PLEDGE AND SECURITY AGREEMENT
Exhibit 10.3
EXECUTION COPY
THIS PLEDGE AND SECURITY AGREEMENT (this “Security Agreement”), dated as of March 31, 2011, is
made by CMS ENERGY CORPORATION, a corporation organized and existing under the laws of the State of
Michigan (the “Grantor”), to BARCLAYS BANK PLC, as Administrative Agent (the “Administrative
Agent”) for the financial institutions (the “Banks”) from time to time parties to the Credit
Agreement (as hereinafter defined).
(1) The Grantor, the Banks and the Administrative Agent have entered into that certain Credit
Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”).
(2) The Grantor is the owner of the Collateral described in Exhibit “A” hereto.
(3) It is a condition precedent to the effectiveness of the Credit Agreement that the Grantor
shall have made the pledge contemplated by this Agreement.
ARTICLE I
DEFINITIONS
DEFINITIONS
1.1. Terms Defined in Credit Agreement. All capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.
1.2. Terms Defined in New York Uniform Commercial Code. Terms defined in the New York
UCC which are not otherwise defined in this Security Agreement are used herein as defined in the
New York UCC.
1.3. Definitions of Certain Terms Used Herein. As used in this Security Agreement, in
addition to the terms defined in the Preliminary Statements, the following terms shall have the
following meanings:
“Accounts” shall have the meaning set forth in Article 9 of the New York UCC.
“Article” means a numbered article of this Security Agreement, unless another document is
specifically referenced.
“Collateral” means the Investment Property described on Exhibit “A” and the proceeds
(including Stock Rights) and products thereof, together with records related thereto.
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“Control” shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104,
9-105, 9-106 or 9-107 of Article 9 of the New York UCC.
“Default” means an event which but for the lapse of time or the giving of notice, or both,
would constitute an Event of Default.
“Event of Default” means an event described in Section 5.1.
“Exhibit” refers to a specific exhibit to this Security Agreement, unless another document is
specifically referenced.
“Investment Property” shall have the meaning set forth in Article 9 of the New York UCC.
“Permitted Liens” means the Liens permitted to be created, incurred or assumed or otherwise to
exist pursuant to Sections 7.1(c), (d), (e), (f) or (n) of the Credit Agreement.
“Section” means a numbered section of this Security Agreement, unless another document is
specifically referenced.
“Secured Obligations” means any and all Obligations, including, without limitation, all
existing and future indebtedness, obligations and liabilities of every kind, nature and character,
direct or indirect, absolute or contingent (including all renewals, extensions and modifications
thereof and all reasonable and reimbursable fees, costs and expenses incurred by any Secured Party
in connection with the preparation, administration, collection or enforcement thereof), of the
Grantor to any Secured Party, arising under or pursuant to this Security Agreement, the Credit
Agreement and any other Credit Document.
“Security” has the meaning set forth in Article 8 of the New York UCC.
“Stock Rights” means any securities, dividends or other distributions and any other right or
property which the Grantor shall receive or shall become entitled to receive for any reason
whatsoever with respect to, in substitution for or in exchange for any securities or other
ownership interests in a corporation, partnership, joint venture or limited liability company
constituting Collateral and any securities, any right to receive securities and any right to
receive earnings, in which the Grantor now has or hereafter acquires any right, issued by an issuer
of such securities.
The foregoing definitions shall be equally applicable to both the singular and plural forms of
the defined terms.
