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EXHIBIT 4(c)
THIRD SUPPLEMENTAL INDENTURE
DATED AS OF OCTOBER __, 1998
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This Third Supplemental Indenture, dated as of the ___ day of October,
1998 between Consumers Energy Company, a corporation duly organized and existing
under the laws of the State of Michigan (hereinafter called the "Company") and
having its principal office at 212 West Michigan Avenue, Jackson, Michigan
49201, and The Chase Manhattan Bank, a New York banking corporation (hereinafter
called the "Trustee") and having its principal Corporate Trust Office at 450 W.
33rd Street, 15th Floor, New York, New York, 10001.
WITNESSETH:
WHEREAS, the Company and the Trustee entered into an Indenture, dated
as of February 1, 1998 (the "Original Indenture"), pursuant to which one or more
series of debt of the Company (the "Notes") may be issued from time to time; and
WHEREAS, Section 2.01 of the Original Indenture permits the terms of
any series of Notes to be established in an indenture supplemental to the
Original Indenture; and
WHEREAS, Section 13.01 of the Original Indenture provides that a
supplemental indenture may be entered into by the Company and the Trustee
without the consent of any Holders of the Notes to establish the form and terms
of the Notes of any series; and
WHEREAS, the Company has requested the Trustee to join with it in the
execution and delivery of this Third Supplemental Indenture in order to
supplement and amend the Original Indenture by, among other things, establishing
the form and terms of a series of Notes to be known as the Company's " ___%
Senior Secured Insured Quarterly Notes due __, 2028" (the "Senior Secured
Insured Quarterly Notes"); and
WHEREAS, the Company and the Trustee desire to enter into this Third
Supplemental Indenture for the purposes set forth in Sections 2.01 and 13.01 of
the Original Indenture as referred to above; and
WHEREAS, the Company has furnished the Trustee with a Board Resolution
authorizing the execution of this Third Supplemental Indenture; and
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WHEREAS, all things necessary to make this Third Supplemental Indenture
a valid agreement of the Company and the Trustee and a valid supplement to the
Original Indenture have been done,
NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Senior
Secured Insured Quarterly Notes to be issued hereunder by holders thereof, the
Company and the Trustee mutually covenant and agree, for the equal and
proportionate benefit of the respective holders from time to time of the Senior
Secured Insured Quarterly Notes as follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 1.01. Standard Provisions. The Original Indenture together with
this Third Supplemental Indenture are hereinafter sometimes collectively
referred to as the "Indenture." All capitalized terms which are used herein and
not otherwise defined herein or in Exhibit A hereto are defined in the Original
Indenture and are used herein with the same meanings as in the Original
Indenture.
ARTICLE II
DESIGNATION AND TERMS OF THE NOTES; FORMS
SECTION 2.01. Establishment of Series. There is hereby created a series
of Notes to be known and designated as the " ___% Senior Secured Insured
Quarterly Notes due ________, 2028," such series limited in aggregate principal
amount (except as contemplated in Section 2.05(c) of the Original Indenture) to
$150,000,000. The form and terms of the Senior Secured Insured Quarterly Notes
are established in the form of Senior Secured Insured Quarterly Notes attached
hereto as Exhibit A.
ARTICLE III
DEFINITIONS
SECTION 3.01. Definitions. The following defined terms used herein
shall, unless the context otherwise requires, have the meanings specified below.
"Holder" means any person in whose name a Senior Secured Insured
Quarterly Note is registered on the records of the Depository.
"Insurance Trustee" means United States Trust Company of New York, or
any successor thereto, as the Insurance Trustee under the Policy.
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"Insurer" means Ambac Assurance Corporation, a Wisconsin-domiciled
stock insurance company.
"Interest Payment Dates" means January 1, April 1, July 1 and October 1
of each year.
"Original Issue Date" means October __, 1998.
"Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of or interest on the
Senior Secured Insured Quarterly Notes on behalf of the Company.
"Policy" shall mean the financial guaranty insurance policy issued by
the Insurer insuring the payment when due of the principal of and interest on
the Senior Secured Insured Quarterly Notes as provided therein.
