Exhibit (4)(a)
THIRD SUPPLEMENTAL INDENTURE
dated as of October 29, 1998
____________________
This Third Supplemental Indenture, dated as of the 29th
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 ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and The Chase Manhattan
Bank, a New York corporation (hereinafter called the "Trustee") and having
an office at ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇.
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 "6.50% Senior Secured Insured Quarterly Notes due October
1, 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
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 "6.5% Senior
Secured Insured Quarterly Notes due October 1, 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.
"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 29, 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 6.50% 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.
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 shall 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 6.5%. 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 will 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"), (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.
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:
(1) 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.
(2) 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 notify the Insurer in
accordance with Section 6.06 if at any time after 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, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
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; ▇▇▇▇▇▇▇▇▇▇▇.▇▇ 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 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 by the Trustee or the Paying Agent 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.
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 from the Company 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 Rights. 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. In the event that any Holder of the Senior Secured Insured
Quarterly Notes is entitled to a vote under the terms of the Indenture,
such Holder shall appoint the Insurer by a written proxy instrument as
their proxy for such vote in accordance with Section 11.04.
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.
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: /s/ A.M. ▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
Attest: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:Vice President and Secretary
(Corporate Seal)
THE CHASE MANHATTAN BANK,
AS TRUSTEE
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___________________________
Name:
Title:
Attest:
(Corporate Seal)
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
DEPOSITARY 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 DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
__________________________________________________________________________
No.:
$150,000,000
CONSUMERS ENERGY COMPANY
6.50% SENIOR SECURED INSURED QUARTERLY NOTES (IQ NOTES)
DUE OCTOBER 1, 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:
CEDE & CO.
or registered assigns, the principal sum of
*ONE HUNDRED AND FIFTY MILLION DOLLARS*
on October 1, 2028 and to pay interest on such principal sum at the rate
of six and one-half percent (6.50%) 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 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. FG0372BE (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 United States Trust Company of New York, as
the insurance trustee (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.
CONSUMERS ENERGY COMPANY
6.50% Senior Secured Insured Quarterly Notes (IQ 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 29, 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 6.50% Senior Secured Insured Quarterly Notes (IQ 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 DTC 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 IQ 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 the Seventy-Fourth Supplemental Indenture, dated
October 29, 1998, providing for a series of first 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 IQ 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
IQ 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 IQ 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 IQ 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 IQ Mortgage
Bonds held by the Trustee, but in no event prior to the Release Date to an
amount less than the aggregate outstanding principal amount of the series
of Notes initially issued contemporaneously with such Senior IQ 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 Security holder
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.
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 6.50%.
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 AND THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF MICHIGAN.
All terms used in this Note which are defined in the Indenture
have the meanings assigned to them in the Indenture.
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 herein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK
as Trustee
By: _________________________________
Authorized Officer
SCHEDULE OF EXCHANGES OF INTERESTS IN THE NOTE
The following exchanges of interests in this Note have been made:
Principal
Amount of
this NoteSignature of
Amount ofAmount of followingauthorized
Date of Decrease increase such decreasesignatory
Exchange in this Notein this Note(or increase)of Trustee
________ _________________________________________________
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.
Signature Guarantee: ____________________________________
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).
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:
EXHIBIT C
FORM OF REQUEST FOR REDEMPTION
CONSUMERS ENERGY COMPANY
6.50% Senior Secured Insured Quarterly Notes
due October 1, 2028
CUSIP No. ▇▇▇▇▇▇▇▇▇
The undersigned Participant does hereby certify, pursuant to
Section 5.01 of the Supplemental Indenture dated as of October 29, 1998 to
the Indenture dated as of February 1, 1998 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].
IN WITNESS WHEREOF, the undersigned has executed this
Request for Redemption as of __________, ____.
[Name of Participant]
By:________________________________
Name: __________________________
Title:__________________________
Signature Guarantee
For Use by Eligible Institutions Only
Name of Guarantor _______________
Authorized Signature________________