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ARTICLE II
GRANT OF SECURITY INTEREST
GRANT OF SECURITY INTEREST
The Grantor hereby pledges, assigns and grants to the Administrative Agent, on behalf of and
for the ratable benefit of the Secured Parties, a security interest in all of the Grantor’s right,
title and interest, whether now owned or hereafter acquired, in and to the Collateral to secure the
prompt and complete payment and performance of the Secured Obligations, provided, however, that the
principal amount of the Secured Obligations secured by the security interests granted pursuant to
this Security Agreement shall not exceed an amount that would cause all secured Debt of Grantor
outstanding on the date hereof to exceed 5% of the “Consolidated Net Tangible Assets” (as defined
in the Nineteenth Supplemental Indenture dated as of December 13, 2005 between the Grantor and Bank
of New York Mellon (successor trustee to JPMorgan Chase Bank, N.A.) with respect to the Grantor’s
original Indenture dated as of September 15, 1992) as of the date hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
The Grantor represents and warrants to the Administrative Agent and the other Secured Parties
that:
3.1. Title, Authorization, Validity and Enforceability. The Grantor has good and
valid rights in or the power to transfer the Collateral and title to the Collateral with respect to
which it has purported to grant a security interest hereunder, free and clear of all Liens (other
than Permitted Liens), and has full power and authority to grant to the Administrative Agent the
security interest in such Collateral pursuant hereto. The execution and delivery by the Grantor of
this Security Agreement has been duly authorized by proper corporate or other proceedings, and this
Security Agreement constitutes a legal, valid and binding obligation of the Grantor and creates a
security interest which is enforceable against the Grantor in all now owned and hereafter acquired
Collateral. When financing statements (or appropriate amendments to existing filings) have been
filed in the appropriate offices against the Grantor in the locations listed on Exhibit “B”, the
Administrative Agent will have a fully perfected first priority security interest in the Collateral
in which a security interest may be perfected by filing.
3.2. Conflicting Laws and Contracts. The execution, delivery and performance by the
Grantor of this Security Agreement (i) are within the Grantor’s powers, (ii) have been duly
authorized by all necessary corporate or other organizational action or proceedings and (iii) do
not and will not (A) require any consent or approval of the stockholders (or other applicable
holder of equity) of the Grantor (other than such consents and approvals which have been obtained
and are in full force and effect), (B) violate any provision of the charter or by-laws (or other
comparable constitutive documents) of the Grantor or of law, (C) violate any legal restriction
binding on or affecting the Grantor, (D) result in a breach of, or constitute a default under, any
indenture or loan or credit agreement or any other agreement, lease or instrument to which the
Grantor is a party or by which it or its properties may be bound or affected, or (E) result in or
require the creation of any Lien (other than pursuant to the Credit Documents as defined in the
Credit Agreement) upon or with respect to any of its properties.
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3.3. Type and Jurisdiction of Organization. The Grantor is a corporation organized
under the laws of the State of Michigan.
3.4. Pledged Securities. Exhibit “A” sets forth a complete and accurate list of the
Securities delivered to the Administrative Agent. The Grantor is the direct and beneficial owner
of each Security listed on Exhibit “A” as being owned by it, free and clear of any Liens, except
for the security interest granted to the Administrative Agent for the benefit of the Secured
Parties hereunder and other Permitted Liens. The Grantor further represents and warrants that all
such Securities have been duly and validly issued, are fully paid and non-assessable and constitute
the percentage of the issued and outstanding shares of stock of the respective issuers thereof
indicated on Exhibit “A” hereto.
ARTICLE IV
COVENANTS
COVENANTS
From the date of this Security Agreement, and thereafter until this Security Agreement is
terminated:
4.1. General.
4.1.1 Inspection. The Grantor will permit the Administrative Agent or any Bank, by
its representatives and agents (i) to inspect the Collateral, (ii) to examine and make copies of
the records of the Grantor relating to the Collateral and (iii) to discuss the Collateral and the
related records of the Grantor with, and to be advised as to the same by, the Grantor’s officers
and employees all at such reasonable times and intervals as the Administrative Agent or such Bank
may determine.
4.1.2 Records and Reports. The Grantor will maintain complete and accurate books and
records with respect to the Collateral, and furnish to the Administrative Agent, with sufficient
copies for each of the Banks, such reports relating to the Collateral as the Administrative Agent
shall from time to time reasonably request.