"Redemption Date" means with respect to any Senior Secured Insured
Quarterly Note to be redeemed, in whole or in part, the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Price" means with respect to any Senior Secured Insured
Quarterly Note to be redeemed, the price at which it is to be redeemed pursuant
to this Indenture.
"Regular Record Date" means the 15th calendar day of the month
preceding the month in which the respective Interest Payment Date occurs
(whether or not a Business Day).
"Stated Maturity" means October 1, 2028.
ARTICLE IV
PAYMENT OF PRINCIPAL AND INTEREST
SECTION 4.01. Payment of Principal and Interest. The principal of the
Senior Secured Insured Quarterly Notes shall be due at Stated Maturity (unless
earlier redeemed). The unpaid principal amount of the Senior Secured Insured
Quarterly Notes shall bear interest at the rate of ____% per annum until paid or
duly provided for. Interest shall be paid quarterly in arrears on each Interest
Payment Date to the Person in whose name the Senior Secured Insured Quarterly
Notes are registered on the Regular Record Date for such Interest Payment Date.
Any such interest that is not so punctually paid or duly provided for will
forthwith cease to be payable to the Holders on such Regular Record Date and may
either be paid to the Person or Persons in whose name the Senior Secured Insured
Quarterly Notes are registered at the close of business on a Special Record Date
for the payment of such defaulted interest to be fixed by the Trustee, notice
whereof shall be given to Holders of the Senior Secured Insured Quarterly Notes
not less than ten days prior to such Special Record Date.
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Payments of interest on the Senior Secured Insured Quarterly Notes will
include interest accrued to but excluding the respective Interest Payment Dates.
Interest payments for the Senior Secured Insured Quarterly Notes shall be
computed and paid on the basis of a 360-day year of twelve 30 day months.
ARTICLE V
REDEMPTION
SECTION 5.01. Redemption at the Company's Option. The Senior Secured
Insured Quarterly Notes shall be subject to redemption at the option of the
Company, in whole or in part, without premium or penalty, at any time or from
time to time on or after October 1, 2003, upon not less than 30 nor more than 60
days' notice, at a Redemption Price equal to 100% of the principal amount to be
redeemed plus accrued but unpaid interest to the Redemption Date.
If notice of redemption is given as aforesaid, the Senior Secured
Insured Quarterly Notes so to be redeemed shall, on the Redemption Date, become
due and payable at the Redemption Price together with any accrued interest
thereon, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) the Senior Secured Insured
Quarterly Notes hall cease to bear interest. If any Senior Secured Insured
Quarterly Note called for redemption shall not be paid upon surrender thereof
for redemption, the principal shall, until paid, bear interest from the
Redemption Date at __%. Subject to the foregoing and applicable law (including
without limitation, United States federal securities laws), the Company or its
affiliates may, at any time and from time to time, purchase outstanding Senior
Secured Insured Quarterly Notes by tender, in the open market or by private
agreement.
SECTION 5.02. Redemption at the Holder's Option. For purposes of this
Section 5.02 a "Beneficial Owner" means the Person who has the right to sell,
transfer or otherwise dispose of an interest in Senior Secured Insured Quarterly
Notes and the right to receive the proceeds therefrom, as well as the interest
and principal payable to the Holder thereof. In general, a determination of
beneficial ownership in the Senior Secured Insured Quarterly Notes wil be
determined by the Company, in its sole discretion, which determinations shall be
final and binding on all parties.
