EXHIBIT 4(g)
Execution Version
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TERM LOAN AGREEMENT
Dated as of March 28, 2003
among
CONSUMERS ENERGY COMPANY,
as the Borrower,
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as the Banks,
and
CITICORP NORTH AMERICA, INC.,
as Agent
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SALOMON SMITH BARNEY INC.
as Lead Arranger and Sole Book Runner
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS........................................................ 1
1.1 Definitions........................................................ 1
1.2 Singular and Plural................................................ 11
1.3 Accounting Terms................................................... 11
ARTICLE II THE TERM LOANS..................................................... 12
2.1 The Term Loans..................................................... 12
2.2 Making of Term Loans............................................... 12
2.3 Repayment of Term Loans............................................ 12
2.4 Optional Principal Payments........................................ 12
2.5 Mandatory Prepayments.............................................. 13
2.6 Conversion or Continuation......................................... 13
2.7 Interest Rates, Interest Payment Dates............................. 14
2.8 Rate after Maturity................................................ 14
2.9 Method of Payment.................................................. 14
2.10 Evidence of Obligation; Telephonic Notices......................... 15
2.11 Lending Installations.............................................. 15
2.12 Non-Receipt of Funds by the Agent.................................. 16
ARTICLE III RESERVED........................................................... 16
ARTICLE IV CHANGE IN CIRCUMSTANCES............................................ 16
4.1 Yield Protection................................................... 16
4.2 Replacement Bank................................................... 17
4.3 Availability of Eurodollar Rate Loans.............................. 17
4.4 Funding Indemnification............................................ 18
4.5 Taxes.............................................................. 18
4.6 Bank Certificates; Survival of Indemnity........................... 20
ARTICLE V REPRESENTATIONS AND WARRANTIES..................................... 20
5.1 Incorporation and Good Standing.................................... 20
5.2 Corporate Power and Authority; No Conflicts........................ 20
5.3 Governmental Approvals............................................. 20
5.4 Legally Enforceable Agreements..................................... 20
5.5 Financial Statements............................................... 21
5.6 Litigation......................................................... 21
5.7 Margin Stock....................................................... 21
5.8 ERISA.............................................................. 21
5.9 Insurance.......................................................... 21
5.10 Taxes.............................................................. 21
5.11 Investment Company Act............................................. 22
5.12 Public Utility Holding Company Act................................. 22
5.13 Bonds.............................................................. 22
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ARTICLE VI AFFIRMATIVE COVENANTS............................................. 22
6.1 Payment of Taxes, Etc............................................. 22
6.2 Maintenance of Insurance.......................................... 22
6.3 Preservation of Corporate Existence, Etc.......................... 22
6.4 Compliance with Laws, Etc......................................... 22
6.5 Visitation Rights................................................. 23
6.6 Keeping of Books.................................................. 23
6.7 Reporting Requirements............................................ 23
6.8 Use of Proceeds................................................... 25
6.9 Maintenance of Properties, Etc.................................... 25
6.10 Bonds............................................................. 25
6.11 Recordation of Supplemental Indenture............................. 25
ARTICLE VII NEGATIVE COVENANTS................................................ 25
7.1 Liens............................................................. 25
7.2 Sale of Assets.................................................... 27
7.3 Mergers, Etc...................................................... 27
7.4 Compliance with ERISA............................................. 27
7.5 Change in Nature of Business...................................... 27
7.6 Restricted Payments............................................... 27
7.7 Off-Balance Sheet Liabilities..................................... 27
ARTICLE VIII FINANCIAL COVENANTS............................................... 27
8.1 Debt to Capital Ratio............................................. 27
8.2 Interest Coverage Ratio........................................... 28
ARTICLE IX EVENTS OF DEFAULT................................................. 28
9.1 Events of Default................................................. 28
9.2 Remedies.......................................................... 29
ARTICLE X WAIVERS, AMENDMENTS AND REMEDIES.................................. 29
10.1 Amendments........................................................ 29
10.2 Preservation of Rights............................................ 30
ARTICLE XI CONDITIONS PRECEDENT.............................................. 30
11.1 Delivery of Documents............................................. 31
11.2 Payment of Fees................................................... 31
11.3 No Default, Etc................................................... 31
ARTICLE XII GENERAL PROVISIONS................................................ 32
12.1 Successors and Assigns............................................ 32
12.2 Survival of Representations....................................... 34
12.3 Governmental Regulation........................................... 34
12.4 Taxes............................................................. 34
12.5 Choice of Law; Waiver of Jury Trial............................... 34
12.6 Headings.......................................................... 35
12.7 Entire Agreement.................................................. 35
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12.8 Expenses; Indemnification......................................... 35
12.9 Severability of Provisions........................................ 35
12.10 Setoff............................................................ 36
12.11 Ratable Payments.................................................. 36
12.12 Nonliability of Banks............................................. 36
12.13 Certain Disclosures............................................... 36
12.14 Limitation of Liability: Communications........................... 37
ARTICLE XIII THE AGENT......................................................... 37
13.1 Appointment....................................................... 37
13.2 Powers............................................................ 37
13.3 General Immunity.................................................. 38
13.4 No Responsibility for Loans, Recitals, Etc........................ 38
13.5 Action on Instructions of Banks................................... 38
13.6 Employment of Agents and Counsel.................................. 38
13.7 Reliance on Documents; Counsel.................................... 38
13.8 Agent's Reimbursement and Indemnification......................... 38
13.9 Rights as a Lender................................................ 39
13.10 Bank Credit Decision.............................................. 39
13.11 Successor Agent................................................... 39
13.12 Agent and Arranger Fees........................................... 39
ARTICLE XIV NOTICES........................................................... 39
14.1 Giving Notice..................................................... 39
14.2 Change of Address................................................. 40
14.3 Platform and Primary Web Portal................................... 40
ARTICLE XV COUNTERPARTS...................................................... 42
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SCHEDULES
Commitment Schedule
EXHIBITS
Exhibit A Form of Supplemental Indenture
Exhibit B-1 Required Opinions from Michael D. VanHemert, Esq.
Exhibit B-2 Required Opinions from Skadden, Arps, Slate, Meagher & Flom LLP
Exhibit B-3 Required Opinions from Miller, Canfield, Paddock and Stone, P.L.C.
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Assumption Agreement
Exhibit E Terms of Subordination (Junior Subordinated Debt)
Exhibit F Terms of Subordination (Guaranty of Hybrid Preferred Securities)
Exhibit G Form of Bond Delivery Agreement
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TERM LOAN AGREEMENT
This Term Loan Agreement, dated as of March 28, 2003, is among
Consumers Energy Company, a Michigan corporation (the "Company"), the financial
institutions listed on the signature pages hereof (together with their
respective successors and assigns, the "Banks") and Citicorp North America,
Inc., a Delaware corporation, as Agent.
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement:
"Affiliate" means, as applied to any specified Person, any other Person
that, directly or indirectly, controls, is controlled by or is under common
control with, such specified Person and includes each officer or director or
general partner of such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with") as applied to any specified Person means the
possession, directly or indirectly, of the power to vote five percent (5.0%) or
more of the Voting Stock or otherwise to direct or cause the direction of, the
management and policies of such Person, whether through the ownership of Voting
Stock, by contract or otherwise. "Affiliated" has a correlative meaning to
Affiliate.
"Agent" means Citicorp in its capacity as administrative agent for the
Banks pursuant to Article XIII, and not in its individual capacity as a Bank,
and any successor Agent appointed pursuant to Article XIII.
"Agreement" means this Term Loan Agreement, as amended from time to
time.
"Applicable Margin" means, with respect to Eurodollar Rate Loans at any
time, 4.50% per annum, and with respect to Floating Rate Loans at any time,
3.50% per annum.
"Approved Fund" means, with respect to any Bank that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Bank or by an
affiliate of such investment advisor.
"Arranger" means Salomon Smith Barney Inc., a New York corporation, and
its successors, in its capacity as Lead Arranger and Sole Book Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assignment Agreement" - see Section 12.1(e).
"Banks" - see the preamble.
"Base Eurodollar Rate" means, with respect to any Interest Period
applicable to a Borrowing of Eurodollar Rate Loans, the per annum interest rate
determined by the offered rate
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per annum at which deposits in Dollars appears on Telerate page 3750 (or any
successor page) as of 11:00 a.m. (London time), or in the event such offered
rate is not available from the Telerate page, the rate offered on deposits in
Dollars by Citibank's London Office to prime banks in the London interbank
market at 11:00 a.m. (London time), on the Eurodollar Interest Rate
Determination Date for such Interest Period and in an amount substantially equal
to the amount of the Eurodollar Rate Loan to be outstanding from Citicorp North
America, Inc. for such Interest Period.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall at all
times be equal to the highest of:
(i) the rate of interest announced publicly by Citibank
in New York, New York from time to time, as Citibank's base rate; and
(ii) the sum (adjusted to the nearest one-quarter of one
percent (0.25%) or, if there is no nearest one-quarter of one percent
(0.25%), to the next higher one-quarter of one percent (0.25%)) of (A)
one- half of one percent (0.50%) per annum plus (B) the rate per annum
obtained by dividing (I) the latest three-week moving average of
secondary market morning offering rates in the United States for three-
month certificates of deposit of major United States money market
banks, such three-week moving average (adjusted to the basis of a year
of 360 days) being determined weekly on each Monday (or, if any such
day is not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday (or, if such day is not
a Business Day, on the next preceding Business Day) by Citibank on the
basis of such rates reported by certificate of deposit dealers to, and
published by, the Federal Reserve Bank of New York, or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three (3) New York
certificate of deposit dealers of recognized standing selected by
Citibank, by (II) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by the FRB
for determining the maximum reserve requirement (including, but not
limited to, any emergency, supplemental or other marginal reserve
requirement) for Citibank in respect of liabilities consisting of or
including (among other liabilities) three- month U.S. dollar
nonpersonal time deposits in the United States plus (C) the average
during such three-week period of the annual assessment rates estimated
by Citibank for determining the then current annual assessment payable
by Citibank to the Federal Deposit Insurance Corporation (or any
successor) for insuring U.S. dollar deposits of Citibank in the United
States; and
(iii) the sum of (A) one- half of one percent (0.50%) per
annum plus (B) the Federal Funds Rate in effect from time to time
during such period.
"Bond Delivery Agreement" means a bond delivery agreement substantially
in the form of Exhibit G whereby the Agent (x) acknowledges delivery of the
Bonds and (y) agrees to hold the Bonds for the benefit of the Banks and to
distribute all payments made by the Company on account thereof to the Banks.
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"Bonds" means a series of First Mortgage Bonds created under the
Supplemental Indenture issued in favor of, and in form and substance
satisfactory to, the Agent.
"Borrowing" means a borrowing consisting of Term Loans of the same Type
made, continued or converted on the same day and, in the case of Eurodollar Rate
Loans, having the same Interest Period.
"Building Lease" means the Master Lease and Lease Supplement, each
dated as of April 23, 2001, between Consumers Campus Holdings, LLC, a wholly
owned Subsidiary of the Company, as lessee, and Wilmington Trust Company, not in
its individual capacity but solely as owner Trustee of CEC Trust 2001-A, as
lessor, together with certain other related agreements, as the same may be
amended, restated or otherwise modified and any similar agreement entered into
in replacement thereof.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in New York, New York for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in New York, New York for the conduct of substantially all of their
commercial lending activities and interbank wire transfers can be made on the
Fedwire system.
"Capital Lease" means any lease which has been or would be capitalized
on the books of the lessee in accordance with GAAP.
"Citibank" means Citibank, N.A., a national banking association.
"Citicorp" means Citicorp North America, Inc., a Delaware corporation,
in its individual capacity, and its successors and assigns.
"Citigroup Parties" means Citibank, Citicorp, the Arranger and each of
their respective Affiliates, and each of their respective officers, directors,
employees, agents, advisors, and representatives.
"CMS" means CMS Energy Corporation, a Michigan corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment Schedule" means the Schedule identifying each Bank's Term
Loan Commitment as of the date hereof attached hereto and identified as such.
"Company" - see the preamble.
"Communications" is defined in Section 14.3.
"Consolidated EBIT" means for any period, Consolidated Net Income for
such period plus, (i) to the extent deducted from revenues in determining
Consolidated Net Income (without
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duplication), (a) Consolidated Interest Expense, (b) expense for taxes paid or
accrued, and (c) any non-cash write-offs and write-downs contained in the
Company's Consolidated Net Income, including, without limitation, write-offs or
write-downs related to the sale of assets, impairment of assets and loss on
contracts, minus, (ii) to the extent included in Consolidated Net Income,
extraordinary gains realized other than in the ordinary course of business, all
calculated for the Company and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" means with respect to any period for
which the amount thereof is to be determined, an amount equal to interest
expense on Debt (excluding any Hybrid Preferred Securities), including payments
in the nature of interest under Capital Leases, all calculated for the Company
and its Subsidiaries on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Company and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Subsidiary" means any Subsidiary whose accounts are or
are required to be consolidated with the accounts of the Company in accordance
with GAAP.
"Conversion/Continuation Notice" - see Section 2.6(b).
"Credit Agreement" means that certain Credit Agreement, dated as of
March 27, 2003, by and among the Company, the banks from time to time parties
thereto, and Bank One, NA, as agent thereunder, as amended, restated,
supplemented or otherwise modified from time to time.
"Debt" means, with respect to any Person, and without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all indebtedness of such
Person for the deferred purchase price of property or services (other than trade
accounts payable arising in the ordinary course of business which are not
overdue), (c) all Unfunded Vested Liabilities of such Person (if such Person is
not the Company, determined in a manner analogous to that of determining
Unfunded Vested Liabilities of the Company), (d) all obligations of such Person
arising under acceptance facilities, (e) all obligations of such Person as
lessee under Capital Leases, (f) all obligations of such Person arising under
any interest rate swap, "cap", "collar" or other hedging agreements; provided,
however, for purposes of the calculation of Debt for this clause (f) only, the
actual amount of Debt of such Person shall be determined on a net basis to the
extent such agreements permit such amounts to be calculated on a net basis, and
(g) all guaranties, endorsements (other than for collection in the ordinary
course of business) and other contingent obligations of such Person to assure a
creditor against loss (whether by the purchase of goods or services, the
provision of funds for payment, the supply of funds to invest in any Person or
otherwise) in respect of indebtedness or obligations of any other Person of the
kinds referred to in clauses (a) through (f) above.
"Default" means an event which but for the giving of notice or lapse of
time, or both, would constitute an Event of Default.
"Designated Officer" means the Chief Financial Officer, the Treasurer,
an Assistant Treasurer, any Vice President in charge of financial or accounting
matters or the principal accounting officer of the Company.
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"Effective Date" means March 28, 2003.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Company or is under common control (within
the meaning of Section 414(c) of the Code) with the Company.
"Eurodollar Interest Rate Determination Date" means the second Business
Day prior to the first day of each Interest Period.
"Eurodollar Rate" means, with respect to any Interest Period applicable
to a Eurodollar Rate Loan, an interest rate per annum equal to the sum of (i)
the quotient obtained by dividing (a) the Base Eurodollar Rate applicable to
that Interest Period by (b) one minus the Reserve Requirement (expressed as a
decimal) applicable to that Interest Period plus (ii) the Applicable Margin.
"Eurodollar Rate Loan" means a Term Loan which bears interest by
reference to the Eurodollar Rate.
"Event of Default" means an event described in Article IX.
"Excluded Taxes" means, in the case of each Bank or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Bank or the Agent is incorporated or organized or (ii) the jurisdiction in
which the Agent's or such Bank's principal executive office or such Bank's
applicable Lending Installation is located.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day in New York, New York, for the next preceding
Business Day) in New York, New York by the Federal Reserve Bank of New York, or
if such rate is not so published for any day which is a Business Day in New
York, New York, the average of the quotations for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by the Agent.
"Fee Letter" means the fee letter dated March [7], 2003 among the
Company, the Arranger and Citicorp.
"First Mortgage Bonds" means bonds issued by the Company pursuant to
the Indenture.
"Fitch" means Fitch, Inc. or any successor thereto.
"Floating Rate" means a rate per annum equal to (i) the Base Rate plus
(ii) the Applicable Margin, changing when and as the Base Rate changes.
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"Floating Rate Loan" means a Term Loan which bears interest at the
Floating Rate.
"FRB" means the Board of Governors of the Federal Reserve System or any
successor thereto.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the date hereof, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
Section 5.5 (except, for purposes of the financial statements required to be
delivered pursuant to Sections 6.7(b) and (c), for changes concurred in by the
Company's independent public accountants).
"Hybrid Preferred Securities" means any preferred securities issued by
a Hybrid Preferred Securities Subsidiary, where such preferred securities have
the following characteristics;
(i) such Hybrid Preferred Securities Subsidiary lends
substantially all of the proceeds from the issuance of such preferred
securities to the Company or a wholly-owned direct or indirect
Subsidiary of the Company in exchange for Junior Subordinated Debt
issued by the Company or such wholly-owned direct or indirect
Subsidiary, respectively;
(ii) such preferred securities contain terms providing for
the deferral of interest payments corresponding to provisions providing
for the deferral of interest payments on the Junior Subordinated Debt;
and
(iii) the Company or a wholly-owned direct or indirect
Subsidiary of the Company (as the case may be) makes periodic interest
payments on the Junior Subordinated Debt, which interest payments are
in turn used by the Hybrid Preferred Securities Subsidiary to make
corresponding payments to the holders of the preferred securities.
"Hybrid Preferred Securities Subsidiary" means any Delaware business
trust (or similar entity) (i) all of the common equity interest of which is
owned (either directly or indirectly through one or more wholly-owned
Subsidiaries of the Company) at all times by the Company or a wholly-owned
direct or indirect Subsidiary of the Company, (ii) that has been formed for the
purpose of issuing Hybrid Preferred Securities and (iii) substantially all of
the assets of which consist at all times solely of Junior Subordinated Debt
issued by the Company or a wholly-owned direct or indirect Subsidiary of the
Company (as the case may be) and payments made from time to time on such Junior
Subordinated Debt.
"Indenture" means the Indenture, dated as of September 1, 1945, as
supplemented and amended from time to time, from the Company to JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as successor Trustee.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months, or such shorter or longer period agreed to by
the Company and the Banks, commencing on a Business Day selected by the Company
pursuant to this Agreement. Such Interest Period shall end on the day which
corresponds numerically to such date one, two, three
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or six months thereafter (or such shorter or longer period agreed to by the
Company and the Banks), provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month (or such
shorter or longer period, as applicable), such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding month (or such
shorter or longer period, as applicable). If an Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day. The Company may not select any Interest
Period that ends after the Maturity Date.
"Junior Subordinated Debt" means any unsecured Debt of the Company or a
Subsidiary of the Company (i) issued in exchange for the proceeds of Hybrid
Preferred Securities and (ii) subordinated to the rights of the Banks hereunder
and under the other Loan Documents pursuant to terms of subordination
substantially similar to those set forth in Exhibit E. or pursuant to other
terms and conditions satisfactory to the Majority Banks.
"Lending Installation" means any office, branch, subsidiary or
affiliate of a Bank.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.
"Loan" means a Floating Rate Loan or a Eurodollar Rate Loan.
"Loan Documents" means this Agreement, the Supplemental Indenture and
the Bonds.
"Majority Banks" means, as of any date of determination, Banks whose
Pro Rata Shares, in the aggregate, are 51% or greater as of such date.
"Material Adverse Change" means any event, development or circumstance
that has had or could reasonably be expected to have a material adverse effect
on (a) the business, assets, property, financial condition, results of
operations or prospects of the Company and its Subsidiaries, considered as a
whole, (b) the Company's ability to perform its obligations under this Agreement
and the other Loan Documents or (c) the validity or enforceability of any Loan
Document or the rights or remedies of the Agent or the Banks thereunder.
"Maturity Date" means March 28, 2006.
"Moody's" means Moody's Investors Service, Inc. or any successor
thereto.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA.
"Net Cash Proceeds of Sale" means proceeds received by the Company in
cash (including cash, equivalents readily convertible into cash, and such
proceeds of any notes received as consideration of any other non-cash
consideration) from the sale, assignment or other disposition of (but not the
lease or license of) any Property, other than sales of inventory in the ordinary
course of business and sales of accounts receivable pursuant to the Receivables
Sale
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Agreement, net of (A) the costs of sale, assignment or other disposition, (B)
any income, franchise, transfer or other tax liability arising from such
transaction and (C) amounts applied to the repayment of Debt (other than the
Obligations) secured by a Lien permitted by Section 7.1 on the asset disposed
of, if such net proceeds arise from any individual sale, assignment or other
disposition or from any group of related sales, assignments or other
dispositions.
"Net Proceeds" means, with respect to any sale or issuance of
securities or incurrence of Debt by any Person, the excess of (i) the gross cash
proceeds received by or on behalf of such Person in respect of such sale,
issuance or incurrence (as the case may be) over (ii) customary underwriting
commissions, auditing and legal fees, printing costs, rating agency fees and
other customary and reasonable fees and expenses incurred by such Person in
connection therewith.
"Net Worth" means, with respect to any Person, the excess of such
Person's total assets over its total liabilities, total assets and total
liabilities each to be determined in accordance with GAAP consistently applied,
excluding, however, from the determination of total assets (i) goodwill,
organizational expenses, research and development expenses, trademarks, trade
names, copyrights, patents, patent applications, licenses and rights in any
thereof, and other similar intangibles, (ii) cash held in a sinking or other
analogous fund established for the purpose of redemption, retirement or
prepayment of capital stock or Debt, and (iii) any items not included in clauses
(i) or (ii) above, that are treated as intangibles in conformity with GAAP.
"Non-U.S. Bank" - see Section 4.5(d).
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Term Loans and all other obligations of the Company to the Banks
or to any Bank or the Agent or Arranger arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any sale and leaseback
transaction which is not a Capital Lease, (iii) any liability under any
so-called "synthetic lease" transaction entered into by such Person, or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from this clause
(iv) Operating Leases.
"Operating Lease" of a Person means any lease of Property (other than a
Capital Lease) by such Person as lessee.
"Other Taxes" - see Section 4.5(b).
"Outstanding Term Loan" - see the Recitals.
"Payment Date" means the second Business Day of each calendar quarter
occurring after the Effective Date.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
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"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
"Plan" means any employee benefit plan (other than a Multiemployer
Plan) maintained for employees of the Company or any ERISA Affiliate and covered
by Title IV of ERISA.
"Platform" is defined in Section 14.3.
"Primary Web Portal" is defined in Section 14.3.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Pro Rata Share" means, with respect to any Bank, at any time, the
percentage obtained by dividing (i) the outstanding principal balance of such
Bank's Term Loan at such time by (ii) the outstanding principal balance of all
Term Loans.
"Receivables Sale Agreement" means the Amended and Restated Receivables
Sale Agreement among the Company, Asset Securitization Cooperative Corporation
and Canadian Imperial Bank of Commerce, dated as of April 1, 2002, as the same
may be amended, restated or otherwise modified and any similar agreement entered
into in replacement thereof.
"Regulation D" means Regulation D of the FRB from time to time in
effect and shall include any successor or other regulation or official
interpretation of said FRB relating to reserve requirements applicable to member
banks of the Federal Reserve System.
"Regulation U" means Regulation U of the FRB from time to time in
effect and shall include any successor or other regulation or official
interpretation of said FRB relating to the extension of credit by banks,
non-banks and non-broker-dealers for the purpose of purchasing or carrying
margin stocks.
"Reportable Event" has the meaning assigned to that term in Title IV of
ERISA.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"S&P" means Standard and Poor's Rating Services, a division of The
McGraw Hill Companies, Inc. or any successor thereto.
"SEC" means the Securities and Exchange Commission or any governmental
authority which may be substituted therefor.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
9
"Securitized Bonds" shall mean any nonrecourse bonds or similar
asset-backed securities issued by a special-purpose Subsidiary of the Company
which are payable solely from specialized charges authorized by the utility
commission of the relevant state in connection with the recovery of regulatory
assets, other stranded costs or other "Qualified Costs" (as defined in M.C.L.
460.10h(g)) authorized to be securitized by the Michigan Public Service
Commission.
"Senior Debt" means the First Mortgage Bonds.
"September 2002 Loan Agreement Obligations" means the "Obligations" as
defined in that certain Amended and Restated Term Loan Agreement dated as of
September 26, 2002 among Consumers Energy Company as borrower, Citicorp North
America, Inc. as agent and the financial institutions party thereto as banks (as
amended or modified from time to time).
"Single Employer Plan" means a Plan maintained by the Company or any
ERISA Affiliate for employees of the Company or any ERISA Affiliate.
"Subsidiary" means, as to any Person, any corporation or other entity
of which at least a majority of the securities or other ownership interests
having ordinary voting power (absolutely or contingently) for the election of
directors or other Persons performing similar functions are at the time owned
directly or indirectly by such Person.
"Supplemental Indenture" means a supplemental indenture substantially
in the form of Exhibit A.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Termination Event" means (a) a Reportable Event described in Section
4043 of ERISA and the regulations issued thereunder (other than a Reportable
Event not subject to the provision for 30-day notice to the PBGC under such
regulations), or (b) the withdrawal of the Company or any of its ERISA
Affiliates from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001 (a) (2) of ERISA, or (c) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (d) the institution of proceedings
to terminate a Plan by the PBGC or to appoint a trustee to administer any Plan.
"Term Loan Commitment" means, for each Bank, the obligation of such
Bank to make a term loan to the Company on the Effective Date in an amount not
exceeding the amount set forth on the Commitment Schedule as its Term Loan
Commitment.
"Term Loans" - see Section 2.1.
"Total Consolidated Capitalization" means, at any date of
determination, the sum of (a) Total Consolidated Debt, (b) equity of the common
stockholders of the Company, (c) equity of the preference stockholders of the
Company and (d) equity of the preferred stockholders of the Company, in each
case determined at such date.
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"Total Consolidated Debt" means, at any date of determination, the
aggregate Debt of the Company and its Consolidated Subsidiaries; provided, that
Total Consolidated Debt shall exclude (i) the principal amount of any
Securitized Bonds, (ii) any Junior Subordinated Debt owned by any Hybrid
Preferred Securities Subsidiary, (iii) any guaranty by the Company of payments
with respect to any Hybrid Preferred Securities, provided that such guaranty is
subordinated to the rights of the Banks hereunder and under the other Loan
Documents pursuant to terms of subordination substantially similar to those set
forth in Exhibit F, or pursuant to other terms and conditions satisfactory to
the Majority Banks, (iv) such percentage of the Net Proceeds from any issuance
of hybrid debt/equity securities (other than Junior Subordinated Debt and Hybrid
Preferred Securities) by the Company or any Consolidated Subsidiary as shall be
agreed to be deemed equity by the Agent and the Company prior to the issuance
thereof (which determination shall be based on, among other things, the
treatment (if any) given to such securities by the applicable rating agencies).