4.1.3 Financing Statements and Other Actions; Defense of Title. The Grantor hereby
authorizes the Administrative Agent to file, and if requested will execute and deliver to the
Administrative Agent, all financing statements describing the Collateral and other documents and
take such other actions as may from time to time be reasonably requested by the Administrative
Agent in order to maintain a perfected security interest in and, if applicable, Control of, the
Collateral. The Grantor will take any and all actions necessary to defend title to the Collateral
against all persons and to defend the security interest of the Administrative Agent in the
Collateral and the priority thereof against any Lien not expressly permitted hereunder.
4.1.4 Change in Corporate Existence, Type or Jurisdiction of Organization, Location,
Name. The Grantor will preserve its existence as a corporation, not change its state of
organization, and not change its mailing address, unless, in each such case, the Grantor shall have
given the Administrative Agent not less than 10 days’ prior written notice of such event or
occurrence and the Administrative Agent shall have either (x) determined that such event or
occurrence will not adversely affect the validity, perfection or priority of the Administrative
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Agent’s security interest in the Collateral, or (y) taken such steps (with the cooperation of the
Grantor to the extent necessary or advisable) as are necessary or advisable to properly maintain
the validity, perfection and priority of the Administrative Agent’s security interest in the
Collateral.
4.2. Securities. The Grantor will (i) deliver to the Administrative Agent immediately
upon execution of this Security Agreement the originals of all Securities constituting Collateral
(if any then exist) and (ii) hold in trust for the Administrative Agent upon receipt and
immediately thereafter deliver to the Administrative Agent any additional Securities constituting
Collateral, in each case together with a stock power or endorsement therefor executed in blank.
4.3. Stock and Other Ownership Interests. The Grantor will permit any registerable
Collateral to be registered in the name of the Administrative Agent or its nominee at any time at
the option of the Majority Banks following the occurrence and during the continuance of an Event of
Default.
4.4. Voting Rights and Dividends
4.5.1 Rights Prior to Default. So long as no Event of Default, and no Default under
Section 9.1(e) of the Credit Agreement, shall have occurred and be continuing:
(i) Until the Administrative Agent shall have notified the Grantor in writing to the
contrary, the Grantor shall be entitled to exercise or refrain from exercising any and all
voting and other consensual rights pertaining to the Collateral or any part thereof for any
purpose not inconsistent with the terms of this Security Agreement or the Credit Agreement,
provided, however, that the Grantor shall not exercise or refrain from exercising any such
right if such action would have a material adverse effect on the value of the Collateral.
(ii) The Grantor shall be entitled to receive and retain any and all dividends
and interest paid in respect of the Collateral; provided, however, that any and all (a)
dividends and interest paid or payable other than in cash in respect of, and securities,
instruments and other property received, receivable or otherwise distributed in respect of,
or in exchange for, any Collateral, and (b) dividends, interest and other distributions paid
or payable in cash in respect of any Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital surplus or
paid-in-surplus, shall be, and shall be forthwith delivered to the Administrative Agent to
hold as, Collateral and shall, if received by the Grantor, be received in trust for the
benefit of the Administrative Agent, be segregated from the other property or funds of the
Grantor, and be forthwith delivered to the Administrative Agent as Collateral in the same
form as so received (with any necessary endorsement or assignment).
(iii) The Administrative Agent shall execute and deliver (or cause to be executed
and delivered) to the Grantor all such proxies and other instruments as the Grantor may
reasonably request for the purpose of enabling the Grantor to exercise the voting and other
rights which it is entitled to exercise pursuant to paragraph (i), above,
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and to receive the dividends and interest which it is authorized to receive and retain
pursuant to paragraph (ii), above.