Unless the Senior Secured Insured Quarterly Notes have been declared
due and payable prior to their maturity by reason of an Event of Default, the
personal representative or other Person authorized to represent the estate of
the deceased Beneficial Owner or from a surviving joint tenant(s) or tenant(s)
by the entirety (each, a "Representative") of a deceased Beneficial Owner has
the right to request redemption prior to Stated Maturity of all or part of such
interest, expressed in integral multiples of $1,000 principal amount, in the
Senior Secured Insured Quarterly Notes, and the Company will redeem the same
subject to the limitations that the Company will not be obligated to redeem,
during the period from the Original Issue Date through and including October 1,
1999 (the "Initial Period"), and during any twelve-month period which ends on
and includes each October 1 thereafter (each such twelve-month period being
hereinafter referred to as a "Subsequent Period"),
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(i) on behalf of a deceased Beneficial Owner any interest in the Senior Secured
Insured Quarterly Notes which exceeds an aggregate principal amount of $25,000
or (ii) interests in the Senior Secured Insured Quarterly Notes in an aggregate
principal amount exceeding $3,000,000. A request for redemption may be initiated
by the Representative of a deceased Beneficial Owner at any time and in any
principal amount in integral multiples of $1,000. Representatives of deceased
Beneficial Owners must make arrangements with the Participant through whom such
interest is owned in order that timely presentation of redemption requests can
be made by the Participant to the Trustee. If the Company, although not
obligated to do so, chooses to redeem interests of any deceased Beneficial Owner
in the Senior Secured Insured Quarterly Notes in the Initial Period or any
Subsequent Period in excess of the $25,000 limitation, such redemption, to the
extent that it exceeds the $25,000 limitation for any deceased Beneficial Owner,
shall not be included in the computation of the $3,000,000 limitation for such
Initial Period or such Subsequent Period, as the case may be, or for any
succeeding Subsequent Period. Any Senior Secured Insured Note (or portion
thereof) tendered pursuant to a redemption request may be withdrawn by a written
request by the Representative received by the Trustee at least 10 days prior to
its repayment.
Subject to the $25,000 and $3,000,000 limitations, the Company will,
after the death of any Beneficial Owner, redeem the interest of such Beneficial
Owner in the Senior Secured Insured Quarterly Notes on the next Interest Payment
Date following receipt by the Trustee of a redemption request received at least
20 days in advance of the next Interest Payment Date. The Trustee will notify
the Company promptly after receipt of any redemption request and the Company
will provide all funds necessary for such redemption prior to the date of
redemption to the Paying Agent. If redemption requests exceed the aggregate
principal amount of interests in Senior Secured Insured Quarterly Notes required
to be redeemed during the Initial Period or during any Subsequent Period, then
such excess redemption requests will be applied in the order received by the
Trustee to successive Subsequent Periods, regardless of the number of Subsequent
Periods required to redeem such interests. All redemption requests will be
redeemed in the order in which the trustee receives the redemption request. To
obtain repayment pursuant to a redemption request, the Representative must
provide to the Participant (i) a written request for repayment signed by the
Representative, and such signature must be guaranteed by a member firm of a
registered national securities exchange or of the NASD or a commercial bank or
trust company having an office or correspondent in the United States, (ii)
appropriate evidence satisfactory to the Company and the Trustee that (A) the
Representative has authority to act on behalf of the deceased Beneficial Owner,
(B) the death of such Beneficial Owner has occurred and (C) the deceased was the
owner of a beneficial interest in such Senior Secured Insured Quarterly Note at
the time of death, (iii) if applicable, a properly executed assignment or
endorsement, and (iv) if the beneficial interest in such Senior Secured Insured
Quarterly Note is held by a nominee of the deceased Beneficial Owner, a
certificate satisfactory to the Trustee from such nominee attesting to the
deceased's ownership of a beneficial interest in such Senior Secured Insured
Quarterly Note. The Participant will provide these documents to the Trustee. All
questions as to the eligibility or validity of any exercise of redemption on
behalf of a deceased Beneficial Owner will be determined by the Company, in its
sole discretion, which determinations will be final and binding on all parties.
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For purposes of this Section 5.02 an interest in Senior Secured Insured
Quarterly Notes held in tenancy by the entirety, joint tenancy or by tenants in
common will be deemed to be held by a single Beneficial Owner and the death of a
tenant by the entirety, joint tenant or tenant in common will be deemed the
death of a Beneficial Owner. The death of a Person who, during his lifetime, was
entitled to substantially all of the rights of a Beneficial Owner of an interest
in the Senior Secured Insured Quarterly Notes will be deemed the death of the
Beneficial Owner, regardless of the recordation of such interest on the records
of the Participant, if such rights can be established to the satisfaction of the
Participant and the Company.