"Type" means, with respect to any Loan, the character of such Loan as a
Eurodollar Rate Loan or a Floating Rate Loan.
"Unfunded Vested Liabilities" means, (i) in the case of Single Employer
Plans, the amount (if any) by which the present value of all vested
nonforfeitable benefits under such Plan exceeds the fair market value of all
Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, and (ii) in the case of Multiemployer
Plans, the withdrawal liability of the Company and its ERISA Affiliates.
"Voting Stock" means, with respect to any Person, shares, securities,
limited liability company interests, general or limited partnership interests or
other equivalents with respect to any class or classes of capital stock of such
Person entitling any holder thereof (whether at all times or only so long as no
senior class of capital stock has voting power by reason of any contingency) (a)
in the case of a corporation (or equivalent organization), to vote in the
election of members of the board of directors (or the equivalent thereof) of
such Person, (b) in the case of a limited liability company, to vote in the
election of managers of such Person or to bind or otherwise act as agent for
such Person, (c) in the case of a limited partnership, to vote on the admission
of the general partner of such Person or to bind or otherwise act as agent for
such Person or (iv) in the case of a general partnership, to bind or otherwise
act as agent for such Person.
1.2 Singular and Plural. The foregoing definitions shall be
equally applicable to both the singular and plural forms of the defined terms.
1.3 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. If any changes in
generally accepted accounting principles are hereafter required or permitted and
are adopted by the Company or any of its Subsidiaries, or the Company or any of
its Subsidiaries shall change its application of generally accepted accounting
principles with respect to any Off-Balance Sheet Liabilities, in each case, with
the agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, tests, restrictions or standards herein or in the related definitions
or terms used therein ("Accounting Changes"), the parties hereto agree, at the
Company's request, to enter into negotiations, in good faith, in order to amend
such
11
provisions in a credit neutral manner so as to reflect equitably such changes
with the desired result that the criteria for evaluating the Company's and its
Subsidiaries' financial condition shall be the same after such changes as if
such changes had not been made; provided, however, until such provisions are
amended in a manner reasonably satisfactory to the Agent, the Arranger and the
Majority Banks, no Accounting Change shall be given effect in such calculations.
In the event such amendment is entered into, all references in this Agreement to
GAAP shall mean generally accepted accounting principles as of the date of such
amendment.
ARTICLE II
THE TERM LOANS
2.1 The Term Loans. Each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make a term loan to the Company on
the Effective Date in an amount equal to such Bank's Term Loan Commitment (each
individually, a "Term Loan" and, collectively, the "Term Loans "). The Term
Loans shall initially be Floating Rate Loans and thereafter may be continued as
Floating Rate Loans or converted into Eurodollar Rate Loans in the manner
provided in Section 2.6.
2.2 Making of Term Loans. Not later than 1:00 p.m. (New York time)
on the Effective Date, each Bank shall make available its applicable Term Loan
in funds immediately available in New York to the Agent at its address specified
pursuant to Section 14. To the extent funds are received from the Banks, the
Agent will make such funds available to the Company at the Agent's aforesaid
address. No Bank's obligation to make any Term Loan shall be affected by any
other Bank's failure to make any Term Loan.
2.3 Repayment of Term Loans. The Term Loans shall be paid in full
on the Maturity Date.
2.4 Optional Principal Payments. The Company may, upon at least
three (3) Business Days' prior written notice to the Agent (which the Agent
shall promptly transmit to each Bank), at any time and from time to time,
without penalty or premium, prepay the Term Loans which are Floating Rate Loans,
in whole or in part. Term Loans which are Eurodollar Rate Loans may be prepaid
in whole or in part upon at least five (5) Business Days' prior written notice
to the Agent (which the Agent shall promptly transmit to each Bank), (A) on the
expiration date of the then applicable Interest Period therefor, and (B) on any
other date upon payment of the amounts required by Section 4.4, but otherwise
without penalty or premium. Any notice of prepayment given to the Agent under
this Section 2.4 shall specify the date (which shall be a Business Day) of
prepayment, the aggregate principal amount of the prepayment and any allocation
of such amount among Floating Rate Loans and Eurodollar Rate Loans. When notice
of prepayment is delivered as provided herein, the principal amount of the Term
Loans specified in the notice shall become due and payable on the prepayment
date specified in such notice. Unless the aggregate outstanding principal
balance of the Term Loans is to be prepaid in full, voluntary prepayments of the
Term Loans shall be in an aggregate minimum amount of $10,000,000 and integral
multiples of $1,000,000 in excess of that amount. Each voluntary prepayment of
the Term Loans shall be allocated first to Term Loans which are Floating Rate
Loans until paid in full and then to Term Loans which are Eurodollar Rate Loans.
Amounts prepaid hereunder may not be
12
reborrowed. Upon any prepayment of the Term Loans pursuant to the terms of this
Section 2.4, the Agent shall, upon request of the Company, promptly surrender to
or upon the order of the Company one or more Bonds specified by the Company;
provided that the Company remains in compliance with Section 6.10.
2.5 Mandatory Prepayments. After repayment of the September 2002
Loan Agreement Obligations, the Company shall make mandatory prepayments of the
Term Loans as provided in this Section 2.5. Within three Business Days after the
Company's receipt of any Net Cash Proceeds of Sale, the Company shall make a
written offer to the Banks to prepay the Term Loans by an amount equal to 50% of
such Net Cash Proceeds of Sale; provided, however, that (i) the Company may
retain up to an aggregate of $100,000,000 of such Net Cash Proceeds of Sale
during the period beginning on September 26, 2002 and ending upon irrevocable
payment of the Obligations before it shall be required to make any such
mandatory offer, and (ii) the Company shall not be required to make any such
mandatory offer unless and until the aggregate amount of such mandatory offer
(on a cumulative basis) would be at least $1,000,000. Such offer shall be
transmitted by facsimile and by overnight courier to each Bank and shall be
deemed received on the Business Day following transmittal. Each Bank shall have
three Business Days following its receipt of such offer to submit a written
response to the Company's prepayment offer, and if any Bank shall not have
responded by the close of business on the third Business Day, it shall be deemed
to have accepted such offer. Payment shall be made to the Agent for the account
of all Banks that have accepted the prepayment offer on the fourth Business Day
following their receipt of the offer from the Company. If any Bank elects not to
accept its Pro Rata Share thereof, such prepayment shall be applied ratably to
the Term Loans of the Banks that have accepted such offer. Amounts prepaid
hereunder may not be reborrowed. Upon any prepayment of the Term Loans pursuant
to the terms of this Section 2.5, the Agent shall, upon request of the Company,
promptly surrender to or upon the order of the Company one or more Bonds
specified by the Company; provided that the Company remains in compliance with
Section 6.10.
2.6 Conversion or Continuation. (a) The Company shall have the
option (A) to convert at any time all or any part of outstanding Floating Rate
Loans to Eurodollar Rate Loans; (B) to convert all or any part of outstanding
Eurodollar Rate Loans having Interest Periods which expire on the same date to
Floating Rate Loans on such expiration date; or (C) to continue all or any part
of outstanding Eurodollar Rate Loans having Interest Periods which expire on the
same date as Eurodollar Rate Loans, and the succeeding Interest Period of such
continued Loans shall commence on such expiration date; provided, however, no
such outstanding Loan may be continued as, or be converted into, a Eurodollar
Rate Loan (i) if the continuation of, or the conversion into, would violate any
of the provisions of this Agreement or (ii) if a Default or Event of Default
would occur or has occurred and is continuing. Any conversion into or
continuation of Eurodollar Rate Loans under this Section 2.6 shall be in a
minimum amount of $10,000,000 and in integral multiples of $1,000,000 in excess
of that amount.
(b) To convert or continue a Loan under Section 2.6(a), the
Company shall deliver an irrevocable notice (a "Conversion/Continuation Notice")
to the Agent no later than 11:00 a.m. (New York time) at least three (3)
Business Days in advance of the proposed conversion/continuation date. A
Conversion/Continuation Notice shall specify (A) the proposed
conversion/continuation date (which shall be a Business Day), (B) the principal
amount of the Loan to be converted/continued, (C) whether such Loan shall be
converted and/or continued, and
13
(D) in the case of a conversion to, or continuation of, a Eurodollar Rate Loan,
the requested Interest Period. Promptly after receipt of a
Conversion/Continuation Notice under this Section 2.6(b) (or telephonic notice
in lieu thereof), the Agent shall notify each Bank by telex or telecopy, or
other similar form of transmission, of the proposed conversion/continuation. Any
Conversion/Continuation Notice for conversion to, or continuation of, a Loan (or
telephonic notice in lieu thereof) shall be irrevocable, and the Company shall
be bound to convert or continue in accordance therewith.
2.7 Interest Rates, Interest Payment Dates. (a) Subject to
Section 2.8, each Term Loan shall bear interest as follows:
(i) if it is a Floating Rate Loan, at a rate per annum
equal to the Floating Rate from time to time in effect; and
(ii) if it is a Eurodollar Rate Loan, at a rate per annum
equal to the Eurodollar Rate for each applicable Interest Period
therein.
Changes in the rate of interest on that portion of any Term Loan maintained as a
Floating Rate Loan will take effect simultaneously with each change in the
Floating Rate.
(b) Interest accrued on each Floating Rate Loan shall be payable
on each Payment Date and at maturity. Interest accrued on each Eurodollar Rate
Loan shall be payable on the last day of its applicable Interest Period, on any
date on which such Eurodollar Rate Loan is prepaid and at maturity. Interest
accrued on each Eurodollar Rate Loan having an Interest Period longer than three
months shall also be payable on the last day of each three- month interval
during such Interest Period. Interest on all Term Loans shall be calculated for
actual days elapsed on the basis of a 360-day year. In computing interest on any
Term Loan, the date of the making of the Term Loan or the first day of an
Interest Period, as the case may be, shall be included and the date of payment
or the expiration date an Interest Period, as the case may be, shall be
excluded; provided, however, if a Term Loan is repaid on the same day on which
it is made, one (1) day's interest shall be paid on such Term Loan. If any
payment of principal of or interest on an Advance shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such payment.
2.8 Rate after Maturity. Any Term Loan not paid by the Company at
maturity, whether by acceleration or otherwise, shall bear interest until paid
in full at a rate per annum equal to the higher of the rate otherwise applicable
thereto plus 2% or the Floating Rate plus 2%. All other Obligations that are not
paid when due (including, without limitation, overdue interest beyond the
applicable grace period) shall bear interest until paid in full at a rate per
annum equal to the Floating Rate plus 2%. In addition, in the case of overdue
interest beyond the applicable grace period, until such overdue interest is paid
in full, the principal amount to which such interest relates shall also bear
interest at a rate per annum equal to the higher of the rate otherwise
applicable thereto plus 2% or the Floating Rate plus 2%.
2.9 Method of Payment. All payments of principal, interest and
fees hereunder shall be made in immediately available funds to the Agent at its
address specified on its signature page to this Agreement (or at any other
Lending Installation of the Agent specified in writing by the
14
Agent to the Company) not later than 1:00 p.m. (New York time) on the date when
due and shall be applied ratably by the Agent among the Banks. Funds received
after such time shall be deemed received on the following Business Day unless
the Agent shall have received from, or on behalf of, the Company a Federal
Reserve reference number with respect to such payment before 1:00 p.m. (New York
time) on the date of such payment. Each payment delivered to the Agent for the
account of any Bank shall be delivered promptly by the Agent in the same type of
funds received by the Agent to such Bank at the address specified for such Bank
on its signature page to this Agreement or at any Lending Installation specified
in a notice received by the Agent from such Bank. The Agent is hereby authorized
to charge the account of the Company maintained with Citicorp, if any, for each
payment of principal, interest and fees as such payment becomes due hereunder.
2.10 Evidence of Obligation; Telephonic Notices.
(a) The obligation of the Company to repay the Obligations shall
be evidenced by one or more Bonds.
(b) Each Bank shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Company to such Bank
resulting from each Term Loan made by such Bank from time to time, including the
amounts of principal and interest payable and paid to such Bank from time to
time hereunder.
(c) The Agent shall also maintain accounts in which it will record
(i) the amount of each Term Loan made hereunder, the Type thereof and the
Interest Period with respect thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Company to each
Bank hereunder, and (iii) the amount of any sum received by the Agent hereunder
from the Company and each Bank's share thereof.
(d) The entries maintained in the accounts maintained pursuant to
paragraphs (b) and (c) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Bank to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Company to repay the Obligations
in accordance with their terms.
(e) The Company hereby authorizes the Banks and the Agent to make,
convert or continue Term Loans based on telephonic notices made by any person or
persons the Agent or any Bank in good faith believes to be acting on behalf of
the Company. The Company agrees to deliver promptly to the Agent a written
confirmation of each telephonic notice signed by a Designated Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Banks, the records of the Agent and the Banks shall govern
absent manifest error.
2.11 Lending Installations. Subject to the provisions of Section
4.6, each Bank may book its Term Loans at any Lending Installation selected by
such Bank and may change its Lending Installation from time to time. All terms
of this Agreement shall apply to any such Lending Installation and the Term
Loans shall be deemed held by the applicable Bank for the benefit of such
Lending Installation. Each Bank may, by written or facsimile notice to the
15
Company, designate a Lending Installation through which Term Loans will be made
by it and for whose account payments on the Term Loans are to be made.
2.12 Non-Receipt of Funds by the Agent. Unless a Bank or the
Company, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Bank, the
proceeds of a Term Loan or (ii) in the case of the Company, a payment of
principal, interest or fees to the Agent for the account of the Banks, that it
does not intend to make such payment, the Agent may assume that such payment has
been made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Bank or the Company, as the case may be, has not in fact made such payment
to the Agent, the recipient of such payment shall, on demand by the Agent, repay
to the Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was so
made available by the Agent until the date the Agent recovers such amount at a
rate per annum equal to (i) in the case of payment by a Bank, the Federal Funds
Rate for such day or (ii) in the case of payment by the Company, the interest
rate applicable to the relevant Term Loan.
ARTICLE III
RESERVED
ARTICLE IV
CHANGE IN CIRCUMSTANCES
4.1 Yield Protection. (a) If any change in law or any governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law), or any interpretation thereof by any agency or authority having
jurisdiction over any Bank,
(i) subjects any Bank or any applicable Lending
Installation to any increased tax, duty, charge or withholding on or
from payments due from the Company (excluding taxation measured by or
attributable to the overall net income of such Bank or applicable
Lending Installation, whether overall or in any geographic area), or
changes the rate of taxation of payments to any Bank in respect of its
Term Loans or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by any Bank or any applicable Lending Installation (including,
without limitation, any reserve costs under Regulation D with respect
to Eurocurrency liabilities (as defined in Regulation D)), or
(iii) imposes any other condition the result of which is to
increase the cost to any Bank or any applicable Lending Installation of
making, funding or maintaining Term Loans, or reduces any amount
receivable by any Bank or any applicable Lending Installation in
connection with Term Loans or requires any Bank or
16
any applicable Lending Installation to make any payment calculated by
reference to its Term Loans or interest received by it, by an amount
deemed material by such Bank, or
(iv) affects the amount of capital required or expected to
be maintained by any Bank or Lending Installation or any corporation
controlling any Bank and such Bank determines the amount of capital
required is increased by or based upon the existence of this Agreement
or its obligation to make Term Loans hereunder or of commitments of
this type,
then, upon presentation by such Bank to the Company of a certificate (as
referred to in the immediately succeeding sentence of this Section 4.1) setting
forth the basis for such determination and the additional amounts reasonably
determined by such Bank for the period of up to 90 days prior to the date on
which such certificate is delivered to the Company and the Agent, to be
sufficient to compensate such Bank in light of such circumstances, the Company
shall within 30 days of such delivery of such certificate pay to the Agent for
the account of such Bank the specified amounts set forth on such certificate.
The affected Bank shall deliver to the Company and the Agent a certificate
setting forth the basis of the claim and specifying in reasonable detail the
calculation of such increased expense, which certificate shall be prima facie
evidence as to such increase and such amounts. An affected Bank may deliver more
than one certificate to the Company during the term of this Agreement. In making
the determinations contemplated by the above-referenced certificate, any Bank
may make such reasonable estimates, assumptions, allocations and the like that
such Bank in good faith determines to be appropriate, and such Bank's selection
thereof in accordance with this Section 4.1 shall be conclusive and binding on
the Company, absent manifest error.
(b) No Bank shall be entitled to demand compensation or be
compensated hereunder to the extent that such compensation relates to any period
of time more than 90 days prior to the date upon which such Bank first notified
the Company of the occurrence of the event entitling such Bank to such
compensation (unless, and to the extent, that any such compensation so demanded
shall relate to the retroactive application of any event so notified to the
Company).
4.2 Replacement Bank. If any Bank shall make a demand for payment
under Section 4.1, then within 30 days after such demand, the Company may, with
the approval of the Agent (which approval shall not be unreasonably withheld)
and provided that no Default or Event of Default shall then have occurred and be
continuing, demand that such Bank assign to one or more financial institutions
designated by the Company and approved by the Agent all (but not less than all)
of such Bank's outstanding Term Loans within the period ending on the later of
such 30th day and the last day of the longest of the then current Interest
Periods or maturity dates for such outstanding Term Loans. It is understood that
such assignment shall be consummated on terms satisfactory to the Company, the
Agent and the assigning Bank, provided that such assigning Bank's consent to
such an assignment shall not be unreasonably withheld.
4.3 Availability of Eurodollar Rate Loans. If:
(i) any Bank determines that maintenance of a Eurodollar
Rate Loan at a suitable Lending Installation would violate any
applicable law, rule, regulation or directive, whether or not having
the force of law, or
17
(ii) the Majority Banks determine that (A) deposits of a
type and maturity appropriate to match fund Eurodollar Rate Loans are
not available or (B) the Base Eurodollar Rate does not accurately
reflect the cost of making or maintaining a Eurodollar Rate Loan,
then the Agent shall suspend the availability of Eurodollar Rate Loans and, in
the case of clause (i), require any Eurodollar Rate Loans to be converted to
Floating Rate Loans on such date as is required by the applicable law, rule,
regulation or directive.
4.4 Funding Indemnification. If any payment of a Eurodollar Rate
Loan occurs on a date which is not the last day of an applicable Interest
Period, whether because of prepayment or otherwise, or a Eurodollar Rate Loan is
not made on the date specified by the Company for any reason other than default
by the Banks, the Company will indemnify each Bank for any loss or cost (but not
lost profits) incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Rate Loan; provided that the Company shall not be
liable for any of the foregoing to the extent they arise because of acceleration
by any Bank.
4.5 Taxes.
(a) All payments by the Company to or for the account of any Bank
or the Agent hereunder or under any Bond shall be made free and clear of and
without deduction for any and all Taxes. If the Company shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder to any Bank
or the Agent, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 4.5) such Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such deductions, (iii) the
Company shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (iv) the Company shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(b) In addition, the Company hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Bond or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Bond ("Other Taxes").
(c) The Company hereby agrees to indemnify the Agent and each Bank
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed on amounts payable under this Section 4.5) paid by
the Agent or such Bank and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date the Agent or such Bank
makes demand therefor pursuant to Section 4.6.
(d) Each Bank that is not incorporated under the laws of the
United States of America or a state thereof (each a "Non-U.S. Bank ") agrees
that it will, not more than ten Business Days after the date hereof, or, if
later, not more than ten Business Days after becoming a Bank hereunder, (i)
deliver to each of the Company and the Agent two (2) duly completed copies of
18
United States Internal Revenue Service Form W8BEN or W8ECI, certifying in either
case that such Bank is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, and (ii)
deliver to each of the Company and the Agent a United States Internal Revenue
Form W-8 or W-9, as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax. Each Non-U.S. Bank further
undertakes to deliver to each of the Company and the Agent (x) renewals or
additional copies of such form (or any successor form) on or before the date
that such form expires or becomes obsolete, and (y) after the occurrence of any
event requiring a change in the most recent forms so delivered by it, such
additional forms or amendments thereto as may be reasonably requested by the
Company or the Agent. All forms or amendments described in the preceding
sentence shall certify that such Bank is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form or
amendment with respect to it and such Bank advises the Company and the Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(e) For any period during which a Non-U.S. Bank has failed to
provide the Company with an appropriate form pursuant to clause (d), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Bank shall not be entitled to
indemnification under this Section 4.5 with respect to Taxes imposed by the
United States; provided that, should a Non-U.S. Bank which is otherwise exempt
from or subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (d) above, the
Company shall take such steps as such Non-U.S. Bank shall reasonably request to
assist such Non-U.S. Bank to recover such Taxes.
(f) Any Bank that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Bond
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Company (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
(g) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Bank (because the appropriate form was
not delivered or properly completed, because such Bank failed to notify the
Agent of a change in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Bank shall indemnify the Agent fully
for all amounts paid, directly or indirectly, by the Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and including taxes
imposed by any jurisdiction on amounts payable to the Agent under this
subsection, together with all costs and expenses related thereto (including
attorneys fees and time charges of attorneys for the Agent, which attorneys may
be
19
employees of the Agent). The obligations of the Banks under this Section 4.5(g)
shall survive the payment of the Obligations and termination of this Agreement.
4.6 Bank Certificates; Survival of Indemnity. To the extent
reasonably possible, each Bank shall designate an alternate Lending Installation
with respect to Eurodollar Rate Loans to reduce any liability of the Company to
such Bank under Section 4.1 or to avoid the unavailability of Eurodollar Rate
Loan under Section 4.3, so long as such designation is not disadvantageous to
such Bank. A certificate of such Bank as to the amount due under Section 4.1,
4.4 or 4.5 shall be final, conclusive and binding on the Company in the absence
of manifest error. Determination of amounts payable under such Sections in
connection with a Eurodollar Rate Loan shall be calculated as though each Bank
funded each Eurodollar Rate Loan through the purchase of a deposit of the type
and maturity corresponding to the deposit used as a reference in determining the
Base Eurodollar Rate applicable to such Eurodollar Rate Loan whether in fact
that is the case or not. Unless otherwise provided herein, the amount specified
in any certificate shall be payable on demand after receipt by the Company of
such certificate. The obligations of the Company under Sections 4.1, 4.4 and 4.5
shall survive payment of the Obligations and termination of this Agreement,
provided, that no Bank shall be entitled to compensation to the extent that such
compensation relates to any period of time more than 90 days after the
termination of this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants that:
5.1 Incorporation and Good Standing. The Company is duly
incorporated, validly existing and in good standing under the laws of the State
of Michigan.
5.2 Corporate Power and Authority; No Conflicts. The execution,
delivery and performance by the Company of the Loan Documents are within the
Company's corporate powers, have been duly authorized by all necessary corporate
action and do not (i) violate the Company's charter, bylaws or any applicable
law, or (ii) breach or result in an event of default under any indenture or
material agreement, and do not result in or require the creation of any Lien
upon or with respect to any of its properties (except the lien of the Indenture
securing the Bonds).
5.3 Governmental Approvals. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Company of any Loan Document, except for the authorization to issue, sell or
guarantee secured and/or unsecured long-term debt granted by the Federal Energy
Regulatory Commission, which authorization has been obtained and is in full
force and effect.
5.4 Legally Enforceable Agreements. Each Loan Document constitutes
a legal, valid and binding obligation of the Company, enforceable in accordance
with its terms, subject to (a) the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws
20
affecting the enforcement of creditors' rights generally and (b) the application
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law).
5.5 Financial Statements. The audited balance sheet of the Company
and its Consolidated Subsidiaries as at December 31, 2001, and the related
statements of income and cash flows of the Company and its Consolidated
Subsidiaries for the fiscal year then ended, as set forth in the Company's
Annual Report on Form 10-K/A (copies of which have been furnished to each Bank),
and the unaudited balance sheets of the Company and its Consolidated
Subsidiaries as at September 30, 2002, and the related statements of income and
cash flows of the Company and its Consolidated Subsidiaries for the nine-month
period then ended (copies of which have been furnished to each Bank), fairly
present the financial condition of the Company and its Consolidated Subsidiaries
as at such dates and the results of operations of the Company and its
Consolidated Subsidiaries for the periods ended on such dates, all in accordance
with GAAP, and since December 31, 2001, there has been no Material Adverse
Change (except to the extent described in the Company's Quarterly Report on Form
10-Q/A for the quarter ended September 30, 2002 as filed with the SEC, copies of
which have been furnished to each Bank).
5.6 Litigation. Except (i) to the extent described in the
Company's Annual Report on Form 10-K/A for the year ended December 31, 2001 and
Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2002 as
filed with the SEC, copies of which have been furnished to each Bank, and (ii)
such other similar actions, suits and proceedings predicated on the occurrence
of the same events giving rise to any actions, suits and proceedings described
in the Reports filed with the SEC set forth in clause (i) hereof, there is no
pending or threatened action or proceeding against the Company or any of its
Consolidated Subsidiaries before any court, governmental agency or arbitrator,
which, if adversely determined, might reasonably be expected to materially
adversely affect the financial condition, results of operations, business,
Property or prospects of the Company and its Consolidated Subsidiaries, taken as
a whole, or that would materially adversely affect the Company's ability to
perform its obligations under any Loan Document. As of the Effective Date, there
is no litigation challenging the validity or the enforceability of any of the
Loan Documents.
5.7 Margin Stock. The Company is not engaged in the business of
extending credit for the purpose of buying or carrying margin stock (within the
meaning of Regulation U), and no proceeds of any Term Loan will be used to buy
or carry any margin stock or to extend credit to others for the purpose of
buying or carrying any margin stock.
5.8 ERISA. No Termination Event has occurred or is reasonably
expected to occur with respect to any Plan. Neither the Company nor any of its
ERISA Affiliates is an employer under a Multiemployer Plan.
5.9 Insurance. All insurance required by Section 6.2 is in full
force and effect.
5.10 Taxes. The Company and its Subsidiaries have filed all tax
returns (Federal, state and local) required to be filed and paid all taxes shown
thereon to be due, including interest and penalties, or, to the extent the
Company or any of its Subsidiaries is contesting in good faith an assertion of
liability based on such returns, has provided adequate reserves for payment
thereof in accordance with GAAP.
21
5.11 Investment Company Act. The Company is not an investment
company (within the meaning of the Investment Company Act of 1940, as amended).
5.12 Public Utility Holding Company Act. The Company is exempt from
the registration requirements of the Public Utility Holding Company Act of 1935,
as amended, 15 USC 79, et seq.