4.5.2 Rights During Default. Upon the occurrence and during the continuance of a
Default under Section 9.1(e) of the Credit Agreement or an Event of Default:
(i) Upon written notice to the Grantor by the Administrative Agent, which
notice can only be given by the Administrative Agent with respect to the Collateral
consisting of the common stock of Consumers after the Grantor has filed an application with
the Federal Energy Regulatory Commission seeking approval pursuant to Section 203 of the
Federal Power Act, 16 U.S.C. 824b, to transfer the common stock of Consumers to the
Administrative Agent and received such approval from the Federal Energy Regulatory
Commission, all rights of the Grantor to exercise or refrain from exercising the voting and
other consensual rights which it would otherwise be entitled to exercise pursuant to
Section 4.5.1(i) and to receive the dividends and interest which it would otherwise be
authorized to receive and retain pursuant to Section 4.5.1(ii) shall cease, and all such
rights shall thereupon become vested in the Administrative Agent who shall thereupon have
the sole right to exercise or refrain from exercising such voting and other consensual
rights and to receive and hold as Collateral such dividends and interest. The Grantor
shall only file the application pursuant to Section 203 of the Federal Power Act referred
to in the prior sentence if the Administrative Agent instructs it to do so in writing, and
the Grantor shall have 10 days after receipt of such instruction in which to prepare and
make the filing; provided, that the Administrative Agent can withdraw such
instruction at any time before the expiration of the ninth day after its receipt.
(ii) All dividends and interest and other property which are received by the Grantor
after proper written notice has been received by the Grantor pursuant to paragraph (i) of
this Section 4.5.2 shall be received in trust for the benefit of the Administrative Agent,
shall be segregated from other funds of the Grantor and shall be forthwith paid over to the
Administrative Agent as Collateral in the same form as so received (with any necessary
endorsement).
ARTICLE V
DEFAULT
DEFAULT
5.1. Default. The occurrence of any “Event of Default” under, and as defined in, the
Credit Agreement shall constitute an Event of Default hereunder.
5.2. Acceleration and Remedies. Upon the acceleration of the Obligations under the
Credit Agreement pursuant to Section 9.2 thereof, the Administrative Agent may, with the
concurrence or at the direction of the Majority Banks, exercise any or all of the following rights
and remedies:
5.2.1 Those rights and remedies provided in this Security Agreement, the Credit Agreement, or
any other Credit Document, provided that this Section 5.2.1 shall not be
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understood to limit any rights or remedies available to the Administrative Agent and the other
Secured Parties prior to an Event of Default.
5.2.2 Those rights and remedies available to a secured party under the New York UCC (whether
or not the New York UCC applies to the affected Collateral) or under any other applicable law
(including, without limitation, any law governing the exercise of a bank’s right of setoff or
bankers’ lien) when a debtor is in default under a security agreement.
5.2.3 Without notice except as specifically provided herein, sell, lease, assign, grant an
option or options to purchase or otherwise dispose of the Collateral or any part thereof in one or
more parcels at public or private sale, for cash, on credit or for future delivery, and upon such
other terms as the Administrative Agent may deem commercially reasonable. The Administrative Agent
may comply with any applicable state or federal law requirements in connection with a disposition
of the Collateral and compliance will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.
ARTICLE VI
WAIVERS, AMENDMENTS AND REMEDIES
WAIVERS, AMENDMENTS AND REMEDIES
No delay or omission of the Administrative Agent or any other Secured Party to exercise any
right or remedy granted under this Security Agreement shall impair such right or remedy or be
construed to be a waiver of any Event of Default or an acquiescence therein, and any single or
partial exercise of any such right or remedy shall not preclude any other or further exercise
thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of
the terms, conditions or provisions of this Security Agreement whatsoever shall be valid unless in
writing signed by the Administrative Agent with the concurrence or at the direction of the Banks
required under Section 10.1 of the Credit Agreement and the Grantor, and then only to the extent in
such writing specifically set forth. All rights and remedies contained in this Security Agreement
or by law afforded shall be cumulative and all shall be available to the Administrative Agent and
the other Secured Parties until the Secured Obligations have been paid in full in cash and all of
the Commitments have been terminated.