In the case of any redemption request which is presented pursuant to
this Section 5.02 and which has not been fulfilled at the time the Company gives
notice of its election to partially redeem Senior Secured Insured Quarterly
Notes pursuant to Section 5.01 hereof, such interest or portion thereof shall
not be subject to redemption pursuant to such Section 5.01, but shall remain
subject to redemption pursuant to this Section 5.02
ARTICLE VI
SPECIAL INSURANCE PROVISIONS
SECTION 6.01. Insurer as Third Party Beneficiary. To the extent that
the Indenture confers upon or gives or grants to the Insurer any right, remedy
or claim, the Insurer is hereby explicitly recognized as being a third-party
beneficiary hereunder and may enforce any such right remedy or claim conferred,
given or granted hereunder.
SECTION 6.02. Notices and Information.
(a) The Company shall furnish to the Insurer:
(i) Any notice that is required to be given to a Holder of
the Senior Secured Insured Quarterly Notes or to the Trustee pursuant to the
Indenture.
(ii) As soon as practicable after the filing thereof, a copy
of any financial statement of the Company and a copy of any audit and annual
report of the Company; a copy of any notice to be given to the registered owners
of the Senior Secured Insured Quarterly Notes including, without limitation,
notice of any redemption of or defeasance of the Senior Secured Insured
Quarterly Notes; and such additional information it may reasonably request.
(b) The Company will permit the Insurer to have access to and to
make copies of all books and records relating to the Senior Secured Insured
Quarterly Notes at any reasonable time.
(c) Notwithstanding any other provision of the Indenture, the
Trustee and the Company shall immediately notify the Insurer in accordance with
Section 6.06 if at any time after
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such amounts are due to be paid to the Trustee or Paying Agent there are
insufficient moneys to make any payments of principal and/or interest as
required and promptly upon the occurrence of any Event of Default hereunder.
All notices and information required to be given to the Insurer
shall be in writing and shall be sent by overnight delivery to Ambac Assurance
Corporation, One State Street Plaza, New York, NY 10004, Attention: Dennis
Pidherny.
SECTION 6.03. Concerning the Special Insurance Provisions. The
provisions of this Article VI shall apply notwithstanding anything in the
Indenture to the contrary, but only so long as the Policy shall be in full force
and effect and the Insurer is not in default thereunder.
SECTION 6.04. Amendments. Any provision of the Indenture expressly
recognizing or granting rights in or to the Insurer may not be amended in any
manner which affects the rights of the Insurer hereunder without the prior
written consent of the Insurer.
SECTION 6.05. Defeasance. Notwithstanding anything herein to the
contrary, in the event that the principal and/or interest due on the Senior
Secured Insured Quarterly Notes shall be paid by the Insurer pursuant to the
Policy, the Senior Secured Insured Quarterly Notes shall remain Outstanding for
all purposes, not be defeased or otherwise satisfied and not be considered paid
by the Company, and the assignment and pledge of moneys held in trust by the
Trustee and all covenants, agreements and other obligations of the Company to
the registered owners shall continue to exist and shall run to the benefit of
the Insurer, and the Insurer shall be subrogated to the rights of such
registered owners.
SECTION 6.06. Insurer's Rights to Notice; Subrogation.As long as the
Policy shall be in full force and effect, the Company, the Trustee and any
Paying Agent agree to comply with the following provisions:
(a) If the Trustee or Paying Agent determines that there will be
insufficient funds to pay the principal of or interest on the Senior Secured
Insured Quarterly Notes on an Interest Payment Date, the Trustee or Paying Agent
shall so notify the Insurer within one business day after such determination.
Such notice shall specify the amount of the anticipated deficiency, the Senior
Secured Insured Quarterly Notes to which such deficiency is applicable and
whether such Senior Secured Insured Quarterly Notes will be deficient as to
principal or interest, or both. The Insurer will make payments of principal or
interest due on the Senior Secured Insured Quarterly Notes on or before the
first day next following the date on which the Insurer shall have received
notice of nonpayment from the Trustee or Paying Agent.
(b) The Trustee or Paying Agent shall, after giving notice to the
Insurer as provided in (a) above, make available to the Insurer and, at the
Insurer's direction, to the Insurance
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Trustee, the registration books of the Company maintained by the Trustee or
Paying Agent and all records relating to the Senior Secured Insured Quarterly
Notes maintained under the Indenture.
