EXHIBIT 4.4
================================================================================
364 DAY CREDIT AGREEMENT
Dated as of July 12, 2002
among
CONSUMERS ENERGY COMPANY,
as the Borrower,
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as the Banks,
and
BANK ONE, NA,
as Agent
================================================================================
BANC ONE CAPITAL MARKETS, INC.
as Lead Arranger and Sole Book Runner
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................................................1
1.1 Definitions....................................................................................1
1.2 Singular and Plural...........................................................................11
1.3 Accounting Terms..............................................................................11
ARTICLE II THE ADVANCES..............................................................................12
2.1 Commitment....................................................................................12
2.2 Required Payments; Termination................................................................12
2.3 Ratable Loans.................................................................................12
2.4 Types of Advances.............................................................................12
2.5 Commitment Fee and Reductions of Commitment...................................................12
2.6 Minimum Amount of Advances....................................................................13
2.7 Optional Principal Payments...................................................................13
2.8 Method of Selecting Types and Interest Periods for New Advances...............................13
2.9 Conversion and Continuation of Outstanding Advances...........................................14
2.10 Interest Rates, Interest Payment Dates........................................................14
2.11 Rate after Maturity...........................................................................15
2.12 Method of Payment.............................................................................15
2.13 Bonds; Record-keeping; Telephonic Notices.....................................................15
2.14 Lending Installations.........................................................................16
2.15 Non-Receipt of Funds by the Agent.............................................................16
ARTICLE III LETTER OF CREDIT FACILITY.................................................................16
3.1 Issuance......................................................................................16
3.2 Participations................................................................................17
3.3 Notice........................................................................................17
3.4 LC Fees.......................................................................................17
3.5 Administration; Reimbursement by Banks........................................................17
3.6 Reimbursement by Company......................................................................18
3.7 Obligations Absolute..........................................................................18
3.8 Actions of LC Issuer..........................................................................19
3.9 Indemnification...............................................................................19
3.10 Banks' Indemnification........................................................................20
3.11 Rights as a Bank..............................................................................20
ARTICLE IV CHANGE IN CIRCUMSTANCES...................................................................20
4.1 Yield Protection..............................................................................20
4.2 Replacement Bank..............................................................................21
4.3 Availability of Eurodollar Rate Loans.........................................................22
4.4 Funding Indemnification.......................................................................22
4.5 Taxes.........................................................................................22
4.6 Bank Certificates, Survival of Indemnity......................................................24
ARTICLE V REPRESENTATIONS AND WARRANTIES............................................................24
5.1 Incorporation and Good Standing...............................................................24
5.2 Corporate Power and Authority: No Conflicts...................................................24
5.3 Governmental Approvals........................................................................25
5.4 Legally Enforceable Agreements................................................................25
5.5 Financial Statements..........................................................................25
5.6 Litigation....................................................................................25
5.7 Margin Stock..................................................................................26
5.8 ERISA.........................................................................................26
5.9 Insurance.....................................................................................26
5.10 Taxes.........................................................................................26
5.11 Investment Company Act........................................................................26
5.12 Public Utility Holding Company Act............................................................26
5.13 Bonds.........................................................................................26
ARTICLE VI AFFIRMATIVE COVENANTS.....................................................................26
6.1 Payment of Taxes, Etc.........................................................................26
6.2 Maintenance of Insurance......................................................................26
6.3 Preservation of Corporate Existence, Etc......................................................27
6.4 Compliance with Laws, Etc.....................................................................27
6.5 Visitation Rights.............................................................................27
6.6 Keeping of Books..............................................................................27
6.7 Reporting Requirements........................................................................27
6.8 Use of Proceeds...............................................................................29
6.9 Maintenance of Properties, Etc................................................................29
6.10 Bonds.........................................................................................29
6.11 Post-Closing Opinion..........................................................................29
ARTICLE VII NEGATIVE COVENANTS........................................................................29
7.1 Liens.........................................................................................30
7.2 Sale of Assets................................................................................31
7.3 Mergers, Etc..................................................................................31
7.4 Compliance with ERISA.........................................................................31
7.5 Change in Nature of Business..................................................................31
7.6 Restricted Payments...........................................................................31
7.7 Off-Balance Sheet Liabilities.................................................................31
ARTICLE VIII FINANCIAL COVENANTS.......................................................................32
8.1 Debt to Capital Ratio.........................................................................32
8.2 Interest Coverage Ratio.......................................................................32
ARTICLE IX EVENTS OF DEFAULT.........................................................................32
9.1 Events of Default.............................................................................32
9.2 Remedies......................................................................................33
ARTICLE X WAIVERS, AMENDMENTS AND REMEDIES..........................................................34
10.1 Amendments....................................................................................34
10.2 Preservation of Rights........................................................................35
ARTICLE XI CONDITIONS PRECEDENT......................................................................35
11.1 Initial Credit Extension......................................................................35
11.2 Each Credit Extension.........................................................................36
ARTICLE XII GENERAL PROVISIONS........................................................................37
12.1 Successors and Assigns........................................................................37
12.2 Survival of Representations...................................................................38
12.3 Governmental Regulation.......................................................................38
12.4 Taxes.........................................................................................39
12.5 Choice of Law.................................................................................39
12.6 Headings......................................................................................39
12.7 Entire Agreement..............................................................................39
12.8 Expenses; Indemnification.....................................................................39
12.9 [Intentionally Omitted].......................................................................40
12.10 Severability of Provisions....................................................................40
12.11 Setoff........................................................................................40
12.12 Ratable Payments..............................................................................40
12.13 Nonliability of Bank..........................................................................40
ARTICLE XIII THE AGENT.................................................................................41
13.1 Appointment...................................................................................41
13.2 Powers........................................................................................41
13.3 General Immunity..............................................................................41
13.4 No Responsibility for Loans, Recitals, Etc....................................................41
13.5 Action on Instructions of Banks...............................................................41
13.6 Employment of Agents and Counsel..............................................................42
13.7 Reliance on Documents; Counsel................................................................42
13.8 Agent's Reimbursement and Indemnification.....................................................42
13.9 Rights as a Lender............................................................................42
13.10 Bank Credit Decision..........................................................................42
13.11 Successor Agent...............................................................................42
13.12 Agent and Arranger Fees.......................................................................43
ARTICLE XIV NOTICES...................................................................................43
14.1 Giving Notice.................................................................................43
14.2 Change of Address.............................................................................43
ARTICLE XV ..........................................................................................44
SCHEDULES
PRICING SCHEDULE
COMMITMENT SCHEDULE
EXHIBITS
Exhibit A Form of Supplemental Indenture
Exhibit B-1 Required Opinions from ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Exhibit B-2 Required Opinions from Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, 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
364 DAY CREDIT AGREEMENT
This 364 Day Credit Agreement, dated as of July 12, 2002, 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 Bank One, NA, a national
banking association having its principal office in Chicago, Illinois, as Agent
and as LC Issuer.
WITNESSETH:
WHEREAS, the Company, certain banks and Bank One, NA (formerly known as
The First National Bank of Chicago), as agent, are parties to a Credit Agreement
dated as of July 14, 1999 (as amended, the "Prior Agreement"); and
WHEREAS, the Company has requested, and the Banks have agreed to enter
into, a 364 day credit facility in an aggregate amount of $250,000,000;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement:
"Accounting Changes" -- see Section 1.3.
"Adjusted Face Amount" means, with respect to any Zero Rate Bond, the
Face Amount of such Zero Rate Bond minus all payments under this Agreement
which, in accordance with the terms set forth in the Supplemental Indenture,
reduce the principal amount of such Zero Rate Bond.
"Advance" means a group of Loans made by the Banks hereunder of the
same Type, made, converted or continued on the same day and, in the case of
Eurodollar Rate Loans, having the same Interest Period.
"Agent" means Bank One in its capacity as administrative agent for the
Banks pursuant to Article XIII, and not in its individual capacity as a Bank,
and any successor Agent appointed pursuant to Article XIII.
"Aggregate Commitment" means the aggregate amount of the Commitments of
all Banks.
"Aggregate Outstanding Credit Exposure" means, at any time, the
aggregate of the Outstanding Credit Exposure of all the Banks.
"Agreement" means this 364 Day Credit Agreement, as amended from time
to time.
1
"Alternate Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of the Federal Funds
Effective Rate for such day plus 1/2% per annum.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Arranger" -- see Section 13.12.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assignment Agreement" -- see Section 12.1(e).
"Available Aggregate Commitment" means, at any time, the Available
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.
"Available Commitment" means, at any time, the least of (i) the
Aggregate Commitment, (ii) the sum of the Face Amount of Interest Bearing Bonds
and the Adjusted Face Amount of Zero Rate Bonds and (iii) $235,000,000 (or, if
the Company has delivered Bonds to the Agent in an aggregate Face Amount of
$265,000,000 or more, $250,000,000).
"Banks" - see the preamble.
"Bank One" means Bank One, NA (Main Office -- Chicago), in its
individual capacity, and its successors and assigns.
"Base Eurodollar Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the per annum interest rate determined by the
offered rate per annum at which deposits in U.S. dollars, for a period equal or
comparable to such Interest Period, appears on Telerate page 3750 (or any
successor page) as of 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period, or in the event such offered rate is not
available from the Telerate page, the rate offered on deposits in U.S. dollars,
for a period equal or comparable to such Interest Period, by Bank One's London
Office to prime banks in the London interbank market at approximately 11:00 a.m.
(London time), two Business Days prior to the first day of such Interest Period,
and in an amount substantially equal to the amount of Bank One's relevant
Eurodollar Rate Loan for such Interest Period.
"Bonds" means, collectively, the Interest Bearing Bonds and the Zero
Rate Bonds.
"Bond Delivery Agreement" means a bond delivery agreement 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, substantially in the form of Exhibit G.
"Borrowing Date" means a date on which a Credit Extension is made
hereunder.
2
"Borrowing Notice" - see Section 2.8.
"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 Chicago, Illinois and 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 Chicago, Illinois and 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.
"CMS" means CMS Energy Corporation, a Michigan corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral Shortfall Amount" -- see Section 9.2.
"Commitment" means, for each Bank, the obligation of such Bank to make
Loans to, and participate in Facility LCs issued upon the application of, the
Company in an aggregate amount not exceeding the amount set forth on the
Commitment Schedule or as set forth in any Assignment Agreement that has become
effective pursuant to Section 12.1, as such amount may be modified from time to
time.
"Commitment Fee" -- see Section 2.5.
"Commitment Fee Rate" means, at any time, the percentage rate per annum
at which Commitment Fees are accruing on the Unused Commitment as set forth in
the Pricing Schedule.
"Commitment Schedule" means the Schedule identifying each Bank's
Commitment as of the date hereof attached hereto and identified as such.
"Company" - see the preamble.
"Consolidated EBIT" means Consolidated Net Income plus, (i) to the
extent deducted from revenues in determining Consolidated Net Income (without
duplication), (a) Consolidated Interest Expense, (b) expense for taxes paid or
accrued, (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, and (d) the pre-tax write-off for the fiscal period ending December
31, 2001 in an amount not to exceed $126,000,000 arising from the loss on Power
Purchase Agreement -- MCV Partnership, 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.
3
"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, 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.
"Credit Documents" means this Agreement, the Facility LC Applications,
the Supplemental Indenture and the Bonds.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"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 agreement; provided
that 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.
"Discounted Amount" means, with respect to any Zero Rate Bond, the
Adjusted Face Amount of such Bond minus the product of (x) such Adjusted Face
Amount multiplied by (y) a percentage equal to the sum of the highest interest
rate then applicable to any Eurodollar Rate Loan hereunder (or, if no Eurodollar
Rate Loans are then outstanding hereunder, the rate that would be applicable to
a Eurodollar Rate Loan borrowed on the most recent Business Day for a one-month
Interest Period) plus the then applicable Commitment Fee Rate multiplied by (z)
a
4
fraction, the numerator of which is the number of days remaining until the
Termination Date and the denominator of which is 360.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Company or is under common control (within
the meaning of Section 414(c) of the Code) with the Company.
"Eurodollar Advance" means an Advance consisting of Eurodollar Rate
Loans.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, an interest rate per annum equal to the sum of (i) the
quotient obtained by dividing (a) the Base Eurodollar Rate applicable to such
Interest Period by (b) one minus the Reserve Requirement (expressed as a
decimal) applicable to such Interest Period, plus (ii) the Applicable Margin.
"Eurodollar Rate Loan" means a Loan which bears interest by reference
to the Eurodollar Rate.
"Event of Default" means an event described in Article IX.
"Excluded Taxes" means, in the case of each Bank, the LC Issuer 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, the LC Issuer or the Agent is incorporated or organized
or (ii) the jurisdiction in which the Agent's, the LC Issuer's or such Bank's
principal executive office or such Bank's or the LC Issuer's applicable Lending
Installation is located.
"Face Amount" means, with respect to any Bond, the face amount of such
Bond.
"Facility LC" -- see Section 3.1.
"Facility LC Application" -- see Section 3.3.
"Facility LC Collateral Account" means a special, interest-bearing
account maintained (pursuant to arrangements satisfactory to the Agent) at the
Agent's office at the address specified pursuant to Article XII, which account
shall be in the name of the Company but under the sole dominium and control of
the Agent, for the benefit of the Banks.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such
5
day on such transactions received by the Agent from three Federal funds brokers
of recognized standing selected by the Agent in its sole discretion.
"First Mortgage Bonds" means bonds issued by the Company pursuant to
the Indenture.
"Fitch" means Fitch, Inc. or any successor thereto.
"Floating Rate" means a rate per annum equal to (i) the Alternate Base
Rate plus (ii) the Applicable Margin, changing when and as the Alternate Base
Rate or the Applicable Margin changes.
"Floating Rate Advance" means an Advance consisting of Floating Rate
Loans.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"FRB" means the Board of Governors of the Federal Reserve System or any
successor thereto.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the 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
6
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.
"Initial Borrowing Date" means July 15, 2002.