ARTICLE VII
SUBORDINATION OF INTERCOMPANY INDEBTEDNESS
SUBORDINATION OF INTERCOMPANY INDEBTEDNESS
The Grantor agrees that any and all claims of the Grantor against any Subsidiary with respect
to any “Intercompany Indebtedness” (as hereinafter defined), any endorser, obligor or any other
guarantor of all or any part of the Secured Obligations, or against any of its properties shall be
subordinate and subject in right of payment to the prior payment, in full and in cash, of all
Secured Obligations; provided, that, for the avoidance of doubt, so long as no Event of
Default shall be continuing, the Borrower and each Subsidiary may make loans to and receive
payments in the ordinary course with respect to Intercompany Indebtedness (as hereinafter defined)
from each other Subsidiary to the extent not prohibited by the terms of the Credit Agreement and
the other Credit Documents. If all or any part of the assets of any the Borrower or any
Subsidiary, or the proceeds thereof, are subject to any distribution, division or application to
the creditors of party, whether partial or complete, voluntary or involuntary, and whether by
reason of liquidation, bankruptcy, arrangement, receivership, assignment for the benefit of
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creditors or any other action or proceeding, or if the business of any such Loan Party is dissolved
or if substantially all of the assets of any such party are sold, then, and in any such event (such
events being herein referred to as an “Insolvency Event”), any payment or distribution of any kind
or character, either in cash, securities or other property, which shall be payable or deliverable
upon or with respect to any indebtedness of any Subsidiary to the Grantor (“Intercompany
Indebtedness”) shall be paid or delivered directly to the Administrative Agent for application to
the Secured Obligations, due or to become due, until the Secured Obligations shall have been fully
paid and satisfied in cash. Should any payment, distribution, security or instrument or proceeds
thereof be received by the Grantor upon or with respect to the Intercompany Indebtedness after any
Insolvency Event and prior to the satisfaction of all of the Secured Obligations, the Grantor shall
receive and hold the same in trust, as trustee, for the benefit of the Secured Parties, and shall
forthwith deliver the same to the Administrative Agent, for the benefit of the Secured Parties, in
precisely the form received (except for any necessary endorsement or assignment of the Grantor),
for application to the Secured Obligations, due or to become due, until the Secured Obligations
shall have been fully paid and satisfied in cash, and, until so delivered, the same shall be held
in trust by the Grantor as the property of the Secured Parties.
ARTICLE VIII
GENERAL PROVISIONS
GENERAL PROVISIONS
8.1. Secured Party Performance of Grantor’s Obligations. Without having any
obligation to do so, the Administrative Agent may perform or pay any obligation which the Grantor
has agreed to perform or pay in this Security Agreement and the Grantor shall reimburse the
Administrative Agent for any reasonable amounts paid by the Administrative Agent pursuant to this
Section 8.1. The Grantor’s obligation to reimburse the Administrative Agent pursuant to the
preceding sentence shall be an Obligation payable on demand.
8.2. Authorization for Secured Party to Take Certain Action. The Grantor irrevocably
authorizes the Administrative Agent at any time and from time to time in the sole discretion of the
Administrative Agent and appoints the Administrative Agent as its attorney in fact (i) to contact
and enter into one or more agreements with the issuers of uncertificated securities which are
Collateral and which are Securities or with financial intermediaries holding other Investment
Property as may be necessary or advisable solely to give the Administrative Agent Control over such
Securities or other Investment Property, (ii) following the occurrence and during the continuance
of an Event of Default, to apply the proceeds of any Collateral received by the Administrative
Agent to the Secured Obligations and (iii) to discharge past due taxes, assessments, charges, fees
or Liens on the Collateral (except for such Liens as are specifically permitted hereunder or under
any other Credit Document), and the Grantor agrees to reimburse the Administrative Agent on demand
for any reasonable payment made or any reasonable expense incurred by the Administrative Agent in
connection therewith, provided that this authorization shall not relieve the Grantor of any of its
obligations under this Security Agreement or under the Credit Agreement.