(c) The Trustee or Paying Agent shall provide the Insurer and the
Insurance Trustee with a list of registered owners of Senior Secured Insured
Quarterly Notes entitled to receive principal or interest payments from the
Insurer under the terms of the Policy, and shall make arrangements with the
Insurance Trustee (i) to mail checks or pay by wire transfer to the registered
owners of Senior Secured Insured Quarterly Notes entitled to receive all or
partial interest payments from the Insurer and (ii) to pay principal upon Senior
Secured Insured Quarterly Notes surrendered to the Insurance Trustee by the
registered owners of Senior Secured Insured Quarterly Notes entitled to receive
full or partial principal payments from the Insurer.
(d) The Trustee or Paying Agent shall, at the time it provides
notice to the Insurer pursuant to (a) above, notify registered owners of Senior
Secured Insured Quarterly Notes entitled to receive the payment of principal or
interest thereon from the Insurer (i) as to the fact of such entitlement, (ii)
that the Insurer will remit to them all or a part of the interest payments next
coming due upon proof of any Holder's entitlement to interest payments and
delivery to the Insurance Trustee, in form satisfactory to the Insurance
Trustee, of an appropriate assignment of the registered owner's right to
payment, (iii) that should they be entitled to receive full payment of principal
from the Insurer, they must surrender their Senior Secured Insured Quarterly
Notes (along with an appropriate instrument of assignment in form satisfactory
to the Insurance Trustee to permit ownership of such Senior Secured Insured
Quarterly Notes to be registered in the name of the Insurer) for payment to the
Insurance Trustee, and not the Trustee or Paying Agent and (iv) that should they
be entitled to receive partial payment of principal from the Insurer, they must
surrender their Senior Secured Insured Quarterly Notes for payment thereon first
to the Trustee or Paying Agent who shall note on such Senior Secured Insured
Quarterly Notes the portion of the principal paid by the Company through the
Trustee or Paying Agent and then, along with an appropriate instrument of
assignment in form satisfactory to the Insurance Trustee, to the Insurance
Trustee, which will then pay the unpaid portion of principal.
(e) In the event that the Trustee or Paying Agent has notice that
any payment of principal of or interest on Senior Secured Insured Quarterly
Notes which has become Due for Payment (as defined in the Policy) and which is
made to a Holder of Senior Secured Insured Quarterly Notes by or on behalf of
the Company has been deemed a preferential transfer and theretofore recovered
from its registered owner pursuant to the United States Bankruptcy Code by a
trustee in bankruptcy in accordance with the final, nonappealable order of a
court having competent jurisdiction, the Trustee or Paying Agent shall, at the
time the Insurer is notified pursuant to (a) above, notify all registered owners
that in the event that any registered owner's payment is so recovered, such
registered owner will be entitled to payment from the Insurer to the extent of
such recovery if sufficient funds are not otherwise available, and the Trustee
or Paying Agent shall furnish to the Insurer its records evidencing the payments
of principal of and interest on the Senior Secured Insured Quarterly Notes which
have been made by the Trustee or Paying Agent and subsequently recovered from
registered owners and the dates on which such payments were made.
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(f) In addition to those rights granted the Insurer under the
Indenture, the Insurer shall, to the extent it makes payment of principal of or
interest on the Senior Secured Insured Quarterly Notes, become subrogated to the
rights of the recipients of such payments in accordance with the terms of the
Policy, and to evidence such subrogation (i) in the case of subrogation as to
claims for past due interest, the Trustee or Paying Agent shall note the
Insurer's rights as subrogee on the registration books of the Company maintained
by the Trustee or Paying Agent upon receipt from the Insurer of proof of the
payment of interest thereon to the registered owners of the Senior Secured
Insured Quarterly Notes, and (ii) in the case of subrogation as to claims for
past due principal, the Trustee or Paying Agent shall note the Insurer's rights
as subrogee on the registration books of the Company maintained by the Trustee
or Paying Agent upon surrender of the Senior Secured Insured Quarterly Notes by
the registered owners thereof together with proof from the Insurer of the
payment of principal thereof.
SECTION 6.07. Insurer's Rights Concerning the Trustee.