"Interest Bearing Bonds" means a series of interest-bearing First
Mortgage Bonds created under the Supplemental Indenture issued in favor of, and
in form and substance satisfactory to, the Agent.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months, or such shorter period agreed to by the
Company and the Banks, commencing on a Business Day selected by the Company
pursuant to this Agreement. Such Interest Period shall end on the day which
corresponds numerically to such date one, two, three or six months thereafter
(or such shorter period agreed to by the Company and the Banks), provided,
however, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month (or such shorter period, as applicable),
such Interest Period shall end on the last Business Day of such next, second,
third or sixth succeeding month (or such shorter period, as applicable). If an
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
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 scheduled
Termination 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 Credit Documents pursuant to terms of subordination
substantially similar to those set forth in Exhibit E, or pursuant to other
terms and conditions satisfactory to the Majority Banks.
"LC Fee" -- see Section 3.4.
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of
(i) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (ii) the aggregate unpaid amount at such time of all
Reimbursement Obligations.
"LC Payment Date" -- see Section 3.5.
"Lending Installation" means any office, branch, subsidiary or
affiliate of a Bank.
7
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.
"Loan" - see Section 2.1.
"Majority Banks" means, as of any date of determination, Banks in the
aggregate having 51% or more of the Aggregate Commitment as of such date or, if
the Aggregate Commitment has been terminated, Banks in the aggregate holding 51%
or more of the aggregate unpaid principal amount of the Aggregate Outstanding
Credit Exposure as of such date.
"Modify" and "Modification" -- see Section 3.1.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
thereto.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA.
"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.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all Reimbursement Obligations, all accrued and unpaid
commitment fees and all other obligations of the Company to the Banks or to any
Bank, the LC Issuer or the Agent arising under the Credit Documents.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any sale and leaseback
transaction which is not a Capital Lease, (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.
8
"Other Taxes" -- see Section 4.5(b).
"Outstanding Credit Exposure" means, as to any Bank at any time, the
sum of (i) the aggregate principal amount of its Loans outstanding at such time,
plus (ii) an amount equal to its Pro Rata Share of the LC Obligations at such
time.
"Payment Date" means the second Business Day of each calendar quarter
occurring after the Initial Borrowing Date.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, 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.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Prior Agreement" - see the recitals.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Pro Rata Share" means, with respect to a Bank, a portion equal to a
fraction the numerator of which is such Bank's Commitment and the denominator of
which is the Aggregate Commitment.
"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.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Company then outstanding under Article III to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Reportable Event" has the meaning assigned to that term in Title IV of
ERISA.
9
"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.
"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 or other stranded costs.
"Senior Debt" means the First Mortgage Bonds.
"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.
"Term Loan Agreement" means the Term Loan Agreement, dated as of July
12, 2002, by and among the Company, the various financial institutions from time
to time parties thereto, and Citicorp USA, Inc., as Agent, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"Termination Date" means the earlier of (i) July 11, 2003, or (ii) the
date on which the Commitments are terminated.
"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
10
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.
"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.
"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 Credit
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" - see Section 2.4.
"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.
"Unused Commitment" means, at any time, the Aggregate Commitment then
in effect minus the Aggregate Outstanding Credit Exposure at such time.
"Zero Rate Bonds" means a series of zero coupon First Mortgage Bonds
created under the Supplemental Indenture issued in favor of, and in form and
substance satisfactory to, the Agent.
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
11
or in the related definitions or terms used therein ("Accounting Changes"), the
parties hereto agree, at the Company's request, to enter into negotiations, in
good faith, in order to amend such provisions in a credit neutral manner so as
to reflect equitably such changes with the desired result that the criteria for
evaluating the Company's and its Subsidiaries' financial condition shall be the
same after such changes as if such changes had not been made; provided, 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 ADVANCES
2.1 Commitment. From and including the Initial Borrowing Date and prior
to the Termination Date, each Bank severally agrees, on the terms and conditions
set forth in this Agreement, (a) to make loans to the Company from time to time
(the "Loans"), and (b) to participate in Facility LCs issued upon the request of
the Company from time to time, provided, that, after giving effect to the making
of each such Loan and the issuance of each such Facility LC, such Bank's
Outstanding Credit Exposure shall not exceed its Commitment. In no event may the
Aggregate Outstanding Credit Exposure exceed the Available Commitment. Subject
to the terms and conditions of this Agreement, the Company may borrow, repay and
reborrow at any time prior to the Termination Date. The Commitments shall expire
on the Termination Date.
2.2 Required Payments; Termination. The Aggregate Outstanding Credit
Exposure and all other unpaid obligations of the Company hereunder shall be paid
in full on the Termination Date.
2.3 Ratable Loans. Each Advance shall consist of Loans made by the
several Banks ratably according to their Pro Rata Shares.
2.4 Types of Advances. The Advances may be Floating Rate Advances or
Eurodollar Advances (each a "Type" of Advance), or a combination thereof, as
selected by the Company in accordance with Sections 2.8 and 2.9.
2.5 Commitment Fee and Reductions of Commitment.
(a) The Company agrees to pay to the Agent for the account of each Bank
according to its Pro Rata Share a commitment fee (the "Commitment Fee") at the
Commitment Fee Rate on the daily Unused Commitment from the Initial Borrowing
Date to but not including the date on which this Agreement is terminated in full
and all of the Obligations hereunder have been paid in full. The commitment fee
shall be payable quarterly in arrears on each Payment Date (for the quarter then
most recently ended) and on the Termination Date (for the period then ended for
which such fee has not previously been paid). The commitment fee shall be
calculated for actual days elapsed on the basis of a 360 day year.
(b) The Company may permanently reduce the Aggregate Commitment in
whole, or in part ratably among the Banks in the minimum amount of $10,000,000
(and in multiples of
12
$1,000,000 if in excess thereof), upon at least five Business Days' written
notice to the Agent, which shall specify the amount of any such reduction,
provided that the Aggregate Commitment may not be reduced below the Aggregate
Outstanding Credit Exposure. All accrued commitment fees shall be payable on the
effective date of any termination of the obligation of the Banks to make Credit
Extensions hereunder. Upon any permanent reduction in the Aggregate Commitment
pursuant to the terms of this Section 2.5(b), 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 (i) the Company remains in
compliance with Section 6.10; and (ii) the Agent shall not be required to
surrender any Interest Bearing Bonds so long as any Zero Rate Bonds remain
outstanding.
2.6 Minimum Amount of Advances. Each Advance shall be in the minimum
amount of $10,000,000 (and in integral multiples of $1,000,000 if in excess
thereof), provided that any Floating Rate Advance may be in the amount of the
Available Aggregate Commitment (rounded down, if necessary, to an integral
multiple of $1,000,000).
2.7 Optional Principal Payments. The Company may from time to time
prepay, without penalty or premium, all outstanding Floating Rate Advances or,
in a minimum aggregate amount of $10,000,000 or a higher integral multiple of
$1,000,000, any portion of the outstanding Floating Rate Advances upon one
Business Day's prior notice to the Agent. The Company may from time to time pay,
subject to the payment of any funding indemnification amounts required by
Section 4.4 but without penalty or premium, all outstanding Eurodollar Advances
or, in a minimum aggregate amount of $10,000,000 or a higher integral multiple
of $1,000,000, any portion of any outstanding Eurodollar Advance upon three
Business Days' prior notice to the Agent; provided that if after giving effect
to any such prepayment the principal amount of any Eurodollar Advance is less
than $10,000,000, such Eurodollar Advance shall automatically convert into a
Floating Rate Advance. All payments made pursuant to this Section 2.7 shall be
deemed to be payments of Obligations evidenced by Zero Rate Bonds (except to the
extent such payment results in the Aggregate Outstanding Credit Exposure being
less than the face amount of all Interest Bearing Bonds).
2.8 Method of Selecting Types and Interest Periods for New Advances.
The Company shall select the Type of Advance and, in the case of each Eurodollar
Advance, the Interest Period applicable thereto from time to time. The Company
shall give the Agent irrevocable notice (a "Borrowing Notice") not later than
11:00 a.m. (Chicago time) on the Borrowing Date of each Floating Rate Advance
and not later than 11:00 a.m. (Chicago time) three Business Days before the
Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the initial Interest
Period applicable thereto.
13
Promptly after receipt thereof, the Agent will notify each Bank of the contents
of each Borrowing Notice. Not later than noon (Chicago time) on each Borrowing
Date, each Bank shall make available its Loan in funds immediately available in
Chicago 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 Loan shall be affected by any other Bank's failure to make any Loan.
2.9 Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances pursuant to this Section
2.9 or are repaid in accordance with Section 2.2 or 2.7. Each Eurodollar Advance
shall continue as a Eurodollar Advance until the end of the then applicable
Interest Period therefor, at which time such Eurodollar Advance shall be
automatically converted into a Floating Rate Advance unless (x) such Eurodollar
Advance is or was repaid in accordance with Section 2.2 or 2.7 or (y) the
Company shall have given the Agent a Conversion/Continuation Notice (as defined
below) requesting that, at the end of such Interest Period, such Eurodollar
Advance continue as a Eurodollar Advance for the same or another Interest
Period. Subject to the terms of Section 2.6, the Company may elect from time to
time to convert all or any part of a Floating Rate Advance into a Eurodollar
Advance. The Company shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate Advance
into a Eurodollar Advance or continuation of a Eurodollar Advance not later than
11:00 a.m. (Chicago time) at least three Business Days prior to the date of the
requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount of the Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
2.10 Interest Rates, Interest Payment Dates. (a) Subject to Section
2.11, each Advance shall bear interest as follows:
(i) at any time such Advance is a Floating Rate Advance, at a
rate per annum equal to the Floating Rate from time to time in effect;
and
(ii) at any time such Advance is a Eurodollar Advance, at a
rate per annum equal to the Eurodollar Rate for each applicable
Interest Period therein.
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Floating Rate.
(a) Interest accrued on each Floating Rate Advance shall be payable on
each Payment Date and at maturity. Interest accrued on each Eurodollar Advance
shall be payable on the last day of its applicable Interest Period, on any date
on which such Eurodollar Advance is prepaid and at maturity. Interest accrued on
each Eurodollar Advance having an Interest Period longer
14
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest on Eurodollar Advances, interest
on Floating Rate Advances based on the Federal Funds Effective Rate and the LC
Fee shall be calculated for actual days elapsed on the basis of a 360-day year.
Interest on Floating Rate Advances based on the Prime Rate shall be calculated
for actual days elapsed on the basis of a 365- or 366-day year, as appropriate.
Interest on each Advance shall accrue from and including the date such Advance
is made to but excluding the date payment thereof is received in accordance with
Section 2.12. If any payment of principal of or interest on an Advance shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest in connection with
such payment.
2.11 Rate after Maturity. Any Advance not paid by the Company at
maturity, whether by acceleration or otherwise, shall bear interest until paid
in full at a rate per annum equal to the higher of the rate otherwise applicable
thereto plus 1% or the Floating Rate plus 1%.
2.12 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 Agent to the
Company) not later than noon (Chicago time) on the date when due and shall
(except in the case of Reimbursement Obligations for which the LC Issuer has not
been fully indemnified by the Banks, or as otherwise specifically required
hereunder) 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 3:00 p.m. (Chicago 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 Bank One, if any, for each
payment of principal, interest, Reimbursement Obligation and fees as such
payment becomes due hereunder. Each reference to the Agent in this Section 2.12
shall also be deemed to refer, and shall apply equally, to the LC Issuer, in the
case of payments required to be made by the Company to the LC Issuer pursuant to
Section 3.6.
2.13 Bonds; Record-keeping; Telephonic Notices.
(a) The obligation of the Company to repay the Obligations shall be
evidenced by one or more Bonds.
(b) Each Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Company to such Bank
resulting from each Loan made by such Bank from time to time, including the
amounts of principal and interest payable and paid to such Bank from time to
time hereunder.
(c) The Agent shall also maintain accounts in which it will record (i)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
with respect thereto, (ii) the
15
amount of any principal or interest due and payable or to become due and payable
from the Company to each Bank hereunder, (iii) the original stated amount of
each Facility LC and the amount of LC Obligations outstanding at any time, and
(iv) the amount of any sum received by the Agent hereunder from the Company and
each Bank's share thereof.
(d) The entries maintained in the accounts maintained pursuant to
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
Advances based on telephonic notices made by any person or persons the Agent or
any Bank in good faith believes to be acting on behalf of the Company. The
Company agrees to deliver promptly to the Agent a written confirmation of each
telephonic notice signed by a Designated Officer. If the written confirmation
differs in any material respect from the action taken by the Agent and the
Banks, the records of the Agent and the Banks shall govern absent manifest
error.
2.14 Lending Installations. Subject to the provisions of Section 4.6,
each Bank may book its Loans and its participation in any LC Obligations and the
LC Issuer may book the Facility LCs at any Lending Installation selected by such
Bank or the LC Issuer, as the case may be, and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans shall be deemed held by the applicable
Bank for the benefit of such Lending Installation. Each Bank may, by written or
facsimile notice to the Company, designate a Lending Installation through which
Loans will be made by it or Facility LC's will be issued by it and for whose
account payments on the Loans or payments with respect to Facility LCs are to be
made.
2.15 Non-Receipt of Funds by the Agent. Unless a Bank or the Company,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Bank, the
proceeds of a Loan or (ii) in the case of the Company, a payment of principal,
interest or fees to the Agent for the account of the Banks, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Bank or the Company, as the case may be, has not in fact made such payment
to the Agent, the recipient of such payment shall, on demand by the Agent, repay
to the Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was so
made available by the Agent until the date the Agent recovers such amount at a
rate per annum equal to (i) in the case of payment by a Bank, the Federal Funds
Rate for such day or (ii) in the case of payment by the Company, the interest
rate applicable to the relevant Loan.
16
ARTICLE III
LETTER OF CREDIT FACILITY
3.1 Issuance. The LC Issuer hereby agrees, on the terms and conditions
set forth in this Agreement, to issue standby and commercial letters of credit
(each, a "Facility LC") and to renew, extend, increase, decrease or otherwise
modify each Facility LC ("Modify," and each such action a "Modification"), from
time to time from and including the date hereof and prior to the Termination
Date upon the request of the Company; provided that immediately after each such
Facility LC is issued or Modified, (i) the aggregate amount of the outstanding
LC Obligations shall not exceed $100,000,000 and (ii) the Aggregate Outstanding
Credit Exposure shall not exceed the Available Commitment. No Facility LC shall
have an expiry date later than the fifth Business Day prior to the scheduled
Termination Date.