5.13 Bonds. The issuance to the Agent of Bonds as evidence of the
Obligations (i) will not violate any provision of the Indenture or any other
agreement or instrument, or any law or regulation, or judicial or regulatory
order, judgment or decree, to which the Company or any of its Subsidiaries is a
party or by which any of the foregoing is bound and (ii) will provide the Banks,
as beneficial holders of the Bonds through the Agent, the benefit of the Lien of
the Indenture equally and ratably with the holders of other First Mortgage
Bonds.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Obligations shall remain unpaid, the Company shall:
6.1 Payment of Taxes, Etc. Pay and discharge before the same shall
become delinquent, (a) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property, and (b) all lawful claims which, if
unpaid, might by law become a Lien upon its property, provided that the Company
shall not be required to pay or discharge any such tax, assessment, charge or
claim (i) which is being contested by it in good faith and by proper procedures
or (ii) the non-payment of which will not materially adversely affect the
financial condition or results of operations of the Company and its Consolidated
Subsidiaries, taken as a whole.
6.2 Maintenance of Insurance. Maintain insurance in such amounts
and covering such risks with respect to its business and properties as is
usually carried by companies engaged in similar businesses and owning similar
properties, either with reputable insurance companies or, in whole or in part,
by establishing reserves or one or more insurance funds, either alone or with
other corporations or associations.
6.3 Preservation of Corporate Existence, Etc. Preserve and
maintain its corporate existence, rights and franchises, and qualify and remain
qualified as a foreign corporation in each jurisdiction in which such
qualification is necessary in view of its business and operations or the
ownership of its properties, provided that the Company shall not be required to
preserve any such right or franchise or to remain so qualified unless the
failure to do so would have a material adverse effect on the financial condition
or results of operations of the Company and its Consolidated Subsidiaries, taken
as a whole, or the ability of the Company to enter into, or to perform its
obligations under, any Loan Document.
6.4 Compliance with Laws, Etc. Comply with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority,
the non-compliance with which would materially adversely affect the financial
condition or results of operations of the
22
Company and its Consolidated Subsidiaries, taken as a whole, or the ability of
the Company to perform its obligations under any Loan Document.
6.5 Visitation Rights. Subject to any necessary approval from the
Nuclear Regulatory Commission, at any reasonable time and from time to time,
permit the Agent, any of the Banks or any agents or representatives thereof to
examine and make copies of and abstracts from its records and books of account,
visit its properties and discuss its affairs, finances and accounts with any of
its officers,
6.6 Keeping of Books. Keep, and cause each Consolidated Subsidiary
to keep, adequate records and books of account, in which full and correct
entries shall be made of all of its financial transactions and its assets and
business so as to permit the Company and its Consolidated Subsidiaries to
present financial statements in accordance with GAAP.
6.7 Reporting Requirements. Furnish to the Agent, with sufficient
copies for each of the Banks:
(a) as soon as practicable and in any event within five Business
Days after becoming aware of the occurrence of any Default or Event of Default,
a statement of a Designated Officer as to the nature thereof, and as soon as
practicable and in any event within five Business Days thereafter, a statement
of a Designated Officer as to the action which the Company has taken, is taking
or proposes to take with respect thereto;
(b) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
at the end of such quarter, and the related consolidated statements of income,
cash flows and common stockholder's equity of the Company and its Consolidated
Subsidiaries as at the end of and for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
date or period of the preceding fiscal year, or statements providing
substantially similar information (which requirement shall be deemed satisfied
by the delivery of the Company's quarterly report on Form 10-Q for such
quarter), all in reasonable detail and duly certified (subject to the absence of
footnotes and to year-end audit adjustments) by a Designated Officer as having
been prepared in accordance with GAAP, together with (i) a certificate of a
Designated Officer (which certificate shall also accompany the financial
statements delivered pursuant to clause (c) below) stating that such officer has
no knowledge (having made due inquiry with respect thereto) that a Default or
Event of Default has occurred and is continuing, or, if a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the actions which the Company has taken, is taking or proposes to take with
respect thereto, and (ii) a certificate of a Designated Officer, in
substantially the form of Exhibit C hereto, setting forth the Company's
computation of the financial ratios specified in Sections 8.1 and 8.2 as of the
end of the immediately preceding fiscal quarter or year, as the case may be, of
the Company;
(c) as soon as available and in any event within 120 days after
the end of each fiscal year of the Company, a copy of the Annual Report on Form
10-K (or any successor form) for the Company for such year, including therein
the consolidated balance sheet of the Company and its
23
Consolidated Subsidiaries as at the end of such year and the consolidated
statements of income, cash flows and common stockholder's equity of the Company
and its Consolidated Subsidiaries as at the end of and for such year, or
statements providing substantially similar information, in each case certified
by independent public accountants of recognized national standing selected by
the Company (and not objected to by the Majority Banks), together with a
certificate of such accounting firm addressed to the Banks stating that, in the
course of its examination of the consolidated financial statements of the
Company and its Consolidated Subsidiaries, which examination was conducted by
such accounting firm in accordance with GAAP, (1) such accounting firm has
obtained no knowledge that an Event of Default, insofar as such Event of Default
related to accounting or financial matters, has occurred and is continuing, or
if, in the opinion of such accounting firm, such an Event of Default has
occurred and is continuing, a statement as to the nature thereof, and (2) such
accounting firm has examined a certificate prepared by the Company setting forth
the computations made by the Company in determining, as of the end of such
fiscal year, the ratios specified in Sections 8.1 and 8.2 which certificate
shall be attached to the certificate of such accounting firm, and such
accounting firm confirms that such computations accurately reflect such ratio;
(d) promptly after the sending or filing thereof, copies of all
proxy statements which the Company sends to its stockholders, copies of all
regular, periodic and special reports (other than those which relate solely to
employee benefit plans) which the Company files with the SEC and notice of the
sending or filing of (and, upon the request of the Agent or any Bank, a copy of)
any final prospectus filed with the SEC;
(e) as soon as possible and in any event (i) within 30 days after
the Company or any of its ERISA Affiliates knows or has reason to know that any
Termination Event described in clause (a) of the definition of Termination Event
with respect to any Plan has occurred and (ii) within ten days after the Company
or any of its ERISA Affiliates knows or has reason to know that any other
Termination Event with respect to any Plan has occurred, a statement of the
Chief Financial Officer of the Company describing such Termination Event and the
action, if any, which the Company or such ERISA Affiliate, as the case may be,
proposes to take with respect thereto;
(f) promptly upon becoming aware thereof, notice of any upgrading
or downgrading of the rating of the Senior Debt by Fitch, Moody's or S&P;
(g) as soon as possible and in any event within five (5) days
after the occurrence of any material default under any material agreement to
which the Company or any of its Subsidiaries is a party, which default would
materially adversely affect the financial condition, business, results of
operations, Property or prospects of the Company and its Subsidiaries,
considered as a whole, any of which is continuing on the date of such
certificate, a certificate of the president or chief financial officer of the
Company setting forth the details of such material default and the action which
the Company or any such Subsidiary proposes to take with respect thereto; and
(h) such other information respecting the business, properties or
financial condition of the Company as the Agent or any Bank through the Agent
may from time to time reasonably request.
24
6.8 Use of Proceeds. The Company will use the proceeds of the Term
Loans for working capital and other general corporate purposes. The Company will
not, nor will it permit any Subsidiary to, use any of the proceeds of the Term
Loans to purchase or carry any "margin stock" (as defined in Regulation U).
6.9 Maintenance of Properties, Etc. The Company shall, and shall
cause each of its Subsidiaries to, maintain in all material respects all of its
respective owned and leased Property in good and safe condition and repair to
the same degree as other companies engaged in similar businesses and owning
similar properties, and not permit, commit or suffer any waste or abandonment of
any such Property, and from time to time shall make or cause to be made all
material repairs, renewals and replacements thereof, including, without
limitation, any capital improvements which may be required; provided, however,
that such Property may be altered or renovated in the ordinary course of
Company's or its Subsidiaries' business; and provided, further, that the
foregoing shall not restrict the sale of any asset of the Company or any
Subsidiary to the extent not prohibited by Section 7.2.
6.10 Bonds. Beginning on the Effective Date and continuing until
all Obligations have been paid in full, cause the aggregate amount of the Bonds
outstanding to at all times be equal to or greater than the aggregate
outstanding Term Loans.
6.11 Recordation of Supplemental Indenture. The Company shall (i)
within ten days after the Effective Date, deliver the Supplemental Indenture in
recordable form to the appropriate recording office in all applicable
jurisdictions for recording in the real estate records and deliver to the office
of the Secretary of State of Michigan a UCC-1 financing statement with the
Supplemental Indenture as an attachment thereto for filing in such office and
(ii) within 25 days after the Effective Date, deliver to the Agent a certificate
signed by a Designated Officer certifying that the actions required by the
foregoing clause (i) have been taken.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Obligations shall remain unpaid, the Company shall not:
7.1 Liens. Create, incur, assume or suffer to exist any Lien upon
or with respect to any of its properties, now owned or hereafter acquired,
except:
(a) Liens created pursuant to the Indenture securing the First
Mortgage Bonds;
(b) Liens securing pollution control bonds, or bonds issued to
refund or refinance pollution control bonds (including Liens securing
obligations (contingent or otherwise) of the Company under letter of credit
agreements or other reimbursement or similar credit enhancement agreements with
respect to pollution control bonds), provided that the aggregate face amount of
any such bonds so issued shall not exceed the aggregate face amount of such
pollution control bonds, as the case may be, so refunded or refinanced;
(c) Liens in (and only in) assets acquired to secure Debt incurred
to finance the acquisition of such assets;
25
(d) Statutory and common law banker's Liens on bank deposits;
(e) Liens in respect of accounts receivable sold, transferred or
assigned by the Company;
(f) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books;
(g) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue or
being contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on its books;
(h) Liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds;
(i) Judgment Liens in existence less than 30 days after the entry
thereof or with respect to which execution has been stayed or the payment of
which is covered (subject to a customary deductible) by insurance;
(j) Zoning restrictions, easements, licenses, covenants,
reservations, utility company rights, restrictions on the use of real property
or minor irregularities of title incident thereto which do not in the aggregate
materially detract from the value of the property or assets of the Company or
materially impair the operation of its business;
(k) Liens arising in connection with the financing of the
Company's fuel resources, including, but not limited to, nuclear fuel;
(l) Liens arising pursuant to MCL 324.20138; provided that the
aggregate amount of all obligations secured by such Liens (excluding any such
Liens of which the Company has no knowledge or which are permitted by subsection
(f) above) shall not exceed $20,000,000;
(m) Liens arising in connection with the Securitized Bonds;
(n) Liens on the Facility LC Collateral Account (as defined in the
Credit Agreement) or any funds therein in favor of the agent under the Credit
Agreement;
(o) Liens on natural gas, oil and minerals, or on stock in trade,
materials or supplies manufactured or acquired for the purpose of sale and/or
resale in the usual course of business or consumable in the operation of any of
the properties of the Company; provided that (i) such liens secure obligations
not exceeding $500,000,000 in aggregate principal amount and (ii) such liens
shall also be permitted under the terms of the Credit Agreement; and
26
(p) Other Liens securing obligations in an aggregate amount not in
excess of $150,000,000.
7.2 Sale of Assets. Sell, lease, assign, transfer or otherwise
dispose of 15% or more of its assets, calculated with reference to total assets
as reflected on the Company's consolidated balance sheet as at September 30,
2002.
7.3 Mergers, Etc. Merge with or into or consolidate with or into
any other Person, except that the Company may merge with any other Person,
provided that, in each case, immediately after giving effect thereto, (a) no
event shall occur and be continuing which constitutes a Default or Event of
Default, (b) the Company is the surviving corporation, (c) the Company shall not
be liable with respect to any Debt or allow its property to be subject to any
Lien which it could not become liable with respect to or allow its property to
become subject to under this Agreement on the date of such transaction and (d)
the Company's Net Worth shall be equal to or greater than its Net Worth
immediately prior to such merger.
7.4 Compliance with ERISA. Permit to exist any occurrence of any
Reportable Event, or any other event or condition which presents a material (in
the reasonable opinion of the Majority Banks) risk of a termination by the PBGC
of any Plan of the Company or any ERISA Affiliate, which termination will
result in any material (in the reasonable opinion of the Majority Banks)
liability of the Company or such ERISA Affiliate to the PBGC.
7.5 Change in Nature of Business. Make any material change in the
nature of its business as carried on as of the date hereof.
7.6 Restricted Payments. The Company: (a) will not declare or pay
any dividends or make any other distributions on its capital stock (other than
dividends payable solely in such capital stock) or redeem any such capital
stock; and (b) will not, and will not permit any Subsidiary to, purchase or
otherwise acquire or retire any of the Company's capital stock or make any loans
or advances to CMS or any Subsidiary thereof (other than the Company or any
Subsidiary thereof); provided that, so long as no Default or Event of Default
exists, the Company may pay dividends in an aggregate amount not to exceed
$300,000,000 during any calendar year.
7.7 Off-Balance Sheet Liabilities. Create, incur, assume or suffer
to exist, or permit any Subsidiary to create, incur, assume or suffer to exist,
Off-Balance Sheet Liabilities (exclusive of obligations pursuant to the
Receivables Sale Agreement and the Building Lease) in the aggregate in excess of
$250,000,000 at any time.
ARTICLE VIII
FINANCIAL COVENANTS
So long as any Obligations shall remain unpaid, the Company shall:
8.1 Debt to Capital Ratio. At all times, maintain a ratio of Total
Consolidated Debt to Total Consolidated Capitalization of not greater than 0.65
to 1.0.
27
8.2 Interest Coverage Ratio. Not permit the ratio, determined as
of the end of each of its fiscal quarters for the then most-recently ended four
fiscal quarters, of (i) Consolidated EBIT to (ii) Consolidated Interest Expense
to be less than 2.0 to 1.0.
ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default":
(a) The Company shall fail to pay (i) any principal of any Term
Loan when due and payable, or (ii) any interest on any Term Loan or any fee or
other Obligation payable hereunder within five (5) days after such interest or
fee or other Obligation becomes due and payable;
(b) Any representation or warranty made by the Company (or any of
its officers) in this Agreement or any other Loan Document or in any
certificate, document, report, financial or other written statement furnished at
any time pursuant to any Loan Document shall prove to have been incorrect in any
material respect on or as of the date made;
(c) The Company shall fail to perform or observe any term,
covenant or agreement contained in Section 6.10, Section 6.11(i), Article VII or
Article VIII: or the Company shall fail to perform or observe any other term,
covenant or agreement on its part to be performed or observed in this Agreement
or in any other Loan Document and such failure shall continue for 30 consecutive
days after notice thereof by means of facsimile, regular mail or written notice
delivered in person (or telephonic notice thereof confirmed in writing) shall
have been given to the Company by the Agent or the Majority Banks;
(d) The Company shall: (i) fail to pay any Debt (other than the
payment obligations described in subsection (a) above) in excess of $25,000,000,
or any interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the instrument
or agreement relating to such Debt; or (ii) fail to perform or observe any term,
covenant or condition on its part to be performed or observed under any
agreement or instrument relating to any such Debt, when required to be performed
or observed, if the effect of such failure to perform or observe is to
accelerate, or to permit the acceleration of, the maturity of such Debt, unless
the obligee under or holder of such Debt shall have waived in writing such
circumstance, or such circumstance has been cured, so that such circumstance is
no longer continuing; or (iii) any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), in each case in accordance with the terms of such agreement or
instrument, prior to the stated maturity thereof; or (iv) generally not, or
shall admit in writing its inability to, pay its debts as such debts become due;
(e) The Company: (i) shall make an assignment for the benefit of
creditors, or petition or apply to any tribunal for the appointment of a
custodian, receiver or trustee for it or a substantial part of its assets, or
(ii) shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect, or (iii) shall have had
any such petition or
28
application filed or any such proceeding shall have been commenced, against it,
in which an adjudication or appointment is made or order for relief is entered,
or which petition, application or proceeding remains undismissed for a period of
30 consecutive days or more; or (iv) by any act or omission shall indicate its
consent to, approval of or acquiescence in any such petition, application or
proceeding or order for relief or the appointment of a custodian, receiver or
trustee for all or any substantial part of its property; or (v) shall suffer any
such custodianship, receivership or trusteeship to continue undischarged for a
period of 30 days or more; or (vi) shall take any corporate action to authorize
any of the actions set forth above in this subsection (e);
(f) One or more judgments, decrees or orders for the payment of
money in excess of $25,000,000 in the aggregate shall be rendered against the
Company and either (i) enforcement proceedings shall have been commenced by any
creditor upon any such judgment or order or (ii) there shall be any period of
more than 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect;
(g) Any Termination Event with respect to a Plan shall have
occurred, and 30 days after notice thereof shall have been given to the Company
by the Agent, (i) such Termination Event (if correctable) shall not have been
corrected and (ii) the then present value of such Plan's vested benefits exceeds
the then current value of the assets accumulated in such Plan by more than the
amount of $25,000,000 (or in the case of a Termination Event involving the
withdrawal of a "substantial employer" (as defined in Section 4001(A)(2) of
ERISA), the withdrawing employer's proportionate share of such excess shall
exceed such amount); or
(h) Any Bond shall cease to be in full force and effect (except
for Bonds surrendered by the Agent pursuant to Section 2.4 or 2.5); or the
Company shall deny that it has any liability or obligation under any Bond or
purport to revoke, terminate, rescind or redeem any Bond (other than in
accordance with the terms of the Bonds and the Indenture).
9.2 Remedies.
If any Event of Default shall occur and be continuing, the Agent shall upon the
request, or may with the consent, of the Majority Banks, by notice to the
Company, declare the Obligations to be forthwith due and payable, whereupon the
Obligations 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 Company, provided that in the case of an Event of Default referred
to in Section 9.1(e) above, the Obligations shall automatically become due and
payable without notice, presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by the Company.
ARTICLE X
WAIVERS, AMENDMENTS AND REMEDIES
10.1 Amendments. Subject to the provisions of this Article X, the
Majority Banks (or the Agent with the consent in writing of the Majority Banks)
and the Company may enter into written agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Banks or the Company hereunder or waiving any
Event of Default hereunder, provided that (except as provided in the
29
proviso immediately below) no such supplemental agreement shall without the
consent of all of the Banks:
(1) extend the maturity of any Term Loan or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest or fees thereon;
(2) modify the percentage specified in the definition of
Majority Banks;
(3) permit the Company to assign its rights under this
Agreement; or
(4) amend Section 6.10, Section 12.12 or this Section 10.1.
Provided, notwithstanding anything in this Section 10.1 or this Agreement to the
contrary (except the ultimate proviso of this paragraph), the Majority Banks may
consent to amend this Agreement to provide for the making of additional term
loans hereunder which additional term loans may have such terms and conditions
as are agreed by the Majority Banks, the Agent and the Company; without limiting
the foregoing, financial institutions which are not Banks as of the date hereof
may be added as Banks hereunder in connection with any such additional term
loans; provided, however, no such amendment or any supplemental agreement to
this Agreement shall increase the amount of the respective Term Loan Commitment
of any Bank hereunder without the consent of such affected Bank and no such
additional term loan shall be made unless the Company issues additional First
Mortgage Bonds in favor of the Agent in an amount at least equal to the
aggregate amount of such additional term loans.
The Agent, as holder of the Bonds, shall not consent to or vote in favor of a
release of all or substantially all of the property subject to the lien of the
Indenture without the consent of all of the Banks. No amendment of any provision
of this Agreement relating to the Agent shall be effective without the written
consent of the Agent.
10.2 Preservation of Rights. No delay or omission of the Banks or
the Agent to exercise any right under the Loan Documents shall impair such right
or be construed to be a waiver of any Default or Event of Default or an
acquiescence therein, and the making of a Term Loan notwithstanding the
existence of a Default or Event of Default or the inability of the Company to
satisfy the conditions precedent to such Term Loan shall not constitute any
waiver or acquiescence. Any single or partial exercise of any such right shall
not preclude other or further exercise thereof or the exercise of any other
right, and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Banks required pursuant to Section 10.1, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Banks until the Obligations have been paid in
full.
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ARTICLE XI
CONDITIONS PRECEDENT
11.1 Delivery of Documents. This Agreement shall not become
effective and the Banks shall not be required to make the Term Loans hereunder
on the Effective Date unless the Company has furnished to the Agent with
sufficient copies for the Banks:
(a) A certificate, signed by a Designated Officer of the Company,
stating that on the Effective Date no Default or Event of Default has occurred
and is continuing.
(b) Evidence satisfactory to the Agent of the issuance of the
Bonds in the form set forth in the Supplemental Indenture and in an aggregate
principal amount of $150,000,000 pursuant to the Bond Delivery Agreement.
(c) Favorable opinions of:
(i) Michael D. VanHemert, Esq., Deputy General
Counsel of CMS, as to the matters set forth in Exhibit B-1 and as to
such other matters as the Agent may reasonably request;
(ii) Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel to the Company, as to the matters set forth in Exhibit
B-2 and as to such other matters as the Agent may reasonably request;
and
(iii) Miller, Canfield, Paddock and Stone, P.L.C.,
special counsel to the Company, as to the matters set forth in Exhibit
B-3 and as to such other matters as the Agent may reasonably request.
Such opinions shall be addressed to the Agent and the Banks and shall be
satisfactory in form and substance to the Agent.
(d) Evidence, in form and substance satisfactory to the Agent,
that the Company has obtained all governmental approvals, if any, necessary for
it to enter into the Loan Documents.
(e) Evidence, in form and substance satisfactory to the Agent,
that the scheduled termination and maturity date of the Credit Agreement is a
date occurring on or after the Maturity Date, including extensions thereunder.
(f) Such other documents as the Agent or any Bank may reasonably
request.
11.2 Payment of Fees. It shall be a further condition precedent to
the making of the Term Loans on the Effective Date that the Company shall have
paid to the Agent for the account of the Banks the fees required to be paid on
the Effective Date pursuant to the Fee Letter.
11.3 No Default, Etc. No Bank shall be required to make any Term
Loan on the Effective Date unless (i) no Default or Event of Default then
exists, (ii) the representations and warranties contained in Article V are true
and correct as of the Effective Date and (iii) all legal matters incident to the
making of such Term Loan are satisfactory to such Bank and its counsel. The
Company represents and warrants that the conditions contained in subsections
(i) and (ii) above will be satisfied on the Effective Date.
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ARTICLE XII
GENERAL PROVISIONS
12.1 Successors and Assigns. (a) The terms and provisions of the
Loan Documents shall be binding upon and inure to the benefit of the Company and
the Banks and their respective successors and assigns, except that the Company
shall not have the right to assign its rights under the Loan Documents. Any Bank
may sell participations in all or a portion of its rights and obligations under
this Agreement pursuant to subsection (b) below and any Bank may assign all or
any part of its rights and obligations under this Agreement pursuant to
subsection (c) below.
(b) Any Bank may sell participations to one or more banks or other
entities (each a "Participant") in all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Term Loan Commitment and its outstanding Term Loan), provided
that (i) such Bank's obligations under this Agreement (including, without
limitation, its Term Loan Commitment to the Company hereunder) shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Bank shall remain the
holder of the Term Loans of such Bank for all purposes of this Agreement and
(iv) the Company shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement. Each
Bank shall retain the sole right to approve, without the consent of any
Participant, any amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver with respect to any
Term Loan or Term Loan Commitment in which such Participant has an interest
which would require consent of all of the Banks pursuant to the terms of Section
10.1 or of any other Loan Document. The Company agrees that each Participant
shall be deemed to have the right of setoff provided in Section 12.11 in respect
of its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Bank under the Loan Documents, provided that each Bank shall retain
the right of setoff provided in Section 12.11 with respect to the amount of
participating interests sold to each Participant. The Banks agree to share with
each Participant, and each Participant, by exercising the right of setoff
provided in Section 12.11, agrees to share with each Bank, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 12.11 as if each Participant were a Bank. The Company
further agrees that each Participant shall be entitled to the benefits of
Sections 4.1, 4.3, 4.4 and 4.5 to the same extent as if it were a Bank and had
acquired its interest by assignment pursuant to Section 12.1(c); provided that
(i) a Participant shall not be entitled to receive any greater payment under
Section.4.1, 4.3, 4.4 or 4.5 than the Bank who sold the participating interest
to such Participant would have received had it retained such interest for its
own account, unless the sale of such interest to such Participant is made with
the prior written consent of the Company, and (ii) any Participant not
incorporated under the laws of the United States of America or any State thereof
agrees to comply with the provisions of Section 4.5 to the same extent as if it
were a Bank.
(c) Any Bank may, in the ordinary course of its business and in
accordance with applicable law, at any time assign to one or more financial
institutions all or any part of its rights and obligations under this Agreement,
provided that the minimum principal amount of any such assignment (other than
assignments to a Federal Reserve Bank, or to any other Bank or affiliate or
Approved Fund of a Bank, or to any direct or indirect contractual counterparties
in swap
32
agreements relating to the Term Loans to the extent required in connection with
the physical settlement of any Bank's obligations pursuant thereto) shall be
$1,000,000 (or such lesser amount consented to by the Agent); provided that,
unless such Bank is assigning all of its rights and obligations hereunder, after
giving effect to such assignment the assigning Bank shall have Term Loans in the
aggregate of not less than $1,000,000 (unless otherwise consented to by the
Agent).
(d) Any Bank may, in connection with any sale or participation or
proposed sale or participation pursuant to this Section 12.1 disclose to the
purchaser or participant or proposed purchaser or participant any information
relating to the Company furnished to such Bank by or on behalf of the Company,
provided that prior to any such disclosure of non-public information, the
purchaser or participant or proposed purchaser or participant (which purchaser
or participant is not an affiliate of a Bank) shall agree to preserve the
confidentiality of any confidential information (except any such disclosure as
may be required by law or regulatory process) relating to the Company received
by it from such Bank.
(e) Assignments under this Section 12.1 shall be made pursuant to
an agreement (an "Assignment Agreement") substantially in the form of Exhibit D
hereto or in such other form as may be agreed to by the parties thereto and
shall not be effective until a $3,500 fee has been paid to the Agent by the
assignee, which fee shall cover the cost of processing such assignment,
provided, that such fee shall not be incurred in the event of an assignment by
any Bank of all or a portion of its rights under this Agreement to (i) a Federal
Reserve Bank or (ii) a Bank or an affiliate or Approved Fund of the assigning
Bank or (iii) to any direct or indirect contractual counterparties in swap
agreements relating to the Term Loans to the extent required in connection with
the physical settlement of any Bank's obligations pursuant thereto.