(a) The Insurer shall receive prompt written notice of any Trustee
or Paying Agent resignation.
(b) Notwithstanding any other provision of the Indenture, in
determining whether the rights of the Holders of Senior Secured Insured
Quarterly Notes will be adversely affected in any material respect by any action
taken pursuant to the terms and provisions of the Indenture, the Trustee or
Paying Agent shall consider the effect on the Holders of Senior Secured Insured
Quarterly Notes as if there were no Policy.
SECTION 6.08. Insurer's Right to Accelerate, etc. Anything in the
Indenture to the contrary notwithstanding, upon the occurrence and continuance
of an Event of Default, so long as the Policy shall be in full force and effect
and the Insurer is not in default under the terms of the Policy, the Insurer
shall be entitled to control and direct the enforcement of all rights and
remedies granted to the Holders of Senior Insured Quarterly Notes.
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ARTICLE VII
SUPPLEMENTAL INDENTURES
SECTION 7.01. Effect On Original Indenture This Third Supplemental
Indenture is a supplement to the Original Indenture. As supplemented by this
Third Supplemental Indenture, the Original Indenture is in all respects
ratified, approved and confirmed, and the Original Indenture and this Third
Supplemental Indenture shall together constitute one and the same instrument.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Counterparts. This Third Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
SECTION 8.02. Recitals. The recitals contained herein shall be taken as
the statements of the Company and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Third Supplemental Indenture.
SECTION 8.03. Governing Law. This Third Supplemental Indenture shall be
governed by and construed in accordance with the laws of the jurisdiction which
govern the Original Indenture and its construction.
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IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first written
above.
CONSUMERS ENERGY COMPANY
By:
--------------------------------
Name: Alan M. Wright
Title: Senior Vice President and
Chief Financial Officer
Attest:
(Corporate Seal)
THE CHASE MANHATTAN BANK,
AS TRUSTEE
By:
--------------------------------
Name:
Title:
Attest:
(Corporate Seal)
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EXHIBIT A
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITORY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
===============================================================================
NO._________ $____________
CONSUMERS ENERGY COMPANY
__________% SENIOR SECURED INSURED QUARTERLY NOTES DUE _____ 2028
CUSIP:___________
CONSUMERS ENERGY COMPANY, a Michigan corporation (herein called the
"Company," which term includes any successor corporation under the Indenture
referred to herein), for value received, hereby promises to pay to:
or registered assigns, the principal sum of
*ONE HUNDRED AND FIFTY MILLION DOLLARS*
on ____________, _______ and to pay interest on such principal sum at the rate
of ____ percent (____%) per annum.
The Company will pay interest quarterly in arrears January 1 (beginning
January 1, 1999), April 1, July 1 and October 1 (each such date an "Interest
Payment Date"), until the principal hereof is otherwise paid or duly provided
for. The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture (as defined below), be
paid to the holder (the "Holder") of this Note (or one or more predecessor
Notes) of record at the close of business on the regular record date (the
"Regular Record Date") for such Interest Payment Date, which, except in the case
of interest payable at the Stated Maturity (as
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defined in the Indenture), shall be the fifteenth calendar day of the month
preceding the month in which the respective Interest Payment Date occurs
(whether or not a Business Day), and, in the case of interest payable at the
Stated Maturity, shall be the date such that interest payable at the Stated
Maturity is payable to the same Person to whom principal on this Note is
payable. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date by
virtue of his having been such Holder, and may be paid to the Holder of this
Note (or one or more predecessor Notes) of record at the close of business on a
special record date (the "Special Record Date") fixed by the Company for the
payment of such defaulted interest, notice whereof shall be given to Holders not
less than 10 days prior to such Special Record Date, all as more fully provided
in the Indenture.
Payment of the principal of this Note and the interest thereon will be
made at the office or agency of the Company in the Borough of Manhattan, City
and State of New York in such currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
Financial Guaranty Insurance Policy No. _______________ (the "Policy")
with respect to payments due for principal of and interest on this Note has been
issued by Ambac Assurance Corporation (the "Insurer"). The Policy has been
delivered to___________________, as the Insurance Trustee under said Policy and
will be held by such Insurance Trustee or any successor insurance trustee. The
Policy is on file and available for inspection at the principal office of the
Insurance Trustee and a copy thereof may be secured from the Insurer or the
Insurance Trustee. All payments required to be made under the Policy shall be
made in accordance with the provisions thereof. The owner of this Note
acknowledges and consents to the subrogation rights of the Insurer as more fully
set forth in the Policy.