3.2 Participations. Upon the issuance or Modification by the LC Issuer
of a Facility LC in accordance with this Article III, the LC Issuer shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably sold to each Bank, and each Bank shall be deemed, without further
action by any party hereto, to have unconditionally and irrevocably purchased
from the LC Issuer, a participation in such Facility LC (and each Modification
thereof) and the related LC Obligations in proportion to its Pro Rata Share.
3.3 Notice. Subject to Section 3.1, the Company shall give the LC
Issuer notice prior to 11:00 a.m. (Chicago time) at least three Business Days
prior to the proposed date of issuance or Modification of each Facility LC,
specifying the beneficiary, the proposed date of issuance (or Modification) and
the expiry date of such Facility LC, and describing the proposed terms of such
Facility LC and the nature of the transactions proposed to be supported thereby.
Upon receipt of such notice, the LC Issuer shall promptly notify the Agent, and
the Agent shall promptly notify each Bank, of the contents thereof and of the
amount of such Bank's participation in such proposed Facility LC. The issuance
or Modification by the LC Issuer of any Facility LC shall, in addition to the
conditions precedent set forth in Article XI (the satisfaction of which the LC
Issuer shall have no duty to ascertain), be subject to the conditions precedent
that such Facility LC shall be satisfactory to the LC Issuer and that the
Company shall have executed and delivered such application agreement and/or such
other instruments and agreements relating to such Facility LC as the LC Issuer
shall have reasonably requested (each, a "Facility LC Application"). In the
event of any conflict between the terms of this Agreement and the terms of any
Facility LC Application, the terms of this Agreement shall control.
3.4 LC Fees. The Company shall pay to the Agent, for the account of the
Banks ratably in accordance with their respective Pro Rata Shares, a letter of
credit fee at a per annum rate equal to the Applicable Margin for Eurodollar
Rate Loans in effect from time to time on the average daily undrawn stated
amount under each Facility LC, such fee to be payable in arrears on each Payment
Date (such fee being the "LC Fee"). The Company shall also pay to the LC Issuer
for its own account (x) at the time of issuance of each Facility LC, a fronting
fee in an amount equal to 0.125% of the initial stated amount (or, with respect
to a Modification of any such Facility LC which increases the stated amount
thereof, such increase in the stated amount) thereof, and (y) documentary and
processing charges in connection with the issuance or Modification of and draws
under Facility LCs in accordance with the LC Issuer's standard schedule for such
charges as in effect from time to time.
17
3.5 Administration; Reimbursement by Banks. Upon receipt from the
beneficiary of any Facility LC of any demand for payment under such Facility LC,
the LC Issuer shall notify the Agent and the Agent shall promptly notify the
Company and each other Bank as to the amount to be paid by the LC Issuer as a
result of such demand and the proposed payment date (the "LC Payment Date"). The
responsibility of the LC Issuer to the Company and each Bank shall be only to
determine that the documents (including each demand for payment) delivered under
each Facility LC in connection with such presentment shall be in conformity in
all material respects with such Facility LC. The LC Issuer shall endeavor to
exercise the same care in the issuance and administration of the Facility LCs as
it does with respect to letters of credit in which no participations are
granted, it being understood that in the absence of any gross negligence or
willful misconduct by the LC Issuer, each Bank shall be unconditionally and
irrevocably liable without regard to the occurrence of any Default or any
condition precedent whatsoever, to reimburse the LC Issuer on demand for (i)
such Bank's Pro Rata Share of the amount of each payment made by the LC Issuer
under each Facility LC to the extent such amount is not reimbursed by the
Company pursuant to Section 3.6 below, plus (ii) interest on the foregoing
amount to be reimbursed by such Bank, for each day from the date of the LC
Issuer's demand for such Reimbursement (or, if such demand is made after 11:00
a.m. (Chicago time) on such date, from the next succeeding Business Day) to the
date on which such Bank pays the amount to be reimbursed by it, at a rate of
interest per annum equal to the Federal Funds Effective Rate for the first three
days and, thereafter, at a rate of interest equal to the rate applicable to
Floating Rate Advances.
3.6 Reimbursement by Company. The Company shall be irrevocably and
unconditionally obligated to reimburse the LC Issuer on the applicable LC
Payment Date for any amounts to be paid by the LC Issuer upon any drawing under
any Facility LC, without presentment, demand, protest or other formalities of
any kind; provided that neither the Company nor any Bank shall hereby be
precluded from asserting any claim for direct (but not consequential) damages
suffered by the Company or such Bank to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the LC Issuer in
determining whether a request presented under any Facility LC issued by it
complied with the terms of such Facility LC or (ii) the LC Issuer's failure to
pay under any Facility LC issued by it after the presentation to it of a request
strictly complying with the terms and conditions of such Facility LC. All such
amounts paid by the LC Issuer and remaining unpaid by the Company shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to (x) the rate applicable to Floating Rate Advances for such day if such day
falls on or before the applicable LC Payment Date and (y) the sum of 1% plus the
rate applicable to Floating Rate Advances for such day if such day falls after
such LC Payment Date. The LC Issuer will pay to each Bank ratably in accordance
with its Pro Rata Share all amounts received by it from the Company for
application in payment, in whole or in part, of the Reimbursement Obligation in
respect of any Facility LC issued by the LC Issuer, but only to the extent such
Bank has made payment to the LC Issuer in respect of such Facility LC pursuant
to Section 3.5. Subject to the terms and conditions of this Agreement (including
without limitation the submission of a Borrowing Notice in compliance with
Section 2.8 and the satisfaction of the applicable conditions precedent set
forth in Article XI), the Company may request an Advance hereunder for the
purpose of satisfying any Reimbursement Obligation.
18
3.7 Obligations Absolute. The Company's obligations under this Article
III shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the Company
may have or have had against the LC Issuer, any Bank or any beneficiary of a
Facility LC. The Company further agrees with the LC Issuer and the Banks that
the LC Issuer and the Banks shall not be responsible for, and the Company's
Reimbursement Obligation in respect of any Facility LC shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Company, any of its affiliates, the beneficiary of any Facility LC or any
financing institution or other party to whom any Facility LC may be transferred
or any claims or defenses whatsoever of the Company or of any of its affiliates
against the beneficiary of any Facility LC or any such transferee. The LC Issuer
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Facility LC. The Company agrees that any
action taken or omitted by the LC Issuer or any Bank under or in connection with
each Facility LC and the related drafts and documents, if done without gross
negligence or willful misconduct, shall be binding upon the Company and shall
not put the LC Issuer or any Bank under any liability to the Company. Nothing in
this Section 3.7 is intended to limit the right of the Company to make a claim
against the LC Issuer for damages as contemplated by the proviso to the first
sentence of Section 3.6.
3.8 Actions of LC Issuer. The LC Issuer shall be entitled to rely, and
shall be fully protected in relying, upon any Facility LC, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the LC Issuer.
The LC Issuer shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Majority Banks as it reasonably deems appropriate or it shall
first be indemnified to its reasonable satisfaction by the Banks against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Notwithstanding any other provision of this
Article III, the LC Issuer shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement in accordance with a request of
the Majority Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Banks and any future holders of a
participation in any Facility LC.
3.9 Indemnification. The Company hereby agrees to indemnify and hold
harmless each Bank, the LC Issuer and the Agent, and their respective directors,
officers, agents and employees from and against any and all claims and damages,
losses, liabilities, reasonable costs or expenses which such Bank, the LC Issuer
or the Agent may incur (or which may be claimed against such Bank, the LC Issuer
or the Agent by any Person whatsoever) by reason of or in connection with the
issuance, execution and delivery or transfer of or payment or failure to pay
under any Facility LC or any actual or proposed use of any Facility LC,
including, without limitation, any claims, damages, losses, liabilities, costs
or expenses which the LC Issuer may incur by reason of or in connection with (i)
the failure of any other Bank to fulfill or comply with its obligations to the
LC Issuer hereunder (but nothing herein contained shall affect any rights the
19
Company may have against any defaulting Bank) or (ii) by reason of or on account
of the LC Issuer issuing any Facility LC which specifies that the term
"Beneficiary" included therein includes any successor by operation of law of the
named Beneficiary, but which Facility LC does not require that any drawing by
any such successor Beneficiary be accompanied by a copy of a legal document,
satisfactory to the LC Issuer, evidencing the appointment of such successor
Beneficiary; provided that the Company shall not be required to indemnify any
Bank, the LC Issuer or the Agent for any claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused by (x) the
willful misconduct or gross negligence of the LC Issuer in determining whether a
request presented under any Facility LC complied with the terms of such Facility
LC or (y) the LC Issuer's failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and conditions
of such Facility LC. Nothing in this Section 3.9 is intended to limit the
obligations of the Company under any other provision of this Agreement.
3.10 Banks' Indemnification. Each Bank shall, ratably in accordance
with its Pro Rata Share, indemnify the LC Issuer, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Company) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees' gross negligence or willful
misconduct or the LC Issuer's failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and conditions
of the Facility LC) that such indemnitees may suffer or incur in connection with
this Article III or any action taken or omitted by such indemnitees hereunder.
3.11 Rights as a Bank. In its capacity as a Bank, the LC Issuer shall
have the same rights and obligations as any other Bank.
ARTICLE IV
CHANGE IN CIRCUMSTANCES
4.1 Yield Protection. (a) If any change in law 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 or the LC Issuer,
(i) subjects any Bank or any applicable Lending Installation
or the LC Issuer 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 or LC Issuer in
respect of its Credit Extensions (including any participations in
Facility LCs) 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, the LC Issuer 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
20
(iii) imposes any other condition the result of which is to
increase the cost to any Bank, the LC Issuer or any applicable Lending
Installation of making, funding or maintaining Credit Extensions
(including any participations in Facility LCs), or reduces any amount
receivable by any Bank, the LC Issuer or any applicable Lending
Installation in connection with Credit Extensions (including any
participations in Facility LCs) or requires any Bank, the LC Issuer or
any applicable Lending Installation to make any payment calculated by
reference to its Outstanding Credit Exposure or interest received by
it, by an amount deemed material by such Bank or the LC Issuer, or
(iv) affects the amount of capital required or expected to be
maintained by any Bank, the LC Issuer or Lending Installation or any
corporation controlling any Bank or LC Issuer and such Bank or the LC
Issuer, as applicable, determines the amount of capital required is
increased by or based upon the existence of this Agreement or its
obligation to make Credit Extensions (including any participations in
Facility LCs) hereunder or of commitments of this type,
then, upon presentation by such Bank or the LC Issuer to the Company of a
certificate (as referred to in the immediately succeeding sentence of this
Section 4.1) setting forth the basis for such determination and the additional
amounts reasonably determined by such Bank or the LC Issuer 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 or the LC
Issuer, as applicable, 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 or the LC Issuer, as applicable, the specified amounts set forth on
such certificate. The affected Bank or the LC Issuer, as applicable, shall
deliver to the Company and the Agent a certificate setting forth the basis of
the claim and specifying in reasonable detail the calculation of such increased
expense, which certificate shall be prima facie evidence as to such increase and
such amounts. An affected Bank or the LC Issuer, as applicable, may deliver more
than one certificate to the Company during the term of this Agreement. In making
the determinations contemplated by the above-referenced certificate, any Bank
and the LC Issuer may make such reasonable estimates, assumptions, allocations
and the like that such Bank or the LC Issuer, as applicable, in good faith
determines to be appropriate, and such Bank's or the LC Issuer's selection
thereof in accordance with this Section 4.1 shall be conclusive and binding on
the Company, absent manifest error.
(a) Neither the LC Issuer nor any 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 or the LC Issuer, as applicable, first notified the Company of the
occurrence of the event entitling such Bank or the LC Issuer, as applicable, to
such compensation (unless, and to the extent, that any such compensation so
demanded shall relate to the retroactive application of any event so notified to
the Company).
4.2 Replacement Bank. (a) 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 Commitment and Outstanding Credit Exposure within the period
21
ending on the later of such 30th day and the last day of the longest of the then
current Interest Periods or maturity dates for such Outstanding Credit Exposure.
It is understood that such assignment shall be consummated on terms satisfactory
to the assigning Bank, provided that such Bank's consent to such an assignment
shall not be unreasonably withheld.
(a) If the Company shall elect to replace a Bank pursuant to clause (a)
above, the Company shall prepay the Outstanding Credit Exposure of such Bank,
and the bank or banks selected by the Company shall replace such Bank as a Bank
hereunder pursuant to an instrument satisfactory to the Company, the Agent and
the Bank being replaced by making Credit Extensions to the Company in the amount
of the Outstanding Credit Exposure of such assigning Bank and assuming all the
same rights and responsibilities hereunder as such assigning Bank and having the
same Commitment as such assigning Bank.
4.3 Availability of Eurodollar Rate Loans. If
(a) any Bank determines that maintenance of a Eurodollar Rate
Loan at a suitable Lending Installation would violate any applicable
law, rule, regulation or directive, whether or not having the force of
law, or
(b) the Majority Banks determine that (i) deposits of a type
and maturity appropriate to match fund Eurodollar Rate Loans are not
available or (ii) the Base Eurodollar Rate does not accurately reflect
the cost of making or maintaining a Eurodollar Rate Loan,
then the Agent shall suspend the availability of Eurodollar Rate Loans and, in
the case of clause (a), require any 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, the
LC Issuer or the Agent hereunder or under any Bond or Facility LC Application
shall be made free and clear of and without deduction for any and all Taxes. If
the Company shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder to any Bank, the LC Issuer 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, the LC Issuer or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such
22
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
Facility LC Application or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Bond or Facility LC Application ("Other
Taxes").
(c) The Company hereby agrees to indemnify the Agent, the LC Issuer 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 3.5) paid by the Agent, the LC Issuer or such Bank and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days of
the date the Agent, the LC Issuer or such Bank makes demand therefor pursuant to
Section 4.6.
(d) Each Bank that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Bank") agrees that it
will, not more than ten 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 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-
23
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 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 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:
24
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 Credit Documents are within the
Company's corporate powers, have been duly authorized by all necessary corporate
action and do not (i) violate the Company's charter, bylaws or any applicable
law, or (ii) breach or result in an event of default under any indenture or
material agreement, and do not result in or require the creation of any Lien
upon or with respect to any of its properties (except the lien of the Indenture
securing the Bonds and any Lien in favor of the Agent on the Facility LC
Collateral Account or any funds therein)
5.3 Governmental Approvals. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Company of any Credit Document, except for the authorization to issue, sell
or guarantee secured and/or unsecured short-term debt granted by the Federal
Energy Regulatory Commission, which authorization has been obtained and is in
full force and effect.