8.3. Benefit of Agreement. The terms and provisions of this Security Agreement shall
be binding upon and inure to the benefit of the Grantor, the Administrative Agent and the other
Secured Parties and their respective successors and assigns (including all persons who become
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bound as a debtor to this Security Agreement), except that the Grantor shall not have the
right to assign its rights or delegate its obligations under this Security Agreement or any
interest herein, without the prior written consent of the Administrative Agent.
8.4. Survival of Representations. All representations and warranties of the Grantor
contained in this Security Agreement shall survive the execution and delivery of this Security
Agreement.
8.5. Taxes and Expenses. Any stamp, documentary or (to the extent provided in the
Credit Agreement) withholding taxes payable or ruled payable by Federal or State authority in
respect of this Security Agreement shall be paid by the Grantor, together with interest and
penalties, if any. The Grantor shall reimburse the Administrative Agent for any and all reasonable
out-of-pocket expenses and internal charges (including reasonable attorneys’, auditors’ and
accountants’ fees and reasonable time charges of attorneys, paralegals, auditors and accountants
who may be employees of the Administrative Agent) paid or incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration, collection and enforcement of
this Security Agreement and in the audit, analysis, administration, collection, preservation or
sale of the Collateral (including the expenses and charges associated with any periodic or special
audit of the Collateral). Any and all costs and expenses incurred by the Grantor in the
performance of actions required pursuant to the terms hereof shall be borne solely by the Grantor.
8.6. Headings. The title of and section headings in this Security Agreement are for
convenience of reference only, and shall not govern the interpretation of any of the terms and
provisions of this Security Agreement.
8.7. CHOICE OF LAW. SUBMISSION TO JURISDICTION. THIS SECURITY AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK, BUT OTHERWISE
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). EACH OF THE GRANTOR AND THE ADMINISTRATIVE AGENT
(I) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING IN
NEW YORK CITY IN ANY ACTION ARISING OUT OF ANY CREDIT DOCUMENT, (II) AGREES THAT ALL CLAIMS IN SUCH
ACTION MAY BE DECIDED IN SUCH COURT, (III) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO,
THE DEFENSE OF AN INCONVENIENT FORUM AND (IV) CONSENTS TO THE SERVICE OF PROCESS BY MAIL. A FINAL
JUDGMENT IN ANY SUCH ACTION SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW OR
AFFECT ITS RIGHT TO BRING ANY ACTION IN ANY OTHER COURT. THE GRANTOR AGREES THAT THE
ADMINISTRATIVE AGENT SHALL HAVE THE RIGHT TO PROCEED AGAINST THE GRANTOR OR ITS PROPERTY IN A COURT
IN ANY LOCATION TO ENABLE THE BANKS TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE ADMINISTRATIVE
AGENT OR THE BANKS. THE GRANTOR
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AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE
ADMINISTRATIVE AGENT TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE ADMINISTRATIVE AGENT. THE GRANTOR WAIVES
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE ADMINISTRATIVE AGENT MAY
COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
8.8. Indemnity. The Grantor hereby agrees to indemnify the Administrative Agent and
its successors, assigns, agents and employees (each, an “indemnified party”), from and against any
and all liabilities, damages, penalties, suits, costs, and expenses of any kind and nature
(including, without limitation, all expenses of litigation or preparation therefor whether or not
the Administrative Agent is a party thereto) imposed on, incurred by or asserted against the
Administrative Agent, or its successors, assigns, agents and employees, in any way relating to or
arising out of this Security Agreement, or the ownership, delivery, possession, or other
disposition of any Collateral except to the extent that such liabilities, damages, penalties, costs
or expenses were caused by the gross negligence or willful misconduct of such indemnified party.
8.9. Addresses for Notices. All notices and other communications provided for
hereunder shall be in writing (including facsimile communication) and mailed, telegraphed,
telecopied, telexed, cabled or delivered, if to the Grantor, at its address at Xxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx Attention: Xxxxx X. Xxxxxxxxxxx, and if to the
Administrative Agent, at its address specified in the Credit Agreement, or, as to either party, at
such other address as shall be designated by such party in a written notice to the other party.