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CONSUMERS ENERGY COMPANY
______% Senior Secured Insured Quarterly Notes due October 1, 2028
This Note is one of a duly authorized issue of debt securities of the
Company (herein called the "Securities"), issuable in one or more series, issued
and to be issued under and pursuant to an Indenture dated as of February 1,
1998, as previously supplemented and as further supplemented by that certain
Third Supplemental Indenture, dated as of October ____ , 1998 (such Indenture,
as so supplemented, the "Indenture"), duly executed and delivered by the Company
to The Chase Manhattan Bank, as trustee (the "Trustee," which term includes any
successor trustee under the Indenture), and is one of a series limited in
aggregate principal amount to One Hundred and Fifty Million Dollars
($150,000,000) and designated as ____ % Senior Secured Insured Quarterly Notes
due October 1, 2028 (the "Notes"). Reference is hereby made to the Indenture for
a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of Securities
(including Holders of the Notes).
The Notes are subject to defeasance at the option of the Company as
provided in the Indenture.
As long as this Note is represented in global form (the "Global
Security") registered in the name of the Depositary or its nominee, except as
provided in the Indenture and subject to certain limitations therein set forth,
no Global Security shall be exchangeable or transferrable.
If an Event of Default (as defined in the Indenture) with respect to
the Notes shall occur and be continuing, the principal plus any accrued interest
may be declared due and payable in the manner and with the effect and subject to
the conditions provided in the Indenture.
Prior to the Release Date (as hereinafter defined), the Notes will be
secured by first mortgage bonds (the "Senior Note Mortgage Bonds") delivered by
the Company to the Trustee for the benefit of the Holders of the Notes, issued
under the Indenture, dated as of September 1, 1945, from the Company to The
Chase Manhattan Bank, as trustee (the "Mortgage Trustee"), as amended and
supplemented by various supplemental indentures and as supplemented by a
Supplemental
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Indenture dated October __, 1998 providing for a series of Senior Note Mortgage
Bonds relating to the Notes (collectively, the "Mortgage"). Reference is made to
the Mortgage and the Indenture for a description of the rights of the Trustee as
holder of the Senior Note Mortgage Bonds, the property mortgaged and pledged,
the nature and extent of the security, the rights of the holders of first
mortgage bonds under the Mortgage and the rights of the Company and of the
Mortgage Trustee in respect thereof, the duties and immunities of the Mortgage
Trustee and the terms and conditions upon which the Senior Note Mortgage Bonds
are secured and the circumstances under which additional first mortgage bonds
may be issued.
From and after such time as all first mortgage bonds (other than Senior
Note Mortgage Bonds) issued under the Mortgage have been retired through
payment, redemption or otherwise at, before or after the maturity thereof (the
"Release Date"), the Senior Note Mortgage Bonds shall cease to secure the Notes
in any manner. In certain circumstances prior to the Release Date as provided in
the Indenture, the Company is permitted to reduce the aggregate principal amount
of a series of Senior Note Mortgage Bonds held by the Trustee, but in no event
prior to the Release Date to amount less than the aggregate outstanding
principal amount of the series of Notes initially issued contemporaneously with
such Senior Note Mortgage Bonds.
The Indenture permits the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the Holders under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Securities then
Outstanding (as defined in the Indenture) of all series which are affected by
such amendment or modification, except that certain amendments which do not
adversely affect the rights of any Holder of the Securities may be made without
the approval of Holders of the Securities. No amendment or modification may,
among other things, change the Stated Maturity of any Security, reduce the
principal amount thereof, reduce the rate or change the time of payment of any
interest thereon, or reduce the aforesaid majority in aggregate principal amount
of Securities of any series, the consent of the Holders of which is required for
any such amendment or modification, without the consent of each Securityholder
affected.