(f) Notwithstanding anything to the contrary contained herein, any
Bank (a "Granting Bank") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing from time to time by the Granting Bank to
the Agent and the Company, the option to provide to the Company all or any part
of any Term Loan that such Granting Bank is obligated to make to the Company
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to make any Term Loan, (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Term
Loan, the Granting Bank shall remain obligated to make such Term Loan pursuant
to the terms hereof, (iii) the Company shall not be required to pay any amount
under Section 4.5 that is greater than the amount which it would have been
required to pay had there been no grant to an SPC and (iv) any SPC (or assignee
of an SPC) will comply, if applicable, with the provisions contained in Section
4.5. No grant by any Granting Bank to an SPC agreeing to provide a Term Loan or
the making of such Term Loan by such SPC shall operate to relieve such Granting
Bank of its liabilities and obligations hereunder, except to the extent of the
making of such Term Loan by such SPC. The making of a Term Loan by an SPC
hereunder shall utilize the Term Loan Commitment of the Granting Bank to the
same extent, and as if, such Term Loan were made by such Granting Bank. Each
party hereto hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement (all liability for which shall
remain with the Granting Bank). In addition, each party hereto hereby agrees
(which agreement shall survive the termination of this Agreement) that any SPC
may (i) with notice to, but without the prior written consent of, the Company
and the Agent and without paying any processing fee therefor, assign all or a
portion
33
of its interests in any Term Loans to the Granting Bank or to any financial
institutions (consented to by the Agent in its sole discretion) providing
liquidity and/or credit support to or for the account of such SPC to support the
funding or maintenance of Term Loans and (ii) disclose on a confidential basis
any non-public information relating to its Term Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC. This Section 12.1(f) may not be amended
without the written consent of any SPC that holds an option to provide Term
Loans. No recourse under any obligation, covenant, or agreement of the SPC
contained in this Agreement shall be had against any shareholder, officer, agent
or director of the SPC as such, by the enforcement of any assessment or by any
proceeding, by virtue of any statute or otherwise; it being expressly agreed and
understood that this Agreement is a corporate obligation of the SPC and no
personal liability shall attach to or be incurred by any officer, agent or
member of the SPC as such, or any of them under or by reason of any of the
obligations, covenants or agreements of the SPC contained in this Agreement, or
implied therefrom, and that any and all personal liability for breaches by the
SPC of any such obligations, covenants or agreements, either at law or by
statute or constitution, of every such shareholder, officer, agent or director
is hereby expressly waived by all parties to this Agreement as a condition of
and consideration for the SPC entering into this Agreement; provided, however,
that the foregoing shall not relieve any such person or entity of any liability
they might otherwise have as a result of fraudulent actions or omissions taken
by them. All parties to this Agreement acknowledge and agree that the SPC shall
only be liable for any claims that each of them may have against the SPC only to
the extent of the SPC's assets. The provisions of this clause shall survive the
termination of this Agreement.
(g) Any Bank may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Bank, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Bank from any of its obligations hereunder or
substitute any such pledgee or assignee for such Bank as a party hereto.
12.2 Survival of Representations. All representations and
warranties of the Company contained in this Agreement shall survive the making
of the Term Loans herein contemplated.
12.3 Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Bank shall be obligated to extend credit to
the Company in violation of any limitation or prohibition provided by any
applicable statute or regulation.
12.4 Taxes. Any taxes (excluding income taxes) payable or ruled
payable by any Federal or State authority in respect of the execution of the
Loan Documents shall be paid by the Company, together with interest and
penalties, if any.
12.5 Choice of Law; Waiver of Jury Trial. THE LOAN DOCUMENTS SHALL
BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT
OTHERWISE WITHOUT REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
34
UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT AND THE
COMPANY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY HEREBY
WAIVES ANY RIGHT TO A JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING HEREUNDER OR UNDER ANY LOAN DOCUMENT.
12.6 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
12.7 Entire Agreement. The Loan Documents embody the entire
agreement and understanding between the Company, the Agent and the Banks and
supersede all prior agreements and understandings between the Company, the Agent
and the Banks relating to the subject matter thereof (other than those contained
in the fee letter described in Section 13.12 which shall survive and remain in
full force and effect during the term of this Agreement).
12.8 Expenses; Indemnification. The Company shall (a) reimburse the
Agent and the Arranger for any reasonable costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and time charges of
attorneys for the Agent) paid or incurred by the Agent or the Arranger in
connection with the preparation, review, execution, delivery, syndication,
distribution (including, without limitation, via the internet), amendment and
modification of the Loan Documents and (b) reimburse the Agent, the Arranger and
each Bank for any reasonable costs, internal charges and out-of-pocket expenses
(including reasonable attorneys' fees and time charges of attorneys for the
Agent or for such Bank) paid or incurred by the Agent, the Arranger or such Bank
in connection with the collection and enforcement of the Loan Documents. The
Company further agrees to indemnify the Agent, the Arranger, each Citigroup
Party and each Bank and their respective directors, officers, employees,
trustees, agents and advisors (collectively, the "Indemnitees") against all
losses, claims, damages, penalties, judgments, liabilities and reasonable
expenses (including, without limitation, all material expenses of litigation or
preparation therefor whether or not the Agent, the Arranger, any Citigroup Party
or any Bank is a party thereto) which any of them may pay or incur arising out
of or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Term Loan hereunder, provided that the
Company shall not be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the respective Indemnitee.
The obligations of the Company under this Section shall survive the termination
of this Agreement.
12.9 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
35
12.10 Setoff. In addition to, and without limitation of, any rights
of the Banks under applicable law, if the Company becomes insolvent, however
evidenced, or any Default or Event of Default occurs, any indebtedness from any
Bank to the Company (including all account balances, whether provisional or
final and whether or not collected or available) may be offset and applied
toward the payment of the Obligations owing to such Bank, whether or not the
Obligations, or any part hereof, shall then be due. The Company agrees that any
purchaser or participant under Section 12.1 may, to the fullest extent permitted
by law, exercise all its rights of payment with respect to such purchase or
participation as if it were the direct creditor of the Company in the amount of
such purchase or participation.
12.11 Ratable Payments. If any Bank, whether by setoff or otherwise,
has payment made to it upon its outstanding Term Loans in a greater proportion
than that received by any other Bank, such Bank agrees, promptly upon demand, to
purchase a portion of the aggregate outstanding Term Loans held by the other
Banks so that after such purchase each Bank will hold its Pro Rata Share of the
aggregate outstanding Term Loans. If any Bank, whether in connection with setoff
or amounts which might be subject to setoff or otherwise, receives collateral or
other protection for its Obligations or such amounts which may be subject to
setoff, such Bank agrees, promptly upon demand, to take such action necessary
such that all Banks share in the benefits of such collateral ratably in
proportion to their respective Pro Rata Share of the aggregate outstanding Term
Loans. In case any such payment is disturbed by legal process, or otherwise,
appropriate further adjustments shall be made.
12.12 Nonliability of Banks. The relationship between the Company,
on the one hand, and the Banks and the Agent, on the other hand, shall be solely
that of borrower and lender Neither the Agent, the Arranger nor any Bank shall
have any fiduciary responsibilities to the Company. Neither the Agent, the
Arranger nor any Bank undertakes any responsibility to the Company to review or
inform the Company of any matter in connection with any phase of the Company's
business or operations. The Company shall rely entirely upon its own judgment
with respect to its business, and any review, inspection, supervision or
information supplied to the Company by the Banks is for the protection of the
Banks and neither the Company nor any third party is entitled to rely thereon.
The Company agrees that neither the Agent, the Arranger nor any Bank shall have
liability to the Company (whether sounding in tort, contract or otherwise) for
losses suffered by the Company in connection with, arising out of, or in any way
related to, the transactions contemplated and the relationship established by
the Loan Documents, or any act, omission or event occurring in connection
therewith, unless it is determined in a final non-appealable judgment by a court
of competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Agent, the Arranger nor any Bank shall have any liability with respect to, and
the Company hereby waives, releases and agrees not to sue for, any special,
indirect, consequential or punitive damages suffered by the Company in
connection with, arising out of, or in any way related to the Loan Documents or
the transactions contemplated thereby.
12.13 Certain Disclosures. Notwithstanding any other provision of
this Agreement, each party (and each Participant pursuant to Section 12.1) (and
each employee, representative or other agent of such party (or Participant)) may
disclose to any and all persons, without limitation of any kind, the U.S. tax
treatment and U.S. tax structure of the transactions contemplated by the Loan
Documents and all materials of any kind (including opinions or other tax
analyses) that are
36
provided to such party relating to such U.S. tax treatment and U.S. tax
structure, other than any information for which nondisclosure is reasonably
necessary in order to comply with applicable securities laws.
12.14 Limitation of Liability: Communications. WITH RESPECT TO
COMMUNICATIONS DELIVERED PURSUANT TO SECTION 14.3 OF THIS AGREEMENT, SUCH
COMMUNICATIONS AND THE PLATFORM ARE PROVIDED "AS IS" AND "AS AVAILABLE". THE
CITIGROUP PARTIES DO NOT WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE
COMMUNICATIONS OR THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR
OMISSIONS IN THE COMMUNICATIONS OR THE PLATFORM. NO WARRANTY OF ANY KIND,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE
CITIGROUP PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. THE
COMPANY HEREBY ACKNOWLEDGES THAT ALTHOUGH THE PRIMARY WEB PORTAL IS SECURED WITH
A DUAL FIREWALL AND A USER IDENTIFICATION/PASSWORD AUTHORIZATION SYSTEM AND THE
PLATFORM IS SECURED THROUGH A SINGLE USER PER DEAL AUTHORIZATION METHOD WHEREBY
EACH USER MAY ACCESS THE PLATFORM ONLY ON A DEAL-BY-DEAL BASIS, THE DISTRIBUTION
OF MATERIAL THROUGH AN ELECTRONIC MEDIUM IS NOT NECESSARILY SECURE AND THAT
THERE ARE CONFIDENTIALITY AND OTHER RISKS ASSOCIATED WITH SUCH DISTRIBUTION. THE
PROVISIONS OF THIS SECTION 12.13 SHALL SURVIVE THE MAKING OF ANY TERM LOAN, THE
REPAYMENT THEREOF AND THE TERMINATION OF THIS AGREEMENT AND ANY LOAN DOCUMENT.
ARTICLE XIII
THE AGENT
13.1 Appointment. Citicorp North America, Inc. is hereby appointed
Agent hereunder, and each of the Banks irrevocably authorizes the Agent to act
as the contractual representative on behalf of such Bank. The Agent agrees to
act as such upon the express conditions contained in this Article XIII. The
Agent shall not have a fiduciary relationship in respect of any Bank by reason
of this Agreement. The Agent hereby acknowledges and agrees that it shall hold
the Bonds for the ratable benefit of the Banks.
13.2 Powers. The Agent shall have and may exercise such powers
hereunder as are specifically delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. The Agent shall
not have any implied duties to the Banks or any obligation to the Banks to take
any action hereunder except any action specifically provided by this Agreement
to be taken by the Agent.
37
13.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Banks or any Bank for any
action taken or omitted to be taken by it or them hereunder or in connection
herewith except for its or their own gross negligence or willful misconduct.
13.4 No Responsibility for Loans, Recitals, Etc. The Agent shall
not be responsible to the Banks for any recitals, reports, statements,
warranties or representations herein or in any Loan Document or be bound to
ascertain or inquire as to the performance or observance of any of the terms of
this Agreement.
13.5 Action on Instructions of Banks. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Majority Banks (or all of the Banks if required by Section 10.1), and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Banks. The Banks hereby acknowledge that the Agent shall
be under no duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Loan Document unless
it shall be requested in writing to do so by the Majority Banks. The Agent shall
be fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its satisfaction
by the Banks pro rata against any and all liability, cost and expense that it
may incur by reason of taking or continuing to take any such action.
13.6 Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder by or through employees, agents and attorneys-in-
fact and shall not be answerable to the Banks, except as to money or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. The Agent
shall be entitled to advice of counsel concerning all matters pertaining to the
agency hereby created and its duties hereunder.
13.7 Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
13.8 Agent's Reimbursement and Indemnification. The Banks agree to
reimburse and indemnify the Agent ratably in proportion to their respective Pro
Rata Shares (i) for any amounts not reimbursed by the Company for which the
Agent is entitled to reimbursement by the Company under the Loan Documents and
(ii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of this Agreement or any other document
delivered in connection with this Agreement or the transactions contemplated
hereby or the enforcement of any of the terms hereof or of any such other
documents, provided that no Bank shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful misconduct of the Agent.
38
13.9 Rights as a Lender. With respect to its Term Loan Commitment,
if any, and any Term Loan made by it, Citicorp shall have the same rights and
powers hereunder as any Bank and may exercise the same as though it were not the
Agent, and the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include Citicorp in its individual capacity. Citicorp may accept
deposits from, lend money to, and generally engage in any kind of banking or
trust business with the Company or any Subsidiary as if it were not the Agent.
13.10 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based on
the financial statements prepared by the Company and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.
13.11 Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Banks and the Company, and the Agent may be
removed at any time with or without cause by written notice received by the
Agent from the Majority Banks. Upon any such resignation or removal, the
Majority Banks shall have the right to appoint, on behalf of the Banks, a
successor Agent. If no successor Agent shall have been so appointed by the
Majority Banks and shall have accepted such appointment within thirty days after
the retiring Agent's giving notice of resignation, then the retiring Agent may
appoint, on behalf of the Banks, a successor Agent. Such successor Agent shall
be a commercial bank having capital and retained earnings of at least
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article XIII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent hereunder.
13.12 Agent and Arranger Fees. The Company agrees to pay to the
Agent and the Arranger, for their respective accounts, the fees agreed to by the
Company, the Agent and the Arranger pursuant to that certain letter agreement
dated March [7], 2003, or as otherwise agreed from time to time.
ARTICLE XIV
NOTICES
14.1 Giving Notice. Except as otherwise permitted by Section 2.6
with respect to Conversion/Continuation Notices, all notices, requests and
other communications to any party hereunder shall be in writing (including
electronic transmission, facsimile transmission or similar writing) and shall be
given to such party; (x) in the case of the Company or the Agent, at its address
or facsimile number set forth on the signature pages hereof, except that
Conversion/Continuation Notices shall be sent to the Agent at 2 Penn's Way,
Suite 200, New Castle, DE 19720, Attention: Jason Trala, telephone 302-894-6086,
fax 302-894-6120, or (y) in
39
the case of any Bank, at its address or facsimile number set forth in its
Administrative Details Form provided to the Agent. Each such notice, request or
other communication shall be effective (i) if given by facsimile transmission,
when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered
(or, in the case of electronic transmission, received) at the address specified
in this Section; provided that notices to the Agent under Article II shall not
be effective until received.
14.2 Change of Address. The Company and the Agent may each change
the address for service of notice upon it by a notice in writing to the other
parties hereto in accordance with Section 14.1. Any Bank may change the address
for service of notice upon it by a notice in writing to the Company and the
Agent in accordance with Section 14.1.
14.3 Platform and Primary Web Portal. (a) The Borrower shall
provide to the Agent all information, documents and other materials that it is
obligated to furnish to the Agent pursuant to this Agreement and the other Loan
Documents, including, without limitation, all notices, requests, financial
statements, financial and other reports, certificates and other information
materials, but excluding any such communication that (i) relates to a notice of
borrowing or other extension of credit or a conversion of an existing interest
rate on any Term Loan or borrowing (including, without limitation, any
Conversion/Continuation Notice), (ii) relates to the payment of any principal
or other amount due hereunder prior to the scheduled date therefor, (iii)
provides notice of any Default or Event of Default hereunder or (iv) is required
to be delivered to satisfy any condition precedent to the effectiveness of this
Agreement and/or any extension of credit hereunder (all such non-excluded
communications being referred to herein collectively as "Communications"), by
transmitting the Communications in an electronic/soft medium in a format
acceptable to the Agent to [oploanswebadmin@citigroup.com]. In addition, the
Company shall continue to provide the Communications to the Agent in the manner
specified in this Agreement but only to the extent requested by the Agent. Each
Bank and the Borrower further agree that the Agent may make the Communications
available to the Banks by posting the Communications on "e-Disclosure" (the
"Platform"), the Agent's internet delivery system that is part of SSB Direct,
Global Fixed Income's primary web portal (the "Primary Web Portal").
(b) The Agent agrees that the receipt of the Communications by
the Agent at its e-mail address set forth in clause (a) above shall constitute
effective delivery of the Communications to the Agent for purposes of this
Agreement and under the Loan Documents. Each Bank agrees that notice to it at
its e-mail address provided in clause (a) above specifying that Communications
have been posted to the Platform shall constitute effective delivery of the
Communications to such Bank under this Agreement and under the Loan Documents.
(c) Nothing in this Agreement or any other Loan Document shall
prejudice the right of the Agent or any Bank to give any notice or other
communication pursuant hereto or to any other Loan Document in any other manner
specified herein or therein.
(e) The provisions of Section 14.3(a) and (b) shall terminate
on the date that neither Citicorp North America, Inc. nor any of the Citigroup
Parties is the Agent.
40
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41
ARTICLE XV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Company, the Agent
and the Banks and each party has notified the Agent by facsimile or telephone
that it has taken such action.
IN WITNESS WHEREOF, the Company, the Banks and the Agent have executed
this Agreement as of the date first above written.
CONSUMERS ENERGY COMPANY
By:/s/ Laura L. Mountcastle
---------------------------
Name: Laura L. Mountcastle
Title: Vice President
212 West Michigan Avenue
Jackson, MI 49201
Attention: Kimberly C. Wilson
Facsimile No.: (517)788-0768
Confirmation Telephone No: (517)788-2194
E-Mail Address: KCWilson@cmsenergy.com
CITICORP NORTH AMERICA, INC., as
Agent and as a Bank
By:/s/ J. Nicholas McKee
----------------------------
Name: J. Nicholas McKee
Title: Managing Director
388 Greenwich Street
New York, NY 10023
Attention: Nick McKee
Facsimile No.: (212) 816-8098
Confirmation No: (212) 816-8592
43
Exhibit A
EIGHTY-NINTH SUPPLEMENTAL INDENTURE
PROVIDING AMONG OTHER THINGS FOR
FIRST MORTGAGE BONDS,
COLLATERAL SERIES DUE 2006
--------------
DATED AS OF MARCH 28, 2003
--------------
CONSUMERS ENERGY COMPANY
TO
JPMORGAN CHASE BANK,
TRUSTEE
Counterpart _____ of 80
THIS EIGHTY-NINTH SUPPLEMENTAL INDENTURE, dated as of March 28, 2003
(herein sometimes referred to as "this Supplemental Indenture"), made and
entered into by and between CONSUMERS ENERGY COMPANY, a corporation organized
and existing under the laws of the State of Michigan, with its principal
executive office and place of business at 212 West Michigan Avenue, in Jackson,
Jackson County, Michigan 49201, formerly known as Consumers Power Company
(hereinafter sometimes referred to as the "Company"), and JPMORGAN CHASE BANK, a
corporation organized and existing under the laws of the State of New York, with
its corporate trust offices at 4 New York Plaza, New York, New York 10004
(hereinafter sometimes referred to as the "Trustee"), as Trustee under the
Indenture dated as of September 1, 1945 between Consumers Power Company, a Maine
corporation (hereinafter sometimes referred to as the "Maine corporation"), and
City Bank Farmers Trust Company (Citibank, N.A., successor, hereinafter
sometimes referred to as the "Predecessor Trustee"), securing bonds issued and
to be issued as provided therein (hereinafter sometimes referred to as the
"Indenture"),
WHEREAS at the close of business on January 30, 1959, City Bank Farmers
Trust Company was converted into a national banking association under the title
"First National City Trust Company"; and
WHEREAS at the close of business on January 15, 1963, First National
City Trust Company was merged into First National City Bank; and
WHEREAS at the close of business on October 31, 1968, First National
City Bank was merged into The City Bank of New York, National Association, the
name of which was thereupon changed to First National City Bank; and
WHEREAS effective March 1, 1976, the name of First National City Bank
was changed to Citibank, N.A.; and
WHEREAS effective July 16, 1984, Manufacturers Hanover Trust Company
succeeded Citibank, N.A. as Trustee under the Indenture; and
WHEREAS effective June 19, 1992, Chemical Bank succeeded by merger to
Manufacturers Hanover Trust Company as Trustee under the Indenture; and
WHEREAS effective July 15, 1996, The Chase Manhattan Bank (National
Association), merged with and into Chemical Bank which thereafter was renamed
The Chase Manhattan Bank; and
WHEREAS effective November 11, 2001, The Chase Manhattan Bank merged
with Morgan Guaranty Trust Company of New York and the surviving corporation was
renamed JPMorgan Chase Bank; and
WHEREAS the Indenture was executed and delivered for the purpose of
securing such bonds as may from time to time be issued under and in accordance
with the terms of the Indenture, the aggregate principal amount of bonds to be
secured thereby being limited to $5,000,000,000 at any one time outstanding
(except as provided in Section 2.01 of the Indenture), and the Indenture
describes and sets forth the property conveyed thereby and is filed in the
Office of the Secretary of State of the State of Michigan and is of record in
the Office of
-1-
the Register of Deeds of each county in the State of Michigan in which this
Supplemental Indenture is to be recorded; and
WHEREAS the Indenture has been supplemented and amended by various
indentures supplemental thereto, each of which is filed in the Office of the
Secretary of State of the State of Michigan and is of record in the Office of
the Register of Deeds of each county in the State of Michigan in which this
Supplemental Indenture is to be recorded; and
WHEREAS the Company and the Maine corporation entered into an Agreement
of Merger and Consolidation, dated as of February 14, 1968, which provided for
the Maine corporation to merge into the Company; and
WHEREAS the effective date of such Agreement of Merger and
Consolidation was June 6, 1968, upon which date the Maine corporation was merged
into the Company and the name of the Company was changed from "Consumers Power
Company of Michigan" to "Consumers Power Company"; and
WHEREAS the Company and the Predecessor Trustee entered into a
Sixteenth Supplemental Indenture, dated as of June 4, 1968, which provided,
among other things, for the assumption of the Indenture by the Company; and
WHEREAS said Sixteenth Supplemental Indenture became effective on the
effective date of such Agreement of Merger and Consolidation; and
WHEREAS the Company has succeeded to and has been substituted for the
Maine corporation under the Indenture with the same effect as if it had been
named therein as the mortgagor corporation; and
WHEREAS effective March 11, 1997, the name of Consumers Power Company
was changed to Consumers Energy Company; and
WHEREAS, the Company has entered into a Term Loan Agreement dated as of
March 28, 2003 (the "Term Loan Agreement") with various financial institutions
and Citicorp North America, Inc., as administrative agent (in such capacity, the
"Agent") for the Banks (as such term is defined in the Term Loan Agreement)
providing for the making of certain financial accommodations thereunder, and
pursuant to such Term Loan Agreement the Company has agreed to issue to the
Agent, as evidence of and security for the Obligations (as such term is defined
in the Term Loan Agreement), a new series of bonds under the Indenture; and
WHEREAS, for such purposes the Company desires to issue a new series of
bonds, to be designated First Mortgage Bonds, Collateral Series due 2006, each
of which bonds shall also bear the descriptive title "First Mortgage Bond"
(hereinafter provided for and hereinafter sometimes referred to as the "2006
Collateral Series Bonds"), the bonds of which series are to be issued as
registered bonds without coupons and are to bear interest at the rate per annum
specified herein and are to mature March 28, 2006; and
WHEREAS, each of the registered bonds without coupons of the 2006
Collateral Series Bonds and the Trustee's Authentication Certificate thereon are
to be substantially in the following form, to wit:
-2-
[FORM OF REGISTERED BOND OF THE 2006 COLLATERAL SERIES BONDS]
[FACE]
CONSUMERS ENERGY COMPANY
FIRST MORTGAGE BOND
COLLATERAL SERIES DUE 2006
No. 1 $150,000,000
CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called
the "Company"), for value received, hereby promises to pay to Citicorp North
America, Inc., as agent (in such capacity, the "Agent") for the Banks under and
as defined in the Amended and Restated Term Loan Agreement dated as of March 28,
2003 among the Company, the Banks and the Agent (the "Term Loan Agreement"), or
registered assigns, the principal sum of One Hundred Fifty Million Dollars
($150,000,000) or such lesser principal amount as shall be equal to the
aggregate principal amount of the Term Loans (as defined in the Term Loan
Agreement) included in the Obligations (as defined in the Term Loan Agreement)
outstanding on March 28, 2006 (the "Maturity Date"), but not in excess, however,
of the principal amount of this bond, and to pay interest thereon at the
Interest Rate (as defined below) until the principal hereof is paid or duly made
available for payment on the Maturity Date, or, in the event of redemption of
this bond, until the redemption date, or, in the event of default in the payment
of the principal hereof, until the Company's obligations with respect to the
payment of such principal shall be discharged as provided in the Indenture (as
defined on the reverse hereof). Interest on this bond shall be payable on each
Interest Payment Date (as defined below), commencing on the first Interest
Payment Date next succeeding March 28, 2003. If the Maturity Date falls on a day
which is not a Business Day, as defined below, principal and any interest and/or
fees payable with respect to the Maturity Date will be paid on the immediately
preceding Business Day. The interest payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions,
be paid to the person in whose name this bond (or one or more predecessor bonds)
is registered at the close of business on the Record Date (as defined below);
provided, however, that interest payable on the Maturity Date will be payable to
the person to whom the principal hereof shall be payable. Should the Company
default in the payment of interest ("Defaulted Interest"), the Defaulted
Interest shall be paid to the person in whose name this bond (or one or more
predecessor bonds) is registered on a subsequent record date fixed by the
Company, which subsequent record date shall be fifteen (15) days prior to the
payment of such Defaulted Interest. As used herein, (A) "Business Day" shall
mean any day, other than a Saturday or Sunday, on which banks generally are open
in New York, New York for the conduct of substantially all of their commercial
lending activities and on which interbank wire transfers can be made on the
Fedwire system; (B) "Interest Payment Date" shall mean each date on which
interest and/or fees under the Term Loan Agreement are due and payable from time
to time pursuant to the Term Loan Agreement; (C) "Interest Rate" shall mean a
rate of interest per annum, adjusted as necessary, to result in an interest
payment equal to the aggregate amount of interest and fees due under the Term
Loan Agreement on the applicable Interest Payment Date; and (D) "Record Date"
with respect to any Interest Payment Date shall mean the day (whether or not a
Business Day) immediately next preceding such Interest Payment Date.