All such notices and other communications shall, when mailed or telecopied, be effective five days
after when deposited in the mails, or when telecopied.
8.10. Continuing Security Interest; Assignments under Credit Agreement. This Security
Agreement shall create a continuing security interest in the Collateral and shall (i) remain in
full force and effect until the earlier to occur of (x) the payment in full of all Secured
Obligations now or hereafter existing under the Credit Agreement, whether for principal, interest,
fees, expenses or otherwise, and all other amounts payable under this Security Agreement and the
termination of all of the Commitments or (y) the release by the Administrative Agent of its
security interest in all of the Collateral, (ii) be binding upon the Grantor, its successors and
assigns, and (iii) inure, together with the rights and remedies of the Administrative Agent
hereunder, to the benefit of, and be enforceable by, the Administrative Agent and its successors,
transferees and assigns. Without limiting the generality of the foregoing clause (iii) and Section
8.3 above, any Bank may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or any portion of its
Commitment, the Loans owing to it and any promissory note held by it) to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect thereof granted to such
Bank herein or otherwise, subject, however to the provisions of Sections 10.3, 12.1 and 13.12 of
the Credit Agreement. Upon the earlier to occur of (A) the payment in full of all Secured
Obligations now or hereafter existing under the Credit Agreement, whether for principal, interest,
fees, expenses or otherwise, and all other amounts payable under this Security Agreement and the
termination of all of the Commitments or (B) the release by the Administrative Agent of its
security interest in all of the Collateral, the security interest granted
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hereby shall terminate and all rights to the Collateral shall revert to the Grantor. In
addition, the Administrative Agent shall release any Collateral as permitted or required pursuant
to Section 10.3 of the Credit Agreement. Upon any such termination, the Administrative Agent will,
at the Grantor’s expense, return to the Grantor such of the Collateral as shall not have been sold
or otherwise applied pursuant to the terms hereof and execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.
8.11. WAIVER OF JURY TRIAL. THE GRANTOR AND THE ADMINISTRATIVE AGENT EACH HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER CREDIT DOCUMENT, OR ANY OTHER INSTRUMENT OR
DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.
[Remainder of page intentionally blank.]
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| CMS ENERGY CORPORATION |
||||
| By: | /s/ Xxxxx X. Xxxxxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxxxxx | |||
| Title: Vice President and Treasurer | ||||
| AGREED AND ACKNOWLEDGED: BARCLAYS BANK PLC, as Administrative Agent |
|||
| By: | /s/ Xxx X. Xxxxxx | ||
| Name: | Xxx X. Xxxxxx | ||
| Title: | Director | ||
EXHIBIT “A”
List of Pledged Securities and Pledged Instruments
(See Section 3.4 of Security Agreement)
(See Section 3.4 of Security Agreement)
STOCK OWNED BY CMS ENERGY CORPORATION:
| Issuer | Certificate Number | Number of Shares | Percentage Ownership Interest | |||||||||
Consumers Energy Company |
04 | 84,108,789 | 100 | % | ||||||||
| INSTRUMENTS OWNED BY CMS ENERGY CORPORATION | ||||||||||||
| Obligor | Amount | Interest Rate | Maturity | |||||||||
None |
||||||||||||
GENERAL INTANGIBLES AND OTHER SECURITIES OR OTHER INVESTMENT
PROPERTY (CERTIFICATED AND UNCERTIFICATED)
OWNED BY CMS ENERGY CORPORATION:
PROPERTY (CERTIFICATED AND UNCERTIFICATED)
OWNED BY CMS ENERGY CORPORATION:
| Issuer | Description of Collateral | Percentage Ownership Interest | ||||||
None |
||||||||
A-1
EXHIBIT “B”
(See Section 3.1 of Security Agreement)
(See Section 3.1 of Security Agreement)
OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED
Secretary of State of Michigan
B-1