Any provision of the Indenture expressly recognizing or granting rights
in or to the Insurer may not be amended in any manner which affects the rights
of the Insurer hereunder without the prior written consent of the Insurer.
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Notwithstanding any provision in the Indenture or any provision of this
Note, the Holder of this Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the currency herein
prescribed.
The Company shall have the right, subject to the terms and conditions
of the Indenture, to redeem this Note, in whole or in part, without premium or
penalty, at any time or from time to time on or after October 1, 2003, at a
Redemption Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest to the Redemption Date. If any Note called for
redemption shall not be paid upon surrender thereof for redemption, the
principal shall, until paid, bear interest from the Redemption Date at __%.
In addition, at the option of any deceased Beneficial Owner's
Representative (as such terms are defined in the Indenture), interests in Notes
are redeemable at 100% of their principal amount, plus accrued interest, subject
to certain limitations provided in the Indenture.
In the event of redemption of this Note in part only, a new Note or
Notes of this series for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon surrender of the Note or the Note will be reduced
in accordance with the provisions of the Indenture. The Notes will not have a
sinking fund.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
All terms used in this Note which are defined in the Indenture have the
meanings assigned to them in the Indenture.
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Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed.
CONSUMERS ENERGY COMPANY
By:
------------------------------------
Name:
Title:
Attested:
------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
- ---------------------------------------
Dated:
-------------------------
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------------
Authorized Signatory
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE NOTE
The following exchanges of interests in this Note have been made:
Principal
Amount of this Signature of
Amount of Amount of Note following authorized
decrease in increase in such decrease signatory of
Date of Exchange this Note this Note (or increase) Trustee
- ---------------------- ------------------ ---------------- -------------- --------------------
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
----------------------------
----------------------------
Insert assignee's social security or tax I.D. no.
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
and all rights thereunder and irrevocably appoint
------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Dated:
----------------------- ----------------------------------------
----------------------------------------
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS IT
APPEARS ON THE FIRST PAGE OF THE WITHIN NOTE.
THE SIGNATURE MUST BE GUARANTEED BY AN "ELIGIBLE GUARANTOR INSTITUTION"
THAT IS A MEMBER OR PARTICIPANT IN A "SIGNATURE GUARANTEE PROGRAM" (E.G., THE
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM, THE STOCK EXCHANGE MEDALLION
PROGRAM OR THE NEW YORK STOCK EXCHANGE, INC. MEDALLION PROGRAM).
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EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Senior Secured Insured Quarterly Notes referred to
in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
Authorized Signatory
Dated:
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EXHIBIT C
FORM OF REQUEST FOR REDEMPTION
CONSUMERS ENERGY COMPANY
____% Senior Secured Insured Quarterly Notes
due October, 2028
CUSIP No.
The undersigned Participant does hereby certify, pursuant to Section
5.01 of the _____ Supplemental Indenture dated as of __________, 1998 to the
Indenture dated as of _______________ between CONSUMERS ENERGY COMPANY (the
"Company") and THE CHASE MANHATTAN BANK, as trustee (the "Trustee"), to the
Company and the Trustee that:
1. [Name of deceased Beneficial Owner] is deceased.
2. [Name of deceased Beneficial Owner] had a $_________________
interest in the Company's ____% Senior Secured Insured Quarterly Notes due
October 1, 2028 (the "Notes").
3. [Name of Representative] is [Beneficial Owner's personal
representative/other person authorized to represent the estate of the Beneficial
Owner/surviving joint tenant/surviving tenant by the entirety] of [Name of
deceased Beneficial Owner] and has delivered to the undersigned a request for
redemption in form satisfactory to the undersigned, requesting that $__________
[$ 1,000 or an integral multiple thereof] be redeemed pursuant to said Section
108. Such request and the documents accompanying such request, all of which are
satisfactory to the undersigned, are delivered herewith.
4. [Name of Participant] holds the interest in the Notes with respect
to which this Request for Redemption is being made on behalf of [Name of
deceased Beneficial Owner].
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IN WITNESS WHEREOF, the undersigned has executed this Request for
Redemption as of ___________, ______.
[Name of Participant]
By:_____________________________
Name:___________________________
Title:__________________________
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