5.4 Legally Enforceable Agreements. Each Credit Document constitutes a
legal, valid and binding obligation of the Company, enforceable in accordance
with its terms, subject to (a) the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) the application of general principles of
equity (regardless of whether considered in a proceeding in equity or at law).
5.5 Financial Statements. 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 (copies of which have been furnished to each Bank),
and the unaudited balance sheet of the Company and its Consolidated Subsidiaries
as at March 31, 2002 (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 in such financial condition or results of operations of the Company and
its Consolidated Subsidiaries, taken as a whole (except to the extent described
in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
2002 as filed with the SEC, copies of which have been furnished to each Bank),
that would materially adversely affect the Company's ability to perform its
obligations under any Credit Document.
5.6 Litigation. Except (i) to the extent described in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001, Quarterly
Report on Form 10-Q for the quarter ended March 31, 2002, and Current Report on
Form 8-K filed by the Company on May 29, 2002, in each case 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
25
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 or
results of operations of the Company and its Consolidated Subsidiaries, taken as
a whole, or that would materially adversely affect the Company's ability to
perform its obligations under any Credit Document. As of the Initial Borrowing
Date, there is no litigation challenging the validity or the enforceability of
any of the Credit 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 Credit Extension will be used
to buy or carry any margin stock or to extend credit to others for the purpose
of buying or carrying any margin stock.
5.8 ERISA. No 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.
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 or any Bank shall have
any Commitment under this Agreement, 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
26
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 Credit 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 Company and its Consolidated
Subsidiaries, taken as a whole, or the ability of the Company to perform its
obligations under any Credit 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;
27
(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 of 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 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
ratios;
(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;
28
(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, ▇▇▇▇▇'▇ 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 or
property 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.
6.8 Use of Proceeds. The Company will use the proceeds of the Credit
Extensions for general corporate purposes, working capital and refinancing the
Debt under the Prior Agreement. The Company will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Credit Extensions to purchase or
carry any "margin stock" (as defined in Regulation U).
6.9 Maintenance of Properties, Etc. The Company shall, and shall cause
each of its Subsidiaries to, maintain in all material respects all of its
respective owned and leased Property in good and safe condition and repair to
the same degree as other companies engaged in similar businesses and owning
similar properties, and not permit, commit or suffer any waste or abandonment of
any such Property, and from time to time make or cause to be made all material
repairs, renewals and replacements thereof, including, without limitation, any
capital improvements which may be required; provided, however, that such
Property may be altered or renovated in the ordinary course of the Company's or
its Subsidiaries' business; and provided, further, that the foregoing shall not
restrict the sale of any asset of the Company or any Subsidiary to the extent
not prohibited by Section 7.2.
6.10 Bonds. Beginning on the Initial Borrowing Date and continuing
until the Commitments have terminated and all Obligations have been paid in
full, cause (a) the sum of (i) the face amount of all Interest Bearing Bonds
plus (ii) the Discounted Amount of all Zero Rate Bonds to at all times be equal
to or greater than (b) the sum of the Aggregate Outstanding Credit Exposure plus
all accrued and unpaid Commitment Fees, LC Fees and interest hereunder.
29
6.11 Post-Closing Opinion. Within ten days after the date hereof, the
Company shall cause to be delivered to the Agent a favorable opinion of 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 opinion shall be addressed to the Agent and the Banks
and shall be satisfactory in form and substance to the Agent.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Obligations shall remain unpaid or any Bank shall have
any Commitment under this Agreement, 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 and any Lien in favor of the Agent on the Facility LC Collateral Account
or any funds therein;
(b) Liens securing pollution control bonds, or bonds issued to refund
or refinance pollution control bonds (including Liens securing obligations
(contingent or otherwise) of the Company under letter of credit agreements or
other reimbursement or similar credit enhancement agreements with respect to
pollution control bonds), provided that the aggregate face amount of any such
bonds so issued shall not exceed the aggregate face amount of such pollution
control bonds, as the case may be, so refunded or refinanced;
(c) Liens in (and only in) assets acquired to secure Debt incurred to
finance the acquisition of such assets;
(d) Statutory and common law banker's Liens on bank deposits;
(e) Liens in respect of accounts receivable sold, transferred or
assigned by the Company;
(f) Liens for taxes, assessments or other governmental charges or
levies not at the 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;
30
(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 Securitized Bonds; and
(n) 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.
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
31
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 arising in connection
with (a) 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 and (b) the Master Lease and Lease
Supplement, each dated as of April 23, 2001, between Consumers Campus Holding,
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, along with various other related agreements) in the aggregate
in excess of $150,000,000 at any time.
ARTICLE VIII
FINANCIAL COVENANTS
So long as any of the Obligations shall remain unpaid or any Bank shall
have any Commitment under this Agreement, 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.
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 Advance when
due and payable, or (ii) any Reimbursement Obligation within one (1) day after
the same becomes due, or (iii) any interest on any Advance 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 Credit Document or in any certificate,
document, report, financial or other written statement furnished at any time
pursuant to any Credit Document shall prove to have been incorrect in any
material respect on or as of the date made;
(c) The Company shall fail to perform or observe any term, covenant or
agreement contained in Section 6.10, Section 6.11, 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 Credit Document and such failure shall continue for
32
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 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).
33
(h) Any Bond shall cease to be in full force and effect (except for
Bonds surrendered by the Agent pursuant to Section 2.5(b)); 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.
(a) If any Event of Default shall occur and be continuing, the Agent
shall upon the request, or may with the consent, of the Majority Banks, by
notice to the Company, (i) declare the Commitments and the obligation and power
of the LC Issuer to issue Facility LCs to be terminated or suspended, whereupon
the same shall forthwith terminate, and/or (ii) declare the Obligations to be
forthwith due and payable, whereupon the Aggregate Outstanding Credit Exposure
and all other Obligations shall become and be forthwith due and payable, and/or
(iii) in addition to the continuing right to demand payment of all amounts
payable under this Agreement, make demand on the Company to pay, and the Company
will, forthwith upon such demand and without any further notice or act, pay to
the Agent the Collateral Shortfall Amount (as defined below), which funds shall
be deposited in the Facility LC Collateral Account, in each case without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Company, provided that in the case of an Event of
Default referred to in subsection 9.1(e) above, the Commitments shall
automatically terminate, the obligation and power of the LC Issuer to issue
Facility LCs shall automatically terminate and the Obligations shall
automatically become due and payable without notice, presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Company, and the Company will be and become thereby
unconditionally obligated, without any further notice, act or demand, to pay to
the Agent an amount in immediately available funds, which funds shall be held in
the Facility LC Collateral Account, equal to the difference of (x) the amount of
LC Obligations at such time, less (y) the amount on deposit in the Facility LC
Collateral Account at such time which is free and clear of all rights and claims
of third parties and has not been applied against the Obligations (such
difference, the "Collateral Shortfall Amount").
(b) If at any time while any Event of Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater than
zero, the Agent may make demand on the Company to pay, and the Company will,
forthwith upon such demand and without any further notice or act, pay to the
Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account.
(c) The Agent may, at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the payment
of the Obligations and any other amounts as shall from time to time have become
due and payable by the Company to the Banks or the LC Issuer under the Credit
Documents. The Company hereby pledges, assigns and grants to the Agent, on
behalf of and for the ratable benefit of the Banks and the LC Issuer, a security
interest in all of the Company's right, title and interest in and to all funds
which may from time to time be on deposit in the Facility LC Collateral Account
to secure the prompt and complete payment and performance of the Obligations.
The Agent will invest any funds on deposit from time to time in the Facility LC
Collateral Account in certificates of deposit of Bank One having a maturity not
exceeding 30 days.
34
(d) At any time while any Event of Default is continuing, neither the
Company nor any Person claiming on behalf of or through the Company shall have
any right to withdraw any of the funds held in the Facility LC Collateral
Account. After all of the Obligations have been indefeasibly paid in full and
the Aggregate Commitment has been terminated, any funds remaining in the
Facility LC Collateral Account shall be returned by the Agent to the Company or
paid to whomever may be legally entitled thereto at such time.
ARTICLE X
WAIVERS, AMENDMENTS AND REMEDIES
10.1 Amendments. Subject to the provisions of this Article X, the
Majority Banks (or the Agent with the consent in writing of the Majority Banks)
and the Company may enter into written agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Credit Documents or
changing in any manner the rights of the Banks or the Company hereunder or
waiving any Event of Default hereunder, provided that no such supplemental
agreement shall, without the consent of all of the Banks:
(a) Extend the maturity of any Loan or reduce the principal
amount thereof, or extend the expiry date of any Facility LC to a date
after the Termination Date, or reduce the rate or extend the time of
payment of interest thereon or fees thereon or Reimbursement
Obligations related thereto.
(b) Modify the percentage specified in the definition of
Majority Banks.
(c) Extend the Termination Date or increase the amount of the
Commitment of any Bank hereunder or the commitment to issue Facility
LCs, or permit the Company to assign its rights under this Agreement.
(d) Amend Section 6.10 or this Section 10.1.
(e) Make any change in an express right in this Agreement of a
single Bank to give its consent, make a request or give a notice.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer.
10.2 Preservation of Rights. No delay or omission of the Banks, the LC
Issuer or the Agent to exercise any right under the Credit Documents shall
impair such right or be construed to be a waiver of any Default or Event of
Default or an acquiescence therein, and the making of a Credit Extension
notwithstanding the existence of a Default or Event of Default or the inability
of the Company to satisfy the conditions precedent to such Credit Extension
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Credit Documents whatsoever shall be
valid unless in writing signed by the Banks required pursuant to Section 10.1,
and then only to the extent in such writing specifically set forth. All remedies
contained in the Credit Documents
35
or by law afforded shall be cumulative and all shall be available to the Agent,
the LC Issuer and the Banks until the Obligations have been paid in full.
ARTICLE XI
CONDITIONS PRECEDENT
11.1 Initial Credit Extension. The Banks shall not be required to make
the initial Credit Extension hereunder unless the Company has furnished to the
Agent with sufficient copies for the Banks:
(a) Copies of the Restated Articles of Incorporation of the Company,
together with all amendments, certified by the Secretary or an Assistant
Secretary of the Company, and a certificate of good standing, certified by the
appropriate governmental officer in its jurisdiction of incorporation.
(b) Copies, certified by the Secretary or an Assistant Secretary of the
Company, of its bylaws and of its Board of Directors' resolutions (and
resolutions of other bodies, if any are deemed necessary by counsel for any
Bank) authorizing the execution of the Credit Documents.
(c) An incumbency certificate, executed by the Secretary or an
Assistant Secretary of the Company, which shall identify by name and title and
bear the original or facsimile signature of the officers of the Company
authorized to sign the Credit Documents and the officers or other employees
authorized to make borrowings hereunder, upon which certificate the Banks shall
be entitled to rely until informed of any change in writing by the Company.
(d) A certificate, signed by a Designated Officer of the Company,
stating that on the date hereof no Default or Event of Default has occurred and
is continuing.
(e) 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 $250,000,000 pursuant to the Bond Delivery Agreement.
(f) Favorable opinions of: (i) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., Deputy
General Counsel of the Company, as to the matters set forth in Exhibit B-1 and
as to such other matters as the Agent may reasonably request; and (ii) Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ 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. Such opinions shall be addressed to the Agent and the Banks
and shall be satisfactory in form and substance to the Agent.
(g) Evidence satisfactory to the Agent that the Prior Agreement shall
have been or shall simultaneously on the Initial Borrowing Date be terminated
(except for those provisions that expressly survive the termination thereof) and
all loans outstanding and other amounts owed to the lenders or agents thereunder
shall have been, or shall simultaneously with the initial Credit Extension
hereunder be, paid in full.
36
(h) Evidence satisfactory to the Agent that the initial "Credit
Extension" under and as defined in the Term Loan Agreement shall have been made
or shall be made simultaneously with the initial Credit Extension hereunder.
(i) Evidence, in form and substance satisfactory to the Agent, that the
Company has obtained all governmental approvals, if any, necessary for it to
enter into the Credit Documents.
(j) Such other documents as any Bank or its counsel may have reasonably
requested.
It shall be a further condition precedent to the making of the initial Credit
Extension hereunder that the Company shall have paid (i) to the Agent for the
account of the Banks the fees required to be paid on the Initial Borrowing Date
and (ii) to the Agent and the Arranger the fees required to be paid to them
pursuant to the fee letter described in Section 13.12.
11.2 Each Credit Extension. The Banks shall not be required to make any
Credit Extension unless on the applicable Borrowing Date, (i) no Default or
Event of Default exists, (ii) the representations and warranties contained in
Article V are true and correct as of such Borrowing Date, (iii) after giving
effect to such Credit Extension the Aggregate Outstanding Credit Exposure, plus
all accrued and unpaid Commitment Fees, LC Fees and interest hereunder, will not
exceed the sum of (x) the Face Amount of all Interest Bearing Bonds plus (y) the
Discounted Amount of all Zero Rate Bonds and (iv) all legal matters incident to
the making of such Credit Extension are satisfactory to the Banks and their
counsel. Each Borrowing Notice and each request for issuance of a Facility LC
shall constitute a representation and warranty by the Company that the
conditions contained in subsections (i), (ii) and (iii) above will be satisfied
on the relevant Borrowing Date. For the avoidance of doubt, the conversion or
continuation of an Advance shall not be considered the making of a Credit
Extension.
ARTICLE XII
GENERAL PROVISIONS
12.1 Successors and Assigns. (a) The terms and provisions of the Credit
Documents shall be binding upon and inure to the benefit of the Company and the
Banks and their respective successors and assigns, except that the Company shall
not have the right to assign its rights under the Credit Documents. Any Bank may
sell participations in all or a portion of its rights and obligations under this
Agreement pursuant to 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.