- 3 -
Payment of the principal of and interest on this bond will be made in
immediately available funds at the office or agency of the Company maintained
for that purpose in the City of Jackson, Michigan, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
The provisions of this bond are continued on the reverse hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.
This bond shall not be valid or become obligatory for any purpose
unless and until it shall have been authenticated by the execution by the
Trustee or its successor in trust under the Indenture of the certificate hereon.
IN WITNESS WHEREOF, Consumers Energy Company has caused this bond to be
executed in its name by its Chairman of the Board, its President or one of its
Vice Presidents by his or her signature or a facsimile thereof, and its
corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon
and attested by its Secretary or one of its Assistant Secretaries by his or her
signature or a facsimile thereof.
CONSUMERS ENERGY COMPANY
Dated:
By: _______________________________
Printed: __________________________
Title: ____________________________
Attest: _________________________
TRUSTEE'S AUTHENTICATION CERTIFICATE
This is one of the bonds, of the series designated therein, described
in the within- mentioned Indenture.
JPMORGAN CHASE BANK, Trustee
By__________________________________
Authorized Officer
- 4 -
[REVERSE]
CONSUMERS ENERGY COMPANY
FIRST MORTGAGE BOND
COLLATERAL SERIES DUE 2006
This bond is one of the bonds of a series designated as First Mortgage
Bonds, Collateral Series due 2006 (sometimes herein referred to as the "2006
Collateral Series Bonds") issued under and in accordance with and secured by an
Indenture dated as of September 1, 1945, given by the Company (or its
predecessor, Consumers Power Company, a Maine corporation) to City Bank Farmers
Trust Company (JPMorgan Chase Bank, successor) (hereinafter sometimes referred
to as the "Trustee"), together with indentures supplemental thereto, heretofore
or hereafter executed, to which indenture and indentures supplemental thereto
(hereinafter referred to collectively as the "Indenture") reference is hereby
made for a description of the property mortgaged and pledged, the nature and
extent of the security and the rights, duties and immunities thereunder of the
Trustee and the rights of the holders of said bonds and of the Trustee and of
the Company in respect of such security, and the limitations on such rights. By
the terms of the Indenture, the bonds to be secured thereby are issuable in
series which may vary as to date, amount, date of maturity, rate of interest and
in other respects as provided in the Indenture.
The 2006 Collateral Series Bonds are to be issued and delivered to the
Agent in order evidence and secure the obligation of the Company under the Term
Loan Agreement to make payments to the Banks under the Term Loan Agreement and
to provide the Banks the benefit of the lien of the Indenture with respect to
the 2006 Collateral Series Bonds.
The obligation of the Company to make payments with respect to the
principal of 2006 Collateral Series Bonds shall be fully or partially, as the
case may be, satisfied and discharged to the extent that, at the time that any
such payment shall be due, the then due principal of the Term Loans included in
the Obligations shall have been fully or partially paid. Satisfaction of any
obligation to the extent that payment is made with respect to the Term Loans
means that if any payment is made on the principal of the Term Loans, a
corresponding payment obligation with respect to the principal of the 2006
Collateral Series Bonds shall be deemed discharged in the same amount as the
payment with respect to the Term Loans discharges the outstanding obligation
with respect to such Term Loans.
The obligation of the Company to make payments with respect to the
interest on 2006 Collateral Series Bonds shall be fully or partially, as the
case may be, satisfied and discharged to the extent that, at the time that any
such payment shall be due, the then due interest and/or fees on the Term Loans
included in the Obligations shall have been fully or partially paid.
Satisfaction of any obligation to the extent that payment is made with respect
to the Term Loans means that if any payment is made on the interest and/or fees
on the Term Loans, a corresponding payment obligation with respect to the
interest on the 2006 Collateral Series
- 5 -
Bonds shall be deemed discharged in the same amount as the payment with respect
to the Term Loans discharges the outstanding obligation with respect to such
Term Loans.
The Trustee may at any time and all times conclusively assume that the
obligation of the Company to make payments with respect to the principal of and
interest on this bond, so far as such payments at the time have become due, has
been fully satisfied and discharged unless and until the Trustee shall have
received a written notice from the Agent stating (i) that timely payment of
principal and interest on the 2006 Collateral Series Bonds has not been made,
(ii) that the Company is in arrears as to the payments required to be made by it
to the Agent pursuant to the Term Loan Agreement, and (iii) the amount of the
arrearage.
If an Event of Default (as defined in the Term Loan Agreement) with
respect to the payment of the principal of any Term Loans shall have occurred,
it shall be deemed to be a default for purposes of Section 11.01 of the
Indenture in the payment of the principal of the 2006 Collateral Series Bonds
equal to the amount of such unpaid principal (but in no event in excess of the
principal amount of the 2006 Collateral Series Bonds). If an Event of Default
(as defined in the Term Loan Agreement) with respect to the payment of interest
on any Term Loans or fees shall have occurred, it shall be deemed to be a
default for purposes of Section 11.01 of the Indenture in the payment of the
interest on the 2006 Collateral Series Bonds equal to the amount of such unpaid
interest or fees.
This bond is not redeemable except upon written demand of the Agent
following the occurrence of an Event of Default under the Term Loan Agreement
and the acceleration of the Obligations, as provided in Section 9.2 of the Term
Loan Agreement. This bond is not redeemable by the operation of the improvement
fund or the maintenance and replacement provisions of the Indenture or with the
proceeds of released property.
In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture. The holders of certain specified percentages of the bonds at the time
outstanding, including in certain cases specified percentages of bonds of
particular series, may in certain cases, to the extent and as provided in the
Indenture, waive certain defaults thereunder and the consequences of such
defaults.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than seventy-five per
centum in principal amount of the bonds (exclusive of bonds disqualified by
reason of the Company's interest therein) at the time outstanding, including, if
more than one series of bonds shall be at the time outstanding, not less than
sixty per centum in principal amount of each series affected, to effect, by an
indenture supplemental to the Indenture, modifications or alterations of the
Indenture and of the rights and obligations of the Company and the rights of the
holders of the bonds and coupons; provided, however, that no such modification
or alteration shall be made without the written approval or consent of the
holder hereof which will (a) extend the maturity of this bond or reduce the rate
or extend the time of payment of interest hereon or reduce the amount of the
principal hereof, or (b) permit the creation of any lien, not otherwise
permitted, prior to or on a parity with the lien of the Indenture, or (c) reduce
the percentage of the principal amount of the bonds the holders of which are
required to approve any such supplemental indenture.
- 6 -
The Company reserves the right, without any consent, vote or other
action by holders of the 2006 Collateral Series Bonds or any other series
created after the Sixty-eighth Supplemental Indenture to amend the Indenture to
reduce the percentage of the principal amount of bonds the holders of which are
required to approve any supplemental indenture (other than any supplemental
indenture which is subject to the proviso contained in the immediately preceding
sentence) (a) from not less than seventy-five per centum (including sixty per
centum of each series affected) to not less than a majority in principal amount
of the bonds at the time outstanding or (b) in case fewer than all series are
affected, not less than a majority in principal amount of the bonds of all
affected series, voting together.
No recourse shall be had for the payment of the principal of or
interest on this bond, or for any claim based hereon, or otherwise in respect
hereof or of the Indenture, to or against any incorporator, stockholder,
director or officer, past, present or future, as such, of the Company, or of any
predecessor or successor company, either directly or through the Company, or
such predecessor or successor company, or otherwise, under any constitution or
statute or rule of law, or by the enforcement of any assessment or penalty, or
otherwise, all such liability of incorporators, stockholders, directors and
officers, as such, being waived and released by the holder and owner hereof by
the acceptance of this bond and being likewise waived and released by the terms
of the Indenture.
This bond shall be exchangeable for other registered bonds of the same
series, in the manner and upon the conditions prescribed in the Indenture, upon
the surrender of such bonds at the Investor Services Department of the Company,
as transfer agent. However, notwithstanding the provisions of Section 2.05 of
the Indenture, no charge shall be made upon any registration of transfer or
exchange of bonds of said series other than for any tax or taxes or other
governmental charge required to be paid by the Company.
The Agent shall surrender this bond to the Trustee when all of the
principal of and interest on the Term Loans arising under the Term Loan
Agreement, and all of the fees payable pursuant to the Term Loan Agreement,
shall have been duly paid, and the Term Loan Agreement shall have been
terminated.
[END OF FORM OF REGISTERED BOND OF THE 2006 COLLATERAL SERIES BONDS]
- 7 -
AND WHEREAS all acts and things necessary to make the 2006 Collateral
Series Bonds, when duly executed by the Company and authenticated by the Trustee
or its agent and issued as prescribed in the Indenture, as heretofore
supplemented and amended, and this Supplemental Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute the Indenture,
as supplemented and amended as aforesaid, as well as by this Supplemental
Indenture, a valid, binding and legal instrument for the security thereof, have
been done and performed, and the creation, execution and delivery of this
Supplemental Indenture and the creation, execution and issuance of bonds subject
to the terms hereof and of the Indenture, as so supplemented and amended, have
in all respects been duly authorized;
NOW, THEREFORE, in consideration of the premises, of the acceptance and
purchase by the holders thereof of the bonds issued and to be issued under the
Indenture, as supplemented and amended as above set forth, and of the sum of One
Dollar duly paid by the Trustee to the Company, and of other good and valuable
considerations, the receipt whereof is hereby acknowledged, and for the purpose
of securing the due and punctual payment of the principal of and premium, if
any, and interest on all bonds now outstanding under the Indenture and the
$150,000,000 principal amount of the 2006 Collateral Series Bonds proposed to be
issued initially and all other bonds which shall be issued under the Indenture,
as supplemented and amended from time to time, and for the purpose of securing
the faithful performance and observance of all covenants and conditions therein,
and in any indenture supplemental thereto, set forth, the Company has given,
granted, bargained, sold, released, transferred, assigned, hypothecated,
pledged, mortgaged, confirmed, set over, warranted, alienated and conveyed and
by these presents does give, grant, bargain, sell, release, transfer, assign,
hypothecate, pledge, mortgage, confirm, set over, warrant, alien and convey unto
JPMorgan Chase Bank, as Trustee, as provided in the Indenture, and its successor
or successors in the trust thereby and hereby created and to its or their
assigns forever, all the right, title and interest of the Company in and to all
the property, described in Section 11 hereof, together (subject to the
provisions of Article X of the Indenture) with the tolls, rents, revenues,
issues, earnings, income, products and profits thereof, excepting, however, the
property, interests and rights specifically excepted from the lien of the
Indenture as set forth in the Indenture;
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in any wise appertaining to the premises, property,
franchises and rights, or any thereof, referred to in the foregoing granting
clause, with the reversion and reversions, remainder and remainders and (subject
to the provisions of Article X of the Indenture) the tolls, rents, revenues,
issues, earnings, income, products and profits thereof, and all the estate,
right, title and interest and claim whatsoever, at law as well as in equity,
which the Company now has or may hereafter acquire in and to the aforesaid
premises, property, franchises and rights and every part and parcel thereof;
SUBJECT, HOWEVER, with respect to such premises, property, franchises
and rights, to excepted encumbrances as said term is defined in Section 1.02 of
the Indenture, and subject also to all defects and limitations of title and to
all encumbrances existing at the time of acquisition. TO HAVE AND TO HOLD all
said premises, property, franchises and rights hereby conveyed, assigned,
pledged or mortgaged, or intended so to be, unto the Trustee, its successor or
successors in trust and their assigns forever;
- 8 -
BUT IN TRUST, NEVERTHELESS, with power of sale for the equal and
proportionate benefit and security of the holders of all bonds now or hereafter
authenticated and delivered under and secured by the Indenture and interest
coupons appurtenant thereto, pursuant to the provisions of the Indenture and of
any supplemental indenture, and for the enforcement of the payment of said bonds
and coupons when payable and the performance of and compliance with the
covenants and conditions of the Indenture and of any supplemental indenture,
without any preference, distinction or priority as to lien or otherwise of any
bond or bonds over others by reason of the difference in time of the actual
authentication, delivery, issue, sale or negotiation thereof or for any other
reason whatsoever, except as otherwise expressly provided in the Indenture; and
so that each and every bond now or hereafter authenticated and delivered
thereunder shall have the same lien, and so that the principal of and premium,
if any, and interest on every such bond shall, subject to the terms thereof, be
equally and proportionately secured, as if it had been made, executed,
authenticated, delivered, sold and negotiated simultaneously with the execution
and delivery thereof;
AND IT IS EXPRESSLY DECLARED by the Company that all bonds
authenticated and delivered under and secured by the Indenture, as supplemented
and amended as above set forth, are to be issued, authenticated and delivered,
and all said premises, property, franchises and rights hereby and by the
Indenture and indentures supplemental thereto conveyed, assigned, pledged or
mortgaged, or intended so to be, are to be dealt with and disposed of under,
upon and subject to the terms, conditions, stipulations, covenants, agreements,
trusts, uses and purposes expressed in the Indenture, as supplemented and
amended as above set forth, and the parties hereto mutually agree as follows:
SECTION 1. There is hereby created one series of bonds (the "2006
Collateral Series Bonds") designated as hereinabove provided, which shall also
bear the descriptive title "First Mortgage Bond", and the form thereof shall be
substantially as hereinbefore set forth (the "Sample Bond"). The 2006 Collateral
Series Bonds shall be issued in the aggregate principal amount of $150,000,000,
shall mature on March 28, 2006 and shall be issued only as registered bonds
without coupons in denominations of $1,000 and any multiple thereof. The serial
numbers of the 2006 Collateral Series Bonds shall be such as may be approved by
any officer of the Company, the execution thereof by any such officer either
manually or by facsimile signature to be conclusive evidence of such approval.
The 2006 Collateral Series Bonds are to be issued to and registered in the name
of the Agent under the Term Loan Agreement (as such terms are defined in the
Sample Bond) to evidence and secure any and all Obligations (as such term is
defined in the Term Loan Agreement) of the Company under the Term Loan
Agreement.
The 2006 Collateral Series Bonds shall bear interest as set forth in
the Sample Bond. The principal of and the interest on said bonds shall be
payable as set forth in the Sample Bond.
The obligation of the Company to make payments with respect to the
principal of 2006 Collateral Series Bonds shall be fully or partially, as the
case may be, satisfied and discharged to the extent that, at the time that any
such payment shall be due, the then due principal of the Term Loans included in
the Obligations shall have been fully or partially paid. Satisfaction of any
obligation to the extent that payment is made with respect to the Term Loans
means that if any payment is made on the principal of the Term Loans, a
corresponding payment obligation with respect to the principal of the 2006
Collateral Series Bonds shall be deemed discharged in the
- 9 -
same amount as the payment with respect to the Term Loans discharges the
outstanding obligation with respect to such Term Loans.
The obligation of the Company to make payments with respect to the
interest on 2006 Collateral Series Bonds shall be fully or partially, as the
case may be, satisfied and discharged to the extent that, at the time that any
such payment shall be due, the then due interest and/or fees on the Term Loans
included in the Obligations shall have been fully or partially paid.
Satisfaction of any obligation to the extent that payment is made with respect
to the Term Loans means that if any payment is made on the interest and/or fees
on the Term Loans, a corresponding payment obligation with respect to the
interest on the 2006 Collateral Series Bonds shall be deemed discharged in the
same amount as the payment with respect to the Term Loans discharges the
outstanding obligation with respect to such Term Loans.
The Trustee may at any time and all times conclusively assume that the
obligation of the Company to make payments with respect to the principal of and
interest on the 2006 Collateral Series Bonds, so far as such payments at the
time have become due, has been fully satisfied and discharged unless and until
the Trustee shall have received a written notice from the Agent stating (i) that
timely payment of principal and interest on the 2006 Collateral Series Bonds has
not been made, (ii) that the Company is in arrears as to the payments required
to be made by it to the Agent pursuant to the Term Loan Agreement, and (iii) the
amount of the arrearage.
The 2006 Collateral Series Bonds shall be exchangeable for other
registered bonds of the same series, in the manner and upon the conditions
prescribed in the Indenture, upon the surrender of such bonds at the Investor
Services Department of the Company, as transfer agent. However, notwithstanding
the provisions of Section 2.05 of the Indenture, no charge shall be made upon
any registration of transfer or exchange of bonds of said series other than for
any tax or taxes or other governmental charge required to be paid by the
Company.
SECTION 2. The 2006 Collateral Series Bonds are not redeemable by the
operation of the maintenance and replacement provisions of this Indenture or
with the proceeds of released property.
SECTION 3. Upon the occurrence of an Event of Default under the Term
Loan Agreement and the acceleration of the Obligations, the 2006 Collateral
Series Bonds shall be redeemable in whole upon receipt by the Trustee of a
written demand from the Agent stating that there has occurred under the Term
Loan Agreement both an Event of Default and a declaration of acceleration of the
Obligations and demanding redemption of the 2006 Collateral Series Bonds
(including a description of the amount of principal, interest and fees which
comprise such Obligations). The Company waives any right it may have to prior
notice of such redemption under the Indenture. Upon surrender of the 2006
Collateral Series Bonds by the Agent to the Trustee, the 2006 Collateral Series
Bonds shall be redeemed at a redemption price equal to the aggregate amount of
the Obligations.
SECTION 4. The Company reserves the right, without any consent, vote or
other action by the holder of the 2006 Collateral Series Bonds or of any
subsequent series of bonds issued under the Indenture, to make such amendments
to the Indenture, as supplemented, as shall be necessary in order to amend
Section 17.02 to read as follows:
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SECTION 17.02. With the consent of the holders of not less than a
majority in principal amount of the bonds at the time outstanding or their
attorneys-in-fact duly authorized, or, if fewer than all series are affected,
not less than a majority in principal amount of the bonds at the time
outstanding of each series the rights of the holders of which are affected,
voting together, the Company, when authorized by a resolution, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or modifying the rights and obligations of the Company
and the rights of the holders of any of the bonds and coupons; provided,
however, that no such supplemental indenture shall (1) extend the maturity of
any of the bonds or reduce the rate or extend the time of payment of interest
thereon, or reduce the amount of the principal thereof, or reduce any premium
payable on the redemption thereof, without the consent of the holder of each
bond so affected, or (2) permit the creation of any lien, not otherwise
permitted, prior to or on a parity with the lien of this Indenture, without the
consent of the holders of all the bonds then outstanding, or (3) reduce the
aforesaid percentage of the principal amount of bonds the holders of which are
required to approve any such supplemental indenture, without the consent of the
holders of all the bonds then outstanding. For the purposes of this Section,
bonds shall be deemed to be affected by a supplemental indenture if such
supplemental indenture adversely affects or diminishes the rights of holders
thereof against the Company or against its property. The Trustee may in its
discretion determine whether or not, in accordance with the foregoing, bonds of
any particular series would be affected by any supplemental indenture and any
such determination shall be conclusive upon the holders of bonds of such series
and all other series. Subject to the provisions of Sections 16.02 and 16.03
hereof, the Trustee shall not be liable for any determination made in good faith
in connection herewith.
Upon the written request of the Company, accompanied by a resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of bondholders as aforesaid
(the instrument or instruments evidencing such consent to be dated within one
year of such request), the Trustee shall join with the Company in the execution
of such supplemental indenture unless such supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion but shall not be obligated to enter
into such supplemental indenture.
It shall not be necessary for the consent of the bondholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such consent shall approve the substance thereof.
The Company and the Trustee, if they so elect, and either before or
after such consent has been obtained, may require the holder of any bond
consenting to the execution of any such supplemental indenture to submit his
bond to the Trustee or to ask such bank, banker or trust company as may be
designated by the Trustee
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for the purpose, for the notation thereon of the fact that the holder
of such bond has consented to the execution of such supplemental
indenture, and in such case such notation, in form satisfactory to the
Trustee, shall be made upon all bonds so submitted, and such bonds
bearing such notation shall forthwith be returned to the persons
entitled thereto.
Prior to the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the
Company shall publish a notice, setting forth in general terms the
substance of such supplemental indenture, at least once in one daily
newspaper of general circulation in each city in which the principal of
any of the bonds shall be payable, or, if all bonds outstanding shall
be registered bonds without coupons or coupon bonds registered as to
principal, such notice shall be sufficiently given if mailed, first
class, postage prepaid, and registered if the Company so elects, to
each registered holder of bonds at the last address of such holder
appearing on the registry books, such publication or mailing, as the
case may be, to be made not less than thirty days prior to such
execution. Any failure of the Company to give such notice, or any
defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
SECTION 5. As supplemented and amended as above set forth, the
Indenture is in all respects ratified and confirmed, and the Indenture and all
indentures supplemental thereto shall be read, taken and construed as one and
the same instrument.
SECTION 6. Nothing contained in this Supplemental Indenture shall, or
shall be construed to, confer upon any person other than a holder of bonds
issued under the Indenture, as supplemented and amended as above set forth, the
Company, the Trustee and the Agent, for the benefit of the Banks (as such term
is defined in the Term Loan Agreement), any right or interest to avail himself
of any benefit under any provision of the Indenture, as so supplemented and
amended.
SECTION 7. The Trustee assumes no responsibility for or in respect of
the validity or sufficiency of this Supplemental Indenture or of the Indenture
as hereby supplemented or the due execution hereof by the Company or for or in
respect of the recitals and statements contained herein (other than those
contained in the sixth, seventh and eighth recitals hereof), all of which
recitals and statements are made solely by the Company.
SECTION 8. This Supplemental Indenture may be simultaneously executed
in several counterparts and all such counterparts executed and delivered, each
as an original, shall constitute but one and the same instrument.
SECTION 9. In the event the date of any notice required or permitted
hereunder shall not be a Business Day, then (notwithstanding any other provision
of the Indenture or of any supplemental indenture thereto) such notice need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the date fixed for such notice.
"Business Day" means, with respect to this Section 9, any day, other than a
Saturday or Sunday, on which banks generally are open in New York, New York for
the conduct
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of substantially all of their commercial lending activities and on which
interbank wire transfers can be made on the Fedwire system.
SECTION 10. This Supplemental Indenture and the 2006 Collateral Series
Bonds shall be governed by and deemed to be a contract under, and construed in
accordance with, the laws of the State of Michigan, and for all purposes shall
be construed in accordance with the laws of such state, except as may otherwise
be required by mandatory provisions of law.
SECTION 11. Detailed Description of Property Mortgaged:
I.
ELECTRIC GENERATING PLANTS AND DAMS
All the electric generating plants and stations of the Company,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture, including all powerhouses, buildings, reservoirs, dams,
pipelines, flumes, structures and works and the land on which the same are
situated and all water rights and all other lands and easements, rights of way,
permits, privileges, towers, poles, wires, machinery, equipment, appliances,
appurtenances and supplies and all other property, real or personal, forming a
part of or appertaining to or used, occupied or enjoyed in connection with such
plants and stations or any of them, or adjacent thereto.
II.
ELECTRIC TRANSMISSION LINES
All the electric transmission lines of the Company, constructed or
otherwise acquired by it and not heretofore described in the Indenture or any
supplement thereto and not heretofore released from the lien of the Indenture,
including towers, poles, pole lines, wires, switches, switch racks,
switchboards, insulators and other appliances and equipment, and all other
property, real or personal, forming a part of or appertaining to or used,
occupied or enjoyed in connection with such transmission lines or any of them or
adjacent thereto; together with all real property, rights of way, easements,
permits, privileges, franchises and rights for or relating to the construction,
maintenance or operation thereof, through, over, under or upon any private
property or any public streets or highways, within as well as without the
corporate limits of any municipal corporation. Also all the real property,
rights of way, easements, permits, privileges and rights for or relating to the
construction, maintenance or operation of certain transmission lines, the land
and rights for which are owned by the Company, which are either not built or now
being constructed.
III.
ELECTRIC DISTRIBUTION SYSTEMS
All the electric distribution systems of the Company, constructed or
otherwise acquired by it and not heretofore described in the Indenture or any
supplement thereto and not heretofore released from the lien of the Indenture,
including substations, transformers, switchboards,
- 13 -
towers, poles, wires, insulators, subways, trenches, conduits, manholes, cables,
meters and other appliances and equipment, and all other property, real or
personal, forming a part of or appertaining to or used, occupied or enjoyed in
connection with such distribution systems or any of them or adjacent thereto;
together with all real property, rights of way, easements, permits, privileges,
franchises, grants and rights, for or relating to the construction, maintenance
or operation thereof, through, over, under or upon any private property or any
public streets or highways within as well as without the corporate limits of any
municipal corporation.
IV.
ELECTRIC SUBSTATIONS, SWITCHING STATIONS AND SITES
All the substations, switching stations and sites of the Company,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture, for transforming, regulating, converting or distributing or
otherwise controlling electric current at any of its plants and elsewhere,
together with all buildings, transformers, wires, insulators and other
appliances and equipment, and all other property, real or personal, forming a
part of or appertaining to or used, occupied or enjoyed in connection with any
of such substations and switching stations, or adjacent thereto, with sites to
be used for such purposes.
V.
GAS COMPRESSOR STATIONS, GAS PROCESSING PLANTS, DESULPHURIZATION STATIONS,
METERING STATIONS, ODORIZING STATIONS, REGULATORS AND SITES
All the compressor stations, processing plants, desulphurization
stations, metering stations, odorizing stations, regulators and sites of the
Company, constructed or otherwise acquired by it and not heretofore described in
the Indenture or any supplement thereto and not heretofore released from the
lien of the Indenture, for compressing, processing, desulphurizing, metering,
odorizing and regulating manufactured or natural gas at any of its plants and
elsewhere, together with all buildings, meters and other appliances and
equipment, and all other property, real or personal, forming a part of or
appertaining to or used, occupied or enjoyed in connection with any of such
purposes, with sites to be used for such purposes.
VI.
GAS STORAGE FIELDS
The natural gas rights and interests of the Company, including wells
and well lines (but not including natural gas, oil and minerals), the gas
gathering system, the underground gas storage rights, the underground gas
storage wells and injection and withdrawal system used in connection therewith,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture: In the Overisel Gas Storage Field, located in the Township of
Overisel, Allegan County, and in the Township of Zeeland, Ottawa County,
Michigan; in the Northville Gas Storage Field located
- 14 -
in the Township of Salem, Washtenaw County, Township of Lyon, Oakland County,
and the Townships of Northville and Plymouth and City of Plymouth, Wayne County,
Michigan; in the Salem Gas Storage Field, located in the Township of Salem,
Allegan County, and in the Township of Jamestown, Ottawa County, Michigan; in
the Ray Gas Storage Field, located in the Townships of Ray and Armada, Macomb
County, Michigan; in the Lenox Gas Storage Field, located in the Townships of
Lenox and Chesterfield, Macomb County, Michigan; in the Ira Gas Storage Field,
located in the Township of Ira, St. Clair County, Michigan; in the Puttygut Gas
Storage Field, located in the Township of Casco, St. Clair County, Michigan; in
the Four Corners Gas Storage Field, located in the Townships of Casco, China,
Cottrellville and Ira, St. Clair County, Michigan; in the Swan Creek Gas Storage
Field, located in the Township of Casco and Ira, St. Clair County, Michigan; and
in the Hessen Gas Storage Field, located in the Townships of Casco and Columbus,
St. Clair, Michigan.
