

     7. Liability Insurance. To the extent the Company maintains an insurance policy or
policies providing directors’ and officers’ liability insurance, Indemnitee will be covered by such
policy or policies, in accordance with its or their terms, to the maximum extent of the coverage
available for any director of the Company. The Company will not be required to create a trust
fund, grant a security interest, obtain a letter of credit, or use other means to ensure the
payment of such amounts as may be necessary to satisfy its obligations to indemnify and advance
expenses pursuant to this Agreement.

     8. Subrogation. In the event of payment under this Agreement, the Company will be
subrogated to the extent of such payment to all of the related rights of recovery of Indemnitee
against other persons or entities (other than Indemnitee’s successors). The Indemnitee will
execute all papers reasonably required to evidence such rights of recovery (all of Indemnitee’s
reasonable Expenses, including attorneys’ fees and charges, related thereto to be reimbursed by or,
at the option of Indemnitee, advanced by the Company).

     9. No Duplication of Payments. The Company will not be liable under this Agreement to
make any payment in connection with any Indemnifiable Loss made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (net of Expenses incurred in connection
therewith) under any insurance policy, the Constituent Documents and Other Indemnity Provisions or
otherwise of the amounts otherwise indemnifiable hereunder.

3

 

     10. Defense of Claims. The Company will be entitled to participate in the defense of
any Claim or to assume the defense thereof, with counsel reasonably satisfactory to the Indemnitee,
provided that in the event that (i) the use of counsel chosen by the Company to represent
Indemnitee would present such counsel with an actual or potential conflict, (ii) the named parties
in any such Claim (including any impleaded parties) include both the Company and Indemnitee and
Indemnitee shall conclude that there may be one or more legal defenses available to him or her that
are different from or in addition to those available to the Company, or (iii) any such
representation by the Company would be precluded under the applicable standards of professional
conduct then prevailing, then Indemnitee will be entitled to retain separate counsel (but not more
than one law firm in respect of any particular Claim) at the Company’s expense. The Company will
not, without the prior written consent of the Indemnitee, effect any settlement of any threatened
or pending Claim which the Indemnitee is or could have been a party unless such settlement solely
involves the payment of money and includes an unconditional release of the Indemnitee from all
liability on any claims that are the subject matter of such Claim.

     11. Successors and Binding Agreement.

          (a) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or assets
of the Company, by agreement in form and substance satisfactory to Indemnitee and his or her
counsel, expressly to assume and agree to perform this Agreement in the same manner and to the same
extent the Company would be required to perform if no such succession had taken place. This
Agreement will be binding upon and inure to the benefit of the Company and any successor to the
Company, including without limitation any person acquiring directly or indirectly all or
substantially all of the business or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor will thereafter be deemed the
“Company” for purposes of this Agreement), but will not otherwise be assignable or
delegatable by the Company.

          (b) This Agreement will inure to the benefit of and be enforceable by the Indemnitee’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
legatees and other successors.

          (c) This Agreement is personal in nature and neither of the parties hereto will, without the
consent of the other, assign or delegate this Agreement or any rights or obligations hereunder
except as expressly provided in Sections 11(a) and 11(b). Without limiting the generality
or effect of the foregoing, Indemnitee’s right to receive payments hereunder will not be
assignable, whether by pledge, creation of a security interest or otherwise, other than by a
transfer by the Indemnitee’s will or by the laws of descent and distribution, and, in the event of
any attempted assignment or transfer contrary to this Section 11(c), the Company will have
no liability to pay any amount so attempted to be assigned or transferred.

     12. Notices. For all purposes of this Agreement, all communications, including
without limitation notices, consents, requests or approvals, required or permitted to be given
hereunder will be in writing and will be deemed to have been duly given when hand delivered or
dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five

4

 

business days after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid or one business day after having been sent for next-day delivery
by a nationally recognized overnight courier service, addressed to the Company (to the attention of
the Secretary of the Company) and to the Indemnitee at the addresses shown on the signature page
hereto, or to such other address as any party may have furnished to the other in writing and in
accordance herewith, except that notices of changes of address will be effective only upon
receipt.

     13. Governing Law. The validity, interpretation, construction and performance of this
Agreement will be governed by and construed in accordance with the substantive laws of the State of
Delaware, without giving effect to the principles of conflict of laws of such State. Each party
consents to non-exclusive jurisdiction of any Delaware state or federal court or any court in any
other jurisdiction in which a Claim is commenced by a third person for purposes of any action, suit
or proceeding hereunder, waives any objection to venue therein or any defense based on forum non
conveniens or similar theories and agrees that service of process may be effected in any such
action, suit or proceeding by notice given in accordance with Section 12.

     14. Validity. If any provision of this Agreement or the application of any provision
hereof to any person or circumstance is held invalid, unenforceable or otherwise illegal, the
remainder of this Agreement and the application of such provision to any other person or
circumstance will not be affected, and the provision so held to be invalid, unenforceable or
otherwise illegal will be reformed to the extent, and only to the extent, necessary to make it
enforceable, valid or legal.

     15. Miscellaneous. No provision of this Agreement may be waived, modified or
discharged unless such waiver, modification or discharge is agreed to in writing signed by
Indemnitee and the Company. No waiver by either party hereto at any time of any breach by the
other party hereto or compliance with any condition or provision of this Agreement to be performed
by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have been made by either party that
are not set forth expressly in this Agreement. References to Sections are to references to
Sections of this Agreement.

     16. Legal Fees. It is the intent of the Company that the Indemnitee not be required
to incur legal fees and or other Expenses associated with the interpretation, enforcement or
defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and
expense thereof would substantially detract from the benefits intended to be extended to the
Indemnitee hereunder. Accordingly, without limiting the generality or effect of any other
provision hereof, if it should appear to the Indemnitee that the Company has failed to comply with
any of its obligations under this Agreement or in the event that the Company or any other person
takes or threatens to take any action to declare this Agreement void or unenforceable, or
institutes any litigation or other action or proceeding designed to deny, or to recover from, the
Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, the
Company irrevocably authorizes the Indemnitee from time to time to retain counsel of Indemnitee’s
choice, at the expense of the Company as hereafter provided, to advise and represent the Indemnitee
in connection with any such interpretation, enforcement or defense,

5

 

including without limitation the initiation or defense of any litigation or other legal
action, whether by or against the Company or any director, officer, stockholder or other person
affiliated with the Company, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel, the Company irrevocably consents
to the Indemnitee’s entering into an attorney-client relationship with such counsel, and in that
connection the Company and the Indemnitee agree that a confidential relationship shall exist
between the Indemnitee and such counsel. Without respect to whether the Indemnitee prevails, in
whole or in part, in connection with any of the foregoing, the Company will pay and be solely
financially responsible for any and all attorneys’ and related fees and expenses incurred by the
Indemnitee in connection with any of the foregoing.

     17. Interpretation. No provision of this Agreement will be interpreted in favor of,
or against, either of the parties hereto by reason of the extent to which any such party or its
counsel participated in the drafting thereof or by reason of the extent to which any such provision
is inconsistent with any prior draft hereof or thereof.

     18. Counterparts. This Agreement may be executed by facsimile and in one or more
counterparts, each of which will be deemed to be an original but all of which together will
constitute one and the same agreement.

     IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly authorized
representative to execute this Agreement as of the date first above written.

INDEMNITEE:

	 	 	 	 	 
	 
	 
	 	 	 
	 
	Name:

	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	 	XCORPOREAL, INC.

 	 
	 	By:  	 	 
	 
	 	Name:  	 	 
	 
	 	Title:  	 	 

6

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