(a) 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 Commitment and its Outstanding Credit Exposure), provided that
(i) such Bank's obligations under this Agreement (including, without limitation,
its Commitment to the Company hereunder) shall remain unchanged, (ii) such Bank
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) such Bank shall remain the holder of the Outstanding
Credit Exposure of such Bank for all purposes of this Agreement and (iv) the
Company shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement. Each Bank shall
retain the sole right to approve, without the consent of any Participant, any
amendment,
37
modification or waiver of any provision of the Credit Documents other than any
amendment, modification or waiver with respect to any Loan or Commitment in
which such Participant has an interest which would require consent of all of the
Banks pursuant to the terms of Section 10.1 or of any other Credit Document. The
Company agrees that each Participant shall be deemed to have the right of setoff
provided in Section 12.11 in respect of its participating interest in amounts
owing under the Credit Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under the Credit
Documents, provided that each Bank shall retain the right of setoff provided in
Section 12.11 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.
(b) 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 (i) such Bank has received the Agent's and, so long as no Event of
Default exists, the Company's prior written consent to such assignment, which
consent shall not be unreasonably withheld, and (ii) the minimum principal
amount of any such assignment (other than assignments to a Federal Reserve Bank,
or to any other Bank or affiliate of such assigning Bank, or to any direct or
indirect contractual counterparties in swap agreements relating to the Loans to
the extent required in connection with the physical settlement of any Bank's
obligations pursuant thereto) shall be $5,000,000 (or such lesser amount
consented to by the Agent and, so long as no Event of Default shall be
continuing, the Company); provided, that after giving effect to such assignment
the assigning Bank shall have a Commitment of not less than $5,000,000 (unless
otherwise consented to by the Agent and, so long as no Event of Default shall be
continuing, the Company). Notwithstanding the foregoing sentence, any Bank may
at any time, without the consent of the Company or the Agent, assign all or any
portion of its rights under this Agreement to (i) a Federal Reserve Bank,
provided that no such assignment shall release the transferor Bank from its
obligations hereunder; and (ii) any Bank or any affiliate of such assigning
Bank, provided that the creditworthiness of such affiliate (as determined in
accordance with customary standards of the banking industry) is no less than
that of the assigning Bank; and (iii) any direct or indirect contractual
counterparties in swap agreements relating to the Loans to the extent required
in connection with the physical settlement of any Bank's obligations pursuant
thereto.
(c) 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
38
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.
(d) Assignments under this Section 12.1 shall be made pursuant to an
agreement ("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 of the assigning Bank or (iii) to any direct or indirect
contractual counterparties in swap agreements relating to the Loans to the
extent required in connection with the physical settlement of any Bank's
obligations pursuant thereto.
12.2 Survival of Representations. All representations and warranties of
the Company contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
12.3 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, neither the LC Issuer nor any Bank shall be
obligated to extend credit to the Company in violation of any limitation or
prohibition provided by any applicable statute or regulation.
12.4 Taxes. Any taxes (excluding income taxes) payable or ruled payable
by any Federal or State authority in respect of the execution of the Credit
Documents shall be paid by the Company, together with interest and penalties, if
any.
12.5 Choice of Law. THE CREDIT DOCUMENTS SHALL BE 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 UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY CREDIT DOCUMENT AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT. THE COMPANY HEREBY WAIVES ANY RIGHT TO A JURY
TRIAL IN ANY ACTION OR ARISING HEREUNDER OR UNDER ANY CREDIT DOCUMENT.
12.6 Headings. Section headings in the Credit Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Credit Documents.
39
12.7 Entire Agreement. The Credit Documents embody the entire agreement
and understanding between the Company, the LC Issuer, the Agent and the Banks
and supersede all prior agreements and understandings between the Company, the
LC Issuer, 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 reimburse the Agent
and the Arranger for (a) 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 Credit Documents and (b) 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 on its own behalf or on behalf of the LC Issuer or any Bank in
connection with the collection and enforcement of the Credit Documents. The
Company further agrees to indemnify the Agent, the Arranger, the LC Issuer and
each Bank and their respective directors, officers and employees 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, the LC Issuer 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 Credit Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Credit Extension 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 Agent, the Arranger, the
LC Issuer or any Bank. The obligations of the Company under this Section shall
survive the termination of this Agreement.
12.9 [Intentionally Omitted]
12.10 Severability of Provisions. Any provision in any Credit Document
that is held to be inoperative, unenforceable or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability or validity of that provision in any other jurisdiction, and to
this end the provisions of all Credit Documents are declared to be severable.
12.11 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.
40
12.12 Ratable Payments. If any Bank, whether by setoff or otherwise,
has payment made to it upon its Outstanding Credit Exposure in a greater
proportion than that received by any other Bank, such Bank agrees, promptly upon
demand, to purchase a portion of the Aggregate Outstanding Credit Exposure held
by the other Banks so that after such purchase each Bank will hold its Pro Rata
Share of the Aggregate Outstanding Credit Exposure. If any Bank, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Bank agrees, promptly upon demand, to take
such action necessary such that all Banks share in the benefits of such
collateral ratably in proportion to their respective Pro Rata Share of the
Aggregate Outstanding Credit Exposure. In case any such payment is disturbed by
legal process, or otherwise, appropriate further adjustments shall be made.
12.13 Nonliability of Bank. The relationship between the Company, on
the one hand, and the Banks, the LC Issuer and the Agent, on the other hand,
shall be solely that of borrower and lender. Neither the Agent, the Arranger,
the LC Issuer nor any Bank shall have any fiduciary responsibilities to the
Company. Neither the Agent, the Arranger, the LC Issuer 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, the LC Issuer 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 Credit
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Agent, the Arranger, the LC Issuer nor any Bank shall have any liability with
respect to, and the Company hereby waives, releases and agrees not to ▇▇▇ for,
any special, indirect, consequential or punitive damages suffered by the Company
in connection with, arising out of, or in any way related to the Credit
Documents or the transactions contemplated thereby.
ARTICLE XIII
THE AGENT
13.1 Appointment. Bank One, NA (Main Office -- Chicago) 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.
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
41
obligation to the Banks to take any action hereunder except any action
specifically provided by this Agreement to be taken by the Agent.
13.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Banks or any Bank for any
action taken or omitted to be taken by it or them hereunder or in connection
herewith except for its or their own gross negligence or willful misconduct.
13.4 No Responsibility for Loans, Recitals, Etc. The Agent shall not be
responsible to the Banks for any recitals, reports, statements, warranties or
representations herein or in any Credit Document or be bound to ascertain or
inquire as to the performance or observance of any of the terms of this
Agreement.
13.5 Action on Instructions of Banks. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Credit Document in accordance with written instructions signed by the
Majority Banks (or all of the Banks if required by Section 10.1), and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Banks. The Banks hereby acknowledge that the Agent shall
be under no duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Credit Document unless
it shall be requested in writing to do so by the Majority Banks. The Agent shall
be fully justified in failing or refusing to take any action hereunder and under
any other Credit Document unless it shall first be indemnified to its
satisfaction by the Banks pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.
13.6 Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder by or through employees, agents and attorneys-in-fact
and shall not be answerable to the Banks, except as to money or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. The Agent
shall be entitled to advice of counsel concerning all matters pertaining to the
agency hereby created and its duties hereunder.
13.7 Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
13.8 Agent's Reimbursement and Indemnification. The Banks agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by the Company for which the
Agent is entitled to reimbursement by the Company under the Credit Documents,
(ii) for any other expenses reasonably incurred by the Agent on behalf of the
Banks, in connection with the preparation, execution, delivery, administration
and enforcement of the Credit Documents, and for which the Agent is not entitled
to reimbursement by the Company under the Credit Documents, and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or
42
asserted against the Agent in any way relating to or arising out of this
Agreement or any other document delivered in connection with this Agreement or
the transactions contemplated hereby or the enforcement of any of the terms
hereof or of any such other documents, and for which the Agent is not entitled
to reimbursement by the Company under the Credit Documents, provided that no
Bank shall be liable for any of the foregoing to the extent they arise from the
gross negligence or willful misconduct of the Agent.
13.9 Rights as a Lender. With respect to its Commitment and any Credit
Extension made by it, the Agent shall have the same rights and powers hereunder
as any Bank and may exercise the same as though it were not the Agent, and the
term "Bank" or "Banks" shall, unless the context otherwise indicates, include
Bank One in its individual capacity. The Agent may accept deposits from, lend
money to, and generally engage in any kind of banking or trust business with the
Company or any Subsidiary as if it were not the Agent.
13.10 Bank Credit Decision. 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 Banc One Capital Markets, Inc. (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 July 9, 2002, or as otherwise agreed from
time to time.
43
ARTICLE XIV
NOTICES
14.1 Giving Notice. Except as otherwise permitted by Section 2.8 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Company or the Agent or the LC Issuer, at its address or
facsimile number set forth on the signature pages hereof, (y) in the case of any
Bank, at its address or facsimile number set forth below its signature hereto or
(z) in the case of any party, at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Agent and the
Company in accordance with the provisions of this Section 14.1. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iii) if given by any other means,
when delivered (or, in the case of electronic transmission, received) at the
address specified in this Section; provided that notices to the Agent under
Article II shall not be effective until received.
14.2 Change of Address. The Company, the Agent and any Bank may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
44
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, the LC Issuer 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, the LC Issuer and the Agent
have executed this Agreement as of the date first above written.
CONSUMERS ENERGY COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇)▇▇▇-▇▇▇▇
Confirmation (Phone) No: (▇▇▇)▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
45
BANK ONE, NA (MAIN OFFICE -
CHICAGO), Individually and as Agent and as
LC Issuer
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Director
ADDRESS:
Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation (Phone) No: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇_▇▇▇@▇▇▇▇▇▇▇.▇▇▇
46
CITIBANK, N.A.
By: /s/ J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name: J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
ADDRESS: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation (Phone) No: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇.▇▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇
47
▇▇ ▇▇▇▇▇▇ CHASE BANK
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
ADDRESS (CREDIT MATTERS ONLY):
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (212) - 270-3089
Confirmation (Phone) No: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
48
BARCLAYS BANK PLC
By:/s/ Sydney ▇. ▇▇▇▇▇▇
--------------------
Name: Sydney ▇. ▇▇▇▇▇▇
Title: Director
ADDRESS: ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:Sydney ▇. ▇▇▇▇▇▇
Facsimile No.:(▇▇▇)▇▇▇-▇▇▇▇ -
Confirmation (Phone) No:(▇▇▇)▇▇▇-▇▇▇▇ -
E-Mail Address:▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ADDRESS: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.:(▇▇▇)▇▇▇-▇▇▇▇
Confirmation (Phone) No:(▇▇▇)▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇
50
COMERICA BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
ADDRESS: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile No.: (▇▇▇)▇▇▇-▇▇▇▇
Confirmation (Phone) No: (▇▇▇)▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇_▇_▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
51
EXHIBIT A
[FORM OF SUPPLEMENTAL INDENTURE]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EIGHTY-FIRST SUPPLEMENTAL INDENTURE
PROVIDING AMONG OTHER THINGS FOR
FIRST MORTGAGE BONDS,
COLLATERAL SERIES (INTEREST BEARING) DUE 2003
and
COLLATERAL SERIES (ZERO RATE) DUE 2003
--------------
DATED AS OF JULY 12, 2002
--------------
CONSUMERS ENERGY COMPANY
TO
JPMORGAN CHASE BANK,
TRUSTEE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
THIS EIGHTY-FIRST SUPPLEMENTAL INDENTURE, dated as of July 12, 2002
(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 ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, in the Borough of Manhattan,
The City of ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (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, ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank merged
with ▇▇▇▇▇▇ 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 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 364 Day Credit Agreement dated
as of July 12, 2002 (as amended or otherwise modified from time to time, the
"Credit Agreement") with various financial institutions and Bank One, NA, as
administrative agent (in such capacity, the "Agent") for the Banks (as such term
is defined in the Credit Agreement), providing for the making of certain
financial accommodations thereunder, and pursuant to such Credit 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 Credit Agreement), two (2) new
series of bonds under the Indenture; and
WHEREAS, for such purposes the Company desires to issue: (i) a new
series of bonds, to be designated First Mortgage Bonds, Collateral Series
(Interest Bearing) due 2003, each of which bonds shall also bear the descriptive
title "First Mortgage Bond" (hereinafter provided for and hereinafter sometimes
referred to as the "2003 Interest Bearing Collateral 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 July 11, 2003;
and (ii) a new series of bonds, to be designated First Mortgage Bonds,
Collateral Series (Zero Rate) due 2003,
2
each of which bonds shall also bear the descriptive title "First Mortgage Bond"
(hereinafter provided for and hereinafter sometimes referred to as the "2003
Zero Rate Collateral Bonds"), the bonds of which series are to be issued as
registered bonds without coupons and are to mature July 11, 2003; and
WHEREAS, each of the registered bonds without coupons of the 2003
Interest Bearing Collateral Bonds and the Trustee's Authentication Certificate
thereon and the 2003 Zero Rate Collateral Bonds and the Trustee's Authentication
Certificate thereon are to be substantially in the following forms, to wit:
3
[FORM OF REGISTERED BOND
OF THE 2003 INTEREST BEARING COLLATERAL BONDS]
[FACE]
CONSUMERS ENERGY COMPANY
FIRST MORTGAGE BOND
COLLATERAL SERIES (INTEREST BEARING) DUE 2003
No. 1 $22,500,000
CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called
the "Company"), for value received, hereby promises to pay to Bank One, NA, as
agent (in such capacity, the "Agent") for the Banks under and as defined in the
364 Day Credit Agreement dated as of July 12, 2002 among the Company, the Banks
and the Agent (as amended or otherwise modified from time to time, the "Credit
Agreement"), or registered assigns, the principal sum of Twenty-Two Million Five
Hundred Thousand Dollars ($22,500,000) or such lesser principal amount as shall
be equal to the IB Percentage (as defined below) of the aggregate principal
amount of the Loans (as defined in the Credit Agreement) and Reimbursement
Obligations (as defined in the Credit Agreement) included in the Obligations (as
defined in the Credit Agreement) outstanding on July 11, 2003 (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 July 12, 2002. 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 Chicago, Illinois and 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) "IB Percentage"
means the difference between 100% and the ZR
4
Percentage (as defined below); (C) "Interest Payment Date" shall mean each date
on which Obligations constituting interest and/or fees are due and payable from
time to time pursuant to the Credit Agreement; (D) "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 Obligations constituting interest and
fees due under the Credit Agreement on the applicable Interest Payment Date; (E)
"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; and (F) "ZR Percentage" means the percentage (rounded, if necessary, to
the nearest or, if there is no nearest, the next higher 1/10 of 1%) which (x)
the Discounted Amount (as defined in the Credit Agreement) of the outstanding
Zero Rate Bonds (as defined in the Credit Agreement) is of (y) the sum of the
Discounted Amount of the outstanding Zero Rate Bonds and the Face Amount (as
defined in the Credit Agreement) of the outstanding First Mortgage Bonds,
Collateral Series (Interest Bearing) due 2003.