VII.
GAS TRANSMISSION LINES
All the gas transmission lines of the Company, constructed or otherwise
acquired by it and not heretofore described in the Indenture or any supplement
thereto and not heretofore released from the lien of the Indenture, including
gas mains, pipes, pipelines, gates, valves, meters and other appliances and
equipment, and all other property, real or personal, forming a part of or
appertaining to or used, occupied or enjoyed in connection with such
transmission lines or any of them or adjacent thereto; together with all real
property, right of way, easements, permits, privileges, franchises and rights
for or relating to the construction, maintenance or operation thereof, through,
over, under or upon any private property or any public streets or highways,
within as well as without the corporate limits of any municipal corporation.
VIII.
GAS DISTRIBUTION SYSTEMS
All the gas distribution systems of the Company, constructed or
otherwise acquired by it and not heretofore described in the Indenture or any
supplement thereto and not heretofore released from the lien of the Indenture,
including tunnels, conduits, gas mains and pipes, service pipes, fittings,
gates, valves, connections, meters and other appliances and equipment, and all
other property, real or personal, forming a part of or appertaining to or used,
occupied or enjoyed in connection with such distribution systems or any of them
or adjacent thereto; together with all real property, rights of way, easements,
permits, privileges, franchises, grants and rights, for or relating to the
construction, maintenance or operation thereof, through, over, under or upon any
private property or any public streets or highways within as well as without the
corporate limits of any municipal corporation.
- 15 -
IX.
OFFICE BUILDINGS, SERVICE BUILDINGS, GARAGES, ETC.
All office, garage, service and other buildings of the Company,
wherever located, in the State of Michigan, constructed or otherwise acquired by
it and not heretofore described in the Indenture or any supplement thereto and
not heretofore released from the lien of the Indenture, together with the land
on which the same are situated and all easements, rights of way and
appurtenances to said lands, together with all furniture and fixtures located in
said buildings.
X.
TELEPHONE PROPERTIES AND
RADIO COMMUNICATION EQUIPMENT
All telephone lines, switchboards, systems and equipment of the
Company, constructed or otherwise acquired by it and not heretofore described in
the Indenture or any supplement thereto and not heretofore released from the
lien of the Indenture, used or available for use in the operation of its
properties, and all other property, real or personal, forming a part of or
appertaining to or used, occupied or enjoyed in connection with such telephone
properties or any of them or adjacent thereto; together with all real estate,
rights of way, easements, permits, privileges, franchises, property, devices or
rights related to the dispatch, transmission, reception or reproduction of
messages, communications, intelligence, signals, light, vision or sound by
electricity, wire or otherwise, including all telephone equipment installed in
buildings used as general and regional offices, substations and generating
stations and all telephone lines erected on towers and poles; and all radio
communication equipment of the Company, together with all property, real or
personal (except any in the Indenture expressly excepted), fixed stations,
towers, auxiliary radio buildings and equipment, and all appurtenances used in
connection therewith, wherever located, in the State of Michigan.
XI.
OTHER REAL PROPERTY
All other real property of the Company and all interests therein, of
every nature and description (except any in the Indenture expressly excepted)
wherever located, in the State of Michigan, acquired by it and not heretofore
described in the Indenture or any supplement thereto and not heretofore released
from the lien of the Indenture. Such real property includes but is not limited
to the following described property, such property is subject to any interests
that were excepted or reserved in the conveyance to the Company:
ALCONA COUNTY
Certain land in Caledonia Township, Alcona County, Michigan described
as:
The East 330 feet of the South 660 feet of the SW 1/4 of the
SW 1/4 of Section 8, T28N, R8E, except the West 264 feet of the South
330 feet thereof; said land being more particularly described as
follows: To find the place of
- 16 -
beginning of this description, commence at the Southwest corner of said
section, run thence East along the South line of said section 1243 feet
to the place of beginning of this description, thence continuing East
along said South line of said section 66 feet to the West 1/8 line of
said section, thence N 02 degrees 09' 30" E along the said West 1/8
line of said section 660 feet, thence West 330 feet, thence S 02
degrees 09' 30" W, 330 feet, thence East 264 feet, thence S 02 degrees
09' 30" W, 330 feet to the place of beginning.
ALLEGAN COUNTY
Certain land in Lee Township, Allegan County, Michigan described as:
The NE 1/4 of the NW 1/4 of Section 16, T1N, R15W.
ALPENA COUNTY
Certain land in Wilson and Green Townships, Alpena County, Michigan
described as:
All that part of the S'ly 1/2 of the former Boyne City-Gaylord
and Alpena Railroad right of way, being the Southerly 50 feet of a 100
foot strip of land formerly occupied by said Railroad, running from the
East line of Section 31, T31N, R7E, Southwesterly across said Section
31 and Sections 5 and 6 of T30N, R7E and Sections 10, 11 and the E 1/2
of Section 9, except the West 1646 feet thereof, all in T30N, R6E.
ANTRIM COUNTY
Certain land in Mancelona Township, Antrim County, Michigan described
as:
The S 1/2 of the NE 1/4 of Section 33, T29N, R6W, excepting
therefrom all mineral, coal, oil and gas and such other rights as were
reserved unto the State of Michigan in that certain deed running from
the State of Michigan to August W. Schack and Emma H. Schack, his wife,
dated April 15, 1946 and recorded May 20, 1946 in Liber 97 of Deeds on
page 682 of Antrim County Records.
ARENAC COUNTY
Certain land in Standish Township, Arenac County, Michigan described
as:
A parcel of land in the SW 1/4 of the NW 1/4 of Section 12,
T18N, R4E, described as follows: To find the place of beginning of said
parcel of land, commence at the Northwest corner of Section 12, T18N,
R4E; run thence South along the West line of said section, said West
line of said section being also the center line of East City Limits
Road 2642.15 feet to the W 1/4 post of said section and the place of
beginning of said parcel of land; running thence N 88 degrees 26' 00" E
along the East and West 1/4 line of said section, 660.0 feet; thence
North parallel with the West line of said section, 310.0 feet; thence S
88 degrees 26' 00"
- 17 -
W, 330.0 feet; thence South parallel with the West line of said
section, 260.0 feet; thence S 88 degrees 26' 00" W, 330.0 feet to the
West line of said section and the center line of East City Limits Road;
thence South along the said West line of said section, 50.0 feet to the
place of beginning.
BARRY COUNTY
Certain land in Johnstown Township, Barry County, Michigan described
as:
A strip of land 311 feet in width across the SW 1/4 of the NE
1/4 of Section 31, T1N, R8W, described as follows: To find the place of
beginning of this description, commence at the E 1/4 post of said
section; run thence N 00 degrees 55' 00" E along the East line of said
section, 555.84 feet; thence N 59 degrees 36' 20" W, 1375.64 feet;
thence N 88 degrees 30' 00" W, 130 feet to a point on the East 1/8 line
of said section and the place of beginning of this description; thence
continuing N 88 degrees 30' 00" W, 1327.46 feet to the North and South
1/4 line of said section; thence S 00 degrees 39'35" W along said North
and South 1/4 line of said section, 311.03 feet to a point, which said
point is 952.72 feet distant N'ly from the East and West 1/4 line of
said section as measured along said North and South 1/4 line of said
section; thence S 88 degrees 30' 00" E, 1326.76 feet to the East 1/8
line of said section; thence N 00 degrees 47' 20" E along said East 1/8
line of said section, 311.02 feet to the place of beginning.
BAY COUNTY
Certain land in Frankenlust Township, Bay County, Michigan described
as:
The South 250 feet of the N 1/2 of the W 1/2 of the W 1/2 of
the SE 1/4 of Section 9, T13N, R4E.
BENZIE COUNTY
Certain land in Benzonia Township, Benzie County, Michigan described
as:
A parcel of land in the Northeast 1/4 of Section 7, Township
26 North, Range 14 West, described as beginning at a point on the East
line of said Section 7, said point being 320 feet North measured along
the East line of said section from the East 1/4 post; running thence
West 165 feet; thence North parallel with the East line of said section
165 feet; thence East 165 feet to the East line of said section; thence
South 165 feet to the place of beginning.
BRANCH COUNTY
Certain land in Girard Township, Branch County, Michigan described as:
A parcel of land in the NE 1/4 of Section 23 T5S, R6W,
described as beginning at a point on the North and South quarter line
of said section at a point
- 18 -
1278.27 feet distant South of the North quarter post of said section,
said distance being measured along the North and South quarter line of
said section, running thence S89 degrees21'E 250 feet, thence North
along a line parallel with the said North and South quarter line of
said section 200 feet, thence N89 degrees21'W 250 feet to the North and
South quarter line of said section, thence South along said North and
South quarter line of said section 200 feet to the place of beginning.
CALHOUN COUNTY
Certain land in Convis Township, Calhoun County, Michigan described as:
A parcel of land in the SE 1/4 of the SE 1/4 of Section 32,
T1S, R6W, described as follows: To find the place of beginning of this
description, commence at the Southeast corner of said section; run
thence North along the East line of said section 1034.32 feet to the
place of beginning of this description; running thence N 89 degrees 39'
52" W, 333.0 feet; thence North 290.0 feet to the South 1/8 line of
said section; thence S 89 degrees 39' 52" E along said South 1/8 line
of said section 333.0 feet to the East line of said section; thence
South along said East line of said section 290.0 feet to the place of
beginning. (Bearings are based on the East line of Section 32, T1S,
R6W, from the Southeast corner of said section to the Northeast corner
of said section assumed as North.)
CASS COUNTY
Certain easement rights located across land in Marcellus Township, Cass
County, Michigan described as:
The East 6 rods of the SW 1/4 of the SE 1/4 of Section 4, T5S,
R13W.
CHARLEVOIX COUNTY
Certain land in South Arm Township, Charlevoix County, Michigan
described as:
A parcel of land in the SW 1/4 of Section 29, T32N, R7W,
described as follows: Beginning at the Southwest corner of said section
and running thence North along the West line of said section 788.25
feet to a point which is 528 feet distant South of the South 1/8 line
of said section as measured along the said West line of said section;
thence N 89 degrees 30' 19" E, parallel with said South 1/8 line of
said section 442.1 feet; thence South 788.15 feet to the South line of
said section; thence S 89 degrees 29' 30" W, along said South line of
said section 442.1 feet to the place of beginning.
- 19 -
CHEBOYGAN COUNTY
Certain land in Inverness Township, Cheboygan County, Michigan
described as:
A parcel of land in the SW frl 1/4 of Section 31, T37N, R2W,
described as beginning at the Northwest corner of the SW frl 1/4,
running thence East on the East and West quarter line of said Section,
40 rods, thence South parallel to the West line of said Section 40
rods, thence West 40 rods to the West line of said Section, thence
North 40 rods to the place of beginning.
CLARE COUNTY
Certain land in Frost Township, Clare County, Michigan described as:
The East 150 feet of the North 225 feet of the NW 1/4 of the
NW 1/4 of Section 15, T20N, R4W.
CLINTON COUNTY
Certain land in Watertown Township, Clinton County, Michigan described
as:
The NE 1/4 of the NE 1/4 of the SE 1/4 of Section 22, and the
North 165 feet of the NW 1/4 of the NE 1/4 of the SE 1/4 of Section 22,
T5N, R3W.
CRAWFORD COUNTY
Certain land in Lovells Township, Crawford County, Michigan described
as:
A parcel of land in Section 1, T28N, R1W, described as:
Commencing at NW corner said section; thence South 89 degrees53'30"
East along North section line 105.78 feet to point of beginning; thence
South 89 degrees53'30" East along North section line 649.64 feet;
thence South 55 degrees 42'30" East 340.24 feet; thence South 55
degrees 44' 37"" East 5,061.81 feet to the East section line; thence
South 00 degrees 00' 08"" West along East section line 441.59 feet;
thence North 55 degrees 44' 37" West 5,310.48 feet; thence North 55
degrees 42'30" West 877.76 feet to point of beginning.
EATON COUNTY
Certain land in Eaton Township, Eaton County, Michigan described as:
A parcel of land in the SW 1/4 of Section 6, T2N, R4W,
described as follows: To find the place of beginning of this
description commence at the Southwest corner of said section; run
thence N 89 degrees 51' 30" E along the South line of said section 400
feet to the place of beginning of this description; thence continuing N
89 degrees 51' 30" E, 500 feet; thence N 00 degrees 50' 00" W, 600
feet; thence S 89 degrees 51' 30" W parallel with the South line of
said
- 20 -
section 500 feet; thence S 00 degrees 50' 00" E, 600 feet to the place
of beginning.
EMMET COUNTY
Certain land in Wawatam Township, Emmet County, Michigan described as:
The West 1/2 of the Northeast 1/4 of the Northeast 1/4 of
Section 23, T39N, R4W.
GENESEE COUNTY
Certain land in Argentine Township, Genesee County, Michigan described
as:
A parcel of land of part of the SW 1/4 of Section 8, T5N, R5E,
being more particularly described as follows:
Beginning at a point of the West line of Duffield Road, 100
feet wide, (as now established) distant 829.46 feet measured N01
degrees42'56"W and 50 feet measured S88 degrees14'04"W` from the South
quarter corner, Section 8, T5N, R5E; thence S88 degrees14'04"W a
distance of 550 feet; thence N01 degrees42'56"W a distance of 500 feet
to a point on the North line of the South half of the Southwest quarter
of said Section 8; thence N88 degrees14'04"E along the North line of
South half of the Southwest quarter of said Section 8 a distance 550
feet to a point on the West line of Duffield Road, 100 feet wide (as
now established); thence S01 degrees42'56"E along the West line of said
Duffield Road a distance of 500 feet to the point of beginning.
GLADWIN COUNTY
Certain land in Secord Township, Gladwin County, Michigan described as:
The East 400 feet of the South 450 feet of Section 2, T19N,
R1E.
GRAND TRAVERSE COUNTY
Certain land in Mayfield Township, Grand Traverse County, Michigan
described as:
A parcel of land in the Northwest 1/4 of Section 3, T25N,
R11W, described as follows: Commencing at the Northwest corner of said
section, running thence S 89 degrees19'15" E along the North line of
said section and the center line of Clouss Road 225 feet, thence South
400 feet, thence N 89 degrees19'15" W 225 feet to the West line of said
section and the center line of Hannah Road, thence North along the West
line of said section and the center line of Hannah Road 400 feet to the
place of beginning for this description.
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GRATIOT COUNTY
Certain land in Fulton Township, Gratiot County, Michigan described as:
A parcel of land in the NE 1/4 of Section 7, Township 9 North,
Range 3 West, described as beginning at a point on the North line of
George Street in the Village of Middleton, which is 542 feet East of
the North and South one-quarter (1/4) line of said Section 7; thence
North 100 feet; thence East 100 feet; thence South 100 feet to the
North line of George Street; thence West along the North line of George
Street 100 feet to place of beginning.
HILLSDALE COUNTY
Certain land in Litchfield Village, Hillsdale County, Michigan
described as:
Lot 238 of Assessors Plat of the Village of Litchfield.
HURON COUNTY
Certain easement rights located across land in Sebewaing Township,
Huron County, Michigan described as:
The North 1/2 of the Northwest 1/4 of Section 15, T15N, R9E.
INGHAM COUNTY
Certain land in Vevay Township, Ingham County, Michigan described as:
A parcel of land 660 feet wide in the Southwest 1/4 of Section
7 lying South of the centerline of Sitts Road as extended to the
North-South 1/4 line of said Section 7, T2N, R1W, more particularly
described as follows: Commence at the Southwest corner of said Section
7, thence North along the West line of said Section 2502.71 feet to the
centerline of Sitts Road; thence South 89 degrees54'45" East along said
centerline 2282.38 feet to the place of beginning of this description;
thence continuing South 89 degrees54'45" East along said centerline and
said centerline extended 660.00 feet to the North-South 1/4 line of
said section; thence South 00 degrees07'20" West 1461.71 feet; thence
North 89 degrees34'58" West 660.00 feet; thence North 00 degrees07'20"
East 1457.91 feet to the centerline of Sitts Road and the place of
beginning.
IONIA COUNTY
Certain land in Sebewa Township, Ionia County, Michigan described as:
A strip of land 280 feet wide across that part of the SW 1/4
of the NE 1/4 of Section 15, T5N, R6W, described as follows:
- 22 -
To find the place of beginning of this description commence at
the E 1/4 corner of said section; run thence N 00 degrees 05' 38" W
along the East line of said section, 1218.43 feet; thence S 67 degrees
18' 24" W, 1424.45 feet to the East 1/8 line of said section and the
place of beginning of this description; thence continuing S 67 degrees
18' 24" W, 1426.28 feet to the North and South 1/4 line of said section
at a point which said point is 105.82 feet distant N'ly of the center
of said section as measured along said North and South 1/4 line of said
section; thence N 00 degrees 04' 47" E along said North and South 1/4
line of said section, 303.67 feet; thence N 67 degrees 18' 24" E,
1425.78 feet to the East 1/8 line of said section; thence S 00 degrees
00' 26" E along said East 1/8 line of said section, 303.48 feet to the
place of beginning. (Bearings are based on the East line of Section 15,
T5N, R6W, from the E 1/4 corner of said section to the Northeast corner
of said section assumed as N 00 degrees 05' 38" W.)
IOSCO COUNTY
Certain land in Alabaster Township, Iosco County, Michigan described
as:
A parcel of land in the NW 1/4 of Section 34, T21N, R7E,
described as follows: To find the place of beginning of this
description commence at the N 1/4 post of said section; run thence
South along the North and South 1/4 line of said section, 1354.40 feet
to the place of beginning of this description; thence continuing South
along the said North and South 1/4 line of said section, 165.00 feet to
a point on the said North and South 1/4 line of said section which said
point is 1089.00 feet distant North of the center of said section;
thence West 440.00 feet; thence North 165.00 feet; thence East 440.00
feet to the said North and South 1/4 line of said section and the place
of beginning.
ISABELLA COUNTY
Certain land in Chippewa Township, Isabella County, Michigan described
as:
The North 8 rods of the NE 1/4 of the SE 1/4 of Section 29,
T14N, R3W.
JACKSON COUNTY
Certain land in Waterloo Township, Jackson County, Michigan described
as:
A parcel of land in the North fractional part of the N
fractional 1/2 of Section 2, T1S, R2E, described as follows: To find
the place of beginning of this description commence at the E 1/4 post
of said section; run thence N 01 degrees 03' 40" E along the East line
of said section 1335.45 feet to the North 1/8 line of said section and
the place of beginning of this description; thence N 89 degrees 32' 00"
W, 2677.7 feet to the North and South 1/4 line of said section; thence
S 00 degrees 59' 25" W along the North and South 1/4 line of said
section 22.38 feet to the North 1/8 line of said section; thence S 89
degrees 59' 10" W along the North 1/8 line of said section 2339.4 feet
to the center line of State Trunkline Highway M-52; thence N 53 degrees
46' 00" W along the center line of said State
- 23 -
Trunkline Highway 414.22 feet to the West line of said section; thence
N 00 degrees 55' 10" E along the West line of said section 74.35 feet;
thence S 89 degrees 32' 00" E, 5356.02 feet to the East line of said
section; thence S 01 degrees 03' 40" W along the East line of said
section 250 feet to the place of beginning.
KALAMAZOO COUNTY
Certain land in Alamo Township, Kalamazoo County, Michigan described
as:
The South 350 feet of the NW 1/4 of the NW 1/4 of Section 16,
T1S, R12W, being more particularly described as follows: To find the
place of beginning of this description, commence at the Northwest
corner of said section; run thence S 00 degrees 36' 55" W along the
West line of said section 971.02 feet to the place of beginning of this
description; thence continuing S 00 degrees 36' 55" W along said West
line of said section 350.18 feet to the North 1/8 line of said section;
thence S 87 degrees 33' 40" E along the said North 1/8 line of said
section 1325.1 feet to the West 1/8 line of said section; thence N 00
degrees 38' 25" E along the said West 1/8 line of said section 350.17
feet; thence N 87 degrees 33' 40" W, 1325.25 feet to the place of
beginning.
KALKASKA COUNTY
Certain land in Kalkaska Township, Kalkaska County, Michigan described
as:
The NW 1/4 of the SW 1/4 of Section 4, T27N, R7W, excepting
therefrom all mineral, coal, oil and gas and such other rights as were
reserved unto the State of Michigan in that certain deed running from
the Department of Conservation for the State of Michigan to George
Welker and Mary Welker, his wife, dated October 9, 1934 and recorded
December 28, 1934 in Liber 39 on page 291 of Kalkaska County Records,
and subject to easement for pipeline purposes as granted to Michigan
Consolidated Gas Company by first party herein on April 4, 1963 and
recorded June 21, 1963 in Liber 91 on page 631 of Kalkaska County
Records.
KENT COUNTY
Certain land in Caledonia Township, Kent County, Michigan described as:
A parcel of land in the Northwest fractional 1/4 of Section
15, T5N, R10W, described as follows: To find the place of beginning of
this description commence at the North 1/4 corner of said section, run
thence S 0 degrees 59' 26" E along the North and South 1/4 line of said
section 2046.25 feet to the place of beginning of this description,
thence continuing S 0 degrees 59' 26" E along said North and South 1/4
line of said section 332.88 feet, thence S 88 degrees 58' 30" W 2510.90
feet to a point herein designated "Point A" on the East bank of the
Thornapple River, thence continuing S 88 degrees 53' 30" W to the
center thread of the Thornapple River, thence NW'ly along the center
thread of said Thornapple
- 24 -
River to a point which said point is S 88 degrees 58' 30" W of a point
on the East bank of the Thornapple River herein designated "Point B",
said "Point B" being N 23 degrees 41' 35" W 360.75 feet from said
above-described "Point A", thence N 88 degrees 58' 30" E to said "Point
B", thence continuing N 88 degrees 58' 30" E 2650.13 feet to the place
of beginning. (Bearings are based on the East line of Section 15, T5N,
R10W between the East 1/4 corner of said section and the Northeast
corner of said section assumed as N 0 degrees 59' 55" W.)
LAKE COUNTY
Certain land in Pinora and Cherry Valley Townships, Lake County,
Michigan described as:
A strip of land 50 feet wide East and West along and adjoining
the West line of highway on the East side of the North 1/2 of Section
13 T18N, R12W. Also a strip of land 100 feet wide East and West along
and adjoining the East line of the highway on the West side of
following described land: The South 1/2 of NW 1/4, and the South 1/2 of
the NW 1/4 of the SW 1/4, all in Section 6, T18N, R11W.
LAPEER COUNTY
Certain land in Hadley Township, Lapeer County, Michigan described as:
The South 825 feet of the W 1/2 of the SW 1/4 of Section 24,
T6N, R9E, except the West 1064 feet thereof.
LEELANAU COUNTY
Certain land in Cleveland Township, Leelanau County, Michigan described
as:
The North 200 feet of the West 180 feet of the SW 1/4 of the
SE 1/4 of Section 35, T29N, R13W.
LENAWEE COUNTY
Certain land in Madison Township, Lenawee County, Michigan described
as:
A strip of land 165 feet wide off the West side of the
following described premises: The E 1/2 of the SE 1/4 of Section 12.
The E 1/2 of the NE 1/4 and the NE 1/4 of the SE 1/4 of Section 13,
being all in T7S, R3E, excepting therefrom a parcel of land in the E
1/2 of the SE 1/4 of Section 12, T7S, R3E, beginning at the Northwest
corner of said E 1/2 of the SE 1/4 of Section 12, running thence East 4
rods, thence South 6 rods, thence West 4 rods, thence North 6 rods to
the place of beginning.
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LIVINGSTON COUNTY
Certain land in Cohoctah Township, Livingston County, Michigan
described as:
Parcel 1
The East 390 feet of the East 50 rods of the SW 1/4 of Section
30, T4N, R4E.
Parcel 2
A parcel of land in the NW 1/4 of Section 31, T4N, R4E,
described as follows: To find the place of beginning of this
description commence at the N 1/4 post of said section; run thence N 89
degrees 13' 06" W along the North line of said section, 330 feet to the
place of beginning of this description; running thence S 00 degrees 52'
49" W, 2167.87 feet; thence N 88 degrees 59' 49" W, 60 feet; thence N
00 degrees 52' 49" E, 2167.66 feet to the North line of said section;
thence S 89 degrees 13' 06" E along said North line of said section, 60
feet to the place of beginning.
MACOMB COUNTY
Certain land in Macomb Township, Macomb County, Michigan described as:
A parcel of land commencing on the West line of the E 1/2 of
the NW 1/4 of fractional Section 6, 20 chains South of the NW corner of
said E 1/2 of the NW 1/4 of Section 6; thence South on said West line
and the East line of A. Henry Kotner's Hayes Road Subdivision #15,
according to the recorded plat thereof, as recorded in Liber 24 of
Plats, on page 7, 24.36 chains to the East and West 1/4 line of said
Section 6; thence East on said East and West 1/4 line 8.93 chains;
thence North parallel with the said West line of the E 1/2 of the NW
1/4 of Section 6, 24.36 chains; thence West 8.93 chains to the place of
beginning, all in T3N, R13E.
MANISTEE COUNTY
Certain land in Manistee Township, Manistee County, Michigan described
as:
A parcel of land in the SW 1/4 of Section 20, T22N, R16W,
described as follows: To find the place of beginning of this
description, commence at the Southwest corner of said section; run
thence East along the South line of said section 832.2 feet to the
place of beginning of this description; thence continuing East along
said South line of said section 132 feet; thence North 198 feet; thence
West 132 feet; thence South 198 feet to the place of beginning,
excepting therefrom the South 2 rods thereof which was conveyed to
Manistee Township for highway purposes by a Quitclaim Deed dated June
13, 1919 and recorded July [11], 1919 in Liber 88 of Deeds on page 638
of Manistee County Records.
- 26 -
MASON COUNTY
Certain land in Riverton Township, Mason County, Michigan described as:
Parcel 1
The South 10 acres of the West 20 acres of the S 1/2 of the NE
1/4 of Section 22, T17N, R17W.
Parcel 2
A parcel of land containing 4 acres of the West side of
highway, said parcel of land being described as commencing 16 rods
South of the Northwest corner of the NW 1/4 of the SW 1/4 of Section
22, T17N, R17W, running thence South 64 rods, thence NE'ly and N'ly and
NW'ly along the W'ly line of said highway to the place of beginning,
together with any and all right, title, and interest of Howard C.
Wicklund and Katherine E. Wicklund in and to that portion of the
hereinbefore mentioned highway lying adjacent to the E'ly line of said
above described land.
MECOSTA COUNTY
Certain land in Wheatland Township, Mecosta County, Michigan described
as:
A parcel of land in the SW 1/4 of the SW 1/4 of Section 16,
T14N, R7W, described as beginning at the Southwest corner of said
section; thence East along the South line of Section 133 feet; thence
North parallel to the West section line 133 feet; thence West 133 feet
to the West line of said Section; thence South 133 feet to the place of
beginning.
MIDLAND COUNTY
Certain land in Ingersoll Township, Midland County, Michigan described
as:
The West 200 feet of the W 1/2 of the NE 1/4 of Section 4,
T13N, R2E.
MISSAUKEE COUNTY
Certain land in Norwich Township, Missaukee County, Michigan described
as:
A parcel of land in the NW 1/4 of the NW 1/4 of Section 16,
T24N, R6W, described as follows: Commencing at the Northwest corner of
said section, running thence N 89 degrees 01' 45" E along the North
line of said section 233.00 feet; thence South 233.00 feet; thence S 89
degrees 01' 45" W, 233.00 feet to the West line of said section; thence
North along said West line of said section 233.00 feet to the place of
beginning. (Bearings are based on the West line of Section 16, T24N,
R6W, between the Southwest and Northwest corners of said section
assumed as North.)
- 27 -
MONROE COUNTY
Certain land in Whiteford Township, Monroe County, Michigan described
as:
A parcel of land in the SW1/4 of Section 20, T8S, R6E,
described as follows: To find the place of beginning of this
description commence at the S 1/4 post of said section; run thence West
along the South line of said section 1269.89 feet to the place of
beginning of this description; thence continuing West along said South
line of said section 100 feet; thence N 00 degrees 50' 35" E, 250 feet;
thence East 100 feet; thence S 00 degrees 50' 35" W parallel with and
16.5 feet distant W'ly of as measured perpendicular to the West 1/8
line of said section, as occupied, a distance of 250 feet to the place
of beginning.
MONTCALM COUNTY
Certain land in Crystal Township, Montcalm County, Michigan described
as:
The N 1/2 of the S 1/2 of the SE 1/4 of Section 35, T10N, R5W.
MONTMORENCY COUNTY
Certain land in the Village of Hillman, Montmorency County, Michigan
described as:
Lot 14 of Hillman Industrial Park, being a subdivision in the
South 1/2 of the Northwest 1/4 of Section 24, T31N, R4E, according to
the plat thereof recorded in Liber 4 of Plats on Pages 32-34,
Montmorency County Records.
MUSKEGON COUNTY
Certain land in Casnovia Township, Muskegon County, Michigan described
as:
The West 433 feet of the North 180 feet of the South 425 feet
of the SW 1/4 of Section 3, T10N, R13W.
NEWAYGO COUNTY
Certain land in Ashland Township, Newaygo County, Michigan described
as:
The West 250 feet of the NE 1/4 of Section 23, T11N, R13W.
OAKLAND COUNTY
Certain land in Wixcom City, Oakland County, Michigan described as:
The E 75 feet of the N 160 feet of the N 330 feet of the W
526.84 feet of the NW 1/4 of the NW 1/4 of Section 8, T1N, R8E, more
particularly described as follows: Commence at the NW corner of said
Section 8, thence N 87 degrees 14' 29" E along the North line of said
Section 8 a distance of 451.84 feet to the place
- 28 -
of beginning for this description; thence continuing N 87 degrees 14'
29" E along said North section line a distance of 75.0 feet to the East
line of the West 526.84 feet of the NW 1/4 of the NW 1/4 of said
Section 8; thence S 02 degrees 37' 09" E along said East line a
distance of 160.0 feet; thence S 87 degrees 14' 29" W a distance of
75.0 feet; thence N 02 degrees 37' 09" W a distance of 160.0 feet to
the place of beginning.
OCEANA COUNTY
Certain land in Crystal Township, Oceana County, Michigan described as:
The East 290 feet of the SE 1/4 of the NW 1/4 and the East 290
feet of the NE 1/4 of the SW 1/4, all in Section 20, T16N, R16W.
OGEMAW COUNTY
Certain land in West Branch Township, Ogemaw County, Michigan described
as:
The South 660 feet of the East 660 feet of the NE 1/4 of the
NE 1/4 of Section 33, T22N, R2E.
OSCEOLA COUNTY
Certain land in Hersey Township, Osceola County, Michigan described as:
A parcel of land in the North 1/2 of the Northeast 1/4 of
Section 13, T17N, R9W, described as commencing at the Northeast corner
of said Section; thence West along the North Section line 999 feet to
the point of beginning of this description; thence S 01 degrees 54' 20"
E 1327.12 feet to the North 1/8 line; thence S 89 degrees 17' 05" W
along the North 1/8 line 330.89 feet; thence N 01 degrees 54' 20" W
1331.26 feet to the North Section line; thence East along the North
Section line 331 feet to the point of beginning.
OSCODA COUNTY
Certain land in Comins Township, Oscoda County, Michigan described as:
The East 400 feet of the South 580 feet of the W 1/2 of the SW
1/4 of Section 15, T27N, R3E.
OTSEGO COUNTY
Certain land in Corwith Township, Otsego County, Michigan described as:
Part of the NW 1/4 of the NE 1/4 of Section 28, T32N, R3W,
described as: Beginning at the N 1/4 corner of said section; running
thence S 89 degrees 04' 06" E along the North line of said section,
330.00 feet; thence S 00 degrees 28' 43" E, 400.00 feet; thence N 89
degrees 04' 06" W, 330.00 feet to the North and
- 29 -
South 1/4 line of said section; thence N 00 degrees 28' 43" W along the
said North and South 1/4 line of said section, 400.00 feet to the point
of beginning; subject to the use of the N'ly 33.00 feet thereof for
highway purposes.
OTTAWA COUNTY
Certain land in Robinson Township, Ottawa County, Michigan described
as:
The North 660 feet of the West 660 feet of the NE 1/4 of the
NW 1/4 of Section 26, T7N, R15W.
PRESQUE ISLE COUNTY
Certain land in Belknap and Pulawski Townships, Presque Isle County,
Michigan described as:
Part of the South half of the Northeast quarter, Section 24,
T34N, R5E, and part of the Northwest quarter, Section 19, T34N, R6E,
more fully described as: Commencing at the East 1/4 corner of said
Section 24; thence N 00 degrees15'47" E, 507.42 feet, along the East
line of said Section 24 to the point of beginning; thence S 88
degrees15'36" W, 400.00 feet, parallel with the North 1/8 line of said
Section 24; thence N 00 degrees15'47" E, 800.00 feet, parallel with
said East line of Section 24; thence N 88 degrees15'36"E, 800.00 feet,
along said North 1/8 line of Section 24 and said line extended; thence
S 00 degrees15'47" W, 800.00 feet, parallel with said East line of
Section 24; thence S 88 degrees15'36" W, 400.00 feet, parallel with
said North 1/8 line of Section 24 to the point of beginning.
Together with a 33 foot easement along the West 33 feet of the
Northwest quarter lying North of the North 1/8 line of Section 24,
Belknap Township, extended, in Section 19, T34N, R6E.
ROSCOMMON COUNTY
Certain land in Gerrish Township, Roscommon County, Michigan described
as:
A parcel of land in the NW 1/4 of Section 19, T24N, R3W,
described as follows: To find the place of beginning of this
description commence at the Northwest corner of said section, run
thence East along the North line of said section 1,163.2 feet to the
place of beginning of this description (said point also being the place
of intersection of the West 1/8 line of said section with the North
line of said section), thence S 01 degrees 01' E along said West 1/8
line 132 feet, thence West parallel with the North line of said section
132 feet, thence N 01 degrees 01' W parallel with said West 1/8 line of
said section 132 feet to the North line of said section, thence East
along the North line of said section 132 feet to the place of
beginning.
- 30 -
SAGINAW COUNTY
Certain land in Chapin Township, Saginaw County, Michigan described as:
A parcel of land in the SW 1/4 of Section 13, T9N, R1E,
described as follows: To find the place of beginning of this
description commence at the Southwest corner of said section; run
thence North along the West line of said section 1581.4 feet to the
place of beginning of this description; thence continuing North along
said West line of said section 230 feet to the center line of a creek;
thence S 70 degrees 07' 00" E along said center line of said creek
196.78 feet; thence South 163.13 feet; thence West 185 feet to the West
line of said section and the place of beginning.
SANILAC COUNTY
Certain easement rights located across land in Minden Township, Sanilac
County, Michigan described as:
The Southeast 1/4 of the Southeast 1/4 of Section 1, T14N,
R14E, excepting therefrom the South 83 feet of the East 83 feet
thereof.
SHIAWASSEE COUNTY
Certain land in Burns Township, Shiawassee County, Michigan described
as:
The South 330 feet of the E 1/2 of the NE 1/4 of Section 36,
T5N, R4E.
ST. CLAIR COUNTY
Certain land in Ira Township, St. Clair County, Michigan described as:
The N 1/2 of the NW 1/4 of the NE 1/4 of Section 6, T3N, R15E.
ST. JOSEPH COUNTY
Certain land in Mendon Township, St. Joseph County, Michigan described
as:
The North 660 feet of the West 660 feet of the NW 1/4 of SW
1/4, Section 35, T5S, R10W.
TUSCOLA COUNTY
Certain land in Millington Township, Tuscola County, Michigan described
as:
A strip of land 280 feet wide across the East 96 rods of the
South 20 rods of the N 1/2 of the SE 1/4 of Section 34, T10N, R8E, more
particularly described as commencing at the Northeast corner of Section
3, T9N, R8E, thence S 89 degrees 55' 35" W along the South line of said
Section 34 a distance of 329.65 feet, thence N 18 degrees 11' 50" W a
distance of 1398.67 feet to the South 1/8
- 31 -
line of said Section 34 and the place of beginning for this
description; thence continuing N 18 degrees 11' 50" W a distance of
349.91 feet; thence N 89 degrees 57' 01" W a distance of 294.80 feet;
thence S 18 degrees 11' 50" E a distance of 350.04 feet to the South
1/8 line of said Section 34; thence S 89 degrees 58' 29" E along the
South 1/8 line of said section a distance of 294.76 feet to the place
of beginning.
VAN BUREN COUNTY
Certain land in Covert Township, Van Buren County, Michigan described
as:
All that part of the West 20 acres of the N 1/2 of the NE
fractional 1/4 of Section 1, T2S, R17W, except the West 17 rods of the
North 80 rods, being more particularly described as follows: To find
the place of beginning of this description commence at the N 1/4 post
of said section; run thence N 89 degrees 29' 20" E along the North line
of said section 280.5 feet to the place of beginning of this
description; thence continuing N 89 degrees 29' 20" E along said North
line of said section 288.29 feet; thence S 00 degrees 44' 00" E,
1531.92 feet; thence S 89 degrees 33' 30" W, 568.79 feet to the North
and South 1/4 line of said section; thence N 00 degrees 44' 00" W along
said North and South 1/4 line of said section 211.4 feet; thence N 89
degrees 29' 20" E, 280.5 feet; thence N 00 degrees 44' 00" W, 1320 feet
to the North line of said section and the place of beginning.
WASHTENAW COUNTY
Certain land in Manchester Township, Washtenaw County, Michigan
described as:
A parcel of land in the NE 1/4 of the NW 1/4 of Section 1,
T4S, R3E, described as follows: To find the place of beginning of this
description commence at the Northwest corner of said section; run
thence East along the North line of said section 1355.07 feet to the
West 1/8 line of said section; thence S 00 degrees 22' 20" E along said
West 1/8 line of said section 927.66 feet to the place of beginning of
this description; thence continuing S 00 degrees 22' 20" E along said
West 1/8 line of said section 660 feet to the North 1/8 line of said
section; thence N 86 degrees 36' 57" E along said North 1/8 line of
said section 660.91 feet; thence N 00 degrees22' 20" W, 660 feet;
thence S 86 degrees 36' 57" W, 660.91 feet to the place of beginning.
WAYNE COUNTY
Certain land in Livonia City, Wayne County, Michigan described as:
Commencing at the Southeast corner of Section 6, T1S, R9E;
thence North along the East line of Section 6 a distance of 253 feet to
the point of beginning; thence continuing North along the East line of
Section 6 a distance of 50 feet; thence Westerly parallel to the South
line of Section 6, a distance of 215 feet; thence Southerly parallel to
the East line of Section 6 a distance of 50 feet;
- 32 -
thence easterly parallel with the South line of Section 6 a distance of
215 feet to the point of beginning.
WEXFORD COUNTY
Certain land in Selma Township, Wexford County, Michigan described as:
A parcel of land in the NW 1/4 of Section 7, T22N, R10W,
described as beginning on the North line of said section at a point 200
feet East of the West line of said section, running thence East along
said North section line 450 feet, thence South parallel with said West
section line 350 feet, thence West parallel with said North section
line 450 feet, thence North parallel with said West section line 350
feet to the place of beginning.
SECTION 12. The Company is a transmitting utility under Section 9501(2)
of the Michigan Uniform Commercial Code (M.C.L. 440.9501(2)) as defined in
M.C.L. 440.9102(1)(aaaa).
IN WITNESS WHEREOF, said Consumers Energy Company has caused this
Supplemental Indenture to be executed in its corporate name by its Chairman of
the Board, President, a Vice President or its Treasurer and its corporate seal
to be hereunto affixed and to be attested by its Secretary or an Assistant
Secretary, and said JPMorgan Chase Bank, as Trustee as aforesaid, to evidence
its acceptance hereof, has caused this Supplemental Indenture to be executed in
its corporate name by a Vice President and its corporate seal to be hereunto
affixed and to be attested by a Trust Officer, in several counterparts, all as
of the day and year first above written.
- 33 -
CONSUMERS ENERGY COMPANY
(SEAL) By
---------------------------------
Paul A. Stadnikia
Attest: Treasurer
- ----------------------------
Joyce H. Norkey
Assistant Secretary
Signed, sealed and delivered
by CONSUMERS ENERGY COMPANY
in the presence of
- ----------------------------
Kimberly C. Wilson
- ----------------------------
Sammie B. Dalton
STATE OF MICHIGAN )
ss.
COUNTY OF JACKSON )
The foregoing instrument was acknowledged before me this 28th day of
March, 2003, by Paul A. Stadnikia, Treasurer of CONSUMERS ENERGY COMPANY, a
Michigan corporation, on behalf of the corporation.
--------------------------------------
Margaret Hillman, Notary Public
[Seal] Jackson County, Michigan
My Commission Expires: June 14, 2004
S-1
JPMORGAN CHASE BANK, AS TRUSTEE
(SEAL) By
---------------------------------
L. O'Brien
Attest: Vice President
- ------------------
Rosa Ciaccia
Trust Officer
Signed, sealed and delivered
by JPMORGAN CHASE BANK
in the presence of
- ----------------------------
James D. Heaney
Vice President
- ----------------------------
William G. Keenan
Vice President
STATE OF NEW YORK )
ss.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 28th day of
March, 2003, by L. O'Brien, a Vice President of JPMORGAN CHASE BANK, a New York
corporation, on behalf of the corporation.
------------------------------------
Notary Public
[Seal]
New York County, New York
My Commission Expires:
Prepared by: When recorded, return to:
Kimberly C. Wilson Consumers Energy Company
212 West Michigan Avenue Business Services Real Estate Dept.
Jackson, MI 49201 Attn: Nancy Fisher EP7-439
One Energy Plaza
Jackson, MI 49201
S-2
EXHIBIT B-1
REQUIRED OPINIONS FROM
MICHAEL D. VANHEMERT, ESQ.
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Michigan.
2. The execution and delivery of the Loan Documents by the
Company and the performance by the Company of the Obligations have been duly
authorized by all necessary corporate action and proceedings on the part of the
Company and will not:
(a) contravene the Company's Restated Articles of
Incorporation, as amended, or bylaws;
(b) contravene any law or any contractual restriction
imposed by any indenture or any other agreement or instrument
evidencing or governing indebtedness for borrowed money of the Company;
or
(c) result in or require the creation of any Lien upon or
with respect to any of the Company's properties except the lien of the
Indenture securing the Bonds.
3. The Loan Documents have been duly executed and delivered by
the Company.
4. To the best of my knowledge, there is no pending or threatened
action or proceeding against the Company or any of its Consolidated Subsidiaries
before any court, governmental agency or arbitrator (except (i) to the extent
described in the Company's annual report on Form 10-K/A for the year ended
December 31, 2001, quarterly report on Form 10-Q/A for the quarter ended
September 30, 2002, and current reports on Form 8-K filed by the Company on May
29, 2002, July 30, 2002 and September 8, 2002, in each case as filed with the
SEC, and (ii) such other similar actions, suits and proceedings predicated on
the occurrence of the same events giving rise to any actions, suits and
proceedings described in the reports filed with the SEC set forth in clause (i)
of this paragraph 4) which might reasonably be expected to materially adversely
affect the financial condition or results of operations of the Company and its
Consolidated Subsidiaries, taken as a whole, or that would materially adversely
affect the Company's ability to perform its obligations under any Loan Document.
To the best of my knowledge, there is no litigation challenging the validity or
the enforceability of any of the Loan Documents.
5. No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Company of any Loan Document,
except for the authorization to issue, sell or guarantee secured and/or
unsecured long-term debt granted by the Federal Energy Regulatory Commission in
Docket No. ES02-36-001 (hereinafter the "FERC Order"). The FERC Order is in full
force and effect as of the date hereof.
6. The Bonds, assuming due authentication in accordance with the
terms of the Indenture, are in due and proper form and, when delivered to the
Agent pursuant to the Bond Delivery Agreement, will evidence and secure the
Obligations owing under the Agreement and will be valid and enforceable
obligations of the Company in accordance with their terms, secured by the lien
of the Indenture on an equal and ratable basis with all other bonds issued
thereunder and otherwise entitled to the benefits provided by the Indenture.
7. The Indenture has been qualified under the Trust Indenture Act
of 1939, as amended, and the execution and delivery of the Supplemental
Indenture will not cause the Indenture to not be so qualified.
8. The Company is not an "investment company" or a company
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
9. The Company (i) is a "public utility" and a "subsidiary
company" of a "holding company", as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended (the "Holding Company Act"), and (ii) is
currently exempt from all provisions of the Holding Company Act, except Section
9(a)(2) thereof.
10. In a properly presented case, a Michigan court or a federal
court applying Michigan choice of law rules should give effect to the choice of
law provisions of the Agreement and should hold that the Agreement is to be
governed by the laws of the State of New York rather than the laws of the State
of Michigan, except in the case of those provisions set forth in the Agreement
the enforcement of which would contravene a fundamental policy of the State of
Michigan. In the course of our review of the Agreement, nothing has come to my
attention to indicate that any of such provisions would do so. Notwithstanding
the foregoing, even if a Michigan court or a federal court holds that the
Agreement is to be governed by the laws of the State of Michigan, the Agreement
constitutes a legal, valid and binding obligation of the Company, enforceable
under Michigan law (including usury provisions) against the Company in
accordance with its terms, subject to (a) the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and (b) the application of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).
EXHIBIT B-2
REQUIRED OPINIONS FROM
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
1. The Agreement constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, subject to (a) the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) the application of general principles of
equity (regardless of whether considered in a preceding in equity or at law).
EXHIBIT B-3
REQUIRED OPINIONS FROM
MILLER, CANFIELD, PADDOCK AND STONE, P.L.C.
1. The Bonds, assuming due authentication in accordance with the
terms of the Indenture, are in due and proper form and, when delivered to the
Agent pursuant to the Bond Delivery Agreement, will evidence and secure the
Obligations owing under the Agreement and will be valid and enforceable
obligations of the Company in accordance with their terms, secured by the lien
of the Indenture on an equal and ratable basis with all other bonds issued
thereunder and otherwise entitled to the benefits provided by the Indenture.
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
I, ___________, _________ of Consumers Energy Company, a Michigan
corporation (the "Company"), DO HEREBY CERTIFY in connection with the Term Loan
Agreement dated as of March 28, 2003 (the "Loan Agreement"; the terms defined
therein being used herein as so defined) among the Company, various financial
institutions and Citicorp North America, Inc., as Agent, that;
I. Section 8.1 of the Loan Agreement provides that the Company shall: "At
all times, maintain a ratio of Total Consolidated Debt to Total
Consolidated Capitalization of not greater than 0.65 to 1.0."
The following calculations are made in accordance with the definitions
of Total Consolidated Debt and Total Consolidated Capitalization in the
Loan Agreement and are correct and accurate as of ________, __:
A. Total Consolidated Debt
(a) Indebtedness for borrowed money $
plus (b) Indebtedness for deferred purchase
price of property/services
plus (c) Unfunded Vested Liabilities
plus (d) Obligations under acceptance facilities
plus (e) Obligations under Capital Leases
plus (f) Obligations under interest rate swap,
"cap", "collar" or other hedging
agreement
minus (g) Guaranties, endorsements and other
contingent obligations
minus (h) Principal amount of any Securitized
Bonds
minus (i) Junior Subordinated Debt owned by
any Hybrid Preferred Securities
Subsidiary
minus (j) Subordinated guaranties by the
Company of payments with respect to
Hybrid Preferred Securities
Hybrid Preferred Securities
minus (k) Agreed upon percentage of Net
Proceeds from issuance of hybrid
debt/equity securities (other than
Junior Subordinated Debt and Hybrid
Preferred Securities ________________
Total $
B. Total Consolidated Capitalization:
(a) Total Consolidated Debt $
(b) Equity of common stockholders
(c) Equity of preference stockholders
(d) Equity of preferred stockholders ________________
Total $
C. Debt to Capital Ratio ___ to 1.00
(total of A divided by total of B)
II. Section 8.2 of the Loan Agreement provides that the Company shall: "Not
permit the ratio, determined as of the end of each of its fiscal
quarters for the then most-recently ended four fiscal quarters, of (i)
Consolidated EBIT to (ii) Consolidated Interest Expense to be less than
2.0 to 1.0"
The following calculations are made in accordance with the definitions
of Consolidated EBIT and Consolidated Interest Expense in the Loan Agreement and
are correct and accurate as of ___________, __:
A. Consolidated EBIT
(a) Consolidated Net Income $
plus (b) Consolidated Interest Expense $
plus (c) Expense for taxes paid or accrued $
plus (d) Non-cash write-offs and write-downs $
contained in the Company's
Consolidated Net Income, including,
without limitation, write-offs or write-
downs related to the sale of assets,
impairment of assets and loss on
contracts
plus (e) The pre-tax under recovery arising $
from the loss on Power Purchase
Agreement - MCV Partnership
minus (f) Extraordinary gains realized other than $
in the ordinary course of business ________________
Total $
B. Consolidated Interest Expense $
C. Interest Coverage Ratio ___ to 1.00
(total of A divided by total of B)
IN WITNESS WHEREOF, I have signed this Certificate this __ day of
_________, ____.
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor], (the "Assignor") and [Insert name of
Assignee] (the "Assignee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Loan Agreement identified below (as
amended, the "Loan Agreement "), receipt of a copy of which is hereby
acknowledged by the Assignee. The Terms and Conditions set forth in Annex 1
attached hereto are hereby agreed to and incorporated herein by reference and
made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Loan Agreement, as of the Effective Date inserted by the
Agent as contemplated below, the interest in and to all of the Assignor's rights
and obligations in its capacity as a Bank under the Loan Agreement and any other
documents or instruments delivered pursuant thereto that represents the amount
and percentage interest identified below of all of the Assignor's outstanding
rights and obligations under the respective facilities identified below
(including without limitation, to the extent permitted to be assigned under
applicable law, all claims (including without limitation contract claims, tort
claims, malpractice claims, statutory claims and all other claims at law or in
equity), suits, causes of action and any other right of the Assignor against any
Person whether known or unknown arising under or in connection with the Loan
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby) (the "Assigned Interest"). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.
1 Assignor: ________________________
2. Assignee: ________________________ [and is an affiliate of Assignor]
3 Borrower: CONSUMERS ENERGY COMPANY
4. Agent: Citicorp North America, Inc., as the Agent under the Loan
Agreement.
5. Loan Agreement: The Term Loan Agreement dated as of March 28, 2003 among
Consumers Energy Company, the Banks party thereto, and Citicorp North America,
Inc., as Agent.
6. Assigned Interest:
Aggregate Amount of
Outstanding Term
Loans for all Banks** Amount of Outstanding Percentage Assigned of
Facility Assigned ? Term Loans Assigned* Outstanding Term Loans(1)
- -----------------------------------------------------------------------------------------------------------
Term Loans $______________ $________________ _______%
- -----------------------------------------------------------------------------------------------------------
7. Trade Date: _______________________________________
Effective Date: _____________, 20__ [TO BE INSERTED BY AGENT AND WHICH SHALL
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE AGENT](2)
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:______________________________
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:______________________________
Title:
[Consented to and (3)] Accepted:
CITICORP NORTH AMERICA, INC., as Agent
By:_________________
Title:
- ----------------------------
* Amount to be adjusted by the counter parties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
(1)Set forth, to at least 9 decimals, as a percentage of the Term Loans of all
Banks hereunder.
(2)Insert if satisfaction of minimum amounts is to be determined as of the Trade
Date.
(3)To be added only if the consent of the Agent is required by the terms of the
Loan Agreement.
ANNEX 1
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1. Assignor. The Assignor represents and
warrants that(i) it is the legal and beneficial owner of the Assigned Interest,
(ii) the Assigned Interest is free and clear of any lien, encumbrance or other
adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby. Neither the Assignor nor any of
its officers, directors, employees, agents or attorneys shall be responsible for
(i) any statements, warranties or representations made in or in connection with
the Loan Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency, perfection, priority,
collectibility, or value of the Loan Documents or any collateral thereunder,
(iii) the financial condition of the Company, any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any Loan Document, (iv)
the performance or observance by the Company, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Document, (v) inspecting any of the property, books or records of the
Company, or any guarantor, or (vi) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Term Loans or the Loan
Documents.
1.2. Assignee. The Assignee (a) represents and
warrants that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Bank under the
Loan Agreement, (ii) from and after the Effective Date, it shall be bound by the
provisions of the Loan Agreement as a Bank thereunder and, to the extent of the
Assigned Interest, shall have the obligations of a Bank thereunder, (iii) its
payment instructions and notice instructions are delivered with this Assignment
and Assumption, (iv) none of the funds, monies, assets or other consideration
being used to make the purchase and assumption hereunder are "plan assets" as
defined under ERISA and that its rights, benefits and interests in and under the
Loan Documents will not be "plan assets" under ERISA, (v) it shall indemnify and
hold the Assignor harmless against all losses, costs and expenses (including,
without limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment and Assumption,
(vi) it has received a copy of the Loan Agreement, together with copies of
financial statements and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Agent or any other Bank, and (vii) together with this Assignment and
Assumption is any documentation required to be delivered by the Assignee with
respect to its tax status pursuant to the terms of the Loan Agreement, duly
completed and executed by the Assignee and (b) agrees that (i) it will,
independently and without reliance on the Agent, the Assignor or any other Bank,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will
perform in accordance with their terms all of the obligations which by the terms
of the Loan Documents are required to be performed by it as a Bank.
2. Payments. The Assignee shall pay the Assignor, on the
Effective Date, the amount agreed to by the Assignor and the Assignee. From and
after the Effective Date, the Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.
3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of New York.
SCHEDULE 1
ADMINISTRATIVE DETAILS FORM
DEAL NAME: CONSUMERS ENERGY COMPANY
GENERAL INFORMATION
YOUR INSTITUTIONS LEGAL NAME:
TAX WITHHOLDING:
Note: To avoid the potential of having interest income withheld, all investors
must deliver all current and appropriate tax forms.
Tax ID #: _________________
SUB-ALLOCATION: (United States only)
Note: If your institution is sub-allocating its allocation, please fill out the
information below. Additionally, an administrative detail form is required for
each legal entity. Execution copies (e.g. Credit Agreement/Assignment Agreement)
will be sent for signature to the Sub-Allocation Contact below.
Sub-Allocated Amount: $
______________________
Signing Credit Agreement? [ ] Yes [ ] No
Coming In Via Assignment? [ ] Yes [ ] No
SUB-ALLOCATION CONTACT:
NAME:
Address: ___________________________________ E- mail: ___________
___________________________________
City: _______________ State: ___________ Phone #: ___________
Postal Code: _______________ Country:___________ Fax #: ___________
CONTACT LIST
BUSINESS/CREDIT MATTERS: (Responsible for trading and credit approval process of
the deal)
Primary:
NAME:
Address: ___________________________________ E- mail: ___________
___________________________________
City: _______________ State: ___________ Phone #: ___________
Postal Code: _______________ Country:___________ Fax #: ___________
Backup:
NAME:
Address: ___________________________________ E- mail: ___________
___________________________________
City: _______________ State: ___________ Phone #: ___________
Postal Code: _______________ Country:___________ Fax #: ___________
- --------------------------------------------------------------------------------
Admin Details can be submitted online, via Citigroup's Global Loans Web Site.
Send an e- mail to oploanswebadmin@ssmb.com with your contact information and
the deal name to request a user ID/password to submit/modify Admin Details
online.
ADMINISTRATIVE DETAILS FORM
ADMIN/OPERATIONS MATTERS: (Responsible for interest, fee, principal payment,
borrowing & pay-downs)
Primary:
NAME:
Address: ___________________________________ E- mail: ___________
___________________________________
City: _______________ State: ___________ Phone #: ___________
Postal Code: _______________ Country:___________ Fax #: ___________
Backup:
NAME:
Address: ___________________________________ E- mail: ___________
___________________________________
City: _______________ State: ___________ Phone #: ___________
Postal Code: _______________ Country:___________ Fax #: ___________
CLOSING CONTACT: (Responsible for Deal Closing matters)
NAME:
Address: ___________________________________ E- mail: ___________
___________________________________
City: _______________ State: ___________ Phone #: ___________
Postal Code: _______________ Country:___________ Fax #: ___________
DISCLOSURE CONTACT: (Receives disclosure materials, such as financial reports,
via our web site)
NAME:
Address: ___________________________________ E- mail: ___________
___________________________________
City: _______________ State: ___________ Phone #: ___________
Postal Code: _______________ Country:___________ Fax #: ___________
Admin Details can be submitted online, via Citigroup's Global Loans Web Site.
Send an e- mail to oploanswebadmin@ssmb.com with your contact information and
the deal name to request a user ID/password to submit/modify Admin Details
online.
ADMINISTRATIVE DETAILS FORM
ROUTING INSTRUCTIONS
ROUTING INSTRUCTIONS FOR THIS DEAL:
City: _____ State: ________ ACCOUNT NAME: ____________
Postal Code: _______ ACCOUNT#: ____________
Payment Type: BENEF. ACCT. NAME: ____________
[ ]Fed [ ]ABA [ ]CHIPS BENEF. ACCT. #: ____________
ABA/CHIPS #:
REFERENCE: ________________________
Attention: ________________________
ADMINISTRATIVE AGENT INFORMATION
BANK LOANS SYNDICATION - AGENT CONTACT AGENT WIRING INSTRUCTIONS
Name: Jason Trala
Telephone: 302-894-6086 Citibank, NA
Fax: 302-894-6120 ABA #: 021-00-0089
Acct Name: Agency
Address: 2 Penn's Way Medium Term Finance
Suite 200 Acct #: 36852248
New Castle, De
19720
INITIAL FUNDING STANDARDS: LIBOR - Fund 2 days after rates are set.
Admin Details can be submitted online, via Citigroup's Global Loans Web Site.
Send an e-mail to oploanswebadmin@ssmb.com with your contact information and the
deal name to request a user ID/password to submit/modify Admin Details online.
EXHIBIT E
TERMS OF SUBORDINATION
[JUNIOR SUBORDINATED DEBT]
ARTICLE ___
SUBORDINATION
Section __.1. Applicability of Article; Securities Subordinated to
Senior Indebtedness.
(a) This Article __ shall apply only to the Securities of any
series which, pursuant to Section __, are expressly made subject to this
Article. Such Securities are referred to in this Article __ as "Subordinated
Securities."
(b) The Issuer covenants and agrees, and each Holder of
Subordinated Securities by his acceptance thereof likewise covenants and agrees,
that the indebtedness represented by the Subordinated Securities and the payment
of the principal and interest, if any, on the Subordinated Securities is
subordinated and subject in right, to the extent and in the manner provided in
this Article, to the prior payment in full of all Senior Indebtedness.
"Senior Indebtedness" means the principal of and premium, if any, and
interest on the following, whether outstanding on the date hereof or thereafter
incurred, created or assumed: (i) indebtedness of the Issuer for money borrowed
by the Issuer (including purchase money obligations) or evidenced by debentures
(other than the Subordinated Securities), notes, bankers' acceptances or other
corporate debt securities, or similar instruments issued by the Issuer; (ii) all
capital lease obligations of the Issuer; (iii) all obligations of the Issuer
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of the Issuer and all obligations of the Issuer under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) obligations with respect to letters of
credit; (v) all indebtedness of others of the type referred to in the preceding
clauses (i) through (iv) assumed by or guaranteed in any manner by the Issuer or
in effect guaranteed by the Issuer; (vi) all obligations of the type referred to
in clauses (i) through (v) above of other persons secured by any lien on any
property or asset of the Issuer (whether or not such obligation is assumed by
the Issuer), except for (1) any such indebtedness that is by its terms
subordinated to or pari passu with the Subordinated Notes, as the case may be,
including all other debt securities and guaranties in respect of those debt
securities, issued to any other trusts, partnerships or other entities
affiliated with the Issuer which act as a financing vehicle of the Issuer in
connection with the issuance of preferred securities by such entity or other
securities which rank pari passu with, or junior to, the Preferred Securities,
and (2) any indebtedness between or among the Issuer and its affiliates; and/or
(vii) renewals, extensions or refundings of any of the indebtedness referred to
in the preceding clauses unless, in the case of any particular indebtedness,
renewal, extension or refunding, under the express provisions of the instrument
creating or evidencing the same or the assumption or guarantee of the same, or
pursuant to which the same is outstanding, such indebtedness or such renewal,
extension or refunding thereof is not superior in right of payment to the
Subordinated Securities.
This Article shall constitute a continuing obligation to all Persons
who, in reliance upon such provisions become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the holders
of Senior Indebtedness, and such holders are made obligees hereunder and they
and/or each of them may enforce such provisions.
Section __.2. Issuer Not to Make Payments with Respect to Subordinated
Securities in Certain Circumstances.
(a) Upon the maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all principal thereof and premium and interest
thereon shall first be paid in full, or such payment duly provided for in cash
in a manner satisfactory to the holders of such Senior Indebtedness, before any
payment is made on account of the principal of, or interest on, Subordinated
Securities or to acquire any Subordinated Securities or on account of any
sinking fund provisions of any Subordinated Securities (except payments made in
capital stock of the Issuer or in warrants, rights or options to purchase or
acquire capital stock of the Issuer, sinking fund payments made in Subordinated
Securities acquired by the Issuer before the maturity of such Senior
Indebtedness, and payments made through the exchange of other debt obligations
of the Issuer for such Subordinated Securities in accordance with the terms of
such Subordinated Securities, provided that such debt obligations are
subordinated to Senior Indebtedness at least to the extent that the Subordinated
Securities for which they are exchanged are so subordinated pursuant to this
Article __).
(b) Upon the happening and during the continuation of any default
in payment of the principal of, or interest on, any Senior Indebtedness when the
same becomes due and payable or in the event any judicial proceeding shall be
pending with respect to any such default, then, unless and until such default
shall have been cured or waived or shall have ceased to exist, no payment shall
be made by the Issuer with respect to the principal of, or interest on,
Subordinated Securities or to acquire any Subordinated Securities or on account
of any sinking fund provisions of Subordinated Securities (except payments made
in capital stock of the Issuer or in warrants, rights, or options to purchase or
acquire capital stock of the Issuer, sinking fund payments made in Subordinated
Securities acquired by the Issuer before such default and notice thereof, and
payments made through the exchange of other debt obligations of the Issuer for
such Subordinated Securities in accordance with the terms of such Subordinated
Securities, provided that such debt obligations are subordinated to Senior
Indebtedness at least to the extent that the Subordinated Securities for which
they are exchanged are so subordinated pursuant to this Article __).
(c) In the event that, notwithstanding the provisions of this
Section __.2, the Issuer shall make any payment to the Trustee on account of the
principal of or interest on Subordinated Securities, or on account of any
sinking fund provisions of such Securities, after the maturity of any Senior
Indebtedness as described in Section __.2(a) above or after the happening of a
default in payment of the principal of or interest on any Senior Indebtedness as
described in Section __.2(b) above, then, unless and until all Senior
Indebtedness which shall have matured, and all premium and interest thereon,
shall have been paid in full (or the declaration of acceleration thereof shall
have been rescinded or annulled), or such default shall have been cured or
waived or shall have ceased to exist, such payment (subject to the provisions of
Sections __.6 and __.7) shall be held by the Trustee, in trust for the benefit
of, and shall be paid forthwith over and
delivered to, the holders of such Senior Indebtedness (pro rata as to each of
such holders on the basis of the respective amounts of Senior Indebtedness held
by them) or their representative or the trustee under the indenture or other
agreement (if any) pursuant to which such Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the payment
of all such Senior Indebtedness remaining unpaid to the extent necessary to pay
the same in full in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior
Indebtedness. The Issuer shall give prompt written notice to the Trustee of any
default in the payment of principal of or interest on any Senior Indebtedness.
Section __.3. Subordinated Securities Subordinated to Prior Payment of
All Senior Indebtedness on Dissolution. Liquidation or Reorganization of Issuer.
Upon any distribution of assets of the Issuer in any dissolution, winding up,
liquidation or reorganization of the Issuer (whether voluntary or involuntary,
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled
to receive payments in full of the principal thereof and premium and interest
due thereon, or provision shall be made for such payment, before the Holders of
Subordinated Securities are entitled to receive any payment on account of the
principal of or interest on such Securities;
(b) any payment or distribution of assets of the Issuer of any
kind or character, whether in cash, property or securities (other than
securities of the Issuer as reorganized or readjusted or securities of the
Issuer or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Article __ with respect to Subordinated Securities, to the
payment in full without diminution or modification by such plan of all Senior
Indebtedness), to which the Holders of Subordinated Securities or the Trustee on
behalf of the Holders of Subordinated Securities would be entitled except for
the provisions of this Article __ shall be paid or delivered by the liquidating
trustee or agent or other person making such payment or distribution directly to
the holders of Senior Indebtedness or their representative, or to the trustee
under any indenture under which Senior Indebtedness may have been issued (pro
rata as to each such holder, representative or trustee on the basis of the
respective amounts of unpaid Senior Indebtedness held or represented by each),
to the extent necessary to make payment in full of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or distribution
or provision thereof to the holders of such Senior Indebtedness; and
(c) in the event that notwithstanding the foregoing provisions of
this Section __.3, any payment or distribution of assets of the Issuer of any
kind or character, whether in cash, property or securities (other than
securities of the Issuer as reorganized or readjusted or securities of the
Issuer or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Article __ with respect to Subordinated Securities, to the
payment in full without diminution or modification by such plan of all Senior
Indebtedness shall be received by the Trustee or the Holders of the Subordinated
Securities on account of principal of or interest on the Subordinated Securities
before all Senior Indebtedness is paid in full, or effective provision made for
its payment, such payment or distribution (subject to the provisions of Section
_.6 and _.7) shall be received and
held in trust for and shall be paid over to the holders of the Senior
Indebtedness remaining unpaid or unprovided for or their representative, or to
the trustee under any indenture under which such Senior Indebtedness may have
been issued (pro rata as provided in subsection (b) above), for application to
the payment of such Senior Indebtedness until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent payment or
distribution or provision therefor to the holders of such Senior Indebtedness,
The Issuer shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Issuer.
The consolidation of the Issuer with, or the merger of the Issuer into,
another corporation or the liquidation or dissolution of the Issuer following
the conveyance or transfer of its property as an entirety, or substantially as
an entirety, to another corporation upon the terms and conditions provided for
in Article __ hereof shall not be deemed a dissolution, winding up, liquidation
or reorganization for the purposes of this Section __.3 if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated such in Article __.
Section __.4. Holders of Subordinated Securities to be Subrogated to
Right of Holders of Senior Indebtedness. Subject to the payment in full of all
Senior Indebtedness, the Holders of Subordinated Securities shall be subrogated
to the rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Issuer applicable to the Senior Indebtedness
until all amounts owing on Subordinated Securities shall be paid in full, and
for the purposes of such subrogation no payments or distributions to the holders
of the Senior Indebtedness by or on behalf of the Issuer or by or on behalf of
the Holders of Subordinated Securities by virtue of this Article __ which
otherwise would have been made to the Holders of Subordinated Securities shall,
as between the Issuer, its creditors other than holders of Senior Indebtedness
and the Holders of Subordinated Securities, be deemed to be payment by the
Issuer to or on account of the Senior Indebtedness, it being understood that the
provisions of this Article __ are and are intended solely for the purpose of
defining the relative rights of the Holders of the Subordinated Securities, on
the one hand, and the holders of the Senior Indebtedness, on the other hand.
Section __.5. Obligation of the Issuer Unconditional. Nothing contained
in this Article __ or elsewhere in this Indenture or in any Subordinated
Security is intended to or shall impair, as among the Issuer, its creditors
other than holders of Senior Indebtedness and the Holders of Subordinated
Securities, the obligation of the Issuer, which is absolute and unconditional,
to pay to the Holders of Subordinated Securities the principal of, and interest
on, Subordinated Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of Subordinated Securities and creditors of the Issuer
other than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or the Holder of any Subordinated Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article __ of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Issuer received upon the exercise of any such remedy. Upon any payment or
distribution of assets of the Issuer referred to in this Article __, the Trustee
and Holders of Subordinated Securities shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or
reorganization proceedings are pending, or, subject to the provisions of Section
__ and __, a certificate of the receiver, trustee in bankruptcy, liquidating
trustee or agent or other Person making such payment or distribution to the
Trustee or the Holders of Subordinated Securities, for the purposes of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Issuer, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article __.
Nothing contained in this Article __ or elsewhere in this Indenture or
in any Subordinated Security is intended to or shall affect the obligation of
the Issuer to make, or prevent the Issuer from making, at any time except during
the pendency of any dissolution, winding up, liquidation or reorganization
proceeding, and, except as provided in subsections (a) and (b) of Section __.2,
payments at any time of the principal of, or interest on, Subordinated
Securities.
Section __.6. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice. The Issuer shall give prompt written notice to the Trustee of
any fact known to the Issuer which would prohibit the making of any payment or
distribution to or by the Trustee in respect of the Subordinated Securities.
Notwithstanding the provisions of this Article __ or any provision of this
Indenture, the Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment or
distribution to or by the Trustee, unless at least two Business Days prior to
the making of any such payment, the Trustee shall have received written notice
thereof from the Issuer or from one or more holders of Senior Indebtedness or
from any representative thereof or from any trustee therefor, together with
proof satisfactory to the Trustee of such holding of Senior Indebtedness or of
the authority of such representative or trustee; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Sections __
and __, shall be entitled to assume conclusively that no such facts exist. The
Trustee shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness (or a
representative or trustee on behalf of the holder) to establish that such notice
has been given by a holder of Senior Indebtedness (or a representative of or
trustee on behalf of any such holder). In the event that the Trustee determines,
in good faith, that further evidence is required with respect to the right of
any Person as a holder of Senior Indebtedness to participate in any payments or
distribution pursuant of this Article __, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, as to the extent to which such
Person is entitled to participate in such payment or distribution, and as to
other facts pertinent to the rights of such Person under this Article __, and if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The Trustee, however, shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness and nothing in this Article __ shall apply to
claims of, or payments to, the Trustee under or pursuant to Section __.
Section __.7. Application by Trustee of Monies or Government
Obligations Deposited with It. Money or Government Obligations deposited in
trust with the Trustee pursuant to and in accordance with Section __ shall be
for the sole benefit of Securityholders and, to the extent allocated for the
payment of Subordinated Securities, shall not be subject to the subordination
provisions of this Article __, if the same are deposited in trust prior to the
happening of any
event specified in Section __.2. Otherwise, any deposit of monies or Government
Obligations by the Issuer with the Trustee or any paying agent (whether or not
in trust) for the payment of the principal of, or interest on, any Subordinated
Securities shall be subject to the provisions of Section __.1, __.2 and __.3
except that, if prior to the date on which by the terms of this Indenture any
such monies may become payable for any purposes (including, without limitation,
the payment of the principal of, or the interest, if any, on any Subordinated
Security) the Trustee shall not have received with respect to such monies the
notice provided for in Section __.6, then the Trustee or the paying agent shall
have full power and authority to receive such monies and Government Obligations
and to apply the same to the purpose for which they were received, and shall not
be affected by any notice to the contrary which may be received by it on or
after such date. This Section __.7 shall be construed solely for the benefit of
the Trustee and paying agent and, as to the first sentence hereof, the
Securityholders, and shall not otherwise effect the rights of holders of Senior
Indebtedness.
Section __.8. Subordination Rights Not Impaired by Acts or Omissions of
Issuer or Holders of Senior Indebtedness. No rights of any present or future
holders of any Senior Indebtedness to enforce subordination as provided herein
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Issuer or by any act or failure to act, in good faith, by
any such holders or by any noncompliance by the Issuer with the terms of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Issuer may, at any time and from time
to time, without the consent of or notice to the Trustee or the Holders of the
Subordinated Securities, without incurring responsibility to the Holders of the
Subordinated Securities and without impairing or releasing the subordination
provided in this Article __ or the obligations hereunder of the Holders of the
Subordinated Securities to the holders of such Senior Indebtedness, do any one
or more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, such Senior Indebtedness, or
otherwise amend or supplement in any manner such Senior Indebtedness or any
instrument evidencing the same or any agreement under which such Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing such Senior Indebtedness;
(iii) release any Person liable in any manner for the collection for such Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Issuer, as the case may be, and any other Person.
Section __.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities. Each Holder of Subordinated Securities by his
acceptance thereof authorizes and expressly directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article __ and appoints the Trustee his
attorney-in-fact for such purpose, including in the event of any dissolution,
winding up, liquidation or reorganization of the Issuer (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise) the immediate filing of a claim for the unpaid balance
of his Subordinated Securities in the form required in said proceedings and
causing said claim to be approved. If the Trustee does not file a proper claim
or proof of debt in the form required in such proceeding prior to 30 days before
the expiration of the time to file
such claim or claims, then the holders of Senior Indebtedness have the right to
file and are hereby authorized to file an appropriate claim for and on behalf of
the Holders of said Securities.
Section __.10. Right of Trustee to Hold Senior Indebtedness. The
Trustee in its individual capacity shall be entitled to all of the rights set
forth in this Article __ in respect of any Senior Indebtedness at any time held
by it to the same extent as any other holder of Senior Indebtedness, and nothing
in this Indenture shall be construed to deprive the Trustee of any of its rights
as such holder.
With respect to the holders of Senior Indebtedness of the Issuer, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article __, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Sections __.2 and __.3, the Trustee shall not be
liable to any holder of such Senior Indebtedness if it shall pay over or deliver
to Holders of Subordinated Securities, the Issuer or any other Person money or
assets to which any holder of such Senior Indebtedness shall be entitled by
virtue of this Article __ or otherwise.
Section __.11. Article Not to Prevent Events of Defaults. The failure
to make a payment on account of principal or interest by reason of any provision
in this Article __ shall not be construed as preventing the occurrence of an
Event of Default under Section ____.
EXHIBIT F
TERMS OF SUBORDINATION
[GUARANTY OF HYBRID PREFERRED SECURITIES]
SECTION __. This Guarantee will constitute an unsecured obligation of
the Guarantor and will rank subordinate and junior in right of payment to all
other liabilities of the Guarantor and pari passu with any guarantee now or
hereafter entered into by the Guarantor in respect of the securities
representing common beneficial interests in the assets of the Issuer or of any
preferred or preference stock of any affiliate of the Guarantor.
EXHIBIT G
FORM OF BOND DELIVERY AGREEMENT
BOND DELIVERY AGREEMENT
CONSUMERS ENERGY COMPANY
TO
CITICORP NORTH AMERICA, INC., AS AGENT
Dated as of March 28, 2003
-------------------
Relating to
First Mortgage Bonds, Collateral Series due March 28, 2006
------------------
THIS BOND DELIVERY AGREEMENT (this "Agreement"), dated as of March 28,
2003, is between Consumers Energy Company (the "Company"), and Citicorp North
America, Inc., as agent (the "Agent") under the Term Loan Agreement (as amended,
supplemented or otherwise modified from time to time, the "Loan Agreement")
dated as of March 28, 2003, among the Company, the financial institutions
parties thereto (the "Banks"), and the Agent. Capitalized terms used but not
otherwise defined herein have the respective meanings assigned to such terms in
the Loan Agreement.
Whereas, the Company has established its First Mortgage Bonds,
Collateral Series due 2006, in the aggregate principal amount of $150,000,000
(the "Bonds"), to be issued under and in accordance with the Eighty-Ninth
Supplemental Indenture dated as of March 28, 2003 (the "Supplemental
Indenture"), to the Indenture of the Company to JPMorgan Chase Bank (formerly
known as The Chase Manhattan Bank) dated as of September 1, 1945 (as amended and
supplemented, the "Indenture"); and
Whereas, the Company proposes to issue and deliver to the Agent, for
the benefit of the Banks, the Bonds in order to provide the Bonds as evidence of
(and the benefit of the lien of the Indenture with respect to the Bonds for) the
Obligations of the Company arising under the Loan Agreement;
Now, therefore, in consideration of the premises and for other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the Company and the Agent hereby agree as follows:
ARTICLE I
THE BONDS
Section 1.1 Delivery of Bonds.
In order to provide the Bonds as evidence of (and through the Bonds the
benefit of the Lien of the Indenture for) the Obligations of the Company under
the Loan Agreement as aforesaid, the Company hereby delivers to the Agent the
Bonds in the aggregate principal amount of $150,000,000, maturing on March 28,
2006 and bearing interest as provided in the Supplemental Indenture. The
obligation of the Company to pay the principal of and interest on the Bonds
shall be deemed to have been satisfied and discharged in full or in part, as the
case may be, to the extent of payment by the Company of the Obligations, all as
set forth in the Bonds and in Section 1 of the Supplemental Indenture.
The Bonds are registered in the name of the Agent and shall be owned
and held by the Agent, subject to the provisions of this Agreement, for the
benefit of the Banks, and the Company shall have no interest therein. The Agent
shall be entitled to exercise all rights of bondholders under the Indenture with
respect to the Bonds.
Section 1.2 Payments on the Bonds.
Any payments received by the Agent on account of the principal of or
interest on the Bonds shall be deemed to be and treated in all respects as
payments of the Obligations, and such payments shall be distributed by the Agent
to the Banks in accordance with the provisions of the
Loan Agreement applicable to payments received by the Agent in respect of the
Obligations (and the Company hereby consents to such distributions).
ARTICLE II
NO TRANSFER OF BONDS; SURRENDER OF BONDS
Section 2.1 No Transfer of the Bonds.
The Agent shall not sell, assign or otherwise transfer any Bonds
delivered to it under this Agreement except to a successor administrative agent
under the Loan Agreement. The Company may take such actions as it shall deem
necessary, desirable or appropriate to effect compliance with such restrictions
on transfer, including the issuance of stop-transfer instructions to the trustee
under the Indenture or any other transfer agent thereunder.
Section 2.2 Surrender of Bonds.
(a) The Agent shall forthwith surrender to or upon the order of
the Company all Bonds held by it at the first time at which all Obligations
shall have been paid in full.
(b) Upon any prepayments of Term Loans pursuant to the terms of
the Loan Agreement, the Agent shall forthwith surrender to or upon the order of
the Company Bonds in an aggregate principal amount equal to the excess of the
aggregate principal amount of Bonds held by the Agent over the aggregate
outstanding Term Loans.
ARTICLE III
GOVERNING LAW
This Agreement shall construed in accordance with and governed by the
internal laws (without regard to the conflict of laws provisions) of the State
of New York, but giving effect to Federal laws applicable to national banks.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Company and the Agent have caused this
Agreement to be executed and delivered as of the date first above written.
CONSUMERS ENERGY COMPANY
_______________________________
Name:
Title:
CITICORP NORTH AMERICA, INC., as Agent
_______________________________
Name:
Title:
COMMITMENT SCHEDULE
TERM LOAN
BANK COMMITMENT
---- ----------
Citicorp North America, Inc. $ 150,000,000.00
$
$
$
$
$
AGGREGATE TERM LOAN $ 150,000,000
COMMITMENTS