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:
--------------------------
5
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
[REVERSE]
CONSUMERS ENERGY COMPANY
FIRST MORTGAGE BOND
COLLATERAL SERIES (INTEREST BEARING) DUE 2003
This bond is one of the bonds of a series designated as First Mortgage
Bonds, Collateral Series (Interest Bearing) due 2003 (sometimes herein referred
to as the "2003 Interest Bearing Collateral 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 2003 Interest Bearing Collateral Bonds are to be issued and
delivered to the Agent in order to evidence and secure the obligation of the
Company under the Credit Agreement to make payments to the Banks under the
Credit Agreement and to provide the Banks the benefit of the lien of the
Indenture with respect to the 2003 Interest Bearing Collateral Bonds.
The obligation of the Company to make payments with respect to the
principal of 2003 Interest Bearing Collateral 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 IB Percentage
of the Loans and/or IB Percentage of the Reimbursement Obligations included in
the IB Percentage of the Obligations shall have been fully or partially paid.
Satisfaction of any obligation to the extent that payment is made with respect
to the IB Percentage of the Loans and/or the IB Percentage of the Reimbursement
Obligations means that if any payment is made on the principal of the IB
Percentage of the Loans and/or the IB Percentage of the Reimbursement
Obligations, a corresponding payment obligation with respect to the principal of
the 2003 Interest Bearing Collateral Bonds shall be deemed discharged in the
same amount as the payment with respect to the IB Percentage of the Loans and/or
the IB Percentage of the Reimbursement Obligations discharges the outstanding
obligation with respect to such IB Percentage of the Loans and/or IB Percentage
of the Reimbursement Obligations. No such payment of principal shall reduce the
principal amount of the 2003 Interest Bearing Collateral Bonds.
The obligation of the Company to make payments with respect to the
interest on 2003 Interest Bearing Collateral 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 IB Percentage of the then due interest
and/or fees under the Credit Agreement shall have been fully or partially
2
paid. Satisfaction of any obligation to the extent that payment is made with
respect to the IB Percentage of the interest and/or fees under the Credit
Agreement means that if any payment is made on the interest and/or fees under
the Credit Agreement, a corresponding payment obligation with respect to the
interest on the 2003 Interest Bearing Collateral Bonds shall be deemed
discharged in the same amount as the payment with respect to the IB Percentage
of the Loans and/or the IB Percentage of the Reimbursement Obligations
discharges the outstanding obligation with respect to such IB Percentage of the
Loans and/or IB Percentage of the Reimbursement Obligations.
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 2003 Interest Bearing Collateral 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 in connection with the Obligations pursuant to the
Credit Agreement, and (iii) the IB Percentage of the amount of the arrearage.
If an Event of Default (as defined in the Credit Agreement) with
respect to the payment of the principal of the Loans and/or the Reimbursement
Obligations 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 2003
Interest Bearing Collateral Bonds equal to the IB Percentage of the amount of
such unpaid principal or Reimbursement Obligations (but in no event in excess of
the principal amount of the 2003 Interest Bearing Collateral Bonds). If an Event
of Default (as defined in the Credit Agreement) with respect to the payment of
interest on the Loans and/or the Reimbursement Obligations or any 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 2003 Interest Bearing
Collateral Bonds equal to the IB Percentage of 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 Credit Agreement and
the acceleration of the Obligations, as provided in Section 9.2 of the Credit
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
3
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.
The Company reserves the right, without any consent, vote or other
action by holders of the 2003 Interest Bearing Collateral 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 Loans and Reimbursement Obligations arising
under the Credit Agreement, and all of the fees payable pursuant to the Credit
Agreement with respect to the Obligations shall have been duly paid, and the
Credit Agreement shall have been terminated.
[END OF FORM OF REGISTERED BOND
OF THE 2003 INTEREST BEARING COLLATERAL BONDS]
- - - - - - - - - - - - - - -
4
[FORM OF REGISTERED BOND
OF THE 2003 ZERO RATE COLLATERAL BONDS]
[FACE]
CONSUMERS ENERGY COMPANY
FIRST MORTGAGE BOND
COLLATERAL SERIES (ZERO RATE) DUE 2003
No. 1 $227,500,000
CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called
the "Company"), for value received, hereby promises to pay to Bank One, NA, as
agent (in such capacity, the "Agent") for the Banks under and as defined in the
364 Day Credit Agreement dated as of July 12, 2002 among the Company, the Banks
and the Agent (as amended or otherwise modified from time to time, the "Credit
Agreement"), or registered assigns, the principal sum of Two Hundred
Twenty-Seven Million Five Hundred Thousand Dollars ($227,500,000) or such lesser
principal amount as shall be equal to the ZR Percentage (as defined below) of
the aggregate Obligations (as defined in the Credit Agreement) consisting of (x)
the principal amount of the Loans (as defined in the Credit Agreement), (y) the
Reimbursement Obligations (as defined in the Credit Agreement) and (z) unpaid
interest and fees under the Credit Agreement. Such amount shall be payable on or
before July 11, 2003 (the "Maturity Date"). Any payment of interest and/or fees
under the Credit Agreement shall be considered a reduction of the principal
amount hereof in an amount equal to the ZR Percentage of such interest and/or
fees and shall reduce the principal amount hereof by such amount. If the
Maturity Date falls on a day which is not a Business Day, as defined below, all
amounts payable on the Maturity Date will be paid on the immediately preceding
Business Day. As used herein, (A) "Business Day" shall mean any day, other than
a Saturday or Sunday, on which banks generally are open in Chicago, Illinois and
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) "ZR Percentage" means the percentage (rounded, if necessary,
to the nearest or, if there is no nearest, the next higher 1/10 of 1%) which (x)
the Discounted Amount (as defined in the Credit Agreement) of the outstanding
First Mortgage Bonds, Collateral Series (Zero Rate) due 2003 is of (y) the sum
of the Discounted Amount of the outstanding First Mortgage Bonds, Collateral
Series (Zero Rate) due 2003 and the Face Amount (as defined in the Credit
Agreement) of the outstanding First Mortgage Bonds, Collateral Series (Interest
Bearing) due 2003.
Payment of the principal of 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. In the event the Company shall fail to pay the
principal amount of this bond at maturity, whether by acceleration or otherwise,
such principal amount
5
shall bear interest until paid in full at a rate per annum equal to the Floating
Rate (as defined in the Credit Agreement) plus 1%.
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:
------------------------
6
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
7
[REVERSE]
CONSUMERS ENERGY COMPANY
FIRST MORTGAGE BOND
COLLATERAL SERIES (ZERO RATE) DUE 2003
This bond is one of the bonds of a series designated as First Mortgage
Bonds, Collateral Series (Zero Rate) due 2003 (sometimes herein referred to as
the "2003 Zero Rate Collateral 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 2003 Zero Rate Collateral Bonds are to be issued and delivered to
the Agent in order to evidence and secure the obligation of the Company under
the Credit Agreement to make payments to the Banks and to provide the Banks the
benefit of the lien of the Indenture with respect to the 2003 Zero Rate
Collateral Bonds.
The obligation of the Company to make payments with respect to the
principal of 2003 Zero Rate Collateral 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 ZR Percentage of the
Loans and/or the ZR Percentage of the Reimbursement Obligations, and the
then-due ZR Percentage of payment obligations with respect to interest and/or
fees under the Credit Agreement, shall have been fully or partially paid.
Satisfaction of any obligation to the extent that payment is made with respect
to the ZR Percentage of the Loans, the ZR Percentage of the Reimbursement
Obligations, or the ZR Percentage of interest and/or fees under the Credit
Agreement means that if any payment is made on the principal of the ZR
Percentage of the Loans and/or the ZR Percentage of the Reimbursement
Obligations, or if any payment is made on the ZR Percentage of the interest
and/or fees under the Credit Agreement, a corresponding payment obligation with
respect to the principal of the 2003 Zero Rate Collateral Bonds shall be deemed
discharged in the same amount as the payment with respect to the ZR Percentage
of the Loans, the ZR Percentage of the Reimbursement Obligations, or the ZR
Percentage of the interest and/or fees discharges the outstanding obligation
with respect to such ZR Percentage of the Loans, ZR Percentage of the
Reimbursement Obligations, or the ZR Percentage of the interest and/or fees. No
payment of principal of the 2003 Zero Rate Collateral Bonds attributable to any
payment of the principal of Loans or Reimbursement Obligations shall reduce the
principal amount of the 2003 Zero Rate Collateral Bonds, but any payment of
-8-
principal of the 2003 Zero Rate Collateral Bonds attributable to any payment of
interest or fees under the Credit Agreement shall reduce the principal of the
2003 Zero Rate Collateral Bonds.
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 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 on
the 2003 Zero Rate Collateral 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 in
connection with the Obligations pursuant to the Credit Agreement, and (iii) the
ZR Percentage of the amount of the arrearage.
If an Event of Default (as defined in the Credit Agreement) with
respect to the payment of the principal of the Loans and/or the Reimbursement
Obligations and/or any interest 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 principal of the 2003 Zero Rate Collateral Bonds equal to the ZR Percentage
of the amount of such unpaid principal, Reimbursement Obligations, interest
and/or fees (but in no event in excess of the principal amount of the 2003 Zero
Rate Collateral Bonds).
This bond is not redeemable except upon written demand of the Agent
following the occurrence of an Event of Default under the Credit Agreement and
the acceleration of the Obligations, as provided in Section 9.2 of the Credit
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
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.
The Company reserves the right, without any consent, vote or other
action by holders of the 2003 Zero Rate Collateral Bonds or any other series
created after the Sixty-eighth Supplemental Indenture, to amend the Indenture to
reduce the percentage of the principal amount
-9-
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 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 Loans and Reimbursement Obligations arising
under the Credit Agreement, and all of the fees payable pursuant to the Credit
Agreement with respect to the Obligations shall have been duly paid, and the
Credit Agreement shall have been terminated.
[END OF FORM OF REGISTERED BOND
OF THE 2003 ZERO RATE COLLATERAL BONDS]
- - - - - - - - - - - - - - -
AND WHEREAS all acts and things necessary to make the 2003 Interest
Bearing Collateral Bonds and the 2003 Zero Rate Collateral Bonds (collectively
referred to herein as, the "Collateral 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
-10-
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 $22,500,000 principal
amount of the 2003 Interest Bearing Collateral Bonds and the $227,500,000
principal amount of the 2003 Zero Rate Collateral Bonds 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;
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
-11-
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 two (2) series of bonds (the "2003
Interest Bearing Collateral Bonds" and the "2003 Zero Rate Collateral Bonds")
designated as hereinabove provided, both of which shall also bear the
descriptive title "First Mortgage Bond", and the forms thereof shall be
substantially as hereinbefore set forth (collectively, the "Sample Bonds"). The
2003 Interest Bearing Collateral Bonds shall be issued in the aggregate
principal amount of $22,500,000, shall mature on July 11, 2003 and shall be
issued only as registered bonds without coupons in denominations of $1,000 and
any multiple thereof. The 2003 Zero Rate Collateral Bonds shall be issued in the
aggregate principal amount of $227,500,000, shall mature on July 11, 2003 and
shall be issued only as registered bonds without coupons in denominations of
$1,000 and any multiple thereof. The serial numbers of the Collateral 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 Collateral Bonds are to be issued to
and registered in the name of the Agent under the Credit Agreement (as such
terms are defined in the Sample Bonds) to evidence and secure any and all
Obligations (as such term is defined in the Credit Agreement) of the Company
under the Credit Agreement.
The 2003 Interest Bearing Collateral Bonds shall bear interest as set
forth in the Form of Registered Bond of the 2003 Interest Bearing Collateral
Bonds hereinbefore set forth (the "Interest Bearing Sample Bond"). The principal
of and the interest on said bonds shall be payable as set forth in the Interest
Bearing Sample Bond. The principal of the 2003 Zero Rate Collateral Bonds shall
be payable as set forth in the Form of Registered Bond of the 2003 Zero Rate
Collateral Bonds hereinbefore set forth (the "Zero Rate Sample Bond"). All
payments of interest with respect to the Obligations shall be applied to the
Collateral Bonds according to the IB Percentage (in the case of the 2003
Interest Bearing Collateral Bonds) or the ZR Percentage (in the case of the 2003
Zero Rate Collateral Bonds), as applicable. "IB Percentage" and "ZR Percentage"
shall have the meanings assigned to such terms in the Interest Bearing Sample
Bond and the Zero Rate Sample Bond, respectively.
The obligation of the Company to make payments with respect to the
principal of 2003 Interest Bearing Collateral 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 IB Percentage
of the Loans and/or IB Percentage of the Reimbursement Obligations included in
the IB Percentage of the Obligations shall have been fully or partially paid.
Satisfaction of any obligation to the extent that payment is made with respect
to the IB
-12-
Percentage of the Loans and/or the IB Percentage of the Reimbursement
Obligations means that if any payment is made on the principal of the IB
Percentage of the Loans and/or the IB Percentage of the Reimbursement
Obligations, a corresponding payment obligation with respect to the principal of
the 2003 Interest Bearing Collateral Bonds shall be deemed discharged in the
same amount as the payment with respect to the IB Percentage of the Loans and/or
the IB Percentage of the Reimbursement Obligations discharges the outstanding
obligation with respect to such IB Percentage of the Loans and/or IB Percentage
of the Reimbursement Obligations. No such payment of principal shall reduce the
principal amount of the 2003 Interest Bearing Collateral Bonds.
The obligation of the Company to make payments with respect to the
interest on 2003 Interest Bearing Collateral 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 IB Percentage of the then due interest
and/or fees under the Credit Agreement shall have been fully or partially paid.
Satisfaction of any obligation to the extent that payment is made with respect
to the IB Percentage of the interest and/or fees under the Credit Agreement
means that if any payment is made on the interest and/or fees under the Credit
Agreement, a corresponding payment obligation with respect to the interest on
the 2003 Interest Bearing Collateral Bonds shall be deemed discharged in the
same amount as the payment with respect to the IB Percentage of the Loans and/or
the IB Percentage of the Reimbursement Obligations discharges the outstanding
obligation with respect to such IB Percentage of the Loans and/or IB Percentage
of the Reimbursement Obligations.
The obligation of the Company to make payments with respect to the
principal of 2003 Zero Rate Collateral 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 ZR Percentage of the
Loans and/or the ZR Percentage of the Reimbursement Obligations, and the
then-due ZR Percentage of payment obligations with respect to interest and/or
fees under the Credit Agreement, shall have been fully or partially paid.
Satisfaction of any obligation to the extent that payment is made with respect
to the ZR Percentage of the Loans, the ZR Percentage of the Reimbursement
Obligations, or the ZR Percentage of interest and/or fees under the Credit
Agreement means that if any payment is made on the principal of the ZR
Percentage of the Loans and/or the ZR Percentage of the Reimbursement
Obligations, or if any payment is made on the ZR Percentage of the interest
and/or fees under the Credit Agreement, a corresponding payment obligation with
respect to the principal of the 2003 Zero Rate Collateral Bonds shall be deemed
discharged in the same amount as the payment with respect to the ZR Percentage
of the Loans, the ZR Percentage of the Reimbursement Obligations, or the ZR
Percentage of the interest and/or fees discharges the outstanding obligation
with respect to such ZR Percentage of the Loans, ZR Percentage of the
Reimbursement Obligations, or the ZR Percentage of the interest and/or fees. No
payment of principal of the 2003 Zero Rate Collateral Bonds attributable to any
payment of the principal of Loans or Reimbursement Obligations shall reduce the
principal amount of the 2003 Zero Rate Collateral Bonds, but any payment of
principal of the 2003 Zero Rate Collateral Bonds attributable to any payment of
interest or fees under the Credit Agreement shall be applied to reduce the
principal of the 2003 Zero Rate Collateral Bonds.
-13-
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 Collateral 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 2003 Interest Bearing Collateral Bonds
has not been made or that timely payment of principal on the 2003 Zero Rate
Collateral 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 Credit
Agreement, and (iii) the amount of the arrearage.
The Collateral 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 Collateral 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 Credit
Agreement and the acceleration of the Obligations, the Collateral 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 Credit Agreement both an Event
of Default and a declaration of acceleration of the Obligations and demanding
redemption of the Collateral 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 Collateral Bonds by the Agent to the Trustee,
the Collateral 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 Collateral 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:
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
-14-
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 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
-15-
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 Credit 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 Chicago, Illinois and
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.
SECTION 10. This Supplemental Indenture and the Collateral 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.
-16-
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, 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
-17-
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 ▇▇▇▇▇
and well lines (but not including natural gas, oil and minerals), the gas
gathering system, the underground gas storage rights, the underground gas
storage ▇▇▇▇▇ 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 in the Township of Salem,
Washtenaw County, Township of Lyon, Oakland County, and the Townships of
Northville and Plymouth and City of Plymouth, ▇▇▇▇▇ 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 ▇▇▇ Gas Storage Field, located in the Township
of ▇▇▇, 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 ▇▇▇,
St. Clair County, Michigan; in the Swan Creek Gas Storage Field, located in the
Township of Casco and ▇▇▇, St. Clair County, Michigan; and in the Hessen Gas
Storage Field, located in the Townships of Casco and Columbus, St. Clair,
Michigan.
-18-
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.
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
line 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
-19-
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 line 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 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 ▇▇▇ 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 ▇▇▇▇▇▇ and Green Townships, Alpena County, Michigan
described as:
-20-
All that part of the S'ly 1/2 of the former Boyne City-▇▇▇▇▇▇▇
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 ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇, 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 ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇,
▇▇▇; run thence South along the West line of said section, said West
line of said section being also the center line of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇.▇▇ 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" 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.
▇▇▇▇▇ COUNTY
Certain land in Johnstown Township, ▇▇▇▇▇ 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
-21-
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 ▇ ▇/▇ ▇▇
▇▇▇ ▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇, ▇▇▇.
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 ▇▇▇▇▇▇ 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 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.
▇▇▇▇▇▇▇ COUNTY
Certain land in ▇▇▇▇▇▇ Township, ▇▇▇▇▇▇▇ 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
-22-
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 ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇,
▇▇▇, ▇▇▇, 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 ▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇,
▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ 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.
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 ▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇,
▇▇▇, ▇▇▇.
-23-
▇▇▇▇▇▇▇▇ COUNTY
Certain land in Lovells Township, ▇▇▇▇▇▇▇▇ County, Michigan described
as:
A parcel of land in ▇▇▇▇▇▇▇ ▇, ▇▇▇▇, ▇▇▇, 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.
▇▇▇▇▇ COUNTY
Certain land in ▇▇▇▇▇ Township, ▇▇▇▇▇ 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 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 ▇▇▇▇▇▇▇▇▇ ▇/▇ ▇▇
▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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 ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇, ▇▇▇; 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 ▇▇▇▇▇▇▇▇ Road, 100 feet wide (as
now
-24-
established); thence S01 degrees42'56"E along the West line of said
▇▇▇▇▇▇▇▇ Road a distance of 500 feet to the point of beginning.
GLADWIN COUNTY
Certain land in ▇▇▇▇▇▇ Township, Gladwin County, Michigan described as:
The East 400 feet of the South 450 feet of ▇▇▇▇▇▇▇ ▇, ▇▇▇▇,
▇▇▇.
GRAND TRAVERSE COUNTY
Certain land in ▇▇▇▇▇▇▇▇ Township, Grand Traverse County, Michigan
described as:
A parcel of land in the ▇▇▇▇▇▇▇▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇,
▇▇▇▇, 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 ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ 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.
GRATIOT COUNTY
Certain land in ▇▇▇▇▇▇ 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
▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ Street; thence West along the North line of ▇▇▇▇▇▇
Street 100 feet to place of beginning.
HILLSDALE COUNTY
Certain land in Litchfield Village, Hillsdale County, Michigan
described as:
▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇) ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ 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 ▇▇▇▇▇▇▇▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ land in Vevay Township, ▇▇▇▇▇▇ County, Michigan described as:
-25-
A parcel of land 660 feet wide in the Southwest 1/4 of Section
7 lying South of the centerline of ▇▇▇▇▇ Road as extended to the
North-South 1/4 line of said ▇▇▇▇▇▇▇ ▇, ▇▇▇, ▇▇▇, 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 ▇▇▇▇▇ 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 ▇▇▇▇▇ 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:
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 ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇,
▇▇▇, ▇▇▇, 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.
▇▇▇▇▇▇▇▇ COUNTY
-26-
Certain land in Chippewa Township, ▇▇▇▇▇▇▇▇ County, Michigan described
as:
The North 8 rods of the NE 1/4 of the SE 1/4 of Section 29,
T14N, R3W.
▇▇▇▇▇▇▇ COUNTY
Certain land in Waterloo Township, ▇▇▇▇▇▇▇ 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 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 ▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇, his wife, dated October 9, 1934 and recorded
December 28, 1934 in Liber 39 on page 291 of
-27-
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 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 ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇, ▇▇▇▇ 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 ▇▇▇▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇, ▇▇▇▇. 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 ▇▇▇▇▇▇▇ ▇, ▇▇▇▇, ▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ land in ▇▇▇▇▇▇ Township, Lapeer County, Michigan described as:
The South 825 feet of the W 1/2 of the ▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇,
▇▇▇, ▇▇▇, except the West 1064 feet thereof.
LEELANAU COUNTY
Certain land in Cleveland Township, Leelanau County, Michigan described
as:
-28-
The North 200 feet of the West 180 feet of the SW 1/4 of the
▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ 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 ▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇, ▇▇▇, 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.
▇▇▇▇▇▇▇▇▇▇ COUNTY
Certain land in Cohoctah Township, ▇▇▇▇▇▇▇▇▇▇ County, Michigan
described as:
Parcel 1
The East 390 feet of the East 50 rods of the ▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇
▇▇, ▇▇▇, ▇▇▇.
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. ▇▇▇▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇▇ 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.
-29-
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.
▇▇▇▇▇ COUNTY
Certain land in Riverton Township, ▇▇▇▇▇ 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 ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 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:
-30-
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 ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇,
▇▇▇, between the Southwest and Northwest corners of said section
assumed as North.)
MONROE COUNTY
Certain land in ▇▇▇▇▇▇▇▇▇ Township, Monroe County, Michigan described
as:
A parcel of land in the ▇▇▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇, ▇▇▇,
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 ▇▇▇▇▇▇▇, Montmorency County, Michigan
described as:
▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, being a subdivision in the
South 1/2 of the ▇▇▇▇▇▇▇▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇, 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.
-31-
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 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 ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇
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 ▇▇▇▇▇▇ Township, Osceola County, Michigan described as:
A parcel of land in the North 1/2 of the ▇▇▇▇▇▇▇▇▇ ▇/▇ ▇▇
▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇, 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
-32-
Certain land in ▇▇▇▇▇▇ Township, Oscoda County, Michigan described as:
The East 400 feet of the South 580 feet of the ▇ ▇/▇ ▇▇ ▇▇▇ ▇▇
▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇.
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 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 ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ and Pulawski Townships, Presque Isle County,
Michigan described as:
Part of the South half of the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇, ▇▇▇, and part of the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇,
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 ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, extended, in ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ land in ▇▇▇▇▇▇▇ Township, Roscommon County, Michigan described
as:
-33-
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.
SAGINAW COUNTY
Certain land in ▇▇▇▇▇▇ 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 ▇▇▇▇▇ Township, Shiawassee County, Michigan described
as:
The South 330 feet of the ▇ ▇/▇ ▇▇ ▇▇▇ ▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇,
▇▇▇, ▇▇▇.
ST. CLAIR COUNTY
Certain land in ▇▇▇ 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. ▇▇▇▇▇▇ COUNTY
Certain land in Mendon Township, St. ▇▇▇▇▇▇ County, Michigan described
as:
-34-
The North 660 feet of the West 660 feet of the NW 1/4 of ▇▇
▇/▇, ▇▇▇▇▇▇▇ ▇▇, ▇▇▇, ▇▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇, ▇▇▇, ▇▇▇, 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 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;
-35-
thence N 00 degrees22' 20" W, 660 feet; thence S 86 degrees 36' 57" W,
660.91 feet to the place of beginning.
▇▇▇▇▇ COUNTY
Certain land in Livonia City, ▇▇▇▇▇ County, Michigan described as:
Commencing at the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇, ▇▇▇;
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; 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 9401(5)
of the Michigan Uniform Commercial Code (M.C.L. 440.9401(5)) as defined in
M.C.L. 440.9105(n).
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.
CONSUMERS ENERGY COMPANY
By___________________________
Printed
Title
-36-
_____________________
Printed
Title
Signed, sealed and delivered
by CONSUMERS ENERGY COMPANY
in the presence of
_____________________
Name Printed
_____________________
Name Printed
-37-
STATE OF MICHIGAN )
ss.
COUNTY OF ▇▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this ___ day of
July, 2002, by ____________________, ___________________of CONSUMERS ENERGY
COMPANY, a Michigan corporation, on behalf of the corporation.
________________________________
_________________, Notary Public
_______________ County, Michigan
My Commission Expires: _____________, 200__
-38-
JPMORGAN CHASE BANK, AS TRUSTEE
By___________________________
Printed
Title
S-1
STATE OF NEW YORK )
ss.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this ___ day of
July, 2002, by ____________________, ___________________of JPMORGAN CHASE BANK,
a New York corporation, on behalf of the corporation.
________________________________
_________________, Notary Public
_______________ County, New York
My Commission Expires: _____________, 200__
Prepared by: When recorded, return to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Consumers Energy Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ General Services Real ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P-21-410B
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇-▇
▇▇▇▇▇▇▇ ▇-▇
REQUIRED OPINIONS FROM
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ESQ.
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Michigan.
2. The execution and delivery of the Credit Documents by the Company
and the performance by the Company of the Obligations have been duly authorized
by all necessary corporate action and proceedings on the part of the Company and
will not:
(a) contravene the Company's Restated Articles of
Incorporation, as amended, or bylaws;
(b) contravene any law or any contractual restriction imposed
by any indenture or any other agreement or instrument evidencing or
governing indebtedness for borrowed money of the Company; or
(c) result in or require the creation of any Lien upon or with
respect to any of the Company's properties except the lien of the
Indenture securing the Bonds and any Lien in favor of the Agent on the
Facility LC Collateral Account or any funds therein.
3. The Credit Documents have been duly executed and delivered by the
Company.
4. To the best of my knowledge, there is no pending or threatened
action or proceeding against the Company or any of its Consolidated Subsidiaries
before any court, governmental agency or arbitrator (except (i) to the extent
described in the Company's annual report on Form 10-K for the year ended
December 31, 2001, quarterly report on Form 10-Q for the quarter ended March 31,
2002, and current report on Form 8-K filed by the Company on May 29, 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 Credit Document. To the best of my knowledge, there is no litigation
challenging the validity or the enforceability of any of the Credit 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 Credit Document,
except for the authorization to issue, sell or guarantee secured and/or
unsecured short-term debt granted by the Federal Energy Regulatory
B-1
Commission in Docket No. ES02-37-000 (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).
B-2
EXHIBIT B-2
REQUIRED OPINIONS FROM
SKADDEN, ARPS, SLATE, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
1. The execution and delivery of the Credit Documents by the Company
and the performance by the Company of the Obligations will not:
(a) contravene any contractual restriction imposed by the
Company Indentures; or
(b) result in or require the creation of any Lien upon or with
respect to any of the Company's properties pursuant to either of the
Company Indentures.
2. 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).
"Company Indentures" means (i) the Indenture dated as of January 1,
1996, as supplemented and amended from time to time, between the Company
(formerly known as Consumers Power Company) and The Bank of New York, as
Trustee, and (ii) the Indenture dated as of February 1, 1998, as supplemented
and amended from time to time, between the Company and ▇▇ ▇▇▇▇▇▇ Chase Bank
(formerly known as The Chase Manhattan Bank), as Trustee.
B-3
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.
B-4
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
I, _________________, ______________ of Consumers Energy Company, a
Michigan corporation (the "Company"), DO HEREBY CERTIFY in connection with the
364 Day Credit Agreement dated as of July 12, 2002 (the "Credit Agreement"; the
terms defined therein being used herein as so defined) among the Company,
various financial institutions and Bank One, NA (Main Office -- Chicago), as
Agent, that:
I. Section 8.1 of the Credit Agreement provides that the Company shall:
"At all times, maintain a ratio of Total Consolidated Debt to Total
Consolidated Capitalization of not greater than 0.65 to 1.0."
The following calculations are made in accordance with the definitions
of Total Consolidated Debt and Total Consolidated Capitalization in the
Credit Agreement and are correct and accurate as of
_____________, ___:
A. Total Consolidated Debt
-----------------------
(a) Indebtedness for borrowed money $
plus (b) Indebtedness for deferred purchase price of
property/services
plus (c) 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
plus (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
minus (k) Agreed upon percentage of Net Proceeds
C-1
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 Credit 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) cash 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 Credit
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) For any fiscal period ending prior to March 31, $
2003, pre-tax write-off for the fiscal
C-2
period ending December 31, 2001 in an amount not to exceed
$126,000,000 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
_________, ___.
C-3
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 Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Agent as contemplated below, the interest in and to all of the Assignor's
rights and obligations in its capacity as a Bank under the Credit Agreement and
any other documents or instruments delivered pursuant thereto that represents
the amount and percentage interest identified below of all of the Assignor's
outstanding rights and obligations under the respective facilities identified
below (including without limitation any letters of credit, guaranties and
swingline loans included in such facilities and, 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 Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby) (the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor:
-----------------------------------------------------
2. Assignee: [and is
-----------------------------------------------------
an affiliate of Assignor]
3. Borrower: CONSUMERS ENERGY COMPANY
4. Agent: Bank One, NA, as the Agent under the Credit Agreement.
5. Credit Agreement: The 364 Day Credit Agreement dated as of July 12, 2002
among Consumers Energy Company, the Banks party thereto, and Bank One, NA, as
Agent.
D-1
6. Assigned Interest:
-------------------------------------------------------------------------------------------------------------------------------
Aggregate Amount of Amount of Commitment/ Percentage Assigned of
Facility Assigned Commitment/ Outstanding Credit Exposure Commitment/ Outstanding Credit
Credit Exposure for all Assigned* Exposure2
Banks*
-------------------------------------------------------------------------------------------------------------------------------
____________ $ $ _______%
-------------------------------------------------------------------------------------------------------------------------------
____________ $ $ _______%
-------------------------------------------------------------------------------------------------------------------------------
____________ $ $ _______%
-------------------------------------------------------------------------------------------------------------------------------
7. Trade Date: (4)
--------------------------------------------
Effective Date: , 20 TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE AGENT.]
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](5) Accepted:
BANK ONE, NA, as Agent
By:
-----------------------------------------
Title:
[Consented to:](6)
*Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Banks thereunder.
(4) Insert if satisfaction of minimum amounts is to be determined as of the
Trade Date.
(5) To be added only if the consent of the Agent is required by the terms of the
Credit Agreement.
D-2
(6) To be added only if the consent of the Company and/or other parties (e.g. LC
Issuer) is required by the terms of the Credit Agreement.
[NAME OF RELEVANT PARTY]
By:
-----------------------------------
Title:
D-3
ANNEX 1
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor represents and warrants that (i) it
is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby. Neither the Assignor nor any of its officers,
directors, employees, agents or attorneys shall be responsible for (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Credit Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency, perfection, priority,
collectibility, or value of the Credit Documents or any collateral thereunder,
(iii) the financial condition of the Company, any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any Credit Document, (iv)
the performance or observance by the Company, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Credit Document, (v) inspecting any of the property, books or records of the
Company, or any guarantor, or (vi) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Credit Extensions or the
Credit Documents.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Bank under the Credit Agreement, (ii) from
and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Bank thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Bank thereunder, (iii) agrees that its payment
instructions and notice instructions are as set forth in Schedule 1 to this
Assignment and Assumption, (iv) confirms that none of the funds, monies, assets
or other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Credit Documents will not be "plan assets" under
ERISA, (v) agrees to indemnify and hold the Assignor harmless against all
losses, costs and expenses (including, 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 Credit
Agreement, together with copies of financial statements and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Agent or any other Bank, and (vii)
attached as Schedule 1 to this Assignment and Assumption is any documentation
required to be delivered by the Assignee with respect to its tax status pursuant
to the terms of the Credit Agreement, duly completed and executed by the
Assignee 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 Credit Documents, and
D-4
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Credit Documents are required to be performed by it as a
Bank.
2. Payments. The Assignee shall pay the Assignor, on the
Effective Date, the amount agreed to by the Assignor and the Assignee. From and
after the Effective Date, the Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, Reimbursement
Obligations, fees and other amounts) to the Assignor for amounts which have
accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of Illinois.
D-5
ADMINISTRATIVE QUESTIONNAIRE
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
(For Forms for Primary Syndication call ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at 312-732-8844)
(For Forms after Primary Syndication call ▇▇▇ ▇▇▇▇▇ at ▇▇▇-▇▇▇-▇▇▇▇)
D-6
US AND NON-US TAX INFORMATION REPORTING REQUIREMENTS
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
(For Forms for Primary Syndication call ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at 312-732-8844)
(For Forms after Primary Syndication call ▇▇▇ ▇▇▇▇▇ at ▇▇▇-▇▇▇-▇▇▇▇)
D-7
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.
E-1
This Article shall constitute a continuing obligation to all
Persons who, in reliance upon such provisions become holders of, or continue to
hold, Senior Indebtedness, and such provisions are made for the benefit of the
holders of Senior Indebtedness, and such holders are made obligees hereunder and
they and/or each of them may enforce such provisions.
Section ___.2 Issuer Not to Make Payments with Respect to
Subordinated Securities in Certain Circumstances.
(a) Upon the maturity of any Senior Indebtedness by lapse of
time, acceleration or otherwise, all principal thereof and premium and interest
thereon shall first be paid in full, or such payment duly provided for in cash
in a manner satisfactory to the holders of such Senior Indebtedness, before any
payment is made on account of the principal of, or interest on, Subordinated
Securities or to acquire any Subordinated Securities or on account of any
sinking fund provisions of any Subordinated Securities (except payments made in
capital stock of the Issuer or in warrants, rights or options to purchase or
acquire capital stock of the Issuer, sinking fund payments made in Subordinated
Securities acquired by the Issuer before the maturity of such Senior
Indebtedness, and payments made through the exchange of other debt obligations
of the Issuer for such Subordinated Securities in accordance with the terms of
such Subordinated Securities, provided that such debt obligations are
subordinated to Senior Indebtedness at least to the extent that the Subordinated
Securities for which they are exchanged are so subordinated pursuant to this
Article ____).
(b) Upon the happening and during the continuation of any
default in payment of the principal of, or interest on, any Senior Indebtedness
when the same becomes due and payable or in the event any judicial proceeding
shall be pending with respect to any such default, then, unless and until such
default shall have been cured or waived or shall have ceased to exist, no
payment shall be made by the Issuer with respect to the principal of, or
interest on, Subordinated Securities or to acquire any Subordinated Securities
or on account of any sinking fund provisions of Subordinated Securities (except
payments made in capital stock of the Issuer or in warrants, rights, or options
to purchase or acquire capital stock of the Issuer, sinking fund payments made
in Subordinated Securities acquired by the Issuer before such default and notice
thereof, and payments made through the exchange of other debt obligations of the
Issuer for such Subordinated Securities in accordance with the terms of such
Subordinated Securities, provided that such debt obligations are subordinated to
Senior Indebtedness at least to the extent that the Subordinated Securities for
which they are exchanged are so subordinated pursuant to this Article ____).
(c) In the event that, notwithstanding the provisions of this
Section ___.2, the Issuer shall make any payment to the Trustee on account of
the principal of or interest on Subordinated Securities, or on account of any
sinking fund provisions of such 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
E-2
paid forthwith over and delivered to, the holders of such Senior Indebtedness
(pro rata as to each of such holders on the basis of the respective amounts of
Senior Indebtedness held by them) or their representative or the trustee under
the indenture or other agreement (if any) pursuant to which such Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of all such Senior Indebtedness remaining unpaid to
the extent necessary to pay the same in full in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness. The Issuer shall give prompt written notice to the Trustee
of any default in the payment of principal of or interest on any Senior
Indebtedness.
Section ___.3 Subordinated Securities Subordinated to Prior
Payment of All Senior Indebtedness on Dissolution, Liquidation or Reorganization
of Issuer. Upon any distribution of assets of the Issuer in any dissolution,
winding up, liquidation or reorganization of the Issuer (whether voluntary or
involuntary, in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payments in full of the principal thereof and premium and
interest due thereon, or provision shall be made for such payment, before the
Holders of Subordinated Securities are entitled to receive any payment on
account of the principal of or interest on such 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)
E-3
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
E-4
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
E-5
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
E-6
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 ____.
E-7
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.
F-1
EXHIBIT G
FORM OF BOND DELIVERY AGREEMENT
BOND DELIVERY AGREEMENT
CONSUMERS ENERGY COMPANY
TO
BANK ONE, NA, AS AGENT
Dated as of July 12, 2002
---------------
Relating to
First Mortgage Bonds,
Collateral Series (Zero Rate) due 2003
and
Collateral Series (Interest Bearing) due 2003
---------------
G-1
THIS BOND DELIVERY AGREEMENT (this "Agreement"), dated as of July 12,
2002, is between Consumers Energy Company (the "Company"), and Bank One, NA, as
agent (the "Agent") under the 364 Day Credit Agreement (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement") dated as of
July 12, 2002, 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 Credit
Agreement.
Whereas, the Company has entered into the Credit Agreement and may from
time to time make borrowings thereunder in accordance with the provisions
thereof;
Whereas, the Company has established its First Mortgage Bonds,
Collateral Series (Interest Bearing) due 2003 and its First Mortgage Bonds,
Collateral Series (Zero Rate) due 2003, in the aggregate principal amount of
$250,000,000 (collectively, the "Bonds"), to be issued under and in accordance
with the Eighty-first Supplemental Indenture dated as of July 12, 2002 (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 Credit 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 Credit Agreement as aforesaid, the Company hereby delivers to the Agent the
Bonds in the aggregate principal amount of $250,000,000, maturing on July __,
2003 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.
G-2
The Agent hereby acknowledges receipt of 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 Credit 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 Credit 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 the Commitments shall
have been terminated and all Obligations shall have been paid in full.
(b) Upon any permanent reduction in the Aggregate Commitment pursuant
to the terms of the Credit 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 Commitment; provided that the Agent shall not surrender Interest
Bearing Bonds at any time that Zero Rate Bonds are outstanding.
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]
G-3
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:
BANK ONE, NA, as Agent
----------------------------------
Name:
Title:
G-4
PRICING SCHEDULE
==================== ============== =============== =============== ================ ============== ===============
APPLICABLE LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
MARGIN STATUS STATUS STATUS STATUS STATUS STATUS
-------------------- -------------- --------------- --------------- ---------------- -------------- ---------------
Eurodollar 1.500% 2.000 % 2.000% 2.500% 2.750% 3.000 %
Rate
-------------------- -------------- --------------- --------------- ---------------- -------------- ---------------
Alternate 0.500% 1.000 % 1.000% 1.500% 1.750% 2.000 %
Base Rate
==================== ============== =============== =============== ================ ============== ===============
==================== ============== =============== =============== ================ ============== ===============
APPLICABLE LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
FEE RATE STATUS STATUS STATUS STATUS STATUS STATUS
==================== ============== =============== =============== ================ ============== ===============
Commitment 0.375% 0.375 % 0.375% 0.500% 0.500% 0.500%
Fee Rate
==================== ============== =============== =============== ================ ============== ===============
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if, on such date, the Company's
▇▇▇▇▇'▇ Rating is Baa1 or better and the Company's S&P Rating is BBB+ or better.
"Level II Status" exists at any date if, on such date, (i) the Company
has not qualified for Level I Status and (ii) the Company's ▇▇▇▇▇'▇ Rating is
Baa2 or better and the Company's S&P Rating is BBB or better.
"Level III Status" exists at any date if, on such date, (i) the Company
has not qualified for Level I Status or Level II Status and (ii) the Company's
▇▇▇▇▇'▇ Rating is Baa3 or better and the Company's S&P Rating is BBB- or better.
"Level IV Status" exists at any date if, on such date, (i) the Company
has not qualified for Level I Status, Level II Status or Level III Status and
(ii) the Company's ▇▇▇▇▇'▇ Rating is Ba1 or better and the Company's S&P Rating
is BB+ or better.
"Level V Status" exists at any date if, on such date, (i) the Company
has not qualified for Level I Status, Level II Status, Level III Status or Level
IV Status and (ii) the Company's ▇▇▇▇▇'▇ Rating is Ba2 or better and the
Company's S&P Rating is BB or better.
"Level VI Status" exists at any date if, on such date, the Company has
not qualified for Level I Status, Level II Status, Level III Status, Level IV
Status or Level V Status.
"▇▇▇▇▇'▇ Rating" means, at any time, the rating issued by Moody's and
then in effect with respect to the Company's Senior Debt.
G-5
"S&P Rating" means, at any time, the rating issued by S&P and then in
effect with respect to the Company's Senior Debt.
"Status" means either Level I Status, Level II Status, Level III
Status, Level IV Status, Level V Status or Level VI Status.
The Applicable Margin and Commitment Fee Rate shall be determined in
accordance with the foregoing table based on the Company's Status as determined
from its then-current Moody's and S&P Ratings. So long as the Company has Level
III Status or above, Status shall be determined by the higher of the Moody's and
S&P Ratings (or the midpoint Status in the event the Moody's and S&P Ratings are
separated by more than one Status level); so long as the Company has Level IV
Status or below, Status shall be determined by the lower of the Moody's and S&P
Ratings. The credit rating in effect on any date for the purposes of this
Schedule is that in effect at the close of business on such date. If at any time
the Company has no ▇▇▇▇▇'▇ Rating or no S&P Rating, Level VI Status shall exist.
G-6
COMMITMENT SCHEDULE
BANK COMMITMENT
---- ----------
Bank One, NA $ 47,000,000
Citibank, N.A. $ 47,000,000
JPMorgan Chase Bank $ 47,000,000
Barclays Bank PLC $ 47,000,000
Union Bank of California, N.A. $ 47,000,000
Comerica Bank $ 15,000,000
AGGREGATE COMMITMENT $250,000,000